VA Sale Disclosure Packet and Inspections

IMO, YES

Mike

Screw with my sale or whatever after 9 years of doing nothing and I will see you in court.

What kind of inspection are we talking about? Does your HOA do some kind of inspection before a house sales? Normally it's a house inspector who does the inspecting. If that is the case, HOA guidelines are usually NOT on their list to check for. Sounds strange but a home inspector or potential buyer would NOT be in possession of ARC documents. So I can imagine the fact that the home was NOT in compliance with HOA ARC conditions would be missed.

Remember a potential buyer is NOT an owner/member. They have to get the HOA documents from the courthouse or seller. The HOA is typically not responsible for providing any HOA documents to potential buyers. It can be a "courtesy" and a good idea, but NOT a requirement. The documents are considered PUBLIC except for the ARC and By-laws. Which are HOA internal documents. (Although the by-laws may be filed with the CC&R's).

The missing of the wrong windows was on the HOA board not the PM. The PM is to do what the board tells them to do. So I may recommend you all get an inspection committee going to help oversee such overlooked inspection issues.

Doctrine of Laches comes in when one party has a cause of action but delays asserting his cause without reason and the other party is prejudiced by the delay.

In this case, the person who bought the home in 2006 and is now trying to sell it is prejudiced by the association's delay. The current owner would not likely have recourse against the former owner due to the expiration of the statute of limitations.

Melissa,

VA law specifies that the Association creates a disclosure package when a home is sold.
The seller is responsible to ask for the package and pay for the package.
Statute specifies the contents of the package.
VA law binds the Association to any statement made within said package (as of the date the package is delivered) if the house is purchased.

Part of the package is a statement if there is anything on the property that is in violation of the Association governing documents. To confirm this, Associations in Virginia typically do an architectural inspection prior to making such a statement.

This process protects both the Association and the purchaser.

We had an instance where the Association issued a disclosure package.
During the home inspection, the purchaser insisted on radon abatement.
The current owner installed the abatement treatment without Association permission.
Once the Association noticed, we went to the new owner about the issue.
The new owner said "it was on the house when I purchased it"
The Association could prove (as we take pictures with our inspections) that although it was on the house when he purchased, it was not on the house when the disclosure package was issued. Hence, the issue is his.

He simply had to submit an application to resolve the issue.

However, the Board is RESPONSIBLE for said inspection.

The actual inspection is performed by an AGENT of the board.

(hence the term 'managing agent')

'Ka-Ka' happens.

Tim's wording is perfect.

This kind of response is totally unnecessary. If you're not confident or knowledgeable to comment on this, you should not. Better to Remain Silent and Be Thought a Fool than to Speak and Remove All Doubt.

Melissa - Your information is totally useless. You are off the hook.

Larry - You are out of touch.

Wow I can pick and choose my own free advice and then insult those who give? Classy... Totally...

I've been a member for about 7 years and have really enjoyed the site, until folks like you started diluting the content and value. Too bad that they don't vet more folks that establish accounts here.
Your comments were totally uncalled for and you really should not try to answer questions where you don't have solid background information and documented information from the state that is involved.
You have a great life Larry - My last word on this.

Mike,

Although that is solid advice, and likely the cause of many give and takes between individual posters, the forum would likely be poorer if we didn't learn how a similar situation would be addressed in different States.

Everyone, including myself, won't always take the time to identify, locate and read applicable statutes to each posters question. Instead, they provide an answer based on their own experiences, knowledge of their applicable statutes and, usually, some common sense. Unfortunately, those answers are not always the best answers and sometimes are simply incorrect answers.

This is why it's important for those asking questions to do their own research and verify that what they are being told makes sense based on the applicable laws of their State and the language within their governing documents.

It's also important for those who are replying to keep in mind that there may be applicable laws that invalidates some or all of the advice being offered. Perhaps even considering including a qualifier in the advice being offered (examples: "In my State . . ." ; "My Association would handle it this way . . ." or "but check your applicable statutes/governing docs to be sure . . . ")

Keep in mind that those who do respond are normally trying to be helpful, and that what is common knowledge to you may not be common knowledge to others who are offering the advice.

Mike, I do hope you continue to be a part of this forum.
I've learned a lot from you by posts provided on this forum and the e-mails we have exchanged off line.

Tim

Respectfullly, the bigger picture is that legislatures (including mine for 40+ years) have ordered these done as a matter of consumer protection.

Compliancing the 'omitted past' is a separate issue, and the 'compliance on future replacement' is one credible & consumer-friendly way to word/insert into current Certificates. Certainly more credible and consumer-friendly than now failing to disclose whatever noticed missed / in non-compliance.

