Washington  |  Credit and Debt Law

Legal Question

Asked on: 3/13/07, 4:52 pm

Financial Privacy

A condo building needs essential repairs that came as a surprise to all members. Can a home owners association ask it's members ''how much they can afford and when they can have the lump sum? It seems to me that this info could be used to force some out and therefore be discriminatory. Wouldn't the best way to approach this issue be for the building to get an estimate, apply for a loan, and distribute the monthly payments to all members? How they pay for thier share is their own business. I would love some advice and any reference links to continue my research.

1 Answer

Answered on: 3/13/07, 5:09 pm by Matthew King

Re: Financial Privacy

You questions raises three main issues. First, should the Condo Association (CA) have planned for the event? If it is a true emergency, the the CA's insurance policy should cover it. If no insurance exists, the CA may be liable under the Washington Condominium Act.

Second, the CA has the power to levy assessments against units, regardless of the owner's ability to pay. If you look at the issue this way, the CA is not being discriminatory, but trying to ensure it doesn't assess members out of the condo. However, I'm not sure the CA can impose differential assessments depending on individual unit owner's ability to pay. As the condos are owned in part by all members, the assessment should be proportional to the owner's interests.

Third, if the CA was newly built (i.e. less than 4 years old), its likely that they can sue the developer for construction defects under the Washington State Condominium Act. It is located at Chapter 64.34 RCW (available at slg.leg.wa.gov). More information can be had at www.CAIonline.org.

If you need additional inforamtion, or would like to discuss any of these matters, please do not hesitate to contact me.

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