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HOA Design Review Application Form

Most homeowners’ associations require owners to submit a Design Review Application Form to approve changes to exterior features of their lots, be it a deck, patio, fence, driveway, or addition. Some even require approval to remove or add trees or change the grading. Owners often misunderstand their rights because the Design Review Application form includes language that obscures the issues or confuses them regarding their obligations to the HOA. The form may not adequately inform them of the criteria that the committee ought to use to evaluate the submission. The application forms provided by the community manager may call for the owner to sign off on things that the HOA does not have any authority to demand. These forms play a prominent role in standardizing the process of controlling what people do with their land or to discourage disputes among neighbors.

Some of my readers may ask whether it makes sense, as a matter of policy, for non-governmental boards or committees to have the authority to make rules or exercise discretion to veto exterior changes to private property. Those are good questions that I have touched upon elsewhere on this blog. The focus of this article is on the interests of a lot owner navigating the HOA design review process or opposing a neighbor’s improper application.

Sometimes, HOA approvals or denials of design proposals resurface years later. These decisions ordinarily become a part of the HOA’s file (to the extent any records are kept) for that lot. Owners ought to pay close attention to the wording of these forms so that they can better protect their own rights in the event of a dispute or to challenge an objectionable application by another member.

Community associations law is about making, changing and supplementation of rules regarding the development, alteration, and maintenance of property, be it a common area or owner’s lot.  A developer creates a HOA by encumbering property in the subdivision by recording a declaration of covenants. These contain rules about what lot owners, or the board of directors can or must do to use or maintain lots or common areas. Those rules may be changed by a formal amendment process. Also, the Property Owners Association Act allows boards to supplement the rules in the declaration with an architectural handbook, to the extent that the declaration establishes rulemaking authority. Newer declarations require an owner to first apply to the board or a committee to obtain approval for changes, even where they do not seek a variance from the covenants or rules. The HOA may be exercising discretion that goes beyond applying established general rules to a new application. These committees often seem to be more case-by-case legislating and less like ministerial gatekeeping. Many owners complete, sign, and submit the Design Review Application Form without considering the scope of the HOA’s authority over use and improvement of their property. This is risky since these forms often include requirements inconsistent with, or absent from, the HOA declaration.

Design Review Application forms vary widely from HOA to HOA, but they mostly keep to the same pattern. In Northern Virginia, there is a prominent law firm that represents many HOA’s and condominiums. A variation of the Design Review Application Form they prepared is the one many managers provide to lot owners. This Design Review Application Form is not based on any statewide laws (and it does not have to). Consideration of these forms illustrates how these HOAs exert control over their members.

First, the statements and disclaimers included in the language of the form may not accurately reflect the governing instruments of the subdivision. The text may mislead the lot owner regarding her rights and responsibilities. However, misleading language in the form presents added problems. The lot owner is expected to sign the Architectural Design Review Application form. The owner may later be accused of having waived certain rights that she had otherwise. Legally, the Board cannot force a lot owner to forgo her legal protections or to enhance its own power without the lot owners’ consent. Many HOAs use these little forms to frame issues in a way that is friendly to their own interests.  

The Design Review Application Form provides space for the lot owner to summarize the changes. The declaration may in fact leave certain improvements, such as those for vegetation or repairs that will not change the appearance, to be “by right.” Lot owners ought to consider whether any application is necessary at all. To a lot owner with little experience, it may be unclear what level of detail is appropriate. It is common for architectural committees to approve applications that are unwarranted or incomplete or to deny ones that are sufficient. The declaration and handbook may require a specific description of the proposed location, color, design, features, illustrated in a written summary, a marked-up survey plat, a design from a builder or engineer, photographs or drawings of products or materials. To the extent that HOA architectural approval is legally necessary, the owner ought to put in the application what is necessary to fulfil the requirements indicated in the declaration. The owner wants to place himself in a position where, after the project is completed, the work cannot be successfully challenged on the basis that a material aspect of it was not disclosed or identified. From a lot owner’s perspective, the process can discourage or prevent later challenges. It is difficult to accomplish this if the application does not adequately describe the location, materials, style, design, et cetera.

HOAs have reoccurring problems with owners getting approval from the committee on an application, and then after the change is made the neighbor voices a complaint about the result and the lack of notice. The Design Review Application Form also provides space for adjoining neighbors to sign to acknowledge receipt. Often these forms specify that the adjoining owner only signs to acknowledge receipt of the document. The governing instruments usually do not state whether such adjoiner signatures are required as part of the application or what the legal effect is of signing the document and then not opposing the application.

Design Review Application forms typically include “Owner’s Acknowledgements” for signature by the applicant. For example, a form used by many Virginia HOA says,

I/we understand and agree 1. That such approval by the Committee shall in no way be construed as to pass judgment on the correctness of the location, structural design, suitability of water flow or drainage, location of utilities, or other qualities of the proposed change being reviewed.

What does this mean? The application form is required because management deems architectural approval of location, design, and other qualities to be carefully considered before the lot owner may implement them. “Passing judgment on correctness” seems to be whole point. Addition of this item seems odd. I understand that the HOA does not want an owner to come back later and complain that it approved a design that resulted in structural failure or wrongful water diversion. From the face of the document it may be unclear whether the design choices were requested by the owner or dictated by the HOA. To the extent that HOAs use the architectural process to impose design requirements on lot owners, the HOA does not want to be held responsible for liabilities to that lot owner or a neighbor in the event that there is resulting damage or impairment of use or enjoyment. The broad scope of Acknowledgement #1, interpreted generously in favor of the HOA, could mean that the owner applicant could later be asked to change or move the approved improvement. I would disagree with this interpretation because it would render the process meaningless. Owners can address the ambiguity by being specific in their design proposal regarding these issues. They can also provide details in a letter as to why the location, design and other details are chosen (as opposed to other designs or locations) to made it more difficult to challenge. An owner could try not initialing this item or using handwriting to change it. Again, if it is not in the declaration or reflective of common sense then the owner is not legally obligated to acknowledge it.

Another reason to make sure that the design application form and supporting materials are complete and accurate is because if the lot owner doesn’t like the decision of the committee, she may have to appeal to the board or ask the circuit court for judicial review. it is more difficult to achieve a desirable outcome on appeal or review if the application is haphazardly prepared.  

Unfortunately, the HOA architectural design review process has gotten out of hand over the years – often it fails to prevent or resolve neighbor disputes, does not succeed in achieving harmonious or attractive effects for the whole neighborhood, or give lot owners a sense that they can rely upon the decisions made by the committee. Many owners discover that they need a professional or experienced person to help them prepare the materials or guide them through the process, or to review what a neighbor is doing with a project that poses a nuisance. If the HOA wrongfully denies an unobjectionable submission or approves an adversarial neighbor’s faulty application, legal counsel may be necessary to bring a timely challenge before the court or board. The assistance of legal counsel may be necessary to avoid waiver or abandonment of rights on procedural or substantive grounds.

Virginia Temporarily Relaxes HOA Open Meeting Statutes for Coronavirus

In March 19, 2020, I posted an article entitled, “Do HOAs Have to Meet Openly During the Coronavirus?” This explored how existing community association open meeting statutes might apply during the Coronavirus epidemic. The epidemic has since spread, particularly in the Washington, D.C. metropolitan region and other cities. On March 23, 2020, Virginia Governor Ralph Northam issued an emergency order directing citizens to stay at home, maintain social distancing, and restricting many normal public activities. That is expected to remain in effect for some time. Continuing effects of the epidemic and emergency orders are felt in community associations, particularly high-rise buildings where residents rely upon hallways, stairs, elevators, laundry rooms, and other common areas. Lobbyists representing the community association industry (lawyers, managers, and other HOA vendors) convinced the General Assembly to add community association boards to the list of “public bodies” that now temporarily enjoy relaxed restrictions on making their meetings accessible to their constituents.

