Section 6.1 — Accounts
The Association shall establish banking and other financial accounts in the name of the Association at one or more financial institutions as necessary to provide for the maintenance, operation, and administration of the Association.
Committee Notes
Accounts must be held in the association's name — not in an individual director's or managing agent's name. This section is under active review.
Section 6.2 — Operating Fund
There shall be established one or more checking accounts in a reputable, FDIC insured, financial institution to be known as the "Operating Fund" or similar named accounts. The Operating Fund will be used for the normal operation of the Association and will generally receive all monthly Assessments and other monies received by the Association. Checks shall be issued from said accounts for all management and operational expenditures necessary for the Association and its maintenance expenses of a routine or minor nature that do not require resort to the Reserve Fund. Owners may be directed to make payments for Assessments or other expenses to a third party as agent for the Association or to the Association, as the Board may determine.
Committee Notes
FDIC insurance requirement protects assessment funds. Operating funds are for routine expenses; major capital items should draw from the Reserve Fund. The board may direct payments to a third-party agent (e.g., a managing agent), but the money still belongs to the association. This section is under active review.
Section 6.3 — Reserve Funds
The Association shall maintain one or more accounts at a reputable financial institution known generally as the "Reserve Fund," or similar named accounts. These accounts shall be used to deposit funds earmarked as reserve funds as required by the reserve funding provisions of the Declaration and laws governing the Association.
Committee Notes
Reserve funds are legally distinct from operating funds — they are set aside for long-term capital needs (roofs, roads, common area infrastructure). Commingling reserves with operating funds is a common governance failure that depletes long-term capital. This section is under active review.
Section 6.4 — Combination and Deposit or Investment of Funds
The funds of the Association shall not be commingled with the funds of any other association or with the funds of any Managing Agent. The reserve funds may be combined in one or more savings accounts, certificates of deposit, or other accounts or deposits, as may be deemed reasonable in the discretion of the Board.
Committee Notes
The prohibition on commingling with a managing agent's funds is critical — association money cannot be held in an agent's operating account. Reserve funds may be invested (CDs, savings), giving the board flexibility to earn interest on long-term capital. This section is under active review.
Section 6.5 — Reconciliation of Actual Expenses to Assessments
The Association shall establish and maintain its accounts and records in such a manner that will enable it to charge Assessments for Common Expenses and any other Assessment, including allocations to reserves, to the account of the appropriate Units and make its expenditures from the appropriate accounts. The accounts of the Association shall be reconciled at least annually.
Committee Notes
Annual reconciliation is the minimum standard. The records must allow assessment charges to be traced to individual units. The committee should consider whether quarterly or semi-annual reconciliation is more appropriate given the association's size and history. This section is under active review.
Section 6.6 — Corporate Records and Books of Account
The corporation shall keep, at its registered or principal office or at the office of the Secretary or Managing Agent, current Articles of Incorporation and Bylaws; a record of Owners, including Owner names and addresses; records of accounts and finances; a record of the names and addresses of officers and Directors; minutes of the proceedings of the Owners, the Board of Directors, and any minutes that may be maintained by committees of the Board; a record of Board resolutions; and any other necessary or advisable corporate records, or any records required to be kept under the Declaration or under applicable law. The non-privileged records of the Association shall be available for inspection by Owners and subject to a reasonable fee as determined by the Board. Inspection and disclosure of records need not exceed what is required by law.
Committee Notes
Owner inspection rights are a fundamental transparency protection. The list of required records is comprehensive — bylaws, articles, owner records, financials, minutes, resolutions. "Reasonable fee" for inspection should be defined (per page, per hour) to prevent the fee from becoming a barrier. The "need not exceed what is required by law" language sets a ceiling, not a floor — the board may choose to be more open than legally required. This section is under active review.
Section 6.7 — Fiscal Year
Unless another fiscal year is selected by the Board, the fiscal year of the Association shall be the calendar year.
Committee Notes
Calendar year fiscal year is the default and standard for most HOAs. A non-calendar fiscal year would create complexity for tax filings and budget cycles. This section is under active review.
Section 6.8 — RCW 64.90 Financial Requirements
If and only if the Association is fully bound by RCW 64.90, the provisions of RCW 64.90.530 and 64.90.535 as in effect at any given time or any successor statutes thereto shall apply notwithstanding anything to the contrary herein.
Committee Notes
RCW 64.90.530 and .535 impose detailed financial management and reserve study requirements for fully WUCIOA-bound associations. The conditionality ("if and only if fully bound") reflects the association's current transitional status. The committee recommends determining the association's WUCIOA applicability status before adoption, as this provision has significant financial implications. This section is under active review.