A recent case out of Florida highlights the tension between federal disability laws and their practical application for community associations.  The case, Bhogaita v. Altamonte Heights Condominium Association, Inc., arose out of a military veteran’s need for an emotional support animal due to a diagnosis of post-traumatic stress disorder.  The association’s governing documents prohibits animals weighing more than 25 pounds, and when it learned that his dog weighed more than 25 pounds, the association notified the owner that he would have to remove his dog from the premises.

The owner requested that the association him to keep his dog to serve as an emotional support animal.  He supplied the association with a letter from his physical confirming his disability and the need for an emotional support animal.  He supplied another letter from his physician stating that his animal was the specifically prescribed emotional support animal.  In response to additional request for information from the association, he supplied a third letter from his physician which directly responded to the association’s questions.

The association continued to ask for more detailed medical information, including a sworn statement from the owner’s physician regarding the owner’s disabilities.  When the owner failed to respond to those requests, the association notified him that he would be required to remove his dog if he did not respond to the association’s demands for more medical information.  He then sued the association for failure to make a reasonable accommodation under the federal and state Fair Housing Acts and for discrimination as a result.

The court found that the association’s letter requesting further medical details, including a sworn statement by his doctor, went beyond the scope of a “reasonable inquiry.”  Even though the association never actually fined the owner, or required him to remove the dog, the court found that by “persisting in its intrusive request for more – and largely irrelevant – information,” the association had “constructively” denied the owner’s request for a reasonable accommodation.

What is the take-away for community associations dealing with requests for reasonable accommodation?  If an owner comes to you with a letter from a medical professional establishing a disability and prescribing treatment (i.e., service animal, companion animal, etc.) for that disability, the board needs to accept that as grounds for a request for reasonable accommodation.  The definition of “reasonable” is fact-specific and depends on the circumstances of each case.  If you are unsure what you can/should do in response to an owner’s request for a reasonable accommodation, consult with an attorney experienced in both community association law and disability law to ensure you are not crossing any lines.

If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!

Associations often have on-site or resident staff working on the property. Should the staff be an employee of the association, or an employee of the association’s management company?

Reasons why it could be beneficial for staff to be employed by the association:

• If the association changes management companies, the staff stays with the association rather than being taken by the management company
• The association could be protected from liability by workers’ compensation laws if the staff is injured on the job
• The association’s liability for taxes and other true costs may be reduced

Reasons why it could be beneficial for the staff to be employed by the management company:

• The management company may be able to offer benefits that the association cannot, such as health insurance
• It may be easier for the management company to process payroll, taxes, and other employment-related costs
• The association might be protected from liability in a wrongful termination lawsuit or other litigation relating to employment

As in all matters affecting community associations, it is essential to examine the governing documents as well as any contracts or insurance policies that may apply to the situation. It is important to balance the pros and cons and make a decision that best fits your community.

For advice in specific situations, you should contact your association’s counsel. If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!

Many clients and associations in general (both condos and HOAs) are in possession of properties that do not have “clear title.”  This puts the association in the position of wanting to rent out the property until the lender forecloses.  One question we hear often is what protections, if any, exist for a tenant who signs a bona fide lease with the association, only to have the lender foreclose on the property during the term of the lease.

The good news is that the Protecting Tenants at Foreclosure Act of 2009 prevents a bank from evicting a tenant from a foreclosed property under certain circumstances.  The Act applies to any property where the foreclosure was initiated after the Act was adopted.  The protections of the Act are currently set to expire on December 31, 2014 unless they are extended by Congress.

The protections of the Act are as follows:

• If a bank forecloses on a property where a tenant lives under an unexpired written lease, the bank cannot evict the tenant and must honor the terms of the lease.
• If the bank foreclosure results in the property being sold to a purchaser who intends to occupy the property as their primary residence, the purchaser must give the tenant 90 days to vacate the property.
• If the purchaser is neither the bank nor someone who intends to occupy the property as their primary residence, the purchaser (like the bank) must honor the terms of the lease.

These protections only apply where there is a “bona fide” written lease.  Bona fide means the lease is made to a person unrelated to the mortgagor (borrower), must be an arm’s length transaction, and must be for a fair market rate rental rate.

If the lease is not a “bona fide” lease, the tenant may be evicted but only after 90 days notice.  In other words, in the worst of circumstances, a tenant can only be evicted upon 90 days’ notice; in the best of circumstances, the tenant can stay in the property for the remaining lease term without being evicted.

If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!

