[WSBARP] WSBARP amendment of covenants

[Carmen Rowe]

The short answer is no, that is subject to challenge and invalid.

Courts have limited the general right to amend to avoid "defeating the
expectations" of owners at the time of purchase. Expectation of right to
rent is specifically considered a right you can't take, the minority cannot
be "victims" of the will of the majority. The formal distinction is
"amendment" versus "change" to covenants.

Taking away ability to rent is considered a "change" under some specific
law. It will depend on the covenants, but reading the body of caselaw as a
whole, I think rental restrictions, bars or caps pretty much never fly if
not already restricted in the original covenants.

The primary case to read is *Wilkinson v. Chiwawa*, though you really do
have to read the cases as a whole and subsequent implementation of
*Wilkinson *to see just how draconian WA courts have been in restricting
amendment rights. I don't see a way to restrict rentals unless already
restricted in some way, and even then the "new" restrictions almost have to
be exactly the same as the existing ones, just adjusting the numbers - I
have seen decisions reject regulation a specific aspect of leasing if that
specific restriction isn't already in there. Like, even when covenants
regulate leasing in general, it's not just an "amendment" but a "change"
(contrary to logic) to impose time limitations; shortening time (i.e., to
ban short-term rentals) is considered a no-no when there was no time limit
in the original covenants.

Bad law, IMO, to tie association's hands to the degree WA has - but such is
the law at this moment.


Carmen Rowe



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

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> Message: 5
> Date: Fri, 4 Aug 2023 09:18:51 -0700
> From: <jgrant at accima.com>
> To: "'WSBA Real Property Listserv'" <wsbarp at lists.wsbarppt.com>
> Subject: Re: [WSBARP] WSBARP Digest, Vol 107, Issue 1
> Message-ID: <035d01d9c6ef$5c3cc470$14b64d50$@accima.com>
> Content-Type: text/plain; charset="utf-8"
>
> I live in a HOA; the covenants were changed not allowing short term
> rentals.  It was approved by the % needed under the CC&R?s to amend.  I
> thought that once approved that would be binding on all members of the HOA,
> as well as grantees in the future of those members.  Yes?
>
>
>
> From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
> On Behalf Of Carmen Rowe
> Sent: Thursday, August 3, 2023 1:16 PM
> To: wsbarp at lists.wsbarppt.com
> Subject: Re: [WSBARP] WSBARP Digest, Vol 107, Issue 1
>
>
>
> 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
>
> **********
>
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