Is your condominium approved for FHA financing?

Many local condominiums are not approved or are about to expire.  We provide advice and application preparation with respect to FHA project approvals.  Condominiums must get certified/approved every two years.  There is no fee charged by the FHA.  The boards of every condominium in which FHA loans are a likely source of financing owe it to their owners to seek this approval as it is a significant benefit to all owners in terms of value and sales of units…..just ask a real estate agent.

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Executive Session - Getting it right

We have found that there is frequently confusion about how to go into and come out of an executive session (aka closed session) of the board of directors.  The governing statutes are Section 55-79.75 (C) of the Virginia Condominium Act and Section 55-510.1 (C) of the Virginia Property Owners Association Act. A motion must be made, seconded, voted on and passed proposing to go into executive session for one of the purposes set forth in the statute which are as follows:      

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What to do when your board is deadlocked

Recently we received the following question the answer to which could be helpful to many of you.

Q.       Our condominium has a serious need for some renovation work on windows, doors and some balconies. It is going to cost around $3,000 a unit as best we can tell right now. One contractor we consulted said it was not urgent and that we could do it over a period of time. Another contractor indicated that he thought the deterioration would accelerate and we needed to do all the work right away. The Board is divided on which way to go, and right now we only have four Board members, and it is a 50/50 split. Our next election is September and we cannot agree on a new Board member either. We have been at this standoff for four months now, and we need to move ahead with some plans, but we do not seem to be able to do so. Do you have any suggestions?

Continue Reading Posted In Association Meetings and Proxies , Board Member Responsibilities , Construction Defects , Renovation Projects
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Boards - Take Notice - 3 big reasons properly funded reserves are essential

Only a few years ago the Virginia General Assembly recognized that many association boards just would not face up to the need for reserves in an effort to keep “dues” at a lower and more competitive level.  Many are paying a price for those decisions now.  It became such a problem that several years ago the Virginia General Assembly passed a law requiring reserve studies every 5 years and an annual review of reserves by every board  (see Section 55-79.83:1of the Condo Act and Section 55-514.1of the POA Act.). 

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Virginia Supreme Court focuses on authority of Association Board to impose charges or suspensions

Recently in a Fairfax County case involving the Shadowood Condominium Association the Court examined whether or not the board could assess charges against an owner for failing to submit a unit owner status report required by the Association and for violations of rules by the unit owner’s tenants.  It appears that this association’s documents had not adopted the provisions provided in the Virginia Condominium Act authorizing the assessment of charges for rules violations. In fact the Master Deed provides that “no common expense or other sums shall be assessed….other than for the maintenance, repair, replacement or improvement of the general common elements….”

Continue Reading Posted In Board Member Responsibilities , Covenant Enforcement , Risk Management
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Mandate from the Legislature-Complaint Procedure

QUESTION: 

I understand that at this time all associations are required to have a complaint procedure in place in order for their members to be able to let the CIC Board know of issues they have with their association. I also know that the Annual Report form requires an Association to state whether or not it has a complaint procedure. What is the consequence if an association fails to comply after getting the DPOR’s letter about non-compliance when they have checked “no” on the Annual Report?

Continue Reading Posted In Board Member Responsibilities , Financial and Records Management , Legal Info , Legislative Issues , News You Can Use
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Requests for Association records - What are the rules of the road?

Q:      We are a self managed association and members often ask for copies of records such as financial data and minutes of meetings. Often they ask for minutes before they are approved. One request is for our contract with the landscaper. We don’t feel that all these requests are appropriate. What do we have to provide to our owners?

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Protecting the Community from Abusive Owners

 

Question

Our association just got started and has read through the VA HOA blog a lot!  It has been a big help to us!

I had a question about the legal responsibility of a HOA board to respond to its members.  We are a volunteer board, and there is one member of our community that is constantly sending emails (averaging 6 a day), certified letters, and posting inflammatory comments on Facebook and on our association home page.  He recently sent one email documenting the number of emails he had sent us that had gone unanswered.  He also attends board meetings and attempts to control the agenda and speak over the board, out of turn, and spending more than the allotted time on issues.  We are a board of 8 neighborhood volunteers.  With jobs, kids, and lives outside of the realm of the HOA, I just don't understand how we possibly could respond to all of his emails.  Is there a legal requirement that we respond to every email he sends?  Or is there a legal guideline for determining which correspondence requires a response?  Also, how can a board effectively manage people who are disruptive at a meeting? What advice would you offer to an association that deals with one particularly time-consuming member?

AN UNPAID VOLUNTEER TRYING TO DO THE RIGHT THING


 

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What to do when the Board wants (or needs) to upgrade the condo exterior

     Consider the situation where the Board of Directors has decided that they want to upgrade the appearance of an aging townhouse style condominium and they are talking about requiring all the unit owners to replace certain areas of vinyl siding with Hardiplank or similar high grade exterior product which is a much more expensive material. They are also going to require solid wood decorative shutters on some of the windows. The plan is to get bids, enter into a contract, and assess the owners because the association doesn’t have any money in reserve for this project. Some owners consider these improvements to be upgrades and say that the Board shouldn’t be able to require the owners to pay for upgrades as opposed to replacements.   This article can also apply to some degree to townhouse communities which are not condos but where the association has the responsibility to maintain the exteriors of dwelling units and common facilities.

Continue Reading Posted In Articles by Team Members , Board Member Responsibilities , Maintenance Responsibilities , Renovation Projects
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How do I fix my association?

