Washington Condos and HOAs Face Difficult Budget Decisions

It's annual budget season for Washington condominium and homeowners associations, and many of them are dealing with the unfortunate reality of smaller revenues this year and next year. Many owners' accounts have become delinquent, and associations are understandably reluctant to begin collection actions against them right away. As a result, many associations must reduce expenses and/or use reserve funds to pay for some expenses in their next budget. Associations should consider deferring scheduled maintenance and repair projects for a year if possible. They should also evaluate whether they can obtain regular services like property management, accounting, and landscaping at a lower price from a different provider. 

Washington community association boards should keep in mind that they are required to comply with the budget procedures contained in state law as amended in 2018 by WUCIOA. The text of the applicable law can be found in my previous post about that subject.

Washington Supreme Court Reinstates Verdict in Favor of Injured Guest

After a night of drinking with friends, a woman fell from the second-story balcony of her boyfriend's apartment when its decayed balcony railing gave way. She sued the owner of the apartments, arguing that its failure to maintain and repair that railing caused her fall and violated its duties to tenants and their guests. A jury agreed. The Washington Court of Appeals overturned the jury's verdict. The Washington Supreme Court reversed that ruling and reinstated the jury's verdict in favor of the injured woman. 

The Court decided that the owner of the apartments was negligent because its breach of its common law duty to provide each of its tenants and their guests with a habitable residence was a proximate cause of the woman's injury. As the Court stated in a previous opinion: "When American city dwellers, both rich and poor, seek 'shelter' today, they seek a well known package of goods and services: a package which includes not merely walls and ceilings, but adequate heat, light, and ventilation, serviceable plumbing facilities, secure windows and doors, proper sanitation, and proper maintenance." 

Washington condominium and homeowners associations are legally obligated to ensure that the common areas for which they are responsible are maintained, repaired, and replaced in a timely manner and in accordance with professional guidance. 

COVID-19 Proclamation Governing WA Community Associations Is Amended

Governor Inslee amended a COVID-19 emergency proclamation pertaining to Washington community associations today. This proclamation restores associations' power to levy fines against owners who violate the association's governing documents. This power to fine was suspended by a previous proclamation. Owners must be given notice and an opportunity to be heard before fines are levied.   

The Governor's proclamation amendment extends a previous proclamation permitting owners and directors to vote on association matters by mail, electronic mail, and proxy and to attend association meetings by conference telephone and similar electronic services until 11:59 p.m. on October 1.  It also extends a prohibition on community associations charging late fees for delinquent assessments until that date.

Washington Court of Appeals Affirms Dismissal of Defamation Claims

A small group of homeowners expressed very negative views about another homeowner in their neighborhood on social media.  For example, they asserted that she was a "problem board member," "insane," and "a plague." She sued them for defamation.  The Washington Court of Appeals recently affirmed the summary dismissal of her lawsuit.

The Court initially noted that the plaintiff was required to show that the defendants' statements were "provably false" in order to prevail.  It next observed that the medium and context in which the statements were published and the audience to whom they were published must be taken into account.  The Court went on to rule that the defendant's statements were "opinions, substantially true, or not shown to be provably false" and that a social media audience "expects the speaker to use exaggeration, rhetoric, or hyperbole" and is "likely to view such representations with an awareness of the subjective biases of the speaker."

Later in its opinion, the Court concluded that the association's board of directors had the authority to adopt a fine and fee schedule pursuant to state law even though the applicable covenants did not explicitly grant the board that power and only described enforcement as being "by proceedings at law or in equity."  The Court interpreted those covenants in that manner in order to "protect the homeowners' collective interest in having covenants enforced."

San Juan Island HOA Dispute Results in Epic Appellate Court Opinion

Twenty homeowners in a San Juan Island development spent the better part of a decade fighting (literally and figuratively) over the meaning of a set of restrictive covenants governing the use of their land and a waterfront parcel, the boundaries between their lots and the waterfront parcel, the erection of a spite fence, and the management of their homeowners association. The Washington Court of Appeals began its ninety-six page unpublished opinion regarding this "saga" by noting that "the record reveals a level of animosity between Stevens and his neighbors and incivility between some of the parties and the attorneys that surpasses anything this court has ever seen." The parties probably incurred a huge amount of attorney fees during the course of this litigation. The Court's entire opinion is available here.      
One portion of the Court's analysis merits emphasis. The Court ruled that an amendment to the homeowners association's Covenants, Conditions, and Restrictions ("CC&Rs") approved by sixty percent of the owners (stating that "tenants" are not "guests in the household" and therefore do not have the right to use common waterfront land) did not impose a new restriction on tenants' access to that land.  As a result, an owner's argument that this amendment required unanimous owner approval because the CC&Rs permit only changes to existing covenants and do not authorize the enactment of new restrictions was rejected by the Court. It instead ruled that the amendment constituted a clarification of a pre-existing prohibition that could be adopted with the approval of sixty percent of the owners. 

If a homeowners association's CC&Rs only permit that document to be "amended", then it may not amend that document to add new restrictions unrelated to any existing covenant without unanimous owner approval. Since it is not always clear whether proposed amendments contain such new restrictions, association boards should consult attorneys with experience in this area when they are considering CC&R amendments.