By Deborah Goonan, Independent American Communities
According to several new state laws, Virginia HOAs and condominium associations will be required to provide greater transparency to homeowners and homebuyers. Developers must also make POAs aware of all common stormwater facilities. And CC&Rs and can prohibit home based child care businesses.
No more special assessment surprises
Virginia already boasts one of the country’s more stringent home buyer disclosure packets from sellers of HOA-governed property, including a copy of the association’s governing documents, the annual budget, recent meeting minutes, and several statements regarding rules.
Legislators added some new reporting requirements for homeowners of association-governed communities as well as disclosure packets for home buyers.
Virginia HOAs (including POAs, condominiums and cooperatives) must conduct a reserve study every 5 years. That’s nothing new. But now your Association will also have to provide an annual statement of the HOA’s reserve balance, and an explanation of how the balance of money in the Reserve Fund compares to the recommended funding level.
As long as current homeowners and home buyers pay close attention to these annual reports and statements, there should be no surprises when an underfunded HOA orders special assessments or regular fee increases to cover the cost of capital improvements.
Home buyer’s right to cancel contract for insufficient disclosure
In addition, a home buyer has the right to cancel a contract for sale after receiving an incomplete disclosure packet, or if the seller fails to produce a disclosure packet within 14 days.
The law offers additional protection for home buyers when the seller resists making a full disclosure, as required by Virginia law. However, a buyer’s sole remedy so to cancel the sale sometime before settlement.
Keep in mind that real estate disclosures are basically “buyer beware” messages. If you go ahead and purchase a home, in spite of any reservations you may have, you’ll be stuck with any negative consequences as soon as you close the sale and own the property.
A new bill aimed at making HOA fees more transparent.
By: Marcus Dash, LocalDVM
Posted: Mar 22, 2019 08:01 PM EDTUpdated: Mar 22, 2019 08:01 PM EDT
Source:
Note: All bill summaries courtesy of Richmond Sunlight
Condominium Act and Property Owners’ Association Act; delivery of association disclosure packets. (SB1580)
Introduced By
Sen. David Suetterlein (R-Salem)
Description
Condominium Act and Property Owners’ Association Act; delivery of condominium resale certificates and association disclosure packets; right of purchaser to cancel contract. Provides that a purchaser of a unit subject to the Condominium Act or a lot subject to the Property Owners’ Association Act who receives a condominium resale certificate or association disclosure packet that is not in conformity with law may cancel the contract for such unit or lot (i) within three days after the date of the contract if the resale certificate or disclosure packet is received on or before the date that the purchaser signs the contract; (ii) within three days of receiving the resale certificate or disclosure packet if the resale certificate or disclosure packet is hand delivered, delivered by electronic means, or delivered by a commercial overnight delivery service or the United States Postal Service, and a receipt obtained; or (iii) within six days after the postmark date if the resale certificate or disclosure packet is sent to the purchaser by United States mail. This bill is identical to HB 2385. Amends § 55-509.4, § 55-79.97, of the Code of Virginia. Read the Bill »
Signed by Governor
Common interest communities; dissemination of annual budget, reserve for capital components. (HB2030) (SB1538)
HB2030 Introduced By
Del. David Bulova (D-Fairfax) with support from co-patron Del. Kathleen Murphy (D-McLean)
SB1538 Introduced By
Sen. Scott Surovell (D-Mount Vernon)
Description
Common interest communities; dissemination of annual budget; reserve for capital components. Requires common interest communities under the Condominium Act, the Property Owners’ Association Act, and the Virginia Real Estate Cooperative Act (the Acts) to make available to members either the common interest community’s annual budget or a summary of the annual budget prior to the beginning of each fiscal year. The bill requires that the five-year cash reserve study required under the Acts include a statement that outlines the amount of the reserves recommended in such study as well as the amount of current cash available for replacement of the reserves. The bill also requires the Common Interest Community Board to prepare guidelines for the development of reserve studies for capital components. This bill is identical to SB 1538. Amends § 55-471.1, § 55-514.1, § 55-79.83:1, of the Code of Virginia.Read the Bill »
Outcome
Bill Has Passed
Declarant/developer must make HOA aware of all stormwater facilities
Many homeowners are surprised to learn that their homeowners or property owners’ association owns stormwater facilities in their common interest community.
