Breaking News

And Then There Were Two

      Just when you thought your horse was out of the running, Italian scientists announced the birth of a healthy cloned horse according to The Washington Post. Ironically, the horse that donated the cell to which the cloned horse was created also carried the clone to term. In effect, a sister bore her identical twin proving that it has the power to reinvent itself. Rick Weiss, First Cloned Horse Created in Italy , The Washington Post , August 7, 2003 , at A1.

Only the Shadow Knows

     Old Dominion University ’s Center for Real Estate and Economic Development was recently given a $100,000, grant to study Community Associations. The group plans to target those mysterious “shadow governments”, that the director of the center claims dictate “everything from the size of your fence to the color of your front door.” Keep an eye out for the group’s website which will be developed based on survey results in attempt to foster discussion of common issues that arise involving the “shadow”. ODU Center is Awarded $100,000 Grant, Old Dominion University News , posted March 31, 2003 , <http://www.odu.edu>.

I Know the POAA, And You, Sir, Are No Unit

     The Circuit Court of Greene County previously enjoined the Dogwood Valley Citizen’s Association, Inc. from enforcing its lien via non-judicial foreclosure due to the language of Section 55-516 of the Property Owners Association Act. (statute refers to “units” rather than “lots’) The lower court interpreted the alleged drafting error in the statue, to only authorize enforcement of liens by sale of a “unit” verses sale of a “lot”. The Supreme Court of Virginia recently granted the appeal of the Association from the lower Court’s decision. Ironically, the Plaintiff, Winkleman, also appealed the lower court’s determination that the Dogwood Valley Citizen’s Association, Inc., is subject to the Property Owners Act. Winkleman v Dogwood Valley Citizens’ Association, Inc. et al , No. 031053

Lenders First!

     No longer will the sale of a property through a non-judicial foreclosure of an Association’s lien be “subject to” the lender’s interest. The Supreme Court has spoken; the first deed of trust must be paid first from the proceeds of an association’s non-judicial foreclosure of its lien. By a vote of 4 to 3, the Court affirmed the decision of the Fairfax County Circuit Court in favor of Wachovia Bank. The Court viewed that a conflict existed in the language of VA. Code §55-79.84, specifically the provision “subject to prior liens” versus the priority of disbursement of proceeds provision, and held that the legislature intended to require that the first deed of trust be satisfied through the sale. In its reasoning, the Court stated that a contrary holding would place the institutional lender at a disadvantage in its ability to safeguard its interest in the property.

     Three of the justices disagreed, arguing that the Court read additional words into the statute that may only be added by the legislature. They did not view a conflict between the priority language and the sale “subject to prior liens” and rejected the majority’s view that the statue, if read to the contrary, would lead to the ruin of the institutional lender. Board of Directors of the Colchester Towne Condominium Council of Co-Owners v. Wachovia Bank , Record No. 021741

Do You Want A Piece Of Me?

     Various property owners held an easement over Millwood Pond Subdivision for use as a private road for ingress and egress from their property to Sugarland Road . The Plaintiff, a developer had acquired some land, a portion of which was used to expand Sugarland Road . After the expansion of the road, the Developer sought a declaratory judgment extinguishing a small part of the easement defendants held. A portion of the private road had been paved as part of the road expansion project, and therefore that small piece of the owners’ easement was no longer needed to provide access to Sugarland Road . The court found that purpose of the property owners’ easement over the small paved portion of road no longer existed and therefore that section of the easement was extinguished. Basheer/Edgemoore-Millwood LLC v. Sizdahkhani et al . Chancery No. 179604, Circuit Court of Fairfax County .

If the Chapter Fits

     The Administrative Office of the Courts just released an analysis of figures that indicates personal bankruptcies are on the rise by 12% from last year. The rise in Virginia is just slightly higher than the nationwide hike of 10%.