These “open meeting” or “open government” statutes exist for good reason. HOA and condominium boards gravitate towards deliberating and deciding in an informal, nondisclosed fashion whereby affected landowners cannot determine what is going on and how they can participate. Normally, “open meeting” protections take the form of in-person, publicized meetings with an opportunity to record the meeting or make comments. For many reasons, there are challenges in translating this “openness” to a hearing conducted on ZOOM or some other audio or video-conferencing technology. However, owners’ interests can also be prejudice if legal or health considerations interfere with the boards ability to meet. As an attorney who represents lot or unit owners in disputes with neighbors or boards, I want the board to have timely, properly conducted meetings so that things can get done.

On April 24, 2020, Governor Northam signed House Bill 29 into law during a special legislative session. The General Assembly added to this budget bill some temporary laws facilitating use of remote meetings for official business.  While HB 29 is in effect, when the Governor declares a state of emergency, any public body, including the governing boards of community associations governed by the Condominium Act or Property Owners Association Act may meet by technological means without a quorum physically assembled at a brick-and-mortar location. This relaxation of legal requirements only applies to the Board of Directors. HB 29 says nothing about committees, association architectural review boards, or meetings of the members at large. Many people will be confused by this and mistakenly believe that this confers substantive or procedural powers on community association boards that it does not. This blog post is to push back on any false “We can do whatever we want” viewpoint.  

HB 29 says that they may only meet in such a fashion if,

(i) the nature of the declared emergency makes it impracticable or unsafe for the public body or governing board to assemble in a single location;

(ii) the purpose of meeting is to discuss or transact the business statutorily required or necessary to continue operations of the public body or common interest community association as defined in § 54.1-2345 of the Code of Virginia and the discharge of its lawful purposes, duties, and responsibilities;

(iii) a public body shall make available a recording or transcript of the meeting on its website in accordance with the timeframes established in §§ 2.2-3707 and 2.2-3707.1 of the Code of Virginia; and

(iv) the governing board shall distribute minutes of a meeting held pursuant to this subdivision to common interest community association members by the same method used to provide notice of the meeting.”

Of these four, (ii) raises the most questions for associations. First, does this mean that the HOA or condo board can only carry on “essential” business at these technology-driven meetings or can they conduct any business discussed in the governing instruments? How much deference should boards receive in determining what is necessary or essential? HOA boards typically have issues that they want to get resolved. Often there are directors who view certain things as urgent or important that could easily be deferred until after the epidemic is over. Landowners ought to remain vigilant and not disregard notices or letters from their HOA because the governors stay at home orders are in effect.

Second, under the Condo Act and the POAA, the recorded instruments define what is necessary and lawful for the board of directors. The declaration and bylaws provide the substantive rights and responsibilities of the board and individual owners. They also outline the procedural requirements to schedule and conduct meetings and hearings of the members, directors or committees. HB 29 does not overwrite any substantive or procedural requirements memorialized in otherwise valid HOA or condo governing instruments.

Third, under Virginia law, statutes are interpreted and applied by the courts by a rebuttable presumption that they ought not to be interpreted in a fashion to rewrite a deed or covenant. HB 29 relaxes certain “open meeting” statutes found in the Nonstock Corporation Act, POAA or Condo Act or other legislation. How to reconcile HB 29 with those statutes, and the particular “contractual” obligations found in governing instruments may present thorny legal questions for lawyers, owners, directors and courts to struggle with.

Many boards are adopting rules and regulations that outline temporary protocols for how to handle certain matters during the coronavirus epidemic. However, HB 29 and the “permanent” statutes do not give boards special powers to bypass the legal requirements to amend the declaration without the signatures of 2/3 of the members or whatever other criteria found in their governing instruments. The declaration may not give them the authority to adopt by board vote the language they have chosen in the emergency resolutions.

Item (iv) is also interesting. For many years, HOA and condo boards have been loath to post meeting minutes of director meetings on their websites. But under this temporary legislation, they must make the available to exercise these privileges.  

If a HOA or condo board desires to use this statute, they are subject to the following further requirements:

1. Give notice to the public or common interest community association members using the best available method given the nature of the emergency, which notice shall be given contemporaneously with the notice provided to members of the public body or governing board conducting the meeting;

2. Make arrangements for public access or common interest community association members access to such meeting through electronic means including, to the extent practicable, videoconferencing technology.  If the means of communication allows, provide the public or common interest community association members with an opportunity to comment; and

The nature of the emergency, the fact that the meeting was held by electronic communication means, and the type of electronic communication means by which the meeting was held shall be stated in the minutes of the public body or governing board.

Notice that this does not require boards to use technology that allows members to make comments, but merely suggests that they do. ZOOM or similar technology has many practical limitations that Americans are becoming more familiar with. I do not like the wording that seems to give HOA boards discretion to determine how much access they want to give their members into what business they are conducting on their behalf. Business conducted in HOA hearings tends to be document intensive.

HB 29 expressly prevails over prior contradictory laws. However, there are many provisions of the Condo Act or POAA that relate to these matters but do not directly “contradict” them. In Virginia, the courts attempt to reconcile seemingly contradictory statutes to give meaning and effect to all provisions. If owners were to seek legal challenge of HOA board action taken pursuant to HB 29, it is likely that the courts would interpret HB 29 in a fashion to avoid overriding existing law except when there is no real other rational way to resolve difficulty in interpretation. HB 29 does not mean that boards get to completely set aside the Condo Act or POAA.  

HB 29 does not state whether technologically driven meetings may be used to hear an architectural application, alleged rule violation, or consider other action that directly impacts a member. Can the measures described in HB 29 be used in such an instance if that owner objects or is not permitted to comment or submit materials in respond to director or manager questions? Does HB 29 override the “due process” that owners are supposed to be afforded in rule violation hearings? I think that the answer is “no.”

Many HOA or condo boards already disregard the “open meeting” requirements imposed on them by statute. Some officers or directors with inadequate professional assistance may lead themselves to believe that HB 29 provides them with a mandate to do whatever they see to be expedient during the COVID-19 emergency.

Other boards may decide that HB 29 is simply too much trouble to implement or not worth the hassle and expense of purchasing the technology and training people in how to use it. Remember that most boards meet only once a month.

While the coronavirus epidemic continues and governor emergency orders are in effect, landowners ought to pay close attention to what their HOA and condominium boards are doing and seek legal advice as necessary to protect their rights. There are people, be they rogue unit owners, board members, vendors or other members of the community who may not be above attempting to exploit a crisis to settle a score or for personal benefit.

Legal Authority:

https://budget.lis.virginia.gov/item/2020/1/HB29/Chapter/4/4-0.01/

https://budget.lis.virginia.gov/item/2020/1/HB29/Chapter/4/4-13.00/

Do HOAs Have to Meet Openly During the Coronavirus?

Updated March 20, 2020

Landowners frequently complain that the board for their HOA or condo association makes important decisions in secret. Virginia law imposes significant “open meeting” requirements on community associations, allowing for attendance and participation by members. This is almost always in person. Open meeting laws can protect landowners from arbitrary or self-interested board action. The Coronavirus pandemic poses unique challenges to “open” HOA operations. State governments currently impose limits on the number of people that may legally congregate simultaneously in one place. Some states are starting to impose even stricter limits than the 10-person rule. The virus is easily communicable through sneezed or coughed droplets in the air. HOAs and condominium residents are at risk, especially older residents, who chose these communities because of the services offered. Older Americans tend to be more civic minded than younger citizens, and devote more time to community organizations, including HOAs. Residents have a civic duty to obey the mandates and recommendations of federal, state and local health officials to “flatten the curve” in the fight against the epidemic. HOAs provide important services to their members, especially at a time when many people confine themselves to their neighborhoods. In this hour, questions about the open or fair management of community associations ought not to be trivialized. Owners must pay their assessments regardless of whether they presently have income or HOAs responsibly spend the money. In condominium buildings, effective response to the threat of spread of Coronavirus may be a matter of life or death to the residents and perhaps the greatest challenge that board will ever face as a group. High-rise condominiums include shared, enclosed facilities such as elevators, hallways, fitness facilities, and so on. Owners may need to use enclosed common areas to access their units. The community association statutes and governing instruments generally do not consider how to carry on necessary business under such circumstances. So, this is an aspect of the epidemic that is below the radar for many people.

