Washington State Supreme Court Resurrects Rental Restrictions for Many Condo Associations

On April 28, 2016, the Washington State Supreme Court issued an order in a case called Bilanko v. Barclay Court which, in effect, reverses its decision in Filmore v. Centre Pointe from 2015 - but only for associations that adopted their rental caps more than a year prior to them being challenged by any owner. RCW 64.34.264(2) establishes a one year statute of limitations for challenging an amendment to the declaration of a condominium created after July 1, 1990. That statute of limitations was held not to apply in a case called Club Envy of Spokane v. Ridpath Tower Condo (2014), where an amendment which was about 5 years was successfully challenged as void. But today, the Court held that the one year statute of limitations does prohibit challenging an amendment creating a rental cap years after it was adopted by an association, even if the 90% approval required by statute (and Filmore) was not obtained. The Court distinguished Club Envy as having an amendment that was fraudulently adopted, and as such equitable principles warranted disregarding RCW 64.34.264. In Bilanko, no fraud was alleged or found, and the mistake of how much approval was required did not wipe out the one year time limit for challenge specified in the statute and the condominium declaration involved. What this means is that many rental caps adopted by “new act” condominiums which we (and most lawyers) considered unenforceable as a result of Filmore, will now be valid and fully enforceable because of today’s ruling in Bilanko. If you adopted a rental cap in the last 10 or more years, and have been advised that it was invalid because of the Filmore decision in 2015, contact us to review your rental cap amendment again and determine if it has been brought back to life by today’s court ruling. We will conduct such review for no charge. We live in interesting times.