Washington's Court of Appeals ruled last week that cities cannot use code enforcement to block the sale of accessory dwelling units as separately owned condominiums. This is a result that helps provide clarity for infill housing development and affordability in a number of contexts. On July 13, 2026, the Washington Court of Appeals, Division I, ruled in Ladder Properties LLC v. City of Snoqualmie, holding for the first time that local governments cannot use zoning or utility regulations to punish property owners simply for recording a condominium declaration on structures that already legally exist.
The dispute began after Ladder Properties LLC ("Ladder") purchased a residential lot in Snoqualmie that had both a primary home built in 1931 and an Accessory Dwelling Unit (ADU) built in 1940. The property shared a single sewer line and water meter. Ladder converted the two units to condominiums by recording a declaration and survey map, but undertook no construction or physical alterations. Ladder then sold the primary home to first-time homebuyers, and the ADU to an individual who had been searching for affordable housing.
Upon discovering the new ownership, the City of Snoqualmie issued code violations to both the buyers and Ladder Properties. The City alleged that creating the condominium violated local zoning codes by effectively changing the land use from an ADU to a single-family home, and violated water/sewer codes by maintaining shared utility meters.
The City proposed a severe remedy: legal dissolution of the condominium association.
But in a serious victory for both the new homeowners and for Ladder Properties, the Court of Appeals rejected the City's enforcement actions outright. The court held that Snoqualmie's actions violated two state laws: the Growth Management Act, ch. 36.70A RCW, and the Washington Uniform Common Interest Ownership Act (WUCIOA), ch. 64.90 RCW. The court specifically pointed to RCW 36.70A.681(1)(k), which now requires cities allow for the sale of ADUs separately from primary units. This new provision was enacted in 2023, as part of Rep. Mia Gregerson and Andrew Barkis’ SB 1337. Ladder Properties appears to be the first case interpreting the provision, and it bodes well for those that would like to see recent state legislation be applied in ways that actually help advance housing abundance.
The court also emphasized that local zoning and building codes may not discriminate against the condominium form of ownership. Because the physical structures and the actual use of the land for a house and an ADU fully complied with local codes at the time they were built, the City could not suddenly deem the property illegal simply because the owner filed a condominium declaration to sell the two units to separate homebuyers.
Significance for Builders and Property Owners:
This decision answers a question that has left many housing providers and first-time homebuyers uncertain: can a city treat a condominium conversion as a change of use, triggering additional site and utility improvements? And can a city block a legally compliant ADU condominium conversion through code enforcement? In Washington, the answers are now very clearly no. By tying local zoning authority to land use rather than land ownership, the ruling gives developers a clearer path forward on "missing middle" housing projects.
In practice, this provides protection for condominiumization, because it makes clear that a city or town cannot use its zoning, water, or sewer codes to regulate—or effectively prohibit—the form of ownership on a property that is otherwise fully code-compliant.
The case also provides a boost for infill housing supply and affordability, because it removes a significant regulatory roadblock for developers and sponsors looking to sell ADUs as separate condominium units. Developers in Washington can now pursue ADU condominium conversions with greater confidence that a compliant project will not be derailed by enforcement action targeting the ownership structure alone. However, while the ruling prevents discriminatory penalties based on ownership form, project sponsors must still ensure that physical layouts, structural additions, and underlying land uses comply with local codes before undertaking a condominium conversion.
For questions about the legal implications of the Ladder Properties decision, or for assistance navigating condominium conversions, land use regulations, and WUCIOA compliance, please contact Josh Friedmann, Kurt Kruckeberg, or Zac DeLap.
