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Real Estate Law Article: Homeowners Associations Basics

What is a homeowners association?

Homeowners associations, or HOAs are governed by the Washington State Homeowners Association Act codified in RCW 64.38.

RCW 64.38.010(1) defines an HOA as “a corporation, unincorporated association, or other legal entity, each member of which is an owner of residential real property located within the association’s jurisdiction, as described in the governing documents, and by virtue of membership or ownership or ownership of property is obligated to pay real property taxes, insurance premiums, maintenance costs, or for improvement of real property other than that which is owned by the member.”

Who may join a homeowners association?

In order to join an HOA, you must own residential property over which the association has jurisdiction. RCW 64.38.010(6) and RCW 64.38.015.

How do I form a homeowners association?

The Washington State Homeowners Association Act does not specify exactly how an HOA must be formed. As indicated in the definition above, an HOA can be almost any legal entity. Typically, a non-profit corporation is formed under RCW 24.03. Thereafter, the HOA drafts a declaration of covenants and bylaws of the association and records them in the county recording office.

What are the powers of a homeowners association?

The powers of an HOA are typically outlined in the Covenants, Conditions & Restricts better known as the CCRs. The CCRs can give the HOA numerous powers, including the right to maintain common areas and the right to collect assessments, or restrictions on home ownership and living including acceptable exterior house colors, regulations on parking and guests, etc.

If the HOA does not adopt CCRs, the provisions of the Homeowners Association Act will apply. The Act lists several powers of the HOA including:

Adopt and amend bylaws, rules and regulations

Adopt and amend budgets for revenues, expenditures, and reserves, and impose and collect assessments for common expenses from owners

Hire and discharge or contract with managing agents and other employees, agents, and independent contractors

Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more owners on matters affecting the homeowners’ association, but not on behalf of owners involved in disputes that are not the responsibility of the association

Make contracts and incur liabilities

Regulate the use, maintenance, repair, replacement and modification of common areas

Cause additional improvements to be made as a part of the common areas

Acquire, hold, encumber, and convey in its own name any right, title or interseet to real or personal property

Grant easements, leases, licenses, and concessions through or over the common areas and petition for or consent to the vacation of streets and alleys

Impose and collect any payments, fees, or charges for the use, rental, or operation of the common areas

 

What should the Bylaws include?

Whereas the CCRs cover the powers of the HOA, the Bylaws cover how the HOA is actually run and structured. The Bylaws should typically include:

The number, qualifications, powers and duties, terms of office, and manner of electing and removing the board of directors and officers and filling vacancies

Election by the board of directors of the officers of the association as the bylaws specify

Which, if any, of its powers the board of directors or officers may delegate to other persons or to a managing agent

Which of its officers may prepare, execute, certify, and record amendments to the governing documents on behalf of the association

The method of amending the bylaws.

Legal Disclaimer: The information on this page does not constitute legal advice and should not be relied upon as each situation is fact specific and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. The information on this page is solely for the purpose of legal education and is intended to only provide general information about the matters stated therein. The information on this page should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area of the matters stated therein. No attorney-client relationship is formed without an actual agreement confirmed in writing. I am licensed only in Washington and Oregon.