Bill Text: VA HB684 | 2016 | Regular Session | Chaptered
Bill Title: Condominium and Property Owners' Association Acts; rental of units and lots; disclosure packets.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2016-03-25 - Governor: Acts of Assembly Chapter text (CHAP0471) [HB684 Detail]
Download: Virginia-2016-HB684-Chaptered.html
Be it enacted by the General Assembly of Virginia: 1. That §§55-79.87:1, 55-79.97, 55-79.97:1, 55-509.3:1, 55-509.4, 55-509.5, and 55-509.6 of the Code of Virginia are amended and reenacted as follows: §55-79.87:1. Rental of units. A. Except as expressly authorized in this chapter or in the
condominium instruments or as otherwise provided by law, no unit owners'
association
1. Condition or prohibit the rental of a unit to a tenant by a unit owner or make an assessment or impose a charge except as provided in §55-79.42:1; 2. Charge a rental fee, application fee, or other
processing fee of any kind in excess of $50
4. Require the unit owner to use a lease or an
addendum to the lease prepared by the unit owners' association;
6. Have the authority to evict a tenant of any unit owner or to require any unit owner to execute a power of attorney authorizing the unit owners' association to so evict. However, if the unit owner designates a person licensed under the provisions of §54.1-2106.1 as the unit owner's authorized representative with respect to any lease, the unit owners' association shall recognize such representation without a formal power of attorney, provided that the unit owners' association is given a written authorization signed by the unit owner designating such representative. Notwithstanding the foregoing, the requirements of §55-79.77 and the condominium instruments shall be satisfied before any such representative may exercise a vote on behalf of a unit owner as a proxy.
C. The provisions of this section shall not apply to units owned by the unit owners' association. §55-79.97. Resale by purchaser. A. In the event of any resale of a condominium unit by a unit owner other than the declarant, and subject to the provisions of subsection F and §55-79.87 A, the unit owner shall disclose in the contract that (i) the unit is located within a development which is subject to the Condominium Act, (ii) the Act requires the seller to obtain from the unit owners' association a resale certificate and provide it to the purchaser, (iii) the purchaser may cancel the contract within three days after receiving the resale certificate or being notified that the resale certificate will not be available, (iv) if the purchaser has received the resale certificate, the purchaser has a right to request a resale certificate update or financial update in accordance with § 55-79.97:1, as appropriate, and (v) the right to receive the resale certificate and the right to cancel the contract are waived conclusively if not exercised before settlement. For purposes of clause (iii), the resale certificate shall be deemed not to be available if (a) a current annual report has not been filed by the unit owners' association with either the State Corporation Commission pursuant to §13.1-936 or the Common Interest Community Board pursuant to § 55-79.93:1, (b) the seller has made a written request to the unit owners' association that the resale certificate be provided and no such resale certificate has been received within 14 days in accordance with subsection C, or (c) written notice has been provided by the unit owners' association that a resale certificate is not available. B. If the contract does not contain the disclosure required by subsection A, the purchaser's sole remedy is to cancel the contract prior to settlement. C. The information contained in the resale certificate shall
be current as of a date specified on the resale certificate. A resale
certificate update or a financial update may be requested as provided in §
55-79.97:1, as appropriate. The purchaser may cancel the contract (i) within
three days after the date of the contract, if the purchaser receives the resale
certificate or is notified that the resale certificate will not be available
on or before the date that the purchaser signs the contract; (ii) within three
days after receiving the resale certificate if the resale certificate or
notice that the resale certificate will not be available is hand delivered,
delivered by electronic means, or delivered by a commercial overnight delivery
