2020 Legislative Changes Affecting Virginia Community Associations
The 2020 legislative session was notable for a few reasons. First, the Democrats held the majority of seats in both houses of the General Assembly for the first time in recent history. Second, the legislature also took action to address the impacts of COVID-19, which has affected virtually every aspect of our society, including community associations. CAI's Virginia Legislative Action Committee monitored numerous bills on diverse topics that had the potential to directly or indirectly affect community associations. new laws with the most direct impact on community associations.
- Virtual Board Meetings During Declared States of Emergency
(HB29/Budget Bill Governor's Amendment 28; HB30/Budget Bill Governor's Amendment 137)
These two amendments give boards a useful tool to meet virtually when the Governor has declared a state of emergency, such as during the COVID-19 pandemic. The amendments allow a common interest community board to meet by electronic communication without having two members physically present (as required by the Condominium Act and the Property Owners' Association Act) at the meeting location stated in the notice when the Governor has declared a state of emergency so long as:
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- the nature of the emergency makes it impracticable or unsafe for the board to assemble in a single location;
- the purpose of the meeting is to discuss or transact the business statutorily required or necessary to continue operations of the association and the discharge of its lawful purposes, duties, and responsibilities; and
- the board distributes minutes of the meeting to its members using the same method it used to provide notice of the board meeting to its members.
The board is also required to (1) give notice of the board meeting to the association members using the best available method in light of the emergency and that notice must be given at the same time as notice is provided to members of the board; and (2) make arrangements for association members to access the meeting electronically, including, to the extent practicable, videoconferencing technology and, if the means of communication allow, provide members with an opportunity to comment.
Further, the minutes of the meeting must state the nature of the emergency, the fact that the meeting was held by electronic communication and the type of electronic communication used.
Notably, these amendments are temporary, available only during a Governor-declared state of emergency and last only through June 30, 2022, unless the General Assembly decides to modify, extend or make permanent this provision. In addition, unlike the other changes discussed in this article, this provision was embedded in budget bills so it became effective on April 24, 2020, when Governor Northam signed the first of two budget bills as amended, instead of on July 1, 2020. For more information, see our previous article on these amendments.
Text of amendments: HB29/Budget Bill Governor's Amendment 28; HB30/Budget Bill Governor's Amendment 137
- Real Estate Contract Right of Cancellation Extended (HB176/SB672)
Beginning July 1, 2020, real estate purchasers have the opportunity to extend the statutory cancellation period by a ratified real estate contract if the purchaser receives the packet, notice that the packet will not be available, or the packet does not conform to the statutory requirements ("right to cancel event"). The bills define "ratified real estate contract" to include any addendum to such contract.
If extended by a ratified real estate contract, a purchaser may now cancel the contract up to seven days after the right to cancel event, which is hand delivered, delivered by electronic means or delivered by commercial overnight delivery service or United States Postal Service, and a receipt is obtained; or up to ten days after the postmark date of the packet, of the right to cancel event, which is sent by U.S. Mail. The statutory right to cancel within three days (for hand, electronic and overnight delivery) and six days (for regular mail delivery) of the right to cancel event, even without a contractual provision, remain in effect.
- Reasonable Restrictions on Solar Power (HB414/SB504)
Associations already are prohibited from preventing an owner from installing an energy collection device on such owner's property unless the association's recorded declaration establishes such prohibition. The statute already permits associations the right to promulgate "reasonable restrictions" concerning the size, place, and manner of placement of such solar energy collection devices on an owner's property.
As of July 1, 2020, the bills clarify what qualifies as a reasonable restriction. A restriction shall not be deemed reasonable if it:
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- increases the costs of the installation of the solar energy collection device by 5% over the projected cost of the initially proposed installation, or
- reduces the energy production by the solar energy collection device by 10% below the projected energy production of the initially proposed installation.
An owner will be required to provide documentation from an independent solar panel design specialist to show that the association's restriction is not reasonable according to the criteria set forth in (i) or (ii) above. The independent solar panel design specialist must be certified by the North American Board of Certified Energy Practitioners and licensed in Virginia.
Amends: Va. Code § 67-701 (Virginia Energy Plan)
- Disclosure Packet Requirement to Include Any Restrictions on Display of Political Signs on Lots (HB720)
A property owners' association's disclosure packet must contain a statement setting forth any restrictions as to the size, place, duration, or manner of placement or display of political signs by a lot owner on his or her lot.
