By: Maren Calvert
As the year ends and homeowners’ associations and condo associations work to pass their budgets for the next year, please note: Under recent legislation, associations are required to give residential owners the opportunity to reject every proposed budget.
A failure to provide this opportunity to will mean the budget is VOID.
The following provisions of the Washington Uniform Common Interest Ownership Act (WUCIOA) apply to all residential associations, regardless of when they were formed. This includes associations formed under:
- the Horizontal Property Regimes Act (RCW Chapter 64.32 – all platted developments with common areas before July 1, 2019);
- the Condominium Act (RCW Chapter 64.34 – formed prior to July 1, 1990); and
- the Homeowners Association Act (RCW Chapter 64.38 – condos formed between July 1, 1990 and June 30, 2018).
In all instances, the Board of Directors is required to give a copy of any proposed budget to all residential unit owners within 30 days of adopting it. The Board shall then set a meeting that is no earlier than 14 and no later than 50 days from the date the Board gave a copy of the proposed budget to the owners.
If there are not enough owners at the meeting to establish a quorum, the proposed budget will pass. If less than the required number of votes are cast to reject the budget, then the proposed budget will pass. If a majority (or whatever number is required by the declaration) of owners vote to reject the budget, then the Board will have to develop and propose a new budget and the ratification process will need to be repeated.
In the meantime, the last budget approved by the unit owners would apply.
If the Board fails to follow this process, then the budget is VOID.
Please note, the law requires all residential association budgets to include:
(a) The projected income to the association by category;
(b) The projected common expenses and specially allocated expenses, both by category;
(c) The amount of the assessments per unit and the date assessments are due;
(d) The amount of assessments budgeted for the reserve account;
(e) A statement of whether the association has a reserve study that satisfies RCW 64.90.550 (WUCIOA) and, if so, the extent to which the budget meets or deviates from the recommendations of that reserve study; and
(f) The current deficiency or surplus in reserve funding expressed on a per unit basis.
These rules also apply to any special assessments the Board votes to impose. Without the owners’ notice and opportunity to vote, the special assessment will be VOID.
WUCIOA has significantly changed the way condo, subdivisions, co-ops and homeowners’ associations operate in Washington.