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.”