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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Real Estate Law
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Experience:  JA Mentor
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Can an HOA request a tenant (condo owner) to take out a loan

Customer Question

Can an HOA request a tenant (condo owner) to take out a loan to finance the replacement of decks within the property?
1) Of 60 units, approximately 1/3 have structurally defective decks.
2) HOA states replacement of those decks will cost $600-750,000.
3) HOA does not have the money to pay for the decks.
4) HOA will not take out a loan to pay for the project.
5) HOA sent notice that the replacement cost, per owner, is to be $8-11,000.
6) HOA stated funds will be required prior to project beginning.
7) HOA stated tenants, if tenants do not have the money, take out a loan (home equity for example) to provide the money to the HOA.
Is it legal for an HOA to require tenants to pay for structurally deficient parts of the property, which said HOA has stated tenants are not allowed to work on or replace (to include exterior doors and windows)?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Lucy, Esq. replied 1 year ago.


I'm Lucy, and I'd be happy to answer your questions today.

An HOA has the power to levy assessments to pay for necessary maintenance and repairs of the common elements within the association if they do not have sufficient funds in the budget or reserve account. RCW 64.38.020. Decks attached to individual units would typically be considered limited common areas, which means that only the 1/3 owners who own the properties with decks that need to be replaced would be required to pay for the replacement. Take a look at your by-laws to see what they say about limited common areas. The HOA unfortunately does not have to allow individual property owners to do the work themselves.

As far as how the assessments are paid, that's really up to the homeowner. The HOA can't force someone to take out a loan on their property. However, the HOA can place a lien for unpaid assessments and foreclose on the property if payments are not made. When an HOA has to foreclose, they're allowed to charge the homeowner for late fees and the costs of bringing the suit, plus attorney's fees - which could easily be at least a few thousand dollars. See RCW 64.38.050. That means, as a practical matter, when a homeowner in an HOA has equity in their home and no cash to pay for an unexpected assessment, and no other way to get the money, it is usually in the homeowner's best interests to take out the loan.

The homeowners have the ability to review the association's records if there is any question regarding whether the HOA should have sufficient funds to pay for the repairs. RCW 64.38.045.

I apologize that this was probably not the Answer you were hoping to receive. However, it would be unfair to you and unprofessional of me were I to provide you with anything less than truthful and honest information. I hope you understand. Please rate my answer positively to ensure I get credit for the time I spend helping. If you are on a mobile device, you may need to scroll to the right. Thank you.

Good luck.

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