The Fifth Board Member

     After the Green County Circuit Court determined that the Associations Board of Directors lacked sufficient proof that it had correctly applied a provision of the Associations Declaration in assessing charges, the Association appealed. In its appeal to the Supreme Court, the Association claimed that the lower court erred in failing to apply “good faith judgment rule” of VA Code §13.1-870 and had replaced the Board of Directors’ decision with that of the Court. The Homeowners’ also appealed the lower courts decision for other reasons, claiming the court erred in holding the association is a property owners association and falls under the Property Owners Association Act (POAA). The Supreme Court recently granted the appeal. Dogwood Valley Citizens Association, Inc. v. Hatcher No. 030486

Contractor 1, Association 0

     The Nelson County Circuit Court held that no contractual relationship existed between the Defendant, a contractor who built five condominium buildings for an investor who subsequently transferred control to the Association, and the Association itself. Therefore, under the theory of implied indemnity, the association could not recover against the contractor for repair costs for work needed due to various violations of the Building Officials Code Administrators Code (BOCA Code). Stone Ridge Condominium Unit Owners’ Ass’n v. J.M. Turner & Co. CL 03-000071-00, Circuit Court of Nelson County .

Possession Really is 9/10 ths of the Law

     The owners of two lots that were separated by a buffer strip owned by the Association brought a suit claiming adverse possession of the buffer strip. For at least 15 years, the owners and the immediate predecessors in title were mistaken as to the existence of neighboring property and the property’s actual boundary, and had used the property as a garden and yard. The court found that all elements of adverse possession were met.

Once A Meeting, Always A Meeting?

     City Council members have appealed, and the Supreme Court has granted the appeal of a City of Fredericksburg Circuit Court decision that the exchange of E-mail between Council members constituted a illicit meeting in that it violated the open meeting requirements of the Virginia Freedom of Information Act, Va . Code Ann . § 2.1-340, et seq. Other issues the Supreme Court will review include the lower court’s interpretation of what it means to “discuss” public business in evaluating whether a meeting had taken place and the court’s decision that Virginia Freedom of Information Act is not applicable members-elect. Bill Beck, etc., et al. v. Gordon Shelton, et al. No. 030723.0

Two Thongs Don't Make a Right II

     The property owners association received a complaint of "indecent skating". A young woman was allegedly rollerblading through the neighborhood in a thong bathing suit on warm days. This begs the question: Are the streets association common area, subject to the association covenants, or public roads dedicated to the local government and immune to the enforcement actions of the association?

There's Gold in them Covenants

     The covenants of Snow Hill Homeowners' Association warn all those that buy there…"should any person find a treasure in this land, such person shall forthwith notify the Declarant and it shall have the right to remove said treasure trove without recourse."

     A pot of pieces-of-eight has been found on the land. Any remaining treasure may be well-guarded (and not by the Architectural Control Committee). According to historian Carl Norton and the book entitled Virginia Ghosts, the ghost of Kirk, believed to a pirate, still looks after the land.

This Must Be Heaven II

     The next best thing to suing a member for nonpayment of assessments is to sue a bunch of members at the same time. Case in point…the builder allegedly reneged on certain promises, like sewer and water, and the Court acknowledged that there also certain management "irregularities". Nevertheless, members were obligated to pay assessments. "Implicit in the Property Owners' Association Act is the General Assembly's concern for the prompt collection of the property owners' assessments," wrote the Court. Lake Holiday Club, Inc. v. Teets.

     The association is the developer's successor in interest, but it "is not a general assignee of all rights and obligations" of the developer. Recoupment is not a valid defense to payment since the association was not part of the sales transaction or the agent of the developer at the time. The association did not "stand in the shoes" of the developer seller and inherit liability for its alleged "transgressions."

Pork Barrel Politics

     The Community Association Institute reports that ham radio operators are asking the United States Congress to make room for their antennas by preempting community associations covenants (HR 4720).