This blog post focuses on what Virginia statutes say and how lot and unit owners can protect their rights and determine their responsibilities with respect to the business of association boards and committees during the Coronavirus epidemic. I’m not going to focus on annual meetings or elections. I’m interested in owner interaction with boards and committees in the context of architectural approval applications, notices of violation, and direct negotiations between owners and boards. The following applies to HOAs that qualify as an “association” for purposes of the Property Owners Association Act or a condominium organized under the Condominium Act.

The Condominium Act and Property Owners Association Act obligate boards and committees to meet, deliberate, and make decisions in settings open to all members. Boards may not use “work sessions” or informal gatherings to circumvent statutory open meeting requirements (this is already a common practice despite the statutory prohibition). Boards and committees are supposed to provide owners with notice of upcoming meetings. Except for matters to deliberated in executive session, packets of information provided to directors and committee members are supposed to also be provided to owners who attend. Boards may meet in closed session during a noticed meeting, but such restrictions are only supposed to be used for attorney-client communications, personnel matters, litigation, pending contracts, and other statutory purposes. Any member may record a meeting using equipment. Boards can use telephone conference or video conference, but at least two members of the board are required by statute to be physically present at the noticed meeting place. Boards and committees may not vote by written or secret ballot.

Virginia statutes require boards to establish reasonable, effective, and free methods for lot owners to communicate with the association’s representatives. Declarations and bylaws also contain express or implied duties and rights for communications between boards and their members. There is no authority for boards to suspend their communications with members during an emergency. If anything, the existence of a health or safety issue of community concern ought to heighten such duties.
In Virginia, if the declaration allows for the board to impose fines for violations of covenants or rules, the member is entitled to a reasonable opportunity to be informed of the alleged defect and a period of time in which to correct or address it. Boards cannot simply shut off an owner’s use of a common area, facility or service because of an alleged violation when they don’t want to hold meetings. Before imposing fines, the board must provide the owner with notice of a hearing before the board or committee where defense against the violation may be heard. Virginia statutes state that HOAs and condominiums have a duty to provide owners with “due process” in the conduct of such hearings. While due process is a flexible standard, at a minimum it includes proper notice and the right to be heard. There is no statutory authority for dispensing with “due process” requirements because the board or committee wants to impose a punishment without a proper hearing, even if the documents require an in-person meeting.

Virginia law allows for associations to use technology in the conduct of their open meetings. However, few HOAs or condominiums are set up for this (yet). In fact, few city or county boards, commissions and authorities are set up for remote participation in public hearings. Many declarations and bylaws don’t provide for remote participation. Virginia law provides that if an owner doesn’t want to participate through technology, then arrangements must be made for them to participate “live.” So remote access is practically unavailable.

Homeowners associations that are also nonstock corporations are also governed by the Virginia Nonstock Corporation Act. The POAA and NSCA both have provisions with respect to board and committee meetings, but the provisions are not the same. Because the POAA is more specific to HOAs than the NSCA, courts are very likely to find that the POAA controls over the terms of the NSCA to the extent that they vary. However, case law also requires judges to make every attempt to harmonize, whenever possible, when two statute sections apply to the same set of facts.This already controversial in Virginia because when disputes arise between owners and boards over open meeting requirements, HOAs tend to cite the NSCA as authority and owners point to provisions of the POAA that support their arguments.

For example, the NSCA allows for boards to act without an actual meeting if each director signs a consent describing the action to be taken and delivers it to the corporation. Under the NSCA, if the articles of incorporation allow, the board may act without the written consent of all the directors if no less than a majority sign written consents. There are provisions in the NSCA for objecting directors to submit notices. Va. Code § 13.1-865 has specific requirements for actions by directors without a meeting. Use of this statute by HOA boards is controversial. The Supreme Court of Virginia has not ruled on whether or not the boards in HOAs that are also non-stock corporations can make use of this statute allowing for action without a meeting. I expect that this controversy to intensify as the Coronavirus crisis grows. It’s unlikely that the courts would construe 13.1-865 so broadly as to allow an exception to swallow the rule.

Many HOAs, large and small, conduct business to some degree without open meetings. HOAs are going to be under intense pressure to maintain and operate common areas and services without interruption and without contributing to the spread of the virus. As far as owners communicating with HOAs about individual concerns, I think that often they are not prejudiced by the lack of an open meeting. Some owners may have no reason to object to the failure of their HOA to not follow the open meeting statutes in particular instances. They want to get to a resolution with the HOA without delay. It’s the other owners who may be impacted by such a decision that may be prejudiced by the lack of open deliberations and an opportunity to be heard. So, an owner must consider whether they believe that insisting upon exercise of the open meeting statutes or related provisions in the governing instruments is in their best interests.

In the context of the Coronavirus, the lack of technological participation methods, and the open meeting statutes, it will be easier for owners to use legal counsel to postpone the decision of matters that require an open meeting to be convened in person. This means that “due process” hearings on notices of alleged violations of covenants and rules will be pushed back in many cases. That said, many HOA boards, especially those that don’t use lawyers or managers much will want to press forward with enforcement or architectural review matters because of the personal opinions of the officers of the association. Bullies will use any convenient circumstances to try to impose their will on others. At the HOA level of “government,” there are often conflicts of interest or personal animosities that play large roles in the dynamic of board-owner relations. The public health emergency isn’t going to make those conflicts go away, it’s only going to intensify the stress of the parties.

If a HOA or condominium fails to follow the statutes or its governing instruments in their procedural handling of making a decision, is the result legal? Under Virginia law, corporate actions that are legally deficient may be found to be “void ab initio” or merely “voidable.” A resolution is void ab initio if the board or committee had no authority to do what they did even if they followed all of the procedural requirements that would apply. In such instances, the result would be a legal nullity. If the board had the authority to do the kind of thing they were doing but performed it in a procedurally deficient matter, then the resolution may later be voided by a court or new board. The improperly procured decision may also be later ratified in a proper meeting. Its more difficult for an owner to challenge a voidable decision than a void one. Challenge to an action that is merely voidable is susceptible to litigation defense tactics than something that is an outright nullity. The parties may not know whether or not the action was legitimate, void or voidable without court review. Such questions are best considered with the advice of legal counsel.

All these controversies are going to occur while the parties may not be able to get a court to hear a petition for redress. Virginia courts are continuing “non-essential” civil matters, and there are no HOA exceptions. When the courts go back to hearing civil cases, there is going to be a huge backlog, and trial dates will be pushed out even further than they are now. It will likely take more than a year to get a trial date in many civil cases. Owners should consult with counsel if it seems that their HOA is improperly pressing forward with something prejudicial to them while the courts, schools and other businesses are closed.

