HOA Nut House

The impact of SB-6016 in simple terms, here it is:

Based on current Virginia Supreme Court precedents (3 cases...Arrowhead, Winkelman, and Shifflett), for the POA Act to apply to your property your deed must contain 2 things: 1) an obligation for you to pay dues and 2) an obligation for the association to maintain the common area. These obligations have to be imposed, they can't be inferred or implied. Because the POA Act gives an Association extraordinary powers (non-judicial foreclosure, levying special assessments are just 2 examples), your protection is that your property deed obligates the association to uphold its part of the bargain by maintaining the common area. SB6016 completely does away with that protection. The Association could do nothing, but you'd still have to pay, and if you didn't, the Association could sell your property on the courthouse steps in a relative blink of the eye.

But's that's petty thievery compared to the real problem in the bill. SB-6016 enables an Association to re-write the deed to your property. It can change "any provision of a declaration" (all quotes are from Vogel's bill) and a "petition" from the Association "shall be deemed sufficient basis" to re-write your deed. Let's say your deed says you have to pay $200 per year in assessments, and the Association wants to raise that to $1000. The Association tries to put that increase to an owner vote, and it fails 3 times. The reality of the bill is that the Association doesn't even have to actually hold a vote, because the bill only requires "good faith attempts". After these 3 tries, the Association can just petition a court, and the court must take the petition as "sufficient basis" to re-write your deed so that now you owe $1000 instead of the $200 in your deed. In my example I've used changing the level of assessments in a deed, but this applies to any provision. If your deed allows pets, your right to have a pet could be taken away. If your deed contains a prohibition on pets, that prohibition could be taken away. All of this could be done after owners rejected these changes.

As we all know, developers typically control association boards until they have sold all or a majority of their developer properties. Using this technique, a developer could lure buyers with very low dues, and then bypass the desires of these owners and re-write their deeds with higher dues used to pay for things the developer originally agreed to provide. For example, a developer could agree to pay for and install a pool and cabana and later change the deed so owners would pay for the pool & cabana with a hefty special assessment. Whatever deal you think you struck could be undone in a heartbeat.

Your property deed is your deal. The deal should not be changed without following the amendment provisions of your deeed, and Vogel's SB-6016 proposed to completely take those property rights from you.

Just so everyone here knows, this bill did pass the Senate by a single vote, but it was referred to a House committee, which in turn referred it to the Housing Commission, where that commission unanimously decided to table the bill. It did, however, appoint an ad hoc commission to study changes to the POA Act, and Vogel herself has committed to try to re-introduce this legislation in 2009. Therefore, this fight is not over. If we're going to defeat this, it is going to take a coordinated and strong attack, so get ready for a big battle if you want to protect your property.

Watch out for this very bad bill in 2009.

Homeowners association covenants, including provisions controlling assessments and pets are not included in the deed to your property, they are contained in a Declaration of Covenants, Conditions and Restrictions. The Declaration has always been amendable in Virginia. See Va. Code Section 55-515.1 D http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+55-515.1.

The point, I believe is that the PROCEDURE for amending the Declaration is set forth in the Declaration itself.

And in MY Declaration, an amendment requires the VOTE OF THE HOMEOWNERS!

And this lousy piece of legislation would deprive the owners of this right.

Wouldn't it?

Jeepers, SGT Schultz!

ATTENTION

SPECIAL CAI CHANNELS MESSAGE TO SERGEANT SCHULTZ OF THE CAI GENERAL STAFF

With the posts above, the cat is out of the bag! CAI tried to slip this one in during the Special Session and we got caught! Now what?

Maybe we were pushing our luck after our big win with HB516, but we figured if we could get away with THAT, we were on a roll, right?

Well now those pesky homeowners are watching us like never before. And they're reading the law. And SOME of em are lawyers themselves!!

One of em, after I read him the above post by Anonymous100, came back and noted that to amend the covenants in HIS association requires a positive vote by 70% of the TOTAL MEMBERSHIP (not just those who show up at a meeting). And then he quoted from Section 55-508 of the Property Owners Association Act, which provides that:

"This chapter shall not be construed to affect the validity of any provision of any prior declaration; however, to the extent the declaration is silent, the provisions of this chapter shall apply."

So the POAA does not trump the 70% required vote.

SGT Schultz, we've got to get our best CAI brains on this right away! You need to call Phil Filechurner, Augustus H. Shaw IV, F. Lee Foreclosure, Velvet Jones Esq, and the rest of our talent pool and get 'em on this!

Why can't all HOA's just have a rule like the one we've got here in Sunnybrook Farms HOA: All owners must have a GOOD ATTITUDE.

And if they don't, we fine 'em and foreclose (Nonjudicially of course) to collect the fine.

You other HOAs should try it! It REALLY WORKS!

