Barker Martin

Condo-HOA Blog

Sudden Valley - The Saga Continues

We previously updated you on a recent Washington Court of Appeals decision that has broad implications for how non-condominium homeowner associations adopt budgets and impose assessments. In Casey v. Sudden Valley Community Association, the court held that a provision in the Association's bylaws requiring 60% approval of owners attending a meeting to raise assessments was not trumped by the HOA Act's budget ratification procedures. The court's ruling contradicts the generally accepted approach to adopting budgets and imposing assessments. As such, it has the potential to unsettle establish practices and force homeowners association to revisit and possibly substantially revise the way they impose assessments and manage their budgets.

At the time of our last update, the Sudden Valley decision was unpublished, and thus the case could not be cited as precedent. Since then the case was published on July 10, 2014. Unless the Washington State Supreme Court accepts review of Sudden Valley and corrects the appellate court's ruling, homeowners associations in Washington operating under RCW Chapter 64.38 may need to reverse long held positions that the HOA Act's budget ratification procedures trump affirmative vote provisions for assessments. Notably, the decision is applicable only to non-condo HOA's, because the Condominium Act explicitly provides that assessments must be made against all units "based on a budget adopted by the association."

After our last article, we at Barker Martin agreed to take on the task of petitioning the Washington State Supreme Court to review the Sudden Valley decision in the hope that it will reverse the lower court's ruling. The petition to the Supreme Court will be submitted on Monday, August 11, 2014. The Supreme Court has discretion on whether to accept review, but given the broad public interest implicated by the Sudden Valley decision, the lower court's tortured interpretation of the HOA Act, and the dire consequences if the lower court's decision goes uncorrected, we hope the Supreme Court will accept review.

If you are a member of an HOA or other industry group affected by this decision, there may be something you can do to help the Supreme Court accept review and reverse this decision by asking the Court to consider an "amicus" brief in support of the petition or reversal of the opinion. If you are interested in helping, please contact us.

If the Supreme Court accepts review it will then set a schedule for substantive briefing. We will update you on this important issue as events unfold.