WA Court Says HOA’s Action Re Assessments Did Not Require Member Ratification

Washington Appellate Court decision (July 10, 2014).

This case involved a dispute over the process required within a homeowners association (“Association”) for the approval of dues and assessments. A group of homeowners initially brought suit seeking a declaratory judgment and injunctive relief against the Association relative to actions that had been taken by the Association relative to the adoption of a revised budget or spending plan that had not been ratified by the homeowners. The Association contended that the spending plans in question were not revised budgets that required ratification.

The trial court agreed with the homeowners, granted judgment in their favor, and awarded them attorney fees. The Association appealed the trial court judgment and the appellate court reversed the decision finding that the Washington Homeowners Association Act (“Act”) does not prohibit or limit an Association’s authority to levy dues and assessments in accordance with the provisions of its governing documents. In this case, the Association’s bylaws (part of the Association’s governing documents) authorized the Association’s process for establishing and increasing dues and assessments. Thus, the appellate court concluded that the Act does not require that dues and assessments that are imposed by an association be approved in accordance with the established statutory budget ratification process. The appellate court further held that the Act does not mandate notice of changes to an association’s budget that result “from” a change in an assessment obligation (as opposed to changes to a budget that result in a change in the assessment obligation). The appellate court also reversed the award of attorney fees to the homeowners and ruled that the Association was entitled to recover its attorney fees as the prevailing party.

See case decision: Casey_v._Sudden_Valley_Cmty