State Supreme Court has issued decision on Filmore rental cap case

Is “leasing” a “use” under the Washington Condominium Act, RCW 64.34 et seq.? The Washington State Supreme Court declined to answer that question in its decision in the Filmore v. Center Pointe Condominium case, issued the morning of September 3, 2015. A copy of the decision can be found here.

The Court focused instead on the language contained in the Filmore Condominium Declaration. It concluded that “leasing” was a “use” in that declaration. And both that declaration and the Act require 90% approval of a restriction to a “use” to which any unit is restricted. Since that declaration made “leasing” a “use,” the Court concluded that the amendment imposing a cap on leasing was invalid because it had not been approved by 90% of the total votes in the association.

The Court reasoned that “leasing” was a “use” in that declaration because the declaration listed “permitted uses,” it included a “leasing restrictions” subsection in that list, and that subsection expressly stated that there was “no restriction on the right of any Unit Owner to lease his or her Unit,” aside from the restrictions imposed in that subsection. (That subsection prohibited leasing for a term of less than one year and leasing without a written lease.)

The Court’s decision means that one must look to the contents of the specific condominium declaration to answer the question “is leasing a use?” “Leasing” is a “use” in a declaration that is identical to the Filmore Condominium Declaration. But differences between the content of a specific declaration and the content of the Filmore Declaration may lead to a different conclusion. The Court’s decision leaves open the possibility that “leasing” might not be a “use” in a declaration that is different enough from the Filmore Declaration that the two declarations can be distinguished.

What lawyers must now focus on is fleshing out the kinds of differences between the language in the Filmore Declaration and the language in another condominium’s declaration that may lead to a conclusion that “leasing” is not a “use” in that other declaration. That is the analysis that has now begun.