After erroneous certifications, judicial outcomes in my own jurisdictions have been overall somewhat tolerant for Certifiers in error/incomplete, where an estoppelling-type certificate contains omission(s). Dealing with omissions of special assessments ( or of a separate monthly for a discrete parking unit ) for example here were punished only by deferral until the end of the current financial year.

Here it has been better to now 'fess up' and now disclose what was overlooked regardless of where the chips may fall. Indicates : let the buyer's counsel work that out, and maybe no big deal if the oversight (for example) gets handled by grand-fathering to next replacement. These certificates are a minefield.

Quick story:

PA has a similar disclosure protection for buyers. On request, HOA must issue Certificate to seller. If buyer doesn't like anything in that Certificate, she has 10 days to cancel sale and get deposit money back. Cannot be forced to go through with purchase.

A few years back, we issued a Certificate. We missed something that wasn't to spec, but didn't catch it til two day before the sale on the house was supposed to close. On advice from counsel, we issued a revised Certificate that identified the deficiency. Very messy. Lot's of yelling by seller. But it was the only way we could protect the community.

In our opinion, seller knew that he cut corners and didn't follow spec. That made us feel a bit more comfortable about the decision to follow lawyer's advice.

Self-managed associations take a risk if they complete these short of diligence or necessary skillsets.

A commercial condo's President here inspected a condo unit (amidst sale here) and issued a D.I.Y. (estoppelling type) certificate reporting a "No Structural issues" without noticing an unimproved major change to a load-bearing wall. The alteration was not some hidden nor complex change requiring a PhD in structural engineering to spot.

Days later however he sent out a notice to the Seller ordering to correct the unauthorized structural change. The deal was closed but the change not reversed.

Courts later refused to order compliance by either Seller nor Buyer. ( Any rectification would be left to the consent of the unit owner and funded by the commercial condo corporation.) A minefield even in commercial management, but check your jurisdiction's treatment.

State law may not require it, but most of the estoppel requests we get do ask about current violations. I suppose by law we could leave that section blank, but we always either note any violations or the lack thereof if asked.

Cf,

You're from VA. Mike never said that the Association never said anything.
Per VA Law, due to the error in 2006, the Association was prohibited from doing anything about it.

Mike is asking, under the requirements of the Statute, would this prohibition be lifted if the Association mentions it in the disclosure package for a new owner 10 years later.

My point being, if the board discloses the issue now in a disclosure packet and a homeowner that had submitted a purchase order retracted that order because of window violations that will apparently cost thousands of dollars to correct, that issue could potentially end up in a courtroom.

By disclosing the violation now is Mike's association expecting a new homeowner to correct the issue? If you were a homeowner looking to purchase, would you be tempted to retract your PO? Does this help the sale of homes in Mike's association?

The mistake, unfortunately, was the boards back in 2006. The board / association should swallow the cost of correcting the problem if they really want the window violation corrected.

As I've said many, many times, this is why it is so important to have noticed architectural standards committee meetings, and records of those meetings made available to the membership. If there was a meeting scheduled say monthly, and at the meeting the committee recorded that they noticed windows going in on a home without an application, the situation may be different in my opinion.

Repudiated sales or not, respectfully the worse outcome is today's 'knowing violation' of what should be inserted into these minefields.

As a buyer I would be less concerned buying into a 'fessing up' today - hopefully grandfathered - than a now deliberate omission. Mistakes happen.

There is likely NO authority to defy a legislated requirement / no authority to 'knowingly' omit required insertions.

And if a 'knowing omission' now occurs, where does that leave the next discovery of a violation of that type . .. say ; next door ?

Legislation leaves this stuff wide open the farther it departs from 'Buyer Beware'.

All,

Lets go back and summarize the issue.

In 2004/2005 Homeowner A replaced windows that did not comply.

In 2006 Homeowner B purchased the property. In accordance with VA law, the Association issued a statement that incorrectly failed to identify the window issue. The Association, per VA law, was bound to that statement and could not enforce compliance (they can ask but can not enforce).

In 200x Association contacted homeowner B about the windows. Homeowner B pointed to the Disclosure statement, the applicable law and told the Association to go away (or words to that effect).

In 2015, the Association was contacted for a disclosure statement so potential homeowner C could purchase the property.

The question is, should the Association mention this noncompliance or not.
If they mention the non-compliance, they protect the Associations rights.
If they fail to mention the non-compliance, they are continuing the problem.

Now, something I have been made aware of that others have not. It will only take $20 per window to bring the issue into compliance. However, per law, the Association can not force such a fix (regardless who might pay for it).

I suggested to make a statement similar to:

The windows currently installed on the property are not compliant with Association governing documents. When the windows are due to be replaced, the windows must confirm to Association documents in existence at the time.

I thought my suggestion was a fair compromise and shouldn't hurt the sale, as it's not saying anything has to be done to the current windows as long as they are properly maintained.

