Community associations in Washington State are regulated by four different acts depending on when the community was created and what type of community it is. Homeowners’ associations and condominium associations built before July 1, 1990, should respectively follow the Homeowners Association Act and the Horizontal Property Regimes Act. For more communities constructed after July 1, 1990, the Washington Uniform Common Interest Ownership Act (HOA) and the Washington Condominium Act (CA) are applicable. It is required that all common interest communities be registered as nonprofit corporations. The Washington Nonprofit Corporation Act regulates the management of all nonprofit corporations within the state.

 

Homeowners Association’s Rights and Responsibilities

To create a homeowners’ association, the initial board of directors or declarant must draft and adopt a community declaration. The declaration will include all the rules and regulations set forth by the association along with a map of all property within the community. It will also provide the formula for the allocation of votes amongst homeowners. Documents must be filed within the county, or counties, that the community is located.

 

Maintenance And Management

The HOA is responsible for the maintenance of all common elements within the community. To create a budget for maintenance and management expenses, the association has the right to collect regular assessments from homeowners. Special assessments may also be collected in the event of an unforeseen maintenance emergency that cannot be covered by the regular budget.

 

Delinquency

If an account becomes delinquent, the homeowners’ association may charge fines and late fees on any overdue assessments. They may also place liens on the property and, in extreme cases, foreclose on the property despite on-time mortgage payments.

 

Community Records

It is the responsibility of the board of directors to maintain detailed association records. These records should include:

  • The current budget

  • Records of receipts and expenditures for the past seven years

  • Minutes of all meetings

  • Register of names, addresses, and allocated votes of each member

  • Original declaration and organizational documents along with any amendments

  • Financial statements and tax returns for the past seven years

  • The most recent annual report delivered to the secretary of state (if any)

  • Copies of any contracts which the association was a party within the last seven years

  • Copies of insurance policies

All association records should be made available during regular business hours to members upon request. Copies of records may also be created if desired.

 

Financial Statements

Financial statements should be prepared annually using standard accrual-based accounting practices. Associations with annual assessments of $50,000 or more must receive an annual audit from a certified public accountant. Associations with assessments below $50,000 still require an annual audit, but it may be waived by unit owners with a majority vote.

 

Insurance

The board of directors must maintain insurance policies on all common property. Property insurance, commercial general liability insurance, and fidelity insurance are mandatory. Other insurance may be required by the community declaration. Property insurance must cover at least 80% of the cash value of the property being covered. The cost of insurance is considered a common expense and should be included in the regular assessments paid by homeowners.

 

Homeowner Rights

Homeowners have the right to participate in board member elections and may vote on amendments made to the community declaration. Votes may be allocated differently between communities. The declaration will contain the formula for deciding how the votes are allocated amongst homeowners.

 

Voting

Voting is to take place during member meetings which are to be held annually. Special meetings may also be called at any time by the association president, a majority of the board of directors, or 20% of the allocated votes. The board of directors is responsible for providing notice of all meetings at least 14 days, but no more than 50 days before the meeting is scheduled to take place.

 

Amendments

Any proposed amendments to the declaration or organizational documents require a 67% vote from homeowners; a lesser amount could be required by the declaration. Once the amendment is passed, it must be documented and filed in the county, or counties, in which the community is located. Any changes made to the governing documents require notice to be sent to homeowners.

 

Public Offering Statement

To terminate a common interest community, it requires at least 80% of the allocated votes. Some declarations may require a higher percentage.

Before purchasing property within a common interest community, buyers must receive a public offering statement describing the community association and any rules they must follow as homeowners. The buyer then has seven days to terminate the sale if they decide that they do not agree with the regulations.

 

Washington Uniform Common Interest Ownership Act

To ensure that your community association is being run following all state and local laws, it helps to have a professional on your side. CSM has a team of experienced professionals that have worked with communities in almost every state in the US. Specializing in HOA financial management, we can help your board of directors manage association finances, write and submit documents, and prepare for audits. If you have any questions regarding state HOA laws and regulations, give us a call at (865) 315-7505, contact us online or email us at help@csmhoa.com.