What's Your Association Name?

Most folks refer to Harker Lepore as a law firm. That's very true. But it's also an idea factory, a think tank. As an example, our colleague Madi Beckley recently created a chart to determine your community association name.

What is your community association name? Use this helpful guide to discover what your owners association name is. Following the chart from left to right, locate the association term that matches your birth month and your first initial. The order of your name is dependent on whether your birth month is listed before or after the nature terms. Finally, using the date you were born, determine whether you are a homeowner or condo association. As an example, Kevin was born on May 24th. Accordingly, his name would be Hidden Glen Condominium Association. Alternatively, Bruce's birthday is April 30th. His name is Lake Court Condominium Association. Follow along to find out your name!

Open Meetings In Oregon HOAs & Condos

Oregon homeowners associations and condominium unit owners associations are subject to open meetings laws. The laws are found in ORS 94.640 for planned communities, and ORS 100.420 for condominiums. However, each of those statutes was amended by the legislature in 2021 by the adoption of Senate Bill 329. The rules for Oregon planned communities and condominiums are essentially identical. But, directors frequently have questions about the scope of open meetings laws and the potential liability for violating them.

The basic rule is that all meetings of the Board of Directors are open to attendance by owners of lots or units, with some stated exceptions. This blog post will first look closely at the basic rule, and then discuss the exceptions. Finally, there will be some discussion of the consequences for violating the laws.

The first thing to note about the open meetings rule is that it applies to board meetings. It does not apply to committee meetings. So, even if an association’s governing documents create a formal Architectural Committee, or if there are other committees formed by the Board, the meetings of those committees may be conducted in private.

A second important point is that the rule requires that owners be allowed to attend. It does not require that owners be allowed to participate. This had been the common interpretation of ORS 94.640 and ORS 100.420 even prior to adoption of SB 329. But, SB 329 made this clear by inserting into each statute the statement that “[a]n owner does not have any right to participate in a meeting except as may be provided by the governing documents or by the board.” Many associations have owner-input sessions, or owner forums, as part of their regular Board meetings. These sessions are usually considered best practice, but they are not required by law (which is in contrast to several other states that require owner input sessions by statute). Therefore, if the Board determines it is advisable to have an owner input session, such owner input is subject to any reasonable rules that the Board decides to impose.

The open meetings rule applies to “all meetings of the Board of Directors.” The statutes clarify that “‘meeting’ means a convening of a quorum of members of the Board of Directors at which association business is discussed.” Directors frequently ask whether the open meetings rules apply if no decisions are going to be made or no votes are to be taken. The answer is yes. Any time a quorum of directors gets together and discusses association business, regardless of whether a vote is taken, that is a meeting which must be noticed to the members and open for observation.

Another common question is whether the open meetings rule applies to committee meetings if the committee is made up of directors. Often, governing documents authorize a Board to carry out the functions of an Architectural Committee. So, for example, perhaps there is a Board of three directors, and all three directors also serve on the Architectural Committee. If those three individuals meet solely for the purpose of carrying out Architectural Committee matters, may that be done in private? The answer is no. Even though the meeting is ostensibly a committee meeting, it is also a board meeting for purposes of the open meetings rules.

The statutes make this point clear by including the following provision: “The meeting and notice requirements in this section may not be circumvented by chance or social meetings or by any other means.” Again, the definition of meeting is “a convening of a quorum of members of the Board of Directors at which association business is discussed.” Architectural Committee business is association business. Just because the directors are wearing two hats—Director hats and Architectural Committee hats—it does not permit a quorum of directors to convene and discuss association business in private. In short, although directors may in some cases wear two hats, they cannot take off their director hat. For purposes of the open meetings rules,

directors are always directors, regardless of whether they may simultaneously be serving in some other function.

However, there are some exceptions written into the statute. The first exception to note is that a convening of a quorum of directors for the purpose of participating in litigation, mediation, or arbitration proceedings is not a board meeting. It would be onerous, and frankly untenable, to give owners a right to observe these types of activities.

