Chiwawa Communities Association
2651 Cottonwood Lane Leavenworth, WA. 98826
(509) 763-4309 Fax (509) 763-0482
email: chiwawa@nwi.net
website: www.chiwawariverpines.wordpress.com
January 13th 2010
Statement of facts from the Chiwawa Community Association Board of Trustees.
Wilkinson et. al. v. Chiwawa River Pines (Chelan County Superior Court Case No: 09-2-00896-0) / Outcome of Cross-Summary Judgment Motions
Background: Chiwawa River Pines is a beautiful planned community consisting of 367 lots located in Leavenworth, Washington. The community is located in an area zoned as Rural Waterfront and is subject to protective covenants. The 1988 and 1991 Amended Protective Covenants restrict use to single-family residential use and prohibit commercial use, nuisance, and offensive use.
Many owners were troubled by the increasing number of properties being used to generate high volume, short-term occupancy for commercial gain. This issue has been debated by the community for the past few years. In November 2007, the Board sent a survey to owners to collect feedback about nightly rentals and how to proceed. At the annual meeting held on April 26, 2008, the Board reviewed the advisory vote, which decided to separate low-impact; service-oriented businesses from the short-term rental issue and allow the owners to vote on each item on its own merits. At the special meeting held on September 27, 2008, the owners were asked to vote to whether to allow each of the following as an exception to industrial or commercial use: low-impact service-oriented businesses, long-term rentals (duration longer than six-months), and short-term rental (duration shorter than six-months).
The owners approved the proposal to allow service-oriented businesses and long-term rentals. The owners did not approve of the exception for short-term rentals. Three hundred and one owners (301) were eligible to vote. Two hundred forty owners (240) voted. One hundred sixty owners (160), an overwhelming majority, chose not to allow short-term rentals as an exception to commercial use.
The Lawsuit: Nine owners sued the Chiwawa Communities Association for a declaratory judgment to overturn the 2008 Amended Protective Covenants. The Board defended the suit and counterclaimed for declaratory and injunctive relief because it has a fiduciary duty to enforce the Protective Covenants.
At the heart of this matter is that Plaintiffs and the Association have fundamentally different views on ownership rights. Plaintiffs believe they have property rights that cannot be restricted. Owners, however, do not have unrestricted property rights when they live in a planned community.
Lawsuits involving covenant interpretation are very case-specific—that is, the outcome depends on the specific facts before the court. The outcome in this current lawsuit may not apply to another planned community with different facts. In addition, Chiwawa River Pines is one of the few planned communities in the area. The ruling in the current case would not apply to properties not subject to restrictive covenants.
Outcome: On January 5, 2010, Honorable T.W. Small of the Chelan County Superior Court issued an oral ruling on the cross-motions for summary judgment and directed counsel to draft a joint order incorporating his ruling for his review and signature.
At the start of his remarks, Judge Small provided an analysis of applicable laws. In conflicts between homeowners regarding the interpretation of restrictive covenants, the Court places a special emphasis on arriving at an interpretation that protects homeowners’ collective interests. In construing restrictive covenants, the Court’s primary task is to interpret the drafter’s intent. Extrinsic evidence is admissible to determine the meaning of the specific words and terms used in the covenants. In the case of an ambiguity, the Court will look beyond the document to ascertain intent from the surrounding circumstances.
The Court found that it was undisputed that the Board took enforcement actions against short-term rentals in the past. The Association submitted a 1987 letter informing an owner that a daily rental was a violation of the Protective Covenants and 1991 Board minutes memorializing the request for an owner to remove a sign for lodging. In addition to these undisputed facts, the Court distinguished the present case from case law cited by Plaintiffs because of the broad language of the Protective Covenants. In Chiwawa, the Protective Covenants not only restrict use to single-family residential use, but there is also language prohibiting commercial use, nuisance, and offensive use.
In summary, Judge Small ruled that rentals for a duration of less than one month are a commercial use and violate the prior Protective Covenants. He believes the frequency of use does change the residential nature of use. Judge Small, however, also ruled that the 2008 Amendment over-reached in prohibiting rentals for a period of more than one month but less than six months. An express reservation of power authorizing less than 100 percent of property owners to adopt new restrictions is valid, provided such power is exercised in a reasonable manner consistent with the general plan of development. Judge Small found the pre-existing covenants allowed month-by-month rentals; therefore the 2008 Amendment was not a reasonable amendment and the prohibition against short-term rentals for less than six months is invalid.
