Washington Supreme Court Says HOA Amendment to Declaration That Limited Rental Units was Invalid

Supreme Court of Washington decision (September 3, 2015).

This case pertained to issues over the validity of an amendment to a condominium declaration (“Declaration”), that established a 30 percent limit on the number of condominium units within the homeowners association (“Association”), that could be leased by the owners. Prior to the passage of the amendment, the Association’s Declaration did not have any such limiting provisions. The amendment was passed by at least 67 percent of the owners (the minimum required percentage for the passage of amendments), but less than 90 percent of the owners.

Applicable state statutes and the Declaration contained provisions that are exceptions to the requirement for at least 67 percent vote, and which mandate at least 90 percent of homeowner votes ( a “supermajority”) for the approval of amendments to the Association’s Declaration that change “the uses to which any unit is restricted.” The plaintiff, an owner of a unit within the Association, filed suit against the Association contending that the amendment was invalid because it changed the uses to which a unit is restricted and it was not passed with the required 90 percent of the eligible homeowner votes. The trial granted summary judgment in favor of the homeowner and the Association appealed. The Court of Appeals affirmed the trial court’s decision and the Association petitioned the State Supreme Court for review.

The threshold question considered by the court was whether the amendment to the condominium Declaration that established a maximum number of units that could be rented had the effect of “changing the uses” to which any unit is restricted. If so, the passage of such an amendment would require a 90 percent vote by the eligible homeowners in the Association.

The State Supreme Court found that the Association’s Declaration specified that the leasing of units is a “use” that comes within the special supermajority voting requirements. As such, the State Supreme Court concluded that the amendment to the Association’s Declaration was not valid because it purported to change “the uses to which any unit is restricted” without the requisite 90 percent supermajority approval by the homeowners who were eligible to vote. Accordingly, the lower court decisions were affirmed by the State Supreme Court.

See case decision: Filmore_LLLP_v._Unit_Owners_