**UPDATE** CAN AN ASSOCIATION AMEND ITS CCRS TO RESTRICT RENTAL OF UNITS?

In 2014 I posted a blog regarding an issue that frequently arises in Condominium and Single Family Residence (“SFR”) planned communities: Can the rental of the units/homes can be prohibited or restricted?

That 2014 Blog, which you can read on this website, is still worth reading, but I wanted to highlight the ruling in a recent 2015 Washington State Supreme Court decision, Filmore LLP v. Unit Owners Association of Center Pointe Condominium, Wn.2d (2015).

In Filmore the Court considered an attempt by a condominium association to amend its CCRs to limit number of units in the complex that could be leased to renters by the unit owners. The Court ruled that the attempted amendment was invalid, because it did not receive a 90% supermajority vote required under RCW 64.34.264(4) of the Condominium Act as applied to this condominium’s CCRs provisions.

While a 67% supermajority vote of condominium community members is generally sufficient under the Condominium Act per RCW 64.34.264(1) , there are certain types of CCRs amendment that require an even larger 90% supermajority vote. In this regard, RCW 64.34.264(4) provides:

(4) … no amendment may create or increase special declarant rights, increase the number of units, change the boundaries of any unit, the allocated interests of a unit, or the uses to which any unit is restricted, in the absence of the vote or agreement of the owner of each unit particularly affected and the owners of units to which at least ninety percent of the votes in the association are allocated other than the declarant or such larger percentage as the declaration provides.

The Court reviewed the terms of the original recorded CCRs for Centre Pointe Condominium and concluded on the basis of the CCRs themselves the attempted restriction on leasing amounted to an attempted restriction upon “uses to which any unit” could be put stating:

The positioning of section [CCRs] 9.1.14 within the [CCRs] section 9.1 “Permitted Uses” heading indicates that, for the purposes of this Declaration, a provision on leasing is one restricting the “use” of a unit — an amendment that requires a 90 percent vote…

Keep in mind that this decision by the Washington Supreme Court involves a statutory provision that is only to condominiums and was based in part on the specific language of that particular condominium’s CCRs. Nevertheless, it underscores that heightened scrutiny that Washington courts will likely apply to CCRs amendments seeking to restrict an owner’s right to rent the owner’s unit (or home in a non-condominium community).

If your Condominium or SFR community is considering imposing new or different use restrictions, including restrictions relating to rental of homes/units, you should wisely seek legal advice to assess the likely success of, and the proper procedure to accomplish, your objectives. In many cases your objectives can be accomplished, but in other cases it may be most difficult or even impossible to do so.

Our firm provides legal representation to Associations and to owners of homes/units in Associations. Please contact us if you need help.

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