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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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Will Sleeth Speaks at James City County Neighborhood Leaders Forum

LeClairRyan attorney Will Sleeth recently spoke at the James City County Neighborhood Leaders Forum on community association law issues. Will was invited to speak on a panel, along with several other attorneys (including the Virginia Common Interest Community Ombudsman, Heather Gillespie, and Deputy James City County Attorney Adam Kinsman), to discuss an array of recent developments in community association law.

The James City County Neighborhood Leaders Forum meetings take place every few months, and consist of various educational presentations and dialogue sessions hosted by the County Administrator, geared towards members and directors of homeowners associations in James City County. For more information on the James City County Neighborhood Leaders Forum, please click here.

 

How To Get Involved With Your Community Association

The biggest way to have an impact on your community association is to obtain a seat on the board of directors (the "Board"). However, if your association is still under developer control (and the developer appoints the directors) this might not be possible. In addition, a position on the Board is a serious commitment and creates a fiduciary duty of the director to act in the best interest of the association. Serving on a Board often entails a substantial commitment of time and effort for the betterment of your association. As mentioned in our blog post dated October 31, 2012 by my colleague Liz White, the responsibility and time commitment associated with being on an association Board can be daunting to many people, and the time commitment could dissuade many people from running for such a position.

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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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Has Your Homeowner's Association Adopted a Records Copying Policy Yet?

If your homeowners association has not yet adopted a records copying policy, it should move quickly. On July 1, 2012, a new law in Virginia goes into effect that requires boards of directors of associations to have adopted a cost schedule if the association wants to charge owners for the costs of copies and labor related to producing books and records for inspection, pursuant to records requests by owners. Under the current law, associations are not required to have adopted a formal cost schedule in order to impose such charges.

Section 55-510(D) states that the cost schedule must: (i) specify the charges for materials and labor, (ii) apply equally to all members in good standing, and (iii) be provided to such requesting member at the time the request is made. Because some owners make very broad records inspection records, and because some owners make frequent requests, every association should have a cost schedule in place in order to pass the costs (which can sometimes be substantial) along to the owners. If your association has not yet adopted such a policy, it should contact its attorney shortly so that it can put one it place as soon as possible.

Are You Signed Up For The Virginia Leadership Retreat?

The annual Virginia Leadership Retreat will take place this year from July 27 - July 29, 2012 at the Homestead in Hot Springs, Virginia. This annual event has become the premier state-wide gathering for the community association industry in Virginia. Once again, LeClairRyan's community association team will be well represented there. Like most years, we'll be blogging live from the event. Also, this year we'll be tweeting live! If you're not currently following Will Sleeth (the Editor of the Virginia Community Association Law Blog) on Twitter, you can follow him @Will_Sleeth. For more information about the Leadership Retreat, click here.

HOA Meetings Via Webcast?

May your community association legally conduct meetings via webcast? Should it conduct meetings in that manner? What are some of the legal risks related to using emerging technology in the context of meetings? HOAleader recently interviewed LeClairRyan's Liz White on this topic. Check out the full article here.

LeClairRyan's Will Sleeth Published in "The Fee Simple" Regarding Developer Transition Issues

The Fee Simple law journal (the journal of the Virginia State Bar's Real Property Section) recently published an article by LeClairRyan's Will Sleeth related to developer transition issues. The article, titled "The Transition from Developer-Control of a Property Owners' Association and the 2002 Attorney General's Opinion," examined whether Virginia law imposes a time-limit on when a developer must transition control of the board of directors of a property owners' association to the owners, if there is not a specific provision requiring such in the association's governing documents. The article examines the current state of the law, with a special focus on a controversial opinion issued by the Virginia Attorney General in 2002. To read a copy of the article, click here.

Can a Dog Serve on Your HOA Board?

 

While many board members have likely been tempted at some point to utter under their breaths that a fellow director can at times be a "dog," reports of actual dogs being appointed as directors of community associations are few and far between.

So it raised a few eyebrows when the Washington Post reported the other week that a shaggy white dog named "Ms. Beatha Lee" was recently elected the president of the Hillbrook-Tall Oaks Civic Association in Annandale, Virginia. The Post reports that certain members, frustrated at the difficulty of having to continually recruit members to serve on the board, decided to offer the dog as a candidate.

While it does not appear that the Association is a property owners’ association or condominium association, as defined under Virginia law, certain smaller community associations may experience similar frustrations in attempting to recruit and retain board members.

Here’s our free legal advice for the day: don’t even think about trying to nominate a dog (or any pet for that matter) for a board position. There is a large list of reasons why it would be improper, not the least of which is that most association documents require directors to be members of the association, something animals can not be by virtue of the fact that they can’t own property. Furthermore, the law imposes upon directors duties of care and loyalty to the corporation. While dog lovers will universally agree that dogs are some of the most "loyal" creatures there are, the legal concept of "loyalty" is quite different from faithfully retrieving a frisbee or curling up on the couch.

 

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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Watch For Those Governing Document Typos!

 Are your association’s governing documents free of typos? Many are not. The danger that typos pose to association documents was brought home with force recently when LAW.com published an article about a $16 million lawsuit related to a typo in the public offering statement for a condominium in New York City.

According to the article, the attorney who drafted the offering statement inserted a provision that said that the buyers of condominiums would receive their deposits back if the first closing in the condominium didn’t occur by September 1, 2008. The attorney intended to draft the statement so that it provided a deadline of September 1, 2009. When the first closing did not occur until February 2009, several buyers filed suit demanding a return of their deposits. Litigation is currently pending before the federal Second Circuit Court of Appeals.

Though a public offering statement is directed towards the initial purchasers of a condominium unit, typos in associations’ articles of incorporation, declaration of restrictive covenants, and bylaws can wreck havoc on a community for years to come. If your association knows that it has a typo or typos in your governing documents, it should consult with its legal counsel to determine whether the typo can be fixed through a corrective amendment.

And if you haven’t read through your association’s governing documents lately to check for typos, we’d strongly recommend that you do so. It’s always smarter to take a proactive approach than to allow a small typo to lead to major legal problems.

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.

The Property Owners' Association Act and the Condo Act: Be Aware of Subtle Differences

If you serve on the board of directors of a property owners’ association or a condominium association, or are a property manager, you need to ensure that you are looking at the correct law – the Property Owners’ Association Act, or the Condominium Act, respectively. Although both acts contain many similar provisions that bear on issues common to both types of associations, on some key issues the provisions of the acts differ, and pose a potential stumbling block to the unwary.

The potential for confusion is especially pronounced among directors in a certain type of association who frequently discuss community association issues with friends who serve as directors of a different type of association (e.g., a director of a property owners’ association discussing issues with a director of a condominium association), as well as property managers who may manage several associations, a few of which may be property owners’ associations, and a few of which may be condominium associations.

For example, § 55.510(F) of the Property Owners’ Association Act provides that a property owners’ association’s “bylaws shall specify an officer or his agent who shall, at least 14 days in advance of any annual or regularly scheduled meeting [of the members]… send to each member notice of the time, place, and purposes of such meeting.”

§ 55.79-75(A) of the Condominium Act, on the other hand, provides that a condominium association’s “bylaws shall specify an officer or his agent who shall, at least 21 days in advance of any annual or regularly scheduled meeting [of the members]… send to each unit owner notice of the time, place, and purposes of such meeting.”

The two acts differ in their provisions relating to a variety of other issues as well, such as proxies (§ 55-79.77 of the Condominium Act contains detailed provisions concerning proxies that are not found in the Property Owners’ Association Act).

The lesson is that board members and property managers need to pay close attention to the provisions of the specific applicable act, and can not just assume that the provisions of one act apply to the other form of association. When in doubt, always make the safe choice of spending a few minutes to review the provisions of the applicable act. And if you’re ever confused by or unsure of the applicability of a certain provision, don’t hesitate to contact your legal counsel for clarification.

POA Disclosure Packets Webinar -- Q&A Follow-up

Thank you to all those who participated in our March 31st webinar on POA Disclosure Packets. To follow up, the following are answers to those questions you submitted that were left unanswered at the end of the program. Thank you for your insightful questions!

Q. Is HB 702, the new law regarding time of payment for disclosure packets (effective July 1, 2010), applicable to professionally managed associations as well as self-managed associations? 

A. The new law will apply only to self-managed associations. For the time being, professionally-managed associations should continue to ensure that fees for disclosure packets are collected at settlement.

Q. Must a copy of an insurance document or certificate for the Association be included in the disclosure packet, or only a notation of the coverage amount?

A. The disclosure packet must include a "statement setting forth what insurance coverage is provided for all lot owners by the association, including the fidelity bond maintained by the association, and what additional insurance would normally be secured by each individual lot owner." A document from the insurance company is not required.

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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.

 

Upcoming Webinar on POA Disclosure Packets

This Wednesday, March 31st, LeClairRyan's Community Association Industry Team will be hosting a free webinar entitled "What You Need to Know About Property Owner Association Disclosure Packets."

On Wednesday from noon to 1 P.M. EST, attorneys Lori Schweller and Liz White will discuss the Virginia Property Owners' Association Act's requirements, including when disclosure packets are required, who is responsible for requesting and providing them, what they should include, the costs of producing them, and the ramifications of non-compliance.

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

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.