Happy Summer! It is hard to believe that 2019 is half over. July 1 means new laws become effective in Virginia.
During the 2019 session of the Virginia General Assembly, CAI’s Virginia Legislative Action Committee (VALAC) monitored over 75 bills that directly or indirectly impacted community associations. Of those 75 bills, VALAC pursued 20, and, fortunately, there are only a few that passed. The bills with the most direct impact on community associations are listed below.
- Home-Based Businesses (HB1853/SB1537).
This bill adds a provision to Va. Code Section 55-513.2 that considers home-based child care services to be a residential use in localities that classify home-based child care services an accessory or ancillary under the locality’s zoning ordinance. However, property owners’ associations (POAs) may expressly either (i) prohibit or restrict such use in the declaration or (ii) restrict in the bylaws or rules the time, place and manner of operation of such use and the size, place, duration, and manner of placement or display of any signs on the lot related to such use. This provision does not apply to condominiums or cooperatives.
Amends: Va. Code § 55-513.2.
- Reserves for Capital Components (HB2030/SB1538)
Perhaps one of the most significant legislative changes of 2019 pertains to reserves for capital components. Unless the recorded documents provide otherwise, the Board is required to make available to owners either the association’s annual budget or a summary of the annual budget prior to the beginning of each fiscal year.
In addition, if the reserve study requires budgeting for reserves, the annual budget made available to the owners must also include a statement that indicates the amount of reserves recommended in the reserve study as well as the amount of current cash available for replacement of the reserves.
The purpose of the legislative change is two-fold: (1) to insure all owners are provided full financial disclosure and (2) to prevent underfunding of replacement reserve accounts.
Amends Va. Code: §§ 55-79.83:1, 55-471.1, 55-514.1.
- Delivery of Condominium Resale Certificates & POA Disclosure Packets (HB2385/SB1580)
Beginning July 1, 2019, a real estate contract may be canceled if the purchaser receives a resale certificate or disclosure packet that does not contain information required by the Condominium Act or the Property Owners’ Association Act. Importantly, the legislative change does not extend the amount of time the purchaser has to cancel the contract.
Amends Va. Code: §§ 55-79.97, 55-509.4.
- Transition from Declarant to Owner Control, Stormwater Facilities (SB1756)
Upon transition from declarant control, the declarant/developer is required to deliver to the president of the association or his designated agent an inventory and description of stormwater facilities located on the common elements/areas for which the association has, or may have, maintenance, repair, or replacement responsibility. In addition, the declarant/developer must also provide the requirements for the maintenance of such facilities.
Amends Va. Code: §§ 55-79.74, 55-509.2
- Notice of Property Owners Association Meetings by Email (HB2694)
Members of POAs may elect to receive association meeting notices by electronic mail provided that the member has elected to receive such notice in such manner. If the electronic mail notice is returned to the sender as undeliverable, then the notice must subsequently be sent to the member by United States mail.
Amends Va. Code: § 55-510.
- Meetings of Condominium Associations, Proxy Voting (HB2647)
Any proxy is void if not signed by or on behalf of the unit owner. In addition, if the unit owner is more than one person, the proxy may be revoked if any such unit owner objects to the proxy at or prior to the meeting.
Although the amended provision creates a lower standard for who can sign a proxy on behalf of an owner, the association bylaws can establish higher standards for persons who can sign on behalf of an owner. This new provision affects condominiums only.
Amends Va. Code: § 55-79.77.
- Association Annual Report Fees and Common Interest Community Manager License Fees (HB 2081)
Fees for association annual reports and CIC manager license applications and renewals will no longer be set by a fixed fee, but rather, fees will be set by the CIC Board based on a percentage of the total amount of funds received by the CIC Board on a biannual basis. The CICB in turn voted to eliminate annual assessment payments as a requirement for manager licensure and association registration.
Amends Va. Code: §§ 54.1-2349, 55-79.93:1, 55-504.1, 55-509.6, 55-509.7, 55-516.1, 55-529.
On the Horizon: (SB1080) Title 55 will be rewritten, effective October 1, 2019, in a new Title 55.1. The acts regarding common interest communities (condominium, property owners, cooperatives, time-shares) will be reorganized in Title 55.1 to be more logical, remove obsolete and duplicate provisions and improve the structure and clarity of the statutes. While there will be some wording changes, there is not supposed to be any substantive changes to the provisions. The Common Interest Community Management Information Fund (Va. Code Section 55-528, et seq.) is expected to be moved to Title 54.1.