Washington Court Affirms Application of Statute of Limitation in Condo Act

In a published decision issued last month, the Washington Court of Appeals affirmed a trial court's application of a one-year statute of limitation contained in the Washington Condominium Act.  The section of the Act governing declaration amendments states that a challenge to an amendment "adopted by the association pursuant to this section" may not be brought more than one year after that amendment is recorded.  However, the court ruled that the statute of limitation did not apply in this case because the declaration amendment was recorded without the consent of any of the other unit owners and was therefore void from its inception. As a result, an owner's successful challenge to the declaration amendment in the lower court was upheld.

Condominium association boards should consult with experienced attorneys before seeking to amend their declarations.   

Washington Court Enforces HOA's Approval Requirement for Assessment Increases

The Washington Court of Appeals issued a published opinion earlier this year that enforced a sixty percent approval requirement for assessment increases contained in a homeowners association's bylaws.  The Court held that the budget ratification process described in the Washington Homeowners' Associations Act (RCW 64.38) is distinct from the assessment imposition process and does not override this type of approval requirement for assessment increases.  In the case of this association, this means that one standard applies when ratifying budgets (owners holding more than forty-nine percent of the voting power must either vote for it or not vote) and another standard applies when assessment increases are proposed (at least sixty percent of the owners present at a meeting must vote for it). 

Washington Supreme Court Limits HOAs' Ability to Create New Restrictive Covenants

The Washington Supreme Court issued a published opinion this past April that significantly limited the ability of homeowners associations to create new restrictive covenants that have no relation to existing covenants.  The case involved a dispute between a homeowners association and a group of owners over the validity of a majority-approved covenant amendment prohibiting short-term vacation rentals.  The owners contended in their lawsuit that the covenant amendment required unanimous owner consent because the existing covenants did not contain any durational limitations on leasing and only gave the association the power to change existing covenants by majority vote (as opposed to the power to create new covenants that have no relation to existing covenants).    

The Court agreed with the owners and invalidated the covenant amendment.  It held that if a homeowners association's existing covenants only authorize it to change existing covenants by majority vote, then that association may only adopt a covenant amendment imposing new restrictions on the use of the property by majority vote if that amendment is "consistent with the general plan of development and related to an existing covenant."  It is notable that two dissenting opinions argued at length that the correct legal standard in this situation is whether the amendment was adopted "in a reasonable manner [and is] consistent with the general plan of development."

As a result of this decision, some homeowners associations may seek to amend their covenants to permit the creation of new restrictive covenants by majority vote.  If your association wants to amend its covenants in any manner, then it should strongly consider consulting an attorney who is familiar with the laws that apply to such amendments.

Washington Court Rules that Condominium Leasing Restrictions Require 90% Approval

The Washington Court of Appeals ruled in a published opinion earlier this month that 90% owner approval is necessary to amend the declarations of condominiums created after July 1, 1990 in a manner that restricts owners' ability to lease their units.  The Court based its ruling on a provision in the Washington Condominium Act that requires 90% owner approval for declaration amendments that change "the uses to which any unit is restricted."  Leasing was deemed to constitute a "use" of property.  Interestingly, the Court declined to award the prevailing party its attorney fees "given the debatable issues of law presented in this case."  This decision is now being appealed.

This new ruling regarding leasing restriction approval does not apply to condominiums created on or before July 1, 1990 unless they have amended their declarations to incorporate the amendment standards contained in the Washington Condominium Act.  Furthermore, it does not invalidate declaration amendments restricting leasing rights that received less than 90% owner approval that were recorded more than one year ago by condominiums created after July 1, 1990 due to a statute of limitation contained in the Washington Condominium Act.  However, this new ruling does make declaration amendments restricting leasing rights that received less than 90% owner approval that were recorded less than one year ago by condominiums created after July 1, 1990 vulnerable to legal challenge.

Community association law is constantly being amended and clarified by legislatures and courts.  Attorneys who focus their practices on community associations are in the best position to keep abreast of those developments.  Wise boards seek advice from such attorneys before proposing amendments to their associations' governing documents.

King County Will Present Free Fair Housing Workshops in August and September

The King County Office of Civil Rights will present free fair housing workshops in Seattle on August 19 and September 17. The August workshop will discuss reasonable accommodations and modifications for residents with disabilities.  The September workshops will include an introduction to fair housing laws and a discussion of more advanced problems in this area. These workshops can help condominium and homeowners association boards understand and comply with the obligations imposed on them by those laws.  If you want to learn more, then please visit the Office's website. 

I Will Be a Panelist in a HOALeader.com Special Assessment Webinar on Thursday

HOALeader.com will be presenting a webinar about special assessments on Thursday, June 26, from 11:00 PST to 12:00 PST.  I will be one of the panelists in that webinar.  I look forward to providing insights about how to make the special assessment process as painless as possible and how to avoid it altogether if possible.  If you want to register for or learn more about this webinar, then please go to HOALeader.com's website.

