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This enhanced analysis condenses guidance documents issued by Department of Professional and Occupational Regulation to eliminate redundancy while preserving all substantive requirements and legal obligations.
Contract and Purchase Order Modification PolicyDoc ID: cic
ADMINISTRATION POLICY #500-02 CONTRACT AND PURCHASE ORDER MODIFICATIONS Effective Date: July 1, 2018
Digitally signed by Jay W. DeBoer DN: cn=Jay W. DeBoer, o=DPOR, Approved By: ou=Director,,email=jay.deboer@dpor.virginia.gov, c=US Date: 2018.07.06 10:25:10 -04'00' I. PURPOSE: The purpose of this policy is to establish agency restrictions on contract and purchase order modifications.
II. POLICY STATEMENT: The Department of Professional and Occupational Regulation (DPOR) shall comply with the requirements of Chapters 3.5, 10.12, and 14.4 of the DPS Agency Procurement and Surplus Property Manual (APSPM), Chapter 10 of the Virginia Information Technologies Agency IT Procurement Manual (ITPM) and §2.2-4309 of the CodeofVirginia as it relates to contract modifications and purchase order changes.
A change order shall be processed for all issued purchase orders when requested by the supplier, or when the invoiced dollar value is greater or less than 10% of the total purchase order value.
III. DEFINITIONS: Contract An agreement enforceable by law, between two or more competent parties, to do or not to do something, not prohibited by law, for consideration. A contract is any type of agreement or order for the procurement of goods or services.
Purchase Order A document used to execute a purchase transaction with a vendor. It serves as a notice to a vendor that an award has been made and that performance can be initiated under the terms and conditions of the contract. It includes a description of what good/service is ordered, how much is needed, and what it will cost. A PO is a legal offer to buy goods and services.
IV. RELATED DOCUMENTS: DPS Agency Procurement & Surplus Property Manual (APSPM) Virginia Information Technologies Agency IT Procurement Manual (ITPM) § 2.2-4309 of the Code of Virginia Commonwealth of Virginia Vendors Manual
V. GENERAL PROVISIONS: A supplier may request a contract modification or purchase order change by contacting the contract administrator or the DPOR Procurement Office. Any request to change contract price, quality, quantity, delivery or cancellation will be evaluated for validity and price reasonableness. The supplier will receive approved changes through Virginia’s eProcurement portal (eVA) or by other written notification.
Policy Title: Administration Policy #500-02 Contract and Purchase Order Modifications [POL410-500_02-v3] Effective: 07/01/2018 Submitted By: Cassandra Lewis, Administration and Financial Services Director Guidance Document: Yes Supersedes: Administration Policy #500-02 Contract and Purchase Order Modifications (Effective 01/01/2017) Page 1 of 1
Letters of Credit as Bond SubstitutesDoc ID: cic
Common Interest Community Board
Guidance Document: Regarding that Letters of Credit may be Accepted in Lieu of Bonds to Comply with § 55.1-1968 of the Code of Virginia
Adopted June 27, 2013 Revised September 3, 2020
Effective December 10, 2020
I. Issue
Section 55.1-1968 of the Code of Virginia does not require letters of credit that may be accepted in lieu of bonds to be issued by financial institutions whose accounts are insured by the FDIC. This does not coincide with § 55.1-1983(B)(2) of the Code of Virginia pertaining to letters of credit in lieu of escrowing deposits which requires an “irrevocable letter of credit issued by a financial institution whose accounts are insured by the FDIC . . .”
II. Applicable Statute
§ 55.1-1968. Bond to be posted by declarant.
A. The declarant of a condominium containing units which are required by this chapter to be registered with the Common Interest Community Board shall post a bond in favor of the unit owners' association with good and sufficient surety, in a sum equal to $1,000 per unit, except that such sum shall not be less than $10,000, nor more than $100,000. Such bond shall be filed with the Common Interest Community Board and shall be maintained for so long as theGuidance Document Regarding that Letters of Credit may be Accepted in Lieu of Bonds to Comply with § 55.1-1968 of the Code of Virginia Adopted June 27, 2013 (Revised September 3, 2020) declarant owns more than 10 percent of the units in the condominium or, if the declarant owns less than 10 percent of the units in the condominium, until the declarant is current in the payment of assessments. However, the Board shall return a bond where the declarant owns one unit in a condominium containing less than 10 units, provided such declarant is current in the payment of assessments.
B. No bond shall be accepted for filing unless it is with a surety company authorized to do business in the Commonwealth, or by such other surety as is satisfactory to the Board and such bond shall be conditioned upon the payment of all assessments levied against condominium units owned by the declarant. The Board may accept a letter of credit in lieu of the bond contemplated by this section.
III.
Policy
Letters of credit submitted in lieu of bonds as required by § 55.1-1968 of the Code of Virginia shall be issued by financial institutions that are FDIC insured. Any letter of credit submitted that does not meet this policy will be reviewed on a case-by-case basis by the Board.
Revenue Refund Policy GuidelinesDoc ID: cic
FINANCE POLICY #700-04 REVENUE REFUNDS Effective Date: July 1, 2018
Digitally signed by Jay W. DeBoer Approved By: DN:ou=Director,,cn=Jay W. DeBoer, o=DPOR, email=jay.deboer@dpor.virginia.gov, c=US Date: 2018.07.17 11:31:16 -04'00' I. PURPOSE: The purpose of this policy is to establish guidelines for refunding fees and other monies paid to the Department of Professional and Occupational Regulation.
II. POLICY STATEMENT: The Department of Professional and Occupational Regulation shall process revenue refunds in an accurate and timely manner and in accordance with state policy and Board regulations.
III. DEFINITIONS: Overpayment A payment that exceeds the amount due to the Department.
IV. RELATED DOCUMENTS: N/A
V. GENERAL PROVISIONS:
A. REVENUE REFUNDS
- The Department shall issue refunds for overpayments of fees and monetary penalties.
- The Department shall issue refunds for Contractor and Real Estate Transaction Recovery Fund assessments and Appraiser National Registry fees collected from applicants not granted a license.
- Application fees for licenses, certifications, and registrations and renewal fees are non-refundable.
- The Finance Section shall process refund requests in accordance with state procedures. a. All checks will be made payable to the regulant regardless of who paid the fee. However, refunds of overpayments may be made to the payer if the payment was for the benefit of more than one regulant. b. Non-regulant refunds shall be made to the original payer. c. Checks will be mailed to the address of record unless different mailing instructions are submitted with the refund request. d. Overpayments made with a credit card shall be refunded to the credit card. Overpayments more than 180 days old will be refunded by check.
- Whenever a refund request from a regulant is not authorized, the section that received the refund request shall be responsible for informing the regulant.
Policy Title: Finance Policy #700-04 Revenue Refunds [POL405-700_04-v7] Effective: 07/01/2018 Submitted By: Jeff Waite, Financial Services Director Guidance Document: Yes Supersedes: Finance Policy #700-04 Revenue Refunds (Effective 02/10/2012) Page 1 of 1
Examinations Development & Review PolicyDoc ID: cic
EXAMINATIONS POLICY #600-03 RESTRICTED PARTICIPATION IN EXAMINATION DEVELOPMENT & REVIEW Effective Date: June 3, 2014
Digitally signed by DeBoer Jay mkw69795 Reason: I am approving this document Approved By: Date: 2014.06.03 09:55:29 -04'00'
I. PURPOSE: The purpose of this policy is to identify individuals who are not permitted to participate in the development or review of examinations used by or on behalf of the Department of Professional and Occupational Regulation (Department) or its policy boards.
II. POLICY STATEMENT: In order to ensure examination security and integrity, any individual affiliated with a regulated school, course or program shall not be permitted to participate in the development or review of examinations used by or on behalf of the Department or its policy boards.
III. DEFINITIONS: Regulated school, course or program Educational providers and curricula approved by the Department or its policy boards to qualify individuals for a license, certificate or registration.
IV. RELATED DOCUMENTS: n/a
V. GENERAL PROVISIONS:
A. RESTRICTED PARTICIPATION The following are not permitted to participate in the development or review of examinations used by or on behalf of the Department or its policy boards:
- Owners or employees of a regulated school, course or program, including instructors;
- Instructors currently regulated by the Department or one of its policy boards;
- Individuals with a contractual relationship with a regulated school, course or program;
- Anyone disciplined by a regulatory board or agency in any jurisdiction for violation of laws and regulations related to educational services or activities; or
- Individuals convicted of a felony or misdemeanor related to educational services or activities.
B. WAIVER OF RESTRICTION The Director of the Department may, in his sole discretion, waive the restrictions stated in this policy for good cause shown, which said cause shall be stated in writing and retained on file.
Policy Title: Examinations Policy #600-03 RESTRICTED PARTICIPATION IN EXAM DEVELOPMENT & REVIEW [POL543-600_03-v1] Effective: 06/03/2014 Submitted By: Mark Courtney, Senior Director, Regulatory & Public Affairs Guidance Document: Yes Supersedes: n/a Page 1 of 1
Examination Site Conduct GuidelinesDoc ID: cic
EXAMINATION POLICY #600-02 EXAMINATION SITE CONDUCT Effective Date: December 1, 2019
Digitally signed by Mary Broz Vaughan Approved By: Date: 2019.12.16 15:59:08 -05'00' I. PURPOSE: The purpose of this policy is to establish guidelines for Department of Professional and Occupational Regulation and examination vendor/contractor staff to follow when dealing with prohibited conduct or irregularities at examination sites.
II. POLICY STATEMENT: Pursuant to § 54.1-102 of the Code of Virginia, it is unlawful for any person to procure or assist another individual to procure, through theft, fraud or other illegal means, a license, certificate, permit, or other authorization issued by the Department. Conduct exhibited by an examination candidate at examination sites that compromises the validity, reliability and security of the examination as well as the efficient and effective administration of the examination is prohibited.
III. DEFINITIONS: Prohibited Conduct Any behavior taking place before, during, or after an examination that compromises the validity, reliability or security of an examination; is disturbing to others; or detracts from the efficient and effective administration of an examination including, but not limited to:
- Looking at another candidate’s computer screen, test booklet, or giving improper assistance to another candidate during administration of an examination.
- Unauthorized use of electronic devices. These devices include but are not limited to: cell phones, smart watches, audio and video recording devices, cameras, spy equipment, and other communication devices.
- Use of notes, sample tests, references, answer keys, calculators, manuals, note pads, or other aids that have not been explicitly approved for use during the examination.
- Copying, recording, transmitting or attempting to copy, record, or transmit examination items, questions, answers, or other content in any form. This includes writing in authorized reference materials during open-book exams and writing in or on unauthorized note or scratch pads.
- Reconstructing or attempting to reconstruct from memory any examination content for any purpose.
- Receiving, soliciting, or possessing current or prior examination content from a person who was not explicitly authorized in writing by DPOR to share the examination content.
- Communicating with any person before, during, or after the examination about specific examination items, questions, answers, or other confidential examination content.
- Exhibiting irrational or disruptive behavior at the examination site.
- Continuing to respond to exam questions whether verbal, online, or in writing after time has been called.
Policy Title: Examination Policy #600-02 Examination Site Conduct [POL543-600_02-v16] Effective: 12/01/2019 Submitted By: Shannon Webster, Director of Education & Examinations Guidance Document: Yes Supersedes: Examination Policy #600-02 Examination Site Conduct (Effective 06/26/2014) Page 1 of 3• Impersonating or attempting to impersonate an examination candidate, or using or attempting to use false identification to take an examination.
- Allowing another person to take or attempt to take your examination.
- Failure to follow any provision of the Candidate Information Bulleting/Handbook or instructions given at the examination site.
- Any non-compliance with § 54.1-102 of the Code of Virginia.
Irregularity Report This report is prepared by DPOR examination proctor(s) that details irregularities encountered during the administration of an in-house examination. Examples of irregularities include emergencies, improper identification, disturbances, or any prohibited conduct defined above.
IV. RELATED DOCUMENTS: Testing Irregularity Report Examination Agreement
V. GENERAL PROVISIONS:
A. EXAMINATION SITE CONDUCT AGREEMENT Prior to administration of the examination, all approved examination candidates shall be required to read, complete, sign, and submit an Examination Agreement provided by the Department of Professional and Occupational Regulation which acknowledges the candidate’s understanding of actions that constitute prohibited conduct and any consequences associated with the conduct.
B. HANDLING PROHIBITED CONDUCT When prohibited conduct is observed at an examination site, proctors are encouraged to exercise sound judgment in handling each incident. Proctors are discouraged from confronting hostile candidates, making physical contact with a candidate, or placing themselves in a position where the candidate could harm them. If possible, the conduct should be brought to the attention of a second proctor to corroborate the incident. All observations of prohibited conduct shall be handled in accordance with the specific guidelines below and documented on a Testing Irregularity Report. Specific guidelines are as follows.
- In situations where a candidate is looking at another candidate’s computer screen, answer sheet/test booklet, or giving assistance to another candidate during administration of an examination, the proctor shall reclaim all examination materials and expel the candidate from the test site.
- In situations where there is unauthorized use of electronic devices, notes, unauthorized notes or scratch pads, sample tests, references, and answer keys during the administration of an examination, the proctor shall reclaim all examination materials and expel the candidate from the test site.
- In situations where the candidate is copying, recording, transmitting, or attempting to copy, record, or transmit in writing, electronically or by other means, any part of an examination, with or without intent to remove the material from the examination room, the proctor shall reclaim all examination materials, both authorized and unauthorized, and expel the candidate from the test site.
- In situations where a candidate exhibits distracting or disruptive behavior at the examination site: a. The proctor shall discuss the observed behavior with the exam candidate and request correction of the behavior. b. If the prohibited conduct continues, the proctor shall reclaim all examination materials and expel the candidate from the test site.
- Continuing to respond to exam questions whether verbal, online, or in paper/pencil format after time has been called: a. The proctor shall warn the candidate that time has been called.
Policy Title: Examination Policy #600-02 Examination Site Conduct [POL543-600_02-v16] Effective: 12/01/2019 Submitted By: Shannon Webster, Director of Education & Examinations Guidance Document: Yes Supersedes: Examination Policy #600-02 Examination Site Conduct (Effective 06/26/2014) Page 2 of 3 b. After the initial warning, any continuation of the prohibited conduct shall result in the collection of all examination materials and expulsion from the test site.
- Any determination of false identity, impersonation, or an attempt to use false identification to impersonate an examination candidate will result in immediate expulsion from the test site. The proctor shall reclaim all examination materials, document the incident, and make copies of any documents provided by the candidate.
Policy Title: Examination Policy #600-02 Examination Site Conduct [POL543-600_02-v16] Effective: 12/01/2019 Submitted By: Shannon Webster, Director of Education & Examinations Guidance Document: Yes Supersedes: Examination Policy #600-02 Examination Site Conduct (Effective 06/26/2014) Page 3 of 3
Common Interest Community Registration GuidanceDoc ID: cic
Common Interest Community Board
Guidance Document: Common Interest Community Association Registration – Interpretive Guidance for 18VAC48-60-60
Adopted September 23, 2021
Effective November 25, 2021
I. Background
Section 18VAC48-60-60 of the Common Interest Community Association Registration Regulations establishes the application fee schedule for initial registration of a common interest community association and for renewal of a registration. The section provides:
The following fee schedule is based upon the number of lots or units subject to the declaration for each association. Each association filing its first annual report shall also pay the assessment required by § 54.1-2354.5 B of the Code of Virginia.
Number of Lots or Units Registration Fee Renewal Fee
1 - 50 $45 $30
51 - 100 $65 $50
101 - 200 $100 $80
201 - 500 $135 $115
501 - 1000 $145 $130
1001 - 5000 $165 $150
5001+ $180 $170Guidance Document Common Interest Community Association Registration – Interpretive Guidance for 18VAC48-60-60 Adopted September 23, 2021
II.
Issues/Concerns
The Board has received inquiries seeking clarification as to the meaning of the phrase “lots or units subject to the declaration.” Those filing an annual report on behalf of an association may need clarification on the meaning of “lots or units subject to the declaration” in order to (i) ensure the annual report is accurate regarding the number of lots or units in the community, and (ii) pay the appropriate registration or renewal fee.
Section 54.1-2345 of the Code of Virginia states, in part:
"Common interest community" means real estate subject to a declaration containing lots, at least some of which are residential or occupied for recreational purposes, and common areas to which a person, by virtue of the person's ownership of a lot subject to that declaration, is a member of the association and is obligated to pay assessments of common expenses… (emphasis added)
"Declaration" means any instrument, however denominated, recorded among the land records of the county or city in which the development or any part thereof is located, that either (i) imposes on the association maintenance or operational responsibilities for the common area as a regular annual assessment or (ii) creates the authority in the association to impose on lots, or on the owners or occupants of such lots, or on any other entity any mandatory payment of money as a regular annual assessment in connection with the provision of maintenance or services or both for the benefit of some or all of the lots, the owners or occupants of the lots, or the common area. "Declaration" includes any amendment or supplement to the instruments described in this definition.
"Lot" means (i) any plot or parcel of land designated for separate ownership or occupancy shown on a recorded subdivision plat for a development or the boundaries of which are described in the declaration or in a recorded instrument referred to or expressly contemplated by the declaration, other than a common area, and (ii) a unit in a condominium association or a unit in a real estate cooperative.
Section 55.1-1800 of the Code of Virginia states, in part:
"Development" means real property located within the Commonwealth subject to a declaration which contains both lots, at Page 2 of 4 Guidance Document Common Interest Community Association Registration – Interpretive Guidance for 18VAC48-60-60 Adopted September 23, 2021 least some of which are residential or are occupied for recreational purposes, and common areas with respect to which any person, by virtue of ownership of a lot, is a member of an association and is obligated to pay assessments provided for in a declaration.
Section 55.1-1900 of the Code of Virginia states, in part:
"Condominium" means real property, and any incidents to or interests in such real property, lawfully subject to this chapter by the recordation of condominium instruments pursuant to the provisions of this chapter.
"Unit" means a portion of the condominium designed and intended for individual ownership and use.
Section 55.1-2100 of the Code of Virginia states, in part:
"Cooperative" means real estate owned by an association, each of the members of which is entitled, by virtue of his ownership interest in the association, to exclusive possession of a unit.
"Unit" means a physical portion of the cooperative designated for separate occupancy under a proprietary lease.
During development of the regulation, the Board responded to public comment it received on this issue by indicating the phrase refers to “…lots or units that have been incorporated into the community by way of the recorded governing documents for the community, or any recorded amendments to such governing documents.”
Based on the above, it appears that the terms “lot” and “unit” refer to the real estate in a development that is designated for individual ownership and use. Once the provisions of the declaration become applicable to a lot or unit and any owner of the lot or unit, through recording of the declaration or an amendment to the recorded declaration, the lot or unit becomes subject to the declaration.
III.
Board Guidance
The Board provides the following interpretative guidance: Page 3 of 4 Guidance Document Common Interest Community Association Registration – Interpretive Guidance for 18VAC48-60-60 Adopted September 23, 2021 The phrase “lots or units subject to the declaration” as used in 18VAC48-60-60 means any lots or units in a development to which the provisions of the recorded declaration, as amended, for the common interest community are applicable.
Page 4 of 4
Time-Share Public Offering GuidanceDoc ID: cic
Common Interest Community Board
Guidance Document: Distribution of Time-Share Public Offering Statements and Purchaser Opportunity to Review Public Offering Statement Prior to Execution of a Contract
Adopted June 7, 2018 Revised March 4, 2021
Effective April 29, 2021
I. Background
Section 55.1-2217 of the Code of Virginia outlines statutory requirements for public offering statements for time-share programs. Subsection A of § 55.1-2217 states, in part:
Prior to the execution of a contract for the purchase of a time-share, the developer shall prepare and distribute to each prospective purchaser a copy of the current public offering statement regarding the time-share program. The public offering statement shall (i) fully and accurately disclose the material characteristics of the time-share program registered under this chapter and such time-share offered and (ii) make known to each prospective purchaser all material circumstances affecting such time-share program. [Emphasis added.]
In addition, Subsection I of § 55.1-2217 states:
The public offering statement may be in any format, including any electronic format, provided that the prospective buyer has available for review, along with ample time for any questions and answers, a copy of the public offering statement prior to his execution of a contract. [Emphasis added.]Guidance Document Distribution of Time-Share Public Offering Statements and Purchaser Opportunity to Review Public Offering Statement Prior to Execution of a Contract Adopted June 7, 2018 (Revised March 4, 2021) The requirement in Subsection A that developers distribute public offering statements to prospective purchasers prior to execution of a contract for purchase came about as a result of changes made to The Virginia Real Estate Time-Share Act (“Time-Share Act”) in 1994. The change was made in conjunction with an amendment to purchaser’s cancellation rights outlined in § 55-376 of the Code of Virginia (now § 55.1-2221) which established the cancellation period to solely be seven days from the date of contract execution. Previous to the 1994 amendment, a purchaser had the right to cancel a contract within seven days following execution of the contract or receipt of the public offering statement, whichever occurred later.
Subsection I was added to § 55-374 of the Code of Virginia (now § 55.1-2217) as a result of amendments to the Time-Share Act in 2007.
