[WSBARP] WSBARP Digest, Vol 107, Issue 1

[Carmen Rowe]

I think if you look at the cases, it's still pretty clear - the question of
whether money changes hands is flat out not part of the equation. It's
whether the use is "residential" in nature. Meals and recreational
activities - if simply offering the amenities of the association - are
residential. Now, if they were operating say a tour business off the
property, that's a business. But has to be something outside how a resident
would use it. That's really the key: are the "activities" the same as
someone living there as a resident would? if so, it's "residential" for
purposes of covenants.

The really crappy thing is that it is nigh impossible for an association to
bar use of properties as short-term rentals unless the covenants already
made some reference to the time required/prohibited by leases. A look
at *Wilkenson
*alone might lead one to think that so long as the covenants discuss
"rentals" that you can amend to prohibit short-term rentals, and I've seen
attorneys advise associations as such. Unfortunately, that's fairly clearly
incorrect in my opinion. The subsequent caselaw has not panned out that
way.  Simply regulating leases does not (per cases subsequent to *Wilkenson*)
lead to allowing an association to amend to restrict shorter time-frames,
unless there is already some specific reference to time-frames in the
covenants. You very likely can't even pass regulations that substantively
impair such use.

Some dissents along the way have pointed out that this use of *Wilkenson *is
terrible, as no one could have anticipated use of residences as hotels
until the last decade or so (using the words from one such dissent), so how
could you have left the door open to regulate something you couldn't have
conceived of? you couldn't - thus tying the hands of associations under the
current criteria of the law re: amendments. There is even a majority
opinion (from the so very often literary Division III) that eloquently
bemoans the rule - but resignedly notes that the appellate courts must
adhere to the Supreme Court decisions until the law gets with modern times.

But so goes it, until someone persuades the Supreme Court that the law
needs to change in light of the modern use of such platforms.

One helpful hint is that an association can at least require that any
short-term rentals comply with the applicable WA statute (RCW 64.37) - that
at least provides some threshold requirements (insurance, etc.). Since it's
legally required by state statute, it's not a barred amendment/regulation
by the association.

The other best approach is a strict and steeply increasing fine schedule
for repeated violations of already existing covenants re: nuisance, noise,
etc. - as the problems inherent with short-term rentals almost always
involve such violations, so hit the owner's pocketbooks for whatever that
may help to deter such use, or get the owner very involved in trying to
ensure good behavior.

An interesting rabbit hole I've had a few occasions to take a deep dive
into.

Carmen Rowe



Phone: (360) 669-3576 (direct cell)
Email:  Carmen at GryphonLawGroup.com

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Date: Mon, 31 Jul 2023 20:11:32 +0000
>
From: Bryce Dille <Bryce at dillelaw.com>
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Air B&Bs
Message-ID:
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MN0PR11MB623098E4B0341646C74FABBFC805A at MN0PR11MB6230.namprd11.prod.outlook.com
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Its not as clear where in addition to rental and use of property other
services are provided such as meals and recreational activities.

Bryce H. Dille
Dille Law, PLLC
2010 Caton Way SW Ste. 101
Olympia, WA 98502
Office: 360-350-0270
Cell: 253-579-5561

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
On Behalf Of Haylee Hurst
Sent: Monday, July 31, 2023 12:57 PM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] Air B&Bs

Bryce, take a look at Wilkinson v. Chiwawa Communities Ass'n, 180 Wash. 2d
241, 327 P.3d 614 (2014).

TL:DR - Short-term rentals are a "residential" as opposed to "commercial"
use for purposes of restrictive covenants.
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