Q.        I reside in a large homeowners association with a Board of Directors that are questionable at best. Our Bylaws and resolution documents state that we are to have a Board of no less than 5 people. At this time there are 3. There have been people that have volunteered to the Board but were not chosen because they ask too many questions, or they were not liked by the current Board. They have hired a manager that has no management experience. We are self-managed and we were supposed to receive a copy of the budget by mail by November 1, and we are hearing that the HOA’s finances are in a mess and we have not passed our budget because of the mess. There is no response to our calls or emails to the management or the Board. Our community newsletter has stopped, so we know nothing about what is happening. If you start to ask questions at meetings, you are asked to leave or they will call the police. I am concerned about the legality of their actions and do not know where to turn. Who can we call to help our community?

 

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Assessment collection - How to be the bad guy

Q. Our association is fairly new and we have just taken over control from the developer. I have been elected Treasurer and want to make sure we are doing all of the steps necessary to manage the Association’s finances. One of my major concerns is collection of delinquent assessments. We are not a large Association and almost everyone knows everyone else. We have just a few who are always behind and a couple who are way behind.  I don’t want to be the bad guy, but I also know that everyone must pay their dues. Can you make some suggestions that will get us on the right track?

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HOA Registration with CIC Board

I'm closing on a townhouse in the near future.  I received the resale documents from the HOA, but found the Common Interest Community Board’s annual report certificate to be missing.  When I inquired the HOA president had no idea what I was talking about.  I checked Virginia's DPOR website and, lo and behold, the HOA's registration expired back in 2006.  This leads me to the question: can an HOA that is not registered with the state compel residents to pay dues and other fees? 

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Spiteful Conduct by Board Member

QUESTION:

I belong to an incorporated HOA here in VA, and the VP of the Board of Directors made a petty issue about where I park within the community (there are no assigned spaces).  He then followed me to my house and pointed out 2 very tall trees (damaged in multiple storms & shedding limbs) which are near my house but on common property.  He then said he intended to withhold having either of these trees examined when the time comes to call in the tree care company to assess which trees are in danger and have unhealthy trees/limbs tended to throughout the community.  

Would this be a violation of any housing laws or association laws - for him to state his unilateral decision to withhold services for some areas of the community, but not others, based on his personal feelings?  Could the HOA have additional liability issues if one of these trees damages property or injures someone because of the willful (in)action of an individual board member?  I personally feel that this board member needs to be removed immediately, but I don't know how to make the gravity of the situation abundantly clear to the other board members.  Or am I just totally shooting in the dark here?

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Can Board of Directors regulate parking in common areas?

We have received a few inquiries regarding the authority of an Association (typically exercised by the Board) to assign parking spaces located in the common areas for the exclusive use of particular unit or lot owners.  This issue arises occasionally in Southeastern Virginia, where parking is relatively plentiful, but it tends more frequently to be a contentious issue in other areas, such as the Washington DC suburbs of Northern Virginia.

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Board control over communication among Association members

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.

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Required Notice for Meetings

QUESTION: I live in a condo association where the Board regularly has meetings, but does not regularly give notice of those meetings to any of the unit owners. On the occasions when they do give owners notice of the meetings, they do not always give the owners a copy of the agenda or subject matter of the meetings. What is the Board required to do with regard to giving prior notice and circulating copies of the agenda to unit owners?   

RESPONSE: This issue is covered by Section 55-79.75 of the Virginia Condo Act. First, it is important to distinguish between unit owner meetings (which generally occur only once per year), and board/director meetings (which may occur regularly throughout the year). 

Subsection (A) of the aforementioned Code section states that all owners must receive prior written notice (via regular mail or hand delivery) of all unit owner meetings. That notice must state the date, time, and place of the meeting, and must also state the "purposes of such meeting," which essentially means that the unit owners must either receive a formal agenda, or at least be given some indication of what will be discussed, decided, or voted upon at the unit owner meeting.

Subsection (B) of the aforementioned Code section applies to meetings of the executive organ (Board of Directors). These requirements are slightly different than the requirements for owner meetings. For Board meetings, the Board must publish notice of the time, date and place of the upcoming meeting in a place "where it is reasonably calculated to be available to a majority of the unit owners." This does not specifically require that written notice be mailed to the owners, nor does it require that owners be provided with an advanced copy of the meeting agenda. 

Subsection (B), in its discussion of Board meetings, later states that an owner can make a written request to the Association that he/she be provided written notice of all upcoming Board meetings, and the Board must honor that request. The unit owner making that request must submit it in writing at least once per year to the Association. 

Further, the information that is being provided to the Board members in preparation of their Board meeting (commonly referred to as a "Board packet") must be "made available for inspection" to the unit owners "at the same time such documents are furnished to the members of the executive organ." This does not mean that each unit owner is entitled to have an agenda or board packet mailed to him prior to each board meeting, but instead only requires that the Association manager (or whoever handles these affairs) make the board packet available for inspection at the same time the Directors receive this information prior to the meeting. Please note, however, that any documents in the Board packet relating to matters that the Board can discuss confidentially in 'executive session' may be lawfully excluded from the packet available for inspection by all unit owners.

Thus, in summary, the Board is obligated to send prior written notice and agendas to all owners in advance of any unit owner meeting. For Board meetings, the Board is only obligated to make a reasonable good-faith effort to publish notice of the meeting to all unit owners (which may be mailing out notice to everyone, putting notices on a bulletin board or in the elevators, posting on the Association website, etc.), unless a unit owner sends the Board a written request, at least once per year, asking for written notice of all upcoming meetings. The Board is not, however, obligated to mail out copies of an agenda prior to its Board meetings, but must honor the request of any unit owner wanting to inspect the board packet prior to the upcoming board meeting.

