Recent Articles Discuss Rental Enforcement and Reserve Withdrawals

I was privileged to be quoted in two recent articles at HOAleader.com.  In the first article, I discuss how Washington condominium associations are increasingly using online sources to enforce their rental restrictions when there is evidence of short-term leasing.  In the second article, I discuss how Washington condominium and homeowners associations must follow certain rules when they withdraw reserve funds to address unforeseen or unbudgeted costs.  These articles also contain insights from attorneys in other states regarding those issues.             

Condominium's Leasing Restriction Ruled Invalid by Washington Court

The Washington Court of Appeals recently issued an unpublished opinion addressing a condominium association's attempt to restrict leasing of units.  In this case, the condominium's original declaration stated that no more than twenty-five percent of the units could be leased at any one time. The declaration established a first-come, first-served waiting list for owners who wanted to lease their units but could not due to the leasing limit.  The association recorded an amendment to the declaration that allowed leased units to be sold and then leased again without giving the owners on the waiting list an opportunity to lease their units.  Owners on the waiting list argued that the amendment was not enforceable.  The Court agreed.                     

The Court first noted that restrictions on owners' ability to lease their units must be contained in a condominium's declaration or in a properly approved and recorded declaration amendment.  In this case, the condominium's declaration stated that it could be amended only by the vote or agreement of at least sixty-seven percent of the owners. Since the association did not obtain the vote or approval of sixty-seven percent of the owners before recording the amendment, it was not properly approved and could not be enforced.   

The Court went on to note that the declaration amendment would be unenforceable even if it were considered to be a house rule.  First, such a house rule would conflict with the declaration, and declarations prevail over house rules when there is conflict between the two. Second, such a house rule would be unreasonable both in purpose and in application.  The house rule's purposes (to protect the value of the original rental units and to allow a board member who bought a rental unit to bypass the waiting list) would be unreasonable because they would not be consistent with improving the health, happiness, and peace of mind of a majority of the condominium's residents.  The house rule's application (favoring one group of owners over another group of owners in terms of leasing) would also be unreasonable because it would not be uniform.  

Restriction of leasing in the condominium context is fraught with peril.  Associations should obtain legal advice if they desire new leasing standards in their communities. 

Scary Halloween Thoughts for Community Association Boards

I am looking forward to taking my younger son (costume: kung-fu student; price: free!) trick-or-treating tonight.  I am also thinking about two temptations that community association boards must confront - the temptation to rely on property managers for legal advice and the temptation to rely on public sources of information for legal guidance.

Association boards understandably want to keep legal budgets as small as possible.  This sometimes leads boards to ask their property managers to provide legal advice or to rely on legal advice offered by property managers.  This can lead to scary results.  Property managers do not have the training and knowledge that are necessary to provide associations with legal advice.  If association boards want to fulfill their legal responsibilities and avoid liability, then they should only seek and accept legal advice from attorneys.

It can also be tempting for association boards to rely on public sources of information like articles, blogs, and seminars rather than seeking legal advice from attorneys.  Such a do-it-yourself approach to legal issues can lead to scary results as well.  Public sources of information usually provide broad overviews of subjects, which necessarily involves omitting numerous details and exceptions.  In addition, there is a substantial possibility that boards will misinterpret public sources of information regarding legal issues.  It is often said that a person who represents himself has a fool for a client. Boards should not put their associations in that position.

Happy Halloween!                                     

Washington Homeowners Association Prevails in Pipe Maintenance Litigation

A recent unpublished opinion by the Washington Court of Appeals involved a dispute between the Crystal Ridge Homeowners Association and the City of Bothell over responsibility for a buried interceptor pipe.  When the pipe failed and caused flood damage, the Association sued the City, arguing that the pipe was the City's responsibility to maintain.  The trial court and the appellate court agreed with the Association.

The courts’ decisions were based on careful examination of the recorded plat for the Crystal Ridge development.  The courts concluded that the plat dedicated the pipe at issue to what was then unincorporated Snohomish County as part of a drainage easement.  This dedication made the City responsible for maintaining that pipe. 

