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HomeMy WebLinkAboutThe Meadows septic systemLinda, I would like to outline the virtues of making the septic sewer systems part of the common elements of a condominium being created at The Meadows. [There will be two condominiums. The system will be a common element of one of the larger of the condominiums with the owners of units in the other condominium (those with existing manufactured housing) having easement rights and obligations to use the system.] * As common elements of a condominium, the system will then be owned by the owners as tenants in common. * The declarant of the condominium is, initially, the owner of all of the units in the condominium and, therefore, still the owner of the system. * The owners of the units in the condominium are the real parties in interest in the system, the ones that care most about it and who should bear the ongoing maintenance obligations of the system. * The costs of maintenance, monitoring, repair of the system should be part of the common expenses of the association of the condominium. The declarant will pay for its share of those expenses, based on the number of units it owns, with the burden being shifted to new owners as units are sold. * The declarant’s obligation to fund the replacement reserve account can be treated separately from ongoing maintenance. As suggested below, it can be funded primarily out of sales of units, with the declarant being obligated to make at least the minimum installment payments do. Which will assure funding even it no units are sold. The sooner the declarant is able to sell units, the sooner the security account will be funded. * I believe lenders will want to see the septic sewer systems part of the common elements and not separately owned by the declarant. * In any event, management of the system will be with the PUD. Whether ownership is technically in the name of the declarant/developer or in owners of units in the condominium (which will include the declarant until all of the units are sold) should not make a difference, either substantively or legally, to the county or PUD. I feel quite strongly that this is the best way to proceed for this property and would be glad to participate in a phone call, or even, meet with those involved in the matter on the county’s side to discuss this further, if need me. Thanks. Gary Gary N. Ackerman ATTORNEY FOSTER PEPPER PLLC 1111 Third Avenue, Suite 3000 Seattle, WA 98101 gary.ackerman@foster.com <mailto:gary.ackerman@foster.com> Tel: 206-447-8956 Fax: 206-749-1901 foster.com <http://www.foster.com/> From: Gary Ackerman Sent: Wednesday, June 12, 2019 12:55 PM To: Linda Atkins (LAtkins@co.jefferson.wa.us) Cc: Austin Watkins; Bill Graham; Emma Bolin; Stuart Whitford Subject: septic system Linda, In reviewing and revising agreements for the septic sewer system, the binding site plan and condominium documents, I see at least one challenging issue, which is ownership of the sewer system. My assumption has been that the sewer system, like the roads, would be common elements of Meadows No. 1, with the owners of units in Meadows No. 2 having rights to use through an easement and maintenance agreement. JCPH is requiring that the developer retain ownership of the system, which would, presumably, include the drainfields, until the security account for replacement is fully funded. The assessor’s office and planning department want the future drainfield, Lots 28-32, and the mini-storage parcel to be units in one of the condominiums. That is no problem. We can deal with Lots 28-32 (and the mini-storage parcel) by making them condominium units and reserving a development right to convert Lots 28-32 to common elements later when they are needed for the later drainfield. The developer would retain ownership of those parcels and the later phase septic system until it is installed, accepted and replacement security account funded. No problem, although agreements for approval and installation of this system is for a later day. The complication is with the existing drainfield. For one thing, it is not marked off as a separate parcel on the binding site plan (it merges with the road) so it cannot be made a “unit” in the condominium (which is necessary for separate ownership) unless it has boundaries. Under the circumstances, it makes sense to allow this drainfield to be a common element, meaning that the owners of the units in the condominium will own undivided interests in the system once the condominium documents are recorded and units conveyed. I understand one reason for keeping ownership in the developer is to make sure the security account for replacement of the system is fully funded before it is turned over to the association. I would like propose an alternative security arrangement, one which in fact provides more security for funding the account. That would be to grant the county a security interest in the property and provide for payments to the security account from sales of units at the rate of $3,000 per unit. This would fully fund the approximately $40,000 estimated cost of replacement through the sale of 14 units. The developer would also have to make the installment payments required in the FAP but the proceeds from sale would be applied against that obligation. This approach solves a lot of problems. It makes the Phase 1 OSS a common element for the owners of units and assures the county that the security account will be funded. Payment of ongoing monitoring and maintenance fees for the Phase 1 system should be paid by the owners through their association, which will include the developer until units are sold. I understand that the existing system has been in place for 20 years, serving eight residences for much of this time, and is designed to serve an additional 13 residences. Please let me know what you think and if you or anyone else at the county would like to talk about this. We are at a critical juncture in this project and hope this provides a way forward that works for everyone. Gary Gary N. Ackerman ATTORNEY FOSTER PEPPER PLLC 1111 Third Avenue, Suite 3000 Seattle, WA 98101 gary.ackerman@foster.com <mailto:gary.ackerman@foster.com> Tel: 206-447-8956 Fax: 206-749-1901 foster.com <http://www.foster.com/> ion1.0