Having concluded the second full week of the General Assembly, we’ve seen tremendous activity and efforts related to legislation affecting Virginia community associations. On the first day of session (January 11, 2017), Vandeventer Black published a 2017 Virginia Legislative Forecast (available here).And, here on day 17, many of our predictions have been accurate.
As of January 27, 2017, 2,430 bills and resolutions have been introduced in the House and Senate. 484 bills or resolutions have failed, 195 have passed, and 1,993 remain pending - there is still much work to do.
Vandeventer Black has been tracking 26 bills affecting community associations, with the status of each summarized below:
Short-Term Rentals and "Limited Residential Lodging"
We forecasted that several bills will be introduced addressing short-term rentals. Legislation similar to that which passed last year is likely from short-term rental proponents, but also expected much more restrictive legislation coming possibly from any of the Senate Republicans (even though this issue has not seen divisive party support or opposition).
To date, legislation similar to that proposed last year on short-term rentals has not been proposed. But, as expected, Senators Norment and Stanley introduced separate bills restricting short term rentals.
Senate Bill 1578, introduced by Senator Norment, authorizes a locality to adopt an ordinance requiring the registration of persons offering property for short-term rental and defines "short-term rental" as the provision of a room or space suitable for sleeping or lodging for less than 30 consecutive days.
The bill amends the Alcoholic Beverage Control (ABC) Act to clarify that certain property rented on a short-term basis is considered a bed and breakfast establishment for purposes of ABC licensing and that the exception from ABC licensing for serving alcoholic beverages to guests in a residence does not apply if the guest is a short-term lessee of the residence.
Status: Senate Bill 1578 is currently pending before the Senate Committee on Rehabilitation and Social Services.
Senate Bill 1579, introduced by Senator Bill Stanley, affirms the rights of localities to regulate the short-term rental of property, defined as the provision of space suitable for sleeping or lodging for fewer than 30 days. The bill also provides that if a locality allows short-term rentals, the locality shall require that the person offering property for rental notify adjacent landowners in writing, obtain local permission to offer the property for rental, and carry a minimum of $500,000 of commercial premises liability insurance. If a locality prohibits short-term rentals, any person or entity, including an online hosting platform, that advertises the availability of a short-term rental in the locality shall be subject to a $10,000 fine per violation.
Status: Senate Bill 1579 is currently pending before the Senate Committee on Local Government.
For more information about short-term rentals in community associations, refer to Short Term Rentals
: A Practical Guide, available here.
Home-Based Businesses & Child Care
As forecasted, Senator Chap Petersen introduced Senate Bill 1096, legislation similar to Senate Bill 238 he introduced in 2016. Senate Bill 1096 provides that a lot owner who is a licensed child care provider (licensure is generally triggered when five or more children, in addition to those children who live in the home, are cared for) operating within his personal residence pursuant to state law and in compliance with local ordinances shall be considered an “accessory residential use” and may not be prohibited by a property owners' association unless child day cares are specifically prohibited by the declaration.
Property owners’ associations that restrict home businesses based on a limitation that lots be used “for residential purposes only,” would no longer be permitted to restrict licensed child care providers. And, communities that prohibit “commercial use” could also no longer restrict licensed child care provider. As the law stands currently, it is generally agreed that those child care providers with 4 orless children (in addition to those children that live in the home) are considered an “accessory residential use” and are probably allowed in most communities that do not have a prohibition against day cares specifically. The licensure changes the nature of the child care service from residential to commercial, regardless of the size of the licensed child care provider.
Status: Senate Bill 1096 is currently pending before the Senate Committee on General Laws and Technology and is likely to be considered by that Committee on Monday, January 30, 2017.
Resale Fees for Self-Managed Property Owners' Associations
Earlier this month, we forecasted several different legislative proposals would be introduced in 2017 to remove the distinction between professionally-managed and non-professionally managed communities for the purpose of resale, but ultimately expected those proposals to be referred again to the Housing Commission. Our forecast was only half-correct.
As forecasted, Delegate Watts introduced House Bill 2376, providing that a property owners’ association that is not professionally managed may act as a professionally managed association only upon complying with specific conditions set out in the bill. But, House Bill 2376 was the only bill introduced on the topic.
Status: House Bill 2376 was laid on the table by the House General Laws Committee Subcommittee #1 - Housing and referred again to the Virginia Housing Commission for further study.
Fair Housing: Gender and Sexual Orientation
Senate Bill 822 was introduced by Senator Wexton to add discrimination on the basis of an individual's sexual orientation or gender identity as an unlawful housing practice under the Virginia Fair Housing Act. Senate Bill 822 includes a definition of sexual orientation and gender identity.
Senator Wexton introduced similar legislation in 2016 (Senate Bill 67), which was passed by the Senate (25-15), but was not reported out of the House Committee on General Laws Subcommittee #4. Similar efforts to add sexual orientation as a protected class also failed in the 2014 and 2015 sessions.
Status: Senate Bill 822 was reported from the Senate Committee on General Laws and Technology and will considered by the full Senate.
Service of Process
Senator Wexton also introduced Senate Bill 823, requiring that an employee or agent of a common interest community with restricting access (i.e., a gate or key-controlled access doors) must grant entry to a person attempting to serve process on a party who resides in, occupies, or is known to be present in the community.
