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Condo-HOA Blog - Marlyn Hawkins

Great News for Condo Homeowners

Great news for Washington Condominium owners! Filmore LLP v. Unit Owners Association of Centre Pointe Condominium, was accepted for review by the Washington Supreme Court yesterday! Our own Dan Zimberoff authored the amicus curiae brief on behalf of the Washington State Community Association Institute. Supplemental briefs of the parties will be due in early April and the court will set a hearing after that. A short synopsis of the devastating opinion from our prior blog is below. read more

Good, Bad and still a little Ugly, UCIOA is Dead for Now

UCIOA Friday, February 20 was the last day for SB 5263, otherwise known as the Washington version of the Uniform Common Interest Ownership Act or "UCIOA" to get out of the Senate committee of origin, the Committee on Financial Institutions and Insurance. Having worked on the committee that was adapting the uniform language for use in Washington (the "WaCIOA" committee) for years, I have mixed feelings about the failure of the bill to pass. Obviously, it is frustrating to have worked so hard on something only to see it die in the committee of origin. On the other hand, it is my opinion that the bill's flaws outweighed its overall benefit to future community association homeowners in Washington and therefore, it's good it didn't pass this time around. Hopefully, homeowners can make their voices heard on those issues in the interim and a more consumer-protective version of the bill can be introduced next year. In addition to providing significant developer benefits, the original version of UCIOA acknowledged that there is no reason for the disparate treatment of common interest communities ("CICs") by treating all such communities, including condominiums, "non-condo" homeowners associations, cooperatives and the new "miscellaneous communities" alike. The Washington version did the same – at least for the development and governance issues contained in Articles I, II and III. The Washington version (WaCIOA) would also have provided significant consumer benefits to homeowners in Washington. Primarily, WaCIOA would have corrected ambiguous language in current acts that led to the devastating recent judicial opinions in Filmore (over 90% approval for "change in use" required), Sudden Valley (assessments not governed by budget approval process in HOAs) and Club Envy (one-year statute of limitation for challenge of amendments does not apply) The bill would also have provided non-condo CICs with the significant additional governance tools currently only available to condominiums, such as default amendment percentages and similar provisions. In terms of consumer protection provisions, WaCIOA's provisions required that resale certificates and public offering statements be made available to almost all common interest community purchasers with streamlined disclosures, making it easier for owners to understand what they were purchasing. Unfortunately, the original bill still had some very serious flaws. First, despite the fact that one of the main components of a uniform or "model" act is the recognition that all CICs are essentially the same, the bill departed from the uniform act in providing only condominiums with implied and express warranties of quality. In theory, the bill was intended to hold the "status quo" in Washington by providing these warranties only to condos, yet subtle changes in the language affecting the time limit to bring claims under the warranties and how warranties can be waived would likely have allowed developers to avoid liability that they currently have under the Condo Act. Moreover, the bill contained other provisions inconsistent with the model act that would have been detrimental to homeowners in Washington, including phase-out of the requirement that developers provide public offering statements to buyers, allowing appointment of board members by people other than owners, delay of the collection of assessments from developer-owned units, and the allowance of pre-sales so far in advance of construction of units that the potential for abuse is massive. Moreover, after the bill was introduced, the two primary consumer protections remaining in the bill were stripped by anti-consumer public interests. First, the banking lobby insisted upon deleting superpriority lien provisions for any CICs other than condos, which actually would have invalidated any current HOA's superpriority contained within its governing documents. Second, the building industry further weakened the warranty protections, again ensuring that only condos enjoyed any statutory warranty protection, and deleted provisions that would allow developers to except advertising materials from claims of misrepresentation. Ultimately, the bill failed to get out of committee for reasons that appear unrelated to the stripping of the consumer protections or CAI's position on the bill, so it is unclear whether the legislators who supported the bill this year will be willing to run it again next year. If it is to be addressed again, it is important to remember that the purpose of adopting a model act is to take advantage of the balance achieved by many nationwide. And while it certainly needs to be adapted to fit Washington law, UCIOA carefully balances the rights of developers, lenders, governing boards and owners. Any decrease in the rights of homeowners upsets that balance. Hopefully, the legislature can pass a more balanced bill in the future. read more

Sudden Valley - The Saga Continues

Update on Sudden Valley. read more

Sudden Valley, Sudden Change for some HOAs

Sudden Valley budget ratification. read more

Who's Invited to this First Party?

Your attorney should be on the list! read more

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