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Bill would ease reserve, audit and EV rules for very small HOAs

House Civil Rights & Judiciary Committee ยท January 28, 2026
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Summary

House Bill 2354 would exempt very small common-interest communities from most uniform-common-interest rules, remove an annual reserve-study mandate for middle housing, raise the audit threshold from $50,000 to $100,000, and keep owner financial responsibility for unit-specific EV chargers and heat pumps.

A proposed substitute to House Bill 2354 would scale back several obligations imposed by the state's common-interest-community law for very small homeowners associations and similar groups.

Yolanda Baker, staff to the House Civil Rights and Judiciary Committee, told the panel the substitute would: exempt small "middle housing" common-interest communities with no more than 50 units and average annual assessments near $1,000 from most Wakaowa provisions; eliminate the requirement that those small communities prepare and annually update a reserve study; raise from $50,000 to $100,000 the threshold of annual assessments that triggers a mandatory certified audit; and clarify that owners of unit-specific electric-vehicle charging stations or heat pumps remain responsible for maintenance and operation costs and that governing documents may not shift that responsibility away from the unit owner.

Representative Julia Reed (36th District), the bill sponsor, described the measure as a trailer and cleanup bill intended to "better reflect the reality" for smaller community associations, citing rising insurance costs and administrative burdens on volunteer boards. Reed said she worked with stakeholders in developing the substitute and asked the committee for support.

Dylan Doty, representing the Washington chapter of the Community Association Institute (an association of condominium and HOA managers), testified in support and urged the committee to preserve the unit-owner vote option for audit waivers. Doty praised the "technical clarifications" and called the measure a targeted fix for small, volunteer-run associations.

No formal action was taken during the hearing. The committee moved from the HB 2354 briefing to its next item after questions from committee members about whether state law should address sweeping HOA requirements uniformly rather than carve out exceptions for small associations.