Commercially Reasonable Efforts

In Washington state, "commercially reasonable efforts" is a standard of conduct that generally requires a party to take those actions a prudent business entity would take under similar circumstances. When applied to implementing lawful Board decisions, it typically means performing the requested tasks with the diligence and resources expected within the specific industry, while balancing the objective against reasonable economic costs and risks 

Key Characteristics of the Standard

• Objective Basis: It is often measured against industry norms—what other similarly situated companies would do to achieve the same result.
• Balance of Interests: Unlike a "best efforts" standard, it does not require a party to exhaust every possible avenue or sacrifice its own business interests. A party is generally not required to take actions that would be commercially detrimental or incur unanticipated, material losses.
• Good Faith: In Washington and broadly, it carries an inherent requirement of good faith and honesty in fact.
• Context-Dependent: Under RCW 60.10.070, the fact that a better outcome (e.g., a higher price in a sale) was possible does not alone prove efforts were not commercially reasonable

Practical Implementation of Board Decisions

To meet this standard when implementing Board mandates, a manager or officer should:

• Use Sound Judgment: Act in accordance with professional business judgment rather than taking only the bare minimum or "check-the-box" actions.
• Document Efforts: Maintain records of the steps taken, resources allocated, and external factors (like market shifts) that influenced the implementation process.
• Consider Proportionality: Efforts must be proportional to the goal; one is not entitled to a "blank check" to fulfill a mandate if the cost outweighs the intended harm or benefit

When a Property Management  Company acts in a way that contradicts Washington state law (such as the Washington Uniform Common Interest Ownership Act - WUCIOA) or the specific terms of an HOA governing document:

1. The Hierarchy of Authority

In Washington, the law operates on a hierarchy. If there is a conflict, the order of "who wins" usually looks like this:

1. Washington State Law (RCWs like 64.34, 64.38, or 64.90)
2. Declaration / CC&Rs
3. Bylaws
4. Board Rules/Resolutions

2. Breach of Fiduciary Duty vs. Contract

If a property management company is following Board instructions that they know are illegal or a breach of the governing documents, several legal issues arise:

• Ultra Vires Acts: This is a legal term for "beyond the powers." If the Board makes a decision that exceeds their authority under the CC&Rs or state law, they are acting ultra vires.
• The Management Agreement: Most contracts between an HOA and a management company  include an indemnification clause. However, these clauses usually do not protect the manager if they engage in "gross negligence" or "willful misconduct

• Standard of Care: Under RCW 64.90.410, Board members must exercise the care an "ordinarily prudent person" would. If the management company facilitates a violation of this care, they may be liable for professional negligence.

3. Common Conflict Areas with Management

In Washington, management companies often run into trouble with the "commercially reasonable" standard in these areas:

Conflict Type	What "Commercially Reasonable" Looks Like	What "Contrary to Statute" Looks Like
Record Requests	Providing redacted copies within a reasonable timeframe (usually 10-14 days).	Refusing to provide records or charging "exit fees" not allowed by RCW 64.38.045.
Notice of Meetings	Sending mailers/emails as per the bylaws.	Holding "secret" meetings or failing to provide the statutory notice period.
Assessments	Following the specific collection policy outlined in the CC&Rs.	Levying fines without a noticed hearing or violating the Washington

If you believe they are acting outside the law, the "commercially reasonable" defense usually fails because it is never commercially reasonable to break the law.

Meeting Packet

 

The most compelling reason for an HOA board of directors in Washington State is Legal Expertise and Compliance: HOAs must comply with a complex blend of federal, state (such as the Washington RCW 64.38 Homeowners' Associations Act), and local laws, in addition to their own governing documents (bylaws, CC&Rs).

Blue Mountain's (An Associa company) core competencies. 

A management company should have specialized knowledge to ensure the association remains compliant, helping to avoid costly legal issues or lawsuits that could arise from inexperience or oversight.