service or the United Notice of cancellation shall be provided to the unit owner or his agent by one of the following methods: a. Hand delivery; b. United States mail, postage prepaid, provided the sender retains sufficient proof of mailing, which may be either a United States postal certificate of mailing or a certificate of service prepared by the sender confirming such mailing; c. Electronic means provided the sender retains sufficient proof of the electronic delivery, which may be an electronic receipt of delivery, a confirmation that the notice was sent by facsimile, or a certificate of service prepared by the sender confirming the electronic delivery; or d. Overnight delivery using a commercial service or the United States Postal Service. In the event of a dispute, the sender shall have the burden to demonstrate delivery of the notice of cancellation. Such cancellation shall be without penalty, and the unit owner shall cause any deposit to be returned promptly to the purchaser. A resale certificate shall include the following: 1. An appropriate statement pursuant to subsection H of § 55-79.84 which need not be notarized and, if applicable, an appropriate statement pursuant to §55-79.85; 2. A statement of any expenditure of funds approved by the unit owners' association or the executive organ which shall require an assessment in addition to the regular assessment during the current or the immediately succeeding fiscal year; 3. A statement, including the amount, of all assessments and any other fees or charges currently imposed by the unit owners' association, together with any known post-closing fee charged by the common interest community manager, if any, and associated with the purchase, disposition and maintenance of the condominium unit and the use of the common elements, and the status of the account; 4. A statement whether there is any other entity or facility to which the unit owner may be liable for fees or other charges; 5. The current reserve study report or a summary thereof, a statement of the status and amount of any reserve or replacement fund and any portion of the fund designated for any specified project by the executive organ; 6. A copy of the unit owners' association's current budget or a summary thereof prepared by the unit owners' association and a copy of the statement of its financial position (balance sheet) for the last fiscal year for which a statement is available, including a statement of the balance due of any outstanding loans of the unit owners' association; 7. A statement of the nature and status of any pending suits or unpaid judgments to which the unit owners' association is a party which either could or would have a material impact on the unit owners' association or the unit owners or which relates to the unit being purchased; 8. A statement setting forth what insurance coverage is provided for all unit owners by the unit owners' association, including the fidelity bond maintained by the unit owners' association, and what additional insurance coverage would normally be secured by each individual unit owner; 9. A statement that any improvements or alterations made to the unit, or the limited common elements assigned thereto, are or are not in violation of the condominium instruments; 10. A copy of the current bylaws, rules and regulations and architectural guidelines adopted by the unit owners' association and the amendments thereto; 11. A statement of whether the condominium or any portion thereof is located within a development subject to the Property Owners' Association Act (§55-508 et seq.) of Chapter 26 of this title; 12. A copy of the notice given to the unit owner by the unit owners' association of any current or pending rule or architectural violation; 13. A copy of any approved minutes of the executive organ and unit owners' association meetings for the six calendar months preceding the request for the resale certificate; 14. Certification that the unit owners' association has filed with the Common Interest Community Board the annual report required by §55-79.93:1; which certification shall indicate the filing number assigned by the Common Interest Community Board and the expiration date of such filing; 15. A statement of any limitation on the number of persons who may occupy a unit as a dwelling; 16. A statement setting forth any restrictions, limitation or prohibition on the right of a unit owner to display the flag of the United States, including, but not limited to reasonable restrictions as to the size, time, place, and manner of placement or display of such flag; 17. A statement setting forth any restriction, limitation, or prohibition on the right of a unit owner to install or use solar energy collection devices on the unit owner's property; and 18. A statement indicating any known project approvals currently in effect issued by secondary mortgage market agencies. Failure to receive a resale certificate shall not excuse any failure to comply with the provisions of the condominium instruments, articles of incorporation, or rules or regulations. The resale certificate shall be delivered in accordance with
