March 12, 2010

Recent Case Upholds Homeowners Association's Power to Assess Owners

The Washington Court of Appeals filed an unpublished opinion last week in a case about the scope of a homeowners association’s power to assess owners. Several owners challenged the Driftwood Key Club’s authority to demand dues from them because the Club’s covenants were almost completely silent about that subject. The court decides that the Club’s articles of incorporation and bylaws complement its covenants and provide it with broad authority to impose assessments on owners. Washington courts are apparently willing to allow articles and bylaws to substantially elaborate on (but not contradict) very sparse language in an association’s covenants.

During the course of this opinion, the court significantly rejects the Club’s argument that it inherently has the power to assess listed in the “Association Powers” section of the Washington Homeowners’ Associations Act. It is important for boards of both condominium and homeowners associations to remember that the association powers listed in their governing documents are their primary source of authority. If a state law lists available powers that are not contained in an association's governing documents, then the association must seek to amend the governing documents if it wants to take advantage of those powers.

The Club’s attorney cited Wikipedia at one point in its brief to the appellate court. This did not go over well. The court responds that “the best citations to Wikipedia for legal practitioners are those citations that underscore its potential for inaccuracy and user abuse.” It then describes how The Colbert Report showed Stephen editing his show’s entry in Wikipedia to describe Oregon as (among other things) “Washington’s Mexico”.