Common Interest Community Board revokes a management company’s license

June 23, 2014 on 11:30 am | In Business Planning, Common Interest Community, HOA, Merger & Acquisition, State & Federal Litigation, Susan B. Tarley | No Comments

Originally posted 2010-09-22 05:35:58. Republished by Blog Post Promoter

The Common Interest Community Board (the “CICB”) revoked a management company’s license for regulatory violations.  In a case reported in the September issue of the Community Associations Institute Law Reporter (Virginia Common Interest Community Board v. Sarraga t/a Lakeside Community Management, File No. 2010-00562, June 24, 2010), the CICB revoked the license of Sarraga t/aLakeside Community Management and issued fines totaling $2,000.

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7 reasons to consider amending your HOA’s governing documents

June 23, 2014 on 11:30 am | In Common Interest Community, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

Originally posted 2011-10-11 08:45:38. Republished by Blog Post Promoter

In other posts we have discussed a homeowner association’s governing documents. Many communities were established 20-40 years ago with governing documents that worked well for the developer, and for the most part the community association. However, many of these governing documents are outdated.  Virginia and federal laws pertaining to community associations have changed substantially.  If your board of directors has not engaged in an audit of your communities governing documents in the past 5-7 years, it should.

What is an “audit” of our governing documents?

An “audit” of your documents is an in-depth review by your HOA’s board of directors in conjunction with your association attorney.  The Board reviews each document noting any sections that lack clarity, are no longer enforced, appear to not apply to your community, protect a long-gone developer, or do not provide the association with adequate remedies.  The Board prepares a list of concerns or issues facing the community, such as homes that are not being maintained, large amounts of delinquent assessments, or enforcement capabilities of the association.  The Board provides this information to the association attorney.

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Lawsuits against HOAs are expensive and time-consuming for all

June 23, 2014 on 11:30 am | In Common Interest Community, General Interest, HOA, John Tarley, State & Federal Litigation, Susan B. Tarley | No Comments

Originally posted 2010-07-20 09:31:06. Republished by Blog Post Promoter

A Virginia Circuit Court case highlights the expense and time commitment required when a homeowner sues a common interest community (referred to as “HOA” in this article). Furthermore, this case illustrates that HOAs can rarely predict or control when they may be dragged into a lawsuit.

In this case, Hornstein v. Federal Hill Homeowners Association, a homeowner had her house for sale with a pending sales contract. Pursuant to Va. Code Ann. § 55-509.5, the HOA provided a disclosure packet that revealed that the homeowner’s fence was not located on her property. In fact, the homeowner’s own survey confirmed that fact. The pending sales contract fell through.

The homeowner sued the HOA in Fairfax Circuit Court for slander of title and tortious interference with contract, including a claim for “bodily injury,” and “mental anguish.” The HOA prevailed in the case, leading to the homeowner’s petition for appeal to the Virginia Supreme Court. [UPDATED: The Virginia Supreme Court refused to hear the case, meaning that the Circuit Court's decision stands].

Another battle has been waged regarding whether the HOA’s insurance carrier had a duty to defend the HOA in the underlying litigation. When the HOA’s insurance carrier denied coverage and representation, the HOA sued the insurance carrier. The case was removed to the federal court. The 4th Circuit District Court agreed with the insurance carrier. The HOA appealed and the 4th Circuit Court of Appeals reversed the trial court and held that the insurance carrier had a duty to defend. The insurance carrier has appealed for a rehearing. [UPDATED: the insurance carrier lost its appeal and was ordered to pay the HOA $217,308.86 for the attorneys' fees the HOA incurred].

For a brief review, the HOA provided the disclosure packet in February 2006. After the homeowner’s pending sale fell through, she sued the HOA in August 2007. As we near August 2010, the underlying case may be close to resolution, but litigation with the insurance company may be far from resolving. Based upon the amount of litigation, we can assume that the HOA’s attorneys’ fees have reached six figures. Obviously, payment for these attorneys’ fees is then passed onto the homeowners (unless the case shifts payment of the attorneys’ fees to the losing party, but even then, courts rarely award the full 100% of the incurred fees).

Many lessons can be drawn from this experience. Most importantly, HOAs need to review their insurance policies to make sure they are covered fully for worst case scenarios. Our experience has shown that “anybody can sue anybody for anything at any time.” Although the plaintiff may not win (and did not win in this case), the ensuing litigation will take abundant resources. We can help you review your documents and insurance policies with the necessary professionals to protect your HOA, and homeowner interests.

Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

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How long should your HOA retain its records?

June 23, 2014 on 11:30 am | In Common Interest Community, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

Originally posted 2014-04-08 08:44:24. Republished by Blog Post Promoter

You are elected Secretary of your homeowners’ association. Congratulations! Someone hands you the minute book, owner roster, and the governing documents. You think, hey this is not overwhelming at all. Then the retiring Secretary mentions in passing that “If you’re home tomorrow I’ll deliver the boxes.” You ask “What boxes?” “Oh, all of the HOA’s records are boxed up and have been in my garage – I’ll bring them by,” replies the retiring Secretary.

What do you do with the boxes? What records and documents do HOAs need to keep? How long do you need to keep them? How should they be stored? This blog post provides some basic guidance on best practice tips for community association record retention.

HOA Filing Information

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Benefits of Community Associations Part 1: Are HOAs really as bad as some portray?

June 23, 2014 on 11:30 am | In Common Interest Community, HOA, HOA litigation, Jason Howell, Real Estate Litigation, Real Estate Strategies, Susan B. Tarley, Unit Owners Association | No Comments

Originally posted 2011-07-26 08:30:49. Republished by Blog Post Promoter

 

Community Associations have been the subject of a lot of bad press lately. An Associated Press article is typical of news reports that lambast associations. The article tells about a 55-and-older condo complex in Florida. According to the article, units in the Inlet House condo complex used to be worth $79,000, but sold for as little as $3,000 after rats started chewing through toilet seats and sewage started leaking from the ceiling. The article goes on to vilify the condo association for levying a $6,000 special assessment on residents and then foreclosing on owners who don’t pay their dues.

In its eagerness to blame the condo association for the woes of these senior citizens, the article and many blogs pointing out the “abuses of HOAs” miss an important point: the association may be the only group really looking out for the interests of the owners. Let’s look at what the article does not allege: it does not allege that the Association was responsible for the rat infestation or the sewage leak and it does not allege that the Association could have prevented the housing meltdown that contributed to the decline in property values.

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Arbitration in debt collection: FTC says it’s a broken system

June 23, 2014 on 11:30 am | In Common Interest Community, State & Federal Litigation, Susan B. Tarley | No Comments

Originally posted 2010-07-13 10:45:13. Republished by Blog Post Promoter

As a follow-up to our post on the costs and benefits of the arbitration process, the Federal Trade Commission (“FTC”) recently issued a report indicating that the litigation and arbitration practices for resolving consumer debt need major reform.

Debt collection cases are on the rise.  We have seen a tremendous increase in the number of cases we are filing on delinquent homeowner association dues. In James City County/Williamsburg, the local courts have seen a 27% increase in civil filings from 2006 to 2008.  Other courts in Virginia and other states are experiencing similar increases in civil filings.

The FTC has made specific recommendations that the Federal government and the states consider new laws to protect consumers including a recommendation that a temporary ban be placed on the use of binding arbitration until such time that the arbitration forums have initiated changes to address deficiencies in arbitration. The FTC has suggested that state legislatures adopt measures to make it more likely that consumers will defend themselves in litigation, decreasing the prevalence of default judgments; require debt collectors to include more information about the alleged debt in their complaints; take steps to make it less likely that collectors will sue on debt on which the statute of limitations has run; and change laws to prevent the freezing of a specified amount in a bank account including funds exempt from garnishment.

We do not believe that these changes, if they occur, will effect our current practice areas and clients. However, we have also seen instances in which perceived procedural unfairness can lead to overreaching legislation. For example, it is fair to say that when the Fair Debt Collection Practices Act was passed, legislators did not intend for it to reach into the wide-ranging areas it now does, including the collection of homeowner dues. See, e.g., Barry v. Board of Managers of Elmwood Park Condominium II, NT Slip Op 27506, http://caselaw.findlaw.com/ny-civil-court/1211140.html (December 12, 2007, NY Civil Court City of New York, Richmond County) (Judge Philip S. Straniere writing that “Somehow I think that Adams, Jefferson and Madison must be turning over in their graves at the thought that the federal government is regulating such a local activity as the collection of condominium association dues between the homeowner and the association”).