the written request and instructions of the seller or D. The seller or E. Subject to the provisions of §55-79.87, but notwithstanding any other provisions of this chapter, the provisions and requirements of this section shall apply to any such resale of a condominium unit created under the provisions of the Horizontal Property Act (§55-79.1 et seq.). F. The resale certificate required by this section need not be provided in the case of: 1. A disposition of a unit by gift; 2. A disposition of a unit pursuant to court order if the court so directs; 3. A disposition of a unit by foreclosure or deed in lieu of foreclosure; or 4. A disposition of a unit by a sale at auction, when the resale certificate was made available as part of the auction package for prospective purchasers prior to the auction. G. In any transaction in which a resale certificate is required and a trustee acts as the seller in the sale or resale of a unit, the trustee shall obtain the resale certificate from the unit owners' association and provide the resale certificate to the purchaser. H. For purposes of this chapter: "Delivery" means that the resale certificate is delivered to the purchaser or purchaser's authorized agent by one of the methods specified in this section. "Purchaser's authorized agent" means any person designated by such purchaser in a ratified real estate contract for purchase and sale of residential real property or other writing designating such agent. "Receives, received, or receiving" the resale certificate means that the purchaser or purchaser's authorized agent has received the resale certificate by one of the methods specified in this section. "Seller's authorized agent" means a person designated by such seller in a ratified real estate contract for purchase and sale of residential real property or other writing designating such agent. I. Unless otherwise provided in the ratified real estate contract or other writing, delivery to the purchaser's authorized agent shall require delivery to such agent and not to a person other than such agent. Delivery of the resale certificate may be made by the unit owner or the seller's authorized agent. J. If the unit is governed by more than one association, the purchaser's right of cancellation may be exercised within the required time frames following delivery of the last resale certificate or disclosure packet. §55-79.97:1. Fees for resale certificate. A. The unit owners' association may charge fees as authorized by this section for the inspection of the property, the preparation and issuance of the resale certificate required by §55-79.97, and for such other services as are set out in this section. Nothing in this chapter shall be construed to authorize the unit owners' association or common interest community manager to charge an inspection fee for a unit except as provided in this section. B. A reasonable fee may be charged by the preparer of the resale certificate as follows for: 1. The inspection of the unit, as authorized in the declaration and as required to prepare the resale certificate, a fee not to exceed $100; 2. The preparation and delivery of the resale certificate in
(i) paper format, a fee not to exceed $150 for no more than two hard copies, or
(ii) electronic format, a fee not to exceed a total of $125, for an electronic
copy to each of the following named in the request: the seller, the seller's
authorized agent, the purchaser, the purchaser's authorized agent, and not more
than one other person designated by the 3. At the option of the seller or 4. At the option of the seller or 5. At the option of the seller or 6. A post-closing fee to the purchaser of the unit, collected at settlement, for the purpose of establishing the purchaser as the owner of the unit in the records of the unit owners' association, a fee not to exceed $50. Neither the unit owners' association nor its common interest
community manager shall require cash, check, certified funds, or credit card
payments at the time the request for the resale certificate is made. The resale
certificate shall state that all fees and costs for the resale certificate
shall be the personal obligation of the unit owner and shall be an assessment
against the unit and collectible as any other assessment in accordance with the
provisions of the condominium instruments and §55-79.83, if not paid at
settlement or within For purposes of this section, an expedite fee shall only be charged if the inspection and preparation of delivery of the resale certificate are completed within five business days of the request for a resale certificate. C. No fees other than those specified in this section, and as
limited by this section, shall be charged by the unit owners' association or
its common interest community manager for compliance with the duties and
responsibilities of the unit owners' association under this section. No
additional fee shall be charged for access to the unit owners' association's or
common interest community manager's website. The unit owners' association or
its common interest community manager shall publish and make available in paper
or electronic format, or both, a schedule of the applicable fees so that the
seller or D. Any fees charged pursuant to this section shall be
collected at the time settlement occurs on the sale of the unit and shall be
due and payable out of the settlement proceeds in accordance with this section.
