CERTIFICATION OF ENROLLMENT
ENGROSSED SECOND SUBSTITUTE SENATE BILL 5258
Chapter 337, Laws of 2023
68th Legislature
2023 Regular Session
CONDOMINIUMS AND TOWNHOUSES—CONSTRUCTION AND SALE—VARIOUS PROVISIONS
EFFECTIVE DATE: July 23, 2023—Except for section 9, which takes
effect January 1, 2024.
Passed by the Senate April 21, 2023 CERTIFICATE
Yeas 49 Nays 0
I, Sarah Bannister, Secretary of
the Senate of the State of
DENNY HECK Washington, do hereby certify that
President of the Senate the attached is ENGROSSED SECOND
SUBSTITUTE SENATE BILL 5258 as
passed by the Senate and the House
of Representatives on the dates
Passed by the House April 20, 2023 hereon set forth.
Yeas 98 Nays 0
SARAH BANNISTER
LAURIE JINKINS
Secretary
Speaker of the House of
Representatives
Approved May 8, 2023 1:16 PM FILED
May 10, 2023
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
 ENGROSSED SECOND SUBSTITUTE SENATE BILL 5258
AS AMENDED BY THE HOUSE
Passed Legislature - 2023 Regular Session
State of Washington 68th Legislature 2023 Regular Session
By Senate Ways & Means (originally sponsored by Senators Shewmake,
Gildon, Billig, Liias, Lovick, Nguyen, Nobles, Randall, and Wellman)
1 AN ACT Relating to increasing the supply and affordability of
2 condominium units and townhouses as an option for homeownership;
3 amending RCW 64.35.105, 64.50.010, 64.50.020, 64.50.040, 64.90.250,
4 64.90.605, 64.90.645, 82.02.060, 58.17.060, and 64.55.160; reenacting
5 and amending RCW 64.38.010; adding a new section to chapter 82.45
6 RCW; creating a new section; and providing an effective date.
7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
8 Sec. 1. RCW 64.35.105 and 2004 c 201 s 101 are each amended to
9 read as follows:
10 The definitions in this section apply throughout this chapter
11 unless the context clearly requires otherwise.
12 (1) "Affiliate" has the meaning in RCW ((64.34.020)) 64.90.010.
13 (2) "Association" has the meaning in RCW ((64.34.020)) 64.90.010.
14 (3) "Building envelope" means the assemblies, components, and
15 materials of a building that are intended to separate and protect the
16 interior space of the building from the adverse effects of exterior
17 climatic conditions.
18 (4) "Common element" has the meaning in RCW ((64.34.020))
19 64.90.010.
20 (5) "Condominium" has the meaning in RCW ((64.34.020)) 64.90.010.
21 (6) "Construction professional" has the meaning in RCW 64.50.010.
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 1 (7) "Conversion condominium" has the meaning in RCW ((64.34.020))
2 64.90.010.
3 (8) "Declarant" has the meaning in RCW ((64.34.020)) 64.90.010.
4 (9) "Declarant control" has the meaning in RCW ((64.34.020))
5 64.90.010.
6 (10) "Defect" means any aspect of a condominium unit or common
7 element which constitutes a breach of the implied warranties set
8 forth in RCW 64.34.445 or 64.90.670.
9 (11) "Limited common element" has the meaning in RCW
10 ((64.34.020)) 64.90.010.
11 (12) "Material" means substantive, not simply formal; significant
12 to a reasonable person; not trivial or insignificant. When used with
13 respect to a particular construction defect, "material" does not
14 require that the construction defect render the unit or common
15 element unfit for its intended purpose or uninhabitable.
16 (13) "Mediation" means a collaborative process in which two or
17 more parties meet and attempt, with the assistance of a mediator, to
18 resolve issues in dispute between them.
19 (14) "Mediation session" means a meeting between two or more
20 parties to a dispute during which they are engaged in mediation.
21 (15) "Mediator" means a neutral and impartial facilitator with no
22 decision-making power who assists parties in negotiating a mutually
23 acceptable settlement of issues in dispute between them.
24 (16) "Person" has the meaning in RCW ((64.34.020)) 64.90.010.
25 (17) "Public offering statement" has the meaning in ((RCW
26 64.34.410)) chapter 64.90 RCW.
27 (18) "Qualified insurer" means an entity that holds a certificate
28 of authority under RCW 48.05.030, or an eligible insurer under
29 chapter 48.15 RCW.
30 (19) "Qualified warranty" means an insurance policy issued by a
31 qualified insurer that complies with the requirements of this
32 chapter. A qualified warranty includes coverage for repair of
33 physical damage caused by the defects covered by the qualified
34 warranty, except to the extent of any exclusions and limitations
35 under this chapter.
36 (20) "Resale certificate" means the statement to be delivered by
37 the association under ((RCW 64.34.425)) chapter 64.90 RCW.
