POSITION:

The Northern Virginia Association of Realtors® (NVAR) supports requiring Common Interest Communities (CICs) to register with the state and to file a complete copy of the condo resale certificate or association disclosure packet to be made available through a central database; and supports legislation providing the Department of Professional and Occupational Regulation (DPOR) with the authority to enforce violations against CICs. 

DISCUSSION / BACKGROUND:

Two Acts, the Property Owner’s Association Act and the Condominium Act govern the activities of homeowner and condo associations, generally referred to as Common Interest Communities. They grant certain powers to associations regarding the appearance of the property, allowance of accessory structures or signs, resale documents and other matters. The laws have been amended piecemeal over the years without a full comprehensive review since its creation. NVAR maintains a standing position that a full review and rewrite of the two acts is necessary to update and modernize the law. Until that rewrite can occur, it is necessary to continue to examine amendments that will protect the interests of homeowners, buyers and sellers within CICs.

Associations, both small and large, oftentimes lack the management necessary to function as the laws intend. Currently, CICs are required to file an annual report with the CIC Board, but the report only includes minimal information including the association’s location and governing officers. As it stands now there is no penalty or incentive for associations to follow the laws.

NVAR supports increasing the information in this annual filing and the enforcement of the registration as a possible solution to some persistent problems such as overcharging fees, the inability for buyers and sellers to obtain timely and complete resale and disclosure packets, and associations’ ability to maintain financial stability.  The following provisions are recommended:

• Requiring the CIC annual report to include complete copies of the condo resale certificate or association disclosure packet and any periodic updates needed to keep the information current.
• Requiring these annual reports be maintained on a central database available to the public.
• Requiring small associations to perform self-audits annually.
• If incomplete disclosure packets and resale certificates are delivered, those provisions not delivered should be unenforceable against the party that did not receive disclosure.
• Allow DPOR to assess penalties or implement appropriate enforcement mechanisms for violations of the POA and Condo Acts.

RECOMMENDATION:

NVAR recommends the Virginia Realtors® CIC Work Group consider the above recommended positions for inclusion in the 2021 state legislative program and when considering a future comprehensive rewrite of the POA and Condo Acts.