Lastly, Judge Small ruled that each party is responsible for their own attorney fees.
The Association’s attorney is also seeking a clarification from the judge regarding the provision of the 2008 amendment providing an exception for low-impact, service-oriented businesses and the Association’s request for an injunction against Plaintiffs. Another update will be provided on line, as well as a copy of the final order. The attorneys for both parties are scheduled to speak with Judge Small on January 21, 2010.
If you would like more information on this topic, please contact the Chiwawa Community Association Board of Trustees at 509-763-4309 chiwawa@nwi.net or on the web at www.chiwawariverpines.wordpress.com
Thank You:
Board of Trustees, Chiwawa Community Association
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Interesting!
I heard a rumor that Ponderosa Pines is considering the same thing..
I concur with Judge Small’s decision. When the property owners in Chiwawa Pines purchased their property, the covenants restricting nightly rentals were in place. This was not something the owners were unaware of. As a 35 year resident (full time ) of the area, and coming from a family of weekend cabin owners since the early 60′s, I can attest to the decline in the quality of life here, commensurate with both the nightly renters and some of the weekend owners. Certainly, the majority of people in the area are “good neighbors” but the ones with no manners cast aspersions on the rest. I feel Judge Small also is protecting the property rights and property values of the area property owners not involved with the nightly rentals. In the case of nightly rentals where the owners are not on site to “police” their renters, the renters have no pride of ownership, nor are they living side by side with the neighbors on a daily basis. The nightly rentals with on-site owners or managers are good neighbors.
Through personal experience, I can attest to the fact that the Chelan County Sheriffs’ department is less than helpful with these matters. As this ruling only affects Chiwawa Pines at the moment, perhaps some of the proponents of the nightly rentals in other areas can introduce some suggestions for successful co-existence and solutions when problems arise. It is in the interest of us all to resolve this problem before it gets any larger!
VERY, VERY PREMATURE BY THIS GROUP OF PEOPLE.
It is very disturbing George that you have posted this after you posted the fund-raiser event. You have allowed this Board to post verbal results that even their attorney is not clear of on your site to demean the fund-raiser.
So far, it is a verbal decision and I think this Board has jumped the shark posting preliminary decisions as official. The Association is under extreme pressure to justify the legal expenses to prosecute against a set of covenants which the judge threw out “verbally”.
Any more than that is pure speculation.
Plain Sense, when I bought in the late 90s my real estate agent showed me a house in Chiwawa which was used as a rental and didn’t disclose it was “illegal”. It wasn’t because the definition of “commercial” wasn’t enforced. If it were, we would have lost plenty of good businesses instead of just the villain of the day- the short term renters.
For me, it is the weekend property owners who are the nuisance, not the renters. Go figure. I deal with it because they have their rights.
BTW, before the “illegal” covenants passed, the renters reached out to try to work things out and were rebuffed. Perhaps, clearer heads will now prevail.
Ted, The above information is only factual and is directly from the court precedings. If you read the letter it provides history of the issue and then goes on to explain what the Judge decided. Your post is full of false information. It also explains that some things are awaiting clarification and are not final, so I don’t see how they are jumping the gun.
First, the Judge ruled that the 1988 covenents are LEGAL and enforcable by the CCA board. When any person buys land in a planned community that has protective covenents they are going to lose certain “rights”. You knew this when you bought as did all the other owners.
The reason the board has sent out factual and public information is to shine some light on the many threads of false information and flat out lies in the community. One just happens to be the fundraiser put on by the “renter group” of CCA. They have failed to tell people supporting the event that they are out to raise funds to fight the Ciwawa HOA and its 301 owners. They have posted signs in the community with out all the facts. They make it sound as if every one from the lake to leavenworth is going to lose their property rights. This is not true.The only people affected are Ciwawa Pines owners and the majority has proven that they do not want nightly rentals by the 2008 vote to ammend the Protective covenents.
The renters did not “reach out” and try to work things out. they had several chances to speak on the issue, incuding many board meetings and HOA meetings and they didn’t.