The second exception is for executive sessions. The Board may close a meeting and meet in executive session for a few specific purposes. Those purposes are:

(A) Consult with legal counsel;

(B) Consider the following:

(i) Personnel matters, including salary negotiations and employee discipline; (ii) Negotiation of contracts with third parties; or

(iii) Collection of unpaid assessments.

It is important to note that the Board may not simply have an executive session without noticing the owners. The Board may “close the meeting” to move into executive session. “[T]he board may not meet in executive session unless voted for by the board in an open meeting and the presiding officer of the board states the general nature of the action to be considered, as precisely as possible, when and under what circumstances the deliberations can be disclosed to owners. The statement, motion or decision to meet in executive session must be included in the minutes of the meeting.”

A common question is whether hearings for violations of covenants or rules may be conducted in executive session. The answer, unfortunately, is no. Although violations hearings are often awkward and involve information specific to one lot or unit owner, the statute simply does not create an exception for these types of hearings. If such hearings include a quorum of directors, then they are meetings of the Board, and they must be open.

Finally, what are the consequences of violating the open meetings rules? ORS 94.640 and ORS 100.420, as amended by SB 329, do not contain any specific penalty for violating the open meetings rules. However, the wording of the statutes provides a clue. Each statute states that “all meetings of the Board of Directors are open to [owners].” It does not say that the Board must hold open meetings. The distinction is, if a meeting is not noticed or open, then it is arguably not a legal meeting. Therefore, any decisions made or votes taken at a private meeting are void and subject to challenge in a court of law.

Additionally, under ORS 94.780 and ORS 100.470, owners have a right to bring an action in court to enforce compliance with the relevant statute, and if that owner prevails, they will have their reasonable attorney fees paid for by the association. While this is unlikely to matter in the case of one or two inadvertent private meetings, if a Board has a regular practice of circumventing the open meetings rules, an owner would likely be able to obtain an injunction— a court order—requiring the Board to comply with the law.

The consequences of violating the open meetings laws may not be severe, but they do matter. Open meetings are the law, and they are best practice as well. Boards should take care to understand the open meetings rules and abide by them.

Receiverships in HOAs and Condos

Volunteering to serve on the Board of a Community Association can, unfortunately, often feel like a thankless job. In many cases, conflict among the Directors, or between owners and the Board, can make service to the community an extremely stressful experience. Several of our clients have reported that they are finding it difficult to recruit new volunteers willing to serve, and they wonder what will happen to their Association if no members are willing to volunteer. Typically, the only alternative to a volunteer Board of Directors is a court-appointed receiver.

Of course, if there are no members willing to serve on the Board, the Association must nonetheless continue to exist. If there is common property, that property requires maintenance. Covenants must, or at least should, continue to be enforced. Dues must be assessed and collected, vendors must be paid, etc. However, if there are no Directors to manage the affairs of the Association, it is very likely that any managing agent would terminate their contract. Managing agents do not make decisions on behalf of the Association, and most managers would be unwilling to take on the role of managing the Association without guidance from a duly authorized Board of Directors.

In the event that no members are willing to serve on the Board, the only other option would be to ask that a court appoint a receiver to manage the affairs of the Association. This does not happen automatically. At least one owner must petition the court to make the appointment. In Washington, under RCW 7.60.025, the court must be persuaded that a receiver is necessary. In Oregon, under ORS 100.418 for condominiums or ORS 94.642 for planned communities, if there are not enough volunteers to fill a quorum of Directorships, an owner may petition for a receivership.

Court-appointed receivers are generally very undesirable for many reasons. First, in order to request that a court appoint a receiver, a legal action must be filed, which costs money. Second, once a receiver is appointed, the Association will have to pay reasonable administrative expenses. That is, the salary of the receiver, court costs, attorney fees, and all other expenses of the receivership are added to the common expenses . Therefore, all owners’ assessments for common expenses will increase. The cost for a receiver is substantial. Although a receiver does not have to be a lawyer, typically courts appoint lawyers to receiverships. A receiver will bill the Association hourly for his or her time spent administering the affairs of the Association, and this time will undoubtedly amount to thousands of dollars monthly.

