Kristina Bulajewski

How Washington Housing Laws Are Changing Seattle Real Estate

by Kristina Bulajewski

Washington State lawmakers passed a series of housing bills in 2023 aimed at reforming housing regulations, increasing housing supply, and creating more options for renters and homebuyers. These new bills will have a significant impact on housing in the state. Most aim to promote opportunities for building density and to provide more affordable housing options. There are also regulatory bills aimed at guiding and streamlining the permitting process for new developments. Additionally, and more directly related to the real estate industry, two of these bills focus on bringing transparency to broker/client relationships and real estate transactions.

In short, Washington is trying to address housing affordability from several angles: allowing more housing types, encouraging density, streamlining permitting, expanding ADU options, increasing condo and townhouse supply, and creating more transparency in real estate transactions.

Washington State currently ranks last in the number of housing units per family nationwide. According to census data, the State Department of Commerce estimates that Washington will require 1 million homes by 2040. The following bills aim to create policies that increase housing supply while ensuring affordability. For example, HB 1110 addresses the development of middle housing, an issue that Windermere’s Chief Economist, Matthew Gardner, has been advocating for years. SB 5258 aims to boost the supply and affordability of condos and townhouses, while HB 1042 enables the creation of housing in existing, underutilized buildings. Additionally, HB 1337 aims to simplify the process of building Accessory Dwelling Units (ADUs) in urban growth areas.

These policy changes also show up in the way some Seattle townhomes and backyard cottages are legally structured. I wrote more about that here: Buying a Seattle Townhome? It Might Actually Be a Condo.

To expedite the housing development process, SB 5412, SB 5290, and HB 1293 have been introduced to consolidate and accelerate the permitting process. Specifically, HB 1293 allows developers to apply “clear and objective design review standards” for the exteriors of new developments. Housing units that cater to low-and moderate-income households will receive expedited reviews of their permitting applications.

Two bills of importance address short-term seller rent-backs (SBH 1070 and SSB 5399). In situations where a house is sold, but the seller is not yet ready to move out or the buyer cannot move in immediately, the parties may agree to a written “leaseback.” This bill clarifies that such a sale/leaseback arrangement is exempt from the state’s landlord-tenant act. There are certain limitations, including a maximum period of 90 days for the seller to remain on the property. The goal is to facilitate a smooth transition period for all parties involved.

Two notable bills, SB 5191 and HB 1284, have been introduced to improve real estate brokerage services in response to Washington State’s outdated real estate agency law, which hasn’t been updated since 1997. The most significant change introduced by these bills is the requirement for brokers to enter into a signed Buyer’s Agency Agreement that clearly outlines the terms of representation and compensation. It’s important to note that this requirement doesn’t force buyers to pay compensation, but it ensures transparency regarding how the buyer’s broker is compensated. Starting from January 1, 2024, all real estate brokers will be obligated to engage in a buyer service agreement with the buyers they work with. This change will bring much-needed clarity to the often confusing process that many buyers experience when searching for a home.

And finally, a long overdue bill, HB 1474 will raise document recording fees by $100 to fund a new state program dedicated to providing down payment and closing cost assistance to individuals, or their descendants, impacted by racially restrictive covenants. This program aims to generate $75 million annually to improve housing affordability.

“Today, what we are about to do with this bill is enable the government,” says Patience Malaba, Executive Director of the Housing Development Consortium. “A government that has been responsible for creating a lot of discriminatory policies to actually remedy the wrong.”

Housing policy can feel abstract, but these changes shape the kinds of homes that get built, where density is added, how buyers are represented, and what options may be available over time. For Seattle buyers and homeowners, it is worth understanding not just what is on the market today, but how local and statewide housing policy may shape the market in the years ahead.

Kristina Bulajewski
Broker | Realtor®
Windermere Real Estate Co. | Ballard
Helping buyers and sellers navigate Seattle real estate with thoughtful guidance and local insight.

Buying a Seattle Townhome? It Might Actually Be a Condo

by Kristina Bulajewski

In Seattle, some homes that look like townhomes or detached backyard cottages are legally structured as condominiums. That means buyers may own their individual unit along with a shared interest in common elements, and they should review the condominium declaration, map, HOA documents, and public offering statement before buying.

In 2019, Seattle City Council made changes to the city’s single-family zoning requirements, and since then, the addition of accessory dwelling units has surged. The number of new ADU permits grew from 280 in 2019 to nearly 1,000 in 2022. That is a 250% increase.