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Board Authority - Where are the limits?

 We often get inquiries from association members who wonder if the elected directors should be putting more association matters to a vote of the unit owners. They think that it doesn't seem fair that the Board of Directors can decide to eliminate a service or make other important decisions without the owners' consent. So that begs the question: what decisions is the board authorized to make without consulting the members?

 

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ASSOCIATION REPRESENTATION

QUESTION:

In VA must a condominium association be represented by counsel in VA General District Court or may a board member (non-attorney) represent the association at trial?

ANSWER:

There is a specific statute regarding the ability of a non-lawyer to represent anyone other than themselves in General District Court.  The statute provides:

§ 16.1-88.03. Pleadings and other papers by certain parties not represented by attorneys. —

 A. Any corporation, partnership, limited liability company, limited partnership, professional corporation, professional limited liability company, registered limited liability partnership, registered limited liability limited partnership or business trust, [...] may prepare, execute, file, and have served [...] in a general district court a warrant in debt, motion for judgment, warrant in detinue, distress warrant, summons for unlawful detainer, counterclaim, crossclaim, suggestion for summons in garnishment, garnishment summons, writ of possession, writ of fieri facias, interpleader and civil appeal notice without the intervention of an attorney[...]

 B. Nothing in this section shall allow a nonlawyer to file a bill of particulars or grounds of defense or to argue motions, issue a subpoena, rule to show cause, or capias; file or interrogate at debtor interrogatories; or to file, issue or argue any other paper, pleading or proceeding not set forth in subsection A.

Basically, this statute allows an Association, whether incorporated or not, to file their own warrant in debt or other paper specifically listed in subsection A.  However, if further pleadings have to be filed, such as a bill of particulars or grounds of defense, then legal counsel is required. Filing a response in violation of this provision of the Code can result in default judgment being entered against the Association if it is the Defendant or having their matter dismissed if it is the Plaintiff.

Further, there is no provision allowing for a non-attorney to appear on behalf of an Association to conduct a trial, which would include making an opening statement and arguments to the court and questioning witnesses.

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Neighbor Issues

QUESTION:  I have a question regarding townhome covenants and the association’s responsibility to enforce the covenants.

 

I live in the middle of two neighbors - one side is great and the other side is heinous. A couple, who live beside me, fight constantly and you can hear the cussing, screaming, and throwing objects at all hours of the day. This behavior has been going on for years, but nothing has been done to them. The board, after many calls from me, has decided to start enforcing the covenants. These neighbors have a dog that barks constantly, whether inside or outside, and other owners in the neighborhood have started to complain. I could honestly write a book about the people, but don't want to spend that much time on them. They have left trash in the parking lot, cigarette butts thrown everywhere, and don't keep their unit clean.

 

Does the townhome association have the authority to take them to court? Do I?

ANSWER:  What occurs in and to the common area is an Association matter (e.g. the incessantly barking dog when outside). What happens in a dwelling which is obnoxious to a neighbor or two, but affects no one else directly, is a private matter. The actions of your neighbors, given the appropriate proof in a court of law, likely constitutes a "private nuisance" and an injunction order could likely be obtained. Such an order requires certain actions to cease and puts the offending neighbor in the positions of being fined or imprisoned if it continues. This would not be an inexpensive proposition for you but your mental well being may justify the expense.

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The Sale of Common Area

QUESTION:
 
I'm a member of the Common Area committee for our homeowners association.  Yesterday a resident asked me what the process is for buying common area property, if there's a process and, if not, why not.  She's interested in a tiny piece of land next to her home.  I told her I'd look into it and while I admit my research skills aren't great, I cant find anything that says she can or she cant, and why.  Can you help point me in the right direction?
 
ANSWER:
 
In answering you, I am assuming that this community is an HOA vs. a condominium.  There is no process via statute or otherwise, nor a prohibition regarding the acquisition of common area in an HOA.  The ability to do so may be addressed by the Declaration and a determination should be made if it is or not.   If not, then it amounts to a decision being made by the Board of Directors, acting in their fiduciary capacity, as to whether or not the parcel being sought is, or may be, of any real use to the members to use in common.  It would seem that a proposal of this sort should be publicized along with the price being offered and an opportunity given to the association members to comment at a board meeting where time is set aside specifically to hear comments on this owners proposal. I would think that an appraisal would be required so as to insure that the parcel is not sold for too little, which is not to say that the board may not require a significantly greater price.  A title exam should be done to make sure that the association got title to the common area from the developer... sometimes title is overlooked.  Also, there is an issue of getting City approval to carve out a parcel of land to sell to an adjacent owner that intends for it to become part of their lot.  There are City regulations on subdivisions with which you must comply.  You should talk to a local surveyor or engineer to find out if there is an issue.
Posted In Board Member Responsibilities , Maintenance Responsibilities , Risk Management
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Pool Closings

Question:    I live in a condo subdivision with 176 units in Virginia Beach. Our board threatened to not open our pool this year citing the pool was too expensive to keep open. When we as homeowners purchased in this development we purchased the pool and use of it. I would think it would be pretty much understood all homeowners whether they use the pool or not are responsible via their association fees to maintain the pool and all common areas. If the cost of maintaining the pool increases, like anything else for that matter, shouldn't the board just raise the association fees to keep the pool open. Can the board decide to just close the pool that we essentially own?