The seller shall be responsible for all costs associated with the preparation
and delivery of the resale certificate, except for the costs of any resale
certificate update or financial update, which costs shall be the responsibility
of the E. If settlement does not occur within F. The maximum allowable fees charged in accordance with this section shall adjust every five years, as of January 1 of that year, in an amount equal to the annual increases for that five-year period in the United States Average Consumer Price Index for all items, all urban consumers (CPI-U), as published by the Bureau of Labor Statistics of the U.S. Department of Labor. G. If a resale certificate has been issued within the
preceding 12-month period, a person specified in the written instructions of
the seller or H. The settlement agent may request a financial update. The I. A reasonable fee for the resale certificate update or
financial update may be charged by the preparer, not to exceed $50. At the
option of the purchaser or J. No unit owners' association or common interest community
manager may require the K. When a resale certificate has been delivered as required by §55-79.97, the unit owners' association shall, as to the purchaser, be bound by the statements set forth therein as to the status of the assessment account and the status of the unit with respect to any violation of the condominium instruments as of the date of the statement unless the purchaser had actual knowledge that the contents of the resale certificate were in error. L. If the unit owners' association or its common interest community manager has been requested in writing to furnish the resale certificate required by §55-79.97, failure to provide the resale certificate substantially in the form provided in this section shall be deemed a waiver of any claim for delinquent assessments or of any violation of the declaration, bylaws, rules and regulations, or architectural guidelines existing as of the date of the request with respect to the subject unit. The preparer of the resale certificate shall be liable to the seller in an amount equal to the actual damages sustained by the seller in an amount not to exceed $1,000. The purchaser shall nevertheless be obligated to abide by the condominium instruments, rules and regulations, and architectural guidelines of the unit owners' association as to all matters arising after the date of the settlement of the sale. §55-509.3:1. Rental of lots. A. Except as expressly authorized in this chapter or in the
declaration or as otherwise provided by law
1. Condition or prohibit the rental to a tenant of a lot by a lot owner or make an assessment or impose a charge except as provided in § 55-509.3; 2. Charge a rental fee, application fee, or other
processing fee of any kind in excess of $50
4. Require the lot owner to use a lease or an
addendum to the lease prepared by the association;
6. Have the authority to evict a tenant of any lot owner or to require any lot owner to execute a power of attorney authorizing the association to so evict. However, if the lot owner designates a person licensed under the provisions of §54.1-2106.1 as the lot owner's authorized representative with respect to any lease, the association shall recognize such representation without a formal power of attorney, provided that the association is given a written authorization signed by the lot owner designating such representative. Notwithstanding the foregoing, the requirements of §55-515 and the declaration shall be satisfied before any such representative may exercise a vote on behalf of a lot owner as a proxy.
C. The provisions of this section shall not apply to lots owned by the association. §55-509.4. Contract disclosure statement; right of cancellation. A. Subject to the provisions of subsection A of §55-509.10, For purposes of clause (iii), the association disclosure packet shall be deemed not to be available if (a) a current annual report has not been filed by the association with either the State Corporation Commission pursuant to §13.1-936 or with the Common Interest Community Board pursuant to §55-516.1, (b) the seller has made a written request to the association that the packet be provided and no such packet has been received within 14 days in accordance with subsection A of §55-509.5, or (c) written notice has been provided by the association that a packet is not available. B. If the contract does not contain the disclosure required by subsection A, the purchaser's sole remedy is to cancel the contract prior to settlement. C. The information contained in the association disclosure
packet shall be current as of a date specified on the association disclosure
packet prepared in accordance with this section; however, a disclosure packet
update or financial update may be requested in accordance with subsection G of
§55-509.6 or subsection C of §55-509.7, as appropriate. The purchaser may
cancel the contract: (i) within three days after the date of the contract, if
on or before the date that the purchaser signs the contract, the purchaser
receives the association disclosure packet or is notified that the association
disclosure packet will not be available; (ii) within three days after receiving
the association disclosure packet if the association disclosure packet or
notice that the association disclosure packet will not be available is hand
delivered, delivered by electronic means, or delivered by a commercial
