Brian McLean

Washington State has a Legislative Action Committee (LAC), Community Association Institute’s (CAI’s) official voice with Washington State legislators and regulators. The 2014-15 legislative session promises to be a doozy. We have the most significant legislation in a generation turning the corner, coming down the final stretch for a photo finish. And we have a trio of recent court cases where the court system has aimed a nail gun squarely at owner associations and thrice pulled the trigger.

The Common Interest Ownership Act.

The multi-year effort to draft a Common Interest Ownership Act (WCIOA) and turn it into a bill is winding down. WCIOA is based on the Uniform Common Interest Ownership Act, promulgated by the National Conference of Commissioners on Uniform State Law. WCIOA would apply to condominium associations, non-condominium associations, cooperatives, and other miscellaneous communities where owners are obligated, by virtue of owning real estate, to pay into a common fund for shared improvements and services. We don’t know yet to what extent the law would apply to associations already in existence, and one real scenario will be, in the not so distant future, four separate statutes that apply to community associations (RCW 64.32, RCW 64.34, RCW 64.38 and WCIOA).

Once the preliminary draft WCIOA bill is circulated for comment, a large part of the LAC’s Fall efforts will be directed at working with principal drafters and other stakeholders toward a final draft that fairly balances the hopes, dreams, and interests of many people with disparate interests. Imagine, if you will, a sort of utopian future where local governments, the Office of the State Treasurer, developers, buyers, owners, investors, tenants, landlords, sellers, trustees, sheriffs, buyers, managers, attorneys, judges, lawmakers, landscapers, the IRS, and your aunt Belinda all get along, real estate prices increase 10% every year, it’s easy to borrow money, everyone has a job, and no one gets sick.

Even if a draft bill is circulated it is up to our Legislature whether a draft bill will become an actual bill. If it does become a bill, it won’t become law until approved by the Legislature and the Governor. The specific challenges posed by this herculean effort of making everyone happy are beyond the scope of this update.

8 Community Associations Journal | October 2014

CAI supports the consideration and adoption of uniform community association acts. At this point so many changes to the uniform model act have been proposed that WCIOA may no longer fairly be considered a uniform act. CAI may turn at some point to each of its member for help educating lawmakers about what’s good, what’s not so good, and what’s missing from this legislation.

Trio Cases and a Dystopian Future?

While the Legislature is ready to christen the S.S. Utopia, the courts have been down below, sabotaging the engines, punching holes in the hull, and furthering their insidious plan for a dystopian future where most of us will be living in cages exposed to the elements, surviving on rainwater Filmore LLLP v. Unit Owners Association of Centre Point Condominium, Casey v. Sudden Valley Community Association, and Wilkinson v. Chiwawa Communities Association.

Others have recently dissected, explained, and written on these cases in detail so let us give you the Reader’s Digest version:

Filmore LLLP v. Unit Owners Association of Centre Pointe Condominium, No. 70013-8-I (Wash. Ct. App. September 2, 2014):

The Court of Appeals held that under RCW 64.34 a minimum of 90% owner approval in a condominium association must be obtained before the association adopts a declaration amendment that restricts an owner from renting or leasing the owner’s unit. The case has much bigger implications regarding a condominium association’s ability to adopt rules and restrictions regulating any use not restricted by covenants in the original declaration.

Casey v. Sudden Valley Community Association, No. 70329-3-I (Wash. Ct. App. May 27, 2014):

The Court of Appeals held in a dispute over the meaning of the association’s peculiar governing documents and RCW 64.38 that a budget ratified by the owners did not automatically impose a binding assessment obligation on the owners. Just as the State of Washington cannot get 60% of the voting population to vote for a tax  to agree on an assessment increase and is unable to maintain its significant assets.