The additional costs are not the only negative aspect of receiverships. Being managed by a receiver means that a non-resident, non-member will be making decisions. These decisions include enforcement for rules violations, adoption of additional rules, regulation of the common areas, and all other matters that the Board of Directors is generally responsible for. Receiverships are an extremely undemocratic remedy, and invariably receiverships are less desirable than governance by an elected board of volunteers.

Lastly, in Washington, receivers are indefinite. Once appointed, a receivership will continue until the court terminates the appointment. This means that if owners wish to have the receiver removed and a democratically elected Board reinstated, those owners will have to bring a second lawsuit, and cover those expenses themselves. In Oregon, a receiver serves until a sufficient number of vacancies on the Board are filled to constitute a quorum. But, if the receiver refuses to relinquish control, a lawsuit may be required.

Receiverships should be considered a last resort. Owners should be willing to serve on the Board for some period of time simply to avoid receivership. If Directors are feeling that the burden of serving on the Board is too much, then there are many ways that the workload can be reduced without having to resort to receivership. Harker Lepore consults with Boards to find effective ways to lighten the burden on the volunteers who are willing to serve.

Tree Resources

Here are some resources for tree identification and local tree ordinances:

City of Portland

Beaverton

Clackamas County

Tree identification iphone app - Picture This

Oregon State University - Common PNW Trees

Northwest Trees, Identifying and Understanding by Stephen Arno

Architectural Guidelines in Oregon & Washington HOAs

Many community associations are governed by architectural design guidelines. Often, those guidelines are enforced by an architectural review committee (sometimes called architectural control committees or architectural design committees). The guidelines allow owners to know what types of changes require approval, acceptable materials and colors, and the process to appeal a decision.

Ideally, architectural design guidelines should educate owners about the design review process. Here is an overview of what should be contained in the guidelines:

The authority in the CC&Rs or other governing documents which allow for the adoption and enforcement of design guidelines. Typically, the CC&Rs contain a broad restriction requiring approval for all construction or “improvements”. The guidelines, in turn, detail the process and criteria.

Indicate what changes require review and approval. In some associations, landscaping changes do not require review or approval, while any changes to the exterior do require approval. Most architectural guidelines require approval for all new construction (including dwellings, sheds and outbuildings), material changes in paint color, and the installation of hot tubs and swimming pools. The guidelines should state exactly what changes require the submittal of plans and architectural review.

The guidelines should articulate the criteria for approval. In most cases, architectural review committees have broad authority to approve or deny an application. Whether the design or color of a structure fits within the aesthetics of the community is an inherently subjective determination. Attempt to include as much criteria as possible. For example, all paint colors must be earthtone, fences must be cedar, roofs must be composition style, etc.

Detail the procedure that will be followed for architectural submittal and approval. Indicate the type and size of the plans that must be submitted, whether color swatches must be included, and all other information required for the committee to make an informed decision. The procedure should also state the time frame for the review and the decision. If there is an appeal right, state the time frame for the appeal and whether the appeal is decided by the committee or the board of directors.

If the CC&Rs do not dictate the number of architectural committee members, the guidelines should set forth the number of individuals. In addition, the guidelines should contain the term limits for each member, whether the members are appointed by the board or elected by the membership, and the criteria for removing a committee member.

Architectural guidelines are not usually recorded in the county records. As a result, it is important to provide the guidelines to all owners, especially new owners in the committee.

Governing Documents of a Community Association

The term 'governing documents' refers to a host of documents, some of which are recorded, some which are filed with the state, and others are merely distributed to owners. In general, governing documents include: the Declaration/CC&Rs, Bylaws, Plat, Articles of Incorporation, and Rules/Regulations/Resolutions.

Understand that there is a hierarchy to these documents. For example, the board cannot adopt a rule or regulation that conflicts with provisions in the CC&Rs.

