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.

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

Editor’s Note: LeClairRyan’s Community Association Team handles sophisticated legal matters for a wide array of large-scale master-planned communities throughout Virginia and the nation. The following press release highlights the Team’s recent work in assisting a large master-planned homeowner’s association in Newport News and York County, Virginia purchase the golf course and country club that is located within the community.

KILN CREEK HOMEOWNERS’ ASSOCIATION TO PURCHASE GOLF COURSE, COUNTRY CLUB & 290 ACRES OF PROTECTED GREEN SPACE

 

Newport News, Virginia—December 23, 2013

The Villages of Kiln Creek Owners Association (KCOA) board of directors today completed its purchase of the Kiln Creek Golf Course & Resort from Dick Ashe. The $3.5 million purchase price includes 290 acres of protected green space with an 18-hole golf course, a former nine-hole golf course, a clubhouse, a 15-room hotel, two restaurants, a swimming pool, tennis courts, a fitness center and office space.

 

Continue Reading LeClairRyan’s Community Association Team Handles Acquisition of Golf Course for Large-Scale HOA

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.

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

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 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.

Continue Reading Collections Options Regarding Owners Who Fail To Pay Their Assessments

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

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:

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

 

When consulting with an attorney on behalf of a legal entity, such as a homeowners association or condominium unit owners association, or a developer that is a limited liability company or corporation, it is easy to lose track of who is being represented by the attorney. The attorney’s engagement letter should clearly state who the client is and, even better, will also state related parties whom the attorney will not be representing. Representation of an entity does not typically include representation of managers, individual officers, members, or shareholders of such entity unless such relationship is expressly or implicitly established.

If you are an officer, member, manager, director, or shareholder of a Declarant or Association, remember that, in your consultations with the attorney for such entity, you are acting as an agent of such entity, which is the client. Remembering that you personally are not the client will help you to avoid divulging confidences that are personal to you and that you may not want the others in the organization to know. In order to represent her Association or Declarant client diligently, the entity’s attorney may not be able to ethically keep your confidences from the client.

Recently, we had a reader ask whether a member of a homeowners association is legally permitted to review and inspect voting records relating to elections for the board of directors of the member’s HOA.

The short answer is that it depends on the nature of the records requested as well as other factors. Virginia Code Section 55-510 spells out when an owner can review certain records for a property owners’ association. If an owner (i) is in good standing with the association, and (ii) makes a records inspection request "for a proper purpose related to his membership in the association," then he is entitled to review association "books and records" that do not fall under any statutory exemptions. Section 55-510’s discussion of "books and records" needs to be read in conjunction with other provisions of the Virginia Code (and chiefly, the Virginia Nonstock Corporation Act) that elaborate on what exactly constitutes "books and records" (as not every document in an association’s possession constitutes a "book and record" as the term is defined in the Virginia Code). As a result, this analysis can sometimes be rather technical, and associations should consult with their legal counsel to ensure that they don’t provide for the inspection of any records that they’re not legally required to provide.

Under this analysis, assuming that the owner is in good standing with the association, and makes the request "for a proper purpose related to his membership in the association" (and does not, for example, submit the request for the purpose of attempting to pursue litigation against the association), then it would be appropriate for an association to provide the owner with a copy of the vote tally sheet that the association used to count all of the votes. Arguably, ballots and proxies do not constitute "books and records" as defined under Virginia law, and therefore should not be produced by the association. Moreover, if an association’s governing documents require or permit voting by secret ballot, producing ballots with names on them or directed proxies would essentially defeat the goals behind such.

Keep in mind that if the association has adopted a records inspection and copying policy, it could charge the owner a monetary fee for expenses related to searching for the records and copying them.

If your homeowners association has not yet adopted an owner complaint policy, it should move quickly. Recently, Virginia’s Common Interest Community Board promulgated regulations to implement a recent law (Virginia Code Section 55-530(E)) requiring all homeowners associations in Virginia to adopt a policy for receiving and reviewing owner complaints.

Under the regulations, all homeowners associations must adopt a policy by the end of this September. Associations will be required to certify, in their annual report to the Virginia Department of Professional and Occupational Regulation, that a policy has been adopted and is in effect. Moreover, associations are required to include the complaint policy in their disclosure packets. As the regulations contain some fairly detailed requirements as to what terms and conditions must be included in the policy, associations should ask their legal counsel for assistance in drafting a policy.