This story was updated March 7, 2014 at 3:30 pm.
A bill that would have given most homeowners and condominium associations in Virginia the ability to fine their members was amended to have a less sweeping impact before it was sent to the governor for his signature.
Del. Jim LeMunyon (R-Dist. 67), who represents the Oak Hill and Chantilly areas, said his goal was to keep most disputes between HOA boards and residents from ending up in court.
He was trying to address two different types of issues: HOA boards that get overzealous and harass residents, and homeowners that don’t pay their dues or violate other covenants that they agreed to when they purchased the home.
It was his solution to the latter problem that became controversial as the bill worked its way through the General Assembly.
People who “flaunt the rules” or have “property in disrepair to the point where it reduces the property value of neighboring homes” can make it difficult for associations to enforce the rules across the board, LeMunyon said.
Some HOAs have explicit language in their charters that allow them to issue fines or revoke privileges such as pool membership to homeowners who violate the covenants. A few explicitly state that the board may not issue fines, but many others are silent on the matter.
The version of the bill that passed the House of Delegates would have allowed HOAs with charters that don’t specify one way or another to issue fines up to the maximum allowed under state law, or to revoke privileges. The maximum fine is $50 for a single offense, or $10 per day for up to 90 days for ongoing violations.
While associations can change their governing documents, LeMunyon said it is challenging for many homeowners associations to get the quorum needed to make an amendment, which can often require assembling 70 or 80 percent of a given community.
There have been a couple of court cases regarding this issue, LeMunyon said, and they had differing outcomes, so another goal is to clarify the legal issues.
The Senate version of the bill did not extend the ability to issue fines to HOAs that don’t already have that poser, but included language stating that associations may amend their rules as outlined in their governing documents.
Sen. Chap Petersen (D-Dist. 34), who tried to amend the bill on the Senate floor, said he is strongly opposed to the fine provision because it violates the contracts people signed when they purchased their homes.
“It’s a major expansion of power, and it’s an expansion of power where the charter didn’t give that power,” Petersen said.
The Fairfax County Board of Supervisors expressed tentative support for the bill during a Legislative Committee meeting last month, with several supervisors saying they know of HOAs in their districts that have struggled with getting property owners to comply with the rules.
“You don’t have any recourse short of spending lots of resources to take them to court,” said Supervisor Linda Smyth (D-Providence), speaking during the Feb. 21 committee meeting. “We can be putting these associations in a financial bind if they don’t have the ability to do something.”
Other supervisors said they also wanted to ensure that the ability to issue fines or revoke privileges could not be abused.
The bill also adds some additional protections for homeowners, requiring the HOA or condo board to provide notice of the violation via a written letter, allow time for the homeowner to correct the violation, and to conduct a hearing before meting out any punishment.
It also allows cases arising from disputes to be filed in General District Court, rather than Circuit Court, which allows for a less expensive legal process. Currently, all such cases must start in Circuit Court.
“All of these things are trying to solve problems without going to court or, if you have to go to court, going to the less expensive court,” LeMunyon said.
After legislators met in a conference committee to resolve the differences between the two versions, the bill passed both the House and Senate on Friday.
The approved version going to Gov. Terry McAuliffe (D) for review only includes the additional protections for homeowners and the change allowing the cases to begin in General District Court.
The story was updated from the original version to reflect the passage of the bill.