HomeMy WebLinkAboutExhibit 56-6 - Att E - 5258-S2.SLCERTIFICATION OF ENROLLMENT
ENGROSSED SECOND SUBSTITUTE SENATE BILL 5258
Chapter 337, Laws of 2023
68th Legislature
2023 Regular Session
CONDOMINIUMS AND TOWNHOUSES—CONSTRUCTION AND SALE—VARIOUS PROVISIONS
EFFECTIVE DATE: July 23, 2023—Except for section 9, which takes
effect January 1, 2024.
Passed by the Senate April 21, 2023
Yeas 49 Nays 0
DENNY HECK
President of the Senate
Passed by the House April 20, 2023
Yeas 98 Nays 0
LAURIE JINKINS
Speaker of the House of
Representatives
CERTIFICATE
I, Sarah Bannister, Secretary of
the Senate of the State of
Washington, do hereby certify that
the attached is ENGROSSED SECOND
SUBSTITUTE SENATE BILL 5258 as
passed by the Senate and the House
of Representatives on the dates
hereon set forth.
SARAH BANNISTER
Secretary
Approved May 8, 2023 1:16 PM FILED
May 10, 2023
JAY INSLEE
Governor of the State of Washington
Secretary of State
State of Washington
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EXHIBIT 56-6
AN ACT Relating to increasing the supply and affordability of 1
condominium units and townhouses as an option for homeownership; 2
amending RCW 64.35.105, 64.50.010, 64.50.020, 64.50.040, 64.90.250, 3
64.90.605, 64.90.645, 82.02.060, 58.17.060, and 64.55.160; reenacting 4
and amending RCW 64.38.010; adding a new section to chapter 82.45 5
RCW; creating a new section; and providing an effective date.6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
Sec. 1. RCW 64.35.105 and 2004 c 201 s 101 are each amended to 8
read as follows:9
The definitions in this section apply throughout this chapter 10
unless the context clearly requires otherwise.11
(1) "Affiliate" has the meaning in RCW ((64.34.020)) 64.90.010.12
(2) "Association" has the meaning in RCW ((64.34.020)) 64.90.010.13
(3) "Building envelope" means the assemblies, components, and 14
materials of a building that are intended to separate and protect the 15
interior space of the building from the adverse effects of exterior 16
climatic conditions.17
(4) "Common element" has the meaning in RCW ((64.34.020)) 18
64.90.010.19
(5) "Condominium" has the meaning in RCW ((64.34.020)) 64.90.010.20
(6) "Construction professional" has the meaning in RCW 64.50.010.21
ENGROSSED SECOND SUBSTITUTE SENATE BILL 5258
AS AMENDED BY THE HOUSE
Passed Legislature - 2023 Regular Session
State of Washington 68th Legislature 2023 Regular Session
By Senate Ways & Means (originally sponsored by Senators Shewmake,
Gildon, Billig, Liias, Lovick, Nguyen, Nobles, Randall, and Wellman)
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(7) "Conversion condominium" has the meaning in RCW ((64.34.020)) 1
64.90.010.2
(8) "Declarant" has the meaning in RCW ((64.34.020)) 64.90.010.3
(9) "Declarant control" has the meaning in RCW ((64.34.020)) 4
64.90.010.5
(10) "Defect" means any aspect of a condominium unit or common 6
element which constitutes a breach of the implied warranties set 7
forth in RCW 64.34.445 or 64.90.670.8
(11) "Limited common element" has the meaning in RCW 9
((64.34.020)) 64.90.010.10
(12) "Material" means substantive, not simply formal; significant 11
to a reasonable person; not trivial or insignificant. When used with 12
respect to a particular construction defect, "material" does not 13
require that the construction defect render the unit or common 14
element unfit for its intended purpose or uninhabitable.15
(13) "Mediation" means a collaborative process in which two or 16
more parties meet and attempt, with the assistance of a mediator, to 17
resolve issues in dispute between them.18
(14) "Mediation session" means a meeting between two or more 19
parties to a dispute during which they are engaged in mediation.20
(15) "Mediator" means a neutral and impartial facilitator with no 21
decision-making power who assists parties in negotiating a mutually 22
acceptable settlement of issues in dispute between them.23
(16) "Person" has the meaning in RCW ((64.34.020)) 64.90.010.24
(17) "Public offering statement" has the meaning in ((RCW 25
64.34.410)) chapter 64.90 RCW.26
(18) "Qualified insurer" means an entity that holds a certificate 27
of authority under RCW 48.05.030, or an eligible insurer under 28
chapter 48.15 RCW.29
(19) "Qualified warranty" means an insurance policy issued by a 30
qualified insurer that complies with the requirements of this 31
chapter. A qualified warranty includes coverage for repair of 32
physical damage caused by the defects covered by the qualified 33
warranty, except to the extent of any exclusions and limitations 34
under this chapter.35
(20) "Resale certificate" means the statement to be delivered by 36
the association under ((RCW 64.34.425)) chapter 64.90 RCW.37
(21) "Transition date" means the date on which the declarant is 38
required to deliver to the association the property of the 39
association under RCW ((64.34.312)) 64.90.420.40
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(22) "Unit" has the meaning in RCW ((64.34.020)) 64.90.010.1
(23) "Unit owner" has the meaning in RCW ((64.34.020)) 64.90.010.2
Sec. 2. RCW 64.38.010 and 2021 c 227 s 9 are each reenacted and 3
amended to read as follows:4
For purposes of this chapter:5
(1) "Assessment" means all sums chargeable to an owner by an 6
association in accordance with RCW 64.38.020.7
(2) "Baseline funding plan" means establishing a reserve funding 8
goal of maintaining a reserve account balance above ((zero dollars)) 9
$0 throughout the ((thirty-year)) 30-year study period described 10
under RCW 64.38.065.11
(3) "Board of directors" or "board" means the body, regardless of 12
name, with primary authority to manage the affairs of the 13
association.14
(4) "Common areas" means property owned, or otherwise maintained, 15
repaired or administered by the association.16
(5) "Common expense" means the costs incurred by the association 17
to exercise any of the powers provided for in this chapter.18
(6) "Contribution rate" means, in a reserve study as described in 19
RCW 64.38.065, the amount contributed to the reserve account so that 20
the association will have cash reserves to pay major maintenance, 21
repair, or replacement costs without the need of a special 22
assessment.23
(7) "Effective age" means the difference between the estimated 24
useful life and remaining useful life.25
(8) "Electronic transmission" or "electronically transmitted" 26
means any electronic communication not directly involving the 27
physical transfer of a writing in a tangible medium, but that may be 28
retained, retrieved, and reviewed by the sender and the recipient of 29
the communication, and that may be directly reproduced in a tangible 30
medium by a sender and recipient.31
(9) "Full funding plan" means setting a reserve funding goal of 32
achieving one hundred percent fully funded reserves by the end of the 33
((thirty-year)) 30-year study period described under RCW 64.38.065, 34
