The Virginia Supreme Court has issued another ruling specifying the limitations of homeowners associations to enact guidelines, rules, and regulations that exceed the scope of their authority.

We had written previously about attempts by HOAs to regulate holiday decorations. The first item on our suggested checklist to assist homeowners association was “Does the Board have the authority to regulate holiday decorations? If not, your inquiry stops here.” As it turns out, that is the basis for the Court’s decision in Sainani v. Belmont Glen Homeowners Association.

In Sainani, the association adopted guidelines for “Seasonal Holiday Decorations” (the “Guidelines”) to regulate various aspects of homeowners’ display of exterior lighting. The trial court found that the homeowners violated the Guidelines by having the “lights . . . on 24/7” for “at least 300 days a year.”

On appeal, the homeowners argued that the Guidelines exceeded the HOA’s authority and were unenforceable. The Virginia Supreme Court agreed. In essence, the Court specifically stated that “None of the covenants in the amended declaration can be construed to authorize the seasonal guidelines, and thus, the seasonal guidelines exceed the scope of the HOA’s authority.”

As we wrote in another blog post analyzing an unpublished order from the Virginia Supreme Court in the case of Shadowood Condominium Association et al., v. Fairfax County Redevelopment and Housing Authority, “Unless the . . . governing documents specifically permit the common interest community to impose the charges and/or suspension of rights for violations of the documents . . . it is likely that a court may find against the association where the owner contests such actions.” The Sainani case will have ramifications for HOAs who do not follow those guidelines.

In Virginia homeowner associations, the governing documents permit a developer to continue control of the HOA’s Board of Directors for a specific period of time, or until a specific number of lots are sold. The length of that period depends upon the governing documents of each association.

This issue has generated litigation in Williamsburg, and now, thanks to Peter Vieth from Virginia Lawyer’s Weekly, we have learned of a formal opinion from the Virginia Attorney General. In an opinion dated January 11, 2013, the AG answered two questions posed by Virginia Senator Bryce E. Reeves. This blog post takes a look at that opinion.

Is the Property Owners Association Act Unconstitutional?

Continue reading “Virginia Attorney General opinion on HOAs”

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Clients sometimes come to us with disputes regarding real estate litigation matters involving boundary line and easement encroachments. We provide legal advice and counsel, trying to balance your real estate rights with neighborly harmony, always looking to avoid a lawsuit when possible.

Easements provide a broad range of legal rights and obligations. In a fairly recent Virginia Supreme Court case, Snead v. C&S Properties Holding Company, a landowner blocked access to a validly recorded easement. The easement holder filed a lawsuit, asking the court to order the obstruction removed. The Virginia Supreme Court ordered the fence removed, concluding that “a significant portion of the easement would be rendered unusable for ingress and egress if injunctive relief were denied.”

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Many of us are so busy in performing the work that we are hired to do that we often neglect the housekeeping we should do for our businesses. Management agreements with community associations may fall into this category. As with many agreements in which sections are revised but the whole contract is not reviewed, management agreements can take on a life of their own as they are tweaked here and there. In this blog, we discuss the need to take time to have your forms and contracts reviewed to ensure that your management company is protected by the agreement, that it reflects current law, and that it comports to any required regulations.

Continue reading “Have You Updated Your HOA Management Contract Lately?”

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“Tree law” fascinates us. I guess part of the reason is because many of us have at least one tree on our property, and during severe storms, we fear what would happen if one of those trees fell on our house, our neighbor’s house, or the street. Once the fear subsides, the next question we ask ourselves is “Who would pay if the tree fell on our neighbor’s property or vice versa and caused damage?” Or our neighbor’s tree may overhang our property or its roots may cause damage to our property, “What can we do then?” These issues are important considerations for property owners and community associations when reviewing their insurance policies.

The Virginia Supreme Court added to the small body of Virginia “tree law” cases. In this case, Cline v. Dunlora South, LLC, a man driving on a public road was struck and injured by a tree  that fell from private property. The man sued the property owner, claiming that the property owner’s “conduct constituted a nuisance because [its] lack of care, inspection, servicing, and/or maintenance of the subject property and tree was a condition that imperiled the safety of the public highway immediately adjacent to the property and tree, creating a danger and hazard to motorists and/or pedestrians.” The trial court dismissed the lawsuit, and on appeal the Virginia Supreme Court agreed that the property owner did not have “a duty to protect travelers on an adjoining public roadway from natural conditions on his or her land.” This blog post reviews that decision and what it means for us.

Continue reading “What happens if a tree falls from my property onto a public highway causing damage?”

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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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Board members are told that they have fiduciary duties to the community association, but what does that really mean?  Fiduciary duties arise because the members of the association entrust a board member to act in the best interest of the association when handling the association’s business.

There are three components that are important to understand fiduciary duty.  First, the Virginia Code, at § 13.1-870, imposes on directors a requirement that a director exercise her duties in good faith and in the best interest of the association.  This requirement is the so-called “business judgment” rule. Second, Virginia case law imposes duty of care that requires a board member to act as a reasonable person would under similar circumstances.  Third, Virginia case law imposes a duty of loyalty that requires a board member to put the association before any personal interest.  These last two duties are referred to as “common law” duties. Continue reading “What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)”

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Although Virginia law does not address who can perform a reserve study, it is clearly in the best interest of an association to hire a credentialed professional to conduct a reserve study for the community. Professionals who provide reserve studies include licensed Professional Engineers (PE), Architects (AIA and/or RA) and experts such as a Reserve Specialist (RS) or Professional Reserve Analyst (PRA).

Continue reading “How does our HOA hire a Reserve Study specialist? (Part 3 of a 3 part series on Reserves)”

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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.

Continue reading “7 reasons to consider amending your HOA’s governing documents”

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Over the course of the past few years, homeowners in the Williamsburg development of Kingsmill on the James have become more vocal over the continued control by the community’s developer, Busch Properties, Inc. In May 2010, Kingsmill resident and a William & Mary Law School professor filed a lawsuit against Busch Properties. On August 20, 2010, the Williamsburg/James City Circuit Court heard the demurrer filed by Busch Properties. The court granted the demurrer. The Plaintiff appealed to the Virginia Supreme Court. The Court declined to hear the appeal. The Plaintiff filed a petition for rehearing that the Court refused to hear by an order dated June 16, 2011.

HOA Transition

Continue reading “Does Virginia law require an HOA to transition automatically to homeowner control of the Board of Directors?”

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