18VAC48-70-110   Review of final adverse decision

Add (underlined) to the last sentence: 

Upon request, the association shall provide such information to the office of the Common Interest Community Ombudsman within a reasonable time, and concurrently forward a copy to the complainant.  If the complainant believes that the association"s response contains false, misleading, or incomplete information, evidence of such must be provided to the Ombudsman within 20 days of receipt of the association's information if it is to be considered prior to a final decision.

Rationale: Unless the complainant has the opportunity before a final decision is made to respond to the information provided by the association, the Ombudsman may be unaware that a possible false, misleading, or incomplete response has been made by the assoication in violation of 18VAC48-50-220.C : A regulant shall not provide a false, misleading, or incomplete response to the board or any of its agents seeking information in the investigation of a complaint filed with the board.

18VAC 48-70-120 Decision from the notice of final adverse decision.

This paragraph provides that even if the director decides that the notice of final adverse decision may be in conflict with CIC laws and regulations, the director has no obligation to provide the complainant and the association with information concerning such conflict.  That is, the complaint can be igmored even if the director believes such conflict may exist.   I recognize that 55-530G so provides, thus so does the Ombudsman's regulations, but why such a caveat?  How does it further the goal of 55-530 of reducing and resolving conflicts amoung associations and their members?  Hopefully, this option to ignore a legitimate complaint by denying explanatory guidance to the complainant and the association will not be exercised.

Add (underlined), following last sentence:  The determination of the director shall not be binding upon the complainant or the association that made the final adverse decision.  However, if it appears that any governing board has engaged, is engaging, or is about to engage in any act or practice in violation of Chapters 4.2, 21, 24, or 26 of Title 55, or any of the Board's regulations or orders, the Board without prior administrative proceedings may issue a cease and desist order or bring suit in the appropriate court to enjoin that act or practice or for other appropriate relief.

Rationale:  To enhance the effectiveness of the association complaint remediation procedure, it should be made clear that non-compliance with the director's finding of a violation, while technically non-binding, does not excape exposure to the remedial actions available in 54.1-2351 / 2352: General powers and duties of [CIC] Board concerning associations / Cease and desist orders, as well as 18VAC48-50-190.A.1 Prohibited acts.

This regulation needs to be amended to not allow for the "digital" or "electronic" dissemination and response to a complaint by the Homeowners Association (HOA) in that may HOA have members of retirement age and as such many are do not have internet services or understand the workings of the internet.  As such, these members are being left out of the process if the HOA so chooses to only respond via electronic methods. We recommend that of the time being all complaints and responses be in a hard copy form.  Additionally, give the VPOAA, it should be directed that all complaints filed be a matter of public record via the a means by which the entire community of the HOA, can see the complaint.   All complaints, responses and action, should also be a matter of pubic record for those who may wish to purchase a home and become a member of that HOA of which complaints may have have on file.  Many HOAs, at times wish to keep their complaints private within the community and not disclose them.  this does a disservice to those wishing to purchase or become members, but not disclosing all the facts of the HOA on record.

Additionally, the Ombudsman should have some form of enforcement role where by if the HOA does not comply with the VA regulations, that a fine be imposed and collected by the Commonwealth, though the Ombudsman's office.  Merely allowing for the complainant to take the HOA to court does not serve the homeowners fairly in that the HOA is in a position to spend members funds to fight any actions, where a member may not have those resources and in fact is also paying the HOA via dues to fight them in a court of law.

18VAC48-70-10/120

"An association complaint shall concern a matter regarding action, inaction, or decision by a governing board, managing agent, or association inconsistent with applicable laws and regulations".  If a governing board has been found to have violated any of the specified chapters of Title 55 and employs a licensed managing agent (regulant), a concurrent violation of CIC Manager Regulation 18VAC48-50-190 Prohibited Acts also may have occurred, unless the managing agent advised the governing board of his/her objection and contemporaneously documented the making of such objection:

A. The following acts are prohibited and any violation may result in disciplinary action by the board:  1. Violating, inducing another to violate, or cooperating with others to violate any of the provisions of any of the regulations of the board or Chapters 23.3 of Title 54.1 of the Code of Virginia, Chapters 4.2, 24, 26, or 29 of Title 55, or engaging in any acts enumerated in 54.1-102 and 54.1-111 of the Code of Virginia.