Part V of the Board’s Time-Share Regulations (18 VAC 48-45-140 through 18 VAC 48-45-320) outline the requirements for public offering statements. Section 18 VAC 48-45-150 states, in part: A. The provisions of § 55.1-2217 of the Code of Virginia and this chapter shall be strictly construed to promote full and accurate disclosure in the public offering statement. [Emphasis added.]
Section 18 VAC 48-45-20 provides the following definition: "Full and accurate disclosure" means the degree of disclosure necessary to ensure reasonably complete and materially accurate representation of the time-share in order to protect the interests of purchasers.
II.
Issues/Concerns
The language in § 55.1-2217 suggests that it is the intention of the General Assembly to protect the public welfare by ensuring that prospective time-share purchasers be provided with, and have the opportunity to review, the public offering statement for a time-share program offering before the statutory rescission period commences.
Subsections A and I of § 55.1-2217 clearly establish the requirement, regardless of the format of the public offering statement (i.e. printed or electronic), that prospective purchasers are to receive the public offering statement before execution of a contract.
Subsection I also provides that prospective purchasers have “ample time for any questions and answers” prior to execution of a contract. The requirements in Subsections A and I prescribe how a developer must act when offering or disposing of a time-share.
If a developer fails to provide a public offering statement prior to execution of a contract, or fails to give prospective purchasers adequate time to review a public offering statement, the Board can investigate complaints involving alleged violations of Guidance Document Distribution of Time-Share Public Offering Statements and Purchaser Opportunity to Review Public Offering Statement Prior to Execution of a Contract Adopted June 7, 2018 (Revised March 4, 2021) the Time-Share Act and take disciplinary action as appropriate. In such instances, though, the obligation is on the consumer to allege the developer failed to comply with the Time-Share Act. However, it is not clear that prospective purchasers would know, or have reason to know, that a developer is required to provide a public offering statement, and afford them with ample time for questions and answers, prior their execution of a contract. Depending on the nature of the time-share program being offered, the length of a public offering statement, including exhibits, can number in the hundreds of pages, which may deter prospective purchasers from immediately reviewing a statement upon receipt. To the extent potential purchasers are unaware of the protection afforded to them under the Time-Share Act, a potential purchaser is placed at a significant information disadvantage in the transaction vis-à-vis the developer. The developer has greater knowledge of the material characteristics and circumstances in the time-share being offered, including any terms and conditions that might affect the purchaser’s decision to accept or decline a purchase. The purpose of the public offering statement is to provide a potential purchaser with sufficient notice of these material characteristics and circumstances. By reviewing the public offering statement and being afforded opportunity to have any questions answered, prior to execution of the contract, potential purchasers can educate themselves regarding the time-share being offered, and be on more equal footing with the developer in the transaction.
To the extent a purchaser executes a purchase contract, thereby initiating the rescission period, without having first reviewed the public offering statement, the purchaser is placed at a disadvantage. The purchaser’s only remedy may be to cancel the contract during the rescission period. However, the purchaser may not be fully aware of any material characteristics and circumstances of the time-share that might have otherwise caused them to forgo a purchase, and may not become aware of these until after the rescission period has ended.
A review of time-share related complaints received by the Office of the Common Interest Community Ombudsman for the 2015-2016 reporting period (56 cases) revealed there were at least six (6) cases where the complaining parties indicated in their complaint that they did not have the opportunity to review documents prior to signing a contract. In the 2016-2017 reporting period, there were at least eight (8) time-share related complaints where the complaining parties indicated that they did not have an opportunity to review documents prior to signing a contract.
Inasmuch as the requirements to provide a public offering statement, and allow ample time for questions and answers prior to execution of a contract serve to protect consumers, adhering to these requirements is beneficial to developers. Following these requirements can place developers in a better position with respect to any complaints that may be made to the Board, as the Board can more efficiently determine whether a complaint is legitimate or simply a matter of “buyer’s remorse.” The Board’s regulations pertaining to public offering statements, which supplement statutory requirements under § 55.1-2217, largely address the form and content of a public offering statement, with the principal standard being that public offering Guidance Document Distribution of Time-Share Public Offering Statements and Purchaser Opportunity to Review Public Offering Statement Prior to Execution of a Contract Adopted June 7, 2018 (Revised March 4, 2021) statements are to provide “full and accurate” disclosure to consumers in order for a time-share to qualify for registration. Regarding delivery of a public offering statement, 18 VAC 48-45-160.B provides that a developer may include a receipt page documenting a purchaser’s receipt of the public offering statement. The regulations do not specifically address the requirement of delivery of a public offering statement prior to execution of a contract, or the requirement that potential purchasers be afforded an opportunity for questions and answers. Consumers, developers, and other members of the public may benefit from the Board’s guidance on this issue.
III.
Board Guidance The Board adopts a guidance document that establishes the following:
- Full and accurate disclosure in a public offering statement includes disclosure to each potential purchaser of the developer’s obligations, as outlined in § 55.1-2217, to distribute the public offering statement to each potential purchaser prior to execution of the purchase contract; and that each potential purchaser must have the public offering statement available for review, along with ample time for questions and answers, prior to execution of the purchase contract.
- The disclosure described in Item #1 above must be provided in either (i) the first page of the public offering statement required by 18 VAC 48-45-160.C; or (ii) the optional public offering statement receipt page described in 18 VAC 48-45-
160.B.
- A developer that seeks to distribute a public offering statement by way of alternative media (i.e. other than paper copy) must obtain written consent from the prospective purchaser to receive the public offering statement by way of alternative media, prior to execution of the purchase contract; and must inform prospective purchasers of the developer’s obligation, as outlined in Subsection I of § 55.1-2217, to provide potential purchasers with a copy of the public offering statement for review, and ample time for questions and answers, prior to execution of a purchase contract.
Accounts Receivable and Debt Collection PolicyDoc ID: cic
FINANCE POLICY #700-03 ACCOUNTS RECEIVABLE & DEBT COLLECTION Effective Date: July 1, 2018
Digitally signed by Jay W. DeBoer DN: cn=Jay W. DeBoer, o=DPOR,
c=US Approved By: ou=Director,,email=jay.deboer@dpor.virginia.gov,Date: 2018.07.26 14:36:29 -04'00'
I. PURPOSE: The purpose of this policy is to establish guidelines for the management and collection of accounts receivable as required by the State Comptroller.
II. POLICY STATEMENT: The Department of Professional and Occupational Regulation shall take all appropriate and cost effective actions to aggressively collect its accounts receivable in accordance with the Code of Virginia and Commonwealth Accounting Policies and Procedures.
III. DEFINITIONS: Accounts Receivable Any amount owed to the Department, including monetary penalties, recovery fund payments, employee reimbursements, and miscellaneous billings arising from the sale of goods or services. An accounts receivable is also referred to as a receivable. Receivables do not include travel advances, which are addressed separately in Finance Policy #700-01 Travel and Business Meals.
Monetary Penalties Penalties assessed against licensees under § 54.1-202 of the Code of Virginia for the violation of any statute or regulation pertaining to a regulatory board of the Department.
Other Receivables Amounts owed for services rendered (e.g., license transcripts, FOIA requests, employee reimbursements, and other miscellaneous billings).
Recovery Fund Payments Amounts owed for Recovery Fund claims paid in accordance with § 54.1-1120, § 54.1-2114 and § 55-530.1 of the Code of Virginia.
IV. RELATED DOCUMENTS: Commonwealth Accounting Policies and Procedures Topic 20505 Accounts Receivable Set-Off Program Information Guide (published by the Virginia Department of Taxation) Attorney General Debt Collection Procedures Certification of Final Order Form Director’s Policy #100-05 License Suspensions Finance Procedure 600-601 Receivables Finance Procedure 600-505 Recovery Fund Receivables
V. GENERAL PROVISIONS:
A. MONETARY PENALTIES
- Creation of the Receivable The approval of any Consent or Final Order that assesses monetary penalties or costs creates a receivable. The receivable is due from the moment the Director signs the Order. However, most Orders give the debtor a fixed amount of time to pay before the account is deemed past due.
- License Suspension The licensing sections are responsible for monitoring disciplinary orders until compliance is obtained. If the order assesses penalties or costs and payment is not made by the due date, the account is deemed to be past due and the Executive Director shall suspend the debtor’s license for non-payment according to the provisions of Director’s Policy #100-05 License Suspensions.
Policy Title: Finance Policy #700-03 Accounts Receivable & Debt Collection [POL405-700_03-v7] Effective: 07/01/2018 Submitted By: Jeff Waite, Financial Services Director Guidance Document: Yes Supersedes: Finance Policy #700-03 Accounts Receivable & Debt Collection (Effective 02/10/2012) Page 1 of 43. Collection Efforts on Unpaid Accounts Following the license suspension, but not more than 30 days after the payment due date, the board shall notify the Finance Section of the need for collection. The Finance Section shall employ the collection procedures outlined in Finance Procedure #600-601 Receivables to collect the amount owed to the Department.
B. RECOVERY FUND CLAIMS
- Payment from the Fund Recovery Fund claims are paid pursuant to approved Final Orders. The payment of any Recovery Fund claim creates an immediate obligation for the regulant to repay the Fund with interest.
Upon payment from the Fund, the Finance Section shall employ the collection procedures outlined in Finance Procedure #600-505 Recovery Fund Receivables to collect the amount owed.
- License Revocation The Finance Section shall notify the regulatory board sections whenever a payment is made from the Recovery Funds. Upon receiving this notice, the board sections shall revoke the regulant’s license except for claims against the Contractor Transaction Recovery Fund or when prevented by bankruptcy.
- Calculation of Interest The Department shall assess interest on all Recovery Fund accounts receivable according to the Virginia Debt Collection Act § 2.2-4805 of the Code of Virginia. Interest is imposed at the judgment rate as provided in § 6.2-302 of the Code of Virginia.
C. OTHER RECEIVABLES The Information Management Section is responsible for billing and collecting all license transcripts, FOIA and other public record fees. If any billed amount remains unpaid on the last day of any quarter, the Information Management Section shall report the amount owed to the Finance Section so that it can be included in the Comptroller’s Quarterly Accounts Receivable Report. In the event that the Information Management Section is unable to obtain payment from the debtor within a reasonable time period, they shall forward the account and all supporting documentation to the Finance Section for further collection efforts.
D. PARTIAL PAYMENTS
- The Department does not accept installment agreements and debtors must pay the full amount owed on or before the required payment due date.
- If partial payment is made, the Department will receipt the funds and apply them to the appropriate account. The receipt does not constitute an installment agreement and will not prevent or stop outside collection efforts if full payment is not received before the required due date. In addition, the debtor’s license shall remain suspended for nonpayment and/or the regulant will be ineligible to reapply for a new license until the account is paid in full.
- Partial payments in disciplinary cases will be applied to costs first and penalties second. All collections on monetary penalties will be deposited to the State Literary Fund in accordance with § 19.2-353 of the Code of Virginia. Partial payments in recovery fund cases will be applied to accrued interest first and then to the principal balance.
E. DEBT SET-OFF MATCHES
- Debt Set-Off The Department participates in the Department of Taxation’s Individual Debt Set-Off Collection Program and the state Comptroller's Debt Set-Off program. These programs intercept state tax Policy Title: Finance Policy #700-03 Accounts Receivable & Debt Collection [POL405-700_03-v7] Effective: 07/01/2018 Submitted By: Jeff Waite, Financial Services Director Guidance Document: Yes Supersedes: Finance Policy #700-03 Accounts Receivable & Debt Collection (Effective 02/10/2012) Page 2 of 4 refunds, lottery winnings, and targeted vendor payments and use them to offset debts owed to state agencies.
- Debtor Notification The state Department of Taxation notifies DPOR via e-mail when available funds have been matched to the agency’s debt. Within ten calendar days of the match date, the Finance Section shall notify the debtor in writing that the Department of Taxation is holding available funds against the debt. The purpose of the letter is to inform debtors that they have thirty calendar days to contest the validity of the debt before the funds are seized.
- Right to Contest The debtor has the right to contest the validity of a claim before the set-off agency. The debtor must give written notice of his desire to contest a claim within 30 calendar days of the mailing date of the set-off agency’s letter. This will suspend further set-off action.
When the Finance Section receives notice that a debtor is contesting, they shall schedule a Set-Off Hearing. The Finance Section shall select a Presiding Officer that has no prior involvement in the circumstances that culminated in the dispute. The Presiding Officer shall establish a date, time and place for the hearing and shall notify the debtor of these facts using certified mail within ten days of receiving the hearing request.
- Hearing Procedures a. The Presiding Officer shall conduct the Set-Off Hearing on the appointed date. The scope of the hearing shall be limited to determining whether the amount in set-off is an obligation that remains due and owed to the Department. The underlying basis of the debt shall not be addressed in the Set-Off Hearing. b. A representative from the Finance Section shall attend the hearing to present the Department’s evidence and may call witnesses on the Department’s behalf. The debtor shall also be allowed to submit evidence relevant to the matter and to call witnesses. A tape recorder or court reporter shall provide a record of the proceedings. c. The Presiding Officer shall consider all the evidence presented at the hearing and shall make a determination as to whether the Department is entitled to the amount held in set-off.
While usually made at the conclusion of the hearing, the Presiding Officer may elect to delay the decision if additional information is needed. In such cases, the Presiding Officer shall notify the debtor of the hearing outcome within three days of receiving the additional information. After the final determination of the validity of the debt is determined, the Finance Section shall finalize the match in the Debt Set-Off system in order to collect or release the funds being held.
- Failure to Appear The debtor’s failure to appear at the hearing at the appointed time and place shall be deemed a forfeiture of their opportunity to contest the claim and final set-off shall be awarded by default.
- Appeal/Grievance Procedures The decision of the Presiding Officer shall be final. However, this does not prevent the debtor from appealing the decision in circuit court as provided in § 58.1-527 of the Code of Virginia. All appeals must be filed in circuit court within thirty days of the Department’s decision.
F. BANKRUPTCY STAYS Bankruptcy law requires the Department to suspend collection efforts against individuals or companies that have filed bankruptcy. To ensure compliance with this law, any DPOR employee who receives notice of a bankruptcy (including those received through the Recovery Fund process) should immediately forward a copy of the notice to the Financial Services Director. The Financial Services Policy Title: Finance Policy #700-03 Accounts Receivable & Debt Collection [POL405-700_03-v7] Effective: 07/01/2018 Submitted By: Jeff Waite, Financial Services Director Guidance Document: Yes Supersedes: Finance Policy #700-03 Accounts Receivable & Debt Collection (Effective 02/10/2012) Page 3 of 4 Section staff will remove the account from the tax set-off program and notify the outside collection agent or Office of the Attorney General of the need to suspend collection efforts until the bankruptcy case is closed. The Financial Services Director or designee shall take appropriate action to protect the Department’s interests during the bankruptcy proceedings.
G. DELEGATION OF AUTHORITY The Director has authorized the Executive Director and Board Administrator of the board issuing the order to sign the Certification of Final Order that accompanies account referrals to the Office of the Attorney General.
Policy Title: Finance Policy #700-03 Accounts Receivable & Debt Collection [POL405-700_03-v7] Effective: 07/01/2018 Submitted By: Jeff Waite, Financial Services Director Guidance Document: Yes Supersedes: Finance Policy #700-03 Accounts Receivable & Debt Collection (Effective 02/10/2012) Page 4 of 4
Common Interest Community Board Guidance OverviewDoc ID: cic
Common Interest Community Board
Summary of Board Interpretations, Policies, and Guidance Documents
Updated June 9, 2022
Effective August 18, 2022
General
Board Interpretations (General) The Board discussed providing interpretations of statutes related to its 10/13/09 programs. The Board considered whether it would entertain requests for interpretations that go beyond those interpretations necessary to administer its programs, enforce the regulations, and make case decisions. The Board agreed by consensus to limit its review to those interpretations that fall within the scope of the Board’s authority.
Associations/Association Registration
Reserve Balance The Board discussed “reserve balance” as it is used in § 55-514.2(B) 9/15/08 (now § 55.1-1827(B)) of the Property Owners Association Act and § 55-79.81(B) (now § 55.1-1963(B)) of the Virginia Condominium Act. The Board agreed by consensus this would be the amount in reserves at the
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end of the fiscal year, plus what they plan to add to the reserve balance, plus one-fourth of the planned assessment income for the coming year.
The bond must cover the highest amount that the reserve balance could be during the year, plus one-fourth in accordance with the Code requirements.
Final Adverse Decisions and Associations with No Governing Boards The Board discussed the applicability of the final adverse decision 10/26/09 process to members of associations with no governing boards. This is a concern because there would be no governing board to consider complaints, thus there could be no final adverse decision. The Board determined that these complaints would have to go through the Department’s regular complaint process and a remedy to these situations could only be handled by a change in the statute.
Applicability of the Common Interest Community Ombudsman Regulations on Solely Commercial Condominiums The Board adopted a guidance document on September 20, 2012, 9/20/12 regarding whether the Common Interest Community Ombudsman Regulations apply to solely commercial condominiums. The Guidance Document is available on Town Hall.
Requests for Waiver of Filing Fee for Notice of Final Adverse Decision The Board adopted a guidance document on September 17, 2013 9/17/13 regarding the waiver of filing fees for filing a Notice of Final Adverse Decision (NFAD). The Guidance Document is available on Town Hall.
Maximum Allowable Fees The Board adopted a guidance document on June 27, 2013, regarding 6/26/14 specific maximum allowable fees set by the Virginia Condominium Act and Property Owners Association Act that may be charged by the preparer of disclosure packets and resale certificates. The Guidance Document is available on Town Hall. Bulletins on these maximum fees are also available on Town Hall.
Best Practices for Property Owners’ Associations’ Declarations The Board adopted this document on December 10, 2015, to offer 12/10/15 guidance on the best practices for the content of property owners’ association declarations. Best Practices for the Content of Property Owners’ Associations’ Declarations is available on Town Hall.
Guidelines for the Development of Reserve Studies for Capital Components The Board adopted this document on September 5, 2019, to provide 9/5/19 guidelines for associations in the development of reserve studies for capital components. Guidelines for the Development of Reserve Studies for Capital Components is available on Town Hall.
Common Interest Community Association Registration – Interpretive Guidance for 18VAC48-60-60
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The Board adopted this document on September 23, 2021, to provide 9/23/21 interpretive guidance regarding the meaning of the phrase "lots or units subject to the declaration" as used in 18VAC48-60-60 of the Common Interest Community Association Registration Regulations. The Guidance Document is available on Town Hall.
CIC Manager Licensure
Reserve Balance The Board discussed “reserve balance” as referenced in Section 54.1- 10/15/08 2346(D) of the Code of Virginia. It was stated that the reserve balance should be calculated based on the last fiscal year, the date of the application, and the highest aggregate amount of each association managed by the Common Interest Community Manager during the last fiscal year. The amount of the bond or insurance for the manager is to maintain maximum coverage.
Blanket Fidelity Bond or Employee Dishonesty Insurance Policy The Board adopted a guidance document on March 2, 2010, regarding 3/2/10 the requirement in § 54.1-2346(D) of the Code of Virginia that a Common Interest Community Manager obtain and maintain a blanket fidelity bond or employee dishonest insurance policy. The Guidance Document is available on Town Hall.
Definition of “Employee” as Used in Statutory Exemption from Licensure The Board adopted a guidance document on December 2, 2010, 12/2/10 regarding the definition of “Employee” as used in § 54.1-2347(A) of the Code of Virginia. The Guidance Document is available on Town Hall.
CIC Manager License Requirements for Association Debt Collections The Board considered whether a common interest community manager 6/9/11 license is required for a company that is only responsible for the collection of past-due assessments on behalf of an association. The Board responded by referencing the definition of “management services” in § 54.1-2345 of the Code of Virginia, which includes “(iii) collecting, disbursing, or otherwise exercising dominion or control over money or other property belonging to an association.” Thus, based on the current statutory language, a license would be required for an entity performing any of the functions in the definition of management services, unless an exemption in § 54.1-2347 of the Code of Virginia applied.
CIC Managers with Disciplinary Action as a Provisional Licensee An applicant for a common interest community manager license who 6/7/12 held a provisional common interest community manager license issued by the Board and had a consent order entered by the Board will not have the previous consent order adversely affect the common interest community manager license application as long as all terms of the
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consent order were met as stipulated in the applicable consent order. All other requirements of the Common Interest Community Manager Regulations regarding convictions, adverse financial history, or administrative discipline are not affected by this policy statement.
Requirement to Obtain and Maintain Separate Fidelity Bond or Insurance Policy The Board adopted a guidance document on September 20, 2012, 9/20/12 regarding the requirement for common interest community managers to obtain and maintain a fidelity bond or employee dishonest insurance policy. The Guidance Document is available on Town Hall.
Certified Principal/Supervisory Employee Personal Adverse Financial History The Board adopted a guidance document on December 3, 2014, 12/03/14 regarding what applicants for a principal/supervisory employee certificate must submit when certain personal adverse financial history is disclosed. The Guidance Document is available on Town Hall.
CIC Management Recovery Fund
Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund The Board adopted this document on March 3, 2022, to provide 3/3/22 interpretive guidance regarding the procedure for submission and consideration of a verified claim for recovery from the Common Interest Community Management Recovery Fund. The Guidance Document is available on Town Hall.
