Director's Only Swim Time

If your association has a pool, odds are it's been busy this summer with all the 90 degree days we've enjoyed.  

And even though we are well into swimming season, it is not too late to review your pool rules to make sure they don't swim against the current of the Federal Fair Housing Act (FHA).

In our experience, most associations draft pool rules with the best of intentions to maximize resident safety.  Yet, many board members are surprised to learn that adult swim times are not allowed, or that they cannot prohibit minors from swimming unattended.  Even rules that are squarely grounded in conservative, safety-oriented principles may expose an association to legal challenge.

The FHA prohibits discrimination in the provision of services or facilities because of race, color, religion, and familial status, among other categories.  This prohibition applies to association pools, which means pool rules must be carefully drafted so that they do not discriminate.

Compliance can be harder than it seems.  For example, a rule banning Episcopalians (or any other religious group) from swimming in the pool is obviously ridiculous, and clearly discriminatory on the basis of religion.  If you have those types of rules at your pool, then you've fallen into the deep end and you better call a lawyer.  Yet, a rule banning minors from swimming alone seems reasonable, but similar rules have been successfully challenged in court, and found to be discriminatory on the basis of familial status (families with children, in this case).  In fact, familial status is often the lynchpin for a challenge to pool rules, because pools often have rules that are designed to ensure inexperienced swimmers are supervised.  Most of us associate inexperience and irresponsibility with persons of a young age, so associations adopt rules to control conduct based on a particular age, such as children age 2, 10 or 16.  Yet, when a rule mentions a specific age, it is per se discriminatory, which means the rule treats children, and families with children, differently and less favorably than households with no children.

Courts have said that to comply with the FHA, a rule must be reasonable and tailored to be the least restrictive means to meet a compelling business necessity.  In the context of pools, safety is a compelling necessity.  Accordingly, instead of a rule requiring a person under 18 (or a minor) to swim with an adult (which courts have reasoned would prohibit even a 17-year old lifeguard from swimming alone), a less restrictive rule might be to require those without swimming skills to be accompanied by someone who can swim, without regard to age.  Maintaining sanitary conditions is also an important goal.  Instead of requiring all children under 3 years of age to wear a swim diaper, you might require all persons who are not toilet trained or incontinent to wear a tight fitting protective covering or swim diaper.

If you have pool rules, a review by legal counsel is recommended.  Let us know if we can help.

 

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.

It's About Time

Recent Oregon Supreme Court Case Brings Some Needed Clarity to the Statute of Limitations for Oregon Construction Defect Claims.

How long does an owner or community association have to bring claims for negligent construction in Oregon?  The answer, surprisingly, remains unsettled. But the Oregon Supreme Court’s decision earlier this year in Rice v. Rabb lends very strong support for those of us who have long been advocating that the statute of limitations is at least six years from the date that construction defects were discovered or should have been discovered.

Many community associations we have met with over the years are surprised to learn that Oregon statutes are unclear with respect to how much time a party has to bring its negligent construction claims. For years, trial courts were all over the map due to ambiguities in the statutes. Many trial courts concluded that the statute of limitations was just two short years from discovery of a problem. Others concluded that the limitations period was six years from discovery. A few trial courts even ruled that other periods applied. This uncertainty created much confusion, affecting the rights of many owners and the resolution of their claims. Some homeowners even lost claims in close cases where courts applied the two-year rule.

For years, we waited for the right construction defect case to wind its way through the appellate courts to provide a definitive answer.  No luck. Then came Rice v. Rabb, a seemingly unrelated but entertaining case involving the conversion (or theft) of the dress of the “Queen of the Pendleton Roundup.” In the case, the Oregon Supreme Court defined how claims “accrue” (or arise) under a statute similar in meaningful ways to those applicable to construction defect disputes. The reasoning in the decision is highly technical. Suffice to say for this discussion that the case has been viewed by attorneys as a sea change in finally resolving the limitations issue. And the trial courts are agreeing in recent decisions. Prevailing wisdom now is that the statute of limitations is six years from the date construction defects were discovered or should have been discovered. Some trial courts have even concluded that Rice v. Rabb overrules prior appellate case law and that breach of contract claims for construction defects now run six years from discovery (as opposed to six years from completion).

Be aware that because Rice v. Rabb construed statues only similar to those applicable to construction defect disputes, it is still possible for a court to conclude that the decision is not binding on a construction defect case. Rice v. Rabb is simply the best case we have at this point. Please also note that nothing in Rice v. Rabb affects the statute of repose, the well-settled time period after which no claim may be brought regardless of when it is discovered. The repose period remains ten years from the “substantial completion” of a building.  

