HB 1636 is a bill that may not have a lot of attention right now, but it should. THIS is the bill that so many home owners across the state of Washington will WISH passed if it doesn’t. HB 1636 removes pre-existing communities from Washington state’s new 2018 law, WUCIOA. Pre existing communities should not be held to WUCIOA in any way, it isn’t fair to change the terms of existing home ownership by a state law. WUCIOA will harm Washington state’s most vulnerable in HOAs with burdening their budget with increased dues, and possibly lowering the market value of their property if dues increases are significant.
What’s WUCIOA?
WUCIOA is a very complex law that sets many rules and guidelines for NEW common interest communities. WUCIOA only pertains to pre-existing communities in regards to their budget, and voting standards in order to approve that budget. According to WUCIOA an HOA’s dues are set by their budget. The budget is created by the HOA board, and must be voted on and approved by the membership. According to WUCIOA, if no members vote, the budget is approved. If 10% of the members vote, the 90% that don’t vote are counted as approving the budget. So, even if every single person that actually votes rejects the budget it does not matter because the 90% that didn’t vote are counted as approving the budget. In no other instance can I think of a voting standard that counts votes that are NOT CAST. This is certainly not a democratic way of voting. This standard is impossible, so essentially, the budget creates the dues without membership input.
How did HB 1636 come about?
HB 1636 was introduced by Representative Jeff Morris of district 40 . District 40 holds one of the state’s biggest home owner associations, Sudden Valley. Sudden Valley is a community of 3157 dues paying lots. Sudden Valley’s HOA made its members aware of the passing of WUCIOA late last spring, right after they voted in an $11 a month increase to fund what had been failed to be budgeted for the previous year. The board president cried tears of joy during this announcement. Sudden Valley’s first budget increased their dues 48%, from $86 to $127. It has been made clear by Sudden Valley’s board this is the first of many increases.
Who is watching the Board?
WUCIOA doesn’t put any checks or balances on the HOA boards. WUCIOA doesn’t make sure that the board is managing the money well, spending it where the members want it spent, fairly maintaining all parts of the community. WUCIOA has nothing in place to protect the members of the HOA regarding the spending of this budget. Maybe members can vote out boards that don’t follow their wishes, but maybe they can’t. Why not? Sometimes each member only gets replaced every 3 years so the board is never all up for replacement at once, sometimes a board will rally support from builders, vacant lot owners, other voters that will need the board to work with them in the near future. Sometimes the board will be more organized than busy home owners realized they needed to be. Plus, sometimes, a lot of damage can happen in a year or two ‘s time before home owners can organize to vote out board members.
Don’t home owners have rights?
When home owners buy their homes in an HOA they know they will always have to pay dues. They know they will always have to follow the rules and regulations of the HOA . When purchasing a home a buyer is given an opportunity to review the association’s rules, and if they don’t like them they can cancel their purchase. CC&Rs (covenants, conditions, & regulations) are attached to the deed of a property so they can’t be ignored, they are important. Real estate brokers will advise buyers to review the CC&Rs during their inspection period. WUCIOA supersedes what home owners agreed to when buying their property. Washington state home owners are now burdened with paying HOA fees that can skyrocket, or relocating and eating the cost of relocation. It isn’t right. Members of an HOA should retain the rights given to them in the CC&Rs for their neighborhood, the ones they agreed to prior to purchase.
Why I care about HB 1636
HB 1636 is something I personally worked with Representative Jeff Morris to create. As a real estate broker and a new resident of Washington state this is important to both my profession and my budget. I personally don’t want my HOAs board to have a blank check, but I also won’t encourage any buyer considering purchasing into an HOA community (or common interest community) and essentially providing that blank check to their board. I didn’t have the option to choose if a board could have control of my monthly dues because I did not know about WUCIOA when I bought, but all of the buyers I work with will know about it. How many will be comfortable trusting a volunteer board that has no training or screening before giving them a blank check?
People are hurting…for real
People live on budgets, especially lower income people. Many people buy into certain communities due to their affordability vs amenities within the community. This is certainly the case with many of my neighbors and friends in MY community. Others bought decades ago and are already struggling with property tax increases, and others have come across unexpected life events that makes the burden of a dues increase too much to bear. Whatever the reason it hurts Washington home owners is reason enough, WUCIOA oversteps.
What can I do???
Please support the passing of HB 1636 by contacting your legislative reps and letting them know you demand THEY support it.You can call your reps at 1-800-562-6000 or email them about this bill. Here is a link to make this easy. We don’t have time for you to consider this, we are very close to this bill being over looked and ignored. YOU MATTER. You really do. Please make sure you have a voice in this issue that affects so many Washington state home owners.
Your statement that “WUCIOA is a very complex law that sets many rules and guidelines for NEW common interest communities” is correct; but it is incorrect to state that the ” WUCIOA only pertains to pre-existing communities in regards to their budget, and voting standards in order to approve that budget.”
