Washington HOA budgets and assessment increases

The default runs in the board's favor, but with a real owner check. The board sends the proposed budget within 30 days and holds a ratification meeting 14 to 50 days later. The budget passes unless owners holding a majority of all the votes vote to reject it, and because that majority is measured against the whole association rather than just those present, rejecting a budget takes an organized effort.

A special assessment is not a board-only move either. It has to go through the same ratification process, so owners get the same chance to reject it. If a budget is rejected, the last ratified budget continues until the board brings back one that survives the vote.

Washington does not cap annual assessment increases. Any limit lives in the governing documents, not the statute, so a board with thin reserves and aging shared systems can raise dues sharply or propose a special assessment without a state-law ceiling in the way.

That makes the budget history and the reserves the real story for a buyer. A community that is underfunded against its obligations is signaling a future increase or special assessment, and the ratification vote rarely stops one.

Read these together before you make an offer:

• The last few years of budgets to see how fast dues have climbed.
• The reserve balance against upcoming big-ticket repairs.
• Any special assessment that has been approved, proposed, or discussed.
• Board minutes for talk of a shortfall, a loan, or a large planned project.

Your dues can rise without a statutory ceiling, so the protection that matters is reading the budget and the reserves before you buy. The ratification vote rarely blocks an increase, which puts the homework on the buyer.

An HOA Notes brief reads the budgets, the reserves, and the minutes together, flags a community heading toward a steep increase or a special assessment, and cites the page behind each finding.

Washington Revised Code 64.38.025 and 64.90.525 (Budget ratification by owners). After the board adopts a proposed annual budget, it must distribute a summary to all owners and hold or give notice of an opportunity for owners to ratify or reject the budget; owners may reject a proposed budget by a majority of votes entitled to be cast at a meeting at which a quorum is present; Washington has NO statutory percentage cap on annual assessment increases -- any cap is found only in the governing documents. The association may adopt any budget amount the board determines necessary; if owners reject the budget, the board may propose a revised budget or the prior year's budget may continue in effect as provided in the governing documents.

When you read the disclosure packet, watch for the board may set annual assessments without owner ratification, and no budget disclosure to owners required before the fiscal year. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.