Legal Authority:

Va. Code §§ 55.1-1807 & 55.1-1939
Va. Code §§ 55.1-1816 & 55.1-1949
Va. Code §§ 55.1-1817 & 55.1-1950
Va. Code §§ 55.1-1819 & 55.1-1959
Va. Code §§ 55.1-1832 & 55.1-1935
Va. Code § 13.1-865

HOA Regulation of Trees and Shrubs

Spring is prime planting season, and many landowners are now making decisions on what landscaping changes they want for 2020. Trees, shrubs and other plants fill essential roles in residential subdivisions. They unlock the value of property by providing shade, screening, beauty, use transitions, and erosion control. Property owners like to control the planting, trimming and cutting of plants on their property. Disputes frequently arise between owners of coterminous lots (or with the HOA regarding common areas) over boundaries, trimming, aesthetics, obstructed views, or the effect of root systems on structures or improvements. Association covenants and local land use ordinances frequently regulate trees and shrubs less strictly than walls, fences or other contractor (or factory) creations. Nonetheless, HOAs frequently seek to force lot owners to remove, trim or replace trees or other plants that do not conform to the Board’s view on architectural harmoniousness. Disputes between HOAs and lot owners frequently arise in the context of landscaping issues ancillary to requests to approve additions, decks, fences or other proposed structures. In any subdivision dispute over vegetation, the threshold issue is the location of the existing or proposed trees or shrubs. Is the location entirely on a lot? Is it within an easement defined by a deed or declaration? Is it on a common area adjacent to an owner’s structure? Some trees sit on boundary lines or mark the corners of property, and specific legal doctrine applies to them. State laws and the associations’ governing documents typically grant boards substantial discretion in removal, maintenance, and replacement of trees on defined common areas.

Many owners, directors and committee members operate on mistaken beliefs regarding the authority of HOAs to regulate trees and shrubs on owners’ lots. The courts will look to the declaration, amendments and rules & regulations to determine what, if any authority the HOA may have. Many older HOA declarations of covenants do not contain significant restrictions on the cutting or planting of trees and shrubs or delegate the authority to the board to make rules and regulations regarding such things. Its common for the declaration to be mostly silent on such issues because the developer is not concerned about the long-term growth or disease of trees in the subdivision. Many years later, boards may struggle with tree issues. If the declaration (or valid amendments) are unambiguous or “clearly silent” on tree issues, then its easier for lot owners to determine the extent of their rights and responsibilities on such issues. However, many declarations are unclear in defining the scope of rulemaking powers or what changes require architectural approval. In Virginia or other states, the silence of the declaration on a topic may mean that the board does not have the authority to regulate it. Rarely, courts will find a restriction to be absent from the express language of the document but reasonably implied by the terms of the covenants. It is common for HOA declarations to specifically require committee or board approval for “structures or improvements” to property. Sometimes the term “structure” is well defined. In other instruments, the parties are left to try to determine from context what the terms “structure” or “improvement” means. Black’s Law Dictionary defines “structure” as “Any construction, production, or piece of work artificially built up or composed of parts put together.” In my opinion, a living thing such as a tree is not a “structure” because it isn’t put together by human hands. A tree would become a structure if someone cut it down and carpentered it into something such as a fence or playground. But a developer could easily lay down specific restrictions regarding trees or delegate authority to the board to make rules, enforce them in hearings or require architectural approvals by submission of plans to a committee.

To the extent that an association’s declaration and amendments do not regulate trees or authorize the board to regulate trees, this silence often will make the planting, cutting, or pruning of trees and shrubs by an owner on her lot largely “by-right” and only limited by common law considerations such as nuisance or encroachment. Sometimes HOA boards will adopt rules and regulations applying to trees and shrubs in the absence of legal authority to do so or enforce such things. The authority to make and enforce rules regarding trees is important, because in Virginia and many other states, the HOA cannot take advantage of out-of-court remedies such as fines, liens, foreclosures, suspension of common privileges or voting rights in the absence of clearly delineated authority. Otherwise, the board could end-run the amendment provisions of the declaration or statute by simply voting to enforce rules that aren’t in the declaration.

In the wording of some governing instruments, the lot owner may be held to maintain the plants on their property to substantially conform to the landscaping design originally adopted by the builder. However, it may be difficult for the owners or directors to determine what that design was and how it would apply to tree questions. Sometimes drawings are lost.

If the planting, cutting, and maintenance of trees in a subdivision is largely or entirely “by right,” then that makes it much easier for lot owners to use plants to maintain and develop their property as they see fit. A good example of this is with the use of arbor vitae or other vegetation to define a boundary between adjacent parcels or to soften the visual impact of a fence, wall or building. Some lot owners use arbor vitae near their boundary lines because you can grow trees taller than the height restrictions imposed on fences. In Virginia, an adjoining owner can trim branches up to the boundary line.  But the trees don’t have to be planted on the boundary line.

It takes time for trees and shrubs to mature and achieve their potential as screening or buffering between uses or adjoining properties. Lot owners ought to carefully consider the location and variety chosen (in addition to whether or not HOA approval is required) because if the trees die or taken down, it may take years for replacements to mature.

To untangle a tree law question, a lot owner may need to consult with a qualified attorney, surveyor, arborist or designer to avoid making decisions or failing to act in a manner that is prejudicial to one’s own rights. When HOAs in Virginia issue notices of violation or schedule fine hearings or architectural improvement requests, owners may only be given a few days to act in response to action by the board, committee, or an adjoining owner. Tree or shrub issues are not an inconsequential matter to which the owner should feel compelled to subordinate their interests to a board or committee in the absence of proper authority. However, agreements can often be achieved through negotiations that avoid the necessity of court review. Vegetation grows or dies, and consideration of an architectural application or notice of violation must consider the long-term effect of how one handles a tree dispute.           

Proposed Virginia Legislation Would Empower Developers to Oppress Rights of Unit Owners in Sale of Terminated Condominium Developments

For many years, I have observed how state statutes enable condominium boards or developers to oppress the rights of unit owners in the termination and sale of condominium developments. I have work experience as an attorney representing unit owners or tenants in such cases. In 2019 I published a case study in a state bar journal relating to a case that is now the focus of efforts by the 2020 General Assembly to rewrite the Condominium Act through House Bill No. 1548. The 1993 amendments to the Virginia Condominium Act made it too easy for boards to sell all the units and common areas of the development to a real estate company for redevelopment purposes, without the consent of all unit owners, and giving unit owners a diminished, unfair share of the proceeds of the sale. My hope was that the Condominium Act would be amended to remove or reform those 1993 amendments. Unfortunately, 2020 House Bill 1548 would make it even easier for the interests of unit owners to be oppressed in condominium termination sales by removing common law protections. This blog post voices my opposition to this proposed bill. This blog post is not as polished of a writing project as I would prefer, because I’ve put it out quickly in the interest of quickly explaining my opposition to the bill.  

Existing Condominium Law. Condominiums are a form of common ownership where the owner owns a “unit” outright, and all of the unit owners own the common areas as tenants in common. The Condominium Association, acting by the Board of Directors, has the exclusive power to operate the common areas for the benefit of the unit owners. The respective rights of the unit owners and the association are defined by the declaration and bylaws recorded by the original developer on the entire project, with any amendments. The courts treat the declaration and bylaws as the “contract” between the unit owners and the association. Like any other real estate “contract” or “tenant-in-common” ownership, the common ownership arrangement can come to an end through termination. When condominiums were a new invention, judges and lawyers understood that because the common areas were owned by the unit owners as tenants in common, the statutes pertaining to partition of real property would apply to issues of termination and sale, along with whatever applicable provisions there are in the Condominium Act and the Declaration. Directors, lawyers, developers, lenders and unit owners involved in the termination of condominium declarations and the sale of the property discovered that the partition statutes did not make it easy for the board, prospective buyer, or a majority of the unit owners to cleanly sell the property and distribute the proceeds. This is because absent a guiding provision in the declaration, it is necessary to litigate the partition action in the court system if 100% agreement cannot be made among the tenants in common. The 1993 amendments to the Condominium Act made it easier for the requisite super-majority of unit owner interests to make a Termination Agreement allowing sale of the entire property and distribution of the proceeds to the unit owners. The reasoning being that a few holdouts should not be able to block the sale of a property that was no longer useable or could be sold for a good price. However, when condominium terminations are made, often the “majority” is not a consensus of individual unit owners, but a commercial interest that has purchased 51%-67% of the units and is in the position of controlling or influencing the seller while also being the buyer. When one party is the buyer and controls to some degree the seller, they can control the purchase price, and thus the proceeds that go to each unit owner according to their percent interest.

