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SusanS14 (Virginia)
Posts: 12
Posted:
I have come to this site in the last couple of months a lot, and am very appreciative as I have been able to find solutions. The HOA in my development has gone amuck. It's latest 'money-maker' is to charge people to review and approve their requests for changes made to their property (awnings, landscaping et al). I dug around and found that the Virginia code states unless the charge is specifically addressed in the code the HOA cannot charge for what they are supposed to be doing as their job. (In fact this 'committee' is the only sanctioned committee in the by-laws (I have another thread about this too)) - which BTW the lead HOA manager told me that the ARC really isn't sanctioned even though it has been included and laid out in the by-laws. sure, whatever . anyway I have digressed.

The code is: Virginia code § 55-509.3. Association charges.
Except as expressly authorized in this chapter, in the declaration, or otherwise provided by law, no association may (i) make an assessment or impose a charge against a lot or a lot owner unless the charge is a fee for services provided or related to use of the common area or (ii) charge a fee related to the provisions set out in § 55-509.6or 55-509.7that is not expressly authorized in those sections.

I have been told that in the by-laws (and I will have to re read them tonight because I don't remember reading anything like this) there is a provision that the HOA can charge for reviewing property changes/additions. My comment is even if it is in the by-laws the VA code trumps the by-laws every day, all day.

Am I way off base?

I searched the web, went through the search feature on this site and couldn't find any information on anything like this occurring in other HOA controlled developments.

Thank you.

FredS7 (Arizona)
Posts: 927
Posted:
> anyway I have digressed.

Keep your inclination to digress under strict control when interacting with the association. It confuses and dilutes your point.

> My comment is even if it is in the by-laws the VA code trumps the by-laws every day, all day.

This may require very careful reading of all of your documents. The declaration (CC&Rs) MIGHT provide authority for fees...note that you quote the VA law saying

"Except as expressly authorized in this chapter, in the declaration, or otherwise provided by law,"

Anyway- does it matter very much? Unless the charge is excessive in relation to the change, I can't see that it is worth disputing.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Susan,

Fred hit the nail on the head. The statute defers to the CC&Rs. Therefore if the CC&Rs allow for such a charge OR authorizes the Association to adopt and impose such fees, then your Association would be in compliance with the statute.

If your using a management company, it's possible that the fee is from the management company and not from the Association. You would need to check their contract.
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By SusanS14 on 06/03/2013 11:53 AM
Except as expressly authorized in this chapter, in the declaration, or otherwise provided by law, no association may (i) make an assessment or impose a charge against a lot or a lot owner unless the charge is a fee for services provided or related to use of the common area or (ii) charge a fee related to the provisions set out in § 55-509.6or 55-509.7that is not expressly authorized in those sections.

I have been told that in the by-laws (and I will have to re read them tonight because I don't remember reading anything like this) there is a provision that the HOA can charge for reviewing property changes/additions. My comment is even if it is in the by-laws the VA code trumps the by-laws every day, all day.

Well, now this is indeed interesting. VA laws aside, I hope your HOA realizes that such charges, since they are not assessments that are charged to all unit owners, that the IRS may consider such charges to be taxable non-exempt income to the HOA. I hope they are reporting it as such on their income tax returns.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
The SC Articles of Incorporation continually make statements like "Proxy voting is allowed" unless the Corporation Bylaws say otherwise.

Many forget to quote and/or read the unless.

SusanS14 (Virginia)
Posts: 12
Posted:
Thank you for the responses. I wanted to finish my homework before making any more comments.

To provide a little background (and I have posted these issues previously) earlier this year the HOA increased the dues to pay for security gates that were promised by the developer. In order to pay for the $40K loan, the dues were increased not by a lot, but still increased. After doing my research I found that according to VA Code, developers cannot use HOA monies to fund their construction (thanks to your forum). The declarant was not happy. However the HOA continues to collect the increase. Although it has been asked many times what will be done with the money, we are told, ā€œon somethingā€. - After saying that the development is still under declarant control. So therefore I do realize he can tell everyone to pound sand - he doesn't have to tell us anything.