Answer:    Generally, the Board has the authority to make all decisions relating to the Association, unless your governing documents say otherwise. Assuming that your documents say nothing specific about operating the pool, the Board likely has this authority.

Consider that the Board is in a very tough position, as the decision to raise dues would be just as unpopular (perhaps more) than the decision to close the pool. Consider also that the Board may not have the legal authority to raise the dues over a certain amount without a full-blown owner vote (depending on what your documents allow), leaving them with no choice.

You are unhappy with the Board's decision, but what is the general feeling among the other owners? If you believe that most owners would gladly pay the increased dues in order to keep the pool open, then perhaps you should organize an owner group to gather opinions and share these thoughts with the Board, or to call an owner meeting at which people can appear and voice their opinions. You may also be able to convince the Board to view the results of an owner survey before making their decision final.

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Power of Attorney

Question: The By-laws in our HOA defines membership eligibility (i.e., must be recorded owner). Can power of attorney be given and that person serve on Board even though the by-laws do not give authority for "designees"?

Answer: A power of attorney may not be used to allow a person designated by a property owner to qualify as a candidate to serve on the association's board of directors. The reason that there is a qualification of ownership is that there is a desire to have persons with a true vested interest in the property making the decisions affecting all the owners. A similar question which is often asked is whether a director can give his or her proxy to another board member or even a non-board member for voting purposes at a board meeting. Again, the answer is: no. Proxies can only used at membership meetings, not board meetings. The reason is that there are generally only five or seven members of the board and this small group of owners is making significant management decisions affecting the community - so at least a quorum of elected board members must meet and confer on these issues without being permitted to allow other people to vote for them.  The operation of a community association involves fiduciary duties which requires active attention by all board members.

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Authority of the President

Question:  How much authority does the president of the board have? Can they arbitrarily withhold routine reports from the Board of Directors members? Can they legally direct legal counsel from dealing with anyone but the president? Thanks.

Response: 

We find that a great number of people are confused about or simply do not understand the authority of an officer (such as President, Vice President, Treasurer, etc.) versus the authority of a single director or the Board of Directors. First, please note our disclaimer that the rights and duties of your particular President or Board of Directors is largely governed by what is contained in your association's documents, which we would need to review to give you a complete and accurate response. This response will outline how a "normal" or "standard" community association government works, which may not be how your particular association is set up.

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Choosing Board Members

Q. I am a member of the nominating committee for my association and we are about to elect our first Board of Directors. We are committed to doing the best job we can and want to elect the best people. Can you give us some guidance on how we can accomplish this?

A.  An effective board of directors requires a team of effective board members. When selecting individuals for the board of directors for your Association, we suggest you look for people with the following qualities:

  • Integrity.  Board members must be committed to an "above-board" organization that complies with all laws on all governmental levels and the association’s documents.
  • Dedication.  Board members must attend Board meetings and other Association events faithfully. They need to communicate with staff members and residents, and sound out problems that need fixing or issues that must be addressed.
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Maintenance - Budget Issues

Q.        Our new condominium board has just finished an inspection of all of our property. We had not been impressed with the condition of the property and a commitment to better maintenance was part of our theme in getting elected.  The prior board minutes show that there was little discussion of maintenance and there is no schedule of work to be done.  What steps should be taken to deal with this situation? We need to do it without raising the money by special assessment.

A.        You will need to set up a maintenance program covering the buildings, grounds, equipment and any recreational items. A good maintenance program requires the community association's Board of Directors to follow these steps:

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Repair and Maintenance

QUESTION:  I live in a condominium and despite repeated requests over a 2 year period, I cannot get the homeowner association to perform needed repairs on my home. A piece of siding blew off in March 07 and it is still off and it is now over six months later.  My door frame is rotted to the point that the door leans and needs to be propped up before the lock will meet the strike plate. I don't know what to do, my insurance company won't cover the damage because by the bylaws the association has to perform the tasks. Can anyone help me?

ANSWER:  Unfortunately, sometimes people (including associations) do not do what the law or the governing documents require them to do. Assuming your documents do require the association to fix the problem you've described (and this is never a sure thing, and something I cannot advise you on without thoroughly examining the documents), then you are essentially stuck waiting on the association for the time being, and you would ultimately have to file a lawsuit to force the association to act if it refuses.

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Maintenance Contracts

QUESTION:  We are a small, self-managed, condo association. I have been newly elected President and we have a big problem: the last president hired a homeowner for maintenance work & didn't pay him. As a result, bad feelings ensued.

Because this homeowner is important, as he knows what he is doing, he's honest and hiring him helps to keep costs down. However, paying him has presented bad feelings with the out-going president.

What guidelines can we implement when hiring homeowners?

RESPONSE:  First and foremost, you should review your Association's governing documents to see if there is any prohibition or special requirements involved when hiring a member of the Association to do paid work for the Association. If any such requirements exist (i.e., no owner may be hired for work unless unanimous consent of the Board), then obviously you should follow them.

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Review of Financial Records

QUESTION:  You mention the right of an Association to charge for copies, but our Association has a Management Company that demands a $55 per hour fee to be paid by a member who wants to examine the financial records of the Association.  The fee for inspection is not mentioned in the contract between the Management Company and the Condo Assn.  Rather, the right of members to inspect is listed as a basic service and the only mention of a charge is for copies at 15 cents per page, which is appropriate.  It seems to me that both the Statute and our Bylaws (which gives members the right to inspect financial records) is being circumvented by the imposition of a charge.

