Washington State Governor Jay Inslee has issued many proclamations suspending and/or modifying state laws in order to provide financial relief to individuals affected by COVID-19. Recent proclamations affect what community associations can do when an owner falls behind on assessments, but also allows electronic meetings for all associations for the next month. It is possible this order will be extended past its current expiration date, which is May 17, 2020.
This memo contains general information, not legal advice. We cannot give legal advice without reviewing your governing documents and your specific circumstances. This summary is also not a substitute for reviewing the actual Proclamation by the Governor.
How does the Proclamation affect collection activities by Community Associations?
The Proclamation released on April 17, 2020 suspends the ability to assess fines, late fees, and interest from April 17 through midnight May 17, 2020. The Proclamation does not prevent an Association from taking other collection action. However, an earlier proclamation suspended all garnishments in Washington State for 30 days, from April 14 to May 14, 2020. The suspension of garnishments only affects Associations that have existing judgments against owners (or former owners) and who are collecting on those judgments via garnishment.
We believe these prohibitions may be extended beyond their current “expiration dates” to closely coincide with the duration of the “stay home” order.
Things you can and should do (or at least consider) for owners who miss payments:
- Send warning notices instead of fining owners who violate the governing documents.
- Be generous to delinquent owners and waive late fees and interest for all of April and May. This is easier to accomplish administratively than only waiving them between April 17 and May 17. It also eliminates the inequity created by different late fee dates, consistent with the intent of the Governor’s proclamation.
- Modify your late notices that are sent to owners who fall behind, in particular the first notice of delinquency.
- Specifically, your notices should not say that late fees or interest will be assessed during the time of this order.
- Notices should still advise owners that payment was not received as required.
- Notices should invite owners to contact the manager or Association to discuss payment plan options so that late fees and interest will not accrue for an extended period of time.
Things you should avoid:
- Telling owners they don’t need to pay, or waiving assessments altogether.
- Charging fines, late fees, and interest for this time frame, or threatening to do so. (This applies even to accounts that were delinquent before the current crisis.)
- Waiting many months to refer a delinquent account to your attorney when the owner has not made contact with the Association.
When in doubt, consult with your association attorney on how to handle delinquencies in general, as well as in individual situations.
How does the Proclamation affect Board and Association Meetings?
The proclamation deletes portions of statutes that prohibit or restrict electronic meetings of the Board or the full Association.
It does not change notice provisions for meetings. Due to the time required for notice (typically a minimum of 10 or 14 days), it may not be possible to schedule and conduct a full association meeting within the one-month window provided.
If you have specific questions for how to handle delinquencies or conduct association meetings in light of COVID-19, we can probably help you.
Please contact us at info@condolaw.net with your questions, or call us at 206-633-1520.
