need advice on big disagreement

[danlpeters]

My Virginia neighborhood is in the midst of a strong disagreement about the rights of the board.

Facts:

There were originally two deeds of declaration, each governing a different section of the subdivision. Both of them were mandatory, and both allow for the HOA, it’s successors or assigns to have specific rights, including:

The right to grant approval for exterior changes to property through the ACC.

The right to notify homeowners of infractions, and if not corrected, to have work done, bill property owner, and recover the debt through regular legal channels.

The right to fine owners for rule infractions on the common grounds.

The HOA for the 1st section went defunct. Then the HOA for the 2nd section went defunct. Threatened with the possibility that the common grounds would revert back to the declarant, some owners in both sections got together to start a new HOA.

They were able to get the required number of owners to agree only by changing the DOD for section 2 to make HOA membership optional, thus taking away the right to make and collect mandatory assessments. Section one DOD was not changed, and new HOA’s authority over section one is referenced only in the Articles of incorporation. The association has always allowed section one owners to have full membership rights, including the right to be on the board and the right to vote for changes to all governing documents, including those of section 2. Historically, the association has not enforced CCR’s in section one, including the one that requires payment of a yearly assessment.

All paperwork related to these changes has been correctly recorded with the county.


The current board believes it has the right to levy fines for covenant infractions, based on it’s ability to fine for common-ground rule infractions and permission given by the Virginia Property Owners Association Act. The board has consulted an attorney that endorses this opinion.

The opposition believes that since the right to fine for covenant violations is not mentioned in DOD, and since there is a specific remedy mentioned, the HOA cannot assume this right from the governing documents. Further, since the HOA is voluntary and does not have authority over any property common to all owners (the common grounds are owned by the members of the association, not the owners in the neighborhood), the HOA is not recognized by the POAA. Thus, the HOA cannot assume this right from the POAA. The opposition has consulted the state department responsible for community relations and interpretation of the act, whose liason endorses this opinion.

The opposition has also referenced VA Supreme Court rulings noting that the POAA does not apply to voluntary associations.


Questions:

Which side has the better legal standing?

Would HOA have authority to fine members? Non members?

Are changes to Section 2 DOD valid if voted upon by Section 1 members?

Does the HOA still have the right to approve/reject exterior changes?

Should the HOA proceed with attempt to enforce covenants by issuing fines?

What should be done to clean this mess up?

[HomeGuru]

Originally Posted by danlpeters

My Virginia neighborhood is in the midst of a strong disagreement about the rights of the board.

Facts:

There were originally two deeds of declaration, each governing a different section of the subdivision. Both of them were mandatory, and both allow for the HOA, it’s successors or assigns to have specific rights, including:

The right to grant approval for exterior changes to property through the ACC.

The right to notify homeowners of infractions, and if not corrected, to have work done, bill property owner, and recover the debt through regular legal channels.

The right to fine owners for rule infractions on the common grounds.

The HOA for the 1st section went defunct. Then the HOA for the 2nd section went defunct. Threatened with the possibility that the common grounds would revert back to the declarant, some owners in both sections got together to start a new HOA.

They were able to get the required number of owners to agree only by changing the DOD for section 2 to make HOA membership optional, thus taking away the right to make and collect mandatory assessments. Section one DOD was not changed, and new HOA’s authority over section one is referenced only in the Articles of incorporation. The association has always allowed section one owners to have full membership rights, including the right to be on the board and the right to vote for changes to all governing documents, including those of section 2. Historically, the association has not enforced CCR’s in section one, including the one that requires payment of a yearly assessment.

All paperwork related to these changes has been correctly recorded with the county.


The current board believes it has the right to levy fines for covenant infractions, based on it’s ability to fine for common-ground rule infractions and permission given by the Virginia Property Owners Association Act. The board has consulted an attorney that endorses this opinion.

The opposition believes that since the right to fine for covenant violations is not mentioned in DOD, and since there is a specific remedy mentioned, the HOA cannot assume this right from the governing documents. Further, since the HOA is voluntary and does not have authority over any property common to all owners (the common grounds are owned by the members of the association, not the owners in the neighborhood), the HOA is not recognized by the POAA. Thus, the HOA cannot assume this right from the POAA. The opposition has consulted the state department responsible for community relations and interpretation of the act, whose liason endorses this opinion.

The opposition has also referenced VA Supreme Court rulings noting that the POAA does not apply to voluntary associations.


Questions:

Which side has the better legal standing?

Would HOA have authority to fine members? Non members?

Are changes to Section 2 DOD valid if voted upon by Section 1 members?

Does the HOA still have the right to approve/reject exterior changes?

Should the HOA proceed with attempt to enforce covenants by issuing fines?

What should be done to clean this mess up?

**A: read your recorded CC&R's as they remain in effect. And hire a HOA attorney.

[JETX]

And...
These questions are far too complex and over-reaching to be answered on a free online forum. I STRONGLY suggest the new HOA talk with a local attorney to find out what rights and limits they might have.... if any.

[HomeGuru]

That's what I hinted at except not so eloquently.