Arbitration tends to release pressure on state courts by handling cases that otherwise would be brought in court. However, if the process continues to be perceived as unfair, restrictions on the use of arbitration could be forthcoming.

Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

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HOA Case Study: A Board’s statements or conduct may establish the enforceability of its governing documents

June 23, 2014 on 11:30 am | In Common Interest Community, General Interest, HOA, HOA litigation, John Tarley, Real Estate Litigation, Susan B. Tarley, Unit Owners Association | No Comments

Originally posted 2012-05-30 08:57:51. Republished by Blog Post Promoter

An article in the Washington Post discussed a pending case in the Virginia Supreme Court regarding a dispute between property owners and a community association regarding the owners’ operation of a vineyard and retail store on their property. In an unpublished Order, the Virginia Supreme Court upheld a Fauquier County jury verdict for the property owners that had been set aside by the trial court.

Although unpublished orders do not have “precedential value or . . . significance for the law or legal system,” this case does provide us with a look at how difficult it can be for community associations to interpret their governing documents and also how a board’s previous actions may have an effect upon future enforcement of the community’s declarations and covenants. This blog post will review the facts of that case and its applicability to your HOA.

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Rental Restrictions in HOAs permitted according to the Virginia Attorney General

June 23, 2014 on 11:30 am | In Common Interest Community, General Interest, HOA, HOA litigation, Real Estate Litigation, Real Estate Strategies, Susan B. Tarley, Unit Owners Association | No Comments

Originally posted 2011-03-22 09:00:43. Republished by Blog Post Promoter

In many HOAs, an issue arises when a homeowner purchases real estate as an investment property intending to lease the home or condo unit. In those situations, the homeowner becomes a “landlord” rather than a resident owner and the situation causes concerns for many homeowner and condominium owner associations. Many association documents contain restrictions on leasing property. In response to an inquiry, the Attorney General for Virginia has issued an official advisory opinion concerning the imposition of rental restrictions in common interest communities concluding that if the restriction is adopted correctly and for a legitimate purpose, the rental restriction is valid.

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Implementing an HOA Complaint Procedure – Slideshow Presentation

June 23, 2014 on 11:30 am | In Common Interest Community, General Interest, HOA, HOA litigation, Susan B. Tarley, Unit Owners Association | No Comments

Originally posted 2011-02-10 10:09:01. Republished by Blog Post Promoter

Still need information for your association’s required Complaint Procedure? Here is the slideshow for the Complaint Procedure Seminar Sept 2012 revised  Susan Tarley presented in Williamsburg in September 2012.

Susan Tarley

This slideshow presentation is provided for informational and educational purposes only. This presentation does not constitute legal advice and should not be relied on. Legal advice can only be provided after consultation with an attorney with experience in the area in which your concern lies. This is so because each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and/or documents at issue. Your use of this slideshow presentation and the information in it does not create an attorney-client relationship. Such a relationship can be created only with a written agreement signed by us and by you.


Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

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“Thank you” to Construction Law Musings – HOAs and the Association Lien

June 23, 2014 on 11:30 am | In Common Interest Community, HOA, HOA litigation, John Tarley, Susan B. Tarley, Unit Owners Association | 1 Comment

Originally posted 2012-12-14 09:45:41. Republished by Blog Post Promoter

For the second time, my friend and colleague, Richmond Construction Law attorney Chris Hill, permitted me the opportunity to blog at his award-winning blog Construction Law Musings on the topic of liens for assessments filed by community associations. You can get a lot of great information on construction law, including the intricacies of mechanic’s liens, from Chris and his blog. You can also follow him on Twitter, @ConstructionLaw.

 

Here’s a brief excerpt of the post:

In this blog, I will discuss another lien that can be filed on real property in Virginia, a lien that I will refer to in this blog as the “Association Lien.” Virginia has two separate code sections that permit community associations to file liens for unpaid assessments. For condominium associations, Va. Code § 55-79.84 sets forth the procedures for filing a lien. For developments governed by the Property Owners Association Act (“POAA”), Va. Code § 55-516 provides the statutory requirements.

I greatly appreciate the opportunity to contribute to Chris’ blog, which, for me, is the “gold standard” for a proper lawyer’s blog. For the full post on filing a community association lien, please check out Chris’ Guest Post Fridays.

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