What the WA State law says about reserve studies

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about the Washington State Requirements for a Reserve Study

Washington State's RCW 64.34.382 deals with the financial management of condominiums, specifically focusing on reserve studies and reserve funds. In essence, this law requires condominium associations in Washington State to regularly assess and plan for the long-term costs of maintaining their property. They must conduct reserve studies, maintain a reserve fund based on these studies, and keep the condominium owners informed about the financial health and planning for their property. Here's a simplified explanation:

Washington State RCW 64.34.382 in Layman's Terms:

• Reserve Study Requirement:

• Condominium associations in Washington State must conduct a detailed study (a "reserve study") of their property. This study is to figure out the cost of maintaining, repairing, and replacing major common elements over time. These elements include things like roofs, elevators, and swimming pools.

• Frequency of the Study:

• The first reserve study must be done within a specific time after the condominium is created.

• After the initial study, a full reserve study should be updated at least every three years.

• Every year, the association should at least review and update the study to reflect current costs and conditions.

• Contents of the Reserve Study:

• The study should include:

• A list of the property's major components.

• The current condition and expected lifespan of these components.

• An estimate of the cost to repair or replace each component.

• An evaluation of the reserve fund's current balance.

• A funding plan for future costs over at least a 30-year period.

• Reserve Fund:

• The association must have a reserve fund specifically for repairing, replacing, and maintaining the major common elements.

• The amount of money in this fund should be based on the reserve study's recommendations.

• Use of Reserve Funds:

• The reserve fund should only be used for the purposes outlined in the study, unless a majority of the unit owners agree otherwise.

• Disclosure to Owners:

• The association must inform the condominium owners about the reserve study's findings and the state of the reserve fund. This information should be included in the annual budget report.

• Exceptions:

• Small condominiums with fewer than ten units might not need to follow these rules if the owners unanimously decide against it.

• Compliance Deadline:

• Condominiums created before July 1, 1990, had until July 1, 2012, to comply with these requirements.