Declaration / CC&Rs

Think of the CC&Rs as the constitution of the community. When you purchase property in a community association, you do so subject to the conditions in the CC&Rs and the other governing documents. The CC&Rs usually include: a description of the property, what you can and can't do on your lot or on common property, the authority to assess regular dues, provisions related to insurance, and who is to maintain, repair and replace property throughout the community. Like the plat, CC&Rs are also recorded with the county recorder.

Bylaws

The bylaws are the operating guidelines for the association and typically include: meeting requirements, quorum requirements, number of officers and directors, and provisions governing books and records. Usually, the bylaws are recorded in the county recorders office.

Articles of Incorporation

This document establishes the corporate structure for the community association. Typically, the association incorporates as a nonprofit corporation. Incorporation can provide protection against liability, allow the association to hold title to property, and simplify the process of securing insurance policies. Articles of Incorporation are filed with the secretary of state.

Plat

The plat map is the graphical depiction of the community. For planned community subdivisions, the plat is a birds-eye view of lot lines, easements, roads, and other property interests. Condominium plats are slightly different. Condo plats include the elevation drawings of the structures, and show the boundaries between the units, limited common elements, and general common elements. Often, plats will have notations regarding ownership of common areas, maintenance obligations, and references to the CC&Rs. Plats are recorded with the county recorders office.

Notations on plats are important, too. Examples of notations include: maintenance obligations, common area ownership, and utility company easements. These notations are just as significant and important as provisions in your CC&Rs.

Assessment Offsets in Oregon HOAs

It is a problem we see often in our office. An owner withholds paying HOA assessments on the grounds that the Association is somehow failing to perform its duties and obligations under the governing documents. Although their actions may seem justified, owners need to understand that these withholdings are not allowed under Oregon law, and it usually ends with the owner paying the association additional hundreds to thousands of dollars in interest and late fees, plus the Association’s collection and legal fees. A lien will also likely be placed on the owner’s property.

Oregon Revised Statutes (“ORS”) 94.704(10)(b) (Planned Communities) and ORS 100.530(2) (Condominiums) specifically prohibits an owner from offsetting an assessment when an association fails to preform its duties and obligations. Similar language is also usually in an Association’s CC&Rs or other governing document. When assessments become delinquent, ORS 94 and ORS 100 allows for an automatic lien to be placed on the owner’s property, and the lien may also include the interest, late charges, and collection and legal fees incurred by the association. Association’s may also petition the Court for a court-ordered judgment and garnishment against the owners’ wages or funds to pay that judgment, and/or to foreclosure against the owners’ property for the unpaid lien.

What can an owner do if they find themselves in this type of situation? First, read the governing documents! Governing documents usually (and should) have notice requirements and allow the owner an opportunity to be heard before levying any fines against the owner’s property. Associations are also required under ORS 94 and ORS 100 to provide at least 10 days written notice before initiating any type of judicial or administrative proceeding against an owner. If these notice and hearing requirements under the governing documents or ORS are not followed, the owner may have a defense against the association.

Governing documents should also state the amount of interest and fines the Association is allowed to collect for delinquent assessments, and the number of days an owner has to make themselves current before their account is deemed delinquent.

Now the big question… If the owner is not allowed to withhold assessments, what rights does an owner have when an association fails to perform its duties and obligations? An exact answer to that will vary depending on the situation, but in general, owners do have a right to bring a breach of contract or breach of fiduciary duty claim against an Association. Discussing these concerns with an experienced attorney that specializes in condominiums or homeowner associations is a good place to start.