38 (21) "Transition date" means the date on which the declarant is
39 required to deliver to the association the property of the
40 association under RCW ((64.34.312)) 64.90.420.
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1 (22) "Unit" has the meaning in RCW ((64.34.020)) 64.90.010.
2 (23) "Unit owner" has the meaning in RCW ((64.34.020)) 64.90.010.
3 Sec. 2. RCW 64.38.010 and 2021 c 227 s 9 are each reenacted and
4 amended to read as follows:
5 For purposes of this chapter:
6 (1) "Assessment" means all sums chargeable to an owner by an
7 association in accordance with RCW 64.38.020.
8 (2) "Baseline funding plan" means establishing a reserve funding
9 goal of maintaining a reserve account balance above ((zero dollars))
10 $0 throughout the ((thirty-year)) 30-year study period described
11 under RCW 64.38.065.
12 (3) "Board of directors" or "board" means the body, regardless of
13 name, with primary authority to manage the affairs of the
14 association.
15 (4) "Common areas" means property owned, or otherwise maintained,
16 repaired or administered by the association.
17 (5) "Common expense" means the costs incurred by the association
18 to exercise any of the powers provided for in this chapter.
19 (6) "Contribution rate" means, in a reserve study as described in
20 RCW 64.38.065, the amount contributed to the reserve account so that
21 the association will have cash reserves to pay major maintenance,
22 repair, or replacement costs without the need of a special
23 assessment.
24 (7) "Effective age" means the difference between the estimated
25 useful life and remaining useful life.
26 (8) "Electronic transmission" or "electronically transmitted"
27 means any electronic communication not directly involving the
28 physical transfer of a writing in a tangible medium, but that may be
29 retained, retrieved, and reviewed by the sender and the recipient of
30 the communication, and that may be directly reproduced in a tangible
31 medium by a sender and recipient.
32 (9) "Full funding plan" means setting a reserve funding goal of
33 achieving one hundred percent fully funded reserves by the end of the
34 ((thirty-year)) 30-year study period described under RCW 64.38.065,
35 in which the reserve account balance equals the sum of the
36 deteriorated portion of all reserve components.
37 (10) "Fully funded balance" means the current value of the
38 deteriorated portion, not the total replacement value, of all the
39 reserve components. The fully funded balance for each reserve
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 1 component is calculated by multiplying the current replacement cost
2 of the reserve component by its effective age, then dividing the
3 result by the reserve component's useful life. The sum total of all
4 reserve components' fully funded balances is the association's fully
5 funded balance.
6 (11) "Governing documents" means the articles of incorporation,
7 bylaws, plat, declaration of covenants, conditions, and restrictions,
8 rules and regulations of the association, or other written instrument
9 by which the association has the authority to exercise any of the
10 powers provided for in this chapter or to manage, maintain, or
11 otherwise affect the property under its jurisdiction.
12 (12) "Homeowners' association" or "association" means a
13 corporation, unincorporated association, or other legal entity, each
14 member of which is an owner of residential real property located
15 within the association's jurisdiction, as described in the governing
16 documents, and by virtue of membership or ownership of property is
17 obligated to pay real property taxes, insurance premiums, maintenance
18 costs, or for improvement of real property other than that which is
19 owned by the member. "Homeowners' association" does not mean an
20 association created under chapter 64.32 ((or)), 64.34, or 64.90 RCW.
21 (13) "Lot" means a physical portion of the real property located
22 within an association's jurisdiction designated for separate
23 ownership.
24 (14) "Owner" means the owner of a lot, but does not include a
25 person who has an interest in a lot solely as security for an
26 obligation. "Owner" also means the vendee, not the vendor, of a lot
27 under a real estate contract.
28 (15) "Remaining useful life" means the estimated time, in years,
29 before a reserve component will require major maintenance, repair, or
30 replacement to perform its intended function.
31 (16) "Replacement cost" means the current cost of replacing,
32 repairing, or restoring a reserve component to its original
33 functional condition.
34 (17) "Reserve component" means a common element whose cost of
35 maintenance, repair, or replacement is infrequent, significant, and
36 impractical to include in an annual budget.
37 (18) "Reserve study professional" means an independent person who
38 is suitably qualified by knowledge, skill, experience, training, or
39 education to prepare a reserve study in accordance with RCW 64.38.065
40 and 64.38.070.
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 1 (19) "Residential real property" means any real property, the use
2 of which is limited by law, covenant or otherwise to primarily
3 residential or recreational purposes.
4 (20) "Significant assets" means that the current replacement
5 value of the major reserve components is ((seventy-five)) 75 percent
6 or more of the gross budget of the association, excluding the
7 association's reserve account funds.
8 (21) "Tangible medium" means a writing, copy of a writing,
9 facsimile, or a physical reproduction, each on paper or on other
10 tangible material.
11 (22) "Useful life" means the estimated time, between years, that
12 major maintenance, repair, or replacement is estimated to occur.