Rebecca
PCAM of Sunnybrook Farm HOA

Senator Jill Holtzman Vogel is helping the developer controlled Board running Lake Holiday. The Lake Holiday HOA has very serious internal problems and here’s a comment that I came across on the rip-off report that talks about what’s been going on for 30 plus years. It seems that the Lake Holiday Board never addressed the plight of membership lot owners, and it's no real surprise that things are in court. The Board collected MILLIONS without authorization and even foreclosed on these lot owners. Now they are facing a ruling in a few months and there's even talk of a possible RICO case. Desperate times for the Developer and the Lake Holiday Board call for Senator Jill Vogel to the rescue. Voters need to remember her developer friendly behavior at election time.

http://www.ripoffreport.com/reports/0/348/RipOff0348526.htm

Beware of the Lake Holiday HOA in Cross Junction, Virginia. I purchased a lot for almost $10,000 in 1975. I am still waiting for utility service to my lot. Can you believe that???? Without utility service my lot is worthless. The Lake Holiday HOA owned until just recently owned the utility company providing water and sewer. The HOA and its President promised getting the utilities to me and probably hundreds of other lot owners. They have collected MILLIONS of dollars in dues from people like me based on the false promise that they would use these funds to improve roads and provide utilities. I have heard numerous times at meetings that the Board was developing a plan to extend the utility lines but nothing has ever happened.

In 2002, the President of the Association said that selling the Lake Holiday Estates Utility Company required a membership vote but a membership vote was never taken on the Utility sale. Then in 2006, the HOA sold the utility built with my dues. After the sale was final, the HOA said they had no responsibility for the utilities and used the proceeds of the utility sale to build a new $1.2 million clubhouse.

My lot sits two lots away from a home with existing utility service. Last year, I learned about an important rule in the utility companys tariff called, Rule 16. This rule has been in place for over 30 years and the accepted method by the SCC to extend utilities to the membership lots at Lake Holiday. This rule was concealed from me and all lot owners waiting for utilities. The President of the Association tried to remove it without even sending me a notice about the change. I learned about this rule not from the Lake Holiday Board but another property owner. I would have made a formal Rule 16 request decades ago. I was tricked into waiting and waiting for Lake Holiday to extend utilities to my lot. Unfortunately, this community has been plagued with endless mismanagement and these problems never seem to get resolved, and just keep piling up.

In a 2 ½ year period, the Board spent over 1 Million in legal fees in a community of 700 homes. Theres a 4-5 Million upcoming dam repair bill, and wasting so much money on lawyers is completely irresponsible! Another low point, a Lake Holiday committee member sent around a 5 page letter mocking another member’s handicap. Unfortunately, the same small group seems to retain control of the HOA board, and nothing seems to ever change at the place.

In January of 2008, the Virginia Supreme Court ruled that the authority to collect dues has to be in the deed to your property, but in many sections at Lake Holiday theres absolutely no requirement in the deeds to pay dues. Lake Holiday was advised of this problem with the deeds by their lawyers but ignored the advice and collected millions in dues anyway. Like a scared bunny, President Wayne Poyer is making the rounds of the local media outlets shouting going bankrupt to anyone that will listen. Hes so concerned about the place going bankrupt that hes not making any attempt to settle the case - not believable! Hes going to take his chances in court. Hes going to take his chances against 3 recent Supreme Court rulings? This whole mess about the dues was created by the Board. They didnt honestly explain to members about the problems with the deeds and people are sick of their endless lies and mismanagement!

I noticed that another person filed a complaint about Rees Broome of Mclean, Virginia. Lake Holiday used this same law firm to handle collections and general legal work.

The post above by Anonymous100 on 7/29 has several problems. First, it reflects a bit of confusion about the term "deed." In some cases, a Declaration of restrictive covenants is referred to as a Deed of Dedication. In these cases, when owners refer to provisions in their deed that govern assessments, they are referring to their Deed of Dedication. There is also a deed of conveyance (the transfer deed), and Anonymous100 is correct that the transfer deed does not include provisions that govern assessments. However, some owners shorten "deed of dedication" to simply "deed", and deeds of dedication do include provisions for assessments and pets, among other things. There are a lot of terms in real estate and law that sound alike, but are different; there are others that sound different, but are essentially the same. It's better to ask and confirm before strongly expressing an inaccurate opinion.

Secondly, Virginia law has been the same for a long time: absent a provision specifying a different amendment mechanism, amendment requires the consent of all owners - unless statute says otherwise. The reference by Anonymous100 is to a section of Virginia's POA Act, and that act does include an amendment provision that allows an association to amend a deed of dedication or declaration (they're essentially the same thing) with 2/3 approval of owners if the deed of dedication or declaration is otherwise silent. However, that act (and therefore, all of its provisions) only applies to those associations subject to the act, and there are Virginia associations that exist that are not subject to the act. Virginia's highest court has heard 3 cases, Lake Arrowhead, Winkelman, and Shifflett, (2 of which involved the same association) and in all of these cases ruled that the entity holding itself out as an association governed by the act was not in fact subject to the act. For owners in Virginia associations, don't rush to the conclusion that your association is in fact subject to the act; for associations, don't hold yourself as being subject to the act unless you meet the applicability of the act. Being an HOA or POA in Virginia is not the same as being subject to Virginia's POA Act.