Minutes

Joint Meeting of the Falls Run Community Association & Villas Boards of Directors

 

Date:  11 August 2008

 

Time:  11:00 AM

 

FRCA Members Present:  Toni Brown, Jake Bernard, Jack Mounts, Harriet Schrader, Don Horan, Chuck Strub, Don Webb

 

Villas Members Present:  Sherri Burke, Joan Bitely, Nancy Garner, Paul Niemi, Carlos Sutton

 

Members Absent:  None

 

Others Present: Ed O’Connell

 

I:  The meeting was called to order at 11:05am by Toni Brown.

 

II:  Toni Brown introduced Mr. Ed O’Connell, attorney to both boards, who was present to brief the boards on newly passed legislation, HB-516, and its’ impact upon the two associations.

 

III:  After a brief overview, Mr. O’Connell discussed a number of specific areas where the legislation will have an impact upon the two associations:

 

                a:  Common Interest Community Board [CICB]:  This eleven member panel was established by HB-516 and is currently being formed.  Members will bring various specified experience to the board and serve four year terms.  The CICB will meet four times per year.  The CICB has a number of distinct responsibilities established by HB-516.

                b:  Licensing:  The law requires that both firms and individuals providing “management services” to associations be licensed.  As of 1 January 2009, any firm providing management services to an Association must hold a license issued by the CICB.  As of 1 July 2011, every individual management or supervisory employee of a licensed CIC Manager who is involved in direct management services must hold a mandatory certification issued by the CICB.  New employees have two years from the date of employment to obtain the certification.  This requirement applies to the Property Managers of both associations.  Uncompensated members of Association Boards are not required to obtain licenses or certification.

                c:  Employee designations and standards:  The CICB will establish educational standards and requirements which must be met in order to be licensed or certified.  The CICB will require annual reports on employees to ensure compliance.

                d:  CICB Regulatory Authority:  The CICB can issue “cease and desist” orders or go to court if needed to enforce CICB regulations or Virginia statutes.  It can also impose sanctions up to $1000 against Associations for each violation.

                e:  Record keeping by management companies:  These requirements were described as the “Koger” provisions.  Notably, Licensed CIC Managers must maintain separate fiduciary trust accounts for Association funds.  The CICB may petition the courts to appoint receivers if a CIC Manager appears unable to discharge the fiduciary responsibilities to an Association.

                f:  Office of the Ombudsman:  This is a new, full-time, employee position working with the CICB.  The Ombudsman will assist individuals in resolving issues with their associations and will serve as a complaint mechanism which will hear appeals from individuals.  The Ombudsman also advises the CICB on legal issues and new legislation affecting the industry.  The position of Ombudsman must be held by an attorney admitted to practice in the State of Virginia.

                g:  Insurance Requirements:  HB-516 imposes new insurance requirements on CIC Management companies.  They must now maintain $1,000,000 minimum Employee Dishonesty Insurance.  Also, a new CIC Recovery Fund is being imposed which will be funded by mandatory fees upon CIC Management companies.

                h:  Management Company Fees:  Mr. O’Connell discussed the fees which may be charged by Management Companies at the time of transfer of properties.  In addition, he indicated that the transfer fee now charged by the associations at the time of transfer can continue to be charged.

                i:  Resale Disclosure Requirements:  There are a number of new or changed requirements for disclosure at the time of property resale.  The disclosure package must include a statement indicating whether the property is in violation of design guidelines or covenants or not.  Likewise, the packet must contain a statement of any fees due on the property.  If these are not revealed, the Board cannot recover from the new owners.  Also, ALL flag display restrictions must be disclosed. 

 

IV:  There was an open forum where residents asked some questions which elaborated upon points covered in the presentation by Mr. O’Connell.

 

V:  The Special Joint FRCA/Villas Board meeting adjourned at 12:20pm.

 

 

 

THOMAS J. WHALEN

Recorder