It's Midnight. Do You Know How Your Association is Faring?

It's Midnight. Do You Know How Your Association is Faring?

By Melissa Payne, Esq. 

Let us set the scene. January 1 has come and gone, the holiday season is long gone, and 2025 is in full swing. You have a 9 A.M. kickboxing class scheduled for every Tuesday until the end of time, and you have every intention of organizing the closets in your house by the end of January (and keeping them that way – here’s to hoping!). This is your year! What more is there to do, you ask.

If we may, let us suggest a few “New Year’s Resolutions” for the community association in your life. We have compiled a list of resolutions that you, as a volunteer board member or community manager, may use as a tool to ensure your association is in tip-top shape for 2025 and beyond.

• Solar Panels and EV Charging Stations. As solar panels and EV charging stations are becoming increasingly commonplace, the law has evolved regarding how community associations may regulate them on owners’ lots. It may be time to review your association’s architectural guidelines or other rules to ensure they align with current law.  Laws in Virginia and DC are pushing associations to go green, and you may have to comply! Also, more and more associations are considering adding common area EV chargers, particularly if the local area does not have much to offer. See if your governing documents allow this kind of upgrade by board or homeowner vote.
• Insurance Professional. If you have not caught up with your insurance professional in a few years, it may be time to set up that meeting. We recommend consulting with your insurance professional every two to three years to ensure your association has the insurance coverage it needs to stay protected, including newer products like cyber liability coverage.  Keep in mind that certain coverages may be required by your governing documents, while some are mandated by law (such as Virginia-mandated fidelity bond or employee dishonesty insurance policy to protect the association’s funds).  Your insurance broker or agent may also have some tips for improving your claims history and potentially even your insurance premiums.
• Renewal Dates. From snow removal to landscaping, fire alarm servicing to management contracts, there are a lot of vendor agreements to track. We recommend creating a matrix of renewal dates for your association’s contracts. That way, an automatic renewal clause will not catch anyone by surprise and the board will have ample time to provide notice of its intent not to renew if a change in providers is desired or under consideration.
• Governing Documents. Your association’s governing documents (i.e. the declaration, bylaws, and rules and regulations) serve as the framework by which the association operates - a joint contract, if you will. Review your governing documents periodically to stay abreast of their provisions, but with an eye out for what amendments may be worth pursuing to benefit the community as the world and your community evolves.
• Va. Requirements. In Virginia, community associations are legally required in some instances to have certain rules or policies in place. It is important to make sure your association has the following policies (and that they are up to date with current law):
  • CICB complaint policy (for complaints the association is violation community association laws or regulations).
  • Policy for charging for access to books and records, with an approved cost schedule (required if the board wants to charge owners for this service).
  • Policy (or “guidelines”) for conducting meetings and voting through electronic means (before e-meetings or e-voting are implemented by the board).
• Managing Agent CICB Requirements. For Virginia managers, check your own compliance with the CICB continuing education requirements and ensure that your management company’s CICB license is active and up to date.
• Reserve Studies. For condominiums and property owners’ associations in Virginia, boards of directors must conduct a reserve study every five years to determine the necessity and amount of reserves required to repair, replace, and restore capital components (i.e., those items, whether or not a part of the common area, for which the association has the obligation for repair, replacement, or restoration). In addition to conducting a study, the board of directors must review the results of that study at least annually to determine if the reserves are sufficient. Think of this as your association’s yearly check-up. Keeping up with the statutorily mandated reserve study requirement is not only the law but also serves as a tool that effectively keeps associations financially healthy and on track to meet future repair and replacement needs.
• FHA Recertification. For most condominiums, in order for buyers and owners to be eligible for financing through FHA insured loans, the condominium must be certified by the FHA as meeting certain minimum standards.  Although boards are not required by law to have the condominium FHA-certified, boards should consider whether the benefits (such as increasing the pool of potential buyers) outweigh the administrative burdens and expense.  If the board decides to obtain FHA certification, keep in mind that you will need to go through the FHA recertification process every three years. If you are unsure of whether your condominium is currently certified or when your condominium’s certification expires, the answer may be found here: https://entp.hud.gov/idapp/html/condlook.cfm
• Resale Certificates: In July 2023, the legal requirements regarding what information must be included in resale certificates was updated, with resale documents for Virginia condominiums and property owners’ associations being consolidated under one law. Check out Section 55.1-2310 of this relatively new Virginia Resale Disclosure Act to ensure that the certificates issued by your Association comply with the updated statutory requirements. The current version of the standardized resale form and maximum allowable fee schedule can be found here: https://www.dpor.virginia.gov/CIC-Board/Disclosure_Notices . For DC Condominiums, the law has not changed recently but is worth checking to ensure compliance – it can be found here:  https://code.dccouncil.gov/us/dc/council/code/sections/42-1904.11.

The new year is the best time for a fresh start. Polish those resolutions, make that call, set up that meeting. In 2025, it’s your association’s year!