Virginia House Bill 1548 does nothing to remedy the problems that exist under the current system. In fact, it makes oppressive tactics faster and easier to conduct. The following identifies several problems with the proposed amendments to Va. Code 55.1-1936:

Erosion of Protections in Recording Acts. Ordinarily a purchaser of property takes the land subject to all defects and encumbrances known to her or reflected in the publicly recorded land records. One of the effects of the land recording system is that it encourages parties to record land instruments to protect their rights by putting potential purchasers or lenders on notice of an encumbrance. A Condominium Termination Agreement is an encumbrance because it evidences the terms by which the declaration is being terminated and how the entire property is going to be sold. This is exactly the kind of information that a prospective purchaser would want to know before buying a condominium unit or accepting the unit as security for a loan. Under present law, there is no reason why a termination agreement would bind a purchaser of a unit unless the agreement was recorded prior to the conveyance of the unit or the seller told them. The Proposed 2020 amendment would do away with this protection, by allowing the proponents of the termination and sale to get the requisite signatures on the Termination Agreement, place the instrument in a desk drawer for recordation at a convenient time, but any purchaser would nonetheless take title subject to that termination agreement. See HB 1548, section C. Allowing “pocket” terminations would create ripe opportunity for abuse by bulk-buyers of condo units who want to keep the remaining unit owners in the dark or see what happens in a rezoning activity. The proposed amendment attempts to provide a replacement safeguard by requiring a copy of the termination agreement to be included in the resale disclosure packet. However, the statutes in Virginia requiring resale disclosures are woefully inadequate. The terms of those statutes give buyers barely any time to evaluate the sufficiency of the disclosures. The remedy for a deficient disclosure packet is to void the sale, not void the omitted instrument from affecting the rights of the purchaser. Also, the persons preparing the packet would not necessarily know about the existence of the termination agreement unless the makers of the agreement told the board or the manager.

Termination Agreement Can Redefine Unit Owners Rights. According to the proposed amendments to section I, new subsection 1, “Expect as provided in subsection 3, the respective interests of the unit owners shall be as set forth in the termination agreement.” This substantially inflates the powers of the supermajority voting interest promoting the termination sale. Ordinarily, the interests of condominium unit owners are defined by the declaration, condominium survey plat, bylaws and other instruments that define what rights are included in the condominium unit. This proposed amendment could allow the majority making the termination agreement to redefine the interests of the unit owners without their consent. The Bill proposes to amend Section G from reading,

If the property that constitutes the condominium is not sold following termination, title to the common elements and  . . . title to all the property in the condominium shall vest in the unit owners, upon termination, as tenants in common in proportion to the unit owners’ respective interests.

The bill would change this language to,

If the property that constitutes the condominium is not sold or otherwise disposed of following termination, title to all the property in the condominium shall vest in the unit owners, upon termination, as tenants in common in proportion to the respective share of the proceeds of sale paid to each unit owner.

So, this proposal would allow the supermajority voting block that approved the termination to, at their discretion, redefine the unit owners’ respective take or share in the context of a subsequent sale. This portion of the amendment may run afoul of the Constitution of Virginia, because the respective rights of the unit owners of existing condominiums are already defined by the Condominium Act and the common law of Virginia, and the legislature can’t pass laws that redistribute rights derived from preexisting contracts, declarations or deeds. With this amendment, the person or groups that make termination agreement would try to use this language to deprive other unit owners of rights by redefining the share of the proceeds. This is not a “mini-democracy.” It’s a tyranny of a super-majority of voting interests.

Further Dilution of the Appraisal rights of Unit Owners. According to the law currently in effect, the Board of Directors is supposed to hire independent appraisers who appraise each unit and use these appraisals to calculate each unit owner’s percentage interest in the net proceeds of the sale. Since the individual or group that has the requisite super-majority will undoubtedly place directors friendly to their cause on the Board, and because of the friendly relationship (or identity of persons) between the buyer and this voting bloc, the seller can greatly influence or control the process of appraising the units, or ignore the appraisal requirements to make the process faster and cheaper. The appraisal requirements in the current statute seem to be there to protect the interests of unit owners who spent considerable sums maintaining or improving their units, so that they would not be treated the same way as persons who neglected maintenance. The proposed bill makes it easy for the proponents of a termination to dispense of the appraisals by allowing the termination to require unit owners to demand appraisals within 30-days’ notice. If the appraisals come out 10% or more higher for the unit owner than the share the unit owner would receive according to the agreement, then the appraisals are used for valuation. If the appraisals come out 10% lower, then the dissenting unit owner’s share of the proceeds is reduced by the cost of the appraisals. This proposed system for challenging the appraisals does nothing to solve the problem of the buyer’s influence over the board that appoints the appraisers. This proposed change would bless the board to depress the share of the dissenting owner by 10%, even if the appraisals showed that the valuation method stated in the termination agreement undervalued a unit owners’ interest in the proceeds of the sale.

Leases and Mortgages. Section (I)(5) adds a new section, “Unless the termination agreement provides otherwise, each unit shall satisfy and cause the release of any mortgage, deed of trust, lease or other lien or encumbrances on his unit at the time required by the termination agreement.” Under the current Condominium Act, the leases and liens convey with the land if sold pursuant to a termination agreement, unless there is some limitation in the declaration that the tenant or lender takes subject to. The Condominium Act does not presently require unit owners to clear liens in the event of termination. Condominium units can be valuable as rental units, whether they are commercial or residential. Commercial leases can have terms that span many years and may involve rights of first refusal for purchase. In the commercial context, unit owners or their tenants frequently improve the interiors of the units at great expense to make them usable as a medical office or restaurant. The effect of this provision would be to devalue the use of condominium units as rental properties because the protections of the tenant and landlords’ leasing rights would be subject to this new provision. Many commercial tenants may refuse to willingly lease a unit where the landlord requires them to have the lease terminated by operation of a termination process outside of the landlord’s control. Also, its common for condominium unit owners to use their property as collateral for loans. Condominium terminations often occur when the economy is changing. In the event of a recession, many unit owners may be underwater on their loans. The effect of Section (I)(5) is to circumscribe condominium unit owners’ opportunities to leverage their investments through loans and leasing necessary to unlock value of the property. The condominium unit owner’s deed becomes less of an individual property right and more of a share in a communal resource.

There are other problems with the bill to which there is inadequate time to explore on short notice. Owners, lenders and tenants of condominium units in Virginia deserve better than to have ill-considered legislation impair their rights and make it easier for others to oppress their property rights through termination sales. For many Virginians, their condominium unit is their greatest investment and where they live or earn a living. Condominium ownership is promoted as a carefree means of living the American dream. The General Assembly has the opportunity to reduce the risk of nightmare for many of their constituents by voting against HB No. 1548.

February 7, 2020 Update: Today the House of Delegates approved HB No. 1548 by a 81-18 margin. To follow the bill status, go to www.lis.virginia.gov

For Further Reading:

Current Version of Va. Code § 55.1-1937 in effect

2020 House Substitute Bill No. 1548 Reported from General Laws Committee, February 4, 2020

My Fall 2020 Fee Simple Journal Article about Owners Rights in Condominium Termination

photo credit: Coastal Elite Construction in Halifax, Nova Scotia – September 2018 via photopin (license)(Doesn’t Depict Anything Mentioned in Post)

Where is Virginia on Selective Enforcement of HOA Covenants?

In Greek mythology, Procrustes was a robber who deceived his victims into entering his house by offering a free bed for the night. Once inside, if the visitor was too short, he violently stretched them to the full length of the bed. If the visitor was too tall, he would chop off their legs to fit them. Either way, Procrustes ended up with their valuables. Procrustes met his end when the hero, Theseus “fitted” Procrustes to the length of the bed in his own guest room. In the law, judges, lawyers and professors sometimes deride arbitrary or unwise legal standards as “Procrustean.”  

