The Virginia Supreme Court’s opinion in Tvardek, et al v. Powhatan Village Homeowners Association, Inc. highlights how critical it is to not only amend your HOA documents in compliance with the law and your existing documents, but to make sure that the amended document that gets recorded properly memorializes that you did so.
The Tvardeks filed a declaratory judgment action in 2013 against Powhatan Village Homeowners Association, Inc. (“Powhatan Village”) to challenge a 2008 amendment to the association covenants that included a provision restricting the owners’ ability to rent their homes. Powhatan Village filed a special plea in bar requesting dismissal of the action as untimely citing the one-year statute of limitations in Va. Code Ann. § 55-515.1(E). Declining to hear any evidence, the Circuit Court made a decision on the pleadings and argument of counsel, ruling in favor of Powhatan Village’s argument that the claim was time-barred. The Circuit Court also awarded Powhatan Village $12,000 in attorney fees.
The Tvardeks appealed the case. The Virginia Supreme Court reversed the Circuit Court’s ruling, determining that the case was not barred by the one-year statute of limitations. The attorney fee award was also reversed.
The statute of limitations argument focused on the “certification” attached to the amendment which read as follows:
CERTIFICATION REQUIRED BY VIRGINIA CODE § 55-515.(F)
The undersigned President of the Association does hereby certify that this Amendment has been approved by a vote of two-thirds of the Class A votes in the Association, as evidenced by the results of the meeting at which the vote was taken, such evidence on file with the Association, as required by Section 9.2 of the Declaration.
Executed on the date first written above by the duly authorized officer of the Association.
The Supreme Court found that the Certification was defective, stating that Va. Code Ann. § 55-515.1 “lays out a detailed process necessary for the effective adoption of an amendment to an association’s declaration” and concluding that the association did not follow the required process.
The one-year statute of limitations provided in Va. Code § 55-515.1(E) states:
E. An action to challenge the validity of an amendment adopted by the association may not be brought more than one year after the amendment is effective. (emphasis added).
Va. Code Ann. § 55-515.1(F) addresses when the amendment becomes effective providing:
F. Agreement of the required majority of lot owners to any amendment of the declaration shall be evidenced by their execution of the amendment, or ratifications thereof, and the same shall become effective when a copy of the amendment is recorded together with a certification, signed by the principal officer of the association or by such other officer or officers as the declaration may specify, that the requisite majority of the lot owners signed the amendment or ratifications thereof.
The Supreme Court opined that the statute must be strictly followed as “[t]he Virginia Property Owners’ Association Act authorizes the creation and enforcement of restrictive covenants against nonconsenting landowners in a manner unknown to the common law.” Citing Va. Code § 55-515.1(F) as being “conspicuously precise,” the Court noted the difference between adopting an amendment and signing it, concluding that the General Assembly included this precaution to “discourage quarrelsome disputes between neighbors about who voted for what and when.”
The Supreme Court’s opinion includes analysis of the effect of the Virginia Property Owners’ Association Act on common law property rights noting that it expands the previously required “privity” to impose changes to property restrictions on owners governed by a declaration if they are amended properly, even if a particular owner votes against the change.
The real query now is what does the Association do next? If the amendment isn’t effective until the process of Va. Code Ann. § 55-515.1(F) is followed, can the Association record a corrective amendment if it still has the owners’ signatures of ratification to make the amendment effective? If your board has questions or comments, contact your HOA attorney.
Tarley Robinson, PLC, Attorneys and Counsellors at Law, Williamsburg, VA
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