HB1658: Property Owners' Association Act; procedures for amending declaration and bylaws.

HOUSE BILL NO. 1658

Offered January 14, 2015
Prefiled January 9, 2015
A BILL to amend and reenact § 55-510 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 55-515.1:1, relating to the Property Owners' Association Act; procedures for amending declaration and bylaws.
Patron-- Rust

Committee Referral Pending

Be it enacted by the General Assembly of Virginia:

1. That § 55-510 of the Code of Virginia is amended and reenacted and that Code of Virginia is amended by adding a section numbered 55-515.1:1 as follows:

§ 55-510. Access to association records; association meetings; notice; minutes.

A. The association shall keep detailed records of receipts and expenditures affecting the operation and administration of the association. All financial books and records shall be kept in accordance with generally accepted accounting practices.

B. Subject to the provisions of subsection C and so long as the request is for a proper purpose related to his membership in the association, all books and records kept by or on behalf of the association, shall be available for examination and copying by a member in good standing or his authorized agent including but not limited to:

1. The association's membership list and addresses, which shall not be used for purposes of pecuniary gain or commercial solicitation; and

2. The actual salary of the six highest compensated employees of the association earning over $75,000 and aggregate salary information of all other employees of the association; however, individual salary information shall not be available for examination and copying during the declarant control period.

Notwithstanding any provision of law to the contrary, this right of examination shall exist without reference to the duration of membership and may be exercised (i) only during reasonable business hours or at a mutually convenient time and location and (ii) upon five business days' written notice for an association managed by a common interest community manager and 10 business days' written notice for a self-managed association, which notice reasonably identifies the purpose for the request and the specific books and records of the association requested.

C. Books and records kept by or on behalf of an association may be withheld from inspection and copying to the extent that they concern:

1. Personnel matters relating to specific, identified persons or a person's medical records;

2. Contracts, leases, and other commercial transactions to purchase or provide goods or services, currently in or under negotiation;

3. Pending or probable litigation. Probable litigation means those instances where there has been a specific threat of litigation from a party or the legal counsel of a party;

4. Matters involving state or local administrative or other formal proceedings before a government tribunal for enforcement of the association documents or rules and regulations promulgated pursuant to § 55-513;

5. Communications with legal counsel that relate to subdivisions 1 through 4 or that are protected by the attorney-client privilege or the attorney work product doctrine;

6. Disclosure of information in violation of law;

7. Meeting minutes or other confidential records of an executive session of the board of directors held in accordance with subsection C of § 55-510.1;

8. Documentation, correspondence or management or board reports compiled for or on behalf of the association or the board by its agents or committees for consideration by the board in executive session; or

9. Individual unit owner or member files, other than those of the requesting lot owner, including any individual lot owner's or member's files kept by or on behalf of the association.

D. Prior to providing copies of any books and records to a member in good standing under this section, the association may impose and collect a charge, reflecting the reasonable costs of materials and labor, not to exceed the actual costs thereof. Charges may be imposed only in accordance with a cost schedule adopted by the board of directors in accordance with this subsection. The cost schedule shall (i) specify the charges for materials and labor, (ii) apply equally to all members in good standing, and (iii) be provided to such requesting member at the time the request is made.

E. Notwithstanding the provisions of subsections B and C, all books and records of the association, including individual salary information for all employees and payments to independent contractors, shall be available for examination and copying upon request by a member of the board of directors in the discharge of his duties as a director.

F. Meetings of the association shall be held in accordance with the provisions of the bylaws at least once each year after the formation of the association. The bylaws shall specify an officer or his agent who shall, at least 14 days in advance of any annual or regularly scheduled meeting, and at least seven days in advance of any other meeting, send to each member notice of the time, place, and purposes of such meeting. In the event of cancellation of any annual meeting of the association at which directors are elected or an amendment to the declaration or the bylaws is proposed, the seven-day notice of any subsequent meeting scheduled to elect such directors or amend the declaration or the bylaws shall include a statement that the meeting is scheduled for the purpose of the election of directors or the amendment of the declaration or bylaws.

Notice shall be sent by United States mail to all members at the address of their respective lots unless the member has provided to such officer or his agent an address other than the address of the member's lot; or notice may be hand delivered by the officer or his agent, provided the officer or his agent certifies in writing that notice was delivered to the member.

Except as provided in subdivision C 7, draft minutes of the board of directors shall be open for inspection and copying (i) within 60 days from the conclusion of the meeting to which such minutes appertain or (ii) when such minutes are distributed to board members as part of an agenda package for the next meeting of the board of directors, whichever occurs first.

§ 55-515.1:1. Procedure for amending declaration and bylaws.

A. In addition to the requirements of §§ 55-510 and 55-515.1, if an amendment to the declaration is proposed, the association shall adhere to the following requirements, unless the declaration or bylaws expressly provide otherwise:

1. The notice of the association meeting at which the proposed amendment to the declaration will be considered shall contain:

a. A statement explaining the purpose of the proposed amendment, the need for the amendment, and the effect of the amendment on the members if adopted; and

b. A statement indicating the time period for members to cast their ballots, not to exceed 60 days after the date of the meeting called for the amendment of the declaration. Ballots cast after such closing date shall not be counted, except for good cause shown by the member;

2. Unless otherwise authorized by this chapter, written ballots shall be used and shall be clearly identified as ballots;

3. Each proposed amendment to the declaration shall be separately stated on the written ballot;

4. Every executed ballot shall bear the signature of the member authorized to vote;

5. Ballots shall include a provision for proxy voting if authorized in the bylaws; and

6. Before any voting, members shall be given an opportunity to make public comment.

B. Unless otherwise specifically provided by law or the declaration, no vote of any kind of the membership of an association shall be taken to amend the declaration or bylaws, other than a vote taken at a meeting conducted in accordance with the provisions of this chapter.

C. Ballots cast shall be retained by the association for five years.

D. Any amendment to the bylaws shall comply with the requirements of the Virginia Nonstock Corporation Act (§ 13.1-801 et seq.).