Subdivision deed restrictions often seem “Procrustean.” But at least Procrustes held all visitors to the same “standard.” When a HOA or condominium seeks to enforce a restrictive covenant against a particular owner, often there are other properties for which the board has failed to enforce that covenant against for a number of years. The owner, reading her notice of violation, may wonder if the HOA had effectively abandoned enforcement of the restriction or if the notice is an unfair “selective enforcement” against some lots but not others. The Supreme Court of Virginia considered this question in the 1992 decision, Raintree of Albemarle Homeowners Association v. Charles & Glenda Jones. Raintree brought suit against the Jones family, seeking an order prohibiting them from keeping a “wrecker” tow truck on their residential property. The HOA’s enforcement was a sore subject. Two other owners, Gordon Nicely and Dennis Powell parked pickup trucks owned by a utility company at their homes without HOA objection. The disputed covenant prohibited lot owners from parking trucks “of any nature” overnight on property in the subdivision, except in an enclosed garage. The section also prohibited, “school buses, commercial vehicles or habitable motor vehicles” outside of an enclosed garage. The Supreme Court disagreed with the HOA’s view that the utility company pickup trucks were not commercial trucks or “trucks of any nature” prohibited by the covenant. The HOA also argued that its failure to enforce the covenant against Messrs. Nicely or Powell, did not constitute a waiver of the enforceability of that covenant in the Jones case. The Supreme Court of Virginia’s longstanding rule says that the right to enforce a restrictive covenant may be lost by “waiver, abandonment or acquiescence” by the association to violations thereof. But the party relying on such waiver must show that the previous conduct or violations had affected, “the architectural scheme and general landscaping of the area so as to render the enforcement of the restriction of no substantial value to the property owners.” The Supreme Court found that the HOA’s failure to enforce the covenant against Nicely and Powell did not substantially devalue of the covenant in the context of the overall architectural scheme of the development.

The Supreme Court found that the Circuit Court properly denied the HOA’s request for an order prohibiting the Joneses from parking their wrecker truck on Old Brook Road. The Supreme Court observed that Old Brook Road is State Route 652, not a private right of way. The HOA had no authority to regulate parking on Old Brook Road because it had been incorporated into the state system of highway maintenance. If VDOT didn’t have a problem with the truck, then there wasn’t anything that could be done against it. This is one reason why many HOAs like to own their own roads.

Many HOA declarations prohibit the keeping of commercial vehicles or motor homes in the subdivision. These rules can be onerous to small business owners who need a commercial vehicle to earn a living. Usually, owners are permitted to use their home as an office for professional work that does not impact the curbside views of the lot. Commercial vehicle or home business restrictions can hit working class people harder than professionals. Enforcement of such rules often “drives” small business owners further away from their service areas, require them to pass on “overhead” garage costs to their customers in higher prices, or force them out of business. This can discourage useful economic growth between services and consumers of ordinary means.

“Selective Enforcement” is a difficult defense to prove when relying upon the rule in Raintree. Motor vehicles are transitory by nature. If this was a case where a majority of the lot owners violated a covenant prohibiting sheds in the front yards for many years, then it would be much more likely to be found to render the prohibition useless. Or if the original declaration called for the association or developer to establish bridle paths across the front of each lot for equestrian activity, and instead of doing so, many lot owners built fences and other structures in the areas originally contemplated for horse trails.

There are other rules which lot owners may be able to use to assert a “selective enforcement” defense other than the “defeat of common scheme” rule discussed in Raintree. For example, federal or state fair housing laws may prohibit certain enforcement actions related to race, religion or other criteria.

Supreme Court of Virginia seem receptive to “textualist” challenges to HOA enforcement actions. Under this approach, set out in Tvardek and Sainani, interpreting the specific language in covenants or statute narrowly to limit enforcement, is more likely to result in a successful challenge. For example, in this case, if the Jones used unmarked mini or compact vans for a house cleaning business that they parked overnight at their property, then such a practice might not violate the covenants, because the minivans look no different than those used by large families.

The covenant at issue in the Raintree strikes me as unreasonable, in its prohibition against “trucks of any nature” being “parked overnight.” Pickup trucks are commonly used by passenger vehicles, and many automobiles used by families are classified as a kind of truck. It doesn’t make sense to put a covenant in a declaration that treats ordinary pickup trucks, SUV’s, vans, etc. like commercial service vehicles. Also, the “overnight” temporal limitation seems unreasonable. By this rule, a commercial vehicle could sit in an open driveway all day and go elsewhere at night. This doesn’t protect onlookers from the “eyesore” of the commercial vehicle. A literalistic enforcement of this covenant would require lot owners to ask their friends, who come to visit using compact pickups, to leave as soon as the sun sets.

Many people want HOA disputes to be resolved based on what others in the subdivision are doing or on “common sense” arguments. However, the courts in Virginia have explained that what the declaration and the statutes actually say is often more important than what some people may be doing. Different lawyers and judges often disagree as to what particular HOA covenants actually mean. At least with Procrustes, people trapped inside his house knew how tall they needed to be to get out unscathed. There were no arguments as to how long the bed was. When the legal standard is unclear as to what compliance would actually look like, then there is a greater problem. This is why the recent trend in Virginia whereby courts refuse to enforce overly general or ambiguous covenants makes sense.  

Selected Legal Authority:

Raintree of Albemarle Homeowners Ass’n, Inc. v. Jones, 243 Va. 155 (1992)

Tvardek v. Powhatan Vill. Homeowners Ass’n, 291 Va. 269 (2016)

Sainani v. Belmont Glen Homeowners Ass’n, 831 S.E.2d 662 (2019)

photo credit: akahawkeyefan RADIATOR SPRINGS? via photopin (license)

This photo does not depict anything discussed in the blog post.

Judicial Limitations on HOA Fining Authority

It’s December. Santa is coming. But for many, Santa isn’t the only person leaving things at homes. Many households using outdoor decorations to share holiday cheer will receive, in addition to gifts from their friends and family, HOA violation notices. Fortunately, Christmas came early in 2019, bringing Virginia landowners new, owner-friendly legal precedent.

Years ago, state legislatures made it easier for HOAs to use handbooks of architectural standards to enforce private land use restrictions.  Upon proper observation of certain formalities, HOAs can make up rules adding to those in the declaration and  impose fines and liens for violation of those rules.

Why is this controversial? It allows boards to bypass the normal, difficult process of obtaining votes of 1/2 to 2/3 of the owners to amend the restrictive covenants in the declaration. The power to adopt and enforce such rules (or the discretion not to do so) can make owners feel like someone is controlling their life or the value of their investment. When such power falls in the hands of an association board, owners are one election away from (1) a civic-minded group doing their best to help the community, (2) a controlling group of bullies acting out of self-interest, or (3) a board that is unengaged or incompetent.

Many people have a mistaken belief that the law empowers these organizations, the language of the documents doesn’t matter, and there is no real way to protect oneself. This is false. In August of 2019, the Supreme Court of Virginia explained in Sainani v. Belmont Glen Homeowners Association, Inc. that the law strictly construes HOA statutes, declarations and rules when Boards try to enforce such rules, and in favor of free use of property. This blog post explains what happened in the Sainani case, and how the legal method outlined in that case can be used to resist other efforts by HOAs to fine owners for violating rules and regulations.

