Many times, parties enter into informal loan agreements on a simple oral promise to “pay it back.”  Similarly, others will enter into oral agreements to perform residential construction projects, or other types of projects. When things do not go as expected and the promises are of a value worth litigating over (or one of the parties to the promise thinks they are) things can go swiftly downhill.

Contracts

Continue reading “Oral Contracts are enforceable, but . . . .”

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Simply stated, caveat emptor means “let the buyer take care,” or even more plainly stated: “Buyer beware.” In real estate matters, buyers are warned that they are to “exercise ordinary care in inspecting the condition of property.” Therefore, buyers are generally urged to obtain a home inspection and take such other care prior to closing on their real estate purchase. Otherwise, the buyers may not have any relief if they find adverse conditions after taking possession.

A case arising out of Charlottesville highlights the obligations of the buyers and the sellers in the purchase of a home. In that case, the seller of the home was also a licensed real estate agent, which added another complication regarding the duty to disclose. This blog posts analyzes that court decision, which offers warnings to buyers and sellers of real estate, as well as to licensed real estate agents.

Continue reading “The Rule of Caveat Emptor in the Sale of Real Estate vs. a Seller’s Duty to Disclose”

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It is relatively routine for developers or “declarants” to include arbitration provisions into the declaration of restrictive covenants recorded to establish a common interest community. Generally, arbitration clauses are preferred by developers for a variety of reasons including avoiding a jury and having a say in the choice of the fact-finder. However, those decisions made by the developers have long lasting effects upon homeowner boards following transition, because it is difficult for a board to effect a change in the documents.

Continue reading “Virginia Supreme Court upholds arbitration award granted to homeowners who sued their HOA”

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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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We have blogged about new requirements under the Americans with Disabilities Act (“ADA”) that may affect Homeowners Associations and Condominium Associations that own swimming pools, wading pools, or spas. Subsequently, we updated our previous post to report upon an update to the required compliance date.

The Justice Department has now issued a “final rule” revising “the Department of Justice regulations implementing the Americans with Disabilities Act to extend until January 31, 2013” as the compliance date for the ADA Standards for Accessible Design for existing pools and spas.

Consequently, if your HOA or Condo Association allows non-members of the association to use its pool in exchange for some form of compensation, your pool may fall under the definition of a public accommodation. If it does, the association would have to comply with the new ADA Standards and provide accessible entry and exits no later than January 31, 2013. What does that mean for your HOA?

Continue reading “ADA Compliance – (Another) Update on HOAs, Condos and Swimming Pools”

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The short answer is, rarely. Virginia is an at-will employment state. This means that an employer can discharge an employee for any reason or for no reason at all, just not for an unlawful reason. An employer who terminates an employee for an unlawful reason may be liable to the employee. The question answer in this blog post is: when is a reason unlawful?

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A case out of Virginia Beach underscores the deviousness of those who engage in identity theft. As reported in Virginia Lawyers Weekly, Guy Gugliotta owned two lots in Virginia Beach. A local realty company maintained contact with Gugliotta via mail in case he was interested in selling the lots. In 2012 someone purporting to be Gugliotta notified the tax assessors office to change the mailing address for tax bills. Then they notified the realty company that they had decided to sell the lots. The lots were listed for sale and in August, a purchaser made an offer.

The seller documents were handled via mail with the fraudulent seller executing documents in Florida and sending them to the closing agent. Deeds to transfer property require that the seller’s signature be notarized so surely this was the end of the road for the fraudster.

But no, not only did the thief take the identity of the owner; he also took the identity of a notary public in Florida. The notary public declared under oath that it was not his signature and that he had never notarized the documents.

Continue reading “A New Twist on Identity Theft and Fraud: How can Realtors, Lenders, Title Companies and Law Firms Protect Your Clients and Yourselves?”

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An all-too-common scenario occurs when a homeowners association attempts to collect past dues and the homeowner files bankruptcy. The law is clear that the bankrupt homeowner is still liable for those post-petition dues. The United States Bankruptcy Code at Section 523(a)(16) makes the homeowner liable for “a fee or assessment that becomes due and payable after the order for relief to a [homeowners association] for as long as the debtor . . .  has a legal, equitable, or possessory ownership interest in such unit.”

In other instances the homeowner decides to walk away from the property and surrenders the property to the lender. Instead of foreclosing, however, the lender simply does nothing. Therefore, the title of the property is still in the name of the bankrupt homeowner who walked away from the property, and they are not paying the assessments. The lender has not foreclosed so they are not paying the assessments. How can the homeowners association collect these past due post-petition assessments?

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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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“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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