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.
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