It seems like we have to say this every year, but the Virginia General Assembly was very busy again this session making amendments to the content and fee structures for condominium and homeowner association disclosure requirements.  These changes are significant so we wanted to give association boards and managers time to prepare before these changes go into effect on July 1, 2018.

House Bill 923 focused first on the disclosure form provided by the Common Interest Community (CIC) Board and made significant additions.  It now must contain the following statements to alert buyers to certain aspects of ownership in a community association even though some of these items will not apply in every community: 

  • limitations on an owner’s ability to rent his unit;
  • limitations on an owner’s ability to park or store certain types of motor vehicles or boats within the community;
  • limitations on an owner’s ability to maintain an animal as a pet within the lot or unit or within the common areas;
  • limitations on an owner’s ability to operate a business within a dwelling or condominium unit; and
  • the period or length of declarant control.

In addition to the disclosure topics in this form discussed above, the CIC Board is also required to add the following additional statements to its disclosure form which it provides for use in common interest community real estate transactions:

  • the purchaser is responsible for his own examination of the documents included in the resale disclosure;
  • the purchaser shall carefully review the entire resale certificate or disclosure package; and
  • the contents of the resale certificate or disclosure package shall control to the extent that there are any inconsistencies between the CIC Board form and the resale certificate or disclosure package.

This bill also requires that the disclosure form which currently is only required to accompany homeowners association disclosure packages now also accompany condominium resale packages.

The CIC Board has posted drafts of the homeowners association and condominium association disclosure forms that will become effective on July 1 on their website for public comment.  You may review these drafts (and make comments if you so desire) at www.dpor.virginia.gov/cic_Public_Comment-Notice/

The final versions of these disclosure forms will be available on the CIC Board website on July 1 and managers and board members should obtain final copies at www.dpor.virginia.gov/Boards/CIC-Board/ under the Forms and Applications tab.

House Bill 1031 is amending the provisions in the Property Owners Association Act (POAA) under which associations can charge fees for the preparation and delivery of disclosure packages.  This bill does not affect fees for condominium associations.

Section 55-509.6 of the POAA entitled “Fees for disclosure packet; professionally managed associations” and Section 55-509.7 of the POAA entitled “Fees for disclosure packet; associations not professionally managed” are being amended to provide that homeowners associations may not collect a fee for preparation and delivery of disclosure packages, whether professionally managed or self-managed, unless the association:

  • is registered with the Common Interest Community (CIC) Board;
  • is current in filing the association’s most recent annual report with the CIC Board;
  • is current in paying the annual payment and assessment to the Common Interest Community Board (payable at registration and with each annual report filed with the CIC Board); and
  • the association can provide the disclosure package electronically, if requested.

Section 55.509.7 of the POAA is also being amended to give homeowners associations that are not professionally managed the right to charge certain fees that currently can only be charged by professionally managed associations including:

  • a reasonable fee (not to exceed $50.00) for expediting the inspection, preparation and delivery of the disclosure package if such expedited delivery can be accomplished within five (5) days – and only if expedited delivery is requested;
  • $25.00 for each additional hard copy requested;
  • the actual cost of using a third-party commercial delivery service or overnight delivery, if requested; and
  • a $100.00 fee for inspection of the lot and exterior of the dwelling as required to prepare the disclosure package.

Please contact us if you have any questions about this information or any other association issues.

The Community Association Law Team