It’s important to make sure your association’s board of directors makes decisions following proper procedure. But what do you do if your board doesn’t?  There are several ways to validate board decisions after the fact. The way to fix an improper board action depends on what kind of mistake was made. Here are some possibilities.

Subsequent ratification:  If an action taken by the board is determined to be invalid for some procedural reason, but is otherwise a proper board action, the board may validate the action by subsequent ratification. For instance, if a board subcommittee (or individual board member) makes a decision that it is not empowered to make, or if the board makes a decision in between meetings, the entire board may vote to ratify the decision at the next board meeting.  The meeting can be a regularly scheduled board meeting or a special meeting called for a specific purpose; so long as the board follows the appropriate voting procedures, the decision becomes valid.  Be sure to record all board decision in the minutes.  As we say often in our office, if it isn’t written down, it didn’t happen.

Publish to owners:  Suppose the board adopts a new late fee of $50 and posts minutes reflecting that decision by the mail boxes.  An owner challenges the late fee claiming he was not given proper notice.  RCW 64.34.304 allows fines “in accordance with a previously established schedule.”  To fix the problem, the association should provide notice of the new fine to all owners as required by the Declaration or CC&Rs.  This is usually accomplished by simply mailing notice of the new fine to the owners via regular first class mail (but as always, check the notice requirements in your governing documents).

Put it to a vote:  If the board takes an action that required a vote of the owners in order to be valid, have the owners vote on the issue. For instance, unit owners must approve an amendment to the Declaration to restrict the ability of owners to rent their units (RCW 64.34.264(4)). If the board voted to prohibit unit owners from renting their units, that decision would not be effective because the board cannot make that decision; it must be made by the unit owners. To remedy this, the board could call a meeting of the owners and vote on the issue; if the required number of owners approves a declaration amendment restricting rentals, the restriction would become valid.

As with all matters affecting condominium associations, it is essential to examine your community’s governing documents, as well as Washington law, to determine what decisions may be made by the board of directors, which decisions must be made by the owners, and the percentage of votes needed. The first challenge to most board actions will be for procedural errors.  Try to avoid them, or take remedial action to correct them when necessary.

If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!

Condominium associations homeowners need to be aware of Washington’s carbon monoxide alarm law! Although the law was passed in 2009, it requires that all buildings classified as residential occupancies (which includes condominiums) be equipped with carbon monoxide detectors by January 1, 2013. See RCW 19.27.530 for the full text of the law.

A carbon monoxide detector is a device that detects the presence of carbon monoxide gas in order to prevent carbon monoxide poisoning. Carbon monoxide poisoning is extremely dangerous and can cause permanent injury or even death. Because carbon monoxide is odorless and colorless, it is not ordinarily detectable without a specialized detector.

The Washington Administrative Code (WAC) section 51-54-4600 specifies that the carbon monoxide detectors must comply with Underwriter’s Laboratory Standard 2034, which sets standards the detectors must comply with. The detector you purchase should specify on the packaging whether it complies with UL 2034.  It should be battery operated or can plug in with a battery backup.

It is not clear from the law whether the association or the individual unit owners are responsible for installing the detectors. To minimize the risk that your association will not be in compliance, we recommend that associations purchase the detectors and offer them to the unit owners for free or at a discount, and require that they be installed.  Non-compliance could potentially result in liability for the condominium association. Carbon monoxide alarms can currently be purchased for around $25-40.

If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!

Washington law contains numerous provisions containing restrictions and requirements on COAs and HOAs. In many cases, however, the law contains a minimum requirement only and defers to the more specific provisions of the governing documents.  For a primer on governing documents and their interplay with the law, please read our Governing Documents post.  The law also provides for “gap filler” provisions that are effective only if an association’s governing documents are silent on an issue.

For these reasons (and many others), it is essential that association members, board members, and community association managers familiarize themselves with their community’s governing documents. It is simply not possible to determine all of your community’s requirements by looking at the laws without also consulting the governing documents (and vice versa!).

Here are some examples of Washington laws that expressly defer to the governing documents:

Board members: The number of board members an association must have, the method for electing them, and what powers, if any, they may delegate must be provided for in the governing documents. See RCW 64.34.324 (New Act condos); RCW 64.32.090 (Old Act condos); and RCW 64.38.025 (HOAs). While general laws of agency and business entities will also apply, the more specific provisions of the governing documents are controlling (unless they conflict with a state or federal law).

