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Drones and HOAs: How Homeowners Associations and Condominium Associations Can Be Prepared to Deal with the New Technology

  Amazon.com’s recent announcement – that in the future it may utilize unmanned drones to deliver packages to individual residences – has created a host of novel legal issues that all homeowners associations should consider and plan for. Although commentators believe that the commercial use of delivery drones may be a few years off, associations should begin planning now for whether they should regulate the use of drones within the association; how they should regulate the use of drones; and how they can minimize potential liability arising from the use of drones.

While the public has so far only been provided with bits and pieces of information about the make-up and capabilities of unmanned delivery drones, some general information is available: a drone will carry a package and will fly from a warehouse to an owner’s house, with the goal of attempting to deliver the package in a very short amount of time right after it has been ordered. The drone is designed to land, helicopter style, on an owner’s lawn and drop off the package. The drone will then use its helicopter-style propellers to vertically ascend from the owner’s lawn and return to the warehouse.

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Parking Rights and Common Area / Common Element: Can the Association (or Declarant) Do That?!

You serve on your condominium or property owners’ association’s board of directors and have been receiving complaints about unauthorized cars and space shortages in the community’s parking lot. The Board would like to designate specific parking spaces for use by designated units so that each unit has a certain number of parking spaces available to it at all times. May it do so? The answer depends on (a) how parking spaces are classified in your declaration of covenants, conditions, and restrictions, and (b) the association’s authority to control common area / common element pursuant to the Virginia Condominium Act or Property Owners’ Association Act and the specific terms of the association’s governing documents.

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Collections Options Regarding Owners Who Fail To Pay Their Assessments

How should a homeowners association or a condominium association deal with an owner who fails to pay his dues or assessments? There are three main remedies that associations have under Virginia law: (1) file a lawsuit against the owner, (2) file a memorandum of lien against the owner’s lot or unit, and (3) suspend an owner’s privilege to use certain portions of the common area or common element (we’ll address this third remedy in a future post).

Filing a Lawsuit

Associations have a right to file a lawsuit against delinquent owners, seeking a judgment for the delinquent amount. Many associations’ governing documents will also provide that the association is entitled to recover its court costs and attorneys’ fees too. In practice, some courts are occasionally reluctant to award associations the full amount of attorneys’ fees incurred in attempting to collect delinquent assessments, so the association may only be able to recover a certain dollar figure, or a certain percentage of the delinquent amount. While each court (and judge within that court) is different, it’s been our experience that in most situations, associations are usually able to recover most of the attorneys fees incurred in attempting to collect delinquent assessments.

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Disclosure Packets and Resale Certificates Revisited: Recent Statutory Amendments

Bills recently passed in the Virginia General Assembly extend the list of items for inclusion in property owners’ association disclosure packets and condominium association resale certificates, and also broaden non-association disclosure requirements.  Effective July 1, 2013, disclosure packets may or must (depending on the item) include the following new items:

 Restrictions on Solar Panels (HB 2305): Disclosure statements for lots within property owners’ associations and resale certificates for condominiums must include a statement setting forth any restriction, limitation, or prohibition on the right of a unit owner or lot owner to install or use solar energy collection devices on the owner’s property or unit. Va. Code §§ 55-79.97(C)(17), 55-509.5(A)(12).

Further, Va. Code  § 55-519(B)(9) provides that the disclosure form required under the Virginia Residential Property Disclosure Act (a Virginia law that spells out, among other things, certain disclosures that most sellers of property must provide, regardless of whether the property is within a community association) must include language to notify purchasers that by delivering the residential property disclosure statement, the owner makes no representations with respect to any right to install or use solar energy collection devices on the property.

Of course, it is always incumbent on the purchaser to read the declaration, bylaws, and rules and regulations for a community association to determine whether the association has established any restrictions concerning the size, place, and manner of placement of solar energy collection devices; or, for an association with a restrictive covenant adopted prior to July 1, 2008, any restriction or prohibition on the installation or use of a solar collection device. 

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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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LeClairRyan Attorneys to Speak at 2012 Conference and Expo of the Washington Metro Chapter of CAI

LeClairRyan attorneys Doug Cuthbertson and Nicole Pszczolkowski were recently selected to give a presentation at the upcoming 2012 Conference and Expo of the Washington Metro Chapter of CAI. Their presentation, entitled "We've Been Sued! Now What?" will feature a discussion of practical tips for board members, community managers, and others on how to avoid litigation and what to do if they find themselves in litigation.

The 2012 Conference and Expo will take place on March 31, 2012, from 8 a.m. - 4 p.m. For more information about the Conference, please click here.