Then there was the debacle about the ad-hoc committees. Your forum was a great assistance. Although the attorneys did find a way around the so-called committees not having to be sanctioned et al, the gist of their letter (which I had initially misinterpreted) was at this time the ā€˜committees’ are only groups which have no authority, can make no recommendations and or implement any changes. To make matters worse, the committees/groups are still meeting in private residences not allowing anyone but the members to attend AND are discussing matters that would/could affect the community. This is something I am still pursuing.

Now up to date, is the matter about the ARC charging for the review of requests. You all are correct. In the by-laws, it states that a ā€˜reasonable’ amount can be charged.

The exact verbiage is:
5.7 ā€œArchitectural Review Committee may charge reasonable fees for the processing of any requests, plans and specifications. The Association shall pay all ordinary and necessary expenses of the ARC. In addition in connection with the discharge of its responsibilities, the ARC may engage or consult with architects, engineers, planners, surveyors, attorneys and others. Any person seeking the approval of the ARAC agrees to pay all fees thus incurred by the ARC. The payment of all such fees is a condition of the approval or disapproval by the ARC of any plans and the commencement of review of any plans may be conditioned upon the payment of the ARC estimate of such fees.ā€

The bottom line is (unless I am mistaken):
1. the declarant can charge whatever he deems to be ā€˜reasonable’ and doesn’t have to tell anyone he is making the change.
2. The declaration of covenants, conditions, restrictions and easements trumps Virginia law.
3. If there are charges, that amount is subject to tax.

I am a housing advocate. I will do what I have to do to keep the HOA/declarant on the straight and narrow. I realize there are costs associated with maintaining a development and there needs to be ā€˜some’ control over what residents do outside their homes or else we might find ourselves living next to someone taking out their car engine with an A frame. However, the declarant/HOA has no moral right to take advantage of the residents in the community because they, the declarant/HOA failed to plan/coordinate/ and or manage.

Although I am a bit verbose on this forum as I want to ensure I explain well, when I write I stick to the fact of law. I insert no emotion; I do not use the pronoun ā€œIā€. This is about ā€˜our’ community, it isn’t about me.

Thank you all again, and I am sure as the sun rises in the morning that I will probably be back.

DavidW5 (North Carolina)
Posts: 565
Posted:
Just a minor quibble: The fees may or may not be taxable to the association depending on whether it files as a corporation on IRS form 1120 or on the form for HOA's, 1120-H. The tax provisions are complicated so it is not clear whether those fees would result in any tax impact.
SteveM9 (Massachusetts)
Posts: 3,699
Posted:
Quote:
It's latest 'money-maker' is to charge people to review and approve their requests for changes made to their property (awnings, landscaping et al).


And now you know..... never buy a house in a development that is still developer controlled. Lots of promises, no delivery.
SusanS14 (Virginia)
Posts: 12
Posted:
Quote:
Posted By SteveM9 on 06/04/2013 6:24 AM
It's latest 'money-maker' is to charge people to review and approve their requests for changes made to their property (awnings, landscaping et al).


And now you know..... never buy a house in a development that is still developer controlled. Lots of promises, no delivery.

Unfortunately most areas I looked were fairly new developments. Additionally unless I read the new VA law incorrectly declarant control just jumped from ten to 15 years. So depending how long they want to go, they can maintain control. When I lived in the Kansas City area the development was under declarant control until it was 100% sold. That was in 2006 and it is still not 100% nor is it ever likely with the economy ( this is a 300-400 house community)

On the up side, I will be selling my house in the next two years when I retire and move back to my home state of Florida which I am sure has its own HOA horror stories .

TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By SusanS14 on 06/04/2013 7:24 AM

Unfortunately most areas I looked were fairly new developments. Additionally unless I read the new VA law incorrectly declarant control just jumped from ten to 15 years.

Only for condominiums

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