RESPONSE:   You did not indicate whether this was a Condominium or Property Owners Association so references to each Act are included as follows:

CONDO ACT: B. Subject to the provisions of subsection C, all books and records kept by or on behalf of the unit owners' association, including, but not limited to, the unit owners' association membership list, addresses and aggregate salary information of unit owners' association employees, shall be available for examination and copying by a unit owner in good standing or his authorized agent so long as the request is for a proper purpose related to his membership in the unit owners' association, and not for pecuniary gain or commercial solicitation. This right of examination shall exist without reference to the duration of membership and may be exercised (I) only during reasonable business hours or at a mutually convenient time and location and (ii) upon five days' written notice reasonably identifying the purpose for the request and the specific books and records of the unit owners' association requested.

D. Prior to providing copies of any books and records, the unit owners' association may impose and collect a charge, reflecting the reasonable costs of materials and labor, not to exceed the actual costs thereof. 

Virginia Code § 55-79.74:1

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Fiduciary Duty of Board of Directors

Q.        I have heard that homeowner association board members have a “fiduciary duty”. What exactly is it? Is it spelled out in the law? What sort of actions would violate that duty?

A.        A fiduciary duty arises out of a relationship in which one person or entity is entrusted to make decisions for, and control the interests of, another person or persons. For example, the common estate planning device of a trust sometimes provides for a qualified individual or bank to be the trustee and control the funds within the trust. In such a relationship the trustee would be a fiduciary and have fiduciary duties to the beneficiaries of the trust. Boards of directors owe a fiduciary duty to the association’s members. Most jurisdictions have either enacted statutes or have specific case law that establishes directors of nonprofit and non-stock corporations as fiduciaries.  In Virginia, there is a statute on this topic in the Virginia Nonstock Corporation Act. Many associations are incorporated as non-stock corporations.

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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).   

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Board Meetings

Q.        I have recently taken over as president of our condominium association, having served on the board for a couple of years. We are not professionally managed. One of the issues I want to address is the way meetings are held.  Our last president, not wanting to spend more time than necessary away from his family, held the meetings at his house in the family room on Wednesday evenings and sometimes served dessert. It was very hospitable, but meetings seemed to drag on for over two hours. What suggestions do you have for the best way to have the most efficient meeting possible and meet all of our legal responsibilities to the members?

A.        Your question certainly illustrates some of the “don’ts” in terms of conducting association board meetings. A board meeting is not a social gathering, it is a business meeting. Board meetings conducted in an unbusinesslike manner often frustrate the best board members and sometimes cause them to resign, which then leads to undersized and unproductive boards. Here are some pointers on conducting board meetings:

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Maintenance Contracts

Q.  Our Board is not happy with the job being done by our current landscaper and we have been trying to work with him; so, we are getting ready to hire a new contractor for our Association. What guidelines should we follow to be sure that we are getting the most for the money we are going to spend since it is a major budget item?

A. First we will specifically address requirements for your landscaping contract. The specifications for getting bids and drafting your contract should include the following:

·        Frequency of cuts – Do not use the term “as needed” it should be specific such as every 7 days from April 1 through November 30.

·        Weeding – Address whether or not the beds are hand weeded, sprayed or both.

·        Mulching – Address type and frequency.

·        Clean up – This could mean blow off the walks or it could mean raking any loose debris – you should specify.

·        Fertilizer and Weed treatment – Here you would specify the type and frequency with which both types of chemicals are applied.

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Access to Association Records

Q:      We are a self managed association and members often ask for copies of records such as financial data and minutes of meetings. Often they ask for minutes before they are approved. One request is for our contract with the landscaper. We don’t feel that all these requests are appropriate. 

A.      This is a recurring topic of questions and has been the subject of several amendments to the statutes. Obviously it is a popular topic. The pertinent Code Sections are Section 55-79.74 of the Condominium Act and Section 55-510 of the Property Owners Association Act. Homeowners are generally asking for records for genuine reasons. The Virginia legislature has been under constant pressure from a variety of constituents to insure more openness on the part of boards – both as to meetings and records. It is important to understand what you are required to do to respond to a request for records – and it’s not immediate copying and provision of the copies to the member either on demand or within 24 hours. First of all you may require the request to be in writing stating a proper purpose related to the person’s membership in the association, and not for commercial purposes. Second, the statute grants a right of examination at a reasonable time and upon 5 days written notice identifying the purpose of the request and the specific books andrecordsrequested. Upon examination, copies can be requested and a charge can be made for the copies reflecting a reasonable cost of materials and labor. The time for providing the requested copies will vary depending on the volume and available staff. Many times the requesting party is asking for a specific document and can describe in detail what he wants (e.g. last year’s minutes of the annual meeting of members). There is no purpose in requiring him to come to the physical location of the document to obtain a copy.

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Board Emailing

QUESTION:  In a previous posting regarding Board Emailing, you referred to a specific ruling by Bowman vs VPOA.  How and/or where can I read this ruling?  I am a first time member and board member with no experience and  need info.
Thanks

ANSWER:  The case being referred to is Bowman v. Wintergreen Property Owners Association, 250 Va. 177 (1995).  To view the entire case, use the "continue reading" link below.  

Jeanne S. Lauer

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Substitute Board Members

QUESTION:  Due to the rash of selling in Northern Virginia, all of our Board sold their homes in the summer.  The managing agent sent notice for a meeting during that meeting two people volunteered to help until the Annual meeting.  However, the annual meeting was not held and the volunteer group asked for more volunteers and as a 'Board' approved a large increase in fees.  We have been complaining that the Board was not elected and that we need to have a formal election process.  The managing agent and the Board are ignoring  our complaints.  Can we petition to remove the "Board?" 

