A couple of months ago we informed you of major changes coming to resale disclosure requirements and the fees that can be charged for preparing those disclosures. Those changes went into effect on July 1, 2018 and we wanted to remind you that you must now be complying with those changes.
Every homeowners association disclosure for both initial sales by the developer and resales is required to include a form developed by the Common Interest Community (CIC) Board titled “Property Owners’ Association Disclosure Packet Notice.” This form has always been required for homeowners associations initial sales and resales but the form has been revised to include multiple additional disclosures enacted by the Virginia General Assembly.
Every condominium association resale is required to include the form developed by the CIC Board titled “Condominium Unit Owners’ Association Resale Certificate Notice.” This disclosure form is NOT required for initial sales by the developer in condominium projects. This is a brand new requirement for condominium resales.
You can obtain copies of these forms from the CIC Board website at: http://www.dpor.virginia.gov/CIC-Board/Disclosure_Notices
We also want to remind you about changes to the provisions in the Property Owners Association Act (POAA) under which homeowners associations can charge fees for the preparation and delivery of disclosure packages. The requirements for fees that can be charged by condominium associations did not change.
Amended 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” were 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.
If your association is not currently registered with the CIC Board or the report required to be filed with the CIC Board on an annual basis is not current, we urge you to do so as soon as possible so your association can continue to collect fees for the time, effort and expense involved in preparing resale certificates. This is especially important if your association is paying a third party company to prepare disclosure packages on behalf of your association. You will also want to make sure that any third party company can deliver the disclosures electronically.
Section 55.509.7 of the POAA was amended to give homeowners associations that are not professionally managed the right to charge certain fees that until now could 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.