Blue Mountain/ Windust Meadows HOA  contract: "Agent will undertake commercially reasonable efforts to implement the lawful decisions of the Board"

The perception that HOA management company employees "ignore" or "don't know" the law often stems from a lack of mandatory licensing and specialized legal training in Washington state. While these companies are hired to provide professional expertise, several structural factors contribute to the knowledge gaps observed:
1. Lack of Specialized Licensing
Unlike real estate brokers, community association managers are not required to hold a specific license in Washington state. They are exempt from real estate licensing unless they are directly involved in selling or leasing property. This means there is no state-mandated educational curriculum or standardized testing specifically for HOA law that all employees must pass before being hired.

2. Ambiguity in Legal Boundaries
Managers often walk a fine line between providing "guidance" and practicing law without a license.
• Administrative vs. Legal: While boards hire companies like Blue Mountain Community Management to handle administrative tasks like keeping minutes and managing vendors, managers are not attorneys.
• Interpreting Documents: When a manager interprets complex Covenants, Conditions, and Restrictions (CC&Rs), they may inadvertently provide incorrect legal advice because they lack formal legal training.

3. High Turnover and Training Gaps
The industry frequently faces high employee turnover. New or inexperienced managers may:

• Be assigned to multiple communities simultaneously, leading to a "one-size-fits-all" approach that ignores the specific legal requirements of your HOA's unique governing documents.
• Rely on internal company "best practices" that might be outdated or not fully aligned with recent changes to the Washington Uniform Common Interest Ownership Act (WUCIOA).

4. Limited Role in Board Meetings
By law, a manager's attendance at board meetings is governed by their contract, not state law. If a contract does not explicitly require them to provide legal compliance oversight during meetings, they may focus solely on logistics (like maintenance and budgets) while ignoring legal procedural errors.

5. Accountability Issues
Because management companies are private entities hired by the Board, homeowners often find it difficult to hold them directly accountable. Common complaints include:
• Poor Communication: Delayed responses or "stonewalling" when legal or maintenance questions are raised.
• Fiduciary Misalignment: While the Board has a fiduciary duty to homeowners, the management company's primary duty is to the Board that hired them, which can lead to a lack of transparency for individual residents.

To address these issues, homeowners often advocate for the Board to hire an independent attorney to review the management company’s actions or attend key meetings, as lawyers are trained to ensure strict adherence to state statutes like the Homeowners Association Act.

It's not the breach - it's the denial.

The worse part is not the breach, but the denial.  Despite the overwhelming evidence, Blue Mountain claims the company has done nothing wrong.  Or that it only follows instructions from the bosrf.

Members of the Board of Directors for Windust Meadows HOA,  are bound by a Fiduciary Duty of Care under Washington law. This legal obligation requires the board to act in good faith and with the same care an ordinarily prudent person would exercise in a similar position. By refusing to investigate documented concerns regarding unilateral contract modification by Blue Mountain, failure to enforce standards of performance and quality as described in the contract and instead delegate it to the Blue Mountain contract coordinator, the undisclosed conflict of interest (Appendix B) and Blue Mountain's refusal to uphold the agency relationship, the board is potentially exposing itself and the Association to significant legal and financial liability. 

• Breach of Duty: Failure to exercise reasonable diligence or ignoring potential financial harm to the Association is a violation of our role.
• Loss of Immunity: The "Business Judgment Rule," which normally protects board members from personal liability, may not apply if it is determined that we acted in bad faith or with "willful ignorance" of our duties.
• Personal Exposure: Refusal to act could lead to a lawsuit by homeowners to compel action, where we may be named individually and held personally responsible for damages

Unilateral Contract modification - Collections process 

Contract unilaterally altered by Board Resolution 

Para. 3.3 Contract

Board resolution

A very long discussion to have Blue Mountain agree they were not following the contract but a Board Resolution which unilaterally modified the contract: Blue Mountain never agreed to having erred in the process 

Unilateral Price Increase

While Blue Mountain may update Exhibit A, it is only valid 30 days after notification to the association.

