In a case from the Chesterfield Circuit Court, the circuit court judge determined that a homeowner could not be forced to pay association dues to a voluntary association. This result is not surprising.

Continue reading “Homeowner cannot be forced to join a voluntary HOA”

Community Associations have been the subject of a lot of bad press lately. An  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.

Continue reading “Benefits of Community Associations Part 1: Are HOAs really as bad as some portray?”

Yes, Virginia, property owners’ associations and condominium associations are required to have a reserve study.  At least once every five years an association must obtain a study to determine the necessity and amount of reserves (i.e. financial savings) required to repair, replace and restore capital components.  Capital components are those items, regardless of whether they are part of the common area or common elements, for which a) the association has an obligation to repair, replace or restore, and for which b) the board or executive organ determines that funding is necessary.

Continue reading “HOAs and a Reserve Study…it’s the law! (Part 1 of a 3 part series on Reserves)”

Community Associations that have adopted rules and regulations that permit the association to avail itself of the enforcement capabilities found in Va. Code Ann. § 55-79.80:2 or § 55-513(B) should have counsel review the governing documents or condominium instruments, as applicable, in light of an unpublished Virginia Supreme Court order in Shadowood Condominium Association et al., v. Fairfax County Redevelopment and Housing Authority. In Shadowood, the Court determined that community associations do not have the authority to impose charges or suspend owner’s rights unless the authority is specifically granted in the condominium instruments or governing documents. This blog post analyzes that Court order.

Continue reading “HOAs and the Power to Adopt Rules and Regulations: Is it more limited than we think?”

A short while ago we wrote a blog piece on the issues relating to community associations regulating service animals. In that blog we noted that the Fair Housing Act (“FHA”)  “permits individuals with disabilities to keep an assistance animal as a reasonable accommodation when there are limitations imposed by the homeowner or condominium association on animals and pets.”  In Broward County, Florida, that county’s Civil Rights Division filed suit against a condominium association for violating the FHA by refusing to consider a person’s request for an “emotional servant animal,” a chihuahua.

In 2008, Virginia enacted legislation requiring condominium and property owners’ associations to establish reasonable procedures for resolving member and citizen complaints. The legislation further required the Common Interest Community Board (the “CICB”) to establish regulations for the associations to govern the complaint process.

What does this mean for your association? You will need to establish, or amend, your written procedures to comply with the regulations.

Continue reading “4 things your HOA needs to know about Virginia’s complaint process”

We have written previously on the costs—both in time and money—for homeowners and condominium associations to litigate cases. On one hand, boards of directors have a fiduciary duty to uphold the governing documents of associations, but on the other, the board must investigate alternatives to the divisive nature of litigation.

As it turns out, sometimes there is no alternative because a homeowner can sue an HOA, forcing the association to defend. But what efforts can or should a homeowners or condo association take to avoid the consequences of litigation?

A series of recent Virginia cases highlights the consequences associations can face in litigation cases. This blog posts provides a brief summary of those cases and some cautionary advice.

Board of Directors Meeting

Continue reading “HOA Litigation: Is it avoidable?”

Once again, my friend and colleague, Richmond Construction Law attorney Chris Hill, permitted me the opportunity to blog at his award-winning blog Construction Law Musings. 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.

For Chris’ blog, we wrote a post exploring the Olde Belhaven case that made it into the national media. Our take is that we must remember that HOA Governing Documents are drafted by counsel for the developers, and when the developers leave, the enforcement of those restrictions is left to the volunteer Boards of Directors of your neighborhood.

Here’s a brief excerpt of the post:

A recent case highlights what happens when an Association’s Board of Directors, trying to uphold its fiduciary duty by enforcing and upholding its governing documents goes head to head with homeowners, both believing that they are in the right. . . .

Our experience is that the volunteer Boards of Directors, when faced with tough choices, try to make decisions consistent with their fiduciary duties, in an attempt to protect the rights of all the owners in the neighborhood. That doesn’t mean they always make the right decisions, but these ordinary people are not ogres, either.

Read the complete blog at Construction Law Musings, as well as many other informative posts on Chris’ outstanding blog. Thanks, Chris!

In litigation matters involving common interest communities (otherwise known as homeowners associations (“HOAs”) or condominium owners associations (“condo associations”)), the issue of awarding attorneys’ fees for prevailing parties ultimately arises. Generally, the HOA’s Governing Documents or the condo association’s Condominium Instruments contain such a provision. Otherwise, attorneys’ fees may be recoverable by statute for HOAs and condo associations.

These attorney fee-shifting provisions, either by contract or statute, are contrary to the typical “American Rule” cases in which each side pays their own attorneys’ fees. Because litigation has become so expensive to pursue, whether to award attorneys’ fees, and the amount of any award, has become separate litigation on its own at the conclusion of cases.

In the recent case of Dewberry & Davis, Inc. v. C3NS, Inc., the Virginia Supreme Court was faced with the issue of “whether the circuit court erred in applying an attorneys’ fees provision of a contract.” We had previously blogged about this case, because in the underlying contract between the parties, Dewberry & Davis, an engineering company, had limited its liability for damages. The trial court had determined the limitation of liability clause was void, pointing to a recent change to Virginia Code § 54.1-411that permitted an engineering company to include a limitation of liability clause. Because the contract predated the code change, the court determined that those changes “demonstrate that the General Assembly fully intended to alter the statute’s intent.”

The case continued to trial, and eventually, upon appeal, to the Virginia Supreme Court. This blog post explains that Supreme Court decision relating to the award of attorneys’ fees.

Continue reading “Attorneys’ Fees and Litigation – When fees get awarded to the “Prevailing Party””

This case has been overturned by statute. Check out this blog post for the details.

We have written about the importance of operating agreements to help succession planning for your limited liability company (“LLC”). Operating agreements can help the company with procedures to remove a member, or with procedures to permit a member to leave the LLC on his own accord. This blog post reviews a recent Virginia Supreme Court case that shows the importance, and limitations of your LLC operating agreement to set forth succession planning of a member’s interest when that member dies.

LLC Agreements

Continue reading “Limited Liability Companies: What happens to an LLC when a Member dies?”