Private Residential Wells in Oregon

The majority of water in Oregon belongs to the public. However, water may be "appropriated for benficial use." (ORS 537.110) Oregon law regulates the construction and useage of domestic water wells. Sellers of property with domestic water wells are required to test the well and provide the results to a buyer within 90 days. Buyers of such properties should perform due diligence to ensure that the well is permitted (if required), that the well has a Well Identification Number, and that the water supply is sufficient for the buyer's intented use. Here are some resources:

Oregon Well Water Handbook

[Oregon Well Report Search][3]

[[Oregon Accredited Well Water Testing Companies][4]

][5][3]: https://apps.wrd.state.or.us/apps/gw/well_log/Default.aspx

Oregon SB 329 (Electronic Meetings) Now Law

Today the Governer signed into law SB 329. This bill authorizes Oregon HOAs to continue to conduct electronic meetings, including special meetings of the owners and annual meetings. Read the full text of the legislation here.

Turnover Documents

The term "turnover" refers to the process used to transfer control and management of a community from the developer to the property owners. As part of the turnover process, developers in Oregon are required to provide the following documents and records to the new owners:

1. Originals or copies of all recorded governing documents (CC&Rs, Bylaws, Plat);

2. Deeds to any common property;

3. Minutes and records of the developer-controlled board of directors;

4. Rules and regulations adopted by the developer;

5. Financial statements;

6. All Association bank funds and records, as well as signature cards;

7. Inventory of all personal property owned by the Association;

8. Reserve study, maintenance plan, and reserve fund information;

9. Operating budget;

10. Building plans (as-builts, utility drawings, etc.);

11. List of all contractors who worked on any common property;

12. All insurance policies;

13. Written warranties for work or materials used on common property;

14. Roster or list of all owners with addresses and telephone numbers; and

15. Any contracts or leases in which the Association is a party.

Governing Document Review

The governing documents of an HOA or condominium association include the Declaration/CC&Rs, Bylaws, Articles of Incorporation, and the Rules & Regulations.

If your governing documents are old, drafted by the developer, or merely unintelligible, one of our lawyers will perform a thorough review of the association's Declaration/CC&Rs and Bylaws. The review lists each of the substantive provisions in your Declaration and Bylaws, as well as provisions which should be in the governing documents. Next to the provision is a recommendation or comment addressing whether the provision is out-dated, should be amended, or should be left as-is. Example:

For associations considering amending the governing documents, this is a great starting point to determine which sections need to be addressed. We charge a flat fee of $1000 for the review.

Fill out the form below to get started:

Dannine Consoli Joins Harker Lepore!

Harker Lepore takes great pleasure in announcing a new addition to our team, associate attorney Dannine Consoli! Dannine graduated from the State University of New York at Buffalo Law School with a JD and an LL.M. Having practiced since 2010, Dannine has extensive experience in foreclosure litigation and working with contracts, which will be an incredible asset to our clients. She is passionate about legal research, writing, and analysis. In addition to her foundation in courtroom litigation, Dannine also is trained in out-of-court dispute resolution. We are thrilled to welcome Dannine to our team.

New Bend Office

On May 18, 2020 Harker Lepore will move to its Central Oregon location in the heart of downtown Bend. Attorney and partner Bruce Lepore will staff and run the office full-time. Our main office will remain in Portland.

Address: 1195 NW Wall St., Ste A, Bend, OR 97703

Phone: (541) 241-6754

Email: bruce@harkerlepore.com

 

Amending Governing Documents

Amending your condominium or homeowners association governing documents is no easy chore. It can be a long and costly process, and even then, you may not receive enough votes to approve the amendments. The process of amending goes like this:

1. Identify the reasons for amendments 2. Determine any statutory requirements 3. Determine voting requirements 4. Decide on the method of voting 5. Solicit owner feedback on proposed amendments 6. Conduct the vote 7. Prepare the amendments for recording 8. Sign and notarize 9. Secure any governmental approvals 10. Record the amendments with the county recorder

Here are some things to consider before embarking on an amendment project:

Identify the Reasons for the Amendments

There are many reasons to amend governing documents. Common reasons include:

1. Legislative changes

2. Ambiguous provisions

3. Outdated provisions

4. Community demographic has changed

5. Removal of “declarant” language

6. Adding or removing restrictions

It’s critical that the reasons for each amendment are conveyed to the owners. After all, most amendments require owner approval. Making a convincing case to the ownership will result in higher voter turnout and more “yes” votes.