13 Sec. 3. RCW 64.50.010 and 2020 c 18 s 23 are each amended to
14 read as follows:
15 Unless the context clearly requires otherwise, the definitions in
16 this section apply throughout this chapter.
17 (1) "Action" means any civil lawsuit or action in contract or
18 tort for damages or indemnity brought against a construction
19 professional to assert a claim, whether by complaint, counterclaim,
20 or cross-claim, for damage or the loss of use of real or personal
21 property caused by a defect in the construction of a residence or in
22 the substantial remodel of a residence. "Action" does not include any
23 civil action in tort alleging personal injury or wrongful death to a
24 person or persons resulting from a construction defect.
25 (2) "Association" means an association, master association, or
26 subassociation as defined and provided for in RCW 64.34.020(4),
27 64.34.276, 64.34.278, ((and)) 64.38.010(((11))) (12), and
28 64.90.010(4).
29 (3) "Claimant" means a homeowner or association who asserts a
30 claim against a construction professional concerning a defect in the
31 construction of a residence or in the substantial remodel of a
32 residence.
33 (4) "Construction defect professional" means an architect,
34 builder, builder vendor, contractor, subcontractor, engineer,
35 inspector, or such other person with verifiable training and
36 experience related to the defects or conditions identified in any
37 report included with a notice of claim as set forth in RCW
38 64.50.020(1)(a).
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 1 (5) "Construction professional" means an architect, builder,
2 builder vendor, contractor, subcontractor, engineer, or inspector,
3 including, but not limited to, a dealer as defined in RCW 64.34.020
4 and a declarant as defined in RCW 64.34.020, performing or furnishing
5 the design, supervision, inspection, construction, or observation of
6 the construction of any improvement to real property, whether
7 operating as a sole proprietor, partnership, corporation, or other
8 business entity.
9 (((5))) (6) "Homeowner" means: (a) Any person, company, firm,
10 partnership, corporation, or association who contracts with a
11 construction professional for the construction, sale, or construction
12 and sale of a residence; and (b) an "association" as defined in this
13 section. "Homeowner" includes, but is not limited to, a subsequent
14 purchaser of a residence from any homeowner.
15 (((6))) (7) "Residence" means a single-family house, duplex,
16 triplex, quadraplex, or a unit in a multiunit residential structure
17 in which title to each individual unit is transferred to the owner
18 under a condominium or cooperative system, and shall include common
19 elements as defined in RCW 64.34.020 and common areas as defined in
20 RCW 64.38.010(4).
21 (((7))) (8) "Serve" or "service" means personal service or
22 delivery by certified mail to the last known address of the
23 addressee.
24 (((8))) (9) "Substantial remodel" means a remodel of a residence,
25 for which the total cost exceeds one-half of the assessed value of
26 the residence for property tax purposes at the time the contract for
27 the remodel work was made.
28 Sec. 4. RCW 64.50.020 and 2002 c 323 s 3 are each amended to
29 read as follows:
30 (1) In every construction defect action brought against a
31 construction professional, the claimant shall, no later than ((forty-
32 five)) 45 days before filing an action, serve written notice of claim
33 on the construction professional.
34 (a) The notice of claim shall state that the claimant asserts a
35 construction defect claim against the construction professional and
36 shall describe the claim in reasonable detail sufficient to determine
37 the general nature of the defect.
38 (b) If the claimant is a condominium association created after
39 the effective date of this section, the written notice of claim shall
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 1 include a written report from a construction defect professional. In
2 addition to describing the claim in reasonable detail sufficient to
3 determine the general nature of the defect the written report shall
4 state the construction defect professional's qualifications, the
5 manner and type of inspection upon which the report was based, and
6 the general location of the defect.
7 (2) Within ((twenty-one)) 14 days after service of the notice of
8 claim, the construction professional may serve a written response
9 demanding a meeting with the claimant and its expert, including the
10 construction defect professional who authored the report required in
11 subsection (1)(b) of this section to confer regarding the report and
12 its contents. The meeting shall take place within 14 days of service
13 of the construction professional's demand or at such later date as
14 mutually agreed to by the parties.
15 (3) Within 14 days after the meeting referenced in subsection (2)
16 of this section or, in the absence of a demand for such meeting,
17 within 21 days after service of the notice of claim, whichever is
18 later, the construction professional shall serve a written response
19 on the claimant by registered mail or personal service. The written
20 response shall:
21 (a) Propose to inspect the residence that is the subject of the
22 claim and to complete the inspection within a specified time frame.
23 The proposal shall include the statement that the construction
24 professional shall, based on the inspection, offer to remedy the
25 defect, compromise by payment, or dispute the claim;
26 (b) Offer to compromise and settle the claim by monetary payment
27 without inspection. A construction professional's offer under this
28 subsection (((2))) (3)(b) to compromise and settle a homeowner's
29 claim may include, but is not limited to, an express offer to
30 purchase the claimant's residence that is the subject of the claim,
31 and to pay the claimant's reasonable relocatio