Condominium Registration
Completion Bonds for Commercial Condos The Board considered whether a commercial condominium needs to 1/26/09 file a completion bond with the Board for incomplete common elements since commercials condominiums are exempt from registration. It was determined that § 55-79.87 (now § 55.1-1972) does not exempt commercial condominiums from filing a completion bond and that Board staff will retain these bonds, if applicable.
Ownership of Condo Unit by POA The Board reviewed a request for an interpretation on ownership of 10/13/09 condominium units by a property owners association. The Board declined to provide an interpretation as it is outside the Board’s authority.
Meaning of “Substantial Completion” The Board considered a request to provide an interpretation of the 10/26/09 meaning of “substantial completion.” The Board agreed by consensus
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that it could not provide an interpretation on this issue as it is outside the Board’s authority.
Registration Process for Condominiums in Foreclosure The Board discussed a recurring issue that involves the foreclosure of 12/1/11 condominiums wherein there are unsold units. Upon learning of a condominium foreclosure (the declarant’s property has been foreclosed, not an individual unit owner’s property), staff proceeds to ascertain the current status of the condominium and, if still owned by the foreclosing entity, the future plans for the condominium in order to ensure that the registration is compliant with the Virginia Condominium Act and the Condominium Regulations. Specifically, staff must know whether the financial institution plans to sell individual units or sell to a successor declarant. Upon learning this information, staff can then advise as to the appropriate steps to ensure the registration remains up-to-date and accurate. The problem arises in situations wherein staff is unable to make contact with the foreclosing financial institution or does not obtain cooperation from the financial institution and it proceeds with the sale of the units.
The Board directed staff to i.) ensure that appropriate confirmation from the association is received before releasing the assessment bond or letter of credit; ii.) attempt to obtain a statement from the financial institution to determine the current status and the next course of action; and, iii.) if appropriate, prepare the registration file so that the Board can review the matter in consideration of entering a cease and desist order in accordance with § 55-79.100 (now § 55.1-1986) of the Code of Virginia if compliance is not obtained and/or sales proceed.
Declarant and Developer Control Period
- QUESTION: Section 55-79.54(c)(3) (now § 55.1- 3/14/13 1916(C)(3))of the Code of Virginia includes a provision for extending the time period for expanding an expandable condominium. Section 55-79.54(d)(3) (now § 55.1-1916(D)(3)) of the Code of Virginia regarding a contractible condominium does not contain a similar provision to allow for an amendment to the declaration to extend the time to contract a contractible condominium. Does the Board take the position that such an amendment is not allowed?
BOARD RESPONSE: The statute does not address extending the time period to withdraw land; therefore, it would not be permitted. Such time period extension only applies to an expandable condominium.
- QUESTION: The Property Owners’ Association Act (Title 55, Chapter 26 of the Code of Virginia) (now Chapter 18 of Title 55.1) does not contain a provision covering the
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extension of a developer control period reserved by a developer in a recorded declaration. Could an amendment adopted by two-thirds of the lot owners provide for an extension of the developer control period?
BOARD RESPONSE: The Board does not have any purview over the extension of a developer control period in a property owners’ association as it is determined by the declaration and not the Property Owners’ Association Act.
Bond Requirements for Commercial Condominiums The Board considered two questions regarding the applicability of § 55- 6/27/13 79.58:1 (now § 55.1-1921) of the Code of Virginia to commercial condominiums and responded as follows.
- Does the Board have the authority to regulate commercial condominiums?
The Board does have the authority to regulate commercial condominiums, except as exempt pursuant to § 55-79.87(B) (now § 55.1-1972(B)) of the Code of Virginia.
- Does the Board accept and hold bonds posted pursuant to Virginia Code § 55-79.58:1 (now § 55.1-1921) on behalf of commercial condominium regimes?
If the declarant of a commercial condominium were to present to the Board a bond pursuant to § 55-79.58:1 (now § 55.1-1921) of the Code of Virginia, the Board would retain the bond in accordance with the Code. Because commercial condominiums are exempt from the application requirements, and therefore are not required to submit plats, plans, and other documentation regarding the condominium, Board staff may not be able to ensure compliance with § 55-79.58:1 (now § 55.1-1921).
Therefore, it may be necessary for Board staff to request such documentation to ensure the bond is in compliance.
Letters of Credit May Be Accepted in Lieu of Assessment Bond The Board adopted a guidance document on June 27, 2013, regarding 6/27/13 the requirement for a declarant to post an assessment bond for a condominium. The Guidance Document is located on Town Hall.
Required Amount of Assessment Bond/Letter of Credit The declarant of a condominium must file and maintain a bond or letter 12/3/13 of credit in favor of the unit owner’s association to insure the declarant’s assessment obligations are fulfilled. It has been the registration practice to require that the bond or letter of credit is equal to $1,000 per unit registered (minimum of $10,000 and maximum of $100,000), regardless of whether the declarant still owns the unit. After discussion, the Board
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agreed by consensus to continue the practice of requiring an assessment bond or letter of credit be filed for the total number of units registered with the Board.
Withdrawal of Condominium Registrations The Board confirmed by consensus that the declarant is not obligated to 3/26/15 maintain the condominium project registration, and may withdraw the registration, if the declarant is not selling units. As part of withdrawing the registration, the declarant will be required to certify that he has no plans to sell units, will continue to pay assessments on units owned by the declarant, and that he will re-register the condominium project and meet all current entry requirements of the Code of Virginia and Board’s regulations should the declarant decide to sell units in the future. Release of the assessment bond or letter of credit is possible with withdrawing the registration with confirmation from the unit owners association that the declarant is current in the payment of assessments.
Time-Share Registration
Procedure for Determination of Compliance with § 55.1-2220 and § 55.1-2234 The Board has the obligation, pursuant to § 55-382(B) (now § 55.1- 10/26/09 2230(B)) of the Code of Virginia, upon the request of an aggrieved owner to render a determination whether compliance with §§ 55-375 and 55-386 (now §§ 55.1-2220 or 55.1-2234) has occurred. The Board adopted procedural guidelines for handling determination requests. The determination procedure is available on Town Hall.
Definition of Alternative Purchase A program that in summary will not be sold during the visit to the resort 9/17/13 but will be marketed to potential purchasers days after they have left the resort does not appear to meet the definition of alternative purchase.
Time-Share Public Offering Statement ( § 55.1-2217(A)(1)(d)) (Previously § 55-374(A)(1)(d)) The Board was asked for an interpretation of what exactly is required 3/26/15 from the time-share developer in the Public Offering Statement regarding unsatisfied judgments and the status of pending lawsuits. The Board declined to provide an interpretation as it is outside the Board’s authority in that it goes beyond an interpretation necessary to administer its programs, enforce the regulations, or make case decisions. The Board further stated that it urges the developer and its counsel to seek full disclosure consistent with the Code of Virginia and Board’s regulations.
Determining Value of Blanket Surety Bonds Filed by Developers in Lieu of Escrowing Deposits The Board adopted a guidance document on June 7, 2018, regarding 6/7/18 changes to § 55-375 (now § 55.1-2220) of the Virginia Real Estate Time-Share Act resulting from legislation during the 2018 General Assembly session. The Guidance Document is available on Town Hall.
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Time-Share Public Offering Statements Delivered by Way of Alternative Media; Purchaser Opportunity to Review Public Offering Statement Prior to Execution of a Contract The Board adopted a guidance document on June 7, 2018, regarding the 6/7/18 requirements for public offering statements under § 55-374 (now § 55.1-2217) of the Virginia Real Estate Time-Share Act. The Guidance Document is available on Town Hall.
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Claims Process for Common Interest Community Recovery FundDoc ID: cic
Common Interest Community Board
Guidance Document: Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund
Adopted March 3, 2022
Effective April 28, 2022
I. Background
Section 54.1-2354.5 of the Code of Virginia establishes the Common Interest Community Management Recovery Fund (“the Fund”). The section states, in part:
A. There is hereby created the Common Interest Community Management Recovery Fund, referred to in this section as "the Fund," to be used in the discretion of the Board to protect the interests of associations.
Section 54.1-2354.1 of the Code of Virginia provides the following definitions as related to the Fund:
"Claimant" means, upon proper application to the Director, a receiver for a common interest community manager appointed pursuant to § 54.1-2353 in those cases in which there are not sufficient funds to restore all funds that were or ought to have been held in a fiduciary capacity by the subject common interest community manager or to pay an award of reasonable fees, costs, and expenses to the receiver.
"Director" means the Director of the Department of Professional and Occupational Regulation.
Section 54.1-2353 of the Code of Virginia provides for the fiduciary obligations a common interest community manager has to associations to which it provides management services, and states, in part:Guidance Document Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund Adopted March 3, 2022
A. A common interest community manager owes a fiduciary duty to the associations to which it provides management services with respect to the manager's handling the funds or the records of each association.
This section of the statute authorizes the Board to seek court appointment of a receiver in cases where a common interest community manager is not able to discharge its fiduciary duties, and states, in part:
C. If the Board has reasonable cause to believe that a common interest community manager is unable to properly discharge its fiduciary responsibilities to an association to which it provides management services, the Board may file a petition with the circuit court of the county or city wherein the subject common interest community manager maintains an office or is doing business. The petition may seek the following relief: (i) an injunction prohibiting the withdrawal of any bank deposits or the disposition of any other assets belonging to or subject to the control of the subject common interest community manager and (ii) the appointment of a receiver for all or part of the funds or property of the subject common interest community manager.
The section further outlines the duties of the receiver and the process for distribution of assets:
E. The court shall describe the powers and duties of the receiver in its appointing order, which may be amended from time to time. The receiver shall, unless otherwise ordered by the court in the appointing order, (i) prepare and file with the Board a list of all associations managed by the subject common interest community manager; (ii) notify in writing all of the associations to which the subject common interest community manager provides management services of the appointment and take whatever action the receiver deems appropriate to protect the interests of the associations until such time as the associations have had an opportunity to obtain a successor common interest community manager; (iii) facilitate the transfer of records and information to such successor common interest community manager; (iv) identify and take control of all bank accounts, including without limitation trust and operating accounts, over which the subject common interest community manager had signatory authority in connection with its management business; (v) prepare and submit an accounting of receipts and disbursements and account balances of all funds under the receiver's control for submission to the court within four months of the appointment and annually thereafter until the receivership is terminated by the court; (vi) attempt to collect any accounts receivable related to the subject common interest community manager's business; (vii) identify and attempt to recover any assets wrongfully diverted from the subject common interest community manager's business, or assets acquired with funds wrongfully diverted from the subject common interest Guidance Document Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund Adopted March 3, 2022
community manager's business; (viii) terminate the subject common interest community manager's business; (ix) reduce to cash all of the assets of the subject common interest community manager; (x) determine the nature and amount of all claims of creditors of the subject common interest community manager, including associations to which the subject common interest community manager provided management services; and (xi) prepare and file with the court a report of such assets and claims proposing a plan for the distribution of funds in the receivership to such creditors in accordance with the provisions of subsection F.
F. Upon the court's approval of the receiver's report referenced in subsection E, at a hearing after such notice as the court may require to creditors, the receiver shall distribute the assets of the common interest community manager and funds in the receivership first to clients whose funds were or ought to have been held in a fiduciary capacity by the subject common interest community manager, then to the receiver for fees, costs, and expenses awarded pursuant to subsection G, and thereafter to the creditors of the subject common interest community manager, and then to the subject common interest community manager or its successors in interest.
H. The court may determine whether any assets under the receiver's control should be returned to the subject common interest community manager.
The section authorizes the receiver to make a claim against the Fund when the common interest community manager does not have sufficient funds to pay the receiver’s costs and expenses:
G. A receiver appointed pursuant to this section shall be entitled, upon proper application to the court in which the appointment was made, to recover an award of reasonable fees, costs, and expenses. If there are not sufficient nonfiduciary funds to pay the award, then the shortfall shall be paid by the Common Interest Community Management Recovery Fund as a cost of administering the Fund pursuant to § 54.1-2354.5, to the extent that the said Fund has funds available. The Fund shall have a claim against the subject common interest community manager for the amount paid.
Subsection H of § 54.1-2354.5 of the Code of Virginia outlines the process for a claimant to make a claim for recovery from the Fund, and states, in part:
H. A claimant may seek recovery from the Fund subject to the following conditions:
- A claimant may file a verified claim in writing to the Director for a Guidance Document Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund Adopted March 3, 2022
recovery from the Fund.
- Upon proper application to the Director, in those cases in which there are not sufficient funds to pay an award of reasonable fees, costs, and expenses to the receiver or to restore all funds that were or ought to have been held in a fiduciary capacity by the subject common interest community manager, the Director shall report to the Board the amount of any shortfall to the extent that there are not sufficient funds (i) to pay any award of fees, costs, and expenses pursuant to subsection G of § 54.1-2353 by the court appointing the receiver; or (ii) to restore all funds that were or ought to have been held in a fiduciary capacity by the subject common interest community manager, as certified by the court appointing the receiver.
- If the Board finds there has been compliance with the required conditions, the Board shall issue a directive ordering payment of the amount of such shortfall to the claimant from the Fund, provided that in no event shall such payment exceed the balance in the Fund. When the Fund balance is not sufficient to pay the aggregate amount of such shortfall, the Board shall direct that payment be applied first in satisfaction of any award of reasonable fees, costs, and expenses to the receiver and second to restore the funds that were or ought to have been held in a fiduciary capacity by the subject common interest community manager. If the Board has reason to believe that there may be additional claims against the Fund, the Board may withhold any payment from the Fund for a period of not more than one year. After such one-year period, if the aggregate of claims received exceeds the Fund balance, the Fund balance shall be prorated by the Board among the claimants and paid in the above payment order from the Fund in proportion to the amounts of claims remaining unpaid.
- The Director shall, subject to the limitations set forth in this subsection, pay to the claimant from the Fund such amount as shall be directed by the Board upon the execution and delivery to the Director by such claimant of an assignment to the Board of the claimant's rights on its behalf and on behalf of the associations receiving distributions from the Fund against the common interest community manager to the extent that such rights were satisfied from the Fund.
- The claimant shall be notified in writing of the findings of the Board.
The Board's findings shall be considered a case decision as defined in §
- 2-4001, and judicial review of these findings shall be in accordance with § 2.2-4025 of the Administrative Process Act (§ 2.2-4000 et seq.).
- Notwithstanding any other provision of law, the Board shall have the right to appeal a decision of any court that is contrary to any distribution Guidance Document Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund Adopted March 3, 2022
recommended or authorized by it.
- Upon payment by the Director to a claimant from the Fund as provided in this subsection, the Board shall immediately revoke the license of the common interest community manager whose actions resulted in payment from the Fund. The common interest community manager whose license was so revoked shall not be eligible to apply for a license as a common interest community manager until he has repaid in full the amount paid from the Fund on his account, plus interest at the judgment rate of interest from the date of payment from the Fund.
II.
Issues/Concerns
Since the Fund was established by the General Assembly in 2008, the Department has never received a claim seeking recovery from the Fund. Section 54.1-2354.5 of the Code of Virginia requires a claimant to file a “verified claim” in writing to the Director.
However, the term “verified claim” is not defined in Chapter 23.3 of Title 54.1 of the Code of Virginia. This is in contrast to provisions in the Virginia Contractor Transaction Recovery Act (“Contractor Recovery Act”) (§ 54.1-1118 et seq. of the Code of Virginia) and Virginia Real Estate Transaction Recovery Act (“Real Estate Recovery Act”) (§ 54.1-2112 et seq. of the Code of Virginia).
The Contractor Recovery Act and the Real Estate Recovery Act each provide a definition for “verified claim.” Sections 54.1-1118 and 54.1-2112 provide, in pertinent part:
"Verified claim" means a completed application, on a form designed by the Board, the truthfulness of which has been attested to by the claimant before a notary public, along with all required supporting documentation, that has been properly received by the Department in accordance with this chapter.
The statute also provides that upon “proper application” to the Director, that the Director report to the Board the amount of the shortfall “…to the extent that there are not sufficient funds (i) to pay any award of fees, costs, and expenses pursuant to subsection G of § 54.1-2353 by the court appointing the receiver; or (ii) to restore all funds that were or ought to have been held in a fiduciary capacity by the subject common interest community manager, as certified by the court appointing the receiver.” However, the statute does not stipulate what information and documents must be submitted to the Director in order for a claim to be considered by the Board.
Section 54.1-1122 of the Contractor Recovery Act states, in part:
A. The claimant shall submit the following supporting documentation with the claim: Guidance Document Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund Adopted March 3, 2022
- Copies of the contract with the regulant and all written change orders to the contract. If no written contract between the regulant and the claimant is available, the claimant may submit an affidavit attesting to the terms of the agreement, promise, or other contractual obligation;
- All pleadings or other documents filed with the court from which judgment was obtained;
- All orders and opinions of the court from which judgment was obtained, including the final judgment order;
- The transcript of the debtor's interrogatories, if conducted, or if no transcript is available, a sworn affidavit affirming that debtor's interrogatories were conducted, or evidence that debtor's interrogatories were attempted if not conducted; a description of assets of the judgment debtor disclosed in the debtor's interrogatories; and a description of all steps taken for the sale or application of those disclosed assets in whole or partial satisfaction of the judgment, or a statement why no means are legally available for the sale or application of those disclosed assets, or a statement that the value of the disclosed assets is less than the cost of levying upon and selling such assets including reasonable estimates of the fair market value of the disclosed assets and costs of levying upon selling such assets;
- A statement of the balance of the judgment remaining unpaid at the time the claim is submitted to the Department, and a statement that the claimant agrees to notify the Department of any additional payment that may be received in whole or partial satisfaction of the judgment during the pendency of the claim before the Board; and
- Any other documentary evidence or exhibits the claimant wishes the Board to consider with the claim.
Further, the Contractor Recovery Act and the Real Estate Recovery Act outline a process for consideration of claims. Section 54.1-1122 of the Contractor Recovery Act states, in part:
B. The Department shall promptly consider the verified claim of the claimant administratively. If the claim form is incomplete or not properly notarized, or if all required supporting documentation is not included with the claim, then the Department may provide the claimant with notice of any deficiency and an additional opportunity to submit a corrected verified claim. The burden shall be on the claimant to comply with all claim requirements and to submit the necessary documentation within 12 months of the initial claim submission. Once the Department confirms that the verified claim is complete, it shall present such verified claim, along Guidance Document Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund Adopted March 3, 2022
with a recommendation regarding payment, to the Board for the Board's consideration and shall notify the claimant of the Board's recommendation.
C. The Department's and Board's consideration of the claim shall be based solely on the contents of the verified claim. Neither an informal fact-finding conference pursuant to § 2.2-4019 nor a formal hearing pursuant to § 2.2-4020 shall be required, unless requested by the claimant.
Section 54.1-2114 of the Real Estate Recovery Act states, in part:
C. The Department shall promptly consider the verified claim. If it appears that a prima facie case has been made for payment of the claim, the Department shall provide the regulant with a notice offering the opportunity to be heard at an informal fact-finding conference pursuant to § 2.2-4019 of the Administrative Process Act (§ 2.2-4000 et seq.). Such notice shall state that if the regulant does not request an informal fact-finding conference within 30 days, with three days added in instances where the notice is sent by mail, the Department shall present the claim to the Board with a recommendation to pay the verified claim.
The statute further provides that upon payment of a claim from the Fund that the Board “immediately revoke” the license of the subject common interest community manager; and bars the common interest community manager from eligibility to reapply for a license until the common interest community manager has repaid the Fund.
However, the statute is not clear as to what extent notice must be given to the common interest community manager prior to the imposition of these sanctions by the Board.
III.
Board Guidance
The Board adopts a guidance document that establishes the following:
1. A verified claim to the Director must include the following:
a. A completed application, on a form designed by the Board, the truthfulness of which has been attested to by the claimant before a notary public, along with all required supporting documentation. Until such time as the prescribed form has been designed, a claimant may submit a claim in writing by letter containing the required information which includes the required supporting documents; b. Name of the claimant; mailing address of the claimant; and other contact information for the claimant, such as telephone number or email address; c. Name and license number of the common interest community manager that will be the subject of the claim; d. The amount of the claim to include: i. The amount to restore all funds that were or ought to have been Guidance Document Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund Adopted March 3, 2022
held in a fiduciary capacity by the subject common interest community manager for which there were not sufficient funds. ii. The amount of fees, costs, and expenses awarded to the receiver by the appointing court for which there were not sufficient non-fiduciary funds; e. A copy of the court order appointing the receiver as described in § 54.1-2353(E) of the Code of Virginia; f. A copy of the receiver’s report to the court as described in § 54.1-2353(E)(xi) of the Code of Virginia; g. A copy of the order of the court approving the receiver’s report; h. A copy of the order of the court awarding fees, costs, and expenses to the receiver; and i. An acknowledgement from the claimant that upon approval by the Board of the claim, and prior to payment any payment of the claim, the claimant will execute and deliver to the Director an assignment to the Board of the claimant’s rights on its behalf and on behalf of the associations receiving distributions from the Fund against the common interest community manager to the extent that such rights were satisfied from the Fund.