Almost all HOAs obligate homeowners to collectively pay for ongoing maintenance and repair of all of the following:
- stormwater ponds
- dams, weirs, or gates that control water levels in ponds or “lakes”
- dry stormwater detention basins
- swales and channels that control stormwater runoff
- underground pipes and catch basins, including infrastructure that is part of the street system in the community
Sometimes I talk to homeowners who tell me that their HOA has no common areas, so they don’t understand why they even need an HOA. But, nine times out of ten, the HOA exists for one reason — to maintain stormwater facilities in the community.
In a small POA consisting of one street with a few homes, the “facilities” may consist of a single stormwater pond or detention basin.
A large planned community usually maintains dozens of ponds, storm pipes, and drainage channels.
Keeping stormwater facilities in good repair is costly. That’s why most local governments prefer to dump the responsibility on HOAs. The problem is, in most cases, the POA board doesn’t know how to properly maintain stormwater infrastructure. And in some cases, the board is not even aware of each component of common stormwater property within the community’s boundaries.
This year, a new law was enacted to solve that problem. From now on, at the time of turnover for the Association, a real estate developer must, at a minimum, provide the POA with a copy of “as-built” drawings of the community’s storm water facilities.
Source:
Virginia Condominium and Virginia Property Owners’ Association Acts; stormwater facilities. (SB1756)
Introduced By
Sen. Scott Surovell (D-Mount Vernon)
Description
Virginia Condominium Act; Virginia Property Owners’ Association Act; stormwater facilities; transfer of control of management, maintenance, repair, or replacement. Requires a declarant to deliver to the president of the unit owners’ association or his designated agent, or in the case of a property-owners’ association, the board of directors or their designee, an inventory and description of stormwater facilities located on their premises. The bill requires the delivery of final site plans and applicable recorded easements and agreements regarding the inventory and description of stormwater management facilities located on common elements of a condominium or property owners’ association property so that such associations are aware of the requirements for the maintenance, repair, or replacement of the stormwater facilities. Amends § 55-509.2, § 55-79.74, of the Code of Virginia. Read the Bill »
Signed by Governor
HOAs can prohibit home-based child care businesses
Parents of young children, who rely on child care providers in their community, take note of this new law.
Your day care or after-school care provider might be forced out of business, if your POA’s governing documents prohibit this type of home-based business, either now or in the future.
This particular new law threatens the property rights of homeowners, who may have relied on local zoning which allows child care as an “accessory or ancillary residential use.”
If a POA decides to amend its governing documents to forbid home-based child care services, property owners will either have to relocate their facilities or go out of business.
This new law coincides with another Virginia HOA dispute over deeded parking spaces. According to a recent opinion letter in the Washington Post, one unnamed POA is amending its governing documents to give homeowners without garages the right to assigned parking spaces in the common parking lot.
Homeowners without a garage may be very happy about this arrangement. But it takes away the rights of other homeowners to make use of common parking spots for their guests. Changing the governing documents in this way completely disregards the original mutual agreement for the use of common parking areas. In effect, it breaks the so-called contract that homeowners agreed to at the time of purchase.
These are just two examples of the assault on private property rights in HOA-ville in Virginia. ♦
Sources:
Virginia Property Owners’ Association Act; home-based businesses. (HB1853)(SB1537)
HB1853 Introduced By
Del. David Bulova (D-Fairfax) with support from co-patrons Del. Joe Lindsey (D-Norfolk), and Del. Kathleen Murphy (D-McLean)
SB1537 Introduced By
Sen. Scott Surovell (D-Mount Vernon)
Virginia Property Owners’ Association Act; home-based businesses. Provides that if a development is located in a locality classifying home-based child care services as an accessory or ancillary residential use under the locality’s zoning ordinance, the provision of home-based child care services in a personal residence shall be deemed a residential use unless (i) expressly prohibited or restricted by the declaration or (ii) restricted by the association’s bylaws or rules. The bill is a recommendation of the Virginia Housing Commission. This bill is identical to SB 1537. Read the Bill »
Outcome
Bill Has Passed
See also:
Property rights are under fire from homeowners associations
Washington Post opinion letter, written by William T. Coleman
March 29, 2019