ANSWER:  It would appear that the volunteers were actually appointed as substitute Board Members and, in such a case, the documents usually provide that the individuals appointed will serve as Board Members through the expiration of the term of the Board Member they are replacing or until the next Annual Meeting of the members.  This is entirely a document driven issue and the question of whether or not they are validly appointed, whether or not they had the authority to make an increase in dues and whether the Board may be removed is a question that resides within the Declaration and Bylaws for your particular Association.  I would also suggest that when reading the documents to determine whether there is a provision for appointment of successor board members and removal of board members (which are most likely found in the Bylaws), that you also look at the provisions in the Bylaws relating to Special Meetings and what is required in order for individual members to be able to force a meeting of the members.

Good luck.

Jeanne S. Lauer, Esquire

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Board Responsibilities

Q. Our association has had a do nothing board for several years. We recently had an election and most of the board has been replaced. We are facing neglected maintenance issues and collection issues. As the new President of our association I am concerned that our new board meets all its responsibilities.  Is there somewhere I can get information or courses that can help me? We would welcome any suggestions.

A. We applaud your volunteerism and desire to get your association on the right track. There are a number of resources that are available to association board members. We have seen that some of the most frequent complaints from owners in associations is lack of action or secretive actions by their boards. Under current statutes governing the operations of community associations, it is not proper to conduct business “behind closed doors”, unless it specifically qualifies for executive session discussion which is outlined in the statutes mentioned below.

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Governing the Association

Q.        I reside in a large homeowners association with a Board of Directors that are questionable at best. Our Bylaws and resolution documents state that we are to have a Board of no less than 5 people. At this time there are 3. There have been people that have volunteered to the Board but were not chosen because they ask too many questions, or they were not liked by the current Board. They have hired a manager that has no management experience. We are self-managed and we were supposed to receive a copy of the budget by mail by November 1, and we are hearing that the HOA’s finances are in a mess and we have not passed our budget because of the mess. There is no response to our calls or emails to the management or the Board. Our community newsletter has stopped, so we know nothing about what is happening. If you start to ask questions at meetings, you are asked to leave or they will call the police. I am concerned about the legality of their actions and do not know where to turn. Who can we call to help our community?

A.        You have certainly presented a myriad of problems that would virtually bring any progress in your association to a standstill. We will try to break down the issues and make a few suggestions that might be helpful.

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Shortage of Board Members

Q.  I have a question concerning certain issues within the election process. We elect three board members to a governing board each year. We take nominations from the floor only and allow those present to cast their vote for the appropriate number of the nominees. Our problem is (and there could be more) that many of the nominees decline being nominated and some or all of the persons voted for decline to be board members. Also, what happens if all the current board members quit and we cannot get any replacements? We tried to get professional management help, but a management company we consulted said we are too small for them to consider.

A.  We think the answer lies in changing from nominating only from the floor to using a nominating committee. 

You'll want to begin the process at least 60 days before the annual meeting. The nominating committee should complete its’ work at least 30 days before the annual meeting.

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Hurricane Preparedness

Q.        After the effects of Hurricane Katrina last year, our board became concerned about what responsibilities we have for our residents in times of disaster? Can we be held liable if someone refuses to evacuate? What steps should we take to protect the property?

A.        The areas of responsibility differ for a homeowners association and a condominium. Because of the nature of ownership, the responsibilities of the condominium are probably greater. While both associations have a responsibility to preserve and protect the commonly owned property, there is little that a Board can do in a homeowners association where owners insure and maintain their own residences.

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Bad Board Members

Q:        Our HOA board has been in place, with a few exceptions, for about 10 years. The same people keep running and getting elected and the same things don’t get done year after year. The only people who get elected who are new have a single agenda of their own and aren’t really there to serve the community.  Also, the board holds some meetings at which there is no owners’ forum.  How do we stop this abuse of power?

A:        The only reason these folks are elected is because the members voted them into office. Presumably the majority of the voting members think they are doing a good job. On the other hand, perhaps those perennial board members are simply proficient at collecting proxies from apathetic owners who are their friends and supporters.

Community associations have often been called “mini governments”. The “elected officials” are empowered to make rules and decisions that affect the lives of all who live in the community.  In associations, as in governments, there are checks and balances. There are bylaws which spell out the ability of the members to remove a director who is not doing a proper job. Additionally, at each election there is the possibility of removing those directors who are not doing the will of the members and replacing them with new candidates.

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Board Replacement

Q.        Our condominium association has been in turmoil over the last year, trying to resolve a number of issues, including pool expenses and new roofs.  Now there is a group of owners who want to remove the board of directors. Are there some ways to tell if the Board is out of control?

A.        There are 10 basic questions to ask when assessing a board’s performance.

1-     Does the board announce the time and place of the meetings?

Under the Virginia Condominium Act, an association must provide notice to the owners of the meetings of the board of directors in a manner “reasonably calculated to be available to a majority of the unit owners”. The notice must include the date, time and place of the meeting, but is not required to state the agenda.

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Management Transition

Q. Our association has decided to make a change in management. Can you give us some guidance on what steps to take to make sure it goes as smooth as possible?

