HOA Power grab in VA General Assembly

See Washington Post Article:
http://www.washingtonpost.com/local/virginia-politics/homeowners-associations-fighting-back-in-virginia-legislature/2014/02/17/a7de19c2-9811-11e3-9616-d367fa6ea99b_story.html

I'm not sure if this is a good or bad thing. I can see both sides of this issue, but I'm not a fan of giving more "power" to HOAs.

If I'm reading the story correctly, this goes back to various court cases that basically established the tone (I think rightfully) in the courts the issue of Ultra vires in Associations and treating the Declaration as a contract (which it should be, as it is a contract).

Although the Farran,
et al. v. Olde Belhaven Towne Owners Association and Shadowood Condominium Association vs Fairfax County Redevelopment and housing authority were the more recent cases, Unit Owners Association of Buildamerica-1, A Condominium v. Harry F. Gillman is the real basis.

Basically, the argument goes (and is upheld by the VA Supreme court) that if the CC&Rs specifically don't authorize monetary penalties as a means of enforcement, then this was an intentional omission of the parties involved and therefore, monetary penalties would be beyond the powers (ultra vires) of the Board for covenant violations.

These rulings prompted the State legislator to amend VA § 55-513 and allow for monetary damages for infractions of rules/regs as they pertain to common areas only.

As we all know, without the option of monetary penalties for covenant enforcement, the Association typically has no other course but to take legal action in order to bring about compliance with the CC&Rs (note, I'm talking specifically about CC&Rs not additional rules and regs). Some members, as Chris has pointed out, won't want the Association to spend $100K to correct paint colors. Therefore, since it's typical that members want the Association to be the enforcer (even though both members and the association have the authority) but they won't want to pay for legal action - it's likely that it can be close to impossible to enforce violations of the covenants (as some members simply won't comply unless it affects their wallet).

Many of us on here have told posters, if you don't like the rules, gather support and change them. Well, it appears that many Associations (ours is not one of them) have taken Franks advice and sought change at the macro level and are lobbying to have a law adopted that will override the CC&Rs and allow the option of monetary damages.

This forum has discussed the issue in the past:

Subject: VA Associations, Do you still have the authority to use monetary penalties for violations? (March 2013)

Legal firms are just now really paying attention:

LAYING DOWN THE LAW: Enforcing Your Community’s Covenants, Rules and Regulation

The article is, in my opinion, a typical Washington post article as it doesn't provide access to the bill, mention the bill number, the name of the committee or any other information that would help the reader to properly identify the actual bill in question.

I think this is the bill: HOUSE BILL NO. 791

Here is the history: HB 791 Condominium and Property Owners' Association Acts; rule enforcement, appeals.

I haven't had time to read the whole bill. I'm trying to get ready for a Board meeting.

Thats not entirely true. In 2008, the Office of the Common Interest Community Ombudsman was created and new regulations that are part of the Virginia Administrative Code are now applicable to VA associations. I expect that this trend will continue.


True. However, as the courts in VA have ruled, since the CC&Rs (at least the one's I have seen in VA) specify how enforcement is to take place ("by any proceeding at law or in equity"), the Association can not adopt new rules that allow for monetary penalties for infractions of the Covenants as this would be in conflict with the CC&Rs.

Per VA law, the Board may still adopt monetary penalties for infractions of the rules/regs as they affect the common areas. However, this is not allowed to be applied to the actual covenants unless the CC&Rs specifically authorize monetary penalties.


In VA, they get everything [contents of disclosure package]:

"13. A copy of the current declaration, the association's articles of incorporation and bylaws, and any rules and regulations or architectural guidelines adopted by the association; "

Richard,

I just read that Associatins CC&Rs. They have the exact same language in thier CC&Rs as we do:

ARTICLE VIII
GENERAL PROVISIONS
Section 1 Enforcement

The Association, or any Owner, shall have the right to enforce, by any proceeding at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration. Failure by the Association or by any Owner to enforce any covenant or restriction herein contained shall in no event be deemed a waiver of the right to do so thereafter.

The only "charges" (taken to mean monetary penalties) in the CC&Rs are for collection of assessments.

The policy resolution I believe you are referring to would (in my opinion) be in conflict with the CC&Rs and therefore, the monetary penalties of that resolution might not be upheld if challenged. This was the case for the farrans:

In that case, the omission of a provision allowing Belhaven to impose fines as a method of enforcement shows an intent to exclude. Belhavens' Declaration provides the only methods of enforcement: a proceeding at law or in equity. Nothing in Va. Code § 55-513(B) gives Belhaven authority to exceed the power granted to it in its governing documents. As a result, the Court concluded that the Farrans have sufficiently pled that Belhaven's enactment of the Penalties Resolution was ultra vires. The demurrer is overruled as to the Penalties Resolution.

This is, in my opinion, the same case with my Association (as I pointed out in an earlier thread referenced in this thread) and, based on reading the CC&Rs of the Association you provided, would be the same case for them.

One thing I noticed about the proposed legislation is there is an upper limit on fines, a mandatory opportunity to correct and a hearing written in. These all could be a good thing in that it would eliminate fines climbing to the tens of thousands of dollars and give homeowners the opportunity to be heard.
Jeanne

To clarify, JohnC46 of SC (myself) says provide everything and anything.

Me thinks it might be time for a name change so I do not get confused with JohnB.

PS

I am the handsome one who does live in an HOA........LOL