California City Drops Nuisance Lawsuit Against Makers of Sriracha Hot Sauce

Sriracha hot sauce is great.  However, I would not want to live near a factory that makes it.  The recent news that a California city is discontinuing its nuisance lawsuit against the makers of Sriracha hot sauce was surprising after extremely intense pepper fumes were reported near the factory.  The decision was almost certainly influenced by the possibility that the factory could be moved to Texas.  Hopefully stronger filters will address the problem.     

Condominium and homeowners associations also sometimes find it necessary enforce real estate covenants that prohibit nuisances and other types of offensive behavior.  This is typically done through a combination of letters, fines, and lawsuits.  Due process procedures must be followed.  Associations should evaluate whether it is possible for owners to mitigate undesirable conditions to the extent that their desired uses of the property can continue.

Washington State HOAs Must Comply With New Law Regarding Meeting Minutes

Only one piece of state legislation directly affecting Washington state community associations became law in 2014.  This new law amends RCW 64.38, which is the state law that governs homeowners associations.  The new law adds the following language to RCW 64.38.035(1): 
    
"The association must make available to each owner of record for examination and copying minutes from the previous association meeting not more than sixty days after the meeting.  Minutes of the previous association meeting must be approved at the next association meeting in accordance with the association's governing documents."

The new law will take effect on June 12, 2014.  Washington state homeowners associations should make their meeting minutes available and approve them in accordance with the new law's requirements from that date forward.  

The new law does not relate to or bind Washington state condominium associations.

The Association's Attorney Should Be A Good Listener

I was recently interviewed by a condominium association board that wanted to replace the association's attorney.  During that interview, one board member made a startling comment.  She remarked that, in her opinion, the association's attorney did not listen to the board.  The attorney urged the board to file lawsuits against owners even after the board made it clear that it wanted to pursue other methods.  Another board member darkly observed that the attorney would certainly make more money if the recommended litigation was pursued.  The board was pleased to learn that my office emphasizes enforcement and collection methods that do not involve litigation.  The board was also pleased to learn that I was willing to implement its desired course of action.

Lawsuits should only be filed as a last resort.  They are expensive, they take months to resolve, and they destroy relationships.  Associations' interests are best served when they work with attorneys who have both the expertise to win lawsuits when necessary and the wisdom to avoid them whenever possible. 

An association's attorney is there to help the board understand its options and to implement the option selected by the board.  It is a problem if the attorney-client relationship is more like a monologue than a dialogue. If your Washington condominium or homeowners association is looking for an attorney who is a good listener, then it should consider contacting my office.

Can a Condominium's Common Parking Spaces Be Reserved for Board Use?

I was recently interviewed by HOAleader.com regarding the proper use of common parking spaces at a condominium.  In the resulting article, I discuss how board members who vote to reserve common parking spaces for their own use could be found to be engaging in self-dealing and abuse of authority.  Board members are entrusted with a great deal of power, and they are obligated to exercise that power for the good of the community.  Using that power to benefit themselves is almost always a bad idea.  

If a board wants common parking spaces to be reserved for its members, then the safest course of action is to submit that matter to the owners for a vote. An attorney can help the board identify the correct voting procedure and approval standard.

Paralegal Stephanie Chapman Has Joined My Office!

A quality paralegal can be an immense help to a busy attorney.  I am therefore happy to announce that paralegal Stephanie Chapman has joined my office.  Stephanie graduated from the University of Washington in 2006 and earned a paralegal certification from Edmonds Community College in 2012.  She performed office administration services at a law firm that focuses on condominium law from 2009 until 2013.  I look forward to working with Stephanie to provide our Washington condominium and homeowners association clients with the tools they need to succeed.

Seattle Seahawks Demonstrate the Power of Teamwork

The Seattle Seahawks' magnificent run to the Super Bowl has been propelled by its dominant defense.  When I took my sons to a game at the Clink this year, we were dazzled by how well their defensive players worked together to cover the field.  If a receiver got past a player, then there was almost always another player right there to assist him.  The defense played as a single entity rather than a collection of individuals.  It was teamwork at the highest level.

Washington condominium and homeowners associations should remember that their success often depends on whether their boards, property managers, attorneys, and accountants function as effective teams.  This requires each member of the team to have certain skills, to understand their role, and to be given an opportunity to excel.  When effective association teams are in place, legal obligations will be fulfilled and the common good will be promoted.  When defective teams are in place, the situation can get ugly in a hurry.  Association boards should seek to cultivate a direct relationship with each member of their team in order to make optimal use of their expertise and in order to evaluate their effectiveness over time.

Go Hawks!