New Washington Law Regulates Short-term Rentals

A new Washington state law regulating short-term rental of real property took effect earlier this year.  The new law requires at least one million dollars of primary liability insurance to be maintained when owners rent their properties on a short-term basis as that term is defined in the statute.  Given the damage and liability issues that can arise in connection with short-term rentals, community associations should take steps to ensure that any owners who are renting their properties on a short-term basis are complying with this law.

Washington Court of Appeals Affirms Order to Abate Water Trespass

The Washington Court of Appeals recently affirmed a trial court's order for a property owner to abate the flow of water from his drainage system to an adjoining property.  The trial court concluded that the property owner's improvements to a drainage system increased and concentrated the flow of water to his neighbors' property and that the resulting water trespass had caused flooding and erosion.  The appellate court held that "when surface water is collected and discharged upon adjoining lands in quantities greater than, or in a manner different from, the natural flow ... injunction is held to be a proper remedy."     

Courts Affirm Condo Board's Decision as Valid Exercise of Business Judgment

A condominium association's board agreed to allow a unit owner to install a heat pump on the condition that he sign a document to protect the association.  The unit owner argued in a lawsuit that imposing that condition breached the board's duty to exercise ordinary and reasonable care.  The board responded that the business judgment rule protected its decision.  The trial and appellate courts agreed with the board.

The business judgment rule requires boards to act in good faith and with such care as an ordinarily prudent person in a like position would use under similar circumstances.  Under this rule, a court will not substitute its judgment for that of the board unless there is evidence of fraud, dishonesty, or incompetence (i.e. failure to exercise proper care, skill, and diligence).  

The appellate court noted that the board sought and followed legal advice to create an agreement for heat pump installations.  The court considered this persuasive evidence that the board exercised ordinary and reasonable care.         

Appellate Court Upholds Outrage Judgment

Over the course of four months, a property owner regularly and repeatedly remote-started his pickup truck, revved its engine, and activated its alarm to scare a neighbor's young piano students as they walked past his truck on the way to their lessons.  The neighbor sued for the tort of outrage, and the trial court awarded her a judgment of $40,000.  On appeal, the Washington Court of Appeals held that annoying conduct done frequently over an extended period of time with the intent to cause severe emotional distress to a person can form the basis of an outrage claim and ruled that the owner's conduct was sufficiently outrageous and extreme to support the judgment against him.

Washington Legislature Amends WUCIOA

The Washington Legislature recently approved a new law updating the Washington Uniform Common Interest Ownership Act ("WUCIOA"; RCW 64.90) in various ways. The most significant changes related to condominium liability.    

Under the new law, officers and board members of condominiums are entitled to the same immunity from liability that is available to officers and directors of nonprofit corporations.  The new law establishes that condominium developers' warranties to unit purchasers include construction in accordance with engineering and construction standards, including applicable building codes, generally accepted in the state of Washington at the time of construction.  It also provides that physical damage to the unit or common elements, material impairment of the performance of mechanical, electrical, plumbing, elevator, or similar building equipment, or an actual, unreasonable safety risk to the occupants of the condominium is a necessary element to establish breach of warranty.  

The new law takes effect on July 28, 2019.  The periodic enactment of state laws is one reason that condominium and homeowners associations should consider an ongoing relationship with an attorney who focuses on community association law.