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Association Charges : Be Aware of Legal Restrictions on Assessments and Charges

As of July 1, 2015, the Virginia Condominium Act provides that no condominium association may impose an assessment or charge against a unit owner unless such charge or assessment (a) is expressly authorized by the Condominium Act (see particularly Va. Code Sec. 55-79.83) and/or by the condominium instruments for the community, (b) represents a fee for service provided, or (c) is a fee for a resale certificate, as provided for in the Condominium Act. Va. Code Section 55-79.42:1.

The Common Interest Community Board has the authority to assess a monetary penalty and/or issue a cease and desist order against an association or common interest community manager who violates this Code section pursuant to its powers under Title 54.1 (“Common Interest Communities”), Sections 54.1-2349, -2351, and -2352. (The Property Owners’ Association Act already included a similar provision regarding assessments and charges in Section 55-509.3, which was amended in 2015 to add the CICB’s enforcement powers.)

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Webinar: Collecting Condo Development and HOA Fees

Will SleethJoin me, Thursday, Jan. 22 (11:00 am - 12:30 pm ET), for this practical collections guide reviewing key issues and processes involved in pursuing outstanding debts in common interest communities. The real estate market troubles have left many condominium and HOAs in turmoil. With fewer members to carry the financial load, every penny counts.  Explore the debtor protections that exist in specific situations, and make certain the collection efforts are lawful and effective.

Topics include: A walk-through of the essential steps of collection procedures; Making certain governing documents support the claim; Finding new ways of legally pursuing the debt owed to the community; and practical tips for staying in compliance with FDCPA.

Who Should Attend: Attorneys, Common-interest community presidents and vice-presidents, Accountants, and Real estate professionals.

Registration fee: $199. CLE credit available. 
Additional details and registration can be found at: www.nbi-sems.com

Removing a Mechanic's Lien (In the Condominium Context) May Be Easier Than You Think

As any condominium association that has had to deal with one knows, the mechanic’s lien is a powerful hammer to force payment to a contractor. Once it is filed in the land records, a lien often makes it impossible for condominium unit owners to sell or refinance, costs the condominium association time and money (in legal fees) to defend, and generally embroils the condominium association in much unwanted litigation.

The good news is that removing a mechanic’s lien can be easier than you might think. Filing a lien, especially on a large condominium association, is not an easy task. The contractor has to conduct a title search and bring down for each condominium unit. And the Virginia mechanic’s lien statute is full of traps for the unwary. Because the Virginia courts view mechanic’s liens as "purely a creature of statute" and "in derogation of the common law," the mechanic’s lien statute is strictly construed. That is, it must be followed meticulously, or the lien will be invalid. Thus, painstaking analysis is required to ensure that the lien complies with Title 43 of the Virginia Code.

As a result, mechanic’s lien claims can be very defensible. Aside from the critical timing issues, which affect all mechanic’s liens (they must be filed within 90 days, and may only include work done within 150 days, of completion of the work), there are certain property identity and allocation issues that are specific to condominiums.

Here are some important points to remember:

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Will Sleeth Quoted in Virginia Lawyers Weekly Magazine on HOA Litigation

LeClairRyan attorney Will Sleeth was recently quoted in a Virginia Lawyers Weekly magazine article reporting on a Virginia state court case in which the trial judge awarded homeowners their attorney’s fees for prevailing in their suit against their property owners’ association. The article (subscription required) discussed how the ruling was a significant decision in interpreting the provision of the Virginia Property Owners’ Association Act that provides for an award of attorney’s fees in certain contexts. In the litigation, the association attempted to argue that the attorney’s fees provision of the Virginia Code only applies if an association sues an owner and loses (as opposed to if an owner sues an association). The judge ruled, however, that the provision can permit an award of attorney’s fees when an owner sues his association and prevails.

The article illustrates an important lesson that all associations should keep in mind: associations should be proactive in seeking out legal advice to ensure that they don’t become ensnared in potentially costly litigation in the first place.

Readers should be mindful that this ruling was a Virginia Circuit Court decision, and not a Virginia Supreme Court decision. Many community associations may likely continue to maintain that the Virginia Property Owners' Association Act does not provide for an award of attorney's fees to an owner in a situation similar to that at issue in this case.

Will Sleeth and Liz White Quoted in Virginia Lawyers Weekly Magazine on HOA Collections

Will Sleeth and Liz White were recently quoted in a Virginia Lawyers Weekly magazine article reporting on the challenges that associations and their attorneys face when attempting to collect unpaid assessments. The article (subscription required) discussed the importance of associations and their attorneys strictly complying with the requirements of the federal Fair Debt Collection Practices Act. The article illustrates an important lesson that all associations should keep in mind: when an association attempts to collect on a debt, it should consult with legal counsel to ensure compliance with all applicable laws.

Free Seminar by the LeClairRyan Attorneys -- April 17th

On April 17, 2010, LeClairRyan's Community Association Team will be presenting a free seminar in Williamsburg, Virginia, entitled "Advanced Legal Aspects of Community Associations."

We invite you to join attorneys Liz White, Dan Quarles, Megan Scanlon, and Will Sleeth as they will discuss four topics that board members and managers frequently encounter as they govern and manage associations: 

 

  • Leasing Restriction Amendments
  • Enforcement and Collection of Assessments and Fines
  • Board Meetings
  • Rules and Regulations and Architectural Guidelines

Resource and reference materials will be provided free of charge on a cd.

Again, the seminar will take place on April 17th, from 9 A.M. to 1 P.M., at Jamestown High School in Williamsburg, Virginia.

Space is limited and registration is required, so please click here to register, if you have not already done so. We look forward to seeing you, and encourage you to contact us if you have any questions.