February 2, 2021

Washington Court of Appeals Affirms HOA's Covenant Amendment

The Washington Court of Appeals recently affirmed a trial court's decision that a homeowners association had the authority to adopt an amendment to the covenants governing the property without a unanimous vote of the owners. The Court noted that an express reservation of power authorizing less than 100 percent of property owners within a subdivision to adopt new restrictions (as opposed to changing existing covenants) respecting the use of privately owned property is valid if such power is exercised in a reasonable manner consistent with the general plan of the development. After reviewing the association's covenants, the Court ruled that the plaintiffs failed to show that any portion of the amendment at issue was inconsistent with the general development plan, imposed unreasonable disparate impacts on their property, or were otherwise invalid.      

January 20, 2021

COVID Proclamation Affecting Community Associations Extended Indefinitely

The Governor of Washington state issued a Proclamation yesterday that permits owners and directors in condominium and homeowners associations to continue to vote by mail, electronic transmission, and proxy and to attend meetings by conference telephone and similar electronic services until the termination of the COVID-19 state of emergency or the rescinding of the Proclamation, whichever occurs first.  This Proclamation also extends a previous prohibition on condominium and homeowners associations charging late fees for delinquent assessments until the termination of the COVID-19 state of emergency or the rescinding of the Proclamation, whichever occurs first.

December 3, 2020

Washington Court of Appeals Rules Tennis Court Removal Vote Complied With CC&Rs

Most of the owners in the Pickle Point neighborhood of Bellevue, Washington voted to remove a tennis court in the neighborhood's common area. An owner in the neighborhood then filed a lawsuit challenging the validity of that vote. The Washington Court of Appeals recently affirmed the lower court's summary dismissal of that lawsuit. The Court ruled that the removal vote complied with the applicable protective covenants, conditions, and restrictions ("CC&Rs"). The Court noted that the Architectural Control Committee ("ACC") established by the CC&Rs weighed all reasonable options and specifically considered whether to leave the tennis court as is, covert it to a grassy area, or reallocate ownership.  The Court concluded that the ACC properly exercised its authority to remove the tennis court.          

November 16, 2020

Washington Court of Appeals: Business Judgment Rule Only Protects Directors

The Washington Court of Appeals recently decided in a published opinion that the business judgment rule protects the directors of a condominium or homeowners association from personal liability but does not immunize the association itself.  The business judgment rule limits the liability of corporate management where (1) the decision to undertake a transaction is within the power of the corporation and the authority of its management; and (2) there is a reasonable basis to indicate that the transaction was made in good faith.  If that rule applies, then a plaintiff may only challenge a decision if made through fraud, dishonesty, or incompetence.  It is based on the notion that directors of a corporation are not liable for mere mistakes or errors of judgment.  The Court's opinion pointed out that directors are required to exercise reasonable care even under the business judgment rule and that directors' failure to adequately investigate a matter removes them from the rule's insulating effect.   

October 6, 2020

Governor Allows Community Associations to Keep Meeting and Voting Remotely

A new COVID proclamation issued by Governor Inslee permits owners and directors in condominium and homeowners associations to continue to vote by mail, electronic mail, and proxy and to attend association meetings by conference telephone and similar electronic services until 11:59 p.m. on January 19, 2021. This proclamation also extends the prohibition on community associations charging late fees for delinquent assessments until that date.