Condo liability reform legislation signed into law

On April 30, the Governor signed condo liability reform legislation, SB 5334, which is intended to revise overreaching condo-warranty liability from the 1990s and allow for more new condo construction.

“It is not meant to be a lessening of consumer protections; it is not meant to allow developers to get away with things,” said Rep. Tana Senn, D-Mercer Island. “It’s really making sure that we bring the pendulum that swung too far in the ’90s (when the condo laws took effect), that we kind of bring condo liability laws kind of back toward the center.”

For years, developers, realtors and other groups have fought to change the state’s condo liability laws as Washington state law makes it easy for condo owners to sue builders over even minor defects in construction. The insurance costs and legal risks are high enough that most developers don’t bother with condos, and the few that do have to tack those added costs onto their new units, making them even more unaffordable.

SB 5334, sponsored by Sen. Jaime Pederson (D-43), chair of the Senate Law and Justice Committee, makes these changes to current law:

It reduces the personal liability of condo-association officers by granting them the same immunity given to board members of nonprofits and companies;. Under current law, those condo board members could be forced to pay to repair defects in their building if they do not sue the builders that cause them. As it stands now, those homeowners’ association (HOA) members often sue proactively to defend themselves against that risk.
It raises the bar for what condo owners can sue over. Instead of the building having to comply with “all laws,” a lawsuit will need to prove the construction team violated building codes in the state. The condo owner would have to prove not just that the defect exists but that it would cause harm, like an unreasonable safety risk.

Proponents believe it’s not a silver bullet to the housing crisis, but it is another option for consumers seeking a path to affordable homeownership, by increasing supply and options for families of all sizes and incomes.

Other condo bills were introduced but did not pass. These include SB 5219, which would have exempted condominiums with less than seven units from the warranty provisions in the Washington Uniform Common Interest Ownership Act. Also failing to pass was HB 1576, which would have required that the board of directors of a common-interest community notify unit owners, convene an informational meeting and conduct a vote prior to commencing action for a construction defect, and required a construction professional be given an opportunity at the meeting to address unit owners regarding the alleged defects.

For more information, contact AGC Chief Lobbyist Jerry VanderWood, 360.352.5000.