HOA Powers Multiply, with Passage of HB 791

A few moments ago, the Senate on a 31-9 vote passed HB 791, giving enhanced powers to homeowner and condo association boards.  This was after the Senate had rejected my substitute version of the bill on a closer (26-14) vote.

Somewhere, George Orwell is rolling over in his grave …

I wrote a few weeks ago about HB 791, which overturns traditional Virginia law stating that HOA’s only held that power conferred by their authorizing document, i.e. the Deed of Declaration.  No more, no less.  In that way, they are the same as any state or local government which must follow its constitution or charter.

With the passage of HB 791 today, that limitation is almost gone.  Instead, HOA Boards  and Condo Boards can levy fines and penalties against individual homeowners, even if that power is not stated in the original instruments.

In other words, these Boards now have a power which is not even held by City Councils or County Boards, i.e. the power to assess and collect fines (and assert a lien against property) even without a court order.   This power can instead lead to $50 a day fines for  offenses as mundane as leaving out toys or hanging up Christmas lights.

Faced with this expansion of power, I filed a floor substitute to HB 791 which did two things:  (i) specified that homeowners have an equal right of access to court and (ii) limited the ability of HOA’s to levy fines to violations involving the common areas, unless that power was specifically stated in the Declaration.   In essence, I tried to bring the bill back into line with traditional Virginia contract law.

In the floor debate today, it was stated that HOA’s and condo associations can serve as “mini-governments” which perform valuable services.  That is true up to a point.  However, there are significant differences:  local governments are governed by a constitution, they are subject to open government requirements, and only actual residents can participate in choosing the leaders.

There is no set of democratic institutions in an HOA.  Even the best ones are run on an ad hoc basis.  Again, this is not to slam the good people who run them (trust me, I don’t have that kind of patience).  Rather, it’s simply to point out that these decisions should not be entitled to the same deference as decisions by elected officials.

The matter goes back to the House which has to approve the Senate amendments.  Assuming it does, the bill will be approved by the House — and will represent a landmark change in Virginia’s property laws.

Don’t expect everyone to be excited about this.

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