- Upon receipt of a claim, the Board’s office will perform a review of the claim to determine whether the claim meets the requirements outlined in Item #1 above. If the claim is deficient, then the Board’s office will provide the claimant with notice of any deficiency and an opportunity to submit a corrected claim. The burden will be on the claimant to comply with all claim requirements.
- Upon determination by the Board’s office that the claim meets the requirements of Item #1 above, the Board’s office will notify the claimant and the common interest community manager that the claimant has made a proper application of a verified claim to the Director. The Board’s office will schedule the verified claim for review and consideration by the Board at its next available meeting.
- In accordance with § 54.1-2354.5(H)(3) of the Code of Virginia, the Board will consider the verified claim and determine whether the conditions required for payment of a verified claim have been met. To the extent the Board may require additional information in order to appropriately consider the claim, the Board may refer the claim for an informal-fact finding in accordance with §
- 2-4019 of the Code of Virginia.
- If the verified claim meets the requirements for payment, the Board will issue an order directing payment of the claim in accordance with the limitations specified under § 54.1-2354.5(H) of the Code of Virginia. Such order will also impose revocation of the license of the common interest community manager as required under § 54.1-2354.5(H)(7) of the Code of Virginia. If Guidance Document Procedure for Consideration of Claims for Recovery from the Common Interest Community Management Recovery Fund Adopted March 3, 2022
the verified claim does not meet the requirements for payment, the Board will issue an order denying the claim. Such order will specify the findings upon which denial of the claim is based.
- The Board’s office will notify the claimant and the common interest community manager of the Board’s decision. Prior to issuing payment for any approved claim, the claimant must execute and deliver to the Director the assignment of the claimant’s rights as described in § 54.1-2354.5(H)(4) of the Code of Virginia.
Equal Employment Opportunity PolicyDoc ID: cic
HUMAN RESOURCES POLICY #200-18 EQUAL EMPLOYMENT OPPORTUNITY Effective Date: March 17, 2010
Digitally signed by Jay W. DeBoer Reason: I am approving this Approved By: documentDate: 2010.03.17 14:52:26 -04'00'
I. PURPOSE: In accordance with DHRM Policy 2.05 Equal Employment Opportunity, the purpose of this policy is to document the Department of Professional and Occupational Regulation’s commitment to EEO in all aspects of human resource management.
II. POLICY STATEMENT: The Department of Professional and Occupational Regulation shall comply with all state and federal laws pertaining to Equal Employment Opportunity and all applicable Executive Orders and Directives.
III. DEFINITIONS: N/A
IV. RELATED DOCUMENTS: DHRM Policy 2.05 Equal Employment Opportunity Governor’s Executive Order Number Six (2010) Governor’s Executive Directive Number One (2010)
V. GENERAL PROVISIONS:
A. APPLICABILITY The provisions of this policy prohibit against discrimination in all aspects of the hiring process and employment practices including: hiring, demotion, promotion, role change, in-band adjustment, layoff, and transfer; application of performance management and development; application of corrective actions, including disciplinary actions; and, compensation, pay practices, and other terms, conditions, and privileges of employment.
B. MONITORING AND COMPLIANCE
- The Human Resources Section shall monitor all aspects of DPOR human resource management to ensure compliance with all federal, state and agency EEO requirements and provisions.
- The Human Resources Section shall investigate any allegation of discrimination by gathering information and corresponding with state and federal agencies regarding any discrimination claims.
Policy Title: Human Resources Policy #200-18 Equal Employment Opportunity Effective: 03/17/2010 Submitted By: Pratt Stelly, Human Resources Director Guidance Document: Yes Supersedes: Human Resources Policy #200-18 Equal Employment Opportunity (Effective 03/05/2010) Page 1 of 1
Fidelity Bond Requirements for CIC ManagersDoc ID: cic
Common Interest Community Board
Guidance Document: Evidence of Proper Fidelity Bond or Dishonesty Insurance and Sufficient Coverage Obtained by CIC Manager Applicant
Adopted March 2, 2010
As a condition for licensure, applicants for a Common Interest Community Manager license shall submit evidence of a blanket fidelity bond or employee dishonesty insurance policy that insures the Common Interest Community Manager against losses resulting from theft or dishonesty committed by the officers, directors, and persons employed by the Common Interest Community Manager. The bond or insurance policy shall also include coverage for losses of clients of the Common Interest Community Manager resulting from theft or dishonesty committed by the officers, directors, and persons employed by the Common Interest Community Manager.
The bond or insurance policy shall provide coverage in an amount equal to the lesser of $2 million or the highest aggregate amount of the operating and reserve balances of all associations under the control of the Common Interest Community Manager during the prior fiscal year. The minimum coverage amount shall be $10,000. The surety company or insurance company shall be authorized to do business in Virginia.
To fulfill the blanket fidelity bond or employee dishonesty insurance requirement, applicants for Common Interest Community Manager shall submit evidence that proper and sufficient coverage has been obtained to comply with § 54.1-2346(D) of the Code of Virginia. Such documentation must include:
The name of the surety company or insurance carrier;
The dollar amount of the bond or insurance policy;
A description of coverage as it applies to the requirements of § 54.1-2346(D); andGuidance Document Evidence of Proper Fidelity Bond or Dishonesty Insurance and Sufficient Coverage Obtained by CIC Manager Applicant Adopted March 2, 2010
The expiration date of the bond or insurance policy.
Staff may require a certified statement from the surety company or insurance carrier that the applicant has sufficient coverage to comply with § 54.1-2346(D) of the Code of Virginia.
Examination Fee Policy and ProceduresDoc ID: cic
EXAMINATION POLICY #600-01 EXAMINATION FEES Effective Date: October 17, 2018
Digitally signed by Jay W. DeBoer DN: cn=Jay W. DeBoer, o=DPOR, Approved By: ou=Director,,email=jay.deboer@dpor.virginia.gov,c=US Date: 2018.10.18 12:10:10 -04'00' I. PURPOSE: The purpose of this policy is to ensure accurate and consistent handling of examination fees received by the Department of Professional and Occupational Regulation (DPOR).
II. POLICY STATEMENT: The Department shall utilize consistent and objective standards in handling examination fees. This policy applies only to those fees collected for examinations administered in-house. This policy does not apply to fees paid directly to vendors under contract with DPOR.
III. DEFINITIONS: Extenuating Circumstances For the purposes of this policy, extenuating circumstances refer to specific events, conditions, or situations beyond the candidate’s control (e.g., hospitalization, short-term disability, death or illness in the candidate’s family, or a call to active duty in the United States military).
IV. RELATED DOCUMENTS: N/A
V. GENERAL PROVISIONS: A. All examination fees are non-refundable and due on or before the applicable examination fee deadline. Examination fees received are applied to the upcoming scheduled administration unless a candidate explicitly requests approval to apply for a different administration date.
B. Candidates whose fees are received after the examination fee deadline shall automatically be scheduled for the next regular examination administration.
C. A candidate whose examination fee is received past the deadline shall not be eligible to sit for that administration unless the Director of Education and Examinations, in his sole discretion, grants a waiver based on evidence of extenuating circumstances.
D. Fees paid for a scheduled examination for which a candidate fails to appear shall be forfeited, unless the candidate requests a one-time approval to apply the missed examination fees to the next regularly scheduled administration. Approval will be granted only upon evidence of extenuating circumstances. If approved, examination fees will only be forwarded once to the next scheduled examination date.
E. All examination fees shall remain active for one year from the date of receipt by the Department or until the examination is administered, whichever occurs first. After that time, all fees shall be forfeited.
Policy Title: Examinations Policy #600-01 Examination Fees [POL543-600_01-v7] Effective: 10/17/2018 Submitted By: Shannon Webster, Director of Education and Examinations Guidance Document: Yes Supersedes: Examinations Policy #600-01 Examination Fees (Effective 03/17/2010) Page 1 of 1
Complaints Handling Policy for RegulantsDoc ID: cic
COMPLIANCE & INVESTIGATIONS POLICY #800-02 FILING OF COMPLAINTS AGAINST REGULANTS Effective Date: March 5, 2010
Digitally signed by Jay W. DeBoer Reason: I am approving this Approved By: documentDate: 2010.03.05 15:47:24 -05'00'
I. PURPOSE: The purpose of this policy is to establish Department of Professional and Occupational Regulation guidelines for receiving complaints filed against regulants.
II. POLICY STATEMENT: Complaints against DPOR regulants shall be handled in accordance with § 54.1-307.1 of the Code of Virginia. The Department shall consider a complaint sufficient when the alleged facts, if shown to be true, would constitute a violation of law or regulation of any regulatory board within Subtitle II of Title 54.1 of the Code of Virginia or any of the programs which may be in another title of the Code for which any regulatory board within Subtitle II has enforcement responsibility.
III. DEFINITIONS: N/A
IV. RELATED DOCUMENTS: N/A
V. GENERAL PROVISIONS:
A. COMPLAINT FILING DEADLINES In order to be investigated by the Department, complaints shall be filed in accordance with the provisions of § 54.1-307.1 of the Code of Virginia.
B. COMPLAINT FORMAT REQUIREMENTS
- All complaints shall be submitted in writing except for: a. Situations where the complainant indicates that filing a written complaint will impose a hardship b. Life-threatening situations or situations that have resulted (or have the potential to result) in harm, personal injury or loss to a consumer or the public c. When the Department becomes aware of information indicating that a regulant has engaged in criminal activity that a regulatory board, through its regulations and applicable statutes, has determined may be related to the practice of the profession or occupation, for which disciplinary action may be taken.
- Anonymous complaints may be accepted.
C. SOURCES OF COMPLAINTS
- Information obtained from the media or other public source or from any court or other public record/document shall be deemed equivalent to a written complaint.
- Written or verbal complaints resulting from information submitted to or obtained by any sworn investigator of the Compliance and Investigations Division indicating that a regulant has violated or is about to violate a law or regulation shall be accepted.
- Written or verbal complaints submitted by other law enforcement or regulatory agencies shall be accepted.
Policy Title: Compliance & Investigations #800-02 Filing of Complaints Against Regulants Effective: 03/05/2010 Submitted By: David Dorner, Investigations Director Guidance Document: Yes Supersedes: Enforcement #800-02 Filing of Complaints Against Regulants (Effective 02/10/2003) Page 1 of 1
Maximum Fees for Resale Certificate PreparationDoc ID: cic
DEPARTMENT OF PROFESSIONAL & OCCUPATIONAL REGULATION Common Interest Community Board | www.dpor.virginia.gov
MAXIMUM ALLOWABLE PREPARATION FEES
Condominium Unit Owners’, Property Owners’, and Cooperative Proprietary
Lessees’ Associations
Includes Fees Updated January 12, 2023, Amended July 1, 2023
Virginia law requires that when reselling a unit or lot in a common interest community, the unit/lot owner must provide a potential purchaser with certain legally required PREPARERS of RESALE CERTIFICATES are information regarding the development, allowed to charge no more than the following common elements/area, and the association. maximum fees for only the following tasks: The Virginia Resale Disclosure Act (§ 55.1-2307, et seq.) calls the legally required $141.31 for inspection of the unit if authorized in the information a resale certificate. The resale declaration and as required to prepare the resale certificate must be requested by the seller, certificate. prepared by the association, and delivered to $211.96 for preparation and delivery of the resale the potential purchaser. certificate in paper form (for no more than two copies) OR $176.64 total in electronic form. Only one Because compiling the required documents fee shall be charged for preparation and delivery of the involves time, effort, and resources, the law resale certificate. allows the preparer to assess reasonable $70.66 for an additional fee to expedite the inspection,fees, but sets a maximum amount for such preparation, and delivery of the resale certificate (iffees. completed within five business days of the request)—but only if the preparer agrees to do so (optional at requestAssociations may charge the fees as of seller/agent).established in § 55.1-2316.B, provided the requirements of § 55.1-2316.E* are met. (See $35.33 for an additional hard copy of the resale adjacent table.) certificate (optional at request of seller/agent).
Actual cost for third-party commercial delivery service To account for inflation, the law automatically to hand-deliver or overnight the resale certificate adjusts the maximum fees applicable to unit (optional at request of seller/agent). owners’ associations every five years, based $70.66 post-closing fee charged to the purchaser to on the U.S. Average Consumer Price Index update ownership records of the unit owners’ (CPI). The General Assembly established the association. initial cap amounts in 2008. The current fees $70.66 for pre-settlement updates to the resale (displayed in bold) are effective as of certificate.
January 12, 2023. The next mandatory CPI $141.31 for additional inspection of the unit ifadjustment will occur in 2028. authorized by the declaration (optional at request of * Subsection E of § 55.1-2316 requires an purchaser/agent). association to be registered with the Common Interest Community Board, Pursuant to § 55.1-2316.A of the Virginia Resale current in filing its most recent annual Disclosure Act and unless provided otherwise by report with the Board, current in paying the association, the appropriate fees shall be paid any assessments by the Board, and when the resale certificate, updated resale provide the option to receive the certificate, or financial update is requested. The seller shall be responsible for all fees associated disclosure packet electronically in order with the preparation and delivery of the resale to collect the fees provided in this bulletin
- 12.23, amended 7.01.23 See page 2 of this form for more information on association registration.certificate, including any fees for inspection of the unit. The requesting party shall pay any fees for the preparation and delivery of the updated resale certificate or financial update.
What to do if your association is not registered/ not current in filing with the CIC Board.
If your association is not registered with the CIC Board, or is not current in filing an annual report to the CIC Board, then your association is prohibited from collecting fees authorized by § 55.1-2316.E.
To verify if your association is registered with the CIC Board, or to verify your association’s current registration status, you may use the License Lookup feature on the website for the Department of Professional and Occupational Regulation (http://www.dpor.virginia.gov). You may also contact the CIC Board office.
To register a association, or to file an annual report, your association must submit a completed registration or annual report application, along with the required application fees and payments. The application is available on the CIC Board website (http://www.dpor.virginia.gov/Boards/CIC-Board/).
Your association will also be required to certify that it has adopted, or will adopt, an association complaint procedure as required by § 54.1-2354.4 of the Code of Virginia, and the Common Interest Community Ombudsman Regulations.
Please be advised that receipt of an application and the deposit of fees/payments by the CIC Board do not indicate CIC Board approval of the application.
For additional information, contact the CIC Board office by email at cic@dpor.virginia.gov or by telephone at 804-367-8510. 07.01.18
Criminal Records and Public Data PolicyDoc ID: cic
COMPLIANCE & INVESTIGATIONS POLICY #800-01 CRIMINAL HISTORY & ONLINE PUBLIC RECORDS INFORMATION Effective Date: June 13, 2011
Digitally signed by Dixon Gordon Approved By: gfq34896Date: 2011.06.13 16:28:20 -04'00'
I. PURPOSE: The purpose of this policy is to establish guidelines for requesting and handling criminal history and public records information in compliance with federal/state laws and applicable information system service/security agreements.
II. POLICY STATEMENT: The Compliance and Investigations Division of the Department of Professional and Occupational Regulation is authorized to enforce laws and conduct criminal investigations within its jurisdiction (§ 19.2-389 of the Code of Virginia). Pursuant to § 54.1-306 of the Code of Virginia, the Director and investigators are authorized to request and receive criminal history and public records information from Central Criminal Records Exchange (CCRE), Virginia Criminal Information Network (VCIN), National Crime Information Center (NCIC), the Interstate Identification Index (III) files, and the LexisNexis ® Accurint® Public Records System. In addition, select Licensing and Regulation Division personnel are authorized to utilize the LexisNexis ® Public Records Depository for information verification purposes only.
III. DEFINITIONS: Criminal History Information Information regarding arrests and disposition received from the Central Criminal Records Exchange (CCRE), other state central bureaus, the FBI and other law enforcement agencies.
IV. RELATED DOCUMENTS: DPOR IT Policy #400-03 Information Technology Security Program Information Security Access Agreement
V. GENERAL PROVISIONS:
A. REQUESTS FOR CRIMINAL HISTORY INFORMATION
- All Department of Professional and Occupational Regulation employees and consultants are required to sign an Information Security Access Agreement in accordance with Information Technology Policy #400-03, Information Technology Security Program.
- Investigators may use criminal history information during a criminal investigation. Investigations are deemed criminal in nature until a determination has been made to proceed under the Administrative Process Act (APA) for a case decision. Matters of a criminal nature arising after an APA case decision shall be reviewed by the appropriate Executive Director and the Investigations Director. Licensing and Regulation Division staff who believe that an applicant has provided false information on an application regarding criminal convictions or any other false information shall forward that information to the Compliance and Investigations Division for alleged violations of §54.1-111 of the Code of Virginia or other applicable code section.
- Investigator requests for criminal history information shall be directed to the investigator assigned to the secured VCIN terminal in the Compliance and Investigations Division.
B. USE AND DESTRUCTION OF CRIMINAL HISTORY INFORMATION
- All criminal history information is confidential and its use is limited to those individuals who are authorized by statute to receive such information.
- Criminal history printouts from the VCIN terminal shall not be copied or shared with personnel outside of the Compliance and Investigations Division. Criminal history documents shall not be stored in investigation files, but shall be secured with the investigators’ working papers during the investigation. Upon completion of the investigation, the records shall be shredded.
Policy Title: Compliance & Investigations Policy #800-01 Criminal History & OL Public Records [POL700-800_01-v1] Effective: 06/13/2011 Submitted By: Mark Courtney, Deputy Director Licensing & Regulation Division Guidance Document: Yes Supersedes: Compliance & Investigations Policy #800-01 Criminal History Information (Effective 03/05/2010) Page 1 of 2C. LexisNexis
® ACCURINT
® PUBLIC RECORDS
- All Compliance and Investigations and Licensing and Regulation Division personnel shall comply with the terms and conditions of the LexisNexis ® Non-FCRA (Fair Credit and Reporting Act) Agreement and the Department’s Information Security Access Agreement.
- All LexisNexis ® Accurint ® Public Records inquiries shall be logged on the LexisNexis User Inquiry Log which shall be available for management inspection at all times.
- Information obtained by the Licensing and Regulation Division from LexisNexis ® Accurint ® Public Records System shall be used for information verification purposes only and shall not be disclosed to anyone outside of DPOR. Only information verified through a publicly available source may be disclosed to an outside party.
Policy Title: Compliance & Investigations Policy #800-01 Criminal History & OL Public Records [POL700-800_01-v1] Effective: 06/13/2011 Submitted By: Mark Courtney, Deputy Director Licensing & Regulation Division Guidance Document: Yes Supersedes: Compliance & Investigations Policy #800-01 Criminal History Information (Effective 03/05/2010) Page 2 of 2
Fidelity Bond Requirements for Community ManagersDoc ID: cic
Common Interest Community Board
Guidance Document: Regarding the Requirement to Obtain and Maintain a Separate Fidelity Bond or Insurance Policy Required for Common Interest Community Managers to Comply with § 54.1-2346(D) of the Code of Virginia and 18 VAC 48-50-30.E of the Board’s Regulations
Adopted September 20, 2012 Revised September 3, 2020
Effective December 10, 2020
I. Issue
Applicants for licensure as a common interest community manager must provide proof of compliance with the bond/insurance policy provisions in 18 VAC 48-50-30.E of the Board’s Regulations and § 54.1-2346(D) of the Code of Virginia. Some applications have included the certificate of insurance for the association’s policy, which is required for compliance with §§ 55.1-1827(B) (property owners’ associations) or 55.1-1963(B) (condominium unit owners’ associations) of the Code of Virginia, with the common interest community manager listed as “additional insured.”
II. Applicable Regulations and Statutes
18 VAC 48-50-30.E of the Common Interest Community Manager Regulations states:
“The applicant for a common interest community manager license shall submit evidence of a blanket fidelity bond or employee dishonestyGuidance Document Regarding the Requirement to Obtain and Maintain a Separate Fidelity Bond or Insurance Policy Required for Common Interest Community Managers to Comply with § 54.1-2346(D) of the Code of Virginia and 18 VAC 48-50-30.E of the Board’s Regulations Adopted September 20, 2012 (Revised September 3, 2020) insurance policy in accordance with § 54.1-2346 D of the Code of Virginia. Proof of current bond or insurance policy with the firm as the named bondholder or insured must be submitted in order to obtain or renew the license. The bond or insurance policy must be in force no later than the effective date of the license and shall remain in effect through the date of expiration of the license.” § 54.1-2346(D) of the Code of Virginia states:
“It shall be a condition of the issuance or renewal of the license of a common interest community manager that the common interest community manager shall obtain and maintain a blanket fidelity bond or employee dishonesty insurance policy insuring the common interest community manager against losses resulting from theft or dishonesty committed by the officers, directors, and persons employed by the common interest community manager. Such bond or insurance policy shall include coverage for losses of clients of the common interest community manager resulting from theft or dishonesty committed by the officers, directors, and persons employed by the common interest community manager. Such bond or insurance policy shall provide coverage in an amount equal to the lesser of $2 million or the highest aggregate amount of the operating and reserve balances of all associations under the control of the common interest community manager during the prior fiscal year. The minimum coverage amount shall be $10,000.” § 55.1-1827(B) of the Code of Virginia states: “Any association collecting assessments for common expenses shall obtain and maintain a blanket fidelity bond or employee dishonesty insurance policy insuring the association against losses resulting from theft or dishonesty committed by the officers, directors, or persons employed by the association, or committed by any managing agent or employees of the managing agent. Such bond or insurance policy shall provide coverage in an amount equal to the lesser of $1 million or the amount of the reserve balances of the association plus one-fourth of the aggregate annual assessment income of such association. The minimum coverage amount shall be $10,000. The board of directors or managing agent may obtain such bond or insurance on behalf of the association.” § 55.1-1963(B) of the Code of Virginia states:
“Any unit owners' association collecting assessments for common expenses shall obtain and maintain a blanket fidelity bond or employee dishonesty insurance policy insuring the unit owners' association against losses resulting from theft or dishonesty committed by the officers, directors, or persons employed by the unit owners' association, or Guidance Document Regarding the Requirement to Obtain and Maintain a Separate Fidelity Bond or Insurance Policy Required for Common Interest Community Managers to Comply with § 54.1-2346(D) of the Code of Virginia and 18 VAC 48-50-30.E of the Board’s Regulations Adopted September 20, 2012 (Revised September 3, 2020) committed by any common interest community manager or employees of the common interest community manager. Such bond or insurance policy shall provide coverage in an amount equal to the lesser of $1 million or the amount of reserve balances of the unit owners' association plus one-fourth of the aggregate annual assessment of such unit owners' association. The minimum coverage amount shall be $10,000. The executive board or common interest community manager may obtain such bond or insurance on behalf of the unit owners' association.”