Find out What’s Required

Most CC&R amendments require a vote of between 65%-75% of the entire ownership. Bylaw amendments typically require a majority vote of the owners. However, sometimes state law will require different approval requirements. For example, in Oregon condominiums the approval of 75% of all owners is required for any amendment related to pet restrictions or the rental or leasing of units. (ORS 100.410(4)). In Washington, a homeowners association may amend its governing documents to remove discriminatory provisions by a majority vote of just the board of directors (RCW 64.38.028)

Method of Voting

Most associations will find it impossible to approve a governing document amendment at a physical meeting of the owners. For a CC&R amendment requiring 75% approval, the chances of that many owners attending a physical meeting in person or proxy is slim. The most common method is to conduct the vote by written ballot. Better yet, some communities may conduct the vote via online ballot. This often generates the most voter turn out. For an example of an online ballot, click here.

Finalize and Record

Once the required number of votes have been received, the amendment must be prepared for signature and recording. In some cases, approval by the state or a governmental authority must be received and reflected on the amendment. The amendment should contain references to the original documents which are subject to the amendments, and must be signed and notarized. The amendments do not become effective until recorded with the county recorders office.

To learn more, check out our document amendment timeline.

Name Change!

Over the next 30 days, “Community Association Law Group” will transition to “Harker Lepore LLC.” Same phone number. Same office address. Same great team.

Brandon Kaskawal Joins Firms as Associate Attorney

Brandon Kaskawal joined Harker Lepore in July 2019. As a former Marine, he served multiple tours in Iraq and Afghanistan. Brandon is an associate attorney and will focus on condominium and HOA law, civil litigation, and business formation.

New Paralegal: Emma Vaughn-Matthews

We are pleased to have Emma Vaughn-Matthews join the firm as a paralegal. Emma is a native of Portland, Oregon and attended Whitman College in Walla Walla, Washington.

Bruce Lepore Joins Firm as Partner

Attorney Bruce Lepore joined the firm full-time on May 1. Prior to law school, Bruce owned and operated a recruiting company in Tokyo. Shortly after selling his company, Bruce moved to Central Oregon where he managed condominium and homeowner associations. Bruce graduated in the top 5 of his law school class and will focus on community association law and real estate disputes. He will join the firm as an equity partner. We are excited to have Bruce as part of the team.

Washington Uniform Common Interest Ownership Act (UCIOA)

In February of 2018, the State of Washington enacted a version of the Uniform Common Interest Ownership Act (UCIOA), which became effective on July 1, 2018. That act was intended to replace the previously enacted Washington Condominium Act and Washington Homeowner’s Association Act.

Under UCIOA, “common interest community” is defined to include condominiums and homeowner’s associations.  It applies in full to any condos or HOAs created after July 1, 2018 (with an exemption for very small communities, defined as 12 or less units and less than $300 per year in assessments). Two subsections of the Act apply to condos and HOAs created prior to July 1, 2018.  Board members should be aware of each of these two subsections.

RCW 64.90.525: Budgets—Assessments—Special assessments

Subsection 90.525 governs the procedure for adopting annual budgets, annual assessments, and special assessments. This provision applies to all residential common interest communities (exempting smaller communities as noted above), and overrides any contrary provisions in the governing documents or previous statutes.  Because setting budgets and assessing the owners is a primary function of the Board, it behooves Board members to understand these procedures in detail.  The text of this provision is relatively straightforward, so I’ve simply included it here for reference:

(1) (a) Within thirty days after adoption of any proposed budget for the common interest community, the board must provide a copy of the budget to all the unit owners and set a date for a meeting of the unit owners to consider ratification of the budget not less than fourteen nor more than fifty days after providing the budget. Unless at that meeting the unit owners of units to which a majority 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.

(b) If the proposed budget is rejected or the required notice is not given, the periodic budget last ratified by the unit owners continues until the unit owners ratify a subsequent budget proposed by the board.

