What Does “Good Standing” Mean?
Do you know? With respect to community associations, the term appears twice in the Virginia Condominium Act (Section 55.1-1939, pertaining to unit owner rights, and Section 55.1-1945, pertaining to inspection and copying of association books and records) and twice similarly in the Virginia Property Owners’ Association Act (Section 55.1-1807, pertaining to lot owner rights, and 55.1-1815, pertaining to inspection and copying of association books and records).
Surprisingly, however, the term isn’t defined in any of the statutory sections cited above, nor in the definitions section of either Act. Nor is the term defined in any manner relevant to community associations anywhere else in the Code of Virginia.
Thus, if your community’s self-appointed watchdog requests (which is usually couched as a demand) to inspect, review and copy your association’s books and records, but the busybody is 30 days in arrears in the payment of his monthly assessment obligation, is he in “good standing” in your association? If he isn’t, you could deny the request. But if he is in good standing and you deny the request, stand by for a complaint to the CIC Ombudsman regarding your association’s alleged violation of a law or regulation pertaining to community associations in Virginia. There are potentially adverse consequences to getting that answer wrong.
So where would you look to determine if “good standing” is defined in your community association? The most logical place to start would be in your association’s bylaws. Such bylaws are, after all, the policies, practices and procedures of the corporate (or association) “side” of your community association. Whether an association member is in “good standing” is an organizational issue. It has nothing to do with land. Thus, you would look to your organizational authority (typically, bylaws for condominium associations, or articles of incorporation and bylaws for your homeowners’/property owners’ association. That’s where the term should be defined.
Many community association bylaws or resolutions define the term. One of our client’s policy resolutions offers the following rather comprehensive definition:
Good Standing shall be defined to mean that a member is current in the payment of assessments and any other financial obligation to the Association and compliant with all other responsibilities of membership, including, but not limited to maintenance of his or her lot in a condition that does not violate any term or provision of the Declaration or Association rules/standards.
But a surprising number of association bylaws don’t define the term, even though “good standing” may appear therein (e.g., the right to vote in association elections or other business may be suspended if the member isn’t in “good standing”). Again, this is a situation where you don’t want to take a legally perilous position by denying an important right attendant to membership. Making up on the fly some arbitrary, ad hoc definition of “good standing” to deny that member’s voting franchise would be an imprudent course of action on the part of your board.
If “good standing” isn’t defined for your association in those organizational documents, you would then look to your condominium declaration or (for an HOA) your declaration of covenants, conditions and restrictions. The term isn’t likely to be defined in a condominium or HOA declaration, because declarations for both condominiums and homeowners’ associations pertain to the land (easements, covenants, use restrictions, etc.). Realize, however, that common interest communities are still — historically speaking — somewhat recent in origin. From the 1960’s through the 1980’s, there wasn’t a great deal of empirical experience to guide developers’ attorneys in the drafting of their association documents. They were, in effect, inventing the wheel. You may therefore find the term defined someplace where, logically speaking, it shouldn’t be.
But if at this point you still can’t find a definition within your association’s documents for “good standing,” you’ll then have to cull through your association’s resolutions that your various boards of directors have adopted over the years. Depending upon the age of your association, the administrative zeal with which your past boards of directors approached their duties, and the efficiency and accuracy of your filing system, that could be either a simple task or as daunting as the search for the Holy Grail.
Let’s assume that your search has been fruitless. What to do? We suggest that at the next annual meeting of the Association, that one of the items on the agenda be an amendment to your bylaws which establishes a definition for “good standing” within your association. That’s where the term should be defined, so if your association intends to fix the problem of a lack of definitional authority, put it where it is supposed to be — in the article in your bylaws pertaining to association membership, specifically the section pertaining to voting or voting eligibility.
When your association has approved that amendment, the concept of good standing will no longer be a matter of “liquor and guessing” within your organization. Your board will then be able to authoritatively and confidently make “good standing” determinations relative to members’ rights and their exercise thereof.