in which the reserve account balance equals the sum of the 35
deteriorated portion of all reserve components.36
(10) "Fully funded balance" means the current value of the 37
deteriorated portion, not the total replacement value, of all the 38
reserve components. The fully funded balance for each reserve 39
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component is calculated by multiplying the current replacement cost 1
of the reserve component by its effective age, then dividing the 2
result by the reserve component's useful life. The sum total of all 3
reserve components' fully funded balances is the association's fully 4
funded balance.5
(11) "Governing documents" means the articles of incorporation, 6
bylaws, plat, declaration of covenants, conditions, and restrictions, 7
rules and regulations of the association, or other written instrument 8
by which the association has the authority to exercise any of the 9
powers provided for in this chapter or to manage, maintain, or 10
otherwise affect the property under its jurisdiction.11
(12) "Homeowners' association" or "association" means a 12
corporation, unincorporated association, or other legal entity, each 13
member of which is an owner of residential real property located 14
within the association's jurisdiction, as described in the governing 15
documents, and by virtue of membership or ownership of property is 16
obligated to pay real property taxes, insurance premiums, maintenance 17
costs, or for improvement of real property other than that which is 18
owned by the member. "Homeowners' association" does not mean an 19
association created under chapter 64.32 ((or)), 64.34, or 64.90 RCW.20
(13) "Lot" means a physical portion of the real property located 21
within an association's jurisdiction designated for separate 22
ownership.23
(14) "Owner" means the owner of a lot, but does not include a 24
person who has an interest in a lot solely as security for an 25
obligation. "Owner" also means the vendee, not the vendor, of a lot 26
under a real estate contract.27
(15) "Remaining useful life" means the estimated time, in years, 28
before a reserve component will require major maintenance, repair, or 29
replacement to perform its intended function.30
(16) "Replacement cost" means the current cost of replacing, 31
repairing, or restoring a reserve component to its original 32
functional condition.33
(17) "Reserve component" means a common element whose cost of 34
maintenance, repair, or replacement is infrequent, significant, and 35
impractical to include in an annual budget.36
(18) "Reserve study professional" means an independent person who 37
is suitably qualified by knowledge, skill, experience, training, or 38
education to prepare a reserve study in accordance with RCW 64.38.065 39
and 64.38.070.40
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(19) "Residential real property" means any real property, the use 1
of which is limited by law, covenant or otherwise to primarily 2
residential or recreational purposes.3
(20) "Significant assets" means that the current replacement 4
value of the major reserve components is ((seventy-five)) 75 percent 5
or more of the gross budget of the association, excluding the 6
association's reserve account funds.7
(21) "Tangible medium" means a writing, copy of a writing, 8
facsimile, or a physical reproduction, each on paper or on other 9
tangible material.10
(22) "Useful life" means the estimated time, between years, that 11
major maintenance, repair, or replacement is estimated to occur.12
Sec. 3. RCW 64.50.010 and 2020 c 18 s 23 are each amended to 13
read as follows:14
Unless the context clearly requires otherwise, the definitions in 15
this section apply throughout this chapter.16
(1) "Action" means any civil lawsuit or action in contract or 17
tort for damages or indemnity brought against a construction 18
professional to assert a claim, whether by complaint, counterclaim, 19
or cross-claim, for damage or the loss of use of real or personal 20
property caused by a defect in the construction of a residence or in 21
the substantial remodel of a residence. "Action" does not include any 22
civil action in tort alleging personal injury or wrongful death to a 23
person or persons resulting from a construction defect.24
(2) "Association" means an association, master association, or 25
subassociation as defined and provided for in RCW 64.34.020(4), 26
64.34.276, 64.34.278, ((and)) 64.38.010(((11))) (12), and 27
64.90.010(4).28
(3) "Claimant" means a homeowner or association who asserts a 29
claim against a construction professional concerning a defect in the 30
construction of a residence or in the substantial remodel of a 31
residence.32
(4) "Construction defect professional" means an architect, 33
builder, builder vendor, contractor, subcontractor, engineer, 34
inspector, or such other person with verifiable training and 35
experience related to the defects or conditions identified in any 36
report included with a notice of claim as set forth in RCW 37
64.50.020(1)(a).38
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(5) "Construction professional" means an architect, builder, 1
builder vendor, contractor, subcontractor, engineer, or inspector, 2
including, but not limited to, a dealer as defined in RCW 64.34.020 3
and a declarant as defined in RCW 64.34.020, performing or furnishing 4
the design, supervision, inspection, construction, or observation of 5
the construction of any improvement to real property, whether 6
operating as a sole proprietor, partnership, corporation, or other 7
business entity.8
(((5))) (6) "Homeowner" means: (a) Any person, company, firm, 9
partnership, corporation, or association who contracts with a 10
construction professional for the construction, sale, or construction 11
and sale of a residence; and (b) an "association" as defined in this 12
section. "Homeowner" includes, but is not limited to, a subsequent 13
purchaser of a residence from any homeowner.14
(((6))) (7) "Residence" means a single-family house, duplex, 15
triplex, quadraplex, or a unit in a multiunit residential structure 16
in which title to each individual unit is transferred to the owner 17
under a condominium or cooperative system, and shall include common 18
elements as defined in RCW 64.34.020 and common areas as defined in 19
RCW 64.38.010(4).20
(((7))) (8) "Serve" or "service" means personal service or 21
delivery by certified mail to the last known address of the 22
addressee.23
(((8))) (9) "Substantial remodel" means a remodel of a residence, 24
for which the total cost exceeds one-half of the assessed value of 25
the residence for property tax purposes at the time the contract for 26
the remodel work was made.27
Sec. 4. RCW 64.50.020 and 2002 c 323 s 3 are each amended to 28
read as follows:29
(1) In every construction defect action brought against a 30
construction professional, the claimant shall, no later than ((forty-31