Homeowner A not cited for violation. Homeowner B not cited for violation. Associated wants to disclose to potential Homeowner C a violation exists. That could potentially cost Homeowner B a sale, and possibly end up in court. But if the association does absolutely nothing, the problem goes away on its own when any future Homeowner ever replaces the windows. In my opinion it is not worth the risk to the association.

Understood Bob and Tim.

I think we just have different points of view. My views are centered around potential financial risk to the association.

Whenever a future homeowner replaces these windows they'll already have to comply with any guidelines in place in the future (which could actually change down the road), so this problem will go away on its own. I don't see any advantage, but I do see a potential financial risk to the association (even if you win a potential court case), by putting in a disclosure packet a home has a significant violation that a "board" missed over a decade and two previous homeowners ago. Nobody views the word "violation" and gets a warm, fuzzy feeling and can't wait to sign on the dotted line. Violations typically need to be corrected sooner rather than later. Home buyers are sometimes finicky about moving into HOAs. Their decision to purchase may immediately change as a result of this information, and the current homeowner, through no fault of his own, may be financially impacted by the delay or cancellation of a potential sale.

Any current covenant and guideline restrictions in place that a potential home buyer will have to adhere to when replacing the windows should already be in the disclosure packet, so that information is already being legally disclosed. Additionally, if this situation was discussed in a board meeting and in the "records" of the association, a potential new home buyer could request and review the information, so it is already being disclosed and available. Of course, the violation should be recorded in the minutes as a result of board oversight, and some boards (especially mine) never, ever convey any of their mishaps and mistakes in the board meeting minutes.

Mike's association is not breaking any disclosure laws in my view because, unless I'm reading it wrong, no one has been cited for a violation. Violations have penalties...but who would be penalized here if a disclosure packet has the word "violation" in it and a sale is lost as a result? It would be the current homeowner, and he's done nothing wrong. How would you react if you were in his shoes and this happened to you?

Mike's association already did not "disclose" the information to the current homeowner prior to his purchase of the home...and nobody died. If laws were broken, who was penalized and what was the penalty?

If the current homeowner were not selling his house, but instead was staying and wanted to replace the windows, he'd have to comply with any guidelines currently in place, whether Mike's association had previously notified him of the problem or not before the purchase of his home.

The most important aspect of this situation in my view is exactly when Mike's board became aware of the "violation", and what actions did they take to correct the problem back in 2004-2005. If they became aware of it and voiced their concern and took steps to correct the violation where it could be recorded in the minutes, then Mike's association is currently in a good place and we wouldn't be discussing it here. The window violation would already be corrected...if it was in fact a violation. But if they cited the homeowner in 2005 with a violation, and recorded no steps to correct it, why is it a problem now? If they became aware of the problem and agreed to look the other way, and didn't record anything of the issue, that would not be good. If there is no "record" of any violation recorded anywhere prior to the sale in 2006, especially if it occurred in 2004-2005, that would be very bad.

Mike's association has obviously already made the current homeowner aware of this issue, I presume in writing. That means this homeowner is aware of material information pertaining to the windows that HE or his real estate agent should legally disclose prior to a potential sale or transaction. Should this end up in court, if Mike's association can show where they've let the homeowner know of a previous board's oversight, and what the board expects a future homeowner will need to do when replacing the windows, they need do nothing else and reduce their potential financial risk to the association.

Sorry, another thought on the issue.

One could argue that, by Statute, the Association has a requirement to make such a statement.

See earlier link that says the contents of the disclosure package shall include:

9. A statement that any improvement or alteration made to the lot, or uses made of the lot or common area assigned thereto are or are not in violation of the declaration, bylaws, rules and regulations, architectural guidelines and articles of incorporation, if any, of the association;

Bob and Tim, you two bring a lot of HOA game to the table. It is a pleasure to discuss topics on this board with people that remove emotion and stick to the facts and laws when discussing issues.

The damage to Mike's association is already done. If the windows are that bad they should have been altered long ago. In my opinion, right now I think the current homeowner could sue Mike's association for the cost of replacing those windows to sell the house "violation" free if he wanted to. If he loses a sale, he might have a case to sue for a lot more.

Unless the records of Mike's association are air tight, I'm suggesting Mike's board let it go. Do not state that it is a "violation" in a disclosure packet, unless, again, those records paint a clear paper trail showing Mike's board took the proper steps at the proper time.

The people that need the explanation as to why the board is not pursuing the issue at the current time would be all of the current homeowners, and it is an easy thing to say to them "A previous board missed this. The windows have been in place for over a decade. To try to do something about it now could land us in court, and that could be very expensive to the association. The window problem will fix itself down the road".

Le'ts just agree to disagree. I respect you both and completely understand your points.