[WSBARP] WSBARP amendment of covenants

[Carmen Rowe]

Since I'm responding off digest, Bryce, I'm going to respond to both of
your questions in one swoop - sorry that means it's a bit long.

One, amendment to change a community to 55+
Two, whether RCW 64.90 (WACOIA) trumps this discussion for associations
formed after 2018 or that have adopted the WACOIA

Question 1:
What about changing a community to a age 55 or older resident restriction
as to 80% of residents can that be done by a 66 and 2/3rd approval vote of
owners to covenants
Bryce H. Dille

This is a super interesting question. I haven't looked at law specific to
this restriction in this context, and am only passingly familiar with the
general requirements for compliance with such a change without violating
the FHA - thus unsure if there are any statutory provisions or guidelines
in the law governing those types of restrictions. Which could dramatically
change my thoughts below - but for whatever they're worth:

Applying the general concept: absent an allowance in law more specific to
this type of restriction, whether statutory or caselaw, no, this wouldn't
fly, as you are restricting a basic right.

I think it's highly analogous to rentals. People bought with the right to
rent, so have the right to maintain property that has that "value"
(property that can be sold as a rental (wider pool of potential buyers)
and/or current owner can use as rental down the road), even if not renting
themselves at time of amendment.

And if anything, an age restriction just restricts the use (and thus value)
of a property that much more than a rental restriction, so - again absent
some more specific law in this specific context - I would think the answer
would be no.

I have to say I get the concept - if someone purchases a significant asset
with specific core rights, there is something to protecting them. What
about someone who lives there now but wants to rent out and maintain as an
asset upon retirement? as one example.

I also think people buy into HOA's/COA's knowing that things might change.
It drives me crazy to see people whine about being held to the rules, or a
(more minor) change to keep the association up with the times that they
don't like. It's right there in the covenants. Just because you didn't read
them when you bought the place ..... sigh.

I don't know the answer. But I do think most agree that the nigh
impossibility of exercising the right to amend to restrain short-term
rentals under the current legal analysis is problematic, as there was zero
chance older covenants contemplated such use as it didn't exist, thus
hardly could leave the door open to restricting it down the road. The
impact clearly MUCH different than your usual rental. I fundamentally
disagree with deeming this "residential" just because someone uses it to
sleep and eat - they aren't using it to LIVE there. Perhaps that is where
legislative change could come in.

To see the degree to which associations are tied on this, here is the
Division III case I referenced - *Twin W. Owners Ass'n v Murphy*, Case No.
39299-6-III, May 16, 2023. (You can also search out rental cases where
people have tried rental caps in order to both accommodate existing rentals
as well as give some limited allowance, to no avail)

In Twin W., the association bent super backwards to make it fair to those
that already had rentals or wanted to rent, an expansive and detailed
grandfathering scheme. It was an impressive set of amendments, very
carefully executed.

But, as above, court (very reluctantly) said no dice under current
precedent from the Supreme Court - people bought with expectation of
renting, and had the right to retain that property right as even if they
aren't currently renting. So grandfathering in existing rental scenarios
didn't carve a workable path (under the law as it is).

Question 2:

You don?t think the amendment provisions of RCW64.90 changed that rule as
to HOA created fter 7/1/18

I think that is an interesting question that I have not had occasion to
visit in the rabbit holes I've travelled down.

Just glancing at RCW 64.90.285, I think there is room to say this has been
negated for newer communities (as they define amendment as a "change"
(1)(a), thus nixing the distinction between "amendment" and "change" in the
courts). The intent is also to negate a single hold-out from holding things
up, as it MAXES the required percentage of a declaration to change the %
vote needed to 90%.

HOWEVER - "An amendment approved under this subsection must provide
reasonable protection for a use permitted at the time the amendment was
adopted." This seems to (1) eliminate the "change" versus "amendment"
clunky analysis BUT (2) retain the reasoning behind that caselaw. So is it
better? end up in same place? Perhaps it allows for something like the Twin
W case, where the association made extensive concessions to protect
existing rights ...

But only time will tell. We'll find out eventually ... I did a quick search
and did not find cases discussing this statute, but that doesn't mean I'm
right - still learning a new research program I switched to.

You also have the one-year limitation on the right to challenge an
amendment absent fraud (2), which as a practical matter is very helpful as
you aren't upending things down the road.



Carmen Rowe



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

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