five)) 45 days before filing an action, serve written notice of claim 32
on the construction professional.33
(a) The notice of claim shall state that the claimant asserts a 34
construction defect claim against the construction professional and 35
shall describe the claim in reasonable detail sufficient to determine 36
the general nature of the defect.37
(b) If the claimant is a condominium association created after 38
the effective date of this section, the written notice of claim shall 39
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include a written report from a construction defect professional. In 1
addition to describing the claim in reasonable detail sufficient to 2
determine the general nature of the defect the written report shall 3
state the construction defect professional's qualifications, the 4
manner and type of inspection upon which the report was based, and 5
the general location of the defect.6
(2) Within ((twenty-one)) 14 days after service of the notice of 7
claim, the construction professional may serve a written response 8
demanding a meeting with the claimant and its expert, including the 9
construction defect professional who authored the report required in 10
subsection (1)(b) of this section to confer regarding the report and 11
its contents. The meeting shall take place within 14 days of service 12
of the construction professional's demand or at such later date as 13
mutually agreed to by the parties.14
(3) Within 14 days after the meeting referenced in subsection (2) 15
of this section or, in the absence of a demand for such meeting, 16
within 21 days after service of the notice of claim, whichever is 17
later, the construction professional shall serve a written response 18
on the claimant by registered mail or personal service. The written 19
response shall:20
(a) Propose to inspect the residence that is the subject of the 21
claim and to complete the inspection within a specified time frame. 22
The proposal shall include the statement that the construction 23
professional shall, based on the inspection, offer to remedy the 24
defect, compromise by payment, or dispute the claim;25
(b) Offer to compromise and settle the claim by monetary payment 26
without inspection. A construction professional's offer under this 27
subsection (((2))) (3)(b) to compromise and settle a homeowner's 28
claim may include, but is not limited to, an express offer to 29
purchase the claimant's residence that is the subject of the claim, 30
and to pay the claimant's reasonable relocation costs; or31
(c) State that the construction professional disputes the claim 32
and will neither remedy the construction defect nor compromise and 33
settle the claim.34
(((3))) (4)(a) If the construction professional disputes the 35
claim or does not respond to the claimant's notice of claim within 36
the time stated in subsection (((2))) (3) of this section, the 37
claimant may bring an action against the construction professional 38
for the claim described in the notice of claim without further 39
notice.40
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(b) If the claimant rejects the inspection proposal or the 1
settlement offer made by the construction professional pursuant to 2
subsection (((2))) (3) of this section, the claimant shall serve 3
written notice of the claimant's rejection on the construction 4
professional. After service of the rejection, the claimant may bring 5
an action against the construction professional for the construction 6
defect claim described in the notice of claim. If the construction 7
professional has not received from the claimant, within ((thirty)) 30 8
days after the claimant's receipt of the construction professional's 9
response, either an acceptance or rejection of the inspection 10
proposal or settlement offer, then at anytime thereafter the 11
construction professional may terminate the proposal or offer by 12
serving written notice to the claimant, and the claimant may 13
thereafter bring an action against the construction professional for 14
the construction defect claim described in the notice of claim.15
(((4))) (5)(a) If the claimant elects to allow the construction 16
professional to inspect in accordance with the construction 17
professional's proposal pursuant to subsection (((2))) (3)(a) of this 18
section, the claimant shall provide the construction professional and 19
its contractors or other agents reasonable access to the claimant's 20
residence during normal working hours to inspect the premises and the 21
claimed defect.22
(b) Within ((fourteen)) 14 days following completion of the 23
inspection, the construction professional shall serve on the 24
claimant:25
(i) A written offer to remedy the construction defect at no cost 26
to the claimant, including a report of the scope of the inspection, 27
the findings and results of the inspection, a description of the 28
additional construction necessary to remedy the defect described in 29
the claim, and a timetable for the completion of such construction;30
(ii) A written offer to compromise and settle the claim by 31
monetary payment pursuant to subsection (((2))) (3)(b) of this 32
section; or33
(iii) A written statement that the construction professional will 34
not proceed further to remedy the defect.35
(c) If the construction professional does not proceed further to 36
remedy the construction defect within the agreed timetable, or if the 37
construction professional fails to comply with the provisions of (b) 38
of this subsection, the claimant may bring an action against the 39
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construction professional for the claim described in the notice of 1
claim without further notice.2
(d) If the claimant rejects the offer made by the construction 3
professional pursuant to (b)(i) or (ii) of this subsection to either 4
remedy the construction defect or to compromise and settle the claim 5
by monetary payment, the claimant shall serve written notice of the 6
claimant's rejection on the construction professional. After service 7
of the rejection notice, the claimant may bring an action against the 8
construction professional for the construction defect claim described 9
in the notice of claim. If the construction professional has not 10
received from the claimant, within ((thirty)) 30 days after the 11
claimant's receipt of the construction professional's response, 12
either an acceptance or rejection of the offer made pursuant to 13
(b)(i) or (ii) of this subsection, then at anytime thereafter the 14
construction professional may terminate the offer by serving written 15
notice to the claimant.16
(((5))) (6)(a) Any claimant accepting the offer of a construction 17
professional to remedy the construction defect pursuant to subsection 18
(((4))) (5)(b)(i) of this section shall do so by serving the 19
construction professional with a written notice of acceptance within 20