III.
Board Policy
The statutes and regulations clearly require a bond or insurance policy in compliance with the provisions of 18 VAC 48-50-30.E of the Board’s Regulations and § 54.1-246(D) of the Code of Virginia to be obtained and maintained by the common interest community manager separate from the association’s policy required in compliance with §§ 55.1-1827(B) (property owners’ associations) and 55.1-1963(B) (condominium unit owners’ associations).
Filing Fee Waiver Guidance for Adverse DecisionsDoc ID: cic
Common Interest Community Board
Guidance Document: Requests for Waiver of Filing Fee for Notice of Final Adverse Decision
Adopted September 17, 2013 Revised September 3, 2020
Effective December 10, 2020
I. Issue
In accordance with 18 VAC 48-70-100 of the Common Interest Community Ombudsman Regulations, the Board may waive or refund the $25 filing fee that must accompany the Notice of Final Adverse Decision. Such waiver or refund is permitted if the Board finds that the payment of the filing fee will cause undue harm or financial hardship. The Waiver of Filing Fee Request Form currently requests an explanation as to why paying the filing fee would cause undue financial hardship.
In order to provide an objective method for determining the appropriateness of waiving or refunding the filing fee, the Board requested at its June 27, 2013, Board meeting that staff conduct research and prepare a recommendation wherein the federal poverty guidelines be used as the basis for determining financial hardship.
II. Applicable Regulations and Statutes
18 VAC 48-70-100 of the Common Interest Community Ombudsman Regulations states:
“In accordance with § 54.1-2354.4 B of the Code of Virginia, the board may, for good cause shown, waive or refund the filing fee upon a finding that payment of the filing fee will cause undue financial hardship for the complainant.”Guidance Document Requests for Waiver of Filing Fee for Notice of Final Adverse Decision Adopted September 17, 2013 (Revised September 3, 2020) § 54.1-2354.4(B) of the Code of Virginia states: A complainant may give notice to the Board of any final adverse decision in accordance with regulations promulgated by the Board. The notice shall be filed within 30 days of the final adverse decision, shall be in writing on forms prescribed by the Board, shall include copies of all records pertinent to the decision, and shall be accompanied by a $25 filing fee. The fee shall be collected by the Director and paid directly into the state treasury and credited to the Common Interest Community Management Information Fund pursuant to § 54.1-2354.2. The Board may, for good cause shown, waive or refund the filing fee upon a finding that payment of the filing fee will cause undue financial hardship for the member. The Director shall provide a copy of the written notice to the association that made the final adverse decision.
III.
Policy The U.S. Department of Health & Human Services (HHS) Poverty Guidelines will be used by the Board to establish the threshold for whether a filing fee will be waived or refunded as a result of financial hardship. The Poverty Guidelines for the most recent or current, whichever is applicable, calendar year will be used. The HHS Poverty Guidelines can be found at http://www.aspe.hhs.gov/.
In order to determine whether an individual requesting the waiver or refund of the filing fee is at or below the HHS Poverty Guidelines, he shall be required to submit supporting documentation that provides proof of income. Such documentation may include:
- Recent tax return form
- W-2 form
- Letter from an employer, welfare officer, case worker, or Social Security Administration office indicating annual income. Such letter must be on agency/company letterhead and must include the verifier’s signature and contact phone number for verification purposes.
The Board authorizes staff to approve a waiver or refund of the filing fee if proof of income submitted is at or below the then-current HHS Poverty Guidelines. Board staff may request additional information as needed in order to ensure compliance with this policy. Should Board staff be unable to satisfactorily affirm that the proof of income submitted complies with this policy, the request for waiver or refund will not be approved. The individual requesting a waiver or refund, or Board staff, may request that the Board consider the request for waiver or refund in the event that the supporting documentation is not sufficient or a determination cannot be reasonably made based on the information submitted.
In accordance with the Virginia Freedom of Information Act (§ 2.2-Guidance Document Requests for Waiver of Filing Fee for Notice of Final Adverse Decision Adopted September 17, 2013 (Revised September 3, 2020) 3700 et seq.), the referenced supporting documentation is exempt from public disclosure.
Maximum Fees for Disclosure Documents in VirginiaDoc ID: cic
Common Interest Community Board Guidance Document: Regarding Specific Maximum Allowable Fees Set by the Property Owners Association Act and Virginia Condominium Act that may be Charged by the Preparer of Disclosure Packets and Resale Certificates Adopted June 27, 2013 Amended March 27, 2014 Amended July 1, 2014 Amended January 16, 2018 Revised September 3, 2020 Amended January 12, 2023 Effective March 2, 2023
I.
Issue The Property Owners’ Association Act (§ 55.1-1800 et seq. of the Code of Virginia) and the Virginia Condominium Act (§ 55.1-1900 et seq. of the Code of Virginia) set specific maximum allowable fees that may be charged by the preparer of disclosure packets and resale certificates, provided that specific provisions of the applicable Acts are met. The Acts also index those maximum allowable fees to inflation and require adjustment every five years based on the United States Average Consumer Price Index, All Urban Consumers (CPI-U).
II.
Applicable Statutes Sections 55.1-1810 and 55.1-1992 of the Code of Virginia both state, in pertinent part: B. A reasonable fee may be charged by the preparer [of the disclosure packet/resale certificate] as follows: Guidance Document Regarding Specific Maximum Allowable Fees Set by the Condominium Act and Property Owners Association Act that may be Charged by the Preparer of Disclosure Packets and Resale Certificates Adopted June 27, 2013 (Amended March 27, 2014; July 1, 2014; January 16, 2018; Revised September 3, 2020; Amended January 12, 2023)
- For the inspection of the [lot/unit], as authorized in the declaration and as required to prepare the [disclosure packet/resale certificate], a fee not to exceed $100;
- For the preparation and delivery of the [disclosure packet/resale certificate] in (i) paper format, a fee not to exceed $150 for no more than two hard copies or (ii) electronic format, a fee not to exceed a total of $125 for an electronic copy to each of the following named in the request: the seller, the seller's authorized agent, the purchaser, the purchaser's authorized agent, and not more than one other person designated by the requester. Only one fee shall be charged for the preparation and delivery of the [disclosure packet/resale certificate];
- At the option of the seller or the seller's authorized agent, with the consent of the [unit owners’] association or the common interest community manager, for expediting the inspection, preparation, and delivery of the [disclosure packet/resale certificate], an additional expedite fee not to exceed $50;
- At the option of the seller or the seller's authorized agent, for an additional hard copy of the [disclosure packet/resale certificate], a fee not to exceed $25 per hard copy;
- At the option of the seller or the seller's authorized agent, for hand delivery or overnight delivery of the overnight [disclosure packet/resale certificate], a fee not to exceed an amount equal to the actual cost paid to a third-party commercial delivery service; and
- A post-closing fee to the purchaser of the [property/unit], collected at settlement, for the purpose of establishing the purchaser as the owner of the [property/unit] in the records of the [unit owners’] association, a fee not to exceed $50.
I. A reasonable fee for the [disclosure packet/resale certificate] update or financial update may be charged by the preparer not to exceed $50. At the option of the purchaser or the purchaser's authorized agent, the requester may request that the [unit owners’] association or the common interest community manager perform an additional inspection of the [lot/unit], as authorized in the declaration, for a fee not to exceed $100. Any fees charged for the specified update shall be collected at the time settlement occurs on the sale of the Guidance Document Regarding Specific Maximum Allowable Fees Set by the Condominium Act and Property Owners Association Act that may be Charged by the Preparer of Disclosure Packets and Resale Certificates Adopted June 27, 2013 (Amended March 27, 2014; July 1, 2014; January 16, 2018; Revised September 3, 2020; Amended January 12, 2023) property. Neither the association nor its common interest community manager, if any, shall require cash, check, certified funds, or credit card payments at the time the request is made for the [disclosure packet/resale certificate] update.
The requester may request that the specified update be provided in hard copy or in electronic form.
Sections 55.1-1810(F) and 55.1-1992(F) of the Code of Virginia both state: The maximum allowable fees charged in accordance with this section shall adjust every five years, as of January 1 of that year, in an amount equal to the annual increases for that five-year period in the United States Average Consumer Price Index for all items, all urban consumers (CPI-U), as published by the Bureau of Labor Statistics of the U.S. Department of Labor.
III.
Policy The CPI-U on 12/31/07 was 210.036, on 12/31/08 was 210.228, on 12/31/09 was 215.949, on 12/31/10 was 219.179, on 12/31/11 was 225.672, and on 12/31/12 was 229.601. With a starting point of 100, the compounded increase between 12/31/07 and 12/31/12 was 9.31%. In order to be consistent in calculation, the Board adopted the following policy indicating the exact compounded monetary amounts that are the maximum allowable fees to be charged by the preparers of disclosure packets and resale certificates, as applicable.
- The inspection pursuant to §§ 55.1-1810(B)(1) and 55.1-1992(B)(1) of the Code of Virginia, a fee not to exceed $109.31;
- The preparation and delivery of the disclosure packet or resale certificate, as applicable, pursuant to §§ 55.1-1810(B)(2) and 55.1-1992(B)(2) of the Code of Virginia, in (i) paper format, a fee not to exceed $163.97 for no more than two hard copies, or (ii) electronic format, a total fee not to exceed $136.64, for a copy to each of the following named in the request: the seller, the seller’s authorized agent, the purchaser, the purchaser’s authorized agent, and not more than one other person designated by the requestor;
- Expediting the inspection, preparation, and delivery of the disclosure packet or resale certificate, as applicable, pursuant to §§ 55.1-Guidance Document Regarding Specific Maximum Allowable Fees Set by the Condominium Act and Property Owners Association Act that may be Charged by the Preparer of Disclosure Packets and Resale Certificates Adopted June 27, 2013 (Amended March 27, 2014; July 1, 2014; January 16, 2018; Revised September 3, 2020; Amended January 12, 2023)
1810(B)(3) and 55.1-1992(B)(3) of the Code of Virginia, an additional expedite fee not to exceed $54.66;
- Pursuant to §§ 55.1-1810(B)(4) and 55.1-1992(B)(4) of the Code of Virginia, an additional hard copy of the disclosure packet or resale certificate, as applicable, a fee not to exceed $27.33 per hard copy; . . .
- Pursuant to §§ 55.1-1810(B)(6) and 55.1-1992(B)(6) of the Code of Virginia, a post-closing fee to the purchaser of the property or unit, as applicable, a fee not to exceed $54.66; . . .
I. A disclosure packet or resale certificate update, as applicable, or financial update pursuant to §§ 55.1-1810(I) and 55.1-1992(I) of the Code of Virginia, a fee not to exceed $54.66. An additional inspection, as authorized in the declaration, pursuant to §§ 55.1-1810(I) and 55.1-1992(I) of the Code of Virginia, a fee not to exceed $109.31.
On November 30, 2017, the Board authorized that the fees listed above remain in place until Bureau of Labor Statistics (BLS) published the CPI-U for December 2017. On January 12, 2017, BLS published the CPI-U for December 2017. The CPI-U for December 2012 was 229.601. The CPI-U for December 2017 was 246.524. Based on the calculation formula outlined above, the increase between 12/31/2012 and 12/31/17 was 7.37%. The revised maximum allowable fees outlined below are effective as of January 16, 2018.
Initial Adjusted Fee Adjusted Fee Fee Type Maximum (2013) (2018) Fee (2008) Inspection of lot/unit $100.00 $109.31 $117.37 Preparation/delivery of $150.00 $163.97 $176.05 packet/certificate (paper) Preparation/delivery of packet/certificate $125.00 $136.64 $146.71 (electronic) Expedited inspection $50.00 $54.66 $58.69 additional fee Additional copy fee $25.00 $27.33 $29.34 Third-party commercial delivery (overnight or hand- Actual cost N/A N/A delivery) Post-closing fee $50.00 $54.66 $58.69Guidance Document Regarding Specific Maximum Allowable Fees Set by the Condominium Act and Property Owners Association Act that may be Charged by the Preparer of Disclosure Packets and Resale Certificates Adopted June 27, 2013 (Amended March 27, 2014; July 1, 2014; January 16, 2018; Revised September 3, 2020; Amended January 12, 2023)
Pre-settlement updates $50.00 $54.66 $58.69 Additional inspection fee $100.00 $109.31 $117.37
On December 8, 2022, the Board authorized that the fees effective January 16, 2018, remain in place until the Bureau of Labor Statistics (BLS) published the CPI-U for December 2022. On January 12, 2023, BLS published the CPI-U for December 2022. The CPI-U for December 2017 was 246.524. The CPI-U for December 2022 was 296.797. Based on the calculation formula outlined above, the increase between December 31, 2017, and December 31, 2022 was 20.4%. The revised maximum allowable fees outlined below are effective as of January 12, 2023.
Fee Type Initial Adjusted Adjusted Adjusted Fee Maximum Fee Fee (2023) Fee (2013) (2018) (2008) Inspection of lot/unit $100.00 $109.31 $117.37 $141.31 Preparation/delivery of packet/certificate $150.00 $163.97 $176.05 $211.96 (paper) Preparation/delivery of packet/certificate $125.00 $136.64 $146.71 $176.64 (electronic) Expedited inspection $50.00 $54.66 $58.69 $70.66 additional fee Additional copy fee $25.00 $27.33 $29.34 $35.33 Third-party commercial delivery (overnight or hand- Actual cost N/A N/A N/A delivery) Post-closing fee $50.00 $54.66 $58.69 $70.66 Pre-settlement updates $50.00 $54.66 $58.69 $70.66 Additional inspection $100.00 $109.31 $117.37 $141.31 fee
Best Practices for Property DeclarationsDoc ID: cic
BEST PRACTICES FOR THE CONTENT OF
PROPERTY OWNERS’ ASSOCIATIONS’
DECLARATIONS
ADOPTED BY THE COMMON INTEREST COMMUNITY BOARD DECEMBER 10, 2015Common Interest Community Board
INTRODUCTION
Chapter 268 of the 2015 Virginia Acts of Assembly, which resulted from the passage of House Bill 1632, amended § 54.1-2349 of the Code of Virginia. This amendment required the Common Interest Community Board (Board) to “develop and publish best practices for the content of declarations consistent with the requirements of the Property Owners’ Association Act (§ 55.1-1800 et seq.).” A development governed by a property owners’ association (association) must comply with the Property Owners’ Association Act (Chapter 18 of Title 55.1 of the Code of Virginia).
The association is created to carry out three functions: (1) the business of running a community; (2) maintenance and management of the common area; and (3) governance of the community and ensuring compliance with the governing documents. Community associations not only provide services to owners, but also encourage a sense of community.
The form of governance, nature and scope of services as well as limitations on property use are addressed in the association documents. While the purpose of this document is to offer guidance on best practices for the content of declarations for property owners’ associations, a summary of the typical association documents provides helpful context.
- Declaration, also commonly referred to as Covenants, Conditions, and Restrictions or CC&Rs Establishes property rights binding on members and residents Establishes assessment obligations and voting rights Establishes easements Reserves and establishes rights and obligations of the declarant, association, and members Provide operational details, including authority to adopt and ensure compliance with rules and regulations
- Articles of Incorporation (if the association is incorporated) Are usually brief, containing basic information – name, location, and purpose of the association Establish the executive board membership Comply with the applicable provisions of the Virginia Nonstock Corporation Act Establish the association upon being filed with the State Corporation Commission
- Bylaws Address administrative details and functions Describe governance processes for association meetings, executive board and committees as well as executive board authority and duties CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board Establish procedures for voting May also address association governance, operation procedures, budgeting, insurance, reconstruction, amendments, and dispute resolution
- Rules and Regulations May be contained in the declaration, or the executive board may adopt separate rules and regulations, based on declaration authority Usually more specific than those contained in declaration Cannot conflict with state or federal law or the declaration
Resolutions Adopted by executive board or where appropriate, association members Must be based on authority from declaration, other association documents, or statute Establish practices and procedures for implementation of association policy CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board
BEST PRACTICES FOR THE CONTENT OF
PROPERTY OWNERS’ ASSOCIATIONS’ DECLARATIONS
I.
OVERVIEW The format and content of association declarations are as varied and distinct as the associations or communities for which the declarations are drafted. Thus the format, style, articles, sections, and the like, may not be present in the declarations for all associations – or may be presented differently. The presence or absence of a particular topic, article, or section is not an indicator of the accuracy or completeness of a declaration.
These best practices offer an overview and are intended to provide a summary of matters that should be considered for inclusion in a declaration. This document is not a model declaration, nor is it intended to replace legal advice provided by an attorney or specific provisions contained in the Code of Virginia.
There may be guidance in this document that is not applicable to all communities, and, conversely, this document may not address all matters that should be addressed in a declaration due to the differences in the associations and communities. For this reason, guidance offered should be carefully considered. The Board is responsible for developing best practices but neither the Board nor Department staff can give guidance or advice on information that must be included in a declaration for a particular community.
If any guidance in this document contradicts or conflicts with any provision of the Property Owners’ Association Act (POAA) or any other legal authority – statutory or case law - the law prevails.
II.
CONTENT OF DECLARATIONS
A. Table of Contents For ease in navigating the declaration, a table of contents may be included.
The table of contents enumerates the specific article number, section heading, and the appropriate page number, and may include specific section references after each article.
Following is an example of a table of contents for a declaration utilizing article references (but no sections for the purposes of this document). While the article headings below will be used throughout the Best Practices for the Content of POA Declarations document, some of the articles may not be applicable to all associations or communities, or may be referenced CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board differently in some association declarations.
Article 1: DEFINITIONS ......................................................................................................................3 Article 2: PROPERTY RIGHTS AND COMMON AREA ..............................................................3 Article 3: MEMBERSHIP AND VOTING RIGHTS ........................................................................3 Article 4: ASSESSMENTS AND COMMON EXPENSES ............................................................4 Article 5: COVENANT AND RULE ENFORCEMENT (COMPLIANCE) ..................................4 Article 6: ARCHITECTURAL CONTROL .........................................................................................5 Article 7: RESTRICTIONS ON USE .................................................................................................5 Article 8: MAINTENANCE AND OPERATION OF THE PROPERTY ......................................6 Article 9: RIGHTS AND OBLIGATIONS OF THE ASSOCIATION AND POWERS AND DUTIES OF THE BOARD ...................................................................6 Article 10: RESERVED RIGHTS AND EASEMENTS ....................................................................6 Article 11: INSURANCE AND CASUALTY LOSSES ...................................................................7 Article 12: DEVELOPMENT RIGHTS ...............................................................................................7
Article 13: MORTGAGES....................................................................................................................8 Article 14: GENERAL PROVISIONS ................................................................................................8
Article 15: AMENDMENT OR TERMINATION ............................................................................8
Article 16: EXTERNAL REQUIREMENTS .......................................................................................9 Article 17: DECLARANT’S RIGHTS AND LIMITATIONS ..........................................................9
B. Recitals The first page of most declarations includes recitals. The recitals 1) establish the purpose for creating the association and imposing covenants and restrictions on the property, 2) describe the real property which is subject to the declaration, and 3) may include a general statement of the declarant’s plan for developing the property.
C. Exhibits Exhibits, if any, may be attached to the declaration. The exhibits may include CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board but are not limited to a description of the property subject to the declaration and land that may be subjected to the declaration later. A plat showing the property may also be attached as an exhibit.
Article 1: Definitions This section defines terms used in the declaration to give clarity to the content of the declaration. In addition, certain sections may contain definitions used only in those sections.
Substantive provisions should not be included in the definitions. There may also be a general reference to definitions in § 55.1-1800 of the POAA. Well-defined terms are helpful in drafting and interpreting a declaration. Among other terms, declarations define qualifications for members, which may include owners and others who are authorized.