This legislation includes other protections for members by (1) removing a Board’s authority to amend governing documents which many Board do by violating or circumventing members’ voting rights, usually for self-serving reasons. (2) ensuring that no amendment to a governing document that proposes special rights for a subset of members can be adopted wo a vote of 90% of the qualified voters in the Association; and (3) ensuring that the a different budget for the next budget cycle cannot be adopted without a full disclosure of the reserve balances and their shortages, if any.
In order to adopt the WUCIOA, the preexisting HOAs must follow specific requirements stated in Section 120 of the legislation (SB6175 which is posted on the Legislature’s website-2017-18 Session). The Board must call a special meeting of the members, the purpose of which is to hold a discussion about all of the important features of the WUCIOA,.Following this meeting, the Board must mail ballots to members who must vote on whether to adopt it. I have witnessed a Board deliberately evade calling this meeting by referring to a section of the WUCIOA would cost each member $300/year (possibly the problem that may be addressed enacting HB1636 ).
Therefore, it is very important to advise members to be neutral about whether to adopt WUCIOA,until after a Special Meeting is called to discuss all features of it, because amending the WUCIOA by a legislative measure such as HB1636 is much easier that than you can imagine if the interpretation of language the WUCIOA is accurate but did not reflect the Legislature’s intent.
As an advocate of citizen lobbyist organizations, I rhope that you will submit an amendment to the House representatives to find a sponsor who believes that the Legislature’s intent was not to penalize preexisting HOAs for adopting legislation that has measures in it that were enacted into law to protect them from abusive Boards of HOAs.
t
.
I think your reference to WUCIOA refers to SB6175 that the Legislature enacted into law effective July 1, 2018.
Section 326 of SB6175 ADOPTION OF BUDGETS—ASSESSMENTS AND SPECIAL ASSESSMENTS- states “Unless at that meeting the unit owners of units to which a majority (i.e., 51%) of the votes in the association are allocated, or any larger percentage specified in the declaration, reject the budget, the budget and the assessments against the units included in the budget are ratified, whether or not a quorum is present”.
The major difference many preexisting HOAs and Section 326 that preexisting HOAs usually set a quorum requirement for holding a meeting at 51% or higher, and some state that the adoption of the Budget requires a majority vote of the members and proxies present (which is not the 51% of the entire membership as stated in Section 326). Therefore,if only 51 of 100 (members and proxies ) are present at a meeting that satisfies the quorum requirement, only 26 votes are needed to either reject or approve the budget, because owners of 49 ballots did not choose to vote. There is no reason why it should be harder to reject a budget than it is to adopt it.
Therefore, I would start out based on the assumption that it was not the Legislature’ intent to grant the Board the unequal amount of power over the members, meaning that it should take a 51% vote of all members ( or 51% of the members or proxies present) to be able to adopt or to reject the Budget.
I suspect that the Legislature would agree that such a proposal would be reasonable and fair.
.
My question concerns an HOA established before 1990, not a common interest community and where the governing documents establish the right of members to approve any dues increase. Is there language in any of the RCWs that would allow the Board to ignore this bylaw and insert the increase into the budget?
The wording in the 2019 changes to WUCIOA and RCW 64.38.025 have been interpreted by some to now mean that “all community associations” must now comply with RCW 64.90.525. RCW 64.90.080 starts out “common interest community, pre-existing” and RCW 64.90.525 refers only to common interest communities.
The definitions, RCW 64.90.010 make it very clear that “The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.” Even terms like plat community and miscellaneous community clearly define these terms as meaning common interest communities. There are many online opinions by lawyers and HOA management companies stating it now applies to “all community associations”. What am I missing that makes them so certain?
Charles did anyone ever answer your questions? We are having the same problems, I recvd an answer from the Senator who wrote the bill and he said we should consider RCW 64.90 in its entirety and/or should have adopted RCW 64.38. We didn’t adopt either and abide by RCW24.03 under which our articles/bylaws were developed. We were established in 1986-RCW 64.38 in 1995 and RCW 64.90 later. He states that a pre-2018 association that has not elected to be governed by 64.90 (which we haven’t nor 64.38) then our own charter documents and 64.38 would continue to govern. If you association’s bylaws permit voting by mail that provision is still in effect. Our board refuses to allow us to vote for the budget by proxy-but we can vote for board members by proxy. Our bylaws say must be done by a secret ballot-a general proxy giving someone else our decision to vote is not secret-a direct proxy is what should be used and sent in by mail.
I don’t think ANYONE knows what the hell the real truth is of all these convoluted laws. I can tell you my board doesn’t have a clue and chooses to ignore when I write and tell them what they are doing is not legal.
