HB 1576 — Concerning construction defect actions.

H-1955.2SUBSTITUTEH-0856.2HOUSE HOUSE BILL 1576State of Washington66th Legislature2019 Regular SessionByHouseSessionByRepresentatives Civil Rights & Judiciary (originally sponsored by Representatives Senn, Irwin, Goodman, Griffey, Ryu, Chapman, and Barkis)READBarkisRead FIRSTfirst TIMEtime 02/22/19.AN01/24/19.Referred to Committee on Civil Rights & Judiciary.AN ACT Relating to construction defect actions;

A new section is added to chapter 64.50 RCW to read as follows:(1)(a) In the event the board of directors, pursuant to RCW 64.90.405, proposesinstitutes to initiate an action asserting defects in the construction of two or more residences, common elements, or common areas, this section applies.(b) The board of directors shall substantially comply with the provisions of this section.(2) Prior to commencementthe service of the summons and complaint on any defendant with respect to an action governed by this section, the board of directors shall provide notice to unithomeowners owners and to each construction professional against whom an action is proposed, convene a meeting of unithomeowners owners to consider whether to initiatebring an action, and conductsecure athe vote of unitthe ownersmajority onof whetherthe homeowners to doproceed so.(3)with the action.(3) The notice provided to unithomeowners owners and to each construction professional against whom an action is proposed shall include:(a) TheA date,general time,description of the alleged defects with reasonable specificity, the relief sought, a good faith estimate of the benefits and locationrisks involved, the expenses and fees that the board of directors anticipates will be incurred in prosecuting the meeting;(b)action, Theand natureany other pertinent information;(b) A general description of the actionprocess and outcome following service of the reliefnotice sought;of claim under RCW 64.50.020;

and(c) TheNotice expensesof and fees that the boardmeeting of directors anticipates will be incurred in prosecuting the action.(4)homeowners The notice to unitconsider ownerswhether shall,to inbring addition,an include:(a)action.(4)(a) A ballot;(b) The timemeeting andof datehomeowners by which a ballot must be deliveredheld towithin theforty-five associationdays toof bethe counted,date whichthe maynotice notwas beprovided, fewerin thanaccordance forty-fivewith daysRCW after64.90.515, theto datehomeowners. of the meeting;

and(c)A quorum is not required at the meeting.(b) The percentconstruction professional against whom the construction defect action is proposed, who may be the declarant or any other person or entity included within the definition of votesconstruction necessaryprofessional, as defined in RCW 64.50.010, shall be invited to rejectattend and shall have an opportunity to address the action.(5)(a)homeowners concerning the alleged construction defects.(c) The presentation at the meeting ofby unitthe ownersconstruction mustprofessional beor heldthe withinconstruction forty-fiveprofessional's daysdesignee or designees may, but is not required to, include an offer to remedy any defect in accordance with this chapter.(5)(a) The board of directors may initiate an action only after the datemeeting of the noticehomeowners wasto provided.consider whether to bring an action and only if authorized by a majority of the homeowners.

AMore quorumthan isa simple majority vote may not be required atin the meeting.governing documents or in any contract or agreement.

(b)Such Theapproval constructionis professionalnot againstrequired whomif the alleged construction defect actionpertains isto proposeda shallfacility bethat invitedis tointended attend and shallused havefor annonresidential opportunitypurposes toand addressif the unitcost ownersto concerningrepair the alleged constructiondefect defects.(c)does Thenot presentationexceed atone hundred thousand dollars or when the meetingassociation byis the constructioncontracting professionalparty orfor the constructionperformance professional'sof designeelabor or designeespurchase may,of butservices isor notmaterials.(b) requiredNotwithstanding to,any includeother anprovision offerof tolaw, remedya anyhomeowner's defectvote inshall accordancebe withsubmitted thisonly chapter.(d)once Followingand may be obtained in any presentations,written unitformat ownersconfirming inthe attendancehomeowner's mayvote castto theirapprove ballotsor atreject the meeting.proposed action.

Alternatively,The unit owners may deliver their ballots to the association onshall ormaintain before the date by which all ballots must be delivered, which may not be fewer than forty-five days after the date of the meeting.(6)(a) Unless the unit owners of units to which a majorityrecord of theall votes inuntil the associationconclusion areof allocated reject the actionaction, byincluding the date by which all ballotsappeals, mustif beany.(c)(i) delivered,For thepurposes action is ratified.(b) If the board of directorscalculating proposes to initiate an action asserting defects in the constructiontotal ofnumber two or more units, common elements, or common areas in which the declarant or an affiliate of the declarant would be a defendant, the declarant and any affiliate of the declarant shall not be eligible tovotes vote and the actionnumber will be ratified unless a majority of the eligible votes inneeded thefor association reject the action.(7)(a)required Exceptmajority asvote providedunder in (b) of this subsection,section theonly, board of directors may commence the actionresidences onlyowned afterby ratification.(b) Ratification is not required if the alleged construction defect pertains to a facilitydevelopment thatparty isare intendedexcluded.(ii) andAs used forin nonresidentialthis purposessubsection and(5)(c), if"development theparty" costmeans toa repaircontractor, thesubcontractor, allegeddeveloper, defect does not exceed one hundred thousand dollars or whenbuilder theresponsible association is the contracting party for theany performancepart of laborthe ordesign, purchaseconstruction, of services or materials.(8)repair Nothing in this section shall require the disclosure of attorney-clientany privilegedportion information.(9) This section supersedes all inconsistent provisions of the governing documents of all common interest communitiescommunity subjectand toany chapter 64.90 RCW.(10)(a) For purposes of thisthat section,party's "action"affiliates; has the same meaning as set forth in RCW 64.50.010.(b) Unless otherwise defined in RCW 64.50.010, the terms in this section have the meaning set forth in RCW 64.90.010.--- END ---

and "affiliate" includes an entity controlled or owned, in whole or in part, by any person that controls or owns a development party or by the spouse of a development party.(6) For purposes of this section, "action" has the same meaning as set forth in RCW 64.50.010.--- END ---