[WSBARP] HOA lien collection

[Rob Wilson-Hoss]

Sorry, this is one of my over the top semi-regular HOA posts that probably gets way too complicated. But I have to deal with this stuff every day for clients. So here goes. Anything in the below that could be construed as critical of any case, court or judge was placed there after I hit "send" by the gremlins in my computer and is not my fault. Damn you, gremlins!

 

This is really complicated, and also really simple (sort of).  First, for the complicated part. To start with, you have to take a very close look at the recorded restrictions, which can come in a plat map, deeds, sets of covenants, or anywhere else a developer put them. 

 

If you have authority, fine. If not, then the first thing I would think about would be the tension between Wilkinson v. Chiwawa Communities and RCW 64.38.020. The statute says what powers an association has, and it covers just about anything, under the proviso, "unless otherwise provided by the governing documents;" but Chiwawa does not address the statute, in its factual context of a covenant amendment; it says, you can't amend covenants to add new covenants, unless that is specified in the covenants already; and if the matter is related in some unspecified way to something that is in the covenants (and the Chiwawa court admits that there is not yet any guidance on relatedness and what that means), then you can't add additional burdens to property owners, and you can't do anything that is not reasonable and within the general plan of the community. And if you want to see gymnastics, don't wait for the next Olympics - just read how the majority reached its conclusion that a single night vacation rental use of a home is exactly the same as a single family residential use of that home, based on one thing - the inclusion of a rule in the covenants about the size of rental signs. Tell that to someone who lives next door to a vacation rental by owner home that specializes in renting to UW or WSU fraternities. 

 

The next question is, how do other documents such as Bylaws and Articles and rules and regulations get treated after Chiwawa? Does Chiwawa only apply to covenant amendments, and therefore Bylaws and regulations aren't controlled by Chiwawa? After all, there is a long string of Washington cases that say that owner association governing documents are co-related, and as a set, are a contract with the members. But Chiwawa's language about not adding burdens to members seems to be very definitive; the issue is notice - did a person who bought in the development have notice that this restriction/rule which acts as a burden on his or her property exist? or not? So, if a set of Bylaws was in force, and recorded, before the owner bought, and that owner is subject to a provision in the Bylaws authorizing water shut off, does that matter? Or does everything have to be in the covenants?

 

Then you have all the other considerations - ratification, estoppel, statute of limitations, and so on. And by the way, the recent analysis of the application of the statute of limitations running against challenges to bylaws amendments in Parker v. Pattison is just dead wrong. Just follow the cases cited, especially, Keller v. Sixty-1, and the case not cited, Bilanko v. Barclay Court, and you will see that the issue is really the classic, void vs. voidable, within the power or not within the power, and not just that the statute of limitations doesn't apply.

 

Now, the simple part. Of course, no one has to provide utility services for free. A utility can shut off service for nonpayment, and the WUTC does not apply the water regs to HOAs so long as they meet its exception requirements, and without those rules, it is all really a matter of contract. The not-so-simple part: does the HOA bill separately for water and other assessments? If it is two bills, can it shut off water if they pay the water bill but not the other assessment bill? If it is combined, can it shut off water if they pay what part of the bill is for water, according to your budget? Members who aren't paying figure this angle out pretty regularly. 

 

I think that so long as you don't have something contradictory in the recorded governing documents then an HOA can shut off water for nonpayment of a water bill, unless the governing documents say you can't ("the association shall provide water to each lot," or something like that). After that, much depends on the governing documents. 

 

I would love to hear dissenting views about any of the above. I am wrong a lot, you know. 

 

Rob 

 

 

Robert D. Wilson-Hoss 
Hoss & Wilson-Hoss, LLP 
236 West Birch Street 
Shelton, WA 98584 
360 426-2999

www.hossandwilson-hoss.com
 <mailto:rob at hctc.com> rob at hctc.com

 

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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of scott scottgthomaslaw.com
Sent: Wednesday, January 04, 2017 10:24 AM
To: WSBA Real Property Listserv
Subject: [WSBARP] HOA lien collection

 

I have a group of clients that have approached me with a question that I have not been able to find an answer to: may an HOA, pursuant to Chapter 64.38, enforce a lien for non-utility related charges, fees, and assessments payable to the HOA by terminating water service for a delinquent homeowner?  HOA owns the water system.  I am aware that local governments have that authority per RCW 35.21.300, but do non-governmental entities also have that authority?  

All thoughts appreciated.  

Thanks.

Scott G. Thomas
Law Office of Scott G. Thomas
1204 Cleveland Avenue
Mount Vernon, WA 98273
(360) 503-1042
www.scottgthomaslaw.com



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