Clearly, the director's determination of a violation of law under the Ombudsman Regulations is not intended to inhibit the CICB from exercising its powers and duties under 54.1-2351, 54.1-2352, or 18VAC48-50-190.A.1.  Therefore, these sections of the law and CIC Manager Regulaions should be referenced in CIC Ombudsman Regulations 18VAC48-70-120 (the "shall no be binding" paragraph) to clearly advise of the potential for such follow-on action if the governing board fails to correct a violation of Virginia law determined by the director.

Additionally, the Ombudsman's office could use its Education and Outreach program to explain these additional actions available to he director, emphasizing that there are consequences to continued violation of virginia law.  Such information would likely quell some of the ongoing association member dissatisfaction referred to in the Ombudsman's 2009-2010 Annual Report:

http://www.dpor.virginia.gov/dporweb/DPOR_CIC_Ombudsman_Annual_Report_2009-10.pdf

The proposed regulations are reasonable for large HOAs, most of which have professional staff (either in-house or via professional management companies).  However, for small associations, the regulations are an undue burden.  The HOA of which I am president has 11 members (and there are smaller HOAs in our area).  We have no professional or legal staff, no standing committees (other then the Board of Directors), no shared assets, and minimal architectural controls (which is likely the cause of most issues such as those contemplated by this regulation). 

Establishing and maintaining a process such as described in this regulation would require substantial effort and expense - probably doubling our annual expenses.  The additional burden would likely cause us to disolve the association.

I suggest that the regulations be modified to exempt small HOAs - perhaps those smaller than 25 homes.

All HOAs already have procedures in place to work homeowner complaints.  Should these not satisfy all parties, there is already a court system available to direct settlement should either party feel strongly enough about the issue to take it that far.  This CIC Board and the proposed legislation is an unnecessary expense to both the state and the individual HOAs.  The state should use their taxpayer revenues for the many much more pressing issues, and let the HOAs continue to concentrate their all volunteer staff's time on managing their own communities in the best interest of the homeowners.  It appears that the CIC has accomplished little in the past two years except create some job(s) and determine the fee structure to be levied on the HOAs of Virginia.  Absolutely unnecessary!

(Responding to the previous comment)  Not all VHOAs have procedures in place to deal with a homeowner's complaint. The lucky (and well run) ones do.  The Virginia Property Owners Association Act is silent on requiring such procedures. The heavy volume of homeowner complaints thus far to the ombudsman's office justifies its existence.  Without that office,  a VHOA member in an association without a functioning complaint procedure is limited to initiating a board recall effort, sueing, or moving.  For $25, the ombudsman option is most welcome.

The proposed complaint process imposes an unnecessary and wasteful burden on HOA's which already have interenal methods and procedures for resolving issues that arise.  The proposed procedure is also useless in that it will produce non-binding opinions.   This effort should be stopped now.   

The main problem with HOA is the abuse of power by Board members.  What good this Ombudsman will be when Board members think that they are GODS.  This is another waste of time and tax payer money.  No HOA will ever disclose in it’s entirely the complaints made by the homeowners, specifically when the Board members are in violation of the covenants.  HOA board members literally harass homeowners via letters for the most petit thing, there are a lot of HOA that run and conduct business as a tyranny.

An association complaint shall concern a matter regarding the action, inaction, or decision by the governing board, managing agent, or association inconsistent with applicable laws and regulations.

The above portion of the definition needs to be further refined.  Is the complaint process for maintenance issues that the Board/management agent has not timely addressed?  Is it for covenant violations?  What exactly is meant by a "complaint."  Will all maintenance requests have to be filed through this process.  The defintion is unclear.  With uneducated Boards and ill-informed management companies, how will unit owners know the complaint process is being performed correctly and who makes a determination as to what a complaint is?

Thank you.

While there is nothing wrong with encouraging HOAs to establish guidelines so that owners can clearly understand their due process rights when filing a complaint, the CIC needs to be very careful about creating any additional undue burden on HOAs, most of which would not function without the willingness of volunteers to step up and serve.

