One of the main takeaways from the Washington Supreme Court's recent decision in Bilanko v. Barclay Court is that a declaration amendment that is adopted in a manner that does not exceed its legal authority and and does not appear to be borne out of fraud or other wrongdoing cannot be challenged more than one year after it is recorded. This is welcome news to associations, which had been thrown onto unsteady legal ground after the Court's earlier decision in Club Envy v. Ridpath called into question the enforceability of rental cap amendments that were over one-year old, but had not been passed with at least 90% owner consent.
However, the Bilanko Court did not really define what it means for an association to "exceed its legal authority." Yet, based on Bilanko, we can infer that an amendment, passed in compliance with the procedures set forth in the association's governing documents, will be enforceable unless challenged within a year of recording.
Obviously, Bilanko addresses a very specific scenario and Associations should not interpret the case as a license to act outside of the Association's authority. There are numerous other ways in which an association, a board of directors, or an individual director, can exceed their legal authority, and the consequences can be dire. One of the more common examples of this occurs when a board member purports to act on behalf of the association, but has not actually been authorized to do so by the board or the association. Another example is the board of directors taking action on an issue that is reserved to a vote of the ownership. If your board is unsure whether or not it is (or may be) acting outside the scope of the association's authority, please do not hesitate to contact Barker Martin.