Unilateral 2026 Budget Rollover 

As I objected to the 2026 proposed budget, Blue Mountain decided to roll over the previous  budget

Audit

According to Blue Mountain an audit i just to make sure the books balance - not about flagging potential problems.

Feb 15, 2026: Audit issues

Audit

Purpose of an audit - followup.

As discussed yesterday,  I do not want an audit to rubber stamp the status quo.
I prefer to point to the elephant in the room and document it for future HOA Board of Directors.

Below is what I think the purpose of an HOA audit is.  it's not an indepth audit but to document Associa's conflict of interest and how to move forward;

An  HOA property management financial audit serves several critical purposes, primarily focused on 
legal compliance, financial transparency, and fraud prevention, under Washington state law (RCW 64.38.045)

Key Purposes of an HOA Financial Audit
1.  Legal & Bylaw Compliance: 
• Fraud & Mismanagement Prevention: Audits serve as a safeguard against the misuse of funds by identifying discrepancies, unauthorized payments, or errors in financial records and or conflict of interest

2.  Building Community Trust: Independent verification provides homeowners with confidence that their dues are being managed responsibly by both the board and the property management company



3 Financial Health & Planning: A professional review identifies areas of inefficiency, such as overspending on contracts or underfunded reserve accounts, allowing for more accurate future budgeting.

4 Fiduciary Protection: Audits help board members fulfill their fiduciary duties by proving they are acting in good faith and managing association assets responsibly.

5  Management Transitions: Transitioning to a new property management company or from developer to homeowner control often triggers an audit to ensure the incoming board starts with a clean financial record. 

Conflict of Interest

The Associa-to-Associa loop has not been fully revealed.  When a request for information was filed, Blue Mountain produced Exhibit B, claiming the Exhibit B is part of the contract. It's not.  Have not received "Documentation of the competitive bidding process that demonstrates AOC provided the most cost-efficient bid."

Potential Conflict of Interest: Request for Information

Hi Joseph,

 

Exhibit B is an addendum to the contract that is updated each year. If the board does not want to proceed with project management with AOC, please let me know. Thank you!

 

 

Mahalo,

Korin Umbay, CMCA

Community Manager

Blue Mountain Community Management -An Associa? Company

Associa? – Delivering unsurpassed management and lifestyle services to communities worldwide.

www.Bluemountaincommunity.com

Office: 503-332-2047

Dear Board of Directors,
C.c Blue Mountain
C.c. Windust HOA

Under RCW 64.38.045 for Washington, I am requesting access to the following records regarding the Association’s relationship with Associa OnCall (AOC):

The signed contract between Windust HOA and Blue Mountain does not mention in-house maintenance  or AOC:  Are there any any clauses or addendums regarding the use of affiliated businesses or "In-House" maintenance?

• Any written conflict of interest disclosures provided by Blue Mountain regarding their ownership/affiliation with AOC.

• Documentation of the competitive bidding process that demonstrates AOC provided the most cost-efficient bid.

I am requesting these to ensure the Association is maintaining its fiduciary duty to the homeowners by prioritizing cost-efficiency and contract compliance. Please let me know when these documents will be available for review.


See Exhibit A for context;

 its a classic "conflict of interest" loop that often plagues managed communities, when a management company (Blue Mountain) uses its own subsidiary (Associa OnCall) as a vendor, the lines between oversight and profit become blurred.

If Associa OnCall (AOC) is being treated as an untouchable fixture rather than a replaceable vendor, the HOA Board may be failing in its fiduciary duty to seek the best value for the homeowners. 
Key Areas of Contractual Friction
• The "Arm's Length" Requirement: Most management contracts imply (or explicitly state) that any affiliated vendors must be competitive with market rates. If AOC is refusing to abide by the primary contract terms, they are technically in default of their vendor agreement.
• The Power of the Board: Contractually, the Management Company works for the Board. If the Board has not authorized a "preferred vendor" status that bypasses competitive bidding, Blue Mountain cannot legally force AOC upon the association if more cost-efficient alternatives exist:  which there appears to be.  See below
• Scope of Work Violations: If AOC is ignoring specific performance standards outlined in the Windust HOA contract, these instances should be documented as "Notice to Cure" item


The "Hidden" Hurdle
Often, management companies like Blue Mountain make it "convenient" to use AOC by waiving administrative fees that they might otherwise charge for managing outside vendors.