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.

Can Your HOA Restrict Pets From The Common Area?

Are associations allowed to prohibit pets in the common area? Liz White was recently interviewed by HOAleader.com on this topic. In the interview, Liz discusses which restrictions may be permissible, and which ones may not be permissible. Check out the full article here.

Will Your Association "Fly" Into Trouble With the New Virginia Flag Law?

 

In a post several months ago, we noted the General Assembly’s adoption of amendments to the Property Owners’ Association Act and the Condominium Act that address associations' ability to regulate the display of the United States flag.  As we reported then, the amended Virginia Code sections (Va. Code § 55-513.1 [POAs] and § 55-79.75:2 [Condos]) follow the language of the federal Freedom to Display the American Flag Act of 2005, signed into law on July 24, 2006. It provides that no association (POA or condominium) shall prohibit an owner from displaying the U.S. flag on his own property (lot or unit) as long as the display conforms to federal law, rule or custom.  You can find the official rules governing flag display in Title 4, Chapter 1 at the U.S. House of Representatives' website at http://uscode.house.gov/uscode-cgi/fastweb.exe?search.

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Homeowners Associations and Medical Marijuana: the New Hot-Button Issue

Editor's note: Liz White was recently quoted in the following article on HOAleader.com, concerning the challenges that community associations are facing regarding medical marijuana.

Fourteen states and the District of Columbia permit the use of medical marijuana. So far, association attorneys haven't seen pot use become a heated issue at the associations they manage--but they anticipate that it will.

 In this week's tip, we give you a head's up on some of the issues you may face when your association rules butt up against your unit owners' use of medical marijuana.

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Should HOAs Relax Their Rules to Increase Occupancy?

We recently received a question from a reader: how lax should homeowners associations be these days in their rules when it comes to helping homeowners sell units or keep them occupied with renters?

Answer: homeowners associations have to be very careful here. On the one hand, it’s in everybody's best interest to ensure that homes are occupied and that what was once a "field of dreams" doesn't become a field of "For Sale/Rent" signs.

Depending on the circumstances, associations may want to seriously consider relaxing some of their rules/covenants. For example, a very restrictive pet rule which limits the number of pets to one or to a particular size, may limit the number of eligible buyers/renters at a time when qualified buyers/renters are few and far between to begin with.

Similarly, many associations are living to regret the adoption of rental restrictions which in many cases were adopted under a much different economic climate and which were intended to limit the number or percentage of homes which could be non-owner occupied.

On the other hand, the enforcement of rules and covenants may be what is keeping property values up in spite of the economic crisis. Many people move into covenant-restricted neighborhoods because they like the appearance of these neighborhoods. An attempt at relaxing the aesthetic and other standards might backfire on the board of directors.

It should be noted that boards should not just ignore their rules and covenants even if they determine that they are in need of change. In most states, and under most declarations (i.e., the legal, contractual document that contains the covenants and which runs with the title to every lot), the board may have the authority to change certain rules by board vote followed by publication, but the board typically must put changes to the covenants in the declaration to a vote of the members. In some cases, a vote, or at least a survey, of the members may be preferable notwithstanding the board's authority, if any, to unilaterally amend the rule or covenant.

Lastly, the new regulations in effect for federal mortgage agencies (such as FHA and VA) are making it harder to get loans in condominiums by imposing additional requirements on owner occupancy and other matters typically overseen by the associations. Any condominium board seeking to relax its covenants should first consult with an experienced Community Association attorney.

Rent-A-Goat: The Latest Craze and the New Challenge for HOAs

 

The other week the Wall Street Journal published an interesting and somewhat amusing article about the latest trend in upscale neighborhoods: renting a goat as a means to trim a yard and eliminate weeds.

Apparently renting a goat constitutes an environmentally-friendly "carbon-emission-free" way to trim grass. The Journal reports that: "Prices can range from $200 a day for a dozen goats to upward of $1,000 for larger herds of 100 or more."

If this trend catches on, it will pose some unique issues for associations throughout Virginia. Many associations will likely look skeptically upon goat trailers carting goats smack into the middle of their neighborhood as they’re let loose to chew-up the grass throughout a lot. Many associations’ covenants contain restrictions on maintaining or raising cattle, livestock, and non-domesticated animals on lots, but those covenants may not explicitly prohibit those animals from coming on to a lot for short periods of time. Therefore, if an association encounters this situation, it may want to consider amending its covenants to prohibit non-domesticated animals from coming on to lots.