Establishing maintenance obligations based on recorded documents can be a difficult task.  My office often helps homeowners associations understand what they are responsible to maintain and what others are responsible to maintain.               

We Now Offer Legal Services to All Washington Community Associations

Until recently, my office limited itself to the provision of legal services to community associations in the Puget Sound area (King, Pierce, and Snohomish Counties).  However, it has become apparent to me over the last several years that many associations' legal needs can be handled largely or entirely using mail, email, and telephone. I am therefore proud to announce that my office now offers legal services to condominium and homeowners associations throughout Washington state.  If your association is located outside the Puget Sound area and needs legal guidance, then we would be glad to assist you.             

Washington Court Voids HOA Committee's Decision Enforcing View Covenant

The Washington Court of Appeals recently issued a published opinion that invalidated the decision of a homeowners association's covenants review committee.  The committee had decided that an owner's maple tree violated a restrictive covenant protecting views and had required that the tree be trimmed or removed.  The appellate court concluded that the committee's decision was based upon an incorrect interpretation of the relevant covenant and was not enforceable. 

The covenant at issue in this case stated that trees must not "unnecessarily" interfere with the view of another resident.  The covenants review committee subjectively determined that the tree in question unnecessarily interfered with a neighbor's view of the Olympic Mountains.  The appellate court ruled that the committee should have applied an objective standard instead.  The court held that the portions of a tree necessary to its survival are a necessary interference with the view of another residence.  Since the committee applied the wrong standard, the court struck down its decision.

Washington condominium and homeowners associations and their committees are often required to interpret and enforce their governing documents.  Seeking advice from an attorney with experience in this area can help to ensure that they do so correctly.             

Enforcement of HOA Covenants Makes for Good TV

The current season of the reality show Duck Dynasty has included some hilarious moments.  In one recent episode, Jase Robertson (one of the stars of the show) was fined by his homeowners association for burning leaves and keeping chickens in his yard.  Mr. Robertson attended an association meeting to challenge the fine and made the following plea to association's board of directors: "We are endowed by our creator with certain unalienable rights: life, liberty, and the pursuit of happiness.  Chickens make me happy.  They get insects.  They fertilize your yard, and if anything goes wrong, you can put them in a pot."  The association's board of directors pointed out that the association's covenants are a lawful restriction of his rights to liberty and the pursuit of happiness and denied his appeal.  Mr. Robertson backed down, stating that he was not aware of what was in the covenants when he bought the property.

Scripted TV or not, this incident reflects two important realities regarding community associations.  One, most owners do not read associations' governing documents.  Two, most owners will do as they please until boards intervene, even if their behavior has a negative impact on their neighbors.  By taking action to enforce associations' governing documents, boards help to ensure that the ultimate purposes of associations' governing documents (enhancement of property values and community harmony) are achieved. 

If your association's board has questions about how to enforce its governing documents, then it should consider contacting my office to obtain guidance regarding that subject.  This can help keep the board out of legal trouble and increase the happiness of the community as a whole.

Washington Condos and HOAs in the News

Community associations are regularly featured in the media. Sometimes the news is positive (community-building grants), sometimes the news is negative (a lawsuit over an amendment’s validity), and sometimes the news is both positive and negative (debate and conflict over clotheslines).

PNWlocalnews.com recently included an article about two homeowners associations in Fairwood, Washington that received grants to support their summer "Concerts in the Park" series.  During 2013, King County will award $60,000 in grants for community projects in unincorporated areas. The article about these grants can be read here.

A Spokane condominium is currently embroiled in a legal battle over the validity of changes to its governing documents. Officers of the condominium association modified the agreement in 2008 to create additional condominium units out of roof space, which shrank the voting rights of other members and gave away common property without notifying the owners or conducting a vote. A lawsuit has been filed challenging the validity of this amendment. A Spokesman-Review article about this lawsuit can be read here.

Some Washington condominium and homeowners associations prohibit the use of clotheslines, citing safety or aesthetic concerns. However, owners are increasingly advocating for a right to use clotheslines as an energy and cost-saving alternative to electric dryers.  A recent article in the Seattle Times about this clothesline debate can be read here. 

