Washington State Condo Leasing Restrictions
Posted Sep 29, 2014
By Washington State Real Estate Lawyer Per E. Oscarsson
Condominiums created in the state of Washington after July 1, 1990 are governed by the Washington Condominium Act, RCW Chapter 64.34 (the “Act”). One requirement for the creation of a condominium is the recording of a declaration in the county in which the condominium will be located. Among the many things required to be included in the declaration are any restrictions on the use of the condominium. Unfortunately, the term “use” is not defined in the Act. The issue is important because the Act requires the approval of owners of condominium units to which 90% of the votes in the owners’ association are allocated for any change in the uses to which a condominium unit are restricted except to the extent expressly permitted or required by other provisions of the Act.
In Filmore LLLP v. Unit Owners Association of Centre Pointe Condominium, a recent case out of Division One of the Washington Court of Appeals, the issue was whether restricting leasing of condominium units constituted a “use” to which the 90% approval requirement applied for amendment of the declaration. The Association argued that “use” referred only to residential versus nonresidential use, not to leasing. Filmore argued that “use” included restrictions on leasing of units. The Court of Appeals agreed with Filmore, finding that the Act does not limit the meaning of “use” in this context and that “use” in the section of the Act dealing with amendments to the declaration “unambiguously includes leasing.” As a result, an amendment to the condominium declaration imposing a restriction on the leasing of condominium units required the approval of owners of units to which 90% of the votes in the Association were allocated and, since that had not occurred, the contemplated amendment was inconsistent with the Act and, therefore, invalid. Here, the declaration followed the language of the section of the Act dealing with amendment of the declaration. In addition, the language in the declaration concerning leasing appeared in the section of the declaration specifically dealing with permitted uses of the condominium units. Consequently, the court held that the declaration also included leasing within the meaning of “use” and required the 90% approval threshold for amendment to restrict leasing.
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