Collecting Past Due Assessments
At the end of November, June and I sat down with an attorney who specializes in land and HOA issues. We were looking for advice on how we should handle members who are refusing to pay their past due HOA assessments. He advised us that the law has changed. He told us that because of COVID and the homeless crisis, the legislature revised the statutes under which our HOA is governed. These new statutes are documented in the Revised Code of Washington (RCW) Title 64, Chapter 90 WASHINGTON UNIFORM COMMON INTEREST OWNERSHIP ACT.
Registering a Lien is HARD
One change makes it virtually impossible for an HOA of our size to register a lien against delinquent members. A member must now be delinquent in excess of $2,000 before a lien can be registered. Given that our regular assessment is about $200 annually, we would not be able to act for about ten years.
This does not mean that the HOA can never recover the delinquent assessments, however. Title companies’ and lenders request a resale certificate from the HOA when a member applies for a loan or sells their property. The HOA can refuse to provide this resale certificate until all delinquent assessments are paid. This includes all the assessment amounts and all the penalties which have been assessed against the member’s property. Good news, the HOA will be paid. Bad news, it could take a while.
Getting Budgets Approved is Easier
We need to draw your attention to the section: Budgets—Assessments—Special assessments specifically:
RCWs > Title 64 > Chapter 64.90 > Section 64.90.525
This section of the law defines the rules your Board must use in order to have a regular or special assessment approved. The last sentence in paragraph (1)(a) of the section states:
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.
This section overrides Section VI – Paragraph 2 of our CC&Rs. This is the paragraph that defines VOTING.
So, if only ten members show up for the meeting, only 6 are required to approve the operating budget for it to be accepted. Only seven are required to approve a special assessment.
Your board is bound by our community CC&Rs and by the WASHINGTON UNIFORM COMMON INTEREST OWNERSHIP ACT. It is our intention to abide by the governing documents as we manage your community.