Washington Supreme Court Rules Federal Arbitration Act Preempts Washington Condominium Act

On December 24, 2009, the Washington Supreme Court held that the Washington Condominium Act’s judicial enforcement provision was preempted by the Federal Arbitration Act (“FAA”). Satomi Owners Ass'n v. Satomi, LLC, _Wn.2d_, _P.3d_, 2009 WL 4985689, 1 (2009). In three consolidated construction defect cases brought by homeowners associations, condominium developers sought to enforce arbitration clauses incorporated into unit owner purchase and sale agreements. The court held that the FAA requires it to enforce such arbitration agreements, including the terms providing for binding arbitration.

The court rejected arguments by one of the homeowners associations that it was not bound by the arbitration provision because the unit owners rather than the association had signed the purchase and sale agreements. The court stated that the property in question, the condominium project’s units, common elements, and limited common elements are owned by the unit owners, not the homeowners association.

The court explained that where the arbitration clause provides that disputes regarding the arbitrability of particular claims must be arbitrated, it is for the arbitrator, rather than the courts, to decide whether a particular claim is subject to arbitration. Accordingly, the court did not determine which of the homeowners associations’ claims were subject to arbitration.