Common Interest Community Board Updates Resale Disclosure Fees
By: Tiago D. Bezerra
The resale disclosure statutes set forth in the Virginia Condominium Act (“Condo Act”) and the Virginia Property Owners’ Association Act (“POA Act”) establish certain maximum charges that can be assessed for preparing the requisite disclosure documents when an owner sells his condominium unit or lot in a common interest community association.
In these statutes, specifically Section 55.1-1992(F) of the Condo Act and Section 55.1-1810(F) of the POA Act, the maximum allowable charges are increased every five years based on the United States Average Consumer Price Index for all urban consumers (commonly referred to as the “CPI-U”), as published by the Bureau of Labor Statistics of the U.S. Department of Labor.
Given that the last increase occurred in 2018, it has been high time that an update in what can be charged for resale disclosures be made. In accordance with established policy, the Virginia Common Interest Community Board (“CICB”) recently published updated guidance documents showing the new maximum allowable fees for preparation of resale disclosure documents – links to each guidance document can be found below and are otherwise available online HERE. These new fees became effective January 12, 2023. Notably, the fee increases do not apply to property owners’ associations that are not professionally managed unless the association provides disclosure packets electronically and otherwise complies with the requirements set forth in Section 55.1-1810 of the POA Act.
The difference is quite staggering, as the CPI-U difference between December 2017 to December 2022 amounted to 20.4%, easily the greatest increase since the maximum fees were initially established in 2008. Where last year inspection of a lot or unit and preparation of an electronic disclosure packet or resale certificate would be subject to a maximum charge of $264.08, the same service may result in a charge of $317.95 this year – greater than a $50 increase!
Boards of directors may consider passing along the news to association members, particularly as the spring blossoms and the housing market (presumably) heats up. We should also mention that changes to the resale disclosure packets are always subject to change each year while the General Assembly is in session. We anticipate some changes may occur this year and will provide updates regarding what, if any, changes are ultimately adopted and signed into law and the impact they may have on how your community association operates.