My private attorney agrees with me and board’s attorney agrees with them. Short of a lawsuit against our board, got any ideas on what can we done?
I actually think that a lawsuit is the only way this is going to be fixed. I could go on and on about this, but someone is going to have to sue the state for this unfair law and hardship that is being put upon home owners without any ability to vote down budget increases…especially those of us who live in pre-existing communities and were home owners prior to the passage of this law. The problem is, who has the money to pay an attorney to fight this fight? Certainly none of us who are upset about the dues increases. Keep your fingers crossed someone with deep pockets will fight for the people this is hurting…we have hit brick walls with all of our legislatures. I do think if enough of us complained from around the state and got our legislative ears that might help, but it would take thousands more than we seem to have now. Please feel free to email me if you want to be connected to Sudden Valley’s efforts to change this law. Thanks, Mary
Thanks for the responses. First I received. I agree with what Jean has written:
He (Senator) states that a pre-2018 association that has not elected to be governed by 64.90 (which we haven’t nor 64.38) then our own charter documents and 64.38 would continue to govern. If you association’s bylaws permit voting by mail that provision is still in effect.
We were established some 20 years before Sudden Valley and most importantly we are not a common interest community. Our bylaws state any increases in dues or assessments must be approved by a mail in vote of the majority of the community entitled to vote. The Sudden Valley lawsuit in 2014 clearly established that the Board cannot use 64.38 to circumvent that right by incorporating the dues approval process into the budget. Thank you, the heavy lifting is now done!
Our Board is using a misguided opinion of a management company and some memo from a local attorney to that company that RCW 64.90.525 now applies to all “community associations”. They have ignored the words in RCW 64.90 that clearly require only pre-existing CIC to comply. They have also stated the 2018 changes to RCW 64.38 and more specifically RCW 64.38.025(3) requires them to “ignore” the bylaws. The Board approved a budget increase, inserted it in the budget and then sent out the bills. They are of course violating RCW 64.38.025(2) which prohibits them from taking any action that requires a vote of the members.
It seems to me that the easiest remedy is to ask the courts to rule on whether RCW 64.90.525 can be imposed on pre-existing non-CIC HOAs’ dues approval process and governing documents ignored.
I am not an attorney but this seems appropriate to decide by summary ruling from the court and then subsequent appeals if they occur like your case. This should not be a large and long case as long as the question is kept simple. In our case no facts in dispute and no need for discovery and all the other pretrial things.
If this “simple” approach would help your case we should email directly or talk about how we might do this. I am in another county so is there some way to combine multiple counties? With multiple individuals willing to participate the cost and risk is reduced. I am seeking 5 members here to join me. A big ask since our dues are still quite low. Your HOA is 25 times larger and pay far greater dues. That gives you more incentive and possible support to pursue a legal challenge. You do have proxy issues to consider as our bylaws specifically forbids the use of proxy since it is obviated by the mail in requirement.
Thanks
I send the following to Roger Goodman, Larry Springer, and Manka Dhingra::
Using the WUCIOA’s pre-existing HOA rules, my HOA’s board just got approval for an assessement to engage a Mgmt Co (doubling our dues) with 10% households objecting. In normal times 10% would be a majority, blocking the assessment. I objected also, but as noted below the bar to object has been placed impossibly high by the WUCIOA..
The WUCIOA is a radical change to HOA rules and the ability of those who care enough to be involved in the decision process, to affect the decisions of the HOA. It will centralize power in the hands of HOA boards, in an undemocratic manner. It’s exactly akin to impeding the vote of citizens, in the interest of improving the ability to pass initiatives that affect everyone, or elect an unpopular candidate for president. Imagine if initiative rules changed, to require that 50% of the voting population (not just registered voters, or even those who care enough to register) must disapprove an initiative, or it passes. That is the rule WUCIOA has created. It is exceedingly rare I bet, that 50% of any HOA ever vote. This changes fundamentally the standing relationship of HOA residents to put their trust in the subset that care enough to participate, and is an undemocratic disenfranchisement of those who would object to proposals.
I agree with you completely. We had almost 40% of our HUGE community reject the budget, but it still passed. Now we are still trying to vote the board out and worrying about the validity of the voting system. Too much money at stake here to not think those doing everything to stay in control have a stake in it.
I think the only solution for the time being is to get active in your association (as I am doing in mine, running for a board seat and joining committees), since those who make the proposals will likely get them passed… and then it’s over. So we need to be the people holding the reins. In our community we have a large greenbelt that in the early 2000s was proposed to be bulldozed to put in a community pool. I helped stop that by standing on the road in with a sign clarifying why it was a really bad idea (even though I really like pools, I love our greenbelt and the many trails even more). I can see such proposals coming back now that people who want such things may realize they now could have the power to make it happen. It was clear from our recent assessment meeting that there are others who feel the same way I do, and networking with them is another example of what we have to do now.