Rule No 1: Don’t Go to the Mailbox

    Nobody knows notices like the Circuit Court of the City of Roanoke . Actual receipt of a foreclosure notice by the borrower was not required—all the mortgage lender had to do was comply with the provisions of the foreclosure statute. Principal Residential Mortgage v. O’Neal.

     The same issue was presented in a non-judicial foreclosure for homeowner assessments. The association alleged that the mail box containing the statutory notices was full because the owners refused to retrieve their mail. The owner blamed it on a postal service error. We’ll never know the truth—whether it was simply a flurry of holiday catalogs—because the case settled. The lien, however, was paid. South Riding Proprietary v. Shourds.

      Another Circuit Court found the statutory notice provisions sufficient, but overturned a non-judicial foreclosure because of the language in the Virginia Property Owners’ Association Act. The Court held that the use of the word “unit” only permitted the homeowners’ association to foreclose on condominium units, rather than “lots”.

The Mail Box Rules

       A notice of cancellation of a sales contract may only be delivered by hand delivery or United States mail, return receipt requested (unless the parties alter the contract) pursuant to the Virginia Property Owners’ Association Act. Had the General Assembly intended another method of delivery, such as a facsimile, it would have drafted the resale provision of the Act to state so, reasoned the Fairfax County Circuit Court. Shawn P. Wilson v. REMAX Gateway, L.L.C., et al.

Lord of the Key Rings

      It was a perfect fit. And we are not talking about the fur coats alleged to have been taken in the burglary, but the missing key said to be misplaced by management. It was the only key not accounted for by the owner…the front door key and the one key that opened them all. The Arlington County jury tagged the association for the cost of the break-in and a whooping $101,000 in pre-judgment interest. King v. Atrium Unit Owners Association.

The Eye of Justice

     The trial transcript has only recently been unearthed (middle-unearthed?). “I quite frankly do not favor condo owners’ associations and home owners’ associations and I view the enforcement of their rules and regulations with a sharp eye,” said Circuit Court Judge Robert W. Woolridge, Jr. A “sharp eye” is not quite as scary as the evil eye keeping watch on Frodo and the Ring, but it is something for associations to consider in their rulemaking. Nor is a “sharp eye” the same as a blind eye…the judge held for the association. Nicksolat v. Idylewood Towers Condominium.

You’ve Got Votes

     A recent referendum by the Reston Association appears to have smashed a few records…1,526 votes, representing about 18% of the total, were sent on the Internet. In four polls of the membership over the past three years, none of the electronic votes has been found invalid.

Y’all Got Mail

      At least that is the bumper sticker that has sprouted in the Fredericksburg area after a Circuit Court ruling that e-mails between City Council members constituted a meeting, and therefore, was required to be open to the public….”Y’all Got Mail! 2002 Email Scandal, Fredericksburg , Va. ” Lawyers for the City alleged that The communications were required to be simultaneous, according to an article by the Washington Post. The decision may have a chilling effect on choosing a chat room to chew the facts in the future. Meanwhile, the General Assembly is acting to permit electronic meetings in exchange for more detailed reporting requirements (Senate Bill No. 1203).

Flower Power

      Where have all the fees gone? Gone to programs every one. Or a least a portion of the annual registration fee paid by community associations to the Virginia Real Estate Board may go to support proposed programs on resale, developer transition, reserves and other courses of the Community Associations Institute Washington Metropolitan Chapter. Several grants have been applied for by the Chapter.

Reasonable Attorney Fees—An Oxymoron

     So, kids what college do you want to go to? But, seriously the Virginia Supreme Court not only held for the association, but also awarded it attorney fees under the statute even though the window replacement costs, which were the source of controversy, had been reimbursed to the association after the owner had filed suit challenging the expense.

“    This provision ensures that all unit owners will not have to absorb their association’s costs of litigation simply because one unit owner brought an unsuccessful suit against the association,” wrote the Court. These words are music to my ears…like the kind they play at Julliard. Such is the cost of harmony. Mozley v. Prestwould Board of Directors.

