Information about WUCIOA (#3)

 

This is the third in a series of communications intended to inform LRAA members about the results of the Board’s review of the new Washington Uniform Common Interest Ownership Act (WUCIOA).

In WUCIOA Information #1 we described two provisions of WUCIOA that must be complied with by all homeowner associations, regardless of when an association was created. You may recall that those two provisions addressed how an HOA, created before July 1, 2018, could agree to be bound by the new law and how all Association budgets must be handled. If you haven’t yet read the first document in this series, please take a look.

WHAT’S NEW
As a result of legislation passed in 2019, the law (RCW 64.90.80 now requires all homeowner associations to comply with two additional provisions of WUCIOA, regardless of when they were created. Those two additional provisions are RCW 64.90.405, paragraphs 1(b) and 1(c), which deal with budgets and assessments, and RCW 64.90.545, which requires that a reserve study be done and that it be undated regularly.
 
Section 405 1(b) requires LRAA to adopt budgets in accordance with the requirements of section 525, which we discussed in Information #1. Section 405 1(c) requires LRAA to impose assessments for common expenses and specially allocated expenses in accordance with the requirements of section 525. Because LRAA has always paid for common elements and services through assessments and a budget, which we discuss and vote on at each annual membership meeting, these two additional mandatory provisions have little impact on day-to-day LRAA operations. Section 545 requires LRAA to have a reserve study done by a reserve study professional. That study must be updated annually. It is intended to identify those physical components of LRAA:

i)  which the association is obligated to maintain, repair, or replace, 


ii)  which has an estimated useful life of less than thirty years, and 


iii) for which the cost of maintenance, repair, or replacement is infrequent, significant, and impractical to include in an annual budget.

Although we don’t yet know what the reserve study professional might identify as a “reserve component,” it seems clear that we’re talking about things like our wells, water pumps, backup generator, water meters, water meter radios, trash shed and firehall roof. The study is intended to identify those kinds of things and help us determine what it will cost to replace them at the ends of their useful lives so we can begin to build a reserve to pay for those replacements. Building those funds over time not only avoids the need for large special assessments, it helps protect our property values and ensures that Lost River remains a healthy, well-run and vibrant community.

As a result of requiring a reserve study, the law requires the establishment of a reserve account; imposes requirements on how withdrawals from the reserve account are to be handled and reported to members; describes the required contents of a reserve study; allows the membership to demand a study be done or updated under certain conditions; and provides a limitation of liability in the event a study is not done or is not updated.

That’s a lot to take in, but at the end of the day these additional, required provisions ensure that LRAA is operated in a fiscally responsible manner and that funds collected as a result of the reserve study are properly handled, accounted for and reported to the membership.

Please feel free to use the website Contact Us form [ select Governance (WUCIOA) from the topic dropdown ] to make comments or ask questions. We will do our best to respond.

Interested in reading the various provisions discuss above? Visit the following links:
RCW 64.90.80
https://app.leg.wa.gov/RCW/default.aspx?cite=64.90.080

RCW 64.90.405, paragraphs 1(b) and 1(c)
https://app.leg.wa.gov/RCW/default.aspx?cite=64.90.405

RCW 64.90.545
https://app.leg.wa.gov/RCW/default.aspx?cite=64.90.545

Interested in looking at the law itself?
Visit https://app.leg.wa.gov/RCW/default.aspx?cite=64.90 to read the full text.

RELATED LINKS

 
Lost River Airport Association