NEW FHA OWNER OCCUPANCY REQUIREMENTS COULD BENEFIT SOME CONDOMINIUM COMMUNITIES

A few months ago we informed you that both houses of Congress voted unanimously to pass the Housing Opportunity Through Modernization Act (HOTMA) which, in part, required FHA to lower the required percentage of owner occupied units in condominiums from 50% to 35% unless FHA could prove that a higher percentage of owner occupancy was justified. 

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BEING SECRETARY OF THE ASSOCIATION CARRIES SIGNIFICANT RESPONSIBILITIES

Questions often arise about the duties of the secretary in taking and producing minutes of meetings and providing association records to members. The primary functions of the Secretary are to produce minutes of meetings and maintain the records of the association. The secretary must produce a draft of the minutes for approval, and then finalize them with any changes upon once they are approved at the next meeting. Records to be maintained include all of the minutes, any resolutions adopted by the Board of Directors, correspondence, contracts and notices of meetings.

We suggest that the following files be maintained:

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LIMITED RESIDENTIAL LODGING (e.g. Airbnb) - IS IT ALLOWED IN YOUR ASSOCIATION?

By: Lindsey Flaherty

What exactly is limited residential lodging?  It is, in essence, renting of rooms or entire homes or condo units for short term occupancy i.e. less than 30 days. Airbnb   provides a searchable online marketplace that enables homeowners to list for rent all or a portion of their homes and prospective customers can choose to rent from one night to several months.  While this type of rental may present a great economic opportunity for some homeowners it causes increased traffic and parking issues in associations and has resulted in excessive noise and damage to common areas.  Essentially the problem seems to be that homeowners who choose to participate in it are introducing a business in to residential neighborhoods. This business involves providing lodging to transient people who are primarily on vacation.

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Congress helps condominium unit buyers - changes to FHA loan requirements

Just before the summer recess, in an amazing moment of bipartisanship, both houses of Congress voted unanimously to change the required percentage of owner occupancy in condominiums from 50% to 35% (unless FHA can prove that a higher percentage is justified within 90 day of this legislation becoming law on July 29, 2016) and made several other helpful changes. They are as follows: 

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Significant win in Supreme Court of Virginia for local association with statewide benefit

 

SADDLEBROOK ESTATES COMMUNITY ASSOCIATION, INC.

v.

CITY OF SUFFOLK

 

TRIAL AND APPEAL HANDLED BY INMAN & STRICKLER

On June 1, 2016, the Supreme Court ruled on a case decided by a Suffolk Circuit Court Judge regarding the taxation of open space in a homeowners association.   The Court unanimously  overturned the Circuit Court ruling finding that the judge misinterpreted the law by upholding the City’s taxation of the Association’s open space. This decision provides an interpretation of a statute that applies to all POAs which have open space designated on their subdivision plats, whether leased to a third party or used by the association members for recreation or otherwise.

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What happened in the 2016 General Assembly?

Rentals; resale disclosure; condemnation

These changes are effective on July 1, 2016:

 

     “Realtor Bill.” HB684 was legislation introduced by Delegate Peace having been requested by the Virginia Association of Realtors. CAI’s Virginia Legislative Action Committee (VALAC) worked very hard to get concessions on this prior to session beginning and sought significant amendments as it went through the process to ensure a fair and balanced approach vs. the original bill which went well beyond the ultimate changes to the statute.  According to the VALAC at the end of the day the bill has a lot of moving parts but does little harm in terms of new policies impacting our group – much of it is clarification of the existing statute or standard practice. https://lis.virginia.gov/cgi-bin/legp604.exe?161+sum+HB684  

     HB684, amending Sections 55-79.87:1 and 55-509.3:1 of the Code, provides that unless expressly provided in the Act or the recorded governing documents, an association may not:

   Condition or prohibit the rental of a unit to a tenant by a unit owner or make an assessment or impose a charge, except as provided in 55-79.42:1 of the Act;

   Charge a rental fee, application fee, or other processing fee of any kind in excess of $50 as a condition of approval of such a rental during the term of any lease;

   Charge an annual or monthly rental fee or any other fee not expressly authorized in Section 55-79.42:1 of the Act;

   Require the unit owner to use a lease or a lease addendum prepared by the Association;

   Charge any deposit from the unit owner or the tenant of the unit owner; or

   Have the authority to evict a tenant of any unit owner or to require any unit owner to execute a power of attorney authorizing the unit owners' association to so evict.

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VIRGINIA ATTORNEY GENERAL ISSUES OPINION ON

The Virginia Attorney General can issue opinions concerning statutory interpretation if requested to do so by an array of government officials from the Governor to a member of the Senate or House of Delegates to a local sheriff. These opinions are not binding on a judge but are persuasive when considering the law affecting a given case. In this case a member of the General Assembly asked: Is it legal under the Virginia Property Owners' Association Act (the "Act") for an association ("POA") to deactivate a member's barcode decal if he or she is more than sixty days late paying an assessment. Deactivation of the barcode decal will restrict, but not completely deny, entry in to the neighborhood due to the existence of two access points, one manned and one not.

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Protections for Victims of Harassment in Housing

 

HUD PROPOSES RULE TO CLARIFY PROTECTIONS FOR VICTIMS OF
HARASSMENT IN HOUSING

Rule would formalize standards for bringing harassment claims under the Fair Housing Act


WASHINGTON - The U.S. Department of Housing and Urban Development announced today that it is issuing a proposed rule that would formalize standards for victims of harassment in housing to bring claims under the Fair Housing Act. The proposed rule, "Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices under the Fair Housing Act," was published in the Federal Register today for public comment.

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Virginia Supreme Court nullifies declaration amendment on technicality

On February 12, 2016, in Tvardek v. Powhatan Village HOA, the Virginia Supreme Court struck down a leasing amendment established by a homeowners association in Virginia as a result of the failure of the recorded amendment to contain what the Court deemed compliance with the statute on amendment of the Declaration.  Virginia Code Section 55-515.1 of the Property Homeowners Association Act requires the certification on the amendment to be ”signed by the principal officer of the association or by such other officer or officers as the declaration may specify that the requisite majority of the lot owners signed the amendment or ratifications thereof.”  In this case the amendment signed by the principal officer stated:

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DOCUMENT MAINTENANCE - DO YOU HAVE ALL OF YOUR ASSOCIATION'S GOVERNING DOCUMENTS?

As association attorneys we are in need of the governing documents in order to answer questions posed by the board or the manager.  Frequently we have those documents in that association’s file if we regularly represent that association.  We do need to keep up to date on any changes in the rules and regulations or architectural guidelines which may be made without our input or review.  Of course, we do believe it is a good investment for associations to allow us to review proposed rule or guideline changes before implementing to insure enforceability.  

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