overnight delivery service or the United Notice of cancellation shall be provided to the lot owner or his agent by one of the following methods: 1. Hand delivery; 2. United States mail, postage prepaid, provided the sender retains sufficient proof of mailing, which may be either a United States postal certificate of mailing or a certificate of service prepared by the sender confirming such mailing; 3. Electronic means provided the sender retains sufficient proof of the electronic delivery, which may be an electronic receipt of delivery, a confirmation that the notice was sent by facsimile, or a certificate of service prepared by the sender confirming the electronic delivery; or 4. Overnight delivery using a commercial service or the United States Postal Service. In the event of a dispute, the sender shall have the burden to demonstrate delivery of the notice of cancellation. Such cancellation shall be without penalty, and the seller shall cause any deposit to be returned promptly to the purchaser. D. Whenever any contract is canceled based on a failure to comply with subsection A or C or pursuant to subsection B, any deposit or escrowed funds shall be returned within 30 days of the cancellation, unless the parties to the contract specify in writing a shorter period. E. Any rights of the purchaser to cancel the contract provided by this chapter are waived conclusively if not exercised prior to settlement. F. Except as expressly provided in this chapter, the provisions of this section and §55-509.5 may not be varied by agreement, and the rights conferred by this section and §55-509.5 may not be waived. G. For purposes of this chapter: "Delivery" means that the disclosure packet is delivered to the purchaser or purchaser's authorized agent by one of the methods specified in this section. "Purchaser's authorized agent" means any person designated by such purchaser in a ratified real estate contract for purchase and sale of residential real property or other writing designating such agent. "Receives, received, or receiving" the disclosure packet means that the purchaser or purchaser's authorized agent has received the disclosure packet by one of the methods specified in this section. "Seller's authorized agent" means a person designated by such seller in a ratified real estate contract for purchase and sale of residential real property or other writing designating such agent. H. Unless otherwise provided in the ratified real estate contract or other writing, delivery to the purchaser's authorized agent shall require delivery to such agent and not to a person other than such agent. Delivery of the disclosure packet may be made by the lot owner or the lot owner's authorized agent. I. If the lot is governed by more than one association, the purchaser's right of cancellation may be exercised within the required time frames following delivery of the last disclosure packet or resale certificate. §55-509.5. Contents of association disclosure packet; delivery of packet. A. The association shall deliver, within 14 days after receipt
of a written request and instructions by a seller or 1. The name of the association and, if incorporated, the state in which the association is incorporated and the name and address of its registered agent in Virginia; 2. A statement of any expenditure of funds approved by the association or the board of directors that shall require an assessment in addition to the regular assessment during the current year or the immediately succeeding fiscal year; 3. A statement, including the amount of all assessments and any other mandatory fees or charges currently imposed by the association, together with any post-closing fee charged by the common interest community manager, if any, and associated with the purchase, disposition, and maintenance of the lot and to the right of use of common areas, and the status of the account; 4. A statement of whether there is any other entity or facility to which the lot owner may be liable for fees or other charges; 5. The current reserve study report or summary thereof, a statement of the status and amount of any reserve or replacement fund, and any portion of the fund allocated by the board of directors for a specified project; 6. A copy of the association's current budget or a summary thereof prepared by the association, and a copy of its statement of income and expenses or statement of its financial position (balance sheet) for the last fiscal year for which such statement is available, including a statement of the balance due of any outstanding loans of the association; 7. A statement of the nature and status of any pending suit or unpaid judgment to which the association is a party and that either could or would have a material impact on the association or its members or that relates to the lot being purchased; 8. A statement setting forth what insurance coverage is provided for all lot owners by the association, including the fidelity bond maintained by the association, and what additional insurance would normally be secured by each individual lot owner; 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; 10. A statement setting forth any restriction, limitation, or prohibition on the right of a lot owner to place a sign on the owner's lot advertising the lot for sale; 11. A statement setting forth any restriction, limitation, or prohibition on the right of a lot owner to display any flag on the owner's lot, including but not limited to reasonable restrictions as to the size, place, and manner of placement or display of such flag and the installation of any flagpole or similar structure necessary to display such flag; 12. A statement setting forth any restriction, limitation, or prohibition on the right of a lot owner to install or use solar energy collection devices on the owner's property; 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; 14. A copy of any approved minutes of the board of directors and association meetings for the six calendar months preceding the request for the disclosure packet; 15. A copy of the notice given to the lot owner by the association of any current or pending rule or architectural violation; 16. A copy of the fully completed one-page cover sheet developed by the Common Interest Community Board pursuant to §54.1-2350; 17. Certification that the association has filed with the Common Interest Community Board the annual report required by §55-516.1, which certification shall indicate the filing number assigned by the Common Interest Community Board, and the expiration date of such filing; and 18. A statement indicating any known project approvals currently in effect issued by secondary mortgage market agencies. B. Failure to receive copies of an association disclosure packet shall not excuse any failure to comply with the provisions of the declaration, articles of incorporation, bylaws, or rules or regulations. C. The disclosure packet shall be delivered in accordance with