Quorums: A quorum is the number of votes that must be present at a meeting for an action taken in the meeting to have effect. RCW 64.34.336 (New Act condos) provides that a quorum for an association meeting is 25%, unless the bylaws specify a larger percentage; for meetings of the board of directors, a quorum is 50% unless the bylaws specify a larger percentage. RCW 64.38.040 (HOAs) provides that a quorum is 34% unless the bylaws specify a different (not necessarily larger) percentage. The Washington Nonprofit Corporations Act specifies that a quorum is whatever is in the bylaws, or 10% if the bylaws are silent for association meetings (RCW 24.03.090) and not less than 33% for board meetings (RCW 24.03.110). As you can see, it is essential to check your governing documents to determine how many votes is a quorum in your community.

In general, Washington law recognizes the authority of an association’s governing documents: RCW 64.34.304(1) grants condo associations broad powers to manage its affairs “subject to the provisions of the declaration.” Similarly, RCW 64.38.020 contains broad grants to power to HOAs, except as “otherwise provided in the governing documents[.]”

For assistance in understanding your community’s governing documents, you may wish to consult your association’s attorney. If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!

Sometimes, board members don’t follow the rules. A board member might speak out of turn at meetings or dominate the floor; might take actions without consulting other board members or in direct conflict with a board decision; or might even hide or steal association records or funds. Sometimes a board member puts his or her personal agenda ahead of the needs and priorities of the association. These types of situations involve what we refer to as “rogue” board members. What can be done about them?

One way to curtail rogue behavior at board meetings is to have rules, and stick to them. Robert’s Rules of Order is the “gold standard” for a set of rules that works in meetings of all types of organizations, and many COAs and HOAs use it. Or, your community can adopt or create a different set of rules. You can read our blog post Robert’s Rules of Order for more information about having a set of rules and why they are a great tool to keep order in meetings. But in addition to agreeing to abide by the rules, the board needs to be firm in enforcing them, or they will not help. The board’s President (who is responsible for running the meetings) must be prepared to speak up and make sure everyone follows the rules.

It is also important that all board members understand that they must act on behalf of the association in their role as a director, and not in their own (or anyone else’s) personal interest. Every board member needs to be aware that they have a legal obligation to their association, and that they can face litigation and even personal liability if they seriously neglect their duties through rogue behavior. It might be a good idea to have your board meet with your association’s attorney to get a clear understanding of their rights and obligations under the applicable laws.

When all else fails, the association’s members can act to remove a rogue director. RCW 64.34.308(8) provides that the unit owners of a New Act condo can remove any board member (unless appointed by the declarant) with or without cause by a two-thirds vote. (There is no similar provision in the Old Act, but if an Old Act condo is incorporated as a nonprofit, see RCW 24.03.103 or RCW 24.06.130.) RCW 64.38.025(5) provides that the owners in an HOA may, by a majority vote, remove a director with or without cause.

Rogue board members aren’t just exasperating; they can also cause serious legal problems for a community. Improper board actions can cause financial harm to the association, create numerous kinds of liability for the association, or even lead to a lawsuit against the board itself.  If you are dealing with “rogue” board member(s) in your association, take action and consider consulting with an attorney to understand your options.

Imagine this scenario: your association’s entire board of directors decides they are fed up with being board members, and all resign at the same time, leaving your association with no board at all. Or, imagine that, one by one, each board member resigned over time and was never replaced, so that when the last board member resigns, the board had no members. Can members of the board simply resign, or does the law constrain their ability to do so?

An association’s board of directors has many legal obligations to the association. Possibly the most important of these obligations is that the board of directors, and each of its members, has duty of care to the association. (For details about this duty of care, such as how it is different for elected or appointed board members, or for board members of COAs or HOAs, see our previous post Standard of Care for Boards.)

Some courts have held that this duty of care constrains a director’s ability to resign. Particularly in the case where resignation would leave the board with no leadership at all, such as the resignation of the entire board or of its last remaining member, resignation could violate a director’s duty of care because the association would be left with no leadership, potentially to the association’s detriment.

In fact, if an association is incorporated as a nonprofit corporation – like many associations in Washington – then the applicable statutes require that members of its board of directors shall hold office for their entire term, and until the director’s successor has been elected or appointed. (See RCW 24.03.100 or RCW 24.06.130.) This language, together with the board member’s duty of care, may impose constraints on the ability of board members to resign.