To move forward with this, we need to establish whether the previous Board of Directors knowingly waived their right to competitive pricing in favor of the convenience offered by Blue Mountain/Associa.

Since Associa OnCall (AOC) is an affiliate, their use typically requires a specific Conflict of Interest Disclosure or a specific addendum in the management agreement. If the previous Board didn't formally documented this "self-dealing" arrangement, they may be in breach of their fiduciary duties.

• The Master Management Contract: Specifically the sections regarding "Affiliated Services" or "Vendor Selection."
• Disclosure Statements: Any written disclosure from Blue Mountain regarding their financial interest in Associa OnCall.
• Meeting Minutes: The minutes from the Board meeting where the use of AOC was approved over other independent bidders.
• The "Request for Proposal" (RFP) Log: Records of any competing bids solicited before AOC was awarded maintenance tasks.






Regards

Joseph Lewis Aguirre

TownSq 

Arguing against use of TownSq for critical information puposes: general reach is 5-20 homeowners 

The relationship between 
Blue Mountain Community Management (an Associa company) and TownSq is a direct business partnership that may present a conflict of interest if not transparently disclosed to the HOAs they manage. 


The Associa-TownSq Relationship
• Direct Partnership: Associa officially partnered with TownSq in 2017 to launch the platform across its communities, including those in Washington.
• Internal Integration: Associa markets TownSq as its "innovative all-in-one platform". While TownSq is owned by HOAM Ventures as of 2022, Associa remains its primary North American partner and integrates it deeply into its management services. 

Potential Conflict of Interest
Whether this constitutes a legal or ethical "conflict of interest" typically depends on disclosure and contractual obligations:
• Financial Incentive: If Blue Mountain or Associa receives financial benefits (referral fees, reduced licensing costs, or equity-related gains) from HOA subscriptions to TownSq, a conflict exists because their recommendation may be motivated by profit rather than the community's best interest.
• Discouraging Alternatives: Discouraging "blast mail" (which you noted as more engaging) in favor of a proprietary or partnered app can be seen as self-serving if it limits the board's ability to reach residents effectively.
• Washington State Law: Under RCW 30B.24.020, fiduciaries must provide "reasonable disclosure" of conflicts that could have a "material adverse impact" on their judgment. 

Blue Mountain Construction Coordinator 

Blue Mountain can't confirm quality of service for "Your request for enhanced communication for work and projects will absolutely be honored when we have AOC coordinated projects. However, for situations with your chosen vendors (In this case, NLS), I cannot always guarantee a clear line of communication when it comes to their schedule" what's the difference 

(Associa-to-Associa loop)  refuses to abide by the contract:  The HOA legally owns all the bids and sets performance and quality standards

After the project coordinator claimed original bids were none of the BOD's business, Blue Mountain was compelled to produce one after reminding them bids were legally owned by the association. 

Bid manipulation 

Contract specifically states the BOD determines quality and performance standards 

Original quote from Resperia,  after Blue Mountain was notified legally belonged to the Windust Meadows HOA and not Blue Mountain or Associa project coordinator, turned out to have identical numbers as the bid the project coordinator presented to the board as a combination of Rssperia and PNWS (SP)

Censorship

While the contract is very  clear about the communications hierarchy, Blue Mountain chooses to ignore it.

Repeated calls to collect the record ignored

Blue Mountain as enabler

Blue Mountain enabling Selective parking violations in public steets and wasting attorney's fees by asking for a legal opinion as to whether the Association can issue citations to homeowners for illegal parked cars NOT owned by homeowners. 

 

Miscellaneous

A reputation in the industry for late payment can result in inflated bids and discourages  smaller contractors who cannot carry the debt.