The Washington Court of Appeals issued a published opinion earlier this year that enforced a sixty percent approval requirement for assessment increases contained in a homeowners association's bylaws. The Court held that the budget ratification process described in the Washington Homeowners' Associations Act (RCW 64.38) is distinct from the assessment imposition process and does not override this type of approval requirement for assessment increases. In the case of this association, this means that one standard applies when ratifying budgets (owners holding more than forty-nine percent of the voting power must either vote for it or not vote) and another standard applies when assessment increases are proposed (at least sixty percent of the owners present at a meeting must vote for it). This decision is now being appealed.
October 15, 2014
The Washington Supreme Court issued a published opinion this past April that significantly limited the ability of homeowners associations to create new restrictive covenants that have no relation to existing covenants. The case involved a dispute between a homeowners association and a group of owners over the validity of a majority-approved covenant amendment prohibiting short-term vacation rentals. The owners contended in their lawsuit that the covenant amendment required unanimous owner consent because the existing covenants did not contain any durational limitations on leasing and only gave the association the power to change existing covenants by majority vote (as opposed to the power to create new covenants that have no relation to existing covenants).
The Court agreed with the owners and invalidated the covenant amendment. It held that if a homeowners association's existing covenants only authorize it to change existing covenants by majority vote, then that association may only adopt a covenant amendment imposing new restrictions on the use of the property by majority vote if that amendment is "consistent with the general plan of development and related to an existing covenant." It is notable that two dissenting opinions argued at length that the correct legal standard in this situation is whether the amendment was adopted "in a reasonable manner [and is] consistent with the general plan of development."
As a result of this decision, some homeowners associations may seek to amend their covenants to permit the creation of new restrictive covenants by majority vote. If your association wants to amend its covenants in any manner, then it should strongly consider consulting an attorney who is familiar with the laws that apply to such amendments.
September 18, 2014
The Washington Court of Appeals ruled in a published opinion earlier this month that 90% owner approval is necessary to amend the declarations of condominiums created after July 1, 1990 in a manner that restricts owners' ability to lease their units. The Court based its ruling on a provision in the Washington Condominium Act that requires 90% owner approval for declaration amendments that change "the uses to which any unit is restricted." Leasing was deemed to constitute a "use" of property. Interestingly, the Court declined to award the prevailing party its attorney fees "given the debatable issues of law presented in this case." This decision is now being appealed.
This new ruling regarding leasing restriction approval does not apply to condominiums created on or before July 1, 1990 unless they have amended their declarations to incorporate the amendment standards contained in the Washington Condominium Act. Furthermore, it does not invalidate declaration amendments restricting leasing rights that received less than 90% owner approval that were recorded more than one year ago by condominiums created after July 1, 1990 due to a statute of limitation contained in the Washington Condominium Act. However, this new ruling does make declaration amendments restricting leasing rights that received less than 90% owner approval that were recorded less than one year ago by condominiums created after July 1, 1990 vulnerable to legal challenge.
Community association law is constantly being amended and clarified by legislatures and courts. Attorneys who focus their practices on community associations are in the best position to keep abreast of those developments. Wise boards seek advice from such attorneys before proposing amendments to their associations' governing documents.
August 11, 2014
The King County Office of Civil Rights will present free fair housing workshops in Seattle on August 19 and September 17. The August workshop will discuss reasonable accommodations and modifications for residents with disabilities. The September workshops will include an introduction to fair housing laws and a discussion of more advanced problems in this area. These workshops can help condominium and homeowners association boards understand and comply with the obligations imposed on them by those laws. If you want to learn more, then please visit the Office's website.
June 24, 2014
HOALeader.com will be presenting a webinar about special assessments on Thursday, June 26, from 11:00 PST to 12:00 PST. I will be one of the panelists in that webinar. I look forward to providing insights about how to make the special assessment process as painless as possible and how to avoid it altogether if possible. If you want to register for or learn more about this webinar, then please go to HOALeader.com's website.