Memoirs of a Lawyer

     Chapter One. Now the story can be told…

     The young couple was oblivious to the snow continuing to fall outside, only interrupting the afternoon to place another log on the fire. Streets were quickly blanketed like footprints in the sand and the only trace of an occasional glance outside, even for a few moments, was her breath on the inside window.

     Suddenly they sprang to the door and ran for where the side-walk had been only hours before, not even having time to gather their garments. It was if the hot coals had been carefully poured into large paper bag. In fact, the fire place coals had been placed in a paper bag (allegedly). An elderly lady, who until now had little to do but watch the storm, grabbed the telephone and screamed to the property manager, “there’s fire and fornication in unit 109!”   

     No doubt, other recent disasters have caused insurance premiums for community associations to dramatically escalate. Companies have also been burned by increasing suits against the board for everything from mold to malfeasance. Some associations have had to resort to overseas insurance companies or the membership has simply endured the costs. An attempt to shift the responsibility for the insurance deductible is pending in the 2003 General Assembly (House Bill No. 2213), however, insurance agents expect another increase next year and confess they will be relieved if it is only in the single-digits.

Backdraft

     Speaking of fire, the City of Alexandria has adopted a program to inspect and test buildings for an emergency response to such an event. The goal is to “ensure the highest level of life safety” in the event of a “fire emergency,” according to the Alexandria Fire and EMS Department. “It is not being implemented to force or coerce property owners or property managers into retroactive compliance of the current codes and standards,” notes the Director of Code Enforcement, Arthur D. Dahlberg. Of course, if the choice is between coercion and disaster, the board of directors may wish to extend an invitation. Alexandria Fire and EMS Department Code Enforcement Bureau Position Paper to Establish a Fire Protection System Retesting Program.

     And speaking of other matters, an unofficial newsletter for the Snow Hill Homeowners Association entitled the Snow Hill Observer reports…”Motion to Require Sex on Annual Basis Fails!” The measure, allegedly requested by a homeowner at a special meeting, was intended to “reduce the tension as the association meetings.”

A Perfect Storm

     It may be perfect even though the lien has not been perfected. A Fairfax Circuit Court judge has agreed that a lien for assessments is continuing under the documents whether or not is has been filed and “perfected” in the public land records. The judge emphasized that the documents were recorded prior to the effective date of the Virginia Property Owners’ Association Act and prevailed in a direct conflict with the Act. The trustee was ordered to pay the association’s claim from the foreclosure proceeds. In the Matter of Trustee’s Sale of Real Property, Nectar Projects Inc., Substitute Trustee.   

Flag Ruling

     The Supreme Court of the United States has refused to hear a case challenging community association rules governing free standing flag poles. An earlier decision favoring the association has been left undisturbed. A legislative effort to address the issue has been carried over to the 2003 Session, but is not expected to move forward (House Bill No. 585).

Oh Say Can You See?

      Fairfax County has refined its proposed outdoor lighting zoning ordinance amendment, and after a final public review, hopes to proceed to the Board of Supervisors and the Planning Commission. An effort by Sen. Janet Howell to further address the issue has been an early casualty (“Twilight Tear”) of the 2003 Session of the General Assembly. Revised Proposed Order Lighting Zoning Ordinance Amendment.

Townhouse Row

     It used to be that prison inmates, with access to a law library, drafted appeals and wrote letters to the United States Supreme Court and passionately detailed how they had been wronged by the system. Now, they write their homeowner association. Can you imagine stewing during the course of a sentence over the alleged injustice of a homeowner association?

     The imprisoned owner asked the court to rehear a judgment for homeowner association assessments awarded prior to his incarceration, and his co-owner requested the court to reconsider the matter for a third time. On the day of the motion, two hours after the start of the docket and a pledge of the judge to be back right back…the former owners walked out of the courtroom. Stay tuned. Falls Church Gardens Unit Owners Association v. Joseph R. Perry, et al.