June 19, 2009

Special Meeting Dispute Highlights Laws' Priority Over Governing Documents

Board decisions to increase assessments, reduce amenities, or enforce the governing documents can spark unpleasant and costly confrontations with groups of dissatisfied owners. The current situation in Iran demonstrates that uprisings can quickly take on a life of their own. The ongoing turmoil within the Sudden Valley Community Association provides an instructive example of community association strife that is much closer to home.

Sudden Valley is located about 70 miles north of Seattle. The Sudden Valley Community Association’s board of directors was served with a petition last month that sought the recall of 5 executive board members. The petition was signed by 55 owners, which satisfied the 50 signature requirement in the Association’s bylaws. The board rejected the petition on May 30 after consulting with the Association’s attorney. The attorney pointed out that the petition did not contain enough signatures to comply with the Washington Homeowners’ Associations Act, which states that special meetings of an association may be called by owners holding at least 10% of the votes in the association. The owners in favor of the recall are now gathering more signatures to meet that requirement.

Interestingly, the petition at issue would have been valid if the Association was a condominium association rather than a homeowners association. The Horizontal Property Regimes Act does not contain any restrictions regarding how special meetings may be called, and the Washington Condominium Act permits owners having 20% of the votes in the association “or any lower percentage specified in the declaration or bylaws” to call special meetings.

Laws enacted by the Washington State Legislature override provisions of community associations’ governing documents when there is a conflict between the two. Simply following the requirements of the association’s governing documents is thus not an advisable policy. It is important for boards to familiarize themselves with the laws relating to their associations and/or consult an attorney to ensure compliance with those laws. This often results in increased respect for board decisions and fewer disputes with owners over time. Even if conflict persists, the board will have placed the association on a firm legal footing that is likely to be upheld if challenged.