Status: Senate Bill 823 was stricken at the patron’s request by the Senate Committee for Courts of Justice.
Proposed changes to Section 13.1-916 of the Virginia Nonstock Corporation Act were proposed by Delegate Albo (House Bill 1527) that would allow for reinstatement of a corporation’s status, regardless of the length of time that has passed since the corporate status was terminated.
Status: House Bill 1527 was tabled in the House Committee on Commerce and Labor.
Amendments - Property Owners' Associations
House Bill 1554, introduced by Delegate David Bulova (D-Fairfax), proposes changes to the Virginia Property Owners’ Association Act to address concerns raised by Tvardek, clarifying the Act provisions apply only when a declaration is silent on amendment and including the statute of limitations language from the Condominium Act (providing that an action may not be brought to challenge an amendment more than one year after the amendment is recorded). An identical bill, House Bill 1670, was introduced by Delegate Joe Lindsey (D-Norfolk/Virginia Beach).
Status: House Bill 1554 passed the House of Delegate unanimously and has been referred to the Senate Committee on General Laws and Technology. House Bill 1670 was stricken from docket by House Committee on General Laws by voice vote.
Written Consent to Board Decisions
Delegate David Bulova also introduced House Bill 1553 related to the use of unanimous written consent by the boards of directors of property owners’ associations. As you may know, Section 13.1-865 of the Virginia Nonstock Corporation Act allows for boards of directors to take action by written consent, without a meeting of the board.
Written consents (usually required to be unanimous) are typically used by nonstock corporations, including incorporated property owners’ associations and condominium unit owners’ associations, to ensure that time-sensitive opportunities are not missed by the board.
House Bill 1553 amends Section 55-510.1 of the Property Owners’ Association Act adding additional requirements for the use of written consents by boards of directors of property owners’ associations (not condominium unit owners’ associations). The changes:
- Require consents be delivered to the secretary, included in agenda packet and minutes, and kept in the association records;
- Expressly provide that owners may comment on the action during open forum;
- Expressly provide the action may be rescinded by the board; and,
- Clarify the effective date of the action.
- Status: House Bill 1553 was laid on the table by House General Laws Committee Subcommittee #1 - Housing.
Several similar bills (House Bills 2045 and 2274 and Senate Bills 1231 and 1255) were introduced providing that except as expressly authorized in governing documents or condominium instruments, no association may (1) require a specific sign provided by the association (at or a fee or for free), or (2) causes a violation of the Virginia Real Estate Board regulations.
The legislation also includes authority for associations to regulate signs on common area and address specific issues related to real estate signs through the adoption of rules.
Status: House Bills 2045 and 2274 were reported unanimously from the House Committee General Laws with substitute language. Senate Bills 1231 and 1255 are pending before the Senate Committee on General Laws and Technology.
Association Disclosure Packet - Required Form
Delegate Robert Orrock introduced House Bill 1475 that will require the Common Interest Community Board to revise its one-page disclosure packet cover sheet to include a statement that “that the purchase contract for a lot within an association is a legally binding document once it is signed by the prospective purchaser where the purchaser has not elected to cancel the purchase contract in accordance with law.”
Status: House Bill 1475 was reported unanimously from the House Committee on General Laws with the substitute language described above.
Dam Safety - State Funding
Delegate Mark Cole introduced House Bill 1562 and Senator Wexton introduced Senate Bill 1079 allowing state funds to be dispersed in the form of grants to common interest communities, as defined in § 54.1-2345, that own dams in order to protect public safety and welfare. The grants can be used for the design, repair, and the safety modifications of dams identified in safety reports.
Status: House Bill 1562 was reported from the House Committee on Agriculture, Chesapeake and Natural Resources with substitute language (20-Y 2-N) and will be considered by the full House of Delegates. Senate Bill 1079 was passed by indefinitely in the Senate Committee for Finance (13-Y 3-N).
Declaration Cover Sheets
Delegate David Bulova introduced House Bill 2307 requiring the cover sheet for a declaration creating a development that is subject to the Property Owners' Association Act to contain an acknowledgment of the review of best practices for the contents of declarations published by the Common Interest Community Board.
Status: House Bill 2307 was reported from the House Committee for Courts of Justice Subcommittee on Civil Law (6-Y 4-N) and will be considered by the full Committee.
Senator Tommy Norment introduced Senate Bill 1373 related to Group Homes. Senate Bill 1373 provides that any entity intending to locate a public or private detention home, group home, or other residential care facility in a locality shall give the chief administrative officer of that locality and the president of any home owner's association for the neighborhood in which such public or private detention home, group home, or other residential care facility is to be located at least 90 days’ written notice prior to the issuance of the license.
Status: Senate Bill 1373 has been referred to the Senate Committee on Local Government.
Declarant Control of Property Owners' Associations
Senate Bill 1401 was introduced by Senator Siobhan Dunnavant requiring, unless the declaration expressly provides otherwise, that the membership of the board of directors of the association include lot owners other than the declarant until the transfer of the common area to the association by the declarant.
Status: Senate Bill 1373 is pending before the Senate Committee on General Laws and Technology.
As we continue to monitor the 2017 session, we may issue legislative alerts through our website www.VanBlackLaw.com, through Twitter (@DMCaseyAtty and @TheMossReport) and on LinkedIn.