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Can Association Members Be Bound by Unrecorded Declarations?

Yes, is the short answer. The long answer is yes if certain facts exist within your Homeowner Association (“HOA”) or other Community Association (both of these may be generally refer to as “Association”). The longest answer is that Washington state courts are likely to bind someone to unrecorded restrictions, rights, and obligations.  

Background

The situations in which this question arises follow a familiar pattern 

An HOA enforces a rule or obligation against a homeowner. For example, leveraging a fine against a homeowner for building without HOA approval, or an HOA board imposing a high dollar special assessment.  

An irritated homeowner decides to look into the HOA’s Declarations of Covenants, Conditions, and Restrictions (“CCRs”) and discovers them to be expired, defective, or flawed in some manner. Using the legal powers of Google, that homeowner also discovers that an HOA needs active CCRs recorded on a property’s deed to enforce rules. Seeing an opportunity, the homeowner challenges the HOAs actions, citing the absence of recorded or defective CCRs. The HOA enforces and fines anyways and the parties are now in a legal dispute. 

Should the dispute ever go as far as a court of law, the homeowner will likely be disappointed to find out they are wrong. Why? Because of equitable servitudes.  

 

The Law  

First, let’s dive into the legal terminology. Obligations of homeowners to their HOAs primarily arise from real covenants. Real covenants are those affirmative, written, and recorded documents like the CCRs. Another source of the obligations for homeowners arises from equitable servitudes.  

Equitable Servitudes create an enforceable interest in the property of another based on that party’s promises (implied or explicit) related to the use of the property. In layman’s terms: Even where a deed does not contain a properly recorded covenant (like CCRs), courts may find that an unrecorded or expired covenant is enforceable as an equitable servitude, and thus that the property owner is still bound by restrictions. An equitable servitude can be unrecorded (and sometimes unwritten), but often based on expired or defective CCRs.  

In specific instances, equitable servitudes can even be based on conduct of interested parties, fairness as decided by a court, representations of sellers, or even acquiescence of homeowners. Bowers v. Dunn, 198 Wn. App. 1034 (2017) (“the joint use of an easement gives rise to an obligation to contribute jointly to repair and maintenance costs.”); Riverview Cmty. Grp. v. Spencer & Livingston, 181 Wn.2d 888 (2014) (“…an equitable servitude may be implied…” because some owners may have been induced to purchase their property on the promise of living in a [specific type] of community.) 

Here’s the essence: Someone who lives within and HOA, pays HOA dues, gets the benefit of living within HOA, and otherwise recognized the HOA’s authority cannot later dispute that authority. To put it another way, if everyone acts like there is an HOA and abides by certain rules for long enough, those rules can be legally enforced. Ebel v. Fairwood Park II Homeowners’ Ass’n, 136 Wn. App. 787 (2007). 

Each situation is fact specific, but factors a court might consider in determining whether to impose an equitable servitude include acquiescence by property owners to restrictions, time the homeowner has spent in the Association’s jurisdiction, visibility and knowledge of the intended restriction, and the extent of the burden being created. It is more likely equitable servitudes will be implied and enforced when an owner makes representations about a property’s restricted use in order to facilitate the sale of a property. For instance, charging more because a home exists within an Association that provides facilities.  

An HOAs authority under this doctrine extends to a wide degree of HOA conduct, including general association powers to raise fees, impose rules, apply liens, and assessment liability. Courts consider homeowner acquiescence and received benefits as pivotal factors. Lake Limerick v. Hunt Mfd. Homes, 120 Wn. App. 246 (2004) 

This is not limited to and HOAs authority over a homeowner. Homeowners within an HOA can use this doctrine to enforce certain things against other homeowners. Bowers v. Dunn; Johnson v. Mt. Baker Park Presbyterian Church, 113 Wash. 458, 466 (1920); Buck Mountain Owner’s Ass’n v. Prestwich, 174 Wn. App. 702 (2013) (affirming order requiring owner near housing development who used adjoining roadways to pay ongoing maintenance costs to HOA). 

 

The Lesson 

RCW 64.90, the new Washington state statute that applies to certain community associations, including HOAs, seemingly accounts for potential challenges to defective CCR amendments or changes. “In the absence of fraud, any action to challenge the validity of an amendment adopted by the association may not be brought more than one year after the amendment is recorded.” RCW 64.90.285(2) 

Ultimately, equitable servitudes are another lesson in caveat emptor (let the buyer beware). Property owners should carefully examine the deed, deed restrictions, and covenants when buying property, but care should be taken to also consider what representations are being made about the community, and what perceived promises they may be making by choosing to move into a community because of those representations.  

 

Caution 

To be clear, the doctrine of equitable servitudes is fact specific and involves more legal analysis than is contained in this blog. Therefore, it is crucial to seek legal advice when dealing with the enforcement of unrecorded restrictions, especially if an HOA knows its Declarations or other organizing documents are defective. While this doctrine provides some comfort, it also carries inherent risks. Although an HOA may have a strong argument for enforcement, the reality is that homeowners may still raise claims based on the absence of recorded documents. This can lead to additional costs, extended timeframes, and increased stress for all parties involved in the dispute. Further, this article, or contacting Apex, does not in any way form an attorney-client relationship. If you have any questions or would like to learn more, please contact us or visit our blog. You might also like to read, Which HOA Law Applies To Me or Can My HOA get Tax-Exemption from the IRS? 

 

 

 

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