a reasonable time period after receipt of the offer, and no later 21
than ((thirty)) 30 days after receipt of the offer. The claimant 22
shall provide the construction professional and its contractors or 23
other agents reasonable access to the claimant's residence during 24
normal working hours to perform and complete the construction by the 25
timetable stated in the offer.26
(b) The claimant and construction professional may, by written 27
mutual agreement, alter the extent of construction or the timetable 28
for completion of construction stated in the offer, including, but 29
not limited to, repair of additional defects.30
(((6))) (7) Any action commenced by a claimant prior to 31
compliance with the requirements of this section shall be subject to 32
dismissal without prejudice, and may not be recommenced until the 33
claimant has complied with the requirements of this section.34
(((7))) (8) Nothing in this section may be construed to prevent a 35
claimant from commencing an action on the construction defect claim 36
described in the notice of claim if the construction professional 37
fails to perform the construction agreed upon, fails to remedy the 38
defect, or fails to perform by the timetable agreed upon pursuant to 39
subsection (((2))) (3)(a) or (((5))) (6) of this section.40
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(((8))) (9) Prior to commencing any action alleging a 1
construction defect, or after the dismissal of any action without 2
prejudice pursuant to subsection (((6))) (7) of this section, the 3
claimant may amend the notice of claim to include construction 4
defects discovered after the service of the original notice of claim, 5
and must otherwise comply with the requirements of this section for 6
the additional claims. The service of an amended notice of claim 7
shall relate back to the original notice of claim for purposes of 8
tolling statutes of limitations and repose. Claims for defects 9
discovered after the commencement or recommencement of an action may 10
be added to such action only after providing notice to the 11
construction professional of the defect and allowing for response 12
under subsection (((2))) (3) of this section.13
(10) If the claimant is an association, and notwithstanding any 14
contrary provisions in the association's governing documents, the 15
association's board of director's ability to incur expenses to 16
prepare and serve a notice of claim and any related reports and 17
otherwise comply with the requirements of this chapter shall not be 18
restricted.19
Sec. 5. RCW 64.50.040 and 2002 c 323 s 5 are each amended to 20
read as follows:21
(1)(a) In the event the board of directors, pursuant to RCW 22
64.34.304(1)(d) or 64.38.020(4), institutes an action asserting 23
defects in the construction of two or more residences, common 24
elements, or common areas, this section shall apply. For purposes of 25
this section, "action" has the same meaning as set forth in RCW 26
64.50.010.27
(b) The board of directors shall substantially comply with the 28
provisions of this section.29
(2)(a) Prior to the service of the summons and complaint on any 30
defendant with respect to an action governed by this section, the 31
board of directors shall mail or deliver written notice of the 32
commencement or anticipated commencement of such action to each 33
homeowner at the last known address described in the association's 34
records.35
(b) The notice required by (a) of this subsection shall state a 36
general description of the following:37
(i) The nature of the action and the relief sought; ((and))38
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(ii) To the extent applicable, the existence of the report 1
required in RCW 64.50.020(1)(a), which shall be made available to 2
each homeowner upon request;3
(iii) A summary of the construction professional's response 4
pursuant to RCW 64.50.020(3), if any; and5
(iv) The expenses and fees that the board of directors 6
anticipates will be incurred in prosecuting the action.7
(3) Nothing in this section may be construed to:8
(a) Require the disclosure in the notice or the disclosure to a 9
unit owner of attorney-client communications or other privileged 10
communications;11
(b) Permit the notice to serve as a basis for any person to 12
assert the waiver of any applicable privilege or right of 13
confidentiality resulting from, or to claim immunity in connection 14
with, the disclosure of information in the notice; or15
(c) Limit or impair the authority of the board of directors to 16
contract for legal services, or limit or impair the ability to 17
enforce such a contract for legal services.18
Sec. 6. RCW 64.90.250 and 2018 c 277 s 211 are each amended to 19
read as follows:20
(1) To exercise any development right reserved under RCW 21
64.90.225(1)(((h))) (g), the declarant must prepare, execute, and 22
record any amendments to the declaration and map in accordance with 23
the requirements of RCW 64.90.245 and 64.90.285(3). The declarant is 24
the unit owner of any units created. The amendment to the declaration 25
must assign an identifying number to each new unit created and, 26
except in the case of subdivision, combination, or conversion of 27
units described in subsection (3) of this section, reallocate the 28
allocated interests among all units. The amendment must describe any 29
common elements and any limited common elements created and, in the 30
case of limited common elements, designate the unit to which each is 31
allocated to the extent required under RCW 64.90.240. The amendments 32
are effective upon recording.33
(2) Development rights may be reserved within any real estate 34
added to the common interest community if the amendment to the 35
declaration adding that real estate includes all matters required 36
under RCW 64.90.225 and 64.90.230 and the amendment to the map 37
includes all matters required under RCW 64.90.245. This subsection 38
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does not extend the time limit on the exercise of development rights 1
imposed by the declaration pursuant to RCW 64.90.225(1)(h).2
(3) When a declarant exercises a development right to subdivide, 3
combine, or convert a unit previously created into additional units 4
or common elements, or both:5
(a) If the declarant converts the unit entirely into common 6
elements, the amendment to the declaration must reallocate all the 7
allocated interests of that unit among the other units as if that 8
unit had been taken by condemnation under RCW 64.90.030; or9
(b) If the declarant subdivides the unit into two or more units, 10
whether or not any part of the unit is converted into common 11
elements, the amendment to the declaration must reallocate all the 12
allocated interests of the unit among the units created by the 13
subdivision in any reasonable manner prescribed by the declarant.14