So if you serve on the board of an association and wake up tomorrow morning to the sight of a flock of goats roaming around a yard, it might be smart to try to have the association address the situation through the covenants rather than having neighbors become angry with each other and try to "chew each other out".

Virginia's New Law on Flag Restrictions: An Overview

The General Assembly recently adopted amendments to the Property Owners’ Association Act and the Condominium Act that address associations' ability to regulate the display of the United States flag.  The amended Virginia Code sections follow the language of the U.S. Code (The Freedom to Display the American Flag Act of 2005), which is the federal law regarding the U.S. flag in Title 4, Chapter 1.  POA and condominium boards and managers, and declarants and their attorneys who are preparing covenants and rules for POAs and condominiums, need to be aware of the new law.  The amendments to Va. Code Sec. 55-79.75:2 of the Condominium Act and Va. Code Sec. 55-513.1 of the POA Act are essentially the same, so I will discuss them together.

The new law provides that no association (POA or Condominium) shall prohibit an owner from displaying the U.S. flag on his own property (lot or unit) as long as the display conforms to federal law, rule or custom.  You can find the official rules governing flag display in Title 4, Chapter 1 at the U.S. House of Representatives' website ( http://uscode.house.gov/search/criteria.shtml).  (There are also several helpful non-governmental sites run by non-profit organizations that you can find by performing an internet search of "flag protocol.")  However, an association may continue to "establish reasonable restrictions as to the size, place, duration, and manner of placement or display of the flag on such property provided such restrictions are necessary to protect a substantial interest of the (unit owners') association."

In addition, be aware that, in any legal action brought by an association for violation of a community flag restriction, the association bears the burden of proving in court that its restrictions as to size, place, duration, and manner of placement are necessary to protect a substantial interest of the association.  Therefore, these criteria should be carefully considered when drafted, and existing regulations should be evaluated to ensure they protect your association's substantial interests.  If not, you may want to consider amending or revoking them.

Associations may continue to restrict the display of flags in the common elements/areas of the community, but any limited common element (i.e. any area over which an owner has "exclusive possession or use"), such as, for example, typically a unit's balcony or porch, should be treated the same as the lot or unit with respect to flag display. 

Remember that POAs must disclose any community restrictions regarding flag display in the disclosure packet.  If an association fails to do so and then brings an action against a homeowner for flag display in violation of the association's rules and/or covenants, the homeowner can assert as a defense that the required disclosure was not contained within the disclosure packet.

Missed the Fair Housing Act Webinar? View it Now.

Did you happen to miss last month's Fair Housing Act webinar put on by LeClairRyan's Liz White and Brian Muse? No problem -- the webinar is available for viewing at your convenience. Just click here to be linked to the blog's "Webinars" section to find links to this webinar as well as all of the team's other webinars.

Upcoming Webinar on the Fair Housing Act

On Wednesday, May 19th, LeClairRyan's Community Association Industry Team will be hosting a free webinar entitled "The Fair Housing Act: Keeping your Community Association in Compliance and Out of Court.”

On Wednesday the 19th from noon to 1 P.M. EST, attorneys Liz White and Brian Muse will provide an overview of the Fair Housing Act and how it applies to Community Associations, and offer practical advice for how Associations can avoid fines, penalties, and lawsuits.

If you haven't already registered for this free event, click here to register now.

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.

 

Does Your Association Have a Plan for Dealing with Potentially Harmful Animals?

Your association's governing documents may address the topic of dangerous animals and give your governing body authority to require their removal.

In a recent case, a Newport News Circuit Court Judge unequivocally recognized the validity of such rules and enforced them against a recalcitrant owner without reservation.

What happened?

The case involved a dog that had bitten the adjacent homeowner on one occasion, and charged her on another. The association directed the owner to remove the dog, but the owner refused to do so.  Thereafter, the association held a due process hearing, again directed the owner to remove the dog and imposed the maximum charges allowable in the event the owner did not comply.  Still the owner refused to remove the dog.

We filed suit on behalf of the association to enforce the governing documents and to compel the removal of the dog.  At a pre-trial hearing, the Judge explained in no uncertain terms that, although he was a dog-lover, the association's rule was enforceable and if the dog bit the neighbor it had to go.  On the trial date, the owner finally conceded the dog-bite had occurred.  The Judge entered an injunction requiring the removal of the dog, and awarded the association attorney's fees. 

Takeaway point:

If your association is dealing with a similar situation related to a dangerous animal, don't hesitate to review your governing documents to see if the association has any options for dealing with the animal and its owner. If the situation is serious, you should contact your legal counsel to discuss the best way to approach the situation.