The Washington Homeowner Association Act, Chapter 64.38 RCW, requires the homeowner members to approve an annual budget of revenues and expenditures proposed by the board of directors. If the budget is not approved by the required percentage of homeowners, the prior budget remains in effect. A group of homeowners in the Sudden Valley Community Association in Whatcom County used this statute to resist an increase in their assessments, arguing that a budget must include expenditures and revenues from all sources, including assessments. A Washington court of appeals in Casey v. Sudden Valley Community Association disagreed.
The court acknowledged that the statute does require the members to approve a budget, but that the budget does not include dues and assessments. Nowhere in the budget ratification statute is “assessment” mentioned. The court further noted that other provisions of the Homeowner Association Act govern assessments and that none of the provisions governing assessments mentions or requires dues and assessments to be approved by the members. While the court’s reasoning has a basis in the wording of the statute, this decision seems to be directed against unsympathetic homeowners who repeatedly failed to approve budgets necessary to pay the association’s expenses because they did not want their assessments to increase. A question for drafters of homeowner association documents is whether to include a member-approval requirement for assessments in addition to budgets. While the statute does not require the former, the association documents may.