(4) If the declaration provides, pursuant to RCW 64.90.225(1)(h), 15
that all or a portion of the real estate is subject to a right of 16
withdrawal:17
(a) If all the real estate is subject to withdrawal, and the 18
declaration or map or amendment to the declaration or map does not 19
describe separate portions of real estate subject to that right, none 20
of the real estate may be withdrawn if a unit in that real estate has 21
been conveyed to a purchaser; or22
(b) If any portion of the real estate is subject to withdrawal as 23
described in the declaration or map or amendment to the declaration 24
or map, none of that portion of the real estate may be withdrawn if a 25
unit in that portion has been conveyed to a purchaser.26
(5) If the declarant combines two or more units into a lesser 27
number of units, whether or not any part of a unit is converted into 28
common elements or common elements are converted units, the amendment 29
to the declaration must reallocate all of the allocated interests of 30
the units being combined into the unit or units created by the 31
combination in any reasonable manner prescribed by the declarant.32
(6) A unit conveyed to a purchaser may not be withdrawn pursuant 33
to subsection (4)(a) or (b) of this section without the consent of 34
the unit owner of that unit and the holder of a security interest in 35
the unit.36
Sec. 7. RCW 64.90.605 and 2018 c 277 s 402 are each amended to 37
read as follows:38
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(1) Except as provided otherwise in subsection (2) of this 1
section, a declarant required to deliver a public offering statement 2
pursuant to subsection (3) of this section must prepare a public 3
offering statement conforming to the requirements of RCW 64.90.610, 4
64.90.615, and 64.90.620.5
(2) A declarant may transfer responsibility for preparation of 6
all or a part of the public offering statement to a successor 7
declarant or to a dealer who intends to offer units in the 8
((condominium)) common interest community.9
(3)(a) Any declarant or dealer who offers to convey a unit for 10
the person's own account to a purchaser must provide the purchaser of 11
the unit with a copy of a public offering statement and all material 12
amendments to the public offering statement before conveyance of that 13
unit.14
(b) Any agent, attorney, or other person assisting the declarant 15
or dealer in preparing the public offering statement may rely upon 16
information provided by the declarant or dealer without independent 17
investigation. The agent, attorney, or other person is not liable for 18
any material misrepresentation in or omissions of material facts from 19
the public offering statement unless the person had actual knowledge 20
of the misrepresentation or omission at the time the public offering 21
statement was prepared.22
(c) The declarant or dealer is liable for any misrepresentation 23
contained in the public offering statement or for any omission of 24
material fact from the public offering statement if the declarant or 25
dealer had actual knowledge of the misrepresentation or omission or, 26
in the exercise of reasonable care, should have known of the 27
misrepresentation or omission.28
(4) If a unit is part of a common interest community and is part 29
of any other real estate regime in connection with the sale of which 30
the delivery of a public offering statement is required under the 31
laws of this state, a single public offering statement conforming to 32
the requirements of RCW 64.90.610, 64.90.615, and 64.90.620 as those 33
requirements relate to each regime in which the unit is located, and 34
to any other requirements imposed under the laws of this state, may 35
be prepared and delivered in lieu of providing two or more public 36
offering statements.37
(5) A declarant is not required to prepare and deliver a public 38
offering statement in connection with the sale of any unit owned by 39
the declarant, or to obtain for or provide to the purchaser a report 40
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or statement required under RCW 64.90.610(1)(oo), 64.90.620(1), or 1
64.90.655, upon the later of:2
(a) The termination or expiration of all special declarant 3
rights;4
(b) The expiration of all periods within which claims or actions 5
for a breach of warranty arising from defects involving the common 6
elements under RCW 64.90.680 must be filed or commenced, 7
respectively, by the association against the declarant; or8
(c) The time when the declarant ceases to meet the definition of 9
a dealer under RCW 64.90.010.10
(6) After the last to occur of any of the events described in 11
subsection (5) of this section, a declarant must deliver to the 12
purchaser of a unit owned by the declarant a resale certificate under 13
RCW 64.90.640(2) together with:14
(a) The identification of any real property not in the common 15
interest community that unit owners have a right to use and a 16
description of the terms of such use;17
(b) A brief description or a copy of any express construction 18
warranties to be provided to the purchaser;19
(c) A statement of any litigation brought by an owners' 20
association, unit owner, or governmental entity in which the 21
declarant or any affiliate of the declarant has been a defendant 22
arising out of the construction, sale, or administration of any 23
common interest community within the state of Washington within the 24
previous five years, together with the results of the litigation, if 25
known;26
(d) Whether timesharing is permitted or prohibited, and, if 27
permitted, a statement that the purchaser of a time share unit is 28
entitled to receive the disclosure document required under chapter 29
64.36 RCW; and30
(e) Any other information and cross-references that the declarant 31
believes will be helpful in describing the common interest community 32
to the purchaser, all of which may be included or not included at the 33
option of the declarant.34
(7) A declarant is not liable to a purchaser for the failure or 35
delay of the association to provide the resale certificate in a 36
timely manner, but the purchase contract is voidable by the purchaser 37
of a unit sold by the declarant until the resale certificate required 38
under RCW 64.90.640(2) and the information required under subsection 39
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(6) of this section have been provided and for five days thereafter 1
or until conveyance, whichever occurs first.2
Sec. 8. RCW 64.90.645 and 2021 c 260 s 2 are each amended to 3
read as follows:4
(1) Except as provided in subsection (2) of this section, any 5
earnest money deposit, as defined in RCW 64.04.005, made in 6
connection with the right to purchase a unit from a person required 7
to deliver a public offering statement pursuant to RCW 64.90.605(3) 8
must be placed in escrow and held in this state in an escrow or trust 9
account designated solely for that purpose by a licensed title 10
