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!       

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The Washington Court of Appeals recently issued an unpublished opinion addressing a condominium association's attempt to restrict leasing of units.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.