Despite the decision in Rice v. Rabb, and its endorsement of a relatively longer limitations period, the best practice is to act on claims soon after they become apparent. Be aware that defendants will seize on any evidence of construction defects, leaks, mold etc. to persuade a court that claims were known or should have been known, and that the limitations period has been triggered. An association need not necessarily have completed a building investigation to “know.” A single complaint from an owner about a window leak may be all a court will require. To be safest, assume that the clock is ticking on claims from the very first indication of a problem. 

Feel free to contact me or one of the other attorneys at Barker Martin if you have a question relating to your rights and the time you or one of your communities has to bring claims. And please continue to look for updates on this site as courts continue to consider pending statute of limitations issues and the implications of Rice v. Rabb.

 

 

 

Electronic Privacy and Community Associations

Community associations, like many organizations, have caught the technology wave and are increasing their reliance upon the lnternet and other digital media for conducting business. As more and more of these associations migrate information from paper to electronic bytes, the specter of electronic privacy looms large. There are several legal and practical issues relating to electronic privacy that community association managers and board members should become familiar with as they conduct digital business via the Internet.

Back in 2012, I wrote an article on this subject which can be accessed here.   A synopsis can be found below.

A community association may look to the commercial industry to see how it is responding to electronic privacy issues. A review of web hosting and virtual community association company websites reveals “best practices” policies regarding protection of electronic privacy and personal identifiable information.  Such protocols include:

1. Strong firewall systems that provide defense against hacking by third-parties;

2. Assurances that all electronic information is kept confidential and never provided to any unauthorized persons;

3. All electronic information must be provided voluntarily with consent;

4. All electronic information may only be used pursuant to agreed upon and authorized purposes;

5. Set schedules to ensure accuracy of the electronic information; and

6. Establish retention and deletion schedules and policies.

Electronic privacy and security of personal identifiable information is a hot topic for community associations. Though there is a little formal guidance or laws for associations to follow, there are sound practices and other guidance offered by the business industry. A community association relying upon the lnternet, or other digitized systems for conducting business, should ensure it, or the company responsible for such services, follows proper protocols to protect its members and itself from unwarranted risk and legal liability.

Feel free to contact me or one of the other attorneys at Barker Martin if you have a question relating to electronic privacy and community associations.

 

Now, Therefore, Be it Resolved

Community associations often look to their declarations and bylaws for guidance on the governance of their community. Sometimes, though, associations want to clarify, supplement, or add to those governing documents. Depending on the circumstances, an association may be able to accomplish this through the adoption of resolutions. This week, we discuss some common situations when the Oregon Condominium Act, the Oregon Planned Community Act, and in some cases, the association's governing documents, require (or allow) the association to adopt resolutions.

The Oregon Planned Community Act and the Oregon Condominium Act generally require a resolution if an association intends to engage in or adopt rules relating to the following:

(1) Borrowing funds from the association's reserve account to meet high seasonal demands on the regular operating funds or to meet unexpected increases in expenses;

(2) If the board of directors adopts a resolution to borrow funds as set forth above, the board of directors must subsequently adopt a resolution establishing a written payment plan for repayment of the borrowed funds within a reasonable period;

(3) If an association intends to impose charges for late payment of assessments or levy reasonable fines for violations of the association's governing documents, the charge imposed or the fine levied shall be based on a resolution of the association or its board of directors (but only if the charge intended to be imposed or the fine levied is not based on a schedule contained in the association's declaration or bylaws);

(4) The board of directors, by resolution, may adopt reasonable rules governing the frequency, time, location, notice and manner of examination and duplication of association records and the imposition of a reasonable fee for furnishing copies of any documents, information or records;

(5) Depending on the information set forth in an association's governing documents, an association may be able to take advantage of the resolution-making authority relating to insurance deductibles and other insurance details set forth in the Oregon statutes: See our blog article here for details.

Some exceptions may apply and the list is not intended to be exhaustive; instead, it identifies common situations where, depending on the association's governing documents, a resolution is either necessary or recommended. There are a variety of other resolutions that might be recommended or particularly helpful to community associations.

To determine whether additional resolutions may be helpful (or necessary), associations should review their governing documents. Sometimes association governing documents will require the board of directors to adopt a specific resolution before the association takes a specific action. And sometimes the association governing documents (or Oregon statutes) require a resolution to be mailed out to all owners before the resolution becomes effective. It is always best to make sure you understand those requirements before attempting to adopt a resolution. Doing so will allow your association to move forward properly and efficiently. Please feel free to contact us if you have any questions.