A. There can come a time when an association or its professional management firm decides to end their relationship. If you are a member of the association's board of directors, this can be a difficult time. Transitions generally go a lot smoother for all three parties; the Association, the in-coming management firm and the out-going management firm if everyone observes these six basic principles as proposed by W. Stephen Castle, President of a professional association management firm and former President of Community Associations Institute (CAI):

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Condominium Act and Property Owners Association Act

Q.I am a new member of my community association's Board of Directors and I am trying to do what's right to do a good job. I need a copy of the Condominium Act and the Property Owners Association Act. Can you tell me what the Acts cover and where I can get a copy? Any other suggestions you have would also be appreciated.

A. You are taking the right first step in becoming educated about the community you are leading. You can acquire a copy of either the Virginia Condominium Act or the Virginia Property Owners Act from www.cai-valac.org. Look under the Statutes link. If your association is incorporated you will also want to download the Virginia Nonstock Corporation Act while you are on the site. If you would rather have printed copies, contact the Department of Professional and Occupational Regulation Post Office Box 11066, Richmond, Virginia 23230.

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Reserves

Q.Our 10 year old clubhouse apparently has some settlement problems that started several years ago. No Boards had done any study of the cause until last Fall. It is going to cost about $35,000.00. They say we do not have money in reserve to take care of this expense. Is the board of directors responsible for failure to fund proper reserves? Is the Board liable to the other members?

A.It appears that something major is occurring with the Clubhouse the significance of which could not have been reasonably anticipated until a couple of years ago. Of course, an earlier study of the problem would have been appropriate and may have allowed for collection of funds over a period of a couple of years to remedy the problem.

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Board Authority

Q. Because of some recent decisions by the Board of Directors of the condominium I live in, some of us are wondering if the Directors should be putting more association matters to a vote of the unit owners. It doesn't seem fair that the Board of Directors can decide to eliminate a service or make other important decisions without the owners' consent. How can we determine what decisions our board is authorized to make without consulting us?

A. As a rule, the Board of Directors of a community association has the authority to make decisions on the use of the common area, to set the assessments and to do all things necessary for the operations of the condominium. The Board oversees and has to approve all of these items unless the governing documents specify that the owners have to approve a particular action, such as the election of Directors, amending the bylaws or declaration and selling part of the common area. Generally, the scope of the board's powers is fairly broad.

Board decisions are measured against a standard known as the "business judgment rule". The Board must ask themselves this question: Is the decision one that a prudent businessperson, having gathered all the pertinent facts, would reasonably make under the circumstances? If the answer to that question is yes, generally the Board's decision will withstand legal scrutiny.

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Board Duties

Q:I live in a 60 unit condominium and some of us think the board has too much power over money matters. They get to approve the budget and make special assessments for unforeseen expenses without owner consent. Some of these were unforeseen because prior boards didn't do their homework. We want to put some limits on the board's powers, such as a cap on annual assessment increases. What are the usual powers of the board regarding money and how can we go about limiting them?


A:It is a common occurrence that owners are concerned about the power of the board of directors over their money and it is certainly one of the primary areas of responsibility of the board. There are also lots of other board responsibilities, like common area maintenance, risk management through insurance, and enforcement of the covenants. Under the law, your board of directors has a fiduciary responsibility to the unit owners which means that they must always be looking out for the welfare of all the owners and cannot make decisions which benefit one group of owners over another, especially themselves. While is seems elementary, owners must sometimes be reminded that directors are owners as well, and any decisions they make, financial or otherwise, affect them equally with all owners - it is not an "us and them" situation. Also, they are not permanently elected to he board; if the majority of owners are dissatisfied with the board's (or a board member's) performance those individuals can be replaced at the next election.

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Keeping Records

Q.I have recently been elected Secretary of my association. I want to make sure I do a proper job of keeping the minutes and records of the association. Should I make an audio recording of the meetings? Can you provide a checklist for me to follow?

A.The primary function of the Secretary is to maintain the records of the association, with the exception of the financial accounts. This includes all of the minutes, any resolutions adopted by the Board of Directors, correspondence, contracts and notices. The best way to accomplish that is by having an organized filing system.

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Board or No Board

Q: My association has only three board members and two of them just resigned saying they didn't have time any more. We are a self managed association with 34 homes and a fair amount of common area and a swimming pool. Being on the board is a lot of work and I am afraid of not getting any volunteers. What can be done if no one comes forward? I cannot run this association alone.

A: Your situation is not entirely unique and it seems fewer citizens want to make time to serve their communities as board members in community associations or in other civic endeavors. Congratulations to you for "hanging in there"! We do have a few suggestions that we hope will be successful for you.

First of all, there is a need to groom future leaders by involving homeowners in smaller projects and creating a strong committee structure. Also good communication through a newsletter or other media (web site) and regular association sponsored social events can help get neighbors in touch with each other and the community's needs. Your pool facility sounds like it would offer a great opportunity for social activities. This can help thwart feelings of apathy toward the governance of the community.

As the sole remaining board member it is your duty to seek out two more volunteers as best you can. If there is not a list of functions and duties of board members in your community you may need to create one so that any "recruits" can be easily familiarized with their potential roles as board members. It may be that the list is shorter than they imagine and there aren't as many meetings as they may think. There are resources available to you through an organization called the Community Associations Institute which has a Southeastern Virginia Chapter. Check it out on line at www.sevacai.org. This organization's goal is to be a resource to folks like you who are charged with governing a community association. CAI has classes and seminars year round concerning all aspects of community association governance, including insurance matters, renovation issues, accounting, rules enforcement, and running meetings.

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Common Definitions

Q.I am considering buying a new home and have looked at several. One is in a condominium. I really do not understand what is meant by unit, common element and limited common element. Can you explain the difference? What impact do the definitions have on my maintenance responsibilities?