SanJay and Sona Sainani owned a home in Belmont Glen HOA in Loudoun County, Virginia. For several years, the HOA sent them violation letters for the stringed holiday lights that adorned their front door and deck most days of the year. For the months of September through April, the Sainanis would leave up lights for several Hindu, Sindhi, and Sikh religious holidays. The HOA’s notices referred to its Handbook of Architectural Design Guidelines.  That document limited display of holiday lights to certain days around Halloween, Thanksgiving, Winter Holidays, and the Fourth of July. Beyond that, the Handbook required owners to obtain written approval from the HOA’s Architectural Review Board. At a hearing that the Sainanis did not attend, the HOA imposed a fine of $10.00 per each day that the violations continued. The ARB suspended the Sainanis voting privileges and their use of common facilities. The HOA filed suit in the General District Court and obtained a default judgment. The Sainanis retained counsel, appealed the GDC order, and filed counterclaims against the HOA on appeal in the Circuit Court of Loudoun County.

The Sainanis took the position that the seasonal display guidelines in the Handbook were unenforceable because their adoption was not authorized by the subdivision’s amended declaration of covenants. The Circuit Court decided that the holiday light rules were enforceable, and entered judgment against the Sainanis for $884.17 in unpaid fines and almost $40,000.00 in attorney fees and court costs. The Supreme Court of Virginia granted the Sainanis an appeal.

Justice D. Arthur Kelsey wrote the opinion of the Supreme Court. The “strict construction” analysis of HOA covenants follows the approach taken in Tvardek v. Powhatan Village HOA which I have written about previously. The general rule of strict construction is that restrictive covenants, “are not favored, and the burden is on [the party] who would enforce such covenants to established that the activity objected to is within their terms.” Covenants, “are to be construed most strictly against the grantor and persons seeking to enforce them, and substantial doubt or ambiguity is to be resolved in favor or the free use of property and against restrictions.” A  longstanding principle of the English common law is protection of the free use, enjoyment and disposal of property without restriction except by the laws of the land.

Most HOA covenants include lists of prohibited activities that range from the specific to the general, using terms that may or may not be clearly defined.  Under the rule of “ejusdem generis,” when a particular class of things is enumerated, and general words follow, the general words are construed in a sense similar to the more specific language. The corollary to this is the rule, “noscitur a sociis”, states that when general and specific words are grouped, the general words will be construed to embrace only objects similar in nature to the specific things mentioned.

Because the language of restrictive covenants is construed in favor of free use, covenants are only enforced where the intention of the covenant is clear and the restrictions are reasonable. Virginia courts are required to determine the meaning of covenants by considering the instrument taken as a whole. Parties are not permitted to cherry-pick bits and pieces of language that, if taken out of context, support their arguments.

The HOA pointed to several sections of the Declaration which they contended allowed for enforcement of anti-holiday light rules against the Sainani family:

1. The Declaration prohibited nuisances. A section provided: “No exterior lighting on a Lot shall be directed outside the boundaries of the Lot. Exterior lighting which results in an adverse visual impact to adjacent Lots, whether by location, wattage or other features, is prohibited.”  Because this covenant concerned the “adverse visual impact” of lighting on one lot to an adjoining lot, the Handbook rules about which days and times one could display decorative holiday lights, the activity objected to fell outside the scope of the light nuisances restrictions. The Court was not persuaded that the general prohibition against nuisances could apply to lighting features that were not proscribed by the “lights” subsection or any other subparts.
2. The Declaration required lot owners to obtain approval of the HOA’s ARB before any “modification or “alteration” of any lot or structure shall be made, installed, constructed, erected, placed, altered and/or externally improved. The Supreme Court used “strict construction” principles to limit the scope of this section to permanent changes to a lot, and not seasonal displays. The Court approved a section of the Restatement (Third) of Property: Servitudes § 6.7 which provides that design-control powers do not include an implied power to impose controls for purely aesthetic purposes, absent express authorization by statute or the declaration. Restatements are treatises where academic experts attempt to summarize and clarify common law doctrines.
3. The Declaration gave the ARB the authority to regulate the external design and appearances of the property so as to enhance property values and to maintain harmonious relationships. The Supreme Court found this grant of authority in the declaration to be overly general and found that it failed to specifically enumerate rulemaking powers beyond the “light nuisance” section previously considered.

The Sainani opinion does not mean that owners can just throw HOA violation notices into the trash. Fines are not now abolished. Owners ought to consult with qualified legal counsel whenever served with a notice to appear in a hearing at the HOA or courthouse. Sainani will prompt lawyers who draft HOA covenants to be more specific in describing prohibited conduct and grants of power to HOA boards and committees. This may avoid having the “void for generality” Sainani principle prevent covenant enforcement.

The court quotes a section of the HOA Handbook which states that the purpose of the holiday guidelines was, in addition to other purposes, “to avoid religious issues in the community.” This opinion doesn’t mention whether or not the Sainanis presented any arguments that any orders of the GDC or Circuit Court’s orders functioned as a restraint on free speech or exercise of religion. The Sainani opinion shows that it is not necessary to frame an issue in terms of first amendment rights for an owner to prevail.

What does the Supreme Court’s approach in the Sainani case mean for lot owners who are concerned about how the board is enforcing rules in the community? Since the Boards are the usual enforcing authority of HOA governing documents, the new opinion is a blow to many board or committee adopted systems of notices of violations, hearings and liens that rely heavily upon thick handbooks only loosely supported by the recorded covenants. The principles of strict construction shine light through loopholes in the HOA fine systems that may be offensive. The Court is 100% correct that interpretation of HOA statutes and covenants ought to look through a lens focused on the free use of property by landowners. The practical value of land comes from its free, un-interfered with use.

What the Sainani case (like the Tvardek case and others before it) introduce into the community associations system is substantial uncertainty about whether sections of governing documents are enforceable, and if so, how. The Supreme Court is not saying that the declaration or the exterior lighting provisions are invalid or that the Board may simply be ignored. The opinion says that the HOA cannot enforce particular sections of a Handbook adopted by the board by imposing fines through a statutory process. This enforcement uncertainty is of great interest to lawyers looking to enable or resist an Association’s rulemaking and enforcement practices. There are active owners in every community who will continue to strive to make other owners lots look a certain way, even if the judiciary raises the banner of private property rights higher. Lobbyists, specialist lawyers and professional managers who represent HOAs will go back and draft new legislation, covenants, rules, and procedures, trying to strengthen the authority of HOA boards and committees The uncertainty imposed by “strict construction” strengthens the rights of owners in the face of Boards and legislators who would like to limit those rights. However, this may be unhelpful to an owner who wants to be able to make plans and decisions now without months or years of litigation.  That’s why I would like to see the 2020 Virginia General Assembly take action to reform HOA fines.  

Selected Legal Authority:

Sainani v. Belmont Glen Homeowners Ass’n, 831 S.E. 2d 662 (Va. Aug. 26, 2019)

Va. Code § 55.1-1819, formerly, Va. Code § 55-513 (Adoption & enforcement of rules)

Photo Credit:

NathalieSt Christmas Flowers via photopin (license)(for decorative purposes only, does not depict anything featured in text of blog post)

Appeals Court Deems Association Street a First Amendment Public Forum

Disputes between individuals and HOAs frequently occur on the roads or sidewalks owned by the Association. The rights of way are usually the HOA’s largest budgetary and operational responsibility. The lot owners and their invitees rely upon the roads to access properties. State and local governments benefit financially by shifting the maintenance burden of the roads, sidewalks and drainage features onto an association that assesses dues on lot owners. Despite this public function, many associations or their residents want to use the roads’ “private” status to exclude undesired visitors or limit the roads’ use by lot owners. Representatives of the board may accost visitors as unwelcome. Managers may try to stop owners from communicating with residents on the sidewalks.

The declaration of covenants will contain provisions that define the respective rights of owners and the board with respect to common areas such as right of ways. By deed or “contract,” a lot owner may find that she has rights or duties with respect to these private roads that vary in scope or character from government-owned streets. However, owners are not the only parties that use HOA roads. HOA boards and committees are not the only authorities that regulate use of land in subdivisions. While the answers to most HOA problems are in the governing documents, sometimes broader legal principles apply. When do courts treat HOA roads or common areas as public forums for purposes of free speech analysis under the Bill of Rights? In July 2019, the U.S. Court of Appeals for the Sixth Circuit considered such a case.

