Virginia Condominium & Homeowners Association Lawyer

Your Virginia Legislative Action Committee,  (LAC) is hard at work monitoring and taking appropriate action on approximately 30 bills that have been introduced in the legislature this month.  Mike Inman serves on the LAC, as he has for over 15 years, and wishes to direct you to the LAC website for detailed information on what is happening in Richmond.  The web site includes a tracking chart for all the bills.  Please see www.cai-valac.org.  for legislative alerts and the tracking chart, as well as other information.

We have recently learned of a relatively new Federal law which gives some protection to tenants who reside in homes owned by folks who don't pay the mortgage resulting in foreclosure UNTIL December 31, 2012. Below is a summary published on the Federal Deposit Insurance Corporation (FDIC) website:

SAVE THE DATE!!! The Annual COMMINITY ASSOCIATIONS DAY 2010, will be held on March 27, 2010 at the Virginia Beach Convention Center. This event includes over 50 vendor booths and programs presented on a wide variety of community association topics all day long. Lunch is provided. It is a great event for board members  and owners to learn a lot in a short time. The theme for 2010 is TAKING THE MYSTERY OUT OF COMMUNITY ASSOCIATION LIVING.  Please put this on your calendar NOW!!

PREPARING PROXIES FOR A MEMBERSHIP MEETING – A TRAP FOR THE UNWARY

Sometimes we have the unhappy duty of telling a client that the proxy they have sent out (or, worse, used) for a member meeting was invalid due to lack of compliance with the Virginia Condominium Act, or simply doesn't constitute a proxy.   It seems that many folks think that a proxy is something that is simple to do and should not require professional assistance.  Unfortunately that is not the case.  There are also a couple myths about proxies that we need to dispel...

For the average person, these words are usually harbingers of doom.  But for common interest communities and the professionals associated with them, they are simply an annual chore.  For a number of years the law has required residential condominiums and homeowners associations to file annually with the Virginia Department of Professional and Occupational Regulation.  Recent changes to the law have added professional management companies as entities required to file as well.  The online link to verify compliance is For the average person, these words are usually harbingers of doom. But for common interest communities and the professionals associated with them, they are simply an annual chore. For a number of years the law has required residential condominiums and homeowners associations to file annually with the Virginia Department of Professional and Occupational Regulation. Recent changes to the law have added professional management companies as entities required to file as well. The online link to verify compliance can be visited here. The same link allows you to check the status of many professionals, including contractors doing work at your home, and is a terrific source of information.

A comment was recently posted to Mike Inman's article about the limits of Board authority.  The commenter asked:

1. What authority does a Condo or HOA Board have to censor the content of:

(a) a community newsletter?
(b) a community website?
(c) notices posted on a community notice board?

2. What authority does a Board have to prohibit Owners (or other Residents) from puttng notices or flyers (relating to community matters)on or uder doors in the community?

The answers to these questions nicely highlight certain laws that apply to help facilitate communication among members of both Condominium Associations and Property Owners Associations.

We bring you news on two popular topics; Insurance and collections.  Two of our team members, Jeanne Lauer and Mike Inman, recently participated as presenters in an enjoyable association Leadership Retreat sponsored by two Virginia CAI chapters at the Boars Head Inn in Charlottesville and hope to repeat the experience next year – as do most who attended. It was a first time event which was well organized and executed. Much credit goes to our local Chapter Executive Director, Rebecca Woodring.

QUESTION:

I live in a condominium townhouse and recently placed a “For Sale” sign in my yard. I was notified by the Association Manager that my sign was not allowed and would have to be removed.  She also sent me the “guidelines” for all signs which has all sorts of information about the size of the sign, what it can say, whether it can be hand-painted, etc. When I bought this house I know there were lots of signs that don’t sound like they were alright under the guidelines. Are they serious?

RESALE DISCLOSURE – SOMETIMES NOT ALL IT SHOULD BE

One topic that seems to always provide interesting fact situations requiring a fair amount of analysis is resale certificates. One reason is that the Legislature keeps messing with the law. There is an amendment of some type virtually every year and 2008 was a banner year for amendments to these provisions. I suspect that many folks who need to know and are subject to the new statutes enacted last year are still not aware of all their requirements and nuances.

We had the following question posed to us on our website (some editing was done):

“Hello.  I purchased a house in an HOA community in Virginia on January 9, 2009. 

The SELLING Real Estate Agent ORDERED a Resale Package from the Association.

Three months after settling into our new home, we were surprised to see $225.00 added to our Home Owners Association Dues Bill.

I called the number on the bill and was told that the SELLING Real Estate Agent ORDERED the resale package and then did not pay for it, so they were charging ME.

This is something I DID NOT order, nor did I receive, so I told them I would not pay it.