I would hope anyone attending this fundraiser understands that the decisions in CCA will not affect areas like ponderosa or River road. Remember that they are now raising funds for their attorney fees, so they can take it to the state court of apeals, where they run the risk of having to pay both sides attorney fees. (if they lose)
Think about this, would you rather support about 15 nightly rentals in CCA or Hundreds of Full time and weekend residents.
123, hundreds? Why not thousands?
As for your legal interpretation, the oral decision was fuzzy and both attorneys are working out details. Simple as that.
Why not wait? Why did you(as member of Board) want to post on the greater community site when it wasn’t official? Your own attorney was confused. The Board comments should remain on their own site.
Lets get one thing straight. I am not a board member nor will I ever be a board member of CCA.
Thousands would not be correct. I only speak of the CCA community, which is about 301 owners.
I heard the judge first hand. Without any attorney sitting behind me, I understood what the judge said crystal clear.
Im sorry if you disagree with the facts that sit right in front of you. My post is my opinion and only that. It is what I beleive the board has done to protect it’s owners and community that has been fed so much false information. All my info I gathered from the CCA blog and nothing more.
Remember that this issue was brought into the outside community by none other than the very people you support! It wouldn’t have been such a huge issue if the nightly renter group hadn’t started telling people they are going to lose their “property rights”. Which is not true.
Why is it ok for the nightly renter group to post on this site for their fundraiser but not ok for the board to state the facts so people can make their own decision? The post about the fundraiser provides a contact to get more info. how would the common Jo know whether they are gettting all the facts without both sides of the story.
I have lived in CCA for almost 26 years and I think Nightly rentals have destroyed the residential nature. I hope CCA is allowed to uphold the current covenents and we all can move on.
And for the record, Ted, I find it in very poor taste that you would chastise George for posting this info. This is a local site for friends and locals of Lake Wenatchee. Sorry that posting this hurts your “shady” fundraiser … but I for one am glad George posted this. I didn’t know of the issue, and I think it is important to the residents of the community. If you could break the CCNR’s of CRP, the no CCNR’s are safe. And I am not OK with that.
And you cannot blame your realtor for not telling you about the “no commercial” short term rentals. CCNR’s are tied to the land, and part of every Escrow closing event. So, whether you read them or not, that is your fault. The only part I don’t get is why doesn’t the few folks who want short term rentals just move to a place that allows them? It is your fault you are in this predicament … quit blaming others.
Peace, Love, and Bobby Sherman.
Having purchased property with covenants before, I agree it is the responsibility of the purchaser to read the covenants, and that they are definitely available at closing. The owners with the nightly rentals took a “calculated risk” and I think very calculated! More and more people seem to think the law either doesn’t apply to them, or it is just there to be changed.
It seems unfair that the Chiwawa homeowners have to pick up the legal fees to fight what should never have gone to court in the first place.
Unfortunately the reality is somewhere between the few incidents (which would definitely bother me) and the “bloviating” by a few “pretentious” folks. The people who truly are hurt from this are the good owners that may need to rent the place out once in a while to help make the ends meet. I luckily do not; but if I did, I still would. It is also amazing how the some of the most opinionated against the “multi-unit” or “for profit” rentals are multi second-home owners.
It is too bad that in a country where our government is diminishing our rights and freedoms hourly, that it has become a hobby to vanquish them further for an ego massage.
But hey, who knows; soon enough it might be illegal to even have a place up there. Don’t worry we’ll start with the homes near (800’) of the water, then expand it into a wilderness area!
Have fun prunes; I’m going to go play in the snow!
There’s one phrase from the case that sticks out in my mind. “Judge Small ruled that rentals for a duration of less than one month are a commercial use…”
If this holds, then I think all short term rentals in Chelan County will be considered commercial activities and regulated consistently under our current Zoning Codes.
This would lay out in case law that such use is not residential in nature, but commercial..
Dave,
I think you are taking that statement out of context. If you read the paragraph before that, it relates to the protective covenants for the Chiwawa pines development, and not for all of Chelan county.
Hi Elaine! I agree with you that the context has to do with the CC&R’s. However, if nightly rentals become classified as commercial activities, then the Chelan County Zoning codes come into play in addition to the CC&R’s any development may have.
I know the group in Manson has been dealing with this issue for several years—as they are in Chelan County, I assume there has been no county wide ruling yet?
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