the written request and instructions of the seller or D. The seller or §55-509.6. Fees for disclosure packet; professionally managed associations. A. A professionally managed association or its common interest
community manager may charge certain fees as authorized by this section for the
inspection of the property, the preparation and issuance of the disclosure
packet required by §55-509.5, and for such other services as set out in this
section. The seller or B. A reasonable fee may be charged by the preparer as follows for: 1. The inspection of the exterior of the dwelling unit and the lot, as authorized in the declaration and as required to prepare the association disclosure packet, a fee not to exceed $100; 2. The preparation and delivery of the disclosure packet in
(i) paper format, a fee not to exceed $150 for no more than two hard copies or
(ii) electronic format, a fee not to exceed a total of $125 for an electronic
copy to each of the following named in the request: the seller, the seller's
authorized agent, the purchaser, the purchaser's authorized agent, and not more
than one other person designated by the 3. At the option of the seller or 4. At the option of the seller or 5. At the option of the seller or 6. A post-closing fee to the purchaser of the property, collected at settlement, for the purpose of establishing the purchaser as the owner of the property in the records of the association, a fee not to exceed $50. Except as otherwise provided in subsection E, neither the
association nor its common interest community manager shall require cash,
check, certified funds or credit card payments at the time the request for the
disclosure packet is made. The disclosure packet shall state that all fees and
costs for the disclosure packet shall be the personal obligation of the lot
owner and shall be an assessment against the lot and collectible as any other
assessment in accordance with the provisions of the declaration and §55-516,
if not paid at settlement or within For purposes of this section, an expedite fee shall only be charged if the inspection and preparation of delivery of the disclosure packet are completed within five business days of the request for a disclosure packet. C. No fees other than those specified in this section, and as
limited by this section, shall be charged by the association or its common
interest community manager for compliance with the duties and responsibilities
of the association under this chapter. No additional fee shall be charged for
access to the association's or common interest community manager's website. The
association or its common interest community manager shall publish and make
available in paper or electronic format, or both, a schedule of the applicable
fees so the seller or D. Any fees charged pursuant to this section shall be
collected at the time of settlement on the sale of the lot and shall be due and
payable out of the settlement proceeds in accordance with this section. The
settlement agent shall escrow a sum sufficient to pay such costs of the seller
at settlement. The seller shall be responsible for all costs associated with
the preparation and delivery of the association disclosure packet, except for
the costs of any disclosure packet update or financial update, which costs
shall be the responsibility of the E. If settlement does not occur within F. The maximum allowable fees charged in accordance with this section shall adjust every five years, as of January 1 of that year, in an amount equal to the annual increases for that five-year period in the United States Average Consumer Price Index for all items, all urban consumers (CPI-U), as published by the Bureau of Labor Statistics of the U.S. Department of Labor. G. If an association disclosure packet has been issued for a
lot within the preceding 12-month period, a person specified in the written
instructions of the seller or H. The settlement agent may request a financial update. The I. A reasonable fee for the disclosure packet update or
financial update may be charged by the preparer not to exceed $50. At the
option of the purchaser or J. No association or common interest community manager may
require the K. When an association disclosure packet has been delivered as required by §55-509.5, the association shall, as to the purchaser, be bound by the statements set forth therein as to the status of the assessment account and the status of the lot with respect to any violation of the declaration, bylaws, rules and regulations, architectural guidelines and articles of incorporation, if any, of the association as of the date of the statement unless the purchaser had actual knowledge that the contents of the disclosure packet were in error. L. If the association or its common interest community manager has been requested in writing to furnish the association disclosure packet required by §55-509.5, failure to provide the association disclosure packet substantially in the form provided in this section shall be deemed a waiver of any claim for delinquent assessments or of any violation of the declaration, bylaws, rules and regulations, or architectural guidelines existing as of the date of the request with respect to the subject lot. The preparer of the association disclosure packet shall be liable to the seller in an amount equal to the actual damages sustained by the seller in an amount not to exceed $1,000. The purchaser shall nevertheless be obligated to abide by the declaration, bylaws, rules and regulations, and architectural guidelines of the association as to all matters arising after the date of the settlement of the sale. |