Summertime Community Building

Interactions between owners in condominium and homeowners associations are all too often characterized by animosities, grievances, and recriminations. An association’s efforts to cultivate better relations between neighbors can minimize that destructive pattern. Here are five simple ways to foster relationships and build community:

1. Place picnic tables in common areas.

2. Schedule potluck dinners, movie nights, and book clubs.
   

3. Create garden spaces and invite owner participation.

4. Call meetings to discuss emergency preparedness and other topics.

5. Distribute newsletters (and include humor whenever possible).

The sunny days of summer are a great time to start encouraging more goodwill in your association.  Good luck!

My Office Now Offers Post-Judgment Collection Services

Creditors often obtain judgments against persons who owe them money in small claims court without hiring attorneys.  Consider this common scenario: a landlord seeks a small claims judgment against a tenant who failed to pay rent, the tenant does not appear for the hearing, and the landlord is awarded a judgment.  The landlord is now faced with a more difficult problem: how does he or she collect the judgment amount?

I am pleased to announce that my office now offers post-judgment collection services to individuals and businesses. We can assist creditors in locating real property, filing judgment liens, and garnishing bank accounts and wages.  In addition, once contact has been made with the judgment debtor, we are sometimes able to negotiate settlements and payment plans without resorting to harsh collection remedies.  

If you have obtained a judgment and don't know what to do next, then you should consider contacting my office. We may be able to help you collect your money.   

Two New Laws Affect Washington Community Associations

Almost every session of the Washington Legislature produces new laws pertaining to Washington condominium and homeowners associations.  This legislative session resulted in the passage of two such laws - one governing speed limit enforcement and one governing meeting notices.

Washington homeowners associations have had the power to establish and enforce speeding rules on private roads within their communities since 2003.  There are four conditions associated with the exercise of that power: 

1. A majority of the association's board of directors must vote to authorize the issuance of speeding infractions and to declare a speed limit not lower than twenty miles per hour;

  

2. A written agreement regarding speeding enforcement must be signed by the association president and the chief law enforcement official of the city or county;

3. The association must provide written notice to all owners describing the new authority to issue speeding infractions; and

4. Signs must be posted declaring the speed limit at all vehicle entrances to the community.

The first new law grants Washington condominium associations the power to establish and enforce speeding rules on private roads subject to those conditions as well.

The Washington Homeowners' Associations Act (RCW 64.38) requires those associations to follow certain procedures when notifying owners of association meetings.  Electronic notice was not mentioned in the original Act.  The second new law amends the Act to permit Washington homeowners associations to notify owners of association meetings using electronic transmissions.  Owners must first opt in to electronic notice by delivering a written notice to the Association requesting to receive notices by electronic transmission.  

The second new law does not affect Washington condominium associations.  The laws specifically governing those associations still lack any reference to electronic notice. 

Both new laws take effect on July 28, 2013.

Maintain Your Common Areas - Or Else

Cities have a legal duty to exercise reasonable care to keep sidewalks in reasonably safe condition.  Cities must have actual or constructive notice of an unsafe sidewalk condition and a reasonable opportunity to correct it before they can be found liable for accidents related to that condition.  The notice issue usually requires a trial to resolve.    

 

In a recent unpublished opinion, the Washington Court of Appeals reversed a trial court’s ruling that the City of Seattle was not liable after a man tripped and fell over a part of the sidewalk that was lifted almost an inch.  The Court of Appeals ruled that the injured man must be given an opportunity to prove that a dangerous condition existed for a sufficient period of time that the City must have known of its existence if it was exercising ordinary care and diligence.  The Court of Appeals concluded that a trial was necessary because reasonable minds could differ in determining whether the City’s maintenance policy was reasonable under the circumstances.

Condominium and homeowners associations also have liability exposure if they fail to properly maintain and repair their common areas.  Associations can avoid liability by inspecting their common areas regularly and by addressing dangerous conditions promptly.  Boards should consider developing comprehensive policies to keep common areas safe in consultation with their associations’ attorneys, property managers, and insurance agents.

