The Washington State Legislature recently approved several new laws that affect existing community associations. The first new law prohibits community associations
from prohibiting, unreasonably restricting, or limiting the use of properties for
licensed family home child care or as licensed child daycare centers. An association
may require properties being used in that manner to: 1) provide direct customer
access from the outside of the buildings or through publicly accessible common
areas, 2) be licensed by the state, 3) indemnify the association against all
claims related to that use except for claims that arise in common elements that
the association is solely responsible for maintaining under the governing
documents, 4) obtain daycare insurance or provide self-insurance, and 5) provide
the association with signed waivers from the guardians of each child
being cared for that release them from legal claims related to that use. An
association may impose reasonable rules pertaining to family home child care
and licensed child daycare centers, but those rules must apply equally to all
other association members. This law took effect on May 1, 2023.
The second new law permits community
associations to require owners who lease their properties
to use a tenant screening service or obtain background information, including
criminal history, pertaining to their prospective tenants at the owners’ sole
cost and expense before executing leases and to require proof that this has
been done. However, associations may not require that tenant screening reports
or any background information pertaining to tenants be furnished to them. This law takes effect on July 23, 2023.
The third new law requires community
associations to keep and maintain the following records: 1) the current budget, detailed records of receipts
and expenditures affecting the operation and administration of the association,
and other appropriate accounting records within the last seven years, 2) minutes
of all meetings of its owners and board other than executive sessions, a record
of all actions taken by its owners or board without a meeting, and a record of
all actions taken by a committee in place of the board on behalf of the
association, 3) the names of current owners, addresses used by the association
to communicate with them, and the number of votes allocated to each property,
4) its organizational and governing documents, including all amendments, 5) all
financial statements and tax returns of the association for the past seven years,
6) a list of the names and addresses of its current board members and officers,
7) its most recent annual report delivered to the Secretary of State, if any, 8)
copies of contracts to which it is or was a party within the last seven years,
9) materials relied upon by the board or any committee to approve or deny any
requests for design or architectural approval for a period of seven years after
the decision is made, 10) materials relied upon by the board or any committee
concerning a decision to enforce the governing documents for a period of seven
years after the decision is made, 11) copies of insurance policies under which
the association is a named insured, 12) any current warranties provided to the
association, 13) copies of all notices provided to the owners or the
association in accordance with state law or the governing documents, and 14) ballots,
proxies, absentee ballots, and other records related to voting by owners for
one year after the election, action, or vote to which they relate.
Community associations’ records must generally
be made available for examination and copying by all owners, holders of
mortgages on the properties, and their respective authorized agents during
reasonable business hours or at a mutually convenient time and location and at
the offices of the association or its managing agent. However, records retained
by associations must have the following information redacted or otherwise
removed prior to disclosure: 1) personnel and medical records relating to
specific individuals, 2) contracts, leases, and other commercial transactions
to purchase or provide goods or services currently being negotiated, 3) existing
or potential litigation or mediation, arbitration, or administrative
proceedings, 4) existing or potential matters involving federal, state, or
local administrative or other formal proceedings before a governmental tribunal
for enforcement of the governing documents, 5) legal advice or communications
that are otherwise protected by the attorney-client privilege or the attorney
work product doctrine, including communications with the managing agent or
other agent of the association, 6) information the disclosure of which would
violate a court order or law, 7) records of an executive session of the board,
8) individual property files other than those of the requesting owner, 9) unlisted
telephone number or electronic address of any owner or resident, 10) security
access information provided to the association for emergency purposes, and 11) agreements
that for good cause prohibit disclosure to the owners. Prior to disclosure of
the list of owners, an association must also
redact or otherwise remove the address of any owner or resident who is known to
the association to be a participant in an address confidentiality program.
Community associations may charge a
reasonable fee for producing and providing copies of any records and for
supervising an owner's inspection of records, but an owner is entitled to
receive a free annual electronic or paper copy of the list of owners from the
association. The right to copy records includes the right to receive copies by
photocopying or other means, including through an electronic transmission, if
available, upon request by an owner. Associations are not obligated to compile
or synthesize information for an owner who requests to review or receive
records. This law takes effect on July 23,
2023.
The fourth new law imposes additional requirements
on community associations related to the
collection of past due assessments. Associations must mail a specified pre-foreclosure notice to delinquent owners
along with the first notice of delinquency for past due assessments and the
same notice again before beginning a foreclosure action against those owners’
properties. The second notice may not be mailed sooner than sixty days after the
first notice is mailed. Associations may not begin foreclosure actions against delinquent owners’ properties unless they owe a sum greater than: 1)
three months or more of assessments, not
including fines, late charges, interest, attorneys' fees, or costs incurred by
the association in connection with the collection of the delinquent owner's account,
or 2) $2,000 of assessments, not including
fines, late charges, interest, attorneys' fees, or costs incurred by the association
in connection with the collection of a delinquent owner's account.
This law takes effect on July 23,
2023.
The laws that apply to community
associations grow more numerous and complex every year. It has unfortunately become
virtually impossible for associations to comply with all of those laws without
legal guidance. Community association boards should strongly consider
consulting with an attorney who specializes in this area on a periodic basis.