September 25, 2009

New Laws Regarding Solar Energy Panels, Adult Family Homes, and Reserve Studies

Three bills that directly affect Washington condominium or homeowners associations were signed into law during the last legislative session. The first two new laws limit homeowners associations’ ability to interfere if owners want to install solar energy panels on their property or use their property as an adult family home. The third new law allows small condominium associations to exempt themselves from the legal requirement to obtain a reserve study if they fulfill certain conditions.

Senate Bill 5136 states that homeowners associations’ governing documents may not prohibit the installation of solar energy panels on an owner’s property unless the panels do not comply with applicable safety and performance standards. This law does not apply to common areas. Homeowners associations’ governing documents may impose reasonable restrictions on the placement and appearance of solar energy panels. For example, governing documents can require solar energy panels to not be visible above roof lines and require portions of the equipment to be painted to coordinate with the roofing material.

House Bill 1935 states that homeowners associations’ governing documents may not limit the use and operation of “adult family homes” on the property. An adult family home is a residential home in which one or more individuals care for two to six adults who are not related by blood or marriage to the individuals providing the services. Homeowners associations are permitted to enforce reasonable nondiscriminatory regulations (such as general landscaping and sign standards) to adult family homes as long as those regulations apply to the rest of the residential property as well.

Senate Bill 5461 states that a condominium association with ten or fewer unit owners is not required to follow the reserve study requirements that went into effect last year if two-thirds of the owners agree to exempt the association from those requirements. The owners must agree to maintain that exemption by a two-thirds vote every three years. The condominium association must include the required disclosure that it does not have a reserve study in resale certificates if it opts for the exemption.

September 18, 2009

A Quick Guide to Budget Ratification

The board of the Issaquah Highlands Community Association recently had a landscaping problem on its hands. Undeveloped common areas that were too steep for people to reach safely or cheaply were becoming overgrown and unsightly. The board responded by renting herds of goats to munch on the unwanted vegetation for several weeks. The board’s creativity and frugality will probably be appreciated as the association considers its next budget. As community associations enter another budget season, they should make sure that they are following the correct procedures.

The Washington laws that govern condominium and homeowners associations require boards to provide owners with summaries of proposed budgets and schedule owners’ meetings between 14 and 60 days later to consider ratification of proposed budgets. Unless owners holding a majority of the voting power or any larger percentage specified in the declaration reject the proposed budget at the meeting, the proposed budget is ratified (whether or not a quorum is present at the meeting) and takes effect. If the proposed budget is vetoed or the required notice is not given, the last budget ratified by the owners continues until another budget is ratified. An association’s governing documents may impose additional requirements pertaining to budgets as well.

The budget ratification meeting is the board’s best opportunity to proactively address owners’ concerns about the size of their assessments and the association’s spending priorities. For example, if the budget increases reserve account contributions, the board should be prepared to explain how this added expense will contribute to the common good. Taking the time to reveal the reasons behind the numbers at the budget ratification meeting will put many owners at ease and can prevent larger disputes later.

September 11, 2009

What's That Noise? - Hard Surface Flooring and Condominium Living

A certain amount of noise must be tolerated in multi-family housing. However, sometimes the situation becomes intolerable. Installation of hard surface flooring in a condominium unit may increase its value, but it can also ruin a downstairs owner’s life. This is why many Washington condominiums have provisions in their declarations that forbid the installation of hard surface flooring in a unit without prior written approval of the board.

Provisions restricting hard surface flooring allow boards to act as gatekeepers. Boards may either ban that flooring entirely or allow it subject to conditions, such as compliance with codes relating to sound transmission. Some boards require owners to install specific sound deadening materials under new hard surface flooring. In some cases, soundproofing systems can substantially lessen the additional noise from new hard surface flooring.

If an owner has improperly installed hard surface flooring that is causing a problem, then the board may have to consider using fines and/or a lawsuit to compel the owner to restore the original flooring. A history of not requiring prior written approval for hard surface flooring can complicate matters, but one valid response is that the board is acting appropriately now. A deliberate failure to enforce a clear provision of the declaration when the circumstances call for it would leave the association and the board vulnerable to civil liability.

September 7, 2009

The Importance of Foreclosing Properly

New York Supreme Court Justice Arthur M. Schack has a motto taped on the wall near the entrance to his chambers – “Be sure brain in gear before engaging mouth.” This is good advice for us all. The New York Times recently featured a profile of this fiery jurist, who has denied 46 of the 102 foreclosure motions that have come before him over the last 2 years. His hard-nosed approach reflects the reality that more judges are scrutinizing foreclosure actions and holding them to a higher standard.

In Justice Schack’s courtroom, if a bank can not prove ownership in a foreclosure action, the case is over. This is a problem because many mortgage documents can no longer be found. It is often unclear which bank owns a mortgage. “If you are going to take away someone’s house, everything should be legal and correct,” he maintains. “I’m a strange guy — I don’t want to put a family on the street unless it’s legitimate.”

Condominium and homeowners associations should scrupulously follow the appropriate legal procedures when pursuing foreclosure actions. This will maximize their potential for success.