Article 2: Property Rights and Common Area This section describes association and member property rights in the common area and lots. Consideration should be given to the following: Description of the property – defining lots and common area as well as limited or reserved common area, if applicable Property rights and common area features Authority to adopt rules and regulations – limiting or restricting member use of common area as well as activity on lots Description of property rights in the common area Authority to impose limitations on use and availability of the common area Authority to enforce rules on common area and lots Extent to which rights may be delegated to others (e.g., family, tenants, guests, invitees) Eminent domain Responsibility for damage to common area Authority to sell, dedicate, and mortgage, and grant licenses and easements with respect to common area Article 3: Membership and Voting Rights Details regarding membership and voting rights are often contained in the association bylaws. However, the bylaws must reflect and be consistent with membership rights and obligations established in the declaration and any articles of incorporation. Consideration should be given to the following: Membership qualifications Categories or types of membership Termination of membership Allocation of voting rights, including declarant voting rights CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board Limitations on the exercise of voting rights Transition of control from declarant Article 4: Assessments and Common Expenses The declaration authorizes the association to assess and collect mandatory fees (assessments) necessary to fund association operation, administration and governance.
Assessments are typically used for maintenance of common area and lots (if applicable) and for services that may benefit some or all of the lots, members, occupants, or common area.
Consideration should be given to the following: Authority to make assessments and establish payment terms Purpose and types of assessments that may be levied (annual or regular, special, individual, maintenance) Allocation of expenses related to maintenance, repair, and replacement Creation of lien and personal obligation to pay assessments Procedures for adoption of the association budget Authority to allow installment payments Establishment, maintenance, and use of reserve funds The manner in which assessments are allocated and calculated Method for applying payments Description or identification of property exempt from paying assessments Any other funds to be collected at closing (e.g., initial capital contribution, reserve funding, amenity fee) Article 5: Covenant and Rule Enforcement (Compliance) This section addresses association authority to ensure compliance with the covenants and rules and regulations affecting use of lots and common area. Consideration should be given to the following: Authority to require compliance with covenants and rules and regulations Responsibility of members and occupants to comply with the association documents Authority and process for development and adoption of rules and regulations Assessments for damage to common area and lots Authority to impose monetary charges to encourage compliance, late charges, interest on unpaid amounts due, administrative fees, attorney’s fees, and other costs incurred due to non-compliance Authority of association to take action to remedy violations Suspension of use and voting rights for non-payment or non-compliance Authority of individual members to enforce the association documents Reference to the association complaint procedure required by § 54.1-2354.4 of the Code of Virginia and 18VAC48-70 of the Virginia Administrative Code Due process procedures in accordance with § 55.1-1819 of the POAA CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board Article 6: Architectural Control This section addresses the framework authorizing the association to establish and enforce architectural standards, restrictions, and limitations. Consideration should be given to the following: Authority to adopt architectural guidelines imposing standards and limitations on improvements or alterations to a lot and improvements on the lot Creation, jurisdiction, and scope of architectural review committee, however designated and if applicable Method for adopting and amending architectural guidelines Process for review and approval of improvements or alterations, including time for approval, appeal process, and procedures Restrictions on changes to the appearance, or making improvements or alterations, to a lot or the improvements to a lot without prior approval Article 7: Restrictions on Use This section contains restrictions on use of lots, typically restrictions that are not intended to be altered, and on conduct. Provisions should give authority to the executive board to adopt rules and regulations consistent with the restrictions. Given judicial decisions and legislative preference requiring specificity in the declaration to ensure enforceability, it may be necessary to include specific restrictions. Commonly used restrictions that should be considered include, but are not limited to, the following: Limitations or restrictions on use of property Limitations or restrictions on subdividing, combining, or rezoning lots Specific restrictions may include, but are not limited to: o Signs o Parking o Vehicles o Solar devices o Animals o Trash o Noise o Landscaping o Temporary structures and outbuildings o Flags and flagpoles o Leasing and resale of lots o Land development activities o Maintenance standards o Residential use restrictions o Home-based businesses CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board o Nuisances o Hazardous substances Article 8: Maintenance and Operation of the Property The declaration imposes on the association maintenance or operational responsibilities for the common area (and sometimes for lots). This section includes provisions related to maintaining and operating the property. Consideration should be given to the following: Association maintenance, repair and replacement responsibilities Authority of association to maintain off-site or non-owned improvements Member maintenance, repair, and replacement responsibilities Whether association has responsibilities to maintain an individual member’s property or will provide optional services Statement of the association authority to establish and require compliance with specific maintenance standards Maintenance responsibilities specific to roads, sidewalks, private streets, alleys, common driveways, party walls, and shared fences Any standards of maintenance Article 9: Rights and Obligations of the Association and Powers and Duties of the Board This section addresses any rights, obligations, and responsibilities of the association and powers and duties of the executive board, in concert with member rights and responsibilities. Consideration should be given to the following: Association responsibility for management and control of common area Association authority to acquire, hold and dispose of personal property and real property subject to authority established in the declaration Association authority to exercise any rights expressed in the declaration or bylaws Any off-site rights and obligations of the association If incorporated, statement indicating the association board has all authorities given pursuant to the Virginia Nonstock Corporation Act (Chapter 10 of Title 13.1 of the Code of Virginia), or a description of any limitations on the authorities given to the board under the Virginia Nonstock Corporation Act. Authority of the executive board to borrow money, assign assessment income, or pledge association assets Article 10: Reserved Rights and Easements This section may contain descriptions of any easements or reserved rights benefitting the association or declarant. Consideration should be given to the following: CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board A description of any applicable easements, including but not limited to the following: o Easements for development (e.g., construction, sales, bonds, drainage) o Easements for access to lots by managers, the executive board members, and others for inspections or upkeep and the limitations of any such rights of access o Easements for encroachments, including a statement of the circumstances that may entitle a member to an easement for encroachment o Easements for access by public and private agencies o Easements for golf course purposes o Use easements over lakes, ponds, streams, and riparian rights o Easements for conservation and environmental purposes o Easements for slope and drainage A description of limitations on the exercise of rights and easements Article 11: Insurance and Casualty Losses This section may contain a description of any insurance coverage required to be obtained by or on behalf of the association and the lot owners or members. In addition, a description of any procedures and requirements related to claims should be considered. Consideration should be given to the following types of insurance coverage: Blanket or “all risk” property insurance Liability insurance Workers’ compensation insurance Blanket fidelity bond or employee dishonesty insurance pursuant to § 55.1-1827 of the Property Owners’ Association Act Directors’ and officers’ liability insurance
Consideration should also be given to how premiums and deductibles should be allocated, and any requirements to rebuild damaged lots and common area.
Article 12: Development Rights This section addresses any rights to add land or withdraw land from the development.
Consideration should be given to the following: Description of any requirements related to the annexation or withdrawal of property by the declarant or association, including procedures for annexation or withdrawal with and without approval of the association membership Procedures related to the acquisition or disposition of common area, including the authority to grant or accept additional easements and establish covenants Statement on whether the declarant is under any obligation to add common area or facilities Description of the circumstances wherein the declarant’s right to consent to any CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board change or modification to development rights is necessary Description of any other development rights Article 13: Mortgages This section contains any guidelines or requirements related to mortgages and mortgagees, as defined in the declaration. Consideration should be given to the following: Description of any notices of action to be provided to a mortgagee. Such notices may include condemnation, assessment delinquency, other default, or any reduction of insurance coverage. Description of any specific events that require notification of the mortgagee and the mortgagees’ right to respond and consequences of failure to respond (§ 55.1-1829 of the Code of Virginia) Statement regarding whether the mortgagees have any right to consent to certain actions of the association. Description of any actions requiring approval of mortgagees Article 14: General Provisions This section may contain those provisions addressing interpretation or application of the declaration. Consideration should be given to the following: The term or duration of any covenants and restrictions established by the declaration.
Typically such covenants should be perpetual. Provisions for the indemnification of officers, directors, or committee members Provisions related to merger or consolidation with other associations Interpretative provisions including standard clauses for severability, interpretation, waiver, and election of remedies A description of any alternative dispute resolution (arbitration or mediation) procedures Notice provisions Use of technology – in communication and voting Article 15: Amendment or Termination This section contains provisions for amendment or termination1 of the declaration.
Consideration should be given to the following: How member approval is obtained The percentage vote or written consent required for amendment Conditions under which covenants and restrictions may be terminated and the
1 Termination of the declaration does not dissolve the association.
CIC Board Best Practices for POA Declarations
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(revised 10/1/19) Common Interest Community Board percentage vote or written consent required for termination When the declarant may unilaterally amend or terminate the declaration A statement on whether an amendment can remove, revoke, or modify a right or privilege of the declarant without the declarant’s written consent The declarant’s right to veto amendments and object to a termination Article 16: External Requirements This section generally contains a description of any rights, restrictions, or obligations of the association or its members arising outside the association documents. Consideration should be given to the following: Description of any conservation areas, stormwater management facilities, and off-site or non-owned facilities, and the association’s rights and responsibilities with respect to such facilities Local jurisdiction requirements including but not limited to zoning, historic preservation, tax districts, and transportation management A description of the relationship with and responsibilities to any master association Proferred development conditions that impose limitations on architectural standards for lots and common area, limitations on use of common area, or limitations on amendments Article 17: Declarant’s Rights and Limitations This section generally contains a description of declarant rights and limitations.
Consideration should be given to the following: Specific rights Transfer of special declarant rights Procedure for effectuating a transfer of declarant rights Description of the rights, obligations, and responsibilities of the transferor and transferee CIC Board Best Practices for POA Declarations
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(revised 10/1/19)
Application & Fee Expiration PolicyDoc ID: cic
LICENSING & REGULATION POLICY #300-02 APPLICATION & APPLICATION FEE EXPIRATION Effective Date: July 1, 2018
Digitally signed by Jay W. DeBoer DN: cn=Jay W. DeBoer, o=DPOR, ou=Director,, email=jay.deboer@dpor.virginia.gov, c=US Approved By: Date: 2018.07.26 14:35:24 -04'00'
I. PURPOSE: The purpose of this policy is to document the length of time license applications are valid.
II. POLICY STATEMENT: Unless otherwise stated in Department or Board regulations, initial and reinstatement applications for licensure, certification or registration shall be valid for one year from the date the application is received by the Department of Professional and Occupational Regulation (DPOR). If the requested authorization to practice the profession or occupation is not granted within the period established by this policy, the application shall expire.
III. DEFINITIONS: Application For the purposes of this policy only, applications shall include applications for initial licensure, certification or registration; applications for reinstatement of licensure, certification or registration; and all required supplemental documentation and fees. Renewal applications are excluded from the provisions of this policy.
IV. RELATED DOCUMENTS: N/A
V. GENERAL PROVISIONS: A. Unless otherwise stated in Department or Board regulations, initial and reinstatement applications for licensure, certification or registration shall expire one year from the date the application is received by the Department.
B. Fees associated with unexpired reinstatement applications shall be assessed once per transaction (decision to approve or deny). This includes reinstatement applications valid for more than one year pursuant to Department or Board regulations.
C. Application and reinstatement fees associated with unexpired applications may be transferred to another application in the same board or regulatory program at the Board’s discretion. This includes updated applications requested by the Board or regulatory program.
D. Application and reinstatement fees for expired applications are nonrefundable and shall not be applied or transferred to another application.
Policy Title: Licensing & Regulation Policy #300-02 Application & Application Fee Expiration [POL427-300_02-v3] Effective: 07/01/2018 Submitted By: Mary Broz-Vaughan, Deputy Director of Communications & Board Operations Guidance Document: Yes Supersedes: Licensing & Regulation Policy #300-02 Application & Application Fee Expiration (Effective 10/31/2011) Page 1 of 1
Procedure for Compliance Determination in Common Interest CommunitiesDoc ID: cic
Common Interest Community Board
Guidance Document: Procedure for Determination of Compliance with § 55.1-2220 and § 55.1-2234
Adopted October 26, 2009 Revised September 3, 2020
Effective December 10, 2020
The CIC Board has the obligation pursuant to § 55.1-2230(B) upon request of an aggrieved owner to render a determination whether compliance with §§ 55.1-2220 or 55.1-2234 has occurred. The following are guidelines for handling the determination request.
- Upon receipt of a complaint for which the Ombudsman concludes there is a Request for a Determination, the file will be set up in the name of the Board and the aggrieved owner. The Ombudsman will send the file to the Executive Director of the CIC Board or designated staff person (“Board staff”).
- Board staff will request the aggrieved owner provide all written documentation that owner wishes the Board to consider regarding the Request for Determination. Board staff may supplement the written information with other information in possession of Department. Board staff shall collect all relevant documentation which shall constitute the Request for Determination Record (“Determination Record”).
- If the determination request pertains to compliance with § 55.1-2220 (escrow of deposits), Board staff shall research to determine if the bond or letter of credit filed with the Board to protect all escrowed deposits is current and valid.
- If the determination request pertains to compliance with § 55.1-2234 (developer’s obligation to complete), Board staff shall review the most recently filed public offering statement for language regarding theGuidance Document Procedure for Determination of Compliance with § 55.1-2220 and § 55.1-2234 Adopted October 26, 2009 (Revised September 3, 2020) completion of the units; determine if a payment and performance bond was filed with the Board to ensure completion of all promised and incomplete units and common elements; and determine if the Board was notified by the developer of any of the causes identified in § 55.1-2234(A) which may have delayed, hindered, or prevented completion.
Board staff will place the Request for Determination and associated Determination Record on the next available Board agenda.
The Board will consider the matter at a full Board meeting and determine, based on the Determination Record, whether the information supports a determination that compliance has occurred.
Virginia Condominium Act DisclosureDoc ID: cic
Commonwealth of Virginia Department of Professional and Occupational Regulation 9960 Mayland Drive, Suite 400 Richmond, Virginia 23233-1485 (804) 367-8510 cic@dpor.virginia.gov www.dpor.virginia.gov VIRGINIA CONDOMINIUM ACT DISCLOSURE (Virginia Code Sections 55.1-1943 and 55.1-1955) The Declarant of your condominium has scheduled a special meeting to consider extending the period during which the Declarant:
- May appoint and remove some or all of the officers and directors of the condominium unit owners’ association; and
- May exercise powers and responsibilities otherwise assigned to the unit owners’ association by the condominium instruments and the Virginia Condominium Act.
An affirmative vote of two-thirds of all the unit owners (other than the Declarant) is required to extend the period of Declarant control. During such time, the Declarant or such officers and directors are subject to liability as fiduciaries of the unit owners for their acts or omissions.
UNIT OWNER INTERESTS AND RESPONSIBILITIES As a unit owner, you are advised to exercise whatever due diligence you deem necessary to protect your interests. A Declarant’s interests may or may not align with the interests of other unit owners. It is the responsibility of all unit owners to monitor governance of the association to ensure that business is conducted properly.
COMMON ELEMENT STRUCTURAL WARRANTY Warranty Period. Extending the period of Declarant control means that the Declarant may control the condominium during the period when the unit owners’ association may assert claims for structural defects in the common elements. If the period of Declarant control is extended at the special meeting, the association’s right to pursue warranty claims will be preserved by election of a Warranty Review Committee.
Warranty Review Committee. The unit owners other than the Declarant will elect a Warranty Review Committee consisting of no fewer than three persons unaffiliated with the Declarant.
The Warranty Review Committee will have at least one year to assert warranty claims and will have both necessary funding and authority to: (1) engage an independent architect, engineer, legal counsel and other experts; (2) investigate whether there are any breaches of the Declarant’s warranty on the common elements; and, (3) assert or settle any such claims. [This disclosure must accompany the notice of the special meeting at which extending the period of Declarant control is being considered by the unit owners.] This form was developed by the Common Interest Community Board in accordance with § 55.1-1943(B) of the Code of Virginia. 10/1/19
Financial Disclosure Requirements for Certification ApplicantsDoc ID: cic
Common Interest Community Board
Guidance Document: Regarding what Certified Principal/Supervisory Employee Applicants must submit when Certain Personal Adverse Financial History is Disclosed
Adopted December 3, 2014
I. Issue
The Common Interest Community Manager Regulations at 18VAC48-50-35 H require an applicant for certification to provide all relevant information for the seven years prior to application on any outstanding judgments, past-due tax assessments, defaults on bonds, or pending or past bankruptcies, all as related to providing management services as defined in § 54.1-2345 of the Code of Virginia.
II. Applicable Regulation and Statute
18VAC48-50-35 H
The applicant for certification shall provide all relevant information for the seven years prior to application on any outstanding judgments, past-due tax assessments, defaults on bonds, or pending or past bankruptcies, all as related to providing management services as defined in § 54.1-2345 of the Code of Virginia. The applicant for certification shall further disclose whether or not he was the subject of any adverse disciplinary action, including revocation of a license, certificate, or registration within the seven-year period immediately preceding the date of application.
§ 55.1-2345. Definitions.
"Management services" means (i) acting with the authority of an association in its business, legal, financial, or other transactions with association members and nonmembers; (ii) executing the resolutionsGuidance Document Regarding what Certified Principal/Supervisory Employee Applicants must submit when Certain Personal Adverse Financial History is Disclosed Adopted December 3, 2014 and decisions of an association or, with the authority of the association, enforcing the rights of the association secured by statute, contract, covenant, rule, or bylaw; (iii) collecting, disbursing, or otherwise exercising dominion or control over money or other property belonging to an association; (iv) preparing budgets, financial statements, or other financial reports for an association; (v) arranging, conducting, or coordinating meetings of an association or the governing body of an association; (vi) negotiating contracts or otherwise coordinating or arranging for services or the purchase of property and goods for or on behalf of an association; or (vii) offering or soliciting to perform any of the aforesaid acts or services on behalf of an association.
III.
Policy The Board authorizes staff to approve applicants for principal or supervisory employee certification who disclose personal adverse financial history in accordance with 18VAC48-50-35 H, provided all other entry requirements are met, as follows:
- For past-due tax assessment, the applicant provides proof of an installment agreement or payment plan with the Internal Revenue Service or other applicable taxation authority. Such installment agreement or payment plan shall not be in default.
- For an outstanding judgment, the applicant provides proof of an installment plan to satisfy the judgment and proof that payments pursuant to the established installment plan are current.
- For an active bankruptcy, the applicant provides proof of a payment plan established by a bankruptcy court. Such payment plan shall not be in default.
An applicant unable to provide documentation in accordance with this policy that is acceptable, or discloses adverse financial history not related to a past-due tax assessment, outstanding judgment or bankruptcy shall be afforded the opportunity to have the application considered by the Board through an informal fact-finding conference pursuant to the Administrative Process Act (Chapter 40 of Title 2.2 of the Code of Virginia).
Guidance on Blanket Surety Bonds for DevelopersDoc ID: cic
Common Interest Community Board
Guidance Document: Determining Value of Blanket Surety Bonds Filed by Developers in Lieu of Escrowing Deposits
Adopted June 7, 2018 Revised September 3, 2020
Effective December 10, 2020
I. Background
Section 55.1-2220 of the Code of Virginia outlines requirements for deposits made in connection with the purchase or reservation of a time-share product. Subsection A of § 55.1-2220 requires:
Any deposit made in connection with the purchase or reservation of a product shall be held in escrow. All deposits shall be held in escrow until (i) delivered to the developer upon expiration of the purchaser's cancellation period provided the purchaser's right of cancellation has not been exercised, (ii) delivered to the developer because of the purchaser's default under a contract to purchase a time-share, or (iii) refunded to the purchaser. Such funds shall be deposited in a separate account designated for this purpose that is federally insured and located in the Commonwealth; except where such deposits are being held by a real estate broker or attorney licensed under the laws of the Commonwealth, such funds may be placed in that broker's or attorney's regular escrow account and need not be placed in a separate designated account. Such escrow funds shall not be subject to attachment by the creditors of either the purchaser or the developer.
Subsection B of § 55.1-2220 permits the developer of a time-share project consisting of more than 25 units to file a corporate surety bond or irrevocable letter of credit with the Board in lieu of escrowing deposits. Subsections C and D of § 55.1-2220 provide that the surety bond or letter of credit may either be (i) an individual bond or letter of credit for each deposit accepted, or (ii) a blanket bond or letter of credit if the total amount of depositsGuidance Document Determining Value of Blanket Surety Bonds Filed by Developers in Lieu of Escrowing Deposits Adopted June 7, 2018 (Revised September 3, 2020) accepted by the developer exceeds $10,000.
II.
Issues and Concerns
Subsection D of § 55.1-2220 specifies the following with respect to a blanket letter of credit filed with the Board: For the purposes of determining the amount of any blanket letter of credit that a developer maintains in any calendar year, the total amount of deposits considered held by the developer shall be determined as of May 31 in each calendar year and the amount of the letter of credit shall be in accordance with the amount of deposits held as of May 31.
However, subsection C of § 55.1-2220 does not contain the timeframe for calculating deposits with respect to a blanket bond filed with the Board.
III.
Board Guidance The Board adopts a guidance document that establishes the following: For the purposes of determining the amount of any blanket bond that a developer maintains in any calendar year, the total amount of deposits considered held by the developer shall be determined as of May 31 in each calendar year and the amount of the bond shall be in accordance with the amount of deposits held as of May 31.
