June 1, 2018

Washington Uniform Common Interest Ownership Act (WUCIOA) Effective July 1

The Washington Uniform Common Interest Ownership Act (WUCIOA) takes effect on July 1.  This new law applies to all condominium and homeowners associations created in Washington on or after that date.  The following section of WUCIOA applies to condominium and homeowners associations created in Washington before that date as well:

Section 326 Adoption of Budgets - Assessments and Special Assessments

(1)(a) Within thirty days after adopting of any proposed budget for the common interest community, the board must provide a copy of the budget to all the unit owners and set a date for a meeting of the unit owners to consider ratification of the budget not less than fourteen nor more than fifty days after providing the budget.  Unless at that meeting the unit owners of units to which a majority of the votes in the association are allocated or any larger percentage specified in the declaration reject the budget, the budget and the assessments against the units included in the budget are ratified, whether or not a quorum is present.  

(b) If the proposed budget is rejected or the required notice is not given, the periodic budget last ratified by the unit owners continues until the unit owners ratify a subsequent budget proposed by the board.

(2) The budget must include:

(a) The projected income to the association by category;

(b) The projected common expenses and those specially allocated expenses that are subjected to being budgeted, both by category;

(c) The amount of the assessments per unit and the date the assessments are due;

(d) The current amount of regular assessments budgeted for contribution to the reserve account;

(e) A statement of whether the association has a reserve study that meets the requirements of WUCIOA and, if so, the extent to which the budget meets or deviates from the recommendations of that reserve study; and

(f) The current deficiency or surplus in reserve funding expressed on a per unit basis.

(3) The board, at any time, may propose a special assessment.  The assessment is effective only if the board follows the procedures for ratification of a budget described in subsection (1) and the unit owners do not reject the proposed assessment.  The board may provide that the special assessment may be due and payable in installments over any period it determines and may provide a discount for early payment. 

Starting next month, all Washington condominium and homeowners associations must comply with these procedures when adopting their budgets.

April 9, 2018

Washington Court Upholds Homeowners Association's View Enforcement Decision

A Snohomish County homeowner recently proposed to increase the height of his roof by seven feet, which obstructed the view of Puget Sound from at least one neighboring house.  After the Picnic Point Homeowners Association denied his proposal, the homeowner sued.  The Court of Appeals ruled in a published opinion last month that the plain language of the covenants and the relevant extrinsic evidence supported the Association's enforcement decision.

The Association’s covenants state that “no structures, including fences, hedges or boundary walls, may be constructed or modified on any parcel to a height which would … obstruct the Puget Sound or park view of any other parcel.”  The appellate court held that this plainly prohibits any view obstruction, no matter how minimal.  The Court pointed out that permitting marginal obstructions would result in the gradual elimination of the views that the covenants are attempting to protect.

March 30, 2018

Well, Yes - Washington Court Affirms Authority of Homeowners Association

Two Washington homeowners recently challenged the authority of their homeowners association to manage well water services in their housing development.  In an opinion published earlier this month, the Washington Court of Appeals affirmed that the homeowners association’s exercise of authority was consistent with Washington law and the homeowners’ deed.

RCW 64.38.010(11) states that a homeowners’ association must be: (1) a corporation, unincorporated association, or other legal entity, each member of which (2) is an owner of residential real property located within the association’s jurisdiction, as described in the governing documents, and (3) by virtue of membership or ownership of property is obligated to pay real property taxes, insurance premiums, maintenance costs, or for improvement of real property other than that which is owned by the member.  Since the lot owners in this case were obligated to pay maintenance and insurance costs regarding wells and this obligation arose from joint ownership of the wells, the homeowners association in this case was held to constitute a valid homeowner’s association entitled to exercise the powers described in RCW 64.38 and its CC&Rs.

The appellate court went on to rule that the challenging homeowners did not have the legal right to challenge the homeowners association’s authority because they had ratified its existence and actions.  Ratification occurs when a homeowner either (1) voluntarily accepts the benefits and obligations of the association’s actions with full knowledge of the facts warranting rescission, or (2) accepts the benefits and obligations imposed by the association without inquiry.  The second form of ratification - action without inquiry - was held to apply in this case.  All of the pertinent facts were contained in the title documents, and “a party to a real estate contract will not be heard to declare that he did not read it, or was ignorant of its contents.” 

March 5, 2018

Legal Blogs Are Not A Substitute for Legal Advice

Washington condominium and homeowners association boards face the constant temptation to rely on legal blog posts rather than paid advice from attorneys. They should resist that pernicious pull.  

Attorneys' blog posts are not legal advice, nor are they intended to be.  They provide (at most) a general overview of a subject or issue, and this almost always fails to reflect the complexities encountered when applying legal rules and their many exceptions in specific situations.  Without additional guidance from attorneys, relying on information contained in blog posts often leads to boards misinterpreting that information and reaching incorrect conclusions.  Subsequent events can also render blog posts obsolete in some or all respects.  

As the adage goes, those who represent themselves in legal matters have fools for clients. Washington community association boards should establish relationships with attorneys who focus their practices on community association law and who diligently stay abreast of current developments in that area.  Such attorneys can help them comply with their legal obligations and minimize legal problems when they arise.  As Benjamin Franklin advised about fire safety, an ounce of prevention is worth a pound of cure.          

January 30, 2018

Pheasant Island - The 359-Year-Old Condominium Between Spain and France

Pheasant Island is a tiny (about 3,200 square feet) wooded island in the middle of the Bidassoa River between Spain and France.  In 1659, those two countries negotiated the end to a long war there.  The Treaty of the Pyrenees, which established the border between Spain and France and swapped territory between those two countries, was signed on that island.  The treaty states that Spain and France will share that island by each ruling it for a six-month period each year.  This type of joint sovereignty is called a condominium, and Pheasant Island is one of the oldest in existence.  

Spain and France now meet a few times each year to discuss issues of common interest and disputes relating to Pheasant Island.  For example, Spanish fishermen have recently argued that French pleasure boating near the island has a negative effect on their business.  Each country cuts the grass and prunes the trees on the island during its period of rule. Since the river's tides sometimes allow Spanish pedestrians to reach the island, Spanish police also remove illegal campers on the island from time to time.  May the spirit of cooperation allow this 359-year-old condominium to continue for many more years!  

January 2, 2018

Washington Condo Associations Do Not Have Lien Priority Over Existing HOAs

The Washington Court of Appeals affirmed last month that a condominium association's lien for assessments was not entitled to statutory priority over similar assessments made pursuant to the covenants of an existing homeowners association within which the condominium was organized.  It based that decision on an exception to lien priority found in RCW 64.34.364(2)(a) for encumbrances on property before the recording of the declaration.  The appellate court concluded that the homeowners association's covenants are encumbrances because they consist of "restrictions that diminish the value of the condominium."  It affirmed the trial court's award of attorney fees to the homeowners association and awarded it appellate attorney fees as well.