New Virginia State Law on inspection for HOA disclosure

Yes they can. Here's the link to the state law:

http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+55-512

See section 15B

The management company can also charge up to $350 for preparing the disclosure and re-sale packets under a new provision just passed. See the article in this newsletter:

http://www.reesbroome.com/associations/files/newsletters/May_2007.pdf

Joe

Joseph - You're a life-saver and a saint!
Thanks very much.

You're right. Quickest way to handle it is to simply tell them you can't find any justification for the charge under the contract or the state laws and to provide you with the justification if they want to get paid.

Joe

Jade, In the past, it was always my understanding that the seller wrote a check for $100 and sent this to the PM when they requested a disclosure package. Now under the new law,.. this appears to be a little different.

Did you see the section referenced in the above text on how the "fee is to be paid by the unit owners association to the managing agent promptly and it shall be assessed as an assessment against the unit or lot."?

Joseph, thanks for the link to the Rees Broome newsletter. I found it interesting and found the new cost downright incredible (but only if you have a PM can it be charged -- I wonder if that is really true, there are companies out there that just do these packets, they don't get this windfall?)

Mike, the $50 update charge has "always" been there (or at least has been there for a number of years). You can find it in 55-512 B. "The fee shall reflect the actual cost incurred by the association in providing such assurances but shall not exceed $0.10 per page of copying costs or a total of $50 for all costs incurred in updating the association disclosure packet." When they increased the amount of time that the packet is good for, it became sensible for people who really wanted to be covered to ask for an update. If the information changes between when the packet was first provided and when the house is sold and no update is asked for, the new owner can be held responsible for any violations.

Usually these laws do go into effect on 1 July in Va. Certainly the website has not been changed to reflect the new code. I couldn't find out whether the governor had signed it yet.

Jade, You hit another one of my hot buttons when you mentioned addressing "notification of HOA status within a community". You would not believe how many realtor assisted sales and private sales actually take place where the seller never asks for the HOA disclosure, the buyer never asked for the disclosure, the PM is not notified as to a change in ownership, the new Homeowner is suprised to learn that there are special rules, and I have no idea if they even know that they are in an HOA. It never ceases to amaze me. It's not just a few. It's a lot! believe me.

No problem Mike,

To you and Jade, yes this Act was originally passed so that people would know what they are getting into with an HOA. To make us feel a little bit better for the extra work, they said it would help us as then we would know who is moving in. Somehow, even though it is the law that people are supposed to ask for it, it doesn't always happen. There are things in the act that give the association the ability to assess penalties for covenant infractions and also in theory protect the homeowner by requiring open meetings, etc. etc. Unfortunately there is no teeth in the bill in that regard. Lots of stuff and it changes nearly every year.

I found the changes as signed by the governor -- apparently it will go into effect on 1 July, but as I read it unless you have a clause in your contract that says the managing agent gets $325 they don't. The whole payment thing is peculiar, it sounds like you have to pay the agent before the person pays you though I suppose what you do is just not request it until you get the money in your hot little hands. I also don't see the CPI part that Rees Broome is talking about but I was on the phone trying to read and ttalk at the same time.
http://leg1.state.va.us/cgi-bin/legp504.exe?071+ful+CHAP0712

Definitely you will continue to see people not getting the information. Sometimes I know the real estate agents keep them and then it is flashed before the person at closing. They have no clue then, too many papers are floating around. Mortgage companies have told me they have the packets in their possession -- if they have it the new homeowner doesn't. And sometimes when the mortgage company calls me I have told them they never asked for a packet and the responsible ones talk to the closing attorney about that. The smaller real estate firms sometimes just skip it. We did a survey and less than 60% had gotten the packet or knew that they had gotten them.

I did ask a friend on the local CAI legislative committee about the $325 fee as it sure seems unfair and like one group is being singled out to get more money. (There are firms that specialize in making the packet and they wouldn't get this windfall) She said our CAI Legislative Action Committee (VALAC) was against it, and that it was promoted by VOCAM (I gather a VA. organization of community managers). No wonder it favors them, huh? In theory the $325 is still cost, but then wonders how the management firms are going to put it on their website -- a list of properties they manage and how much a packet costs for each? Call me a cynic, but I think magically the costs will be $325 for all myself. I do wonder whether the people in communities with multiple associations will get a number of $325 fees piled on them. (i.e. the umbrella association setup).

1. Yes, I am in Virginia. The POAA states that in the contract there must be the disclosure that the house is part of an HOA and the seller must request a packet. It does not say that the buyer must take the packet from the seller. Of course in the houses that I am talking about the seller doesn't request the packet either. I do not know how they do this as of course I am not privy to the contract itself. It often happens in a situation where the seller is selling sort of under the table -- i.e. the house never actually goes on the market either.

2. When I read it, I didn't see that the seller did not have to pay for it up front. It is definitely worded oddly, but it seems to me the HOA could still say they would not ask for it from the PM until they got the money from the seller.
Actually we have never insisted on that and often just get the money when they pick up the packet. Remember this was written by the PM group so they just made it stronger that they would get paid it seems. Odd that they go through the machinations about how you could not insist on cashier's checks, etc. though. Maybe some associations did not pay them until the check cleared.

3.I would think the electronic version would be cheaper also as there are no printing costs with it and the packet is supposed to reflect actual costs. What is actually happening is that the third parties have not had to justify their costs. So, if the association produces the packet themselves they have to justify the cost, but if they have someone else do it for them they justify the cost by the bill and that person doesn't have to justify the cost. In fact when the Act first got passed the advice by CAI in our area was to hire it out so you didn't have to deal with justification. Crummy way to run a railroad. Anyhow, in the best of all possible worlds the electronic version would be considerably cheaper I would think.

You are correct OCR-ing the docs in is a real job. We did it some 15 years or more ago, but were prompted a lot by our docs looked awful -- copies of copies of typewritten things, different fonts, etc. It is wonderful to have them in electronic form. I almost always use the electronic version to look things up. We had someone with a work quality scanner and it took us a lot of effort to catch all the typos that were introduced. Better copy goes better of course! Perhaps you have two people in your association with a real editor's eye that could do it. The person who did the original scanning for us was quite an exacting sort, and I am a pretty fair editor. As I say lots of work but well worth it.

Go here for a summary of the changes to the Act:

http://www.dpor.virginia.gov/dporweb/prg_legchanges.cfm

POA Act see 55-512

Condo Act see 55-79.97

Joe

You know when I was going through the act piece by piece it seemed to me that the regulations on flags had actually been loosened. In the actual language they took out that the flag of the state, military branches, etc. were covered. They have had that displaying on the unit holder's property was subject to written reasonable rules. The only thing that they seem to have added was that perhaps there is more of a right to display it on common property before -- the association has to write reasonable rules to prevent it whereas before they could just say "this is our land, you can't display a flag on it". Is that the interpretation of others as to the effect of the change in the flag display wording?