Friday, January 14, 2011

Virginia HOA’s to gain more cost effective control over unit owners under potential new legislation

Updated January 14, 2011 - companion bill

Home Owners Associations [HOAs] are private organizations designed to provide common benefits to unit owners and maintain preferable standards in the community to ensure higher property values.  To maintain preferable standards a mixture of private contracting and public laws have been enacted to control the procedures  for enforcing maintenance standards.  

Although I could criticize these procedures from a myriad of perspectives, on the whole they present a generally fair system.  The one major deficiency is lack of available affordable judicial intervention. 
SB1327 has been offered by Sen. Mark Herring (D - Leesburg) as an attempt to make the Court system more accessible when there is an alleged problem with architectural guidelines.  The problem is it makes the court system more accessible to HOA’s without similar accessibility for homeowners. 

The problem HOA’s face lies in the limited jurisdiction of General District Courts [GDC].  The GDC is a fast and cheap method of adjudication in Virginia, but GDC judges are limited in their powers.   As indicated in another post here, the GDC has limited equity power, or the powers to force anything other than a money judgment on a person.  Right now if an HOA wants to obtain a court order and have a homeowner held in contempt for not conforming their property, that HOA must file an expensive complicated costly lawsuit in the Circuit Court, as equity powers are explained here.  Only a Circuit Court can enter an injunction.  An injunction orders a party to do something.

If a homeowner believes they are not in violation of an HOA’s architectural guidelines, their primary remedy is to file a declaratory judgment action to have him or herself declared not in violation.  This type of lawsuit also must be filed in the Circuit Court and is expensive and costly.

SB1327 allows an HOA to obtain an injunction in the GDC while offering no similar right of the homeowner to sue for declaratory judgment.  This puts the decision to sue in the less costly GDC largely in the hands of the HOA.

I feel the GDC’s jurisdiction should be expanded marginally to take on some more equity matters such as suggested in SB1327.  But as SB1327 stands it is a boon to the HOA’s while leaving aggrieved homeowners with fewer procedural options.

Prediction:  HOA friendly bills are difficult to stop entirely.  Coming from a Senate democrat, if a Republican Delegate supports a similar measure, this will head to the Governor’s desk and be signed into law with little scrutiny or fanfare.  I hope parity for homeowners is added to the bill before it finishes the legislative process.

UPDATE: Apparently Del. Mark Sickles (D - Alexandria) has introduced the same bill in the House, HB2289.  I stand by my original prediction that this bill would need strong support from a Republican Delegate to make it to the Governor.

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