Amends: Va. Code §§ 55.1-1809 and 55.1-1814 (Virginia Property Owners' Association Act)
- Respective Interests of Unit Owners In Termination of Condominium (HB1548)
This bill concerns the distribution of assets after the termination of a condominium. Among other changes concerning the legal parameters of this process, the new law provides that if the method of determining the respective interests of unit owners in the proceeds of sale or disposition in the termination agreement is other than relative fair market values of the units, then the association must provide notice of the proceeds that the proposed method would yield to each unit owner as to his or her unit. In the event that more than 10 percent of unit owners dispute the interest to be distributed to their units within 30 days of the transmission of the notice, the objecting unit owners may require the association to obtain an independent appraisal of the condominium units. If the appraised fair market value of the objecting owners' units is at least 10% more than the amount the unit owners would have received using the proposed method, then the association should adjust the respective interest of the unit owners so that each unit owner's share is based on the fair market value for each unit. If the difference is less than 10% more, then the previously proposed method must be implemented and the objecting unit owners receive their distribution minus their pro rata share of the cost of appraisal.
Amends: Va. Code § 55.1-1937 (Virginia Condominium Act)
- Amendment to Condominium Instruments Voidable by some Mortgagees (HB1548)
This bill provides that any amendment to the condominium instruments that is adopted without the required consent of the mortgagee will be voidable only by an institutional lender that was entitled to notice and an opportunity to consent. An action to void an amendment is subject to a one-year statute of limitations from the date the amendment is recorded.
Amends: Va. Code § 55.1-1941 (Virginia Condominium Act)
- Electric Vehicle Charging Stations (SB630)
Lot owners, unit owners, and proprietary lessees will be permitted to install an electric vehicle charging station for their personal use within the boundaries of their lot (for property owners' associations) or unit or limited common element parking space (for condominiums and cooperatives)—unless an association's declaration, condominium instruments, or other recorded governing document provide otherwise.
Property owners' associations ("POAs") may establish reasonable restrictions regarding the number, size, place and manner of placement or installation of the charging station on the exterior of the property owned by the owner. With regard to the common areas, POAs may prohibit or restrict the installation of electric vehicle charging stations and establish reasonable restrictions as to the number, size, place, and manner of placement or installation of such charging station.
As a condition of approving electric vehicle charging stations, condominium associations and cooperatives may require unit owners or proprietary lessees to:
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- Provide detailed plans and drawings of the charging station prepared by licensed and registered electrical contractor or engineer familiar with the installation and core requirements of such charging stations;
- Comply with building codes or safety standards;
- Comply with reasonable association architectural standards that govern the dimensions, placement, or external appearance of the charging station;
- Pay costs of the installation, maintenance, operation and use of the charging station;
- Indemnify and hold harmless the association from any claim made by a contractor or supplier pursuant to Title 43 (mechanics' and other liens) of the Virginia Code;
- Pay the cost of removing the charging station if no longer needed by the unit owner or proprietary lessee;
- Separately meter, at the sole expense of the unit owner or proprietary lessee, the utilities associated with the charging station and pay the cost of electricity and other associated utilities;
- Engage services of a licensed electrician or engineer familiar with charging stations to install such charging station;
- Obtain and maintain insurance covering claims and defenses of claims related to the installation, maintenance, operation and use of the charging station and provide a certificate of insurance naming the association as an additional insured under such policy within 14 days after receiving installation approval from the association; and
- Reimburse the association for any increase in common expenses specifically attributable to the charging station installation within 14 days of notice from the association.
Condominium associations and cooperatives may prohibit a unit owner or proprietary lessee from installing an electronic vehicle charging station if such installation is not technically feasible or reasonably practicable due to safety risks, structural issues, or engineering conditions.
Lastly, lot owners, condominium unit owners, and proprietary lessees must indemnify and hold the association harmless from all liability, including reasonable attorney fees incurred by the association resulting from a claim, arising out of the installation, maintenance, operation, or use of such electric charging station. In addition, associations may require the lot owners, condominium unit owners, and proprietary lessees to obtain and maintain insurance covering claims and defenses related to the electric vehicle charging station and may also require to be named as an additional insured under such policy.
- Additional Protected Classes Added to Fair Housing Laws (HB6/HB104/SB868)
Virginia fair housing laws and regulations are designed to provide for fair housing to all individuals regardless of certain factors, such as race, color, religion, national origin, sex, familial status, disability and elderliness. In one of the most notable pieces of legislation for the 2020 session, the classes of individuals protected from unlawful discriminatory housing practices have been expanded to include sexual orientation, gender identity, source of funds, and status as a veteran.
"Source of funds" means any source that lawfully provides funds to or on behalf of a renter or buyer of housing, including any assistance, benefit, or subsidy program, whether such program is administered by a governmental or nongovernmental entity.
Amends: Va. Code §§ 36-96.1, 36-96.2, 36-96.3, 36-96.4, and 36-96.6 (Virginia Fair Housing Law)
- The "Clean Up" Bill (HB1340)
HB 1340 is known as the "Clean Up" Bill. There is not substantively much to report on this bill since it simply makes technical amendments and implements clarifying changes relating to the revision and recodification of Title 55 enacted in the 2019 Session.
Disclaimer: The information in this article is for general information and is not legal or tax advice. Nor does any exchange of information associated with this article in any way establish an attorney-client relationship.
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