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

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.

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.

Welcome to the Virginia Community Association Legal Blog! LeClairRyan’s Community Association Team is excited to launch this resource that we hope will prove to be valuable to board members of community associations, property managers, developers, lenders, and local governing bodies. We’ll be constantly updating the blog with posts that will discuss topics of interest to our readers. Our bloggers will be discussing topics related to the governance, management, and creation of associations, as well as providing updates on all of the latest cutting-edge developments in the world of community association law.

I’d encourage you to read the “About Us” section to become more familiar with our team’s experience, and to check out the “Blogger Bios” section for each team member’s biography. Also, feel free to click on the “Webinars” tab to be linked to the database of our team’s webinars on a wide variety of topics.

Thank you for visiting our blog, and we hope that you’ll continue to check back in with us as constantly update it. We hope to be your “go to” source for information and resources on community association law.

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

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.

 

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.

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 manager, the POA’s contract with the manager typically gives the manager this responsibility. 

It’s not always obvious that a property is or is not part of a POA, so it’s a good idea for the seller to know and to share this information with his realtor. A purchaser’s first clue that a property is part of a POA comes from the property listing prepared by the seller’s realtor. And, of course, the residential purchase contract must disclose whether or not the property is part of a POA. 

Unfortunately, sometimes sellers and realtors are not sure which box to check when preparing property listings and residential contracts. To avoid unintentional misrepresentation, here are some guidelines from the Virginia Code:

The Virginia POA Act does not apply to every subdivision subject to a recorded declaration. It applies only to “developments” (a defined term) subject to a “declaration” (another defined term) initially recorded after January 1, 1959 and to subdivisions created under the former Subdivided Land Sales Act (§ 55-536 et seq.), which is superseded by the POA Act.

The following five elements must be present for a “development”:

  1. lots, at least some of which are
  2. residential or recreational;
  3. common area;
  4. automatic membership in an association; and
  5. (potential) obligation to pay assessments.

And, a “declaration” must do one or both of the following:

  1. impose responsibilities on the association to maintain or operate the common area; and/or
  2. give the association authority to impose on lots or their owners a mandatory obligation to pay money in connection with such responsibilities. (I stress “authority” because sometimes an association may have the authority but not have a regular assessment in place.)

So, even if a neighborhood looks like a development and is subject to a recorded declaration, it is not a “development” for purposes of the Property Owners Association Act unless each lot owner is a member of an association, the association has a duty to maintain common area, and the declaration gives the association the power to charge mandatory assessments against the lot owner.