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2015 General Assembly Update for Virginia Community Associations

The legislation that passed the 2015 General Assembly Session is mostly helpful to Virginia HOAs–clarifying issues created by some legislation, and providing solutions for owner apathy and bank foreclosure problems for associations.

House Bill 2055 amends the Virginia Condominium Act (the “Condo Act”) addressing the problem caused by not having enough eligible voting members to conduct business, including holding a meeting or amending documents. Unless the condominium instruments for a condo provide otherwise, the voting interest of the suspended unit owner will not be counted in the total number of votes required to be used to determine the quorum for any meeting or the vote under the condominium instruments.

House Bill 2080 gives partial assistance to community associations impacted by bank foreclosures. It amends the Condo Act and the Virginia Property Owners’ Association Act (the “POAA”). Now, when a lender is going to foreclose on a property, they are now required to give 60 days notice of the sale to the common interest community association. Further, both Acts are further amended to provide that the definition of “unit owner” or “owner” now includes the purchaser of a condominium unit or lot, regardless of whether the deed is recorded. Therefore, if the lender purchases the property at foreclosure, it is now considered the “unit owner” or “owner.” Although this amendment does not address the lender that sits on the foreclosure sale, it does start the clock on a new owner at the time of the sale rather than having to wait until a deed is finally recorded.

House Bill 2100 is a multi-part bill. It addresses fees, authority of the Common Interest Community Board (the ”CICB”), rentals, resale certificates and disclosure packets. It amends the Condo Act and the POAA. It clarifies that HOAs may only charge fees, charges, or assessments to an owner as authorized in the condominium instruments, for a condominium, or in the declaration for a property owners association, or as authorized by law, or for services provided. For violations, the CICB is authorized to issue a cease and desist order, or to assess a monetary penalty.

House Bill 2100 adds new sections to both Acts addressing the rental of units or lots. This area seems to have garnered a lot of attention. The Bill does not create a prohibition on rental restrictions, but rather requires that any rental restriction be in the declaration for a property owners association, and in the condominium instruments (declaration or bylaws) for a condominium association. It prohibits a common interest community from prohibiting or conditioning rentals unless permitted by law, or by the declaration or condominium instruments. It further requires that any rental fee, application fee, other processing fee in excess of $50, or a security deposit must be in the declaration or condominium instruments.

House Bill 2100 permits the association to require the use of a lease prepared by the association but only if required by the declaration or the condominium instruments. House Bill 2100 also empowers common interest community associations by permitting the association to require a copy of the lease from the owner, the completion of a form that discloses the name and contact information of the tenant or any occupant, and the acknowledgement and consent by the tenant to the rules and regulations of the association.

The last part of House Bill 2100 addresses resale certificates and disclosure packets. If the resale certificate or disclosure packet is provided via a website link, the provider cannot cause the website link to expire for at least 90 days. Further, the provider shall not require an additional fee during the subsequent 12-month period except the update fee of $50 after the expiration of the 90-day period.

House Bill 2100 also addresses payment for the resale certificate/disclosure packet requiring the settlement agent to escrow the funds for payment.

Senate Bill 1390 amends the Condo Act addressing the apathy experienced by many condominium associations. If an association has been unable to hold its annual meeting due to the failure to obtain a quorum, and the association as made good faith attempts to hold its annual meeting for three successive years and has been unsuccessful, it may petition the court and the court is authorized to set the quorum for the meeting, and for such other orders as necessary to convene the meeting.

Senate Bill 1008 does not create new law but rather puts in one place the rights that owners have with regard to their association, such as, obtaining documents, voting, notice for meetings, and serving on the board of directors.

House Bill 1632 adds responsibility to the CICB, requiring that it develop and publish best practices for drafting declarations of covenants, conditions and restrictions.

Many of these changes require your HOA or Condominium Board to review with your experienced homeowners association law firm. Make an appointment soon so that your association can ensure its compliance with Virginia law.

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Susan Tarley

Susan chairs the firm's common interest community (HOAs and Condos) practice area. She was admitted into the College of Community Association Attorneys (“CCAL”). Susan is one of fewer than 150 attorneys nationwide to be admitted to CCAL, for distinguishing herself through contributions to the evolution or practice of community association law.

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