Construction Defects: A Call for Accountability

Owners frequently ask why construction defects and building product failures are so prevalent these days. In his New York Times op-ed article, "They Don't Make 'em Like They Used To: Inferior Products and Labor Drive Modern Construction," Duke University engineering professor Henry Petroski considers that question. He concludes that the answer lies in the drive to make "quick money" via modern construction practices that favor inferior products and labor at the expense of craftsmanship. He calls for homeowners and legislatures to hold suppliers and contractors accountable for the quality of materials and work they promise.

For a link to the article please click here.

On the issue of accountability at the legislative level--and apart from our efforts litigating on behalf of homeowners--several Barker Martin attorneys remain highly active in the Washington and Oregon legislative process, including serving on legislative committees for homeowner association industry groups and testifying on behalf of bills affecting owner rights. On occasion, we also are asked to review and help draft prospective legislation. Keep checking this Blog to obtain the latest legislative developments affecting homeowners.
 

Accomodating Accomodations

Recently, while reviewing a Federal district court case from the Southern District of Florida concerning a dispute over a disabled resident’s request for a service animal, it occurred to me how challenging it can be for an association to properly respond to FHA requests for reasonable accommodation (or modification), even if the board is trying its best to do the right and reasonable thing.

The case I mention above is Sabal Palm Condominiums of Pine Island Ridge Association v. Fischer, 2014 WL 1092361 (S.D.Fla.)). In it, a condominium association with a no-pets policy was held to have violated the Fair Housing Act by constructively denying a disabled resident’s request for a service animal. Deborah Fischer, a condominium resident who was confined to a wheelchair due to Multiple Sclerosis, notified the board that she was bringing home a trained service dog to assist with her tasks of daily living. The association rightly treated the notification as a request for a reasonable accommodation from its no-pets policy, but from there, the association’s handling of the request ultimately landed it on the losing side of a Federal court case.

The Sabal Palm association requested extensive documentation of Deborah’s disability, such as medical records from all her healthcare providers, all documents related to the nature, size and species of the dog, as well as all documents regarding its training. Even though Deborah eventually provided a medical history form from her doctor that confirmed she was disabled and explained the nature of her disability and the limitations it imposed, along with a letter from the dog trainer detailing the dog’s training, the association still was not satisfied and requested more information. Deborah continued to provide information consistent with the information she previously provided: that Deborah’s medical condition rendered her severely disabled and required her to rely on the assistance of others to maximize her function status. Yet, more than 4 months after receiving the first medical records, the Association inexplicably failed to grant Deborah’s request and then compounded their error by suing Deborah, arguing that she was not entitled to keep a service animal at the condominium.

The court was not pleased. In its decision, the court found that the association had more than enough information to grant the request and allow the dog to stay, and held that the continuing delay asking for even more information amounted to constructive denial. The association was held liable for damages. In fact, the board president was held liable as well, because he was found to have “personally committed or contributed to a Fair Housing Act violation.”

So, how does an association comply? First, an association needs to know if the FHA applies to their complex. The Federal Fair Housing Act (FHA) prohibits discrimination in housing on the basis of race, color, religion, sex, national origin, familial status, and disability. It applies to multifamily dwellings of four or more dwelling units, so most condominiums must comply. A person with a disability is generally defined as any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such impairment; or is regarded as having such an impairment. The FHA requires an association to make reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling or common space. Associations must also allow for reasonable modifications to structures to afford equal use and enjoyment. Failure to do so where an accommodation or modification is warranted can constitute discrimination.

One could fill a law school course with all of the points of law and interpretations of each of the many provisions of the FHA and how they apply to condominiums. Yet, there are a few simple things an association can do to best ensure requests are properly handled when received.  

First, there is no substitute for basic education on this topic in aiding board members and managers identify issues when they arise. To this end, there was a very helpful and informative Q & A statement published in 2004 called the “Joint Statement of The Department of Housing and Urban Development and the Department of Justice Reasonable Accommodations Under the Fair Housing Act.” A big part of the challenge of compliance is simply knowing what types of situations may fall under the FHA, and being informed on how these laws are interpreted. Here is a link to the Joint Statement: http://www.hud.gov/offices/fheo/library/huddojstatement.pdf. Reading it is time well-spent.

Second, remember that a request for a reasonable accommodation does not need to contain the words “request” or “reasonable” or “accommodation.” If you receive a letter, email, voicemail or other communication that might be a request for an exception, change or adjustment to a rule, policy, practice or service at your association, and there is a connection to a person with a disability and their equal opportunity to use and enjoy a dwelling or common space, you should immediately review the request through the reasonable accommodation lens. It may be that the request does not implicate the FHA, or does not meet accommodation standards, but it is a good practice to review the inquiry as if it is a request for a reasonable accommodation (or modification, if it involves changes to building structures). Also, if your association has any publically accessible facilities, you may also be subject to the Americans with Disabilities Act.