Washington Court Invalidates Restriction on Dues Increases in Association's Bylaws

In late 2011, the board of directors of the Sudden Valley Community Association approved a budget that increased the membership dues by thirty percent.  A short time later, a newly elected board of directors rescinded that dues increase because a provision in the Association’s bylaws required dues increases to be approved by at least sixty percent of the owners.  The former board members then filed a lawsuit seeking to establish that the bylaws provision requiring owner approval of dues increases was unenforceable.  On April 17, a Whatcom County Superior Court judge agreed with those former board members, ruling that the bylaws provision at issue could not be enforced because it conflicted with the state law governing homeowners association budgets.       

The Washington Homeowners’ Associations Act requires the boards of such associations to provide owners with summaries of proposed budgets and to schedule association meetings to consider the ratification of those budgets.  Unless owners holding a majority of the voting power or any larger percentage specified in the covenants reject a proposed budget, it is ratified (even if a quorum is not present at the meeting).  In other words, it takes a vote of at least a majority of the owners to prevent a board-approved budget from taking effect.

The Sudden Valley ruling serves as a reminder that declarations and covenants are not always the last word in community association disputes.  State and federal laws can also come into play, which is an important reason to establish a relationship with an attorney who is familiar with those laws and how they are typically applied.        

Does Your Board Have Rapport with the Association's Attorney?

The French word rapporter entered the English language as rapport in the 1660's. While rapporter means to “fetch”, “yield”, or “bring back”, rapport is defined as “a sympathetic or harmonious relationship or state of mutual understanding”. When rapport entered into common use in English, the relationship that it was most often used to describe was the relationship between therapist and patient.

The French word counseillier entered the English language as counselor.  Counselor has referred to “one who gives professional legal advice” in modern English for almost 500 years.  Counselor also became a common synonym for therapist in the middle of the 20th Century.  A counselor of either type ideally seeks to establish rapport with clients in order to help them solve their problems. 

When a professional relationship is not based upon rapport, communication suffers and inferior results are produced. When rapport is present, communication flourishes and superior results are produced. As an attorney and counselor at law, I make it a priority to establish the best possible rapport with community association boards by responding quickly to their concerns, by working efficiently on their projects and by offering them clear and concise advice. In my experience, this leads to empowered and informed boards that are well satisfied with the legal services that they receive.

Announcing My New Mediation Practice

Over the last eight years, I have provided legal representation to condominium and homeowners associations and owners within such associations.  During the course of that work, I have helped numerous parties in conflict communicate with each other and identify solutions to their problems.  However, until now I have exclusively acted as an advocate for one side in each dispute.  This is about to change.  

I am excited to announce that I am now offering mediation services to community associations and owners as well as legal services.  I will discuss mediation-related topics on my new weblog seattlecondomediator.blogspot.com in the coming months. I look forward to helping associations and owners resolve their disputes through mediation.

Illinois Supreme Court Upholds HOA’s Enforcement of Speeding Restrictions

I was recently quoted in an article on HOAleader.com, a website devoted to helping community association board members stay informed about relevant laws and avoid legal trouble. The article examined a recent Illinois Supreme Court decision that upheld a homeowners association’s enforcement of speeding restrictions within a community. The Court concluded that this power was authorized by the recorded covenants and was neither an abuse of that power or an unauthorized exercise of police power.  The full article can be reviewed here.

Local Educator Rebecca Osman Helps People Improve Communication Skills

All the world's a stage, and we all want to perform well when it's our time in the spotlight. To that end, I recently attended an excellent series of workshops presented by local educator Rebecca Osman.  Ms. Osman is the founder of Your Stage Coach, a business devoted to helping people improve their communication, presentation, and leadership skills.  She teaches people how they can adjust their voice, body, and mind to more effectively connect with others and inspire confidence.  Her workshops feature fun, interactive demonstrations that draw upon her extensive experience in theater, music, and dance.  I look forward to applying the techniques that I learned from Ms. Osman in future professional and social situations.

You should consider attending one or more of Ms. Osman's workshops if you are interested in reaping the benefits of better communication. She is presenting a two-hour workshop entitled Powerful Profitable Presentations on the following dates and times next month: April 5 at 11:30 a.m. at Mosaic Coffeehouse in Seattle, April 11 at 7:00 p.m. at the Southcenter DoubleTree Hotel, and April 22 at 7:00 p.m. at the Swedish Cultural Center.  Those workshops are free if you pre-register for them on her website (yourstagecoach.com/classes). Ms. Osman is also presenting a paid two-day workshop entitled Connect & Captivate on May 9 and 10 in Seattle.    