There needs to be a provision in these regulations, should they be adopted, to control frivolous and nuisance complaints.  If this is not addressed you will surely drive good members from serving on Boards.

Section 6 needs to be modified to loosen the requirement that “Any specific documentation that must be provided with the association complaint shall be clearly described in the association complaint procedure.”   That wording is too specific.  There is no way that a policy could be written that would identify every “specific” document that is required for each complaint.  It would depend on the circumstances.   For example, if someone’s car was towed and  they wanted the HOA to reimburse the towing costs, a required document might be the towing invoice.  To say that a process must list every “specific” document that may be required in each and every case is impossible.

It should be changed  to something like  “The Association complaint procedure shall make clear that any documentation that the complainant wishes to provide in support of their case must be provided at the time of the filing.”   

Section 9 needs to be modified to eliminate the requirement that the notice of final determination “ …include specific citations to applicable association governing documents, laws, or regulations.”

This will require HOAs to run every complaint through an attorney driving up costs to the HOAs exponentially.    This requirement, in conjunction with the lack of a restriction on the filing frivolous complaints, will definitely bankrupt some HOAs and result in much higher fees.

To give an example, if it cost $300 for an attorney to review the final decision (to say nothing about being involved in other parts of the process) and you had someone file three complaints a year, that  would cost almost  $100 per homeowner in that 11 person HOA that was mentioned in a previous comment.    And that is just one member filing 3 times a year.  A frivolous filer might file something every week.  There is no question that if this provision remains, and an HOA feels they need legal review for each of these, it will raise an average size HOA’s legal fees a few thousand dollars even without frivolous filings.

Even your office obviously contemplated the issue of frivolous complaints since it imposed a filing fee.  That filing fee is clearly intended to reduce the number of cases filed with your office s well as raise revenue. 

While not explicitly forbidden in these regulations, I recommend a provision be added that HOAs can establish filing fees to require individuals who file more than one complaint in a five year period to pay a filing fee to the HOA as a way to control frivolous complaints. 

While it is important to give members their due process rights and make it as structured a process as possible, it is even more important to keep the process flexible enough so that it can be managed with volunteers.   This is why you need to remove the requirement that the laws and regulations be cited in the final decision and just say “the Association shall make clear the basis for its decision in relation to the Association’s policies and governing documents.”  

If the complainant wants to make the case that the Association’s policies are not consistent with the law, they can make that case to the CIC or in the courts.  The way it is now would require a legal review of each decision which would be a terrible burden. 

I recommend that these rules regarding the establishment of a complaint process be strongly encouraged but made voluntary.  You should also develop a sample template policy resolution that can be used.  After all, the main reason HOAs do not have such policies is not that they want to deny their members due process, but they do not have the time and resources to develop policies.  Providing such a template for HOAs to use would do far  more to get complaint policies implemented by HOAs than these regulations will ever do.

In the end, good Boards will develop policies (or use your template if you provide one) and  bad  Boards will not articulate policies whether you require them or not.  As your policy makes clear, in the end, ultimately the only recourse of a member who has to deal with an intransigent Board will remain the court system.   It is important to understand this and not develop policies that put an undue burden on the vast majority of Boards that are volunteering their time to do the right thing.

We appreciate the outstanding efforts of the Common Interest Community Board and Office of the Common Interest Community Ombudsman to develop the Common Interest Community Ombudsman Regulations.

Our comments follow below:

1. These regulations are consistent with the statutory requirements of Title 55 Chapter 29 of the Code of Virginia, including Section 55-530. Powers of the Board; common interest community ombudsman; complaints.

2. It should be pointed out that the complaint procedures set forth in the regulations are not the same as the procedure established by common interest community Board of Directors to handle internal association complaints regarding violations of documents, including the rules and regulations.

3. The requirements of the proposed regulations can be met with reasonable efforts to comply by common interest communities. Some of the comments previously submitted reflect the need for seminars and educational programs designed to address areas of concern to community associations. These programs should focus on the education of association members including officers and directors of those associations. Heather Gillespie, the Ombudsman, has been extremely pro active in this regard, particularly given the limited resources available to the Office of the Ombudsman. Further efforts and adding resources should be made a priority for the Office of the Ombudsman.