I paid my normal dues.  To my surprise, they applied part of my dues to the $225.00 and are now claiming that I am not paying my dues on time and they are charging me $25 late fees per month.

Recently I received a letter via certified mail from the manager: Notice of Intent to Accelerate Installments and File Lien.

The letter lists the association's attorney with a phone number.

I bought this house, which was a foreclosure, and got a great price, but I feel that this has marked me because the Association regularly charges $200K more for houses here then I paid.  I feel I am being retaliated against because I got a great deal on a house. Could you please help?”

So what we have here, judging solely by the facts presented by the writer, is the request for a packet by a real estate agent, compliance with that request by the Association and a subsequent failure to deliver the packet to the buyer, which is in fact now the responsibility of the Association. 

We must now wonder whether the Association provided as required by Section 55-509.6 C of the POA Act and Section 55-79.97:1(C) of the Condominium Act a schedule of fees to the person who requested the packet at the time of the request. Perhaps such a schedule could also have instructions on payment and notification of the settlement agent with regard to collection of the fee.   In this case it is possible that the settlement agent was neither advised of the resale packet nor the requirement to collect a fee. There is no mechanism of which we are aware by which the settlement agent can learn about the requirement for collection if the agent is not informed by the person who obtained the packet. In this case, it would seem the real estate agent should have informed the settlement agent of the need to collect the Association’s fee. In this case the buyer would not have known to look on the settlement statement to ensure that the fee was paid (such an awareness would be uncommon to say the least) because he never received the packet. One would think that in most cases the packet is received and that the buyer’s agent is aware of the packet and could then ensure that the settlement statement reflects collection of the fee for the packet from the seller.

As most of you probably know the amendments of 2008 upset the prior course of dealing whereby payment for the packet was required at the time it was obtained from the Association or the management agent; now payment is to be obtained at settlement or by collection from the lot owner if payment is not received by the association within 90 days of the issuance of the packet.

So what is the homeowner who has received a bill from the Association for the packet supposed to do? The issues we see are as follows:

1.      Did the Association do all that it was supposed to do to comply with the statute and, therefore; have the right under the statute to place a lien on the lot then seek to collect it?

2.      If so, does a homeowner who did not receive the packet have to pay the association to get the lien removed?

3.      If the Association failed to adhere to its obligations strictly under the statute, is it precluded from collecting on the lien?

4.      What action can the homeowner take to have the lien removed?

5.      If the lien is not permitted, how can the association obtain payment? Who are the possible responsible parties?

This fact situation illustrates that the new law passed in 2008 has some flaws which need to be monitored. We solicit your input on any experiences you have had with resale packets which you think may help determine the effectiveness and suitability of this new law. 

This situation also illustrates another unfortunate fact: some home buyers do not appreciate the need for obtaining and reading the disclosure packet. This buyer expresses no interest in obtaining the documents….only to avoid payment,  of course, the seller should have paid for the packet. We believe that resale disclosure is critical to successful living in a community association – without it buyers are at risk of moving into a new home with rules and covenants under which they do not wish to live. This will benefit no one.

Question:

I understand that the elected Board members are the only persons able to make motions and vote on them at a "Board Meeting." Is it true that at a "Membership Meeting”, either Annual or Special, that the members have the right to vote on issues affecting them, such as election results, budget proposals or even reversing or rescinding actions the Board may have taken?

In short, the association members are not just an audience to the Board at such "membership" meetings, it is actually their meeting, which is usually Chaired by the President of the Board, with all the rights to vote and make and second motions.  Am I correct in this assumption?

Answer:

You are correct that the issues which are discussed and voted on at meetings of the board of directors are subject to discussion only by board members. However, the Virginia Code does allow homeowners to be present and there must be some time allotted at each such meeting for owners to address the board about any issue pertaining to the association.  This is generally referred to as the “owners forum.”  Time limits may be imposed.

The manner of conducting annual and any special meeting of members/owners are largely dependent on the provisions of the Bylaws for your particular Association. For example, in almost all cases the Bylaws will provide that the members have the right at the annual membership meeting to vote for election of the Board Members whose terms are expiring.  Also, together the Declaration and Bylaws likely will set out what powers the Association has as a whole, and which, if any, of those powers can be exercised by the members exclusively, rather than the Board.

Unlike Board meetings, there are no hard and fast rules about how the agenda is developed, what the level of comment and discussion is to be allowed from the individual members and whether there are votes taken on those items. You are most likely to find information related to Board and Member meetings in your Bylaws and suggest you start by carefully reviewing those provisions. Also you may find that your Bylaws provide that your meetings are governed by Roberts Rules of Order which is the internationally recognized authority on the conduct of meetings of all types of organizations. The Virginia Code does limit comments by members at these meetings during the owners’ forum to items appearing on the agenda, and, again, members may be given a time limit.