Applicability of CIC Ombudsman Regulations to Commercial CondominiumsDoc ID: cic
Common Interest Community Board
Guidance Document: Regarding the Applicability of the Common Interest Community Ombudsman Regulations on Solely Commercial Condominiums
Adopted September 20, 2012 Revised September 3, 2020
Effective December 10, 2020
I. Issue
The Office of the Common Interest Community (CIC) Ombudsman has received numerous inquiries from Virginia attorneys as to whether the Common Interest Community Ombudsman Regulations apply to solely commercial condominiums.
II. Applicable Laws
§ 54.1-2345. Definitions.
"Association" includes condominium, cooperative, or property owners' associations.
"Common interest community" means real estate subject to a declaration containing lots, at least some of which are residential or occupied for recreational purposes, and common areas to which a person, by virtue of the person's ownership of a lot subject to that declaration, is a member of the association and is obligated to pay assessments of common expenses, provided that for the purposes of this chapter only, a common interest community does not include any time-share project registered pursuant to the Virginia Real Estate Time-Share Act (§ 55.1-2200 et seq.) or any additionalGuidance Document Regarding the Applicability of the Common Interest Community Ombudsman Regulations on Solely Commercial Condominiums Adopted September 20, 2012 (Revised September 3, 2020) land that is a part of such registration. "Common interest community" does not include an arrangement described in § 54.1-2345.1. § 54.1-2354.2. Common Interest Community Management Information Fund.
A. There is hereby created the Common Interest Community Management Information Fund, referred to in this section as "the Fund," to be used in the discretion of the Board to promote the improvement and more efficient operation of common interest communities through research and education. The Fund shall be established on the books of the Comptroller. The Fund shall consist of money paid into it pursuant to §§ 54.1-2349, 55.1-1835, 55.1-1980, and 55.1-2182, and such money shall be paid into the state treasury and credited to the Fund.
Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but, at the discretion of the Board, shall remain in the Fund or shall be transferred to the Common Interest Community Management Recovery Fund established pursuant to § 54.1-2354.5. § 54.1-2354.4. Association complaint procedures; final adverse decisions.
A. The Board shall establish by regulation a requirement that each association shall establish reasonable procedures for the resolution of written complaints from the members of the association and other citizens. Each association shall adhere to the written procedures established pursuant to this subsection when resolving association member and citizen complaints...
B. A complainant may give notice to the Board of any final adverse decision in accordance with regulations promulgated by the Board. The notice shall be filed within 30 days of the final adverse decision, shall be in writing on forms prescribed by the Board, shall include copies of all records pertinent to the decision, and shall be accompanied by a $25 filing fee. The fee shall be collected by the Director and paid directly into the state treasury and credited to the Common Interest Community Management Information Fund pursuant to § 54.1-2354.2. The Board may, for good cause shown, waive or refund the filing fee upon a finding that payment of the filing fee will cause undue financial hardship for the member. The Director shall provide a copy of the written notice to the association that made the final adverse decision.
C. The Director or his designee may request additional information concerning any notice of final adverse decision from the association that made the final adverse decision. The association shall provide such information to the Director within a reasonable time upon request. If the Director upon review determines that the final adverse decision may be in conflict with laws or regulations governing common interest communities or interpretations thereof by the Board, the Director may, in his sole discretion, provide the complainant and the association with information concerning such laws or regulations governing common interest communities or interpretations thereof by the Board. The determination of whether the final Guidance Document Regarding the Applicability of the Common Interest Community Ombudsman Regulations on Solely Commercial Condominiums Adopted September 20, 2012 (Revised September 3, 2020) adverse decision may be in conflict with laws or regulations governing common interest communities or interpretations thereof by the Board shall be a matter within the sole discretion of the Director, whose decision is final and not subject to further review. The determination of the Director shall not be binding upon the complainant or the association that made the final adverse decision. § 54.1-2354.5. Common Interest Community Management Recovery Fund.
A. There is hereby created the Common Interest Community Management Recovery Fund, referred to in this section as "the Fund," to be used in the discretion of the Board to protect the interests of associations.
B. Each common interest community manager, at the time of initial application for licensure, and each association filing its first annual report after the effective date shall be assessed $25, which shall be specifically assigned to the Fund. Initial payments may be incorporated in any application fee payment or annual filing fee and transferred to the Fund by the Director within 30 days. § 54.1-2351. General powers and duties of Board concerning associations.
A. The Board may adopt, amend, and repeal rules and regulations and issue orders consistent with and in furtherance of the objectives of this article, but the Board may not intervene in the internal activities of an association except to the extent necessary to prevent or cure violations of this article or of the chapter pursuant to which the association is created. The Board may prescribe forms and procedures for submitting information to the Board.
B. If it appears that any governing board has engaged, is engaging, or is about to engage in any act or practice in violation of this article, the Property Owners' Association Act (§ 55.1-1800 et seq.), the Virginia Condominium Act (§ 55.1-1900 et seq.), the Virginia Real Estate Cooperative Act (§ 55.1-2100 et seq.), or the Virginia Real Estate Time-Share Act (§ 55.1-2200 et seq.), or any of the Board's regulations or orders, the Board without prior administrative proceedings may bring an action in the appropriate court to enjoin that act or practice or for other appropriate relief. The Board is not required to post a bond or prove that no adequate remedy at law exists.
C. The Board may intervene in any action involving a violation by a declarant or a developer of a time-share project of this article, the Property Owners' Association Act (§ 55.1-1800 et seq.), the Virginia Condominium Act (§ 55.1-1900 et seq.), the Virginia Real Estate Cooperative Act (§ 55.1-2100 et seq.), or the Virginia Real Estate Time-Share Act (§ 55.1-2200 et seq.), or any of the Board's regulations or orders.
D. The Board may accept grants-in-aid from any governmental source and may contract with agencies charged with similar functions in this or other jurisdictions in furtherance of the objectives of this article.
Guidance Document Regarding the Applicability of the Common Interest Community Ombudsman Regulations on Solely Commercial Condominiums Adopted September 20, 2012 (Revised September 3, 2020) E. The Board may cooperate with agencies performing similar functions in this and other jurisdictions to develop uniform filing procedures and forms, uniform disclosure standards, and uniform administrative practices, and may develop information that may be useful in the discharge of the Board's duties.
F. In issuing any cease and desist order, the Board shall state the basis for the adverse determination and the underlying facts.
G. Without limiting the remedies that may be obtained under this article, the Board, without compliance with the Administrative Process Act (§ 2.2-4000 et seq.), shall have the authority to enforce the provisions of this section and may institute proceedings in equity to enjoin any person, partnership, corporation, or any other entity violating this article, the Property Owners' Association Act (§ 55.1-1800 et seq.), the Virginia Condominium Act (§ 55.1-1900 et seq.), the Virginia Real Estate Cooperative Act (§ 55.1-2100 et seq.), or the Virginia Real Estate Time-Share Act (§ 55.1-2200 et seq.), or any of the Board's regulations or orders.
Such proceedings shall be brought in the name of the Commonwealth by the Board in the circuit court or general district court of the city or county in which the unlawful act occurred or in which the defendant resides.
H. The Board may assess a monetary penalty to be paid to the Common Interest Community Management Information Fund of not more than $1,000 per violation against any governing board that violates any provision of this article, the Property Owners' Association Act (§ 55.1-1800 et seq.), the Virginia Condominium Act (§ 55.1-1900 et seq.), the Virginia Real Estate Cooperative Act (§ 55.1-2100 et seq.), or the Virginia Real Estate Time-Share Act (§ 55.1-2200 et seq.), or any of the Board's regulations or orders. In determining the amount of the penalty, the Board shall consider the degree and extent of harm caused by the violation. No monetary penalty may be assessed under this article, the Property Owners' Association Act (§ 55.1-1800 et seq.), the Virginia Condominium Act (§ 55.1-1900 et seq.), the Virginia Real Estate Cooperative Act (§ 55.1-2100 et seq.), or the Virginia Real Estate Time-Share Act (§ 55.1-2200 et seq.), or any of the Board's regulations or orders unless the governing board has been given notice and an opportunity to be heard pursuant to the Administrative Process Act (§ 2.2-4000 et seq.). The penalty may be sued for and recovered in the name of the Commonwealth.
§ 55.1-1900. Definitions. "Condominium" means real property, and any incidents thereto or interests therein, lawfully submitted to this chapter by the recordation of condominium instruments pursuant to the provisions of this chapter. No project shall be deemed a condominium within the meaning of this chapter unless the undivided interests in the common elements are vested in the unit owners. § 55.1-1972. Exemptions from certain provisions of article.
Guidance Document Regarding the Applicability of the Common Interest Community Ombudsman Regulations on Solely Commercial Condominiums Adopted September 20, 2012 (Revised September 3, 2020) B. In cases of dispositions in a condominium where all units are restricted to nonresidential use, the provisions of §§ 55.1-1974 through 55.1-1983 shall not apply, unless the method of offer or disposition is adopted for the purpose of evasion of this chapter. 55.1-1974 Limitations on dispositions of units. 55.1-1975 Application for registration; fee. 55.1-1976 Public offering statement; condominium securities. 55.1-1977 Inquiry and examination. 55.1-1978 Notice of filing and registration. 55.1-1979 Annual report by declarant. 55.1-1980 Annual report by unit owners' association. 55.1-1981 Termination of registration. 55.1-1982 Conversion condominiums; special provisions. 55.1-1983 Escrow of deposits.
Considerations
- Section 54.1-2354.4(A) requires each “association” to “establish reasonable procedures for the resolution of written complaints from the members of the association and other citizens.” The term “association” under § 54.1-2345 “includes condominium, cooperative, or property owners' associations.” Nowhere does the law state that associations are to be construed in these statutes as being solely common interest communities.
- New commercial condominiums are not required to register with the Board and commercial condominium associations do not currently submit annual reports to the Board nor do they submit any form of payment to the Commonwealth in support of the Common Interest Community Management Information Fund. All common interest communities are required to submit annual reports and annual payments that are applied to the Common Interest Community Management Information Fund.
- While the definition of association appears to include commercial condominiums, or at least does not exclude them, the definition of common interest community sets forth the premise that a “person, by virtue of his ownership of a lot, is a member of an association…” The responsibility of the Board, under § 54.1-2354.4(A) is to “establish by regulation a requirement that each association shall establish reasonable procedures for the resolution of written complaints from the members of the association and other citizens.” Guidance Document Regarding the Applicability of the Common Interest Community Ombudsman Regulations on Solely Commercial Condominiums Adopted September 20, 2012 (Revised September 3, 2020)
- If commercial condominiums draft and adopt a complaint process, doing so would be futile as there is no jurisdiction or enforcement authority for commercial condominiums since they do not fall under the definition of a common interest community.
- The CIC Ombudsman Regulations pertain only to violations of common interest community laws or regulations. The Director or his designee, under § 54.1-2354.4(C), “may provide the complainant and association with information if the final adverse decision may be in conflict with laws or regulations governing common interest communities…”
- The Board is responsible for establishing the regulations that require complaint procedures within associations. The Board has no jurisdiction over any association except a common interest community association, in whatever form it may take – Cooperative, Condominium, Property Owners’.
- The Board has no authority to enforce the requirement that an association other than a common interest community association have a complaint procedure, since its only authority is over common interest communities.
- Based on the jurisdiction of the Board, the CIC Ombudsman, and the Board staff, notices of the new regulations and mandatory complaint procedure were sent only to those common interest communities currently registered with the Board.
III.
Board Policy The Board determined that the definition of association, as set forth in § 54.1-2345 is not intended to include commercial condominiums, the Board does not have jurisdiction over commercial condominiums, and there will be no action taken by the Board if a commercial condominium does not implement and adopt a complaint process under the CIC Ombudsman Regulations. Based on the language of the law, it does not appear that the Board can unequivocally state that commercial condominiums are not required to adopt complaint procedures, but the Board can address the jurisdictional aspect of this issue and its lack of authority to take action if a commercial condominium does not adopt a complaint process.
Definition of “Employee” in Community ManagementDoc ID: cic
Common Interest Community Board
Guidance Document: Definition of “Employee” as used in § 54.1-2347(A) of the Code of Virginia
Adopted December 2, 2010
The exceptions and exemptions from common interest community manager licensure contained in Chapter 23.3 of Title 54.1 of the Code of Virginia include “an employee of an association from providing management services for that association’s common interest community.” As used in this context, the factors as contained in Internal Revenue Service Revenue Ruling 87-41 shall be used to determine whether an individual is an employee.
Internal Revenue Service Revenue Ruling 87-41 is attached and hereby incorporated into this guidance document.IRS Rev. Rul. 87-41 Page 1 of 7 Rev. Rul. 87-41, 1987-1 C.B. 296.
Internal Revenue Service Revenue Ruling
EMPLOYMENT STATUS UNDER SECTION 530(D) OF THE REVENUE ACT OF 1978
Published: 1987
Section 3121.-Definitions, 26 CFR 31.3121(d)-1: Who are employees.
(Also Sections 3306, 3401; 31.3306(i)-1, 31.3401(c)-1.)
Employment status under section 530(d) of the Revenue Act of 1978. Guidelines are set forth for determining the employment status of a taxpayer (technical service specialist) affected by section 530(d) of the Revenue Act of 1978, as added by section 1706 of the Tax Reform Act of 1986. The specialists are to be classified as employees under generally applicable common law standards.
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ISSUE
In the situations described below, are the individuals employees under the common law rules for purposes of the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), and the Collection of Income Tax at Source on Wages (chapters 21, 23, and 24 respectively, subtitle C, Internal Revenue Code)? These situations illustrate the application of section 530(d) of the Revenue Act of 1978, 1978-3 (Vol. 1) C.B. xi, 119 (the 1978 Act), which was added by section 1706(a) of the Tax Reform Act of 1986, 1986-3 (Vol. 1) C.B. (the 1986 Act) (generally effective for services performed and remuneration paid after December 31, 1986).
FACTS
In each factual situation, an individual worker (Individual), pursuant to an arrangement between one person (Firm) and another person (Client), provides services for the Client as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.
SITUATION 1
The Firm is engaged in the business of providing temporary technical services to its clients. The Firm maintains a roster of workers who are available to provide technical services to prospective clients. The Firm does not train the workers but determines the services that the workers are qualified to perform based on information submitted by the workers.
The Firm has entered into a contract with the Client. The contract states that the Firm is to provide the Client with workers to perform computer programming services meeting specified qualifications for a particular project. The Individual, a computer programmer, enters into a contract with the Firm to perform services as a computer programmer for the Client's project, which is expected to last less than one year. The Individual is one of several programmers provided by the Firm to the Client. The Individual has not been an employee of or performed services for the Client (or any predecessor or affiliated corporation of the Client) at any time preceding the time at which the Individual begins performing services for the Client. Also, the Individual has not been an employee of or performed services for or on behalf of the Firm at any time preceding the time at which the Individual begins performing services for the Client. The Individual's contract with the Firm states that the Individual is an independent contractor with respect to services performed on behalf of the Firm for the Client.
The Individual and the other programmers perform the services under the Firm's contract with the Client. During the time the Individual is performing services for the Client, even though the Individual retains the right to perform services for other persons, substantially all of the Individual's working time is devoted to performing services for the
http://www.medlawplus.com/legalforms/instruct/revrul87-41.htm 11/19/2010IRS Rev. Rul. 87-41 Page 2 of 7 Client. A significant portion of the services are performed on the Client's premises. The Individual reports to the Firm by accounting for time worked and describing the progress of the work. The Firm pays the Individual and regularly charges the Client for the services performed by the Individual. The Firm generally does not pay individuals who perform services for the Client unless the Firm provided such individuals to the Client.
The work of the Individual and other programmers is regularly reviewed by the Firm. The review is based primarily on reports by the Client about the performance of these workers. Under the contract between the Individual and the Firm, the Firm may terminate its relationship with the Individual if the review shows that he or she is failing to perform the services contracted for by the Client. Also, the Firm will replace the Individual with another worker if the Individual's services are unacceptable to the Client. In such a case, however, the Individual will nevertheless receive his or her hourly pay for the work completed.
Finally, under the contract between the Individual and the Firm, the Individual is prohibited from performing services directly for the Client and, under the contract between the Firm and the Client, the Client is prohibited from receiving services from the Individual for a period of three months following the termination or services by the Individual for the Client on behalf of the Firm.
SITUATION 2 The Firm is a technical services firm that supplies clients with technical personnel. The Client requires the services of a systems analyst to complete a project and contacts the Firm to obtain such an analyst. The Firm maintains a roster of analysts and refers such an analyst, the Individual, to the Client. The Individual is not restricted by the Client or the Firm from providing services to the general public while performing services for the Client and in fact does perform substantial services for other persons during the period the Individual is working for the Client.
Neither the Firm nor the Client has priority on the services of the Individual. The Individual does not report, directly or indirectly, to the Firm after the beginning of the assignment to the Client concerning (1) hours worked by the Individual, (2) progress on the job, or (3) expenses incurred by the Individual in performing services for the Client.
No reports (including reports of time worked or progress on the job) made by the Individual to the Client are provided by the Client to the Firm.
If the Individual ceases providing services for the Client prior to completion of the project or if the Individual's work product is otherwise unsatisfactory, the Client may seek damages from the Individual. However, in such circumstances, the Client may not seek damages from the Firm, and the Firm is not required to replace the Individual. The Firm may not terminate the services of the Individual while he or she is performing services for the Client and may not otherwise affect the relationship between the Client and the Individual. Neither the Individual nor the Client is prohibited for any period after termination of the Individual's services on this job from contracting directly with the other. For referring the Individual to the Client, the Firm receives a flat fee that is fixed prior to the Individual's commencement of services for the Client and is unrelated to the number of hours and quality of work performed by the Individual. The Individual is not paid by the Firm either directly or indirectly. No payment made by the Client to the Individual reduces the amount of the fee that the Client is otherwise required to pay the Firm.
The Individual is performing services that can be accomplished without the Individual's receiving direction or control as to hours, place of work, sequence, or details of work.
SITUATION 3 The Firm, a company engaged in furnishing client firms with technical personnel, is contacted by the Client, who is in need of the services of a drafter for a particular project, which is expected to last less than one year. The Firm recruits the Individual to perform the drafting services for the Client. The Individual performs substantially all of the services for the Client at the office of the Client, using materials and equipment of the Client. The services are performed under the supervision of employees of the Client. The Individual reports to the Client on a regular basis.
The Individual is paid by the Firm based on the number of hours the Individual has worked for the Client, as reported to the Firm by the Client or as reported by the Individual and confirmed by the Client. The Firm has no obligation to pay the Individual if the Firm does not receive payment for the Individual's services from the Client.
For recruiting the Individual for the Client, the Firm receives a flat fee that is fixed prior to the Individual's commencement of services for the Client and is unrelated to the number of hours and quality of work performed by the Individual. However, the Firm does receive a reasonable fee for performing the payroll function. The Firm may http://www.medlawplus.com/legalforms/instruct/revrul87-41.htm 11/19/2010 IRS Rev. Rul. 87-41 Page 3 of 7 not direct the work of the Individual and has no responsibility for the work performed by the Individual. The Firm may not terminate the services of the Individual. The Client may terminate the services of the Individual without liability to either the Individual or the Firm. The Individual is permitted to work for another firm while performing services for the Client, but does in fact work for the Client on a substantially full-time basis.
LAW AND ANALYSIS This ruling provides guidance concerning the factors that are used to determine whether an employment relationship exists between the Individual and the Firm for federal employment tax purposes and applies those factors to the given factual situations to determine whether the Individual is an employee of the Firm for such purposes. The ruling does not reach any conclusions concerning whether an employment relationship for federal employment tax purposes exists between the Individual and the Client in any of the factual situations.
Analysis of the preceding three fact situations requires an examination of the common law rules for determining whether the Individual is an employee with respect to either the Firm or the Client, a determination of whether the Firm or the Client qualifies for employment tax relief under section 530(a) of the 1978 Act, and a determination of whether any such relief is denied the Firm under section 530(d) of the 1978 Act (added by Section 1706 of the 1986 Act).
An individual is an employee for federal employment tax purposes if the individual has the status of an employee under the usual common law rules applicable in determining the employer-employee relationship. Guides for determining that status are found in the following three substantially similar sections of the Employment Tax Regulations: sections 31.3121(d)-1(c); 31.3306(i)-1; and 31.3401(c)-1.
These sections provide that generally the relationship of employer and employee exists when the person or persons for whom the services are performed have the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but as to how it shall be done. In this connection, it is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient if the employer has the right to do so.
Conversely, these sections provide, in part, that individuals (such as physicians, lawyers, dentists, contractors, and subcontractors) who follow an independent trade, business, or profession, in which they offer their services to the public, generally are not employees.
Finally, if the relationship of employer and employee exists, the designation or description of the relationship by the parties as anything other than that of employer and employee is immaterial. Thus, if such a relationship exists, it is of no consequence that the employee is designated as a partner, coadventurer, agent, independent contractor, or the like.
