It was a busy legislative session for community associations. New laws on a variety of significant topics were enacted. Among them are significant changes to the sections which deal with reserves for replacing components of the common area and new provisions in the resale certificate procedures and requirements.
Reserves. One of the important topics that was addressed this year was the definition of “reserve study” in both the Property Owners Association Act and the Condominium Act. In sections 55.1-1800 and 55.1-1900 “reserve study” is now defined in the Act as “a capital budget planning tool used to determine the physical status and estimated repair or replacement cost of capital components and an analysis of association funding capacity to maintain, repair, and replace capital components.” A tragedy in Florida several years ago has inspired legislatures in several states to pay closer attention to the need for associations to be vigilant in maintaining reserves so that they are prepared for both anticipated, as well as unexpected, repairs and renovations. The Community Associations Institute has produced an excellent and detailed report on the lessons learned from the collapse of the Florida condo at Surfside. It is entitled Condominium Safety Public Policy Report and can be found on the CAI national website. It covers reserve studies, reserve funding, maintenance and structural integrity. Also, Sections 55.1-1965 and 55.1-1826 were amended to clearly articulate the Board’s duties and authority with regard to repairs and replacements through replacement reserves, additional assessments or borrowed funds.
Resale Disclosure. Effective on July 1 this year the new resale disclosure statute which was enacted last year has been significantly amended in various places. We suggest you locate the new statute and should be read closely to insure that you are in compliance. You can find the statute as amended by a Google search for Senate Bill 526 Virginia General Assembly. The phrases or sentences in italics are the changes made this year. One of the changes allows requests for a Resale Certificate to be made by the seller or the seller’s agent and be delivered to the buyer or the buyers agent and this cannot be changed by agreement. Another new provision states: If no resale certificate is delivered within 14 days after such request, the resale certificate is deemed unavailable. This provides a finite date to the unavailability so that other consequential actions can be taken by the parties to a purchase agreement. Also, a financial update can be requested by anyone authorized by the seller or purchaser.
In the event you have questions about the content of this update please give us a call. You may access our website at www.vahoalaw.com for more information on community association matters and prior updates.