insurance company or agent, a licensed attorney, a real estate broker 11
or independent bonded escrow company, or an institution whose 12
accounts are insured by a governmental agency or instrumentality 13
until: (a) Delivered to the declarant at closing, (b) delivered to 14
the declarant because of the purchaser's default under a contract to 15
purchase the unit, (c) refunded to the purchaser, or (d) delivered to 16
a court in connection with the filing of an interpleader action.17
(2)(a) If a purchase agreement for the sale of a unit provides 18
that deposit funds may be used for construction costs and the 19
declarant obtains and maintains a surety bond as required by this 20
section, the declarant may withdraw escrow funds when construction of 21
improvements has begun. The funds may be used only for actual 22
building and construction costs of the project in which the unit is 23
located.24
(b) The bond must be issued by a surety insurer licensed in this 25
state in favor of the purchaser in an amount adequate to cover the 26
amount of the deposit to be withdrawn. The declarant may not withdraw 27
more than the face amount of the bond. The bond must be payable to 28
the purchaser if the purchaser obtains a final judgment against the 29
declarant requiring the declarant to return the deposit pursuant to 30
the purchase agreement. The bond may be either in the form of an 31
individual bond for each deposit accepted by the declarant or in the 32
form of a blanket bond assuring the return of all deposits received 33
by the declarant.34
(c) The party holding escrow funds who releases all or any 35
portion of the funds to the declarant has no obligation to monitor 36
the progress of construction or the expenditure of the funds by the 37
declarant and is not liable to any purchaser for the release of funds 38
pursuant to this section.39
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(3) ((A)) The amount of deposit ((under)) funds that may be used 1
pursuant to subsection (2) of this section may not exceed five 2
percent of the purchase price.3
NEW SECTION. Sec. 9. A new section is added to chapter 82.45 4
RCW to read as follows:5
(1) The down payment assistance account is created in the custody 6
of the state treasurer. Receipts from the real estate excise tax on 7
sales of condominiums or townhouses to persons using a down payment 8
assistance program offered by the Washington state housing finance 9
commission must be deposited in the account, as provided in 10
subsection (2) of this section. Expenditures from the account may be 11
used only for payment toward a person's down payment assistance loan 12
that was used to purchase a condominium or townhouse for which the 13
tax was collected. Only the Washington state housing finance 14
commission or the commission's designee may authorize expenditures 15
from the account. The account is subject to allotment procedures 16
under chapter 43.88 RCW, but an appropriation is not required for 17
expenditures.18
(2)(a) Beginning June 15, 2024, and each June 15th thereafter, 19
the department must notify the economic and revenue forecast council 20
of the total amount received under RCW 82.45.060 from sales of 21
condominiums or townhouses to persons using a down payment assistance 22
program offered by the Washington state housing finance commission 23
during the prior calendar year.24
(b) Beginning in fiscal year 2025, and each fiscal year 25
thereafter, the legislature must appropriate from the general fund to 26
this account the lesser of (i) the amount received under RCW 27
82.45.060 on sales of condominiums or townhouses to persons using a 28
down payment assistance program offered by the Washington state 29
housing finance commission during the prior calendar year, as 30
determined under (a) of this subsection, or (ii) $250,000 per fiscal 31
year.32
(c) On or before March 1, 2024, and each March 1st thereafter, 33
the Washington state housing finance commission must provide the 34
department with the following information for each sale of a 35
condominium or townhouse to a person using a down payment assistance 36
program offered by the Washington state housing finance commission 37
that occurred during the prior calendar year:38
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(i) The real estate excise tax affidavit number associated with 1
the sale;2
(ii) The date of sale;3
(iii) The parcel number of the property sold;4
(iv) The street address of the property sold;5
(v) The county in which the property sold is located;6
(vi) The full legal name of the seller, or sellers, as shown on 7
the real estate excise tax affidavit;8
(vii) The full legal name of the buyer, or buyers, as shown on 9
the real estate excise tax affidavit; and10
(viii) Any additional information the department may require to 11
verify the property sold is a condominium or townhouse sold to 12
persons using a down payment assistance program offered by the 13
Washington state housing finance commission.14
(d) For the purposes of this subsection, "townhouse" means 15
dwelling units constructed in a row of two or more attached units 16
where each dwelling unit shares at least one common wall with an 17
adjacent unit and is accessed by a separate outdoor entrance.18
(3) This section expires January 1, 2034.19
Sec. 10. RCW 82.02.060 and 2021 c 72 s 1 are each amended to 20
read as follows:21
The local ordinance by which impact fees are imposed:22
(1) Shall include a schedule of impact fees which shall be 23
adopted for each type of development activity that is subject to 24
impact fees, specifying the amount of the impact fee to be imposed 25
for each type of system improvement. The schedule shall be based upon 26
a formula or other method of calculating such impact fees. The 27
schedule shall reflect the proportionate impact of new housing units, 28
including multifamily and condominium units, based on the square 29
footage, number of bedrooms, or trips generated, in the housing unit 30
in order to produce a proportionally lower impact fee for smaller 31
housing units. In determining proportionate share, the formula or 32
other method of calculating impact fees shall incorporate, among 33
other things, the following:34
(a) The cost of public facilities necessitated by new 35
development;36
(b) An adjustment to the cost of the public facilities for past 37
or future payments made or reasonably anticipated to be made by new 38
development to pay for particular system improvements in the form of 39
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user fees, debt service payments, taxes, or other payments earmarked 1
for or proratable to the particular system improvement;2
(c) The availability of other means of funding public facility 3
improvements;4
(d) The cost of existing public facilities improvements; and5
(e) The methods by which public facilities improvements were 6