As an aid to determining whether an individual is an employee under the common law rules, twenty factors or elements have been identified as indicating whether sufficient control is present to establish an employer-employee relationship. The twenty factors have been developed based on an examination of cases and rulings considering whether an individual is an employee. The degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed. The twenty factors are designed only as guides for determining whether an individual is an employee; special scrutiny is required in applying the twenty factors to assure that formalistic aspects of an arrangement designed to achieve a particular status do not obscure the substance of the arrangement (that is, whether the person or persons for whom the services are performed exercise sufficient control over the individual for the individual to be classified as an employee). The twenty factors are described below:
- INSTRUCTIONS. A worker who is required to comply with other persons' instructions about when, where, and how he or she is to work is ordinarily an employee. This control factor is present if the person or persons for whom the services are performed have the RIGHT to require compliance with instructions. See, for example, Rev. Rul. 68-598, 1968-2 C.B. 464, and Rev. Rul. 66-381, 1966-2 C.B. 449.
- TRAINING. Training a worker by requiring an experienced employee to work with the worker, by corresponding with the worker, by requiring the worker to attend meetings, or by using other methods, indicates that the person or http://www.medlawplus.com/legalforms/instruct/revrul87-41.htm 11/19/2010 IRS Rev. Rul. 87-41 Page 4 of 7 persons for whom the services are performed want the services performed in a particular method or manner. See Rev. Rul. 70-630, 1970-2 C.B. 229.
- INTEGRATION. Integration of the worker's services into the business operations generally shows that the worker is subject to direction and control. When the success or continuation of a business depends to an appreciable degree upon the performance of certain services, the workers who perform those services must necessarily be subject to a certain amount of control by the owner of the business. See United States v. Silk, 331 U.S. 704 (1947), 1947-2 C.B. 167.
- SERVICES RENDERED PERSONALLY. If the Services must be rendered personally, presumably the person or persons for whom the services are performed are interested in the methods used to accomplish the work as well as in the results. See Rev. Rul. 55-695, 1955-2 C.B. 410.
- HIRING, SUPERVISING, AND PAYING ASSISTANTS. If the person or persons for whom the services are performed hire, supervise, and pay assistants, that factor generally shows control over the workers on the job.
However, if one worker hires, supervises, and pays the other assistants pursuant to a contract under which the worker agrees to provide materials and labor and under which the worker is responsible only for the attainment of a result, this factor indicates an independent contractor status. Compare Rev. Rul. 63-115, 1963-1 C.B. 178, with Rev.
Rul. 55-593 1955-2 C.B. 610.
- CONTINUING RELATIONSHIP. A continuing relationship between the worker and the person or persons for whom the services are performed indicates that an employer-employee relationship exists. A continuing relationship may exist where work is performed at frequently recurring although irregular intervals. See United States v. Silk.
- SET HOURS OF WORK. The establishment of set hours of work by the person or persons for whom the services are performed is a factor indicating control. See Rev. Rul. 73-591, 1973-2 C.B. 337.
- FULL TIME REQUIRED. If the worker must devote substantially full time to the business of the person or persons for whom the services are performed, such person or persons have control over the amount of time the worker spends working and impliedly restrict the worker from doing other gainful work. An independent contractor on the other hand, is free to work when and for whom he or she chooses. See Rev. Rul. 56-694, 1956-2 C.B. 694.
- DOING WORK ON EMPLOYER'S PREMISES. If the work is performed on the premises of the person or persons for whom the services are performed, that factor suggests control over the worker, especially if the work could be done elsewhere. Rev. Rul. 56-660, 1956-2 C.B. 693. Work done off the premises of the person or persons receiving the services, such as at the office of the worker, indicates some freedom from control. However, this fact by itself does not mean that the worker is not an employee. The importance of this factor depends on the nature of the service involved and the extent to which an employer generally would require that employees perform such services on the employer's premises. Control over the place of work is indicated when the person or persons for whom the services are performed have the right to compel the worker to travel a designated route, to canvass a territory within a certain time, or to work at specific places as required. See Rev. Rul. 56-694. 10. ORDER OR SEQUENCE SET. If a worker must perform services in the order or sequence set by the person or persons for whom the services are performed, that factor shows that the worker is not free to follow the worker's own pattern of work but must follow the established routines and schedules of the person or persons for whom the services are performed. Often, because of the nature of an occupation, the person or persons for whom the services are performed do not set the order of the services or set the order infrequently. It is sufficient to show control, however, if such person or persons retain the right to do so. See Rev. Rul. 56-694. 11. ORAL OR WRITTEN REPORTS. A requirement that the worker submit regular or written reports to the person or persons for whom the services are performed indicates a degree of control. See Rev. Rul. 70-309, 1970-1 C.B. 199, and Rev. Rul. 68-248, 1968-1 C.B. 431. 12. PAYMENT BY HOUR, WEEK, MONTH. Payment by the hour, week, or month generally points to an employer-employee relationship, provided that this method of payment is not just a convenient way of paying a lump sum agreed upon as the cost of a job. Payment made by the job or on § straight commission generally indicates that the worker is an independent contractor. See Rev. Rul. 74-389, 1974-2 C.B. 330. 13. PAYMENT OF BUSINESS AND/OR TRAVELING EXPENSES. If the person or persons for whom the services are performed ordinarily pay the worker's business and/or traveling expenses, the worker is ordinarily an employee. An employer, to be able to control expenses, generally retains the right to regulate and direct the worker's business activities. See Rev. Rul. 55-144, 1955-1 C.B. 483. 14. FURNISHING OF TOOLS AND MATERIALS. The fact that the person or persons for whom the services are performed furnish significant tools, materials, and other equipment tends to show the existence of an employer-employee relationship. See Rev. Rul. 71-524, 1971-2 C.B. 346. 15. SIGNIFICANT INVESTMENT. If the worker invests in facilities that are used by the worker in performing services and are not typically maintained by employees (such as the maintenance of an office rented at fair value http://www.medlawplus.com/legalforms/instruct/revrul87-41.htm 11/19/2010 IRS Rev. Rul. 87-41 Page 5 of 7 from an unrelated party), that factor tends to indicate that the worker is an independent contractor. On the other hand, lack of investment in facilities indicates dependence on the person or persons for whom the services are performed for such facilities and, accordingly, the existence of an employer- employee relationship. See Rev. Rul. 71-524. Special scrutiny is required with respect to certain types of facilities, such as home offices. 16. REALIZATION OF PROFIT OR LOSS. A worker who can realize a profit or suffer a loss as a result of the worker's services (in addition to the profit or loss ordinarily realized by employees) is generally an independent contractor, but the worker who cannot is an employee. See Rev. Rul. 70-309. For example, if the worker is subject to a real risk of economic loss due to significant investments or a bona fide liability for expenses, such as salary payments to unrelated employees, that factor indicates that the worker is an independent contractor. The risk that a worker will not receive payment for his or her services, however, is common to both independent contractors and employees and thus does not constitute a sufficient economic risK to support treatment as an independent contractor. 17. WORKING FOR MORE THAN ONE FIRM AT A TIME. If a worker performs more than de minimis services for a multiple of unrelated persons or firms at the same time, that factor generally indicates that the worker is an independent contractor. See Rev. Rul. 70-572, 1970-2 C.B. 221. However, a worker who performs services for more than one person may be an employee of each of the persons, especially where such persons are part of the same service arrangement. 18. MAKING SERVICE AVAILABLE TO GENERAL PUBLIC. The fact that a worker makes his or her services available to the general public on a regular and consistent basis indicates an independent contractor relationship. See Rev. Rul. 56-660. 19. RIGHT TO DISCHARGE. The right to discharge a worker is a factor indicating that the worker is an employee and the person possessing the right is an employer. An employer exercises control through the threat of dismissal, which causes the worker to obey the employer's instructions. An independent contractor, on the other hand, cannot be fired so long as the independent contractor produces a result that meets the contract specifications. Rev. Rul. 75- 41, 1975-1 C.B. 323. 20. RIGHT TO TERMINATE. If the worker has the right to end his or her relationship with the person for whom the services are performed at any time he or she wishes without incurring liability, that factor indicates an employer-employee relationship. See Rev. Rul. 70-309.
Rev. Rul. 75-41 considers the employment tax status of individuals performing services for a physician's professional service corporation. The corporation is in the business of providing a variety of services to professional people and firms (subscribers), including the services of secretaries, nurses, dental hygienists, and other similarly trained personnel. The individuals who are to perform the services are recruited by the corporation, paid by the corporation, assigned to jobs, and provided with employee benefits by the corporation. Individuals who enter into contracts with the corporation agree they will not contract directly with any subscriber to which they are assigned for at least three months after cessation of their contracts with the corporation. The corporation assigns the individual to the subscriber to work on the subscriber's premises with the subscriber's equipment. Subscribers have the right to require that an individual furnished by the corporation cease providing services to them, and they have the further right to have such individual replaced by the corporation within a reasonable period of time, but the subscribers have no right to affect the contract between the individual and the corporation. The corporation retains the right to discharge the individuals at any time. Rev. Rul. 75-41 concludes that the individuals are employees of the corporation for federal employment tax purposes.
Rev. Rul. 70-309 considers the employment tax status of certain individuals who perform services as oil well pumpers for a corporation under contracts that characterize such individuals as independent contractors. Even though the pumpers perform their services away from the headquarters of the corporation and are not given day-to-day directions and instructions, the ruling concludes that the pumpers are employees of the corporation because the pumpers perform their services pursuant to an arrangement that gives the corporation the right to exercise whatever control is necessary to assure proper performance of the services; the pumpers' services are both necessary and incident to the business conducted by the corporation; and the pumpers are not engaged in an independent enterprise in which they assume the usual business risks, but rather work in the course of the corporation's trade or business.
See also Rev. Rul. 70-630, 1970-2 C.B. 229, which considers the employment tax status of sales clerks furnished by an employee service company to a retail store to perform temporary services for the store.
Section 530(a) of the 1978 Act, as amended by section 269(c) of the Tax Equity and Fiscal Responsibility Act of 1982, 1982-2 C.B. 462, 536, provides, for purposes of the employment taxes under subtitle C of the Code, that if a http://www.medlawplus.com/legalforms/instruct/revrul87-41.htm 11/19/2010 IRS Rev. Rul. 87-41 Page 6 of 7 taxpayer did not treat an individual as an employee for any period, then the individual shall be deemed not to be an employee, unless the taxpayer had no reasonable basis for not treating the individual as an employee. For any period after December 31, 1978, this relief applies only if both of the following consistency rules are satisfied: (1) all federal tax returns (including information returns) required to be filed by the taxpayer with respect to the individual for the period are filed on a basis consistent with the taxpayer's treatment of the individual as not being an employee ('reporting consistency rule'), and (2) the taxpayer (and any predecessor) has not treated any individual holding a substantially similar position as an employee for purposes of the employment taxes for periods beginning after December 31, 1977 ('substantive consistency rule').
The determination of whether any individual who is treated as an employee holds a position substantially similar to the position held by an individual whom the taxpayer would otherwise be permitted to treat as other than an employee for employment tax purposes under section 530(a) of the 1978 Act requires an examination of all the facts and circumstances, including particularly the activities and functions performed by the individuals. Differences in the positions held by the respective individuals that result from the taxpayer's treatment of one individual as an employee and the other individual as other than an employee (for example, that the former individual is a participant in the taxpayer's qualified pension plan or health plan and the latter individual is not a participant in either) are to be disregarded in determining whether the individuals hold substantially similar positions.
Section 1706(a) of the 1986 Act added to section 530 of the 1978 Act a new subsection (d), which provides an exception with respect to the treatment of certain workers. Section 530(d) provides that section 530 shall not apply in the case of an individual who, pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work. Section 530(d) of the 1978 Act does not affect the determination of whether such workers are employees under the common law rules. Rather, it merely eliminates the employment tax relief under section 530(a) of the 1978 Act that would otherwise be available to a taxpayer with respect to those workers who are determined to be employees of the taxpayer under the usual common law rules.
Section 530(d) applies to remuneration paid and services rendered after December 31, 1986.
The Conference Report on the 1986 Act discusses the effect of section 530(d) as follows: The Senate amendment applies whether the services of [technical service workers] are provided by the firm to only one client during the year or to more than one client, and whether or not such individuals have been designated or treated by the technical services firm as independent contractors, sole proprietors, partners, or employees of a personal service corporation controlled by such individual. The effect of the provision cannot be avoided by claims that such technical service personnel are employees of personal service corporations controlled by such personnel.
For example, an engineer retained by a technical services firm to provide services to a manufacturer cannot avoid the effect of this provision by organizing a corporation that he or she controls and then claiming to provide services as an employee of that corporation. * * * [T]he provision does not apply with respect to individuals who are classified, under the generally applicable common law standards, as employees of a business that is a client of the technical services firm. 2 H. R. Rep. No. 99-841 (Conf. Rep.), 99th Cong., 2d Sess. II-834 to 835 (1986).
Under the facts of Situation 1 the legal relationship is between the Firm and the Individual, and the Firm retains the right of control to insure that the services are performed in a satisfactory fashion. The fact that the Client may also exercise some degree of control over the Individual does not indicate that the Individual is not an employee.
Therefore, in Situation 1, the Individual is an employee of the Firm under the common law rules. The facts in Situation 1 involve an arrangement among the Individual, Firm, and Client, and the services provided by the Individual are technical services. Accordingly, the Firm is denied section 530 relief under section 530(d) of the 1978 Act (as added by section 1706 of the 1986 Act), and no relief is available with respect to any employment tax liability incurred in Situation 1. The analysis would not differ if the acts of Situation 1 were changed to state that the Individual provided the technical services through a personal service corporation owned by the Individual.
In Situation 2, the Firm does not retain any right to control the performance of the services by the Individual and, thus, no employment relationship exists between the Individual and the Firm. http://www.medlawplus.com/legalforms/instruct/revrul87-41.htm 11/19/2010 IRS Rev. Rul. 87-41 Page 7 of 7 In Situation 3, the Firm does not control the performance of the services of the Individual, and the Firm has no right to affect the relationship between the Client and the Individual. Consequently, no employment relationship exists between the Firm and the Individual.
HOLDINGS SITUATION 1. The Individual is an employee of the Firm under the common law rules. Relief under section 530 of the 1978 Act is not available to the Firm because of the provisions of section 530(d).
SITUATION 2. The Individual is not an employee of the Firm under the common law rules.
SITUATION 3. The Individual is not an employee of the Firm under the common law rules.
Because of the application of section 530(b) of the 1978 Act, no inference should be drawn with respect to whether the Individual in Situations 2 and 3 is an employee of the Client for federal employment tax purposes. http://www.medlawplus.com/legalforms/instruct/revrul87-41.htm 11/19/2010
DPOR Information Disclosure PolicyDoc ID: cic
DIRECTOR’S POLICY #100-04 RELEASE OF INFORMATION Effective Date: June 5, 2017
Digitally signed by Jay W. DeBoer Approved By: Reason:documentI am approving this Date: 2017.06.05 10:55:39 -04'00' I. PURPOSE: The purpose of this policy is to provide Department of Professional and Occupational Regulation (DPOR) employees with guidelines for responding to requests for information. As a DPOR guidance document, it is intended to provide the public with a general understanding of DPOR’s record disclosure practices.
II. POLICY STATEMENT: Pursuant to the Virginia Freedom of Information Act (§ 2.2-3700 et seq. of the Code of Virginia), the Department of Professional and Occupational Regulation assumes a predisposition toward full disclosure of all public records in the Department’s possession. Specific exclusions shall apply in accordance with § 54.1-108 and §§ 2.2-3705.1 through 2.2-3706 of the Code of Virginia and, in the absence of any board policy to the contrary, when the Department exercises its discretionary authority to withhold personal or confidential information that may compromise an individual’s safety and security. A subpoena duces tecum for the production of records shall be processed in accordance with Director’s Policy #100-06, Subpoenas, Service of Process and Notices.
III. DEFINITIONS:
Personal information As defined in § 2.2-3801 of the Code of Virginia is information that (i) describes, locates or indexes anything about an individual including, but not limited to, his social security number, driver's license number, agency-issued identification number, student identification number, real or personal property holdings derived from tax returns, and his education, financial transactions, medical history, ancestry, religion, political ideology, criminal or employment record, or (ii) affords a basis for inferring personal characteristics, such as finger and voice prints, photographs, or things done by or to such individual; and the record of his presence, registration, or membership in an organization or activity, or admission to an institution. "Personal information" shall not include routine information maintained for the purpose of internal office administration whose use could not be such as to affect adversely any data subject nor does the term include real estate assessment information.
Public record Recorded information that documents a transaction or activity by or with any public officer, agency or employee of an agency. Regardless of physical form or characteristic, the recorded information is a public record if it is produced, collected, received or retained in pursuance of law or in connection with the transaction of public business.
The medium (e.g., electronic documents and mail) on which such information is recorded has no bearing on the determination of whether the record is a public record or whether it is subject to public disclosure.
Record Custodian A public official or official designee in charge of an office housing public records.
IV. RELATED DOCUMENTS: Virginia Freedom of Information Act Government Data Collection and Dissemination Practices Act Director’s Policy #100-06 Subpoenas, Service of Process and Notices
Policy Title: Director’s Policy #100-04 Release of Information [POL401-100_04-v16] Effective: 06/05/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-04 Release of Information (Effective 04/01/2015) Page 1 of 7V. GENERAL PROVISIONS:
A. CUSTODIAN OF RECORD
- The Records and FOIA Manager shall serve as the custodian of all Department records with specific positions designated as custodians for disclosure and authentication purposes. In the absence of the designated custodians, the Records and FOIA Manager and the Information Management Director shall authenticate records for court submission. The following individuals shall serve as custodians of any record created, processed and/or maintained by their respective sections. These individuals shall designate a backup custodian to perform record authentications in their absence. a. Executive Directors in the Communications and Board Operations Division b. Directors in the Compliance and Investigations Division (Investigations, Alternative Dispute Resolution, Complaint Analysis and Resolution, Adjudication, and Fair Housing) with Field Supervisors and Investigators designated as record custodians for the purpose of authenticating licensing and investigation records in court. c. Human Resources Director d. Senior Manager Administrative and Financial Services e. Budget and Financial Services Director f. Education and Examinations Director
B. RESPONDING TO INFORMATION REQUESTS
- All requests for records are subject to the provisions of the Virginia Freedom of Information Act. A requester is not required to reference FOIA in order to be subject to the provisions of the Act.
- Generally, DPOR does not require FOIA requests to be submitted in writing; however, in situations where the requested records are not identified with reasonable specificity (Code of Virginia § 2.2-3704.B), DPOR may require a detailed written or e-mail request to ensure accurate response preparation.
- To prepare a response within five workdays of receipt, immediate delivery of a FOIA request to the appropriate (responsible) section is essential. The first workday following receipt of the request is considered day one when calculating the response deadline.
- The Records and FOIA Manager shall make all decisions concerning routine FOIA requests and provide guidance to DPOR staff in determining the appropriate response to information requests. Specific exclusions shall apply in accordance with § 54.1-108 and §§ 2.2-3705.1 through 2.2-3706 of the Code of Virginia and any applicable board or agency policies. Non-routine FOIA requests from the public shall be communicated to the Information Management Director. Non-routine requests from the media and elected officials shall be communicated to the Deputy Director for Communications and Board Operations.
- In accordance with § 2.2-3704.F of the Code of Virginia, DPOR may assess reasonable charges for the actual costs associated with accessing, duplicating, supplying or searching for records. Documents requested by a federal, state or local governmental or law-enforcement agency shall be provided at no cost. Photocopies are available for $.25 per page for 40 or more pages. Copies of less than 40 pages shall be available at no charge.
Furthermore, pursuant to § 2.2-3704.H unless approved by the Information Management Director, DPOR shall require advanced payment for requests that are likely to exceed $200 prior to preparing the response.
- Pursuant to § 2.2-3704.I of the Code of Virginia, before processing a request for records, DPOR may require payment of any amount owed for previous FOIA requests that remain unpaid for at least 30 days. A letter requesting payment prior to providing additional records shall be mailed within five workdays of receiving the new request.
Policy Title: Director’s Policy #100-04 Release of Information [POL401-100_04-v16] Effective: 06/05/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-04 Release of Information (Effective 04/01/2015) Page 2 of 7
C. RECORD CATEGORIES AND FOIA RESPONSE ASSIGNMENTS
- Applications Direct record requests to: Information Management Section Applications for admission to examinations or for licensure are exempt from public disclosure (§ 54.1-108.2 of the Code of Virginia). Applications include initial, reinstatement and upgrade applications, as well as license maintenance documents that include social security numbers or other personal information.
However, applications are subject to disclosure when: a. Requested by the regulant/applicant (or any party authorized by the regulant or applicant). The regulant or their representative may obtain copies of their own applications for admission to examinations or licensure (§ 54.1-108.2 of the Code of Virginia). b. Requested by agencies in another state, district, or territory of the United States where the information is requested by the state, district, or territory in connection with an application for a service, privilege or right under their laws. Requests shall be made in a manner that substantiates the requester’s affiliation (on official letterhead or by e-mail) and states the reason for the request. c. Requested by any federal, state or local law enforcement agencies to be used in conjunction with an investigation or authentication of credentials. Requests shall be made in a manner that substantiates the requester’s affiliation (on official letterhead or by e-mail) and states the reason for the request. A letter or e-mail from the Department must accompany the information verifying that DPOR is releasing this information for investigative or authentication purposes only.
- Bonds Direct record requests to: Licensing Section Copies of and information related to performance bonds required for licensure (including the amount of the bond and the issuer) are subject to public