This change was part of a broader effort to meet housing demand in Seattle by adding density and widening living opportunities in neighborhoods traditionally zoned for single houses.

“Land use planning really is the most powerful tool that we have as a city. It affects how the neighborhoods in our city change and grow, and so it’s really important that we all understand what the processes are, and figure out how we engage in those processes.” -Tammy Morales

Now, in areas zoned for single-family housing, two ADUs can be built per lot. This can be two AADUs or one AADU and one DADU. Additional changes include that property owners are no longer required to live on-site and off-street parking is now optional. ADUs can now be built larger, taller, and on smaller lots than before.

Some of this shift is tied to broader housing policy changes in Washington, including efforts to increase middle housing, ADUs, condos, and townhome supply.

Another unsuspecting factor is that some new dwellings that look like townhomes are not being constructed on traditional plats. They are being built as condominiums.

Read on to learn more about what makes owning a condo different from owning a single-family home.

What is a condominium?

A condominium is a property that contains dwelling “units” that are designated for separate ownership.

Unlike a traditional plat, which may divide a piece of physical real estate into smaller lots, a condominium does not divide the physical real estate into segmented portions.

Basically, condo buyers own the condominium unit itself, along with an “interest” in the common elements.

What are common elements in a condo?

In addition to units, a condominium may also include portions called “common elements.” These are designated for shared use and ownership by all or some of the unit owners. Look to the condominium declaration for specific details.

Common elements are portions of the condominium that all owners of the condominium project can use.

Limited common elements are portions of the condominium that fewer than all owners have the right to use.

Exclusive common elements are limited common elements that only the owners of one unit have the right to use.

What is a condominium declaration?

A condominium declaration is a written document that accompanies the condominium map. It contains information about the number and type of units in the building, the homeowners association’s rights and duties to owners, and a list of any easements or liens affecting title to the building.

The condominium declaration is similar to the CC&Rs, or conditions, covenants, and restrictions, that may accompany a traditional plat development.

What is an Accessory Dwelling Unit?

Lots within single-family zones are typically restricted to one single-family dwelling. However, the zoning codes of some jurisdictions allow for one or more accessory dwelling units to be constructed per lot. These units are additional residential structures.

An Attached Accessory Dwelling Unit, commonly referred to as an AADU, is a dwelling that is attached to the principal dwelling unit, often by a common wall.

A Detached Accessory Dwelling Unit, commonly referred to as a DADU, is a dwelling that is not physically attached to the principal dwelling unit.

How is a condominium legally created?

In Washington, the creation of condominiums is governed by the Washington Uniform Common Interest Ownership Act, or WUCIOA, which went into effect in July 2018.

Under WUCIOA, a condominium is created when the condominium survey map and declaration are recorded in the public records.

What is a public offering statement for a new construction condo?

WUCIOA requires that every buyer be provided with a public offering statement, which is a document prepared by the attorneys representing the builder of a newly constructed condominium building. The statement includes the condominium declaration.

Buyers looking to purchase a new construction condo can get the public offering statement from their broker before making an offer.

For resale of a pre-owned condo, a resale certificate is provided instead.

Does every condominium have an HOA?

WUCIOA requires an HOA for every condominium, even if the condominium has only two or three units, and even if one person or entity owns all of the units.

Creation of the HOA requires incorporating the entity with the Washington Secretary of State’s office, obtaining an EIN from the IRS, and filing annual paperwork with both agencies. A formal transition meeting to transfer management of the HOA from the developer to the homeowners happens within 60 days of the sale of 75% of the units.

What warranty protections apply to new construction condos?

Though most developers routinely provide a standard one-year warranty, WUCIOA imposes a separate implied warranty of quality on all condominiums for a period of four years from closing. To trigger the warranty, the homeowner must prove that the defect is more than technical, is significant, and has or will affect the performance of that portion of the unit.

Thinking about purchasing a condo?

If you are interested in buying a condo or learning more about what ownership could mean for you, a real estate broker can help. Your broker can get a copy of the condominium map and public offering statement for the condominium project and help you understand what to look for before making an offer.

Kristina Bulajewski
Broker | Realtor®
Windermere Real Estate Co. | Ballard
Helping buyers and sellers navigate Seattle real estate with thoughtful guidance and local insight.