In recent years, property owners’ associations in Virginia (commonly called “homeowners’ associations” or “HOAs”) and condominium associations have come to wield significant powers to adopt rules, enforce them, and even penalize members for violating these rules. In many associations, the board of directors or architectural committee may appear to owners to exercise quasi-governmental powers — to issue fines and punishments. But it is important to remember that under Virginia law, community associations are NOT governments — rather, they are private entities which have limited powers derived from their covenants, which constitute a contract, and which are narrowly construed in Virginia courts in favor of the free use and enjoyment of property.
Historically, Virginia law has always had a “highly skeptical view of restrictions” burdening land and that limited the free use of property. Tvardek v. Powhatan Vill. Homeowners Ass’n, 291 Va. 269, 274-275 (2016). In Virginia courts, “the general rule” is that restrictive covenants “are not favored, and the burden is on [the party] who would enforce such covenants to establish that the activity objected to is within their terms.” Sainani v. Belmont Glen Homeowners Ass’n, 831 S.E.2d 662, 666 (2019).
The basic rights and responsibilities of every homeowner and their property owners’ association can be found in its declaration of covenants and by-laws. Every purchaser of a home in an association is entitled to a disclosure packet which contains the declaration and by-laws, when the unit is sold. In addition, every member of the association in good standing is generally entitled to review and copy documents of the association upon written request.
The association’s declaration of covenants is a contract between all members of the association. When its language is clear, it means what it says. Otherwise, if any doubt or uncertainty exists, the covenants will be strictly construed against restrictions and in favor of the free use of property.
An association can adopt rules and regulations, only if they are both (i) explicitly authorized by the covenants, and (ii) not arbitrary and capricious. The Virginia Supreme Court has said:
“Certainly, [an] association is not at liberty to adopt arbitrary or capricious rules bearing no relationship to the health, happiness and enjoyment of life of the various unit owners. On the contrary, we believe the test is reasonableness. If a rule is reasonable the association can adopt it; if not, it cannot.”
In recent years, the Virginia Supreme Court has been especially hostile toward any Association’s attempt to exercise implied powers to regulate aesthetics – for instance, adopting rules about color, materials, paints, plants, or holiday decorations. In 2019, the Supreme Court of Virginia decided the landmark case of Sainani v. Belmont Glen Homeowners Association, which rejected an HOA’s argument that HOAs have “broad authority” to adopt design-control rules, and the implied power to regulate the aesthetics of individually held lots. The Supreme Court stated:
“[T]he general rule [is] that design-control powers do not include “an implied power to impose design controls for aesthetic purposes.” . . . . [D]esign-control powers “are not necessary to the effective functioning of the community,” and “powers to control the design of individual properties within the community do not necessarily further public interests or fulfill reasonable expectations of the property owners.” . . . .
While express design-control powers granted by statute or by the declaration are generally enforceable, the scope of implied powers is limited to governing or protecting common property and preventing “nuisance-like activities” on individually owned property. . . .
The rationale for not giving an expansive interpretation to an association’s power to make rules restricting use of individually owned property is based in the traditional expectations of property owners that they are free to use their property for uses that are not prohibited and do not unreasonably interfere with the neighbors’ use and enjoyment of their property.”
Sainani v. Belmont Glen Homeowners Ass’n, 831 S.E.2d 662, 668-669 (2019).
What does Sainani mean? Well, it depends on who you ask. In the initial wake of the Sainani case, the decision caused a great deal of controversy and large amount of panic among HOA/Condo lawyers, who worried that many of their clients’ HOA/Condo rules would suddenly no longer be enforceable. Many HOA/Condo firms advised their clients to have their rules reviewed, to determine if they were still enforceable. But lower courts in Virginia have not yet had enough time to publish many cases interpreting Sainani, so it remains to be seen how large of an impact it will have. This has been exacerbated by the relative recency of the case and the COVID-19 crisis, which has delayed many pending suits. That said, it is obvious that Virginia courts will be taking a very hard look at HOA and Condo rules in the future that purport to impose color, material, and aesthetic restrictions upon homeowners, and may refuse to enforce those rules, if the association did not have the specific right in the declaration to adopt the rule, or if the rule is unreasonable or arbitrary.
What does this mean for homeowners? If a dispute develops between you and your association, or if you are cited with a violation by your association, it means you might have an opportunity to challenge the rule in court, especially if it is an aesthetic restriction adopted by the board without a basis in the declaration of covenants, or if the rule is unreasonable, or being inconsistently or unfairly applied. I would recommend that it is best to consult with a lawyer who can advise you of your specific rights and responsibilities. Please give the law firm of Surovell Isaacs & Levy PLC a call today at 703-251-5400 or email NRozsa@surovellfirm.com.
Posted in: HOA