(2) The budget must include:

(a) The projected income to the association by category;

(b) The projected common expenses and those specially allocated expenses that are subject to being budgeted, both by category;

(c) The amount of the assessments per unit and the date the assessments are due;

(d) The current amount of regular assessments budgeted for contribution to the reserve account;

(e) A statement of whether the association has a reserve study that meets the requirements of RCW 64.90.550 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.

(3) The board, at any time, may propose a special assessment. The assessment is effective only if the board follows the procedures for ratification of a budget described in subsection (1) of this section and the unit owners do not reject the proposed assessment. The board may provide that the special assessment may be due and payable in installments over any period it determines and may provide a discount for early payment.

RCW 64.90.095: Election of Preexisting Common Interest Communities

Subsection 90.095 also applies to all common interest communities, and provides a procedure by which communities created before July 1, 2018 may “opt in” to UCIOA. Under this subsection, the process of opting in is considered an amendment to the governing documents, but the voting threshold is reduced from the usual threshold required for amendment.  This reduced threshold overrides any conflicting provisions in previous statutes or the governing documents themselves.

In short, the legislature adopted a mechanism that makes it relatively easy for communities to operate under UCIOA instead of the previously enacted Washington Condominium Act or Washington Homeowner’s Association Act. But, before explaining the procedure for opting in, I’ll first discuss some of the benefits of UCIOA over previous statutory schemes.

There are a number of benefits to opting in to UCIOA, particularly for pre-existing homeowner's associations.  The previously enacted Homeowners’ Association Act (RCW 64.38) is relatively sparse and, frankly, inadequate.  UCIOA, by contrast, is fairly robust and comprehensive.  To see the difference, simply compare side by side the provisions governing the powers and duties of a homeowners’ association (RCW 64.38.020 vs. RCW 64.90.405).  The new law adds a few useful powers that were previously absent, such as the power to provide for indemnification of directors and officers or the power to suspend rights and privileges of delinquent owners. The new law also places some important limits on board authority to convey common property or borrow money.  It also clarifies the circumstances under which a board has an affirmative duty to enforce covenants, and when the board may decline to do so (which is a topic for an upcoming blog post).

In addition to being generally more robust and comprehensive, UCIOA has the benefit of applying equally to HOAs and condominiums. This makes it much simpler to understand the governing law (particularly for the association’s lawyers). UCIOA also provides for the option of conducting votes of the membership in lieu of a meeting (RCW 64.90.455). This is a particularly useful provision for associations where it is difficult to get the required number of owners to attend a meeting.  In addition, UCIOA provided associations a right to enter the privately owned lots in order to maintain common property or inspect for violations of the governing documents.  

The procedure for opting in to the UCIOA is rather simple, despite the convoluted wording of RCW 64.90.095. Under subsection (3), regardless of what amendment provisions are included in an Association’s governing documents, the following procedure may be used to opt in to UCIOA:

(1) The amendment to opt in to UCIOA may be proposed to the Association in one of two ways.  Either the Board may propose the amendment or owners holding 20% of the total votes in the Association may bring a petition proposing the amendment.

(2) The Board then prepares a proposed amendment document, along with a notice of a “town hall” meeting to be called to discuss the amendment.  The notice of the town hall meeting and the proposed amendment must be delivered to all owners at least 30 days prior to the meeting. The statute does not include any quorum requirement for this meeting.

(3) Once the meeting has been held, the Board prepares a ballot and notice of a vote.  The ballot and notice must be delivered to each owner.

(4) At least 30% of the total voting power must participate in the vote, and 67% of those participating must vote to approve the amendment.  

In essence, this means that only 21% of the total voting power must actually approve the opt in amendment for it to be valid.  This is a relatively low threshold and one that can probably be obtained even in the most apathetic or disinterested communities.  Although the process for opting in to UCIOA does involve some initial effort and expense, as noted above, this new law should make things easier for common interest communities in the long run. 

Attorney Kevin Harker files lawsuit to enforce CC&RS

Read the article here in the Bend Bulletin.