Before Litigation, Community Associations Should Consider Mediation

The March edition of the King County Bar Bulletin contains the following article that I co-wrote with my paralegal Elizabeth Demong.  We argue in this article that community associations and owners should strongly consider engaging in mediation before initiating litigation.

In his forward to a 2000 collection of case studies compiled by the Carnegie Commission on Preventing Deadly Conflict (CCPDC), former Secretary of State Cyrus R. Vance called for an international effort to improve the existing methods of preventing and resolving deadly conflict. While conflicts within condominium and homeowners associations involve lower stakes than the types of situations that Mr. Vance has faced (he played a major role in the negotiations to end apartheid in South Africa and end the Bosnian War), they can still get plenty ugly once litigation rears its head.  Fortunately, community associations and owners with opposing interests can often successfully mediate their disputes, even if there is substantial bad blood between them.  Mediation is particularly appropriate in that context because it seeks to reconcile parties and rebuild a sense of connection between them.  After all, everyone still has to live and work together once the dogs of war have been chased away.

Disputes between community associations and owners can escalate rapidly. Consider this hypothetical situation: 

A condominium unit owner stores items on a second-floor balcony in clear violation of the community’s rules.  The board sends a violation notice to the unit indicating that daily fines will be imposed if the items are not removed by a specified date.  When the deadline comes and goes without the items being removed, the board begins to charge daily fines.  The owner arrives home from an extended trip to find that $3,000.00 in fines has been imposed.  The owner removes the items from the balcony, but the board is not willing to remove any of the fines.  Both sides come away from a meeting regarding the fines convinced that their position is correct.  The board sends the owner a letter stating that it will sue her if she does not pay the fines.

Absent the intervention of a third party, the association and the owner in this hypothetical will likely spend many months and thousands of dollars engaged in litigation.  Regardless of the outcome in court, the parties will almost certainly regard each other with hostility from that point forward, which will probably lead to more disagreements.  This unfortunate outcome is inevitable in some cases, but mediation should be seriously considered before litigation is pursued.    

Mediation is an informal process in which two parties hire a neutral third party to help them resolve a dispute.  A mediator does not typically express views on the merits of the parties’ positions.  A mediator’s primary goal is to help the parties reach agreement by identifying issues, exploring possible basis for agreement, describing the consequences of not settling, and encouraging each party to consider the interests of the other party.  Both sides are encouraged to compromise.  Mediation can usually resolve disputes faster and cheaper than litigation, and it has the potential to make future disputes less likely by restoring the parties’ long-term relationship.

In his forward to the CCPDC’s report, Mr. Vance concedes that it is difficult to negotiate with people one dislikes.  He writes that as “much as I might have been repelled by the acts of many of the leaders with whom I negotiated, they were the only men empowered to make peace, and peace in the end was the most important goal.” Community associations and owners likewise may not always hold one another in high regard, but this does not preclude successful mediation of their disputes.      

When reflecting on his involvement in the negotiations to transfer power from the white minority to the black majority leader in the 1990s, Mr. Vance describes a negotiation in which South Africans “sought out areas of agreement with the other side and worked together on a process of power sharing and reconciliation.”  He praises those who showed “leadership...[which]...allowed for the truth of the apartheid years to emerge in a way that encouraged catharsis and honesty without vengeance.”  Seeking common ground, facilitating open communication, and foregoing punitive measures were vital because the citizens of South Africa still had to live together in close proximity after the transfer of power took place.  Mediation can similarly help community associations and owners end disputes in a way that will sow the seeds of future peace between neighbors.       

Conflict between community associations and owners will happen from time to time, and occasionally litigation is necessary to resolve it.  However, mediation often offers a better path.  By agreeing to negotiate solutions with the assistance of a mediator, associations and owners can in many instances reach settlements that reflect the interests of both sides and, as a result, produce real and lasting reconciliation.