Third, as the Sabal Palm case teaches us, even unreasonable delay in responding to a request, or requiring unnecessary documentation or overly burdensome procedural hoops, can result in a constructive denial. Do not delay in analyzing requests.

Requests that concern disabilities can be challenging for community association boards and managers. How to gauge whether a request is reasonable, or who pays for a requested modification, can add complexities to an already testing scenario. Realize that when it comes to disabled residents, it is very often the case that making changes to your rules and policies is not only the right and kind thing to do, but may it be required under the law. If you have questions, we are here to help.
 

UCIOA Update

The Washington State Chapter of CAI is hosting its monthly chapter luncheon on Tuesday, June 24 at the Redmond Marriott Town Center From 11:30 to 1:30 - and we hope you can make it!

I will be leading a discussion on the Uniform Common Interest Ownership Act (UCIOA). The prospect of UCIOA becoming law in Washington has been on the horizon for several years and the drafting process is now at a point that we can expect legislation to be introduced in the next legislative session. This lunch program will include a summary of what UCIOA includes and does not include, with an emphasis on: Declarant Rights, Assessments, Collections and Consumer Protections.

For more information and to register for this lunch please click here.

We would love to have you join us and hope to see you there!
 

WSCAI's Made for Manager's Day

The Washington State Chapter of CAI is hosting its annual Made for Managers Day next Thursday, June 19th at the Lynnwood Convention Center - and we hope you can make it!

This is a great educational opportunity for community association managers to earn 3.75 continuing education credits and learn from industry professionals. In addition to a full day of interactive educational sessions, there will be a full Exhibit Hall occurring with fun booth giveaways and networking opportunities galore. Stop by the Barker Martin booth to meet the team and learn about our newly expended legal service offerings designed to aid both community associations and managers.

Presentation topics include:

--'What To Do When the Press Comes Calling or Social Media Turns On You'
--'Beyond Customer Service: The Art of Hospitality'
--'Management Ethics'
--'Legal Marijuana and Other 'Aromatic' Substances in Condominiums'
--'The Big Picture! Contemporary Issues and What's Happening in the Industry'

For more information and to register for the event please click here.

We would love to have you join us and hope to see you there!

Sudden Valley, Sudden Change for some HOAs

On the heels of the Washington Supreme Court's peculiar plurality decision in Wilkinson v. Chiwawa, Division One of the Washington Court of Appeals recently issued an equally perplexing decision relating to procedures employed by non-condo homeowner associations in establishing budgets and levying assessments. In the as-yet unpublished opinion called 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.

As in Chiwawa, the court seemed to subjugate common sense and a basic understanding of community association law to its desire for a particular outcome based on the facts of the case. Apparently, the Sudden Valley community had, for years, attempted to give effect to both the bylaw provision requiring the affirmative vote for assessment increases and the HOA budget ratification procedure (which allows passage of a budget unless rejected by a majority of the votes in the association under RCW 64.38.025). While the budget consistently passed, the assessment was consistently voted down by a minority of owners (comprising a majority of those attending the assessment vote meeting). Frustrated with this consistent outcome, the board determined, by motion, to hold one ratification vote on the budget, which they would interpret as assent to the assessments.

In a paragraph that sums up the basic distaste for the statutory ratification process, the court seemed particularly offended that the board "combined the vote on dues and assessments with the vote on the budget" and thereby "achieved its goal of increasing dues and assessments despite the members' overwhelming vote to reject it."

In ultimately holding that the budget ratification procedure in RCW 64.38.025 does not trump a bylaw provision requiring an affirmative vote to raise assessments, the court held strong to the absurd contention that budgets and assessments are completely unrelated, which further required them to recognizing a board's ability to forego use of budgets and adopt unregulated "spending plans."

At the same time, completely absent from the opinion is any recognition of the difficulty of operating an aging association where a small but active minority of unit owners use the super majority attendee vote requirements ensure that assessments are never raised - even where the raises are objectively legitimate or even required to fund reserves. This is exactly the policy behind the statutory budget ratification procedure and why it has been interpreted to supplant affirmative vote provision.

As an unpublished opinion, the case technically has no value as precedent, but it remains to be seen whether the case will be published or appealed. If published, many HOAs in Washington may need to reverse long held positions that the HOA Act's budget ratification procedures trump affirmative vote provisions for assessments. Notably, the decision itself limits it applicability to non-condo HOA's, noting that the Condominium Act explicitly provides that assessments must be made against all units "based on a budget adopted by the association." Yet the court still refused to see the connection between budgets and assessments, meaning that for struggling associations with affirmative vote requirements in their governing documents, Sudden Valley may mean sudden death to fiscal responsibility.

As always, please contact us if we can be of assistance.