financed;7
(2) May provide an exemption for low-income housing, and other 8
development activities with broad public purposes, including 9
development of an early learning facility, from these impact fees, 10
provided that the impact fees for such development activity shall be 11
paid from public funds other than impact fee accounts;12
(3)(a) May not impose an impact fee on development activities of 13
an early learning facility greater than that imposed on commercial 14
retail or commercial office development activities that generate a 15
similar number, volume, type, and duration of vehicle trips;16
(b) When a facility or development has more than one use, the 17
limitations in this subsection (3) or the exemption applicable to an 18
early learning facility in subsections (2) and (4) of this section 19
only apply to that portion that is developed as an early learning 20
facility. The impact fee assessed on an early learning facility in 21
such a development or facility may not exceed the least of the impact 22
fees assessed on comparable businesses in the facility or 23
development;24
(4) May provide an exemption from impact fees for low-income 25
housing or for early learning facilities. Local governments that 26
grant exemptions for low-income housing or for early learning 27
facilities under this subsection (4) may either: Grant a partial 28
exemption of not more than eighty percent of impact fees, in which 29
case there is no explicit requirement to pay the exempted portion of 30
the fee from public funds other than impact fee accounts; or provide 31
a full waiver, in which case the remaining percentage of the exempted 32
fee must be paid from public funds other than impact fee accounts, 33
except as provided in (b) of this subsection. These exemptions are 34
subject to the following requirements:35
(a) An exemption for low-income housing granted under subsection 36
(2) of this section or this subsection (4) must be conditioned upon 37
requiring the developer to record a covenant that, except as provided 38
otherwise by this subsection, prohibits using the property for any 39
purpose other than for low-income housing. At a minimum, the covenant 40
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must address price restrictions and household income limits for the 1
low-income housing, and that if the property is converted to a use 2
other than for low-income housing, the property owner must pay the 3
applicable impact fees in effect at the time of conversion;4
(b) An exemption for early learning facilities granted under 5
subsection (2) of this section or this subsection (4) may be a full 6
waiver without an explicit requirement to pay the exempted portion of 7
the fee from public funds other than impact fee accounts if the local 8
government requires the developer to record a covenant that requires 9
that at least 25 percent of the children and families using the early 10
learning facility qualify for state subsidized child care, including 11
early childhood education and assistance under chapter 43.216 RCW, 12
and that provides that if the property is converted to a use other 13
than for an early learning facility, the property owner must pay the 14
applicable impact fees in effect at the time of conversion, and that 15
also provides that if at no point during a calendar year does the 16
early learning facility achieve the required percentage of children 17
and families qualified for state subsidized child care using the 18
early learning facility, the property owner must pay 20 percent of 19
the impact fee that would have been imposed on the development had 20
there not been an exemption within 90 days of the local government 21
notifying the property owner of the breach, and any balance remaining 22
thereafter shall be a lien on the property; and23
(c) Covenants required by (a) and (b) of this subsection must be 24
recorded with the applicable county auditor or recording officer. A 25
local government granting an exemption under subsection (2) of this 26
section or this subsection (4) for low-income housing or an early 27
learning facility may not collect revenue lost through granting an 28
exemption by increasing impact fees unrelated to the exemption. A 29
school district who receives school impact fees must approve any 30
exemption under subsection (2) of this section or this subsection 31
(4);32
(5) Shall provide a credit for the value of any dedication of 33
land for, improvement to, or new construction of any system 34
improvements provided by the developer, to facilities that are 35
identified in the capital facilities plan and that are required by 36
the county, city, or town as a condition of approving the development 37
activity;38
(6) Shall allow the county, city, or town imposing the impact 39
fees to adjust the standard impact fee at the time the fee is imposed 40
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to consider unusual circumstances in specific cases to ensure that 1
impact fees are imposed fairly;2
(7) Shall include a provision for calculating the amount of the 3
fee to be imposed on a particular development that permits 4
consideration of studies and data submitted by the developer to 5
adjust the amount of the fee;6
(8) Shall establish one or more reasonable service areas within 7
which it shall calculate and impose impact fees for various land use 8
categories per unit of development; ((and))9
(9) May provide for the imposition of an impact fee for system 10
improvement costs previously incurred by a county, city, or town to 11
the extent that new growth and development will be served by the 12
previously constructed improvements provided such fee shall not be 13
imposed to make up for any system improvement deficiencies; and14
(10) Must adopt or amend by ordinance, and incorporate into their 15
development regulations, zoning regulations, and other official 16
controls the requirements of this section to take effect six months 17
after the jurisdiction's next periodic comprehensive plan update 18
required under RCW 36.70A.130.19
For purposes of this section, "low-income housing" means housing 20
with a monthly housing expense, that is no greater than thirty 21
percent of eighty percent of the median family income adjusted for 22
family size, for the county where the project is located, as reported 23
by the United States department of housing and urban development.24
For the purposes of this section, "early learning facility" has 25
the same meaning as in RCW 43.31.565.26
Sec. 11. RCW 58.17.060 and 1990 1st ex.s. c 17 s 51 are each 27
amended to read as follows:28
(1) The legislative body of a city, town, or county shall adopt 29
regulations and procedures, and appoint administrative personnel for 30
the summary approval of short plats and short subdivisions or 31
alteration or vacation thereof. When an alteration or vacation 32