A.The easy part is in defining the terms. The hard part is applying those definitions.

Common Element: means all those portions of the property that are owned by all of the unit owners as a group and which are for the use of all of the owners.

Limited Common Element: means a portion of the common elements so designated in the declaration as being reserved for the use of a certain unit or several units to the exclusion of other units.

Unit: means a portion of the condominium designed and intended for individual ownership and use.

It is important when you are considering purchasing a condominium that you review the declaration and determine exactly how each of these terms are defined in that specific condominium. In almost all associations the streets, the sidewalks and the recreational facilities are all common elements. In other associations the common elements will include the roofs, exterior siding and trim and other parts of the buildings, including interior load bearing walls.

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Reserve Studies

Q.I am having a major problem with my association. In the last 5 years we have had three special assessments to cover major repairs. I thought the Board of Directors had to do something called a reserve study to avoid these types of problems. How can we go about avoiding these kinds of unexpected expenses?

A.The answer to your question is very simple. Yes, the board should have an independent reserve study done and see that it is fully funded and periodically updated. Two parts of this statement are important.

The reserve study should be performed by qualified, independent and experienced professionals. By this we mean either architects or engineers who have experience in the reconstruction of properties. It is generally beyond the ability of most boards and managers to perform the necessary detailed inspection and have access to the cost data to do a proper reserve study. There are companies that offer you a check sheet and for a fee will calculate your reserve requirements. This is totally inadequate, because it doesn't adequately address your specific issues based on a forensic examination of the property. Association managers should also not be asked, or expected, to do reserve studies for the same reason.

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Managing the Meeting

Q. I have recently been elected to the Board of Directors of our association and I am concerned that our board meetings are entirely too long. It seems that we have more of a conversation with board members and homeowners all talking and little if any progress being made. Can you help with a few ideas that might get us on the right track?

A. The problem you describe arises too frequently. It happens for three basic reasons: the lack of understanding of the members of the purpose of the board of directors meeting, the unfamiliarity with meeting protocol and a lack of control by the chairperson. We find that many homeowners do not understand how community associations are governed.

The solution is fairly simple. First, homeowners, when attending a board of directors meeting, need to understand that it is not a general membership meeting. It may be helpful for the Chairperson to explain the structure and protocol periodically at the beginning of a board meeting. Except for a period set aside for homeowner comments, non-board members should refrain from trying to speak on issues unless recognized by the chairperson for a particular purpose. The board should set aside 15 minutes or more at the beginning of the meeting for homeowner input, then politely remind them that the remainder of the meeting is a business meeting of the board and that, as owners, they will not be voting or speaking on any issues.

Second, the chairperson needs to control the meeting using several techniques. The most important of these is by using Robert's Rules of Order for conducting the meeting. Almost all association documents state that meetings will be held in accordance with parliamentary procedure. Both the Community Associations Institute and the National Association of Parliamentarians have booklets that offer guidelines on these procedures. This doesn't mean that these guidelines must be followed to the letter, but understanding the principles set out in these booklets are essential to successful meetings.

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Planning and Executing Successful Elections

Q: We are a self managed association and election time is coming up. It seems that something gets fouled up technically each year...especially with the use of proxies. What tips can you give us to have a smooth and successful election process? Who can hold a proxy for a member? Does it have to be a board member or an officer of the association? What can we do if we don't have a quorum of members? Can you count the proxies toward a quorum?

A: These are important questions and some of them are likely on the minds of other homeowners anticipating elections.

First, to have an election you need candidates. Often that is a problem for associations and one reason that some are putting in limits on the number of units that can be rented. Generally absentee owners are not particularly active in the association's affairs. You should start "recruiting" volunteers for board positions as much as six months in advance of elections. You need to let your members know that the board is looking for interested homeowners to serve on the Board or as committee members. Ask members who may be interested to come to a board meeting and, after the meeting, familiarize them with board participation requirements.

Second, appoint a nominating committee to seek out qualified candidates and meet with them about the needs and expectations of board service. The nominating committee is tasked with coming up with at least the number of candidates necessary to full the seats being vacated....hopefully more. The names selected by the nominating committee are presented to the Board as a slate of possible board members to be placed on the ballot. No one intending to run for office should serve on the nominating committee.

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Document Review

Q. I have recently been elected to the Board of Directors of our condominium association. The board has appointed me to a committee to review the legal documents and rules and to update them. The documents and the rules we have now were put in place by the developer. Many of the rules are listed in the bylaws. What is the best approach to take when reviewing the documents?


A. The board of directors is on the right track. The associations governing documents - declaration and bylaws - should be reviewed on a periodic basis. The review should also include any policy resolutions adopted by the board as well as the rules and regulations.

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A Community Association's Duty to Provide Security

The issue of providing security can be a real dilemma for community associations. If you do nothing, there may be liability and if you do something you may be sued for not doing enough. In Atrium Unit Owners Association v. King, 266 Va. 288 (2003), the Virginia Supreme Court found that an Association was not liable for a unit burglary which may have occurred by use of the "convenience key" placed with the Associations' management. Liability was escaped only because there was no proof that that was how entrance to the unit was obtained by the thieves. While the Supreme Court's word was the last on the subject, it is worth noting that in doing so the Court was reversing a jury which found the lack of checks and security for the extra keys was negligent on the part of the Association and made a hefty award to the Unit Owner. Perhaps with slightly different facts the Supreme Court would not have reversed the decision.

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