On the other hand, one Washington case has held that despite this language, directors cannot be required to remain in office after they have resigned. In King County Dept. of Community and Human Services v. Northwest Defenders Assn., 118 Wn. App. 117 (2003), a nonprofit corporation’s entire board of directors resigned one by one until no board members were left. The court held that despite the language of the nonprofit corporation statutes, the directors could not be required to remain in office for their entire terms or until successors were chosen. This was true even though the association was left with no board members at all.

Because the law surrounding issues of board member resignation is not clear, we recommend that board members, association members, managers, and others confronting issues arising out of board member resignation consult with their association’s counsel to determine what the rights and obligations of all parties are.

If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!

A resale certificate is a document that a unit owner must provide to the purchaser before they can sell their condominium unit. Any unit owner who wishes to sell his or her unit needs to be aware of the resale certificate requirements. These requirements apply to all Washington condominiums.

The resale certificate must contain certain information, which is set forth in detail in RCW 64.34.425, part of the Washington Condominium Act.  This section of the Condo Act applies to both old act (Horizontal Property Regimes Act, RCW 64.32) and new act (Condominium Act, RCW 64.34) condos.

In brief, the certificate must inform a purchaser of, among other things, the financial status of the association (including the budget); any dues still owed by the unit’s current owner; the amounts of assessments, dues, and fees that must be paid by owners within the community; copies of the community’s governing documents; and information about any reserve studies (or, just as important, the lack of reserve studies). It is important that the association’s board of directors familiarize themselves with and be prepared to comply with the statutory requirements.

The information contained in the certificate must be accurate, based on the information contained in the books and records of the association. (This is one reason why it is essential for associations to keep detailed financial records – the financial records must be detailed enough to comply with the extensive requirements of RCW 64.34.425.) If the association is discussing or planning significant repairs or maintenance, that information should also be disclosed to the purchaser.

Despite the fact that the law requires a unit owner to provide the resale certificate to their buyer, the certificate must be signed by an officer or agent of the association. Once a unit owner requests the certificate from the association, it must be provided within 10 days.

It is important to note that once the resale certificate has been provided, the legal rights of the former and new owner are affected. For instance, the purchaser’s liability for unpaid assessments or fees against the unit can be limited. Also, the purchaser may void the sale until the certificate has been provided, and for up to 5 days after that, or until conveyance of the unit.

The resale certificate requirement is not a unit owner’s only obligation to potential purchasers. Many other laws apply to both sellers and purchasers of condo units. You may wish to consult with an experienced attorney to ensure compliance with all legal requirements.

If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!

Many condominium and homeowners’ associations are preparing their annual budgets this time of year. Association members, as well as the association’s board of directors, need to be aware of the laws applicable to community association budgets.

A budget is an estimate of the future financial needs of the association. A budget needs to provide for collecting assessments to pay for ongoing expenses and for contributions into the reserve fund, as well as any other matters necessary for both the short- and long-term operation of the association.  Designing the budget is the responsibility of the association’s board of directors.

Washington’s Condominium Act (RCW 64.34) requires “New Act” condominium associations to prepare an annual budget. All condo associations must have a budget in order to collect assessments. HOAs (created under the HOA Act, RCW 64.38) are also required to prepare an annual budget.

It is essential that every association examine its governing documents (the Declaration/CC&Rs, Articles of Incorporation, Bylaws, and other relevant documents), because those documents may contain rules, procedures, or requirements for the community’s budget in addition to those imposed by statute.  You may also wish to consult with your association’s attorney for help in understanding what your budget must contain and how it must be adopted.

HOAs and New Act condos must follow a process mandated by statute:

(1)  The board must adopt a proposed budget.

(2)  The board must, within 30 days of adopting the proposed budget, provide a summary of it to all the owners.

(3)  The board must set a date for a budget meeting where the owners will vote on whether to reject the proposed budget. If the budget is rejected, the old budget continues in effect until a new one can be ratified.

Old Act condos are not subject to these statutory rules, but should check their governing documents to see what is required.  All associations need to check their governing documents to determine what procedures they are required to follow other than those mandated by the statute (i.e., how many days’ notice must be given to owners regarding the budget meeting, etc.).

In addition to these procedural requirements, there are also substantive requirements. Both an HOA’s and a New Act condo association’s budget must include certain information specified in RCW 64.34.308(4) and RCW 64.38.025(4).  We’ll cover the specific information that is required for HOAs and New Act condos in a future blog post.

If you have any questions we can answer, please feel free to leave a comment or contact us directly.  We look forward to continuing this conversation with you in our future posts!