Barker Martin

Condo-HOA Blog

Why So Few Condos in Seattle (Part 2)

In last week's post, we discussed the data and hard numbers supporting the influx of apartment buildings over condominium projects in the Puget Sound region. We concluded simple economics-maximizing profit-was the reason the large number of cranes in Seattle and Bellevue are constructing apartment buildings and not condominiums. But that's not what the building industry wants you to think.

Within the past few months, several news articles began appearing citing "frivolous lawsuits" and "remarkably onerous construction defect laws" from the Washington Condominium Act.  See recent articles here and here.

Why the recent attack on lawyers? One can only surmise that having been unsuccessful for years in Olympia to unroll the Washington Condominium Act's implied warranties of quality, the building industry (funded in Washington State through groups such as Building Industry Association of Washington ("BIAW") and Master Builder's Association ("MBA")) is taking advantage of a short-term housing crisis to further its agenda. As mentioned in last week's post, the Condo Act's warranties have been in place since July 1, 1990 and there have been multiple construction boom cycles where thousands upon thousands of condominium units were constructed.  Clearly, the Condominium Act warranties are not the deciding factor.

Earlier this year the University of Washington's Runstad Center for Real Estate Studies commissioned a study on the shortage of condominiums in the Puget Sound region. The School appointed an Interim Director to head the study. Great independent university to study the issue. Not so fast. Who is the Interim Director named to head this study? None other than a building industry professional with over 25 years working for some of the largest home builders in the state, who also served as a past president of King County and Snohomish County Master Builder's Association.

Some say Washingtonians have more rights when they buy a toaster in this state than a home. The exception is the implied warranties of quality that attach to a new condominium. As the legislature determined when it adopted the law back in 1990:

Quality condominium construction needs to be encouraged to achieve growth management act mandated urban densities and to ensure that residents of the state, particularly in urban growth areas, have a broad range of ownership choices.

RCW 64.34.005 (Findings - Intent).

The implied warranties ensure basic quality of construction-not perfection-and consist of the following: construction that is suitable for the ordinary uses of its type and is: (a) free from defective materials; (b) in accordance with sound engineering and construction standards; (c) in a workmanlike manner; and (d) in compliance with all laws then applicable to such improvements.

Does that sound "remarkably onerous" to you? Does that sound like laws that encourage frivolous lawsuits? Does that sound like it is stopping developers from constructing condominiums? Should the average condominium buyer lose these warranties that in favor of multi-national, or even local, corporate developers?

If later this year the building industry formally attacks the Condo Act's implied warranties, the team at Barker Martin will work in earnest to protect these vital homeowner rights. Stay tuned for more information on this important topic.