involves a public dedication, the alteration or vacation shall be 33
processed as provided in RCW 58.17.212 or 58.17.215. Such regulations 34
shall be adopted by ordinance and shall provide that a short plat and 35
short subdivision may be approved only if written findings that are 36
appropriate, as provided in RCW 58.17.110, are made by the 37
administrative personnel, and may contain wholly different 38
requirements than those governing the approval of preliminary and 39
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final plats of subdivisions and may require surveys and 1
monumentations and shall require filing of a short plat, or 2
alteration or vacation thereof, for record in the office of the 3
county auditor: PROVIDED, That such regulations must contain a 4
requirement that land in short subdivisions may not be further 5
divided in any manner within a period of five years without the 6
filing of a final plat, except that when the short plat contains 7
fewer than four parcels, nothing in this section shall prevent the 8
owner who filed the short plat from filing an alteration within the 9
five-year period to create up to a total of four lots within the 10
original short plat boundaries: PROVIDED FURTHER, That such 11
regulations are not required to contain a penalty clause as provided 12
in RCW 36.32.120 and may provide for wholly injunctive relief.13
An ordinance requiring a survey shall require that the survey be 14
completed and filed with the application for approval of the short 15
subdivision.16
(2) Cities, towns, and counties shall include in their short plat 17
regulations and procedures pursuant to subsection (1) of this section 18
provisions for considering sidewalks and other planning features that 19
assure safe walking conditions for students who walk to and from 20
school.21
(3) All cities, towns, and counties shall include in their short 22
plat regulations procedures for unit lot subdivisions allowing 23
division of a parent lot into separately owned unit lots. Portions of 24
the parent lot not subdivided for individual unit lots shall be owned 25
in common by the owners of the individual unit lots, or by a 26
homeowners' association comprised of the owners of the individual 27
unit lots.28
Sec. 12. RCW 64.55.160 and 2005 c 456 s 17 are each amended to 29
read as follows:30
(1) On or before the ((sixtieth)) 60th day following completion 31
of the mediation pursuant to RCW 64.55.120(4) and following filing 32
and service of the complaint, the declarant, association, or party 33
unit owner may serve on an adverse party an offer to allow judgment 34
to be entered. The offer of judgment shall specify the amount of 35
damages, not including costs or fees, that the declarant, 36
association, or party unit owner is offering to pay or receive. A 37
declarant's offer shall also include its commitment to pay costs and 38
fees that may be awarded as provided in this section. The declarant, 39
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association, or party unit owner may make more than one offer of 1
judgment so long as each offer is timely made. Each subsequent offer 2
supersedes and replaces the previous offer. Any offer not accepted 3
within ((twenty-one)) 21 days of the service of that offer is deemed 4
rejected and withdrawn and evidence thereof is not admissible and may 5
not be provided to the court or arbitrator except in a proceeding to 6
determine costs and fees or as part of the motion identified in 7
subsection (2) of this section.8
(2) A declarant's offer must include a demonstration of ability 9
to pay damages, costs, and fees, including reasonable attorneys' 10
fees, within thirty days of acceptance of the offer of judgment. The 11
demonstration of ability to pay shall include a sworn statement 12
signed by the declarant, the attorney representing the declarant, 13
and, if any insurance proceeds will be used to fund any portion of 14
the offer, an authorized representative of the insurance company. If 15
the association or party unit owner disputes the adequacy of the 16
declarant's demonstration of ability to pay, the association or party 17
unit owner may file a motion with the court requesting a ruling on 18
the adequacy of the declarant's demonstration of ability to pay. Upon 19
filing of such motion, the deadline for a response to the offer shall 20
be tolled from the date the motion is filed until the court has 21
ruled.22
(3) An association or party unit owner that accepts the 23
declarant's offer of judgment shall be deemed the prevailing party 24
and, in addition to recovery of the amount of the offer, shall be 25
entitled to a costs and fees award, including reasonable attorneys' 26
fees, in an amount to be determined by the court in accordance with 27
applicable law.28
(4) If the amount of the final nonappealable or nonappealed 29
judgment, exclusive of costs or fees, is not more favorable to the 30
offeree than the offer of judgment, then the offeror is deemed the 31
prevailing party for purposes of this section only and is entitled to 32
an award of costs and fees, including reasonable attorneys' fees, 33
incurred after the date the last offer of judgment was rejected and 34
through the date of entry of a final nonappealable or nonappealed 35
judgment, in an amount to be determined by the court in accordance 36
with applicable law. The nonprevailing party shall not be entitled to 37
receive any award of costs and fees.38
(5) If the final nonappealable or nonappealed judgment on 39
damages, not including costs or fees, is more favorable to the 40
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offeree than the last offer of judgment, then the court shall 1
determine which party is the prevailing party and shall determine the 2
amount of the costs and fees award, including reasonable attorneys' 3
fees, in accordance with applicable law.4
(6) Notwithstanding any other provision in this section, with 5
respect to claims brought by an association or unit owner, the 6
liability for declarant's costs and fees, including reasonable 7
attorneys' fees, shall:8
(a) With respect to claims brought by an association, not exceed 9
five percent of the assessed value of the condominium as a whole, 10
which is determined by the aggregate tax-assessed value of all units 11
at the time of the award; and12
(b) With respect to claims brought by a party unit owner, not 13
exceed five percent of the assessed value of the unit at the time of 14
the award.15
NEW SECTION. Sec. 13. Sections 3 through 5 of this act apply 16
only to construction defect claims commenced after the effective date 17
of this section.18
NEW SECTION. Sec. 14. Section 9 of this act takes effect 19
January 1, 2024.20
Passed by the Senate April 21, 2023.
Passed by the House April 20, 2023.
Approved by the Governor May 8, 2023.
Filed in Office of Secretary of State May 10, 2023.
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