Recent Developments - Amending Virginia HOA Governing Documents
The Supreme Court of Virginia published an opinion relating to the process of amending the Declaration of a Property Owners Association. The case titled Steven F. Tvardek, Jr., et al. v. Powhattan Village Homeowners Association, Inc., ruled that an Amended Declaration is not effective unless the President’s certificate recorded with the amendment verifies that the required majority of owners signed the amendment or ratification approving the amendment. In this case, the certificate merely stated the owners approved the amendment. The Court relied that this was insufficient to comply with the statute regarding amendments, and the amendment was not effective.
Section 55-515.1(E) of the Virginia Code states there is a one (1) year statute of limitations that bars actions challenging the validity of amendments. However, that applies if the action is “brought more than one year after the amendment is effective (emphasis supplied).” Section 55-515.1(F) of the Virginia Code states that an amendment is effective when a copy of the amendment is recorded together with a certification signed by the principal officer of the association that states that the requisite majority of the lot owners signed the amendment or ratifications.
In the present case, the certification filed with the amendment stated that the amendment was “approved by a vote of two-thirds of the Class A votes…” The certificate goes on to state that this was “…evidenced by the results of the meeting at which the vote was taken.” The owners argued that the amendment did not become effective as the certificate did not state that the requisite majority of the owners “signed” the amendment or ratifications.
The Supreme Court of Virginia agreed with the owners. The Court stated that restrictive covenants are viewed strictly. The General Assembly used the word “signed” not approved. It noted that there is a difference between adopting an amendment and signing it or some written ratification thereof.
It is important to note, the Court in a footnote states that the Condominium Act starts the statute of limitations when the amendment is recorded. It does not impose the signature requirement. Thus, this decision does not apply to condominiums.
The association made a number of other arguments that were rejected by the Court. While this opinion applies to only Virginia homeowners associations, it does stand for the greater proposition that covenants are strictly construed and focus on the details is extraordinarily important.