5325 Summer Avenue Property Owners Association, Inc. owns Virginia Run Cove, a two-lane asphalt street in Memphis, Tennessee. The public uses Virginia Run Cove to access a gas station, a church, a federal government office, and, since May 1, 2017 a Planned Parenthood Clinic. John Brindley, who does not live or work in this subdivision, decided to stand on this private street near Planned Parenthood’s parking lot to share with others his pro-life, anti-abortion message. In his Complaint, Brindley explained that he wanted to speak with Planned Parenthood patrons about alternatives to abortion without having to shout at a distance. His Complaint states that he wanted to share his views about abortion, as informed by his religious faith, in a nonviolent and non-harassing manner. Planned Parenthood complained to the Memphis police department that Mr. Brindley was trespassing on a private street in front of their business. The police arrived. Based on Planned Parenthood’s explanation that this was private property, they instructed Brindley to relocate. Under fear of arrest, Brindley left.

Mr. Brindley filed suit against the City of Memphis and representatives of its police department for infringing upon his First Amendment rights because Virginia Run Cove functions as a “public forum” for purposes of Free Speech analysis under the Constitution. Mr. Brindley did not name Planned Parenthood or the Association as co-defendants.

The case went up to the Sixth Circuit Court of Appeals after the federal trial-level court denied Mr. Brindley’s motion for a preliminary injunction.

On appeal, the outcome turned on how “public” Virginia Run Cove is for purposes of the First Amendment. Brindley contended that the road was a “traditional public forum,” requiring the court to strictly scrutinize governmental restriction on speech activities. The City of Memphis contended that it was a non-public forum, and the courts ought to defer to the police department’s actions.

Under federal case law, there is a strong presumption that public streets are traditional public forums. Also, the Supreme Court has held that a street does not lose its status as a traditional public forum simply because it is privately owned. If the street looks and functions like a public right of way, it suffices as a traditional public forum regardless as to who may hold ownership of it. The emphasis in this analysis is on how the road, sidewalk, park or other public space functions in the daily commerce and life of the neighborhood

The District Court for the Western District of Tennessee denied Brindley’s Motion for a Preliminary Injunction. The District Court Judge wrote:

When property is privately owned, it is subject to the First Amendment in proportion with the owner’s authorization of public use. “The more an owner, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it.” Marsh, 326 U.S. at 506. Inversely, where a property owner invites the public for a more limited use, reflected in a utilitarian design facilitating only the specific commercial purpose of the invitation, the balance tips in favor of the owner, as the limited invitation results in the retention of some of the property’s private nature. See Lloyd Corp. v. Tanner, 407 U.S. 551, 569 (1972).

Brindley v. City of Memphis, 2:17-cv-02849-SHM-dkv, 2018 U.S. Dist. Lexis 117481 (W. D. Tenn, Jul. 13, 2018)

The district judge denied the motion on the grounds that at the hearing, Brindley failed to carry his burden of establishing that the present or historic uses of Virginia Run Cove made it a “traditional public forum.”

On appeal, the Sixth Circuit Court of Appeals took up the question of how “public” Virginia Run Cove is for purposes of the First Amendment. Brindley contended that the road was a “traditional public forum,” requiring the court to strictly scrutinize governmental restriction on speech activities. The City of Memphis contended that it was a non-public forum, and the courts ought to defer to the police department’s actions.
Under federal case law, there is a strong presumption that public streets are traditional public forums. Also, the Supreme Court has held that a street does not lose its status as a traditional public forum simply because it is privately owned. If the street looks and functions like a public right of way, it suffices as a traditional public forum regardless as to who may hold ownership of it. The emphasis in this analysis is on how the road, sidewalk, park or other public space functions in the daily commerce and life of the neighborhood or community. The Sixth Circuit summarized the judicial opinions regarding whether a private street is a traditional public forum according to a two-part test: (1) is the privately-owned street physically indistinguishable from a public street and (2) does the street function like a public street. If both of these criteria are met, it is a “traditional public forum.” The Sixth Circuit observed that Brindley did not need to prove the past and present history of the use of Virginia Run Cove because consideration of its objective characteristics is sufficient. The appeals court arrived at a different result because it applied the First Amendment with greater generosity than the trial-level court.

The Sixth Circuit reversed the District Court. The appeals court found Virginia Run Cove physically indistinguishable from a public street. There were no signs or visual indicators that it was privately owned. The Court also found that the Cove functioned like public streets in the way it gave cars and pedestrians access to the businesses on that street. The City of Memphis argued that Virginia Run Cove was distinguishable from a public street because its street sign was blue, unlike the green signs used for public streets. The Sixth Circuit found that this open but subtle indicator to be insufficient to make Virginia Run Cove “distinguishable” as a nonpublic forum. This suggests that the “indistinguishable” requirement is not a rigid one.

The Court considered the effect of recorded land instruments. Under the Constitution, courts do not defer to state-law definitions whether the street is a publicly dedicated right of way to decide whether it is a traditional public forum. However, if such a dedication exists, that may be used in support of a free-speech argument. The final plat of the development contained a certification of dedication of the streets for public use.
The Sixth Circuit found that Virginia Run Cove is a “traditional public forum” for First Amendment purposes. The City admitted that under a strict scrutiny standard, they could not identify a compelling governmental interest in excluding demonstrators. The appeals court reversed the denial of the preliminary injunction and remanded the case to the District Court. On October 15, 2019, the District Court entered a consent order enjoining the city of Memphis police from infringing upon Brindley’s constitutionally protected right of self-expression on Virginia Run Cove.

Notice that the HOA was not party to this lawsuit. The complaint and opinion don’t mention HOA involvement. However, this case illustrates how the legal status of HOA common areas affect the rights of visitors and residents. This can be confusing if someone tells a visitor that they must leave because the right of way or common area is “private property.” Bill of Rights protections might not apply. This is further confused by the fact that HOAs often enjoy status as a tax-exempt entity because they perform a public benefit by maintaining roads, playgrounds and other public open spaces that would otherwise fall upon the government. HOA roads, easements and playgrounds are commonly used by persons who don’t reside or work in the community.

When people feel threatened in the HOA or condominium setting, they often call the local police department. While the police may have the authority to detain, arrest or summon someone under certain circumstances, they may not want to get involved in neighbor disputes. Also, the accused will have constitutional protections against governmental officers not ordinarily available in civil disputes. Its often unclear to whom an aggrieved party ought to state their claims in the event of a dispute involving an association.

The growing body of case opinions defining privately owned roads or other open spaces as “traditional public forums” shapes the way that developers and HOA boards treat common areas and rights of way. Desires to have the government take over maintenance of roads for financial reasons runs contrary to restrictions on use for free speech. HOA boards may erect signage viewable to the public that may not be consistent with the terms of recorded instruments regarding the road or other common area. In fact, in some subdivisions, people may make a road or open space appear private when in fact the land instruments show that it is publicly dedicated. The signs may suggest that land is controlled by the HOA as a common area when in fact it is part of lots.

The City of Memphis did not attempt to appeal the adverse decision up to the U.S. Supreme Court. I see nothing to suggest that the Brindley case was incorrectly decided on appeal. This is good news, because every year more and more rights of way and park-like open spaces are developed as common areas of HOAs and condominiums. Citizens ought not to lose recourse to protections for speaking with others on public forums because they are developed as privately-owned land.

Judicial Opinions Discussed:

Brindley v. City of Memphis, 934 F.3d 461 (6th Cir. 2019).

Brindley v. City of Memphis, 2:17-cv-02849, 2018 U.S. Dist. Lexis 117481 (W. D. Tenn, Jul. 13, 2018).