Minutes from the December 2015 Common Interest Community Board meeting were approved yesterday and are now available.
Virginia Senate Bill 389 was approved by Governor McAuliffe on Monday, becoming effective July 1, 2016.
The Virginia Common Interest Community Board issued a Notice of Intended Regulatory Action (NOIRA) on December 28, 2015. The CICB intends to amend 18 VAC 48-50-253 and 255 to require only certain training for individuals renewing certifications and clarify training course content in reference to Virginia laws and regulations directly related to common interest communities.
Busch Properties, Inc. filed suit against its insurer, NationalUnion Fire Insurance Company, after National Union denied coverage for Busch’s expenditures to remediate mold in the Kingsmill Resort condominium that Busch managed in Wiliamsburg, Virginia.
Through contractual arrangements (with all unit owners and the unit owners association), Busch paid for all required upkeep and maintenance of the condominium units. After mold growth was found behind vinyl wallpaper, Busch began to remediate the mold growth.
Before Busch began mold remediation efforts, Busch obtained the written consent of individual unit owners, without admitting liability for the mold growth or a release of claims, to enter the Units and perform work which would likely have been the responsibility of individual unit owners under the condominium instruments.
National Union denied coverage because it concluded that Busch was not legally obligated to make the repairs. The 8th Circuit Court of Appeals had to determine, under Missouri law, whether National Union could lawfully deny coverage under the policies that provide coverage if Busch “become[s] legally obligated to pay as damages for liability imposed upon the Insured by law,” “becomes legally obligated to pay by reason of liability imposed by law,” or incurs “liability assumed by the Insured under contract.”
The district court concluded that there was no coverage for the mold remediation payments and Busch appealed, arguing that National Union should pay the cost of mold removal.
The 8th Circuit Court of Appeals affirmed the district court’s conclusion that Busch’s payments for mold remediation are not covered under its policy with National Union because its legal obligation to remediate the mold did not spring from “liability imposed by law,” but instead resulted from a voluntary, contractual obligation.
Even though decided under Missouri law, the Busch decision reminds us of the importance to carefully consider maintenance, repair and replacement responsibilities as set out in the recorded condominium instruments. And, associations must weigh the benefits (economies of scale and uniformity) and potential burdens (loss of insurance coverage or potential challenge for ultra vires acts) before undertaking additional responsibilities that are normally borne by individual unit owners.
Because every set of recorded condominium instruments and every insurance policy are different, the application of law to each community association differs. As always, contact an experienced attorney for advice and counsel.
As two bills move through the Virginia General Assembly that would allow property owners to rent out their homes, or portions of their homes, for periods of less than 30 consecutive days, community association volunteer leaders must consider the impact short-term residential lodging will have on their community.
Governing documents of many (most) condominium, cooperative, and property owners association prohibit short-term rentals, use of the home for hotel or transient purposes and leasing only a portion of the home.
The Department of Consumer and Regulatory Affairs (DCRA) Business License Amnesty Program, which allows businesses (including District community associations) to become compliant with DC regulations requiring business licenses and corporate registrations without penalties, late fees, or delinquent filing fees, expires Monday, February 29.