Disclosure Packets / Resale Certificates

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The Virginia General Assembly passed hundreds of bills during the 2020 legislative session. For those who lead, live in, or associate with community associations, many of these changes could impact the day to day operations of how individuals and these associations interact. Below is a summary of some of the General Assembly’s more significant recent bills that effect community associations.

House Bill 176 – Contract Disclosure Statement with regards to the Property Owners’ Association Act and Virginia Condominium Act

With House Bill 176, the Virginia General Assembly updated Virginia Code Section 55.1-1808. Section 55.1-1808 is a provision that requires the seller of a lot to disclose that the lot is located within a development that is subject to the Property Owners’ Association Act and provide to the purchaser of the lot an association disclosure packet. Under certain terms, the purchaser has the right to cancel the contract to purchase the lot upon receipt of this disclosure packet. The new law updates the language of the statute to include the term “ratified real estate contract.” Generally, the purchaser previously had the right to cancel the contract within three days of receiving the association disclosure packet. Now, the purchaser also has the right to cancel the contract of purchase for a period of up to seven days if specified in a ratified real estate contract.
Continue Reading Summary of New Virginia Legislation Impacting Community Associations in 2020

Since our last postings on the subject of disclosure packets, the General Assembly has adopted several minor Code changes to clarify existing provisions:

Delivery by Overnight Carrier 
The Code section providing for cancellation of the purchase agreement within a certain time period after receipt of the resale certificate / disclosure packet previously failed to mention when the purchaser could cancel if the resale certificate / disclosure packet were delivered by overnight delivery service. For both property owners’ associations (“POAs”) and condominium associations, whether self-managed or professionally managed, if the resale certificate / disclosure packet is delivered by commercial overnight delivery service, the purchaser may cancel the contract within three days after receiving it.

The seller or the seller’s authorized agent may choose whether a resale certificate / disclosure packet will be delivered in hard copy or electronically. Such request and instructions must be stated in writing.Continue Reading Disclosure Packets and Resale Certificates: Statutory Updates

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.　Continue Reading Disclosure Packets and Resale Certificates Revisited: Recent Statutory Amendments

 

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.Continue Reading Will Your Association “Fly” Into Trouble With the New Virginia Flag Law?

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…

We received the following question relating to disclosure packets and financial updates: Va. Code § 55-509.9 provides that settlement agents may request escrow instructions from the disclosure packet preparer, who would be the association manager in the case of a professionally managed association. No fee may be charged for escrow instructions, whereas an association manager may charge a $50 fee for a financial update. Settlement agents and other parties involved in the sale of a property (e.g. real estate agents) regularly request written confirmation of outstanding assessments, special assessments, HOA insurance coverage, insurance agent contact information, etc. Since this information is in the disclosure packet already provided, does this information qualify as a “financial update” for which a fee may be charged? Is there a definition of what is included in a settlement agent request that is not subject to a fee and one that is?Continue Reading Disclosure Packets and Financial Updates

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.Continue Reading POA Disclosure Packets Webinar — Q&A Follow-up

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…

Anyone selling a lot or home that is part of a Property Owners’ Association (POA) is responsible for providing potential lot purchasers with information about the POA, referred as a “disclosure packet.” Sellers rely on their associations to provide complete and current disclosure packets to prospective purchasers. If a POA is managed by a POA…