Condominium Practices and Procedures

Dale Galvin is an expert on condominium related laws in the State of Washington.

He teaches courses related to condominium laws and has helped thousands of realtors and consumers with their condominium related questions.

Dale has often asked me to join in on these courses and talk about construction related issues (he is the expert on the law, I am not). In the process of working with Dale, I have seen the quality and clarity of the information he presents. And I am very pleased that he has agreed to present some of this information on The Sound Home Resource Center.

Don't let the more technical or "legalistic" aspect of this material stop you from learning this information. If you own a condominium, are buying or selling a condominium, you need this information. - George

Index

  • Dale J.Galvin, attorney at law Galvin Realty Law Group 21907-64th Ave W., Suite 360 Mountlake Terrace, WA. 98043 phone: 425-248-2163 fax: 425-248-2168 email: dgalvin@grlg.net website: www.grlg.net

    This material is reprinted with the permission of the author.

  • ANSWER: Limited Common Elements are those common elements that are allocated by the Declaration or by operation of the WCA to the exclusive use of one or more but fewer than all of the units. The limited common elements which are most critical to the Buyer are the parking space(s) and storage locker(s). The Selling Agent should review the preliminary title report to assure that the parking space(s) and storage locker(s) are listed as a Limited Common Element allocated to the Buyer and insured as such in the Buyer’s Policy of Title Insurance.

    PRACTICE TIP: If availability of a parking space and/or storage unit is a critical issue to the Buyer’s Purchase, a contingency should be inserted providing that the sale is contingent upon the allocation to Buyer of the given parking space and/or storage locker as the case may be.

  • ANSWER: HB 1848 enacts design document and inspection requirements for certain condominiums that had permits or Public Offering Statements issues after August 1, 2005.

    A. Applicability.
    1. Permits issued after August 1, 2005.
    2. Multiunit Residential Buildings that
    • Have adjacent heated living spaces
    • More than two units (Duplexes are excluded, even if they are condominiums)
    • Not on a platted lot
    3. Developer can opt out by recording a covenant not to sell the building as a condominium for five years.
    4. Condominium converters where the cost of repair is more than 5% of the assessed value of the building. Note: If the repair cost is less than 5%, the person applying for the permit shall submit to the building department a letter certifying that the costs of repair are less than 5% the assessed value of the building. In this situation, no building design documents are needed.
    B. Design Documentation.
    1. Waterproofing Details. “Building Enclosure Design Documents” must show how to “waterproof, weatherproof, and otherwise protect the building or its components from water or moisture intrusion, including details of flashing, intersections at roof, eaves or parapets, means of drainage, water resistive membrane, and details around openings.”
    2. Drawings Stamped and Certified. The Building Enclosure Design Documents must be stamped by the architect or engineer with the following certification: “The undersigned has provided building enclosure design documents that in my professional judgment are appropriate to satisfy the requirements of [the act].”
    3. Submission to Building Department. The Building Department merely checks that the documents are stamped and the certification is present before issuing the permit. It does not determine the adequacy of the drawings. Any changes must also be stamped, certified, and delivered to the Building Department.
    C. Course of Construction Inspection.
    1. Inspection and Testing. A qualified and independent building inspector must inspect the construction to ensure that the construction complies with the Building Enclosure Design documents.
    2. Window Testing Required. Water penetration resistance testing of windows and window installations (spraying water on window installations to see if it leaks) is required.
    3. Certificate of Compliance. The building inspector must issue a certificate stating that the building has been constructed in “substantial compliance” with the Building Enclosure Design Documents before the Building Department will issue a certificate of occupancy. The Act does not address the situation where a certificate of occupancy is not needed.

    PRACTICE TIP: Even if a certificate of occupancy is not required, to be safe, insist on getting a certificate of substantial compliance from the building inspector.

  • ANSWER: Reserve studies are visual site inspections conducted by reserve study professionals for the purpose of providing the condo association with an estimate of the nature and cost of any anticipated major maintenance, repair and replacement of limited common elements and common elements.

    1. Reserve Studies.
    Reserve studies estimate the funds necessary to conduct all property maintenance and repair of all common and limited common elements that will likely require such maintenance and repair within 30 years from the date of the study. Associations are required to prepare (and update annually) reserve studies. If more than 3 years have passed since the last reserve study was prepared, unit owners to which at least 20% of the votes are allocated may demand that a study be obtained by the end of that budget year.

    The reserve study is considered supplemental to the condominium’s operating and maintenance budget. A budget ratified by unit owners under the Condominium Act will not be invalidated because of an association’s failure to comply with these rules.

    The reserve study must include a reserve component list detailing each component’s useful life, remaining useful life and current repair and replacement cost for each component. The reserve study must also include the following disclosure:

    “This reserve study should be reviewed carefully. It may not include all common and limited common element components that will require major maintenance, repair or replacement in future years, and may not include regular contributions to a reserve account for the cost of such maintenance, repair or replacement. The failure to include a component in a reserve study, or to provide contributions to a reserve account for a component, may, under some circumstances, require you to pay on demand as a special assessment your share of common expenses for the cost of major maintenance, repair, or replacement of a reserve component.”

    2. Exception.
    Associations do NOT have to prepare and update a reserve study IF doing so would impose an unreasonable hardship, which exists where the cost of preparing a reserve study would exceed 10% of the association’s annual budget.

    3. Public Offering Statements and Resale Certificates.
    RCW 64.34.410 and RCW 64.34.425 now require that public offering statements and resale certificates include the following disclosure IF the association does NOT have a reserve study:

    “This association does not have a current reserve study. The lack of a current reserve study poses certain risks to you, the purchaser. Insufficient reserves may, under some circumstances, require you to pay on demand as a special assessment your share of common expenses for the cost of major maintenance, repair or replacement of a common element.”

    4. Reserve Accounts.
    Associations are encouraged to establish separate reserve accounts, the balance of which should be equal to the amount of cash reserves needed to pay major maintenance, repair or replacement costs (as determined by the reserve study) without the need of special assessment.
    An association may withdraw funds from its reserve account to pay for unforeseen or unbudgeted costs. Notice of the withdrawal must be given to each unit owner. A repayment schedule must be adopted within 24 months (unless repayment within 24 months would impose an unreasonable burden on the unit owners).