Documents to Obtain from Developer
Q. We were elected last year after the developer turned over the association to us, but we don’t think we have all the info that the developer should have furnished, such as plans for the clubhouse, paint color information and information on all the assessments collected from each owner. Is there a law that states what records we should get from the developer?
A. During the development period, the Developer should be operating the association and maintaining proper records, financial and otherwise. The answer to your question is covered in Section 55-79.74G of the Virginia Condominium Act and Section 55-509.2 of the Virginia Property Owners Association Act (the POAA).
The developer, called the declarant in most association documents, must promptly turn over the following items to the new board elected by the homeowners at transition:
1. All association books and records held by or controlled by the declarant, including, without limitation, the following items: minute books and all rules, regulations and amendments thereto which may have been promulgated;
2. A statement of receipts and expenditures from the date of the recording of the condominium instruments to the end of the regular accounting period immediately succeeding the first election of the board of directors by the unit owners not to exceed sixty days from the date of the election, such statement being prepared in an accurate and complete manner, utilizing the accrual method of accounting;
3. A copy of the latest available approved plans and specifications for all improvements in the project or as-built plans if available (this would not include house plans for individual homes in an HOA – the focus is on property for which the Association has maintenance responsibility).
4. All association insurance policies which are currently in force;
5. Written unexpired warranties of the contractors, subcontractors, suppliers and manufactures, if any;
6. Any contracts in which the association is a contracting party, if any; and
7. A list of manufacturers of paints, roofing materials and other similar materials if specified for use in the community.
There is one notable exception, if the association has been managed professionally (and the developers have no financial interest in that management company), then the management company must provide the items listed as 1, 2, 4 and 6 above.
Admittedly this is not an exhaustive list of every item you might like, but it is the final product after various discussions when this law was written and promoted in 1996 by the Virginia Legislative Action Committee of Community Associations Institute (CAI) of assistance to the new board. If there are other items which you believe that you legitimately need to operate your association you should certainly make a written request for them, such as a list of all subcontractors who worked on the common elements, or a diagram of the irrigation system.
Annual Report to the State Required
Speaking of records, on a final note,please be reminded that all associations must provide an annual report to the Virginia Real Estate Board as required by Section 55-79.93(1) of the Virginia Condominium Act and Section 55-516.1 of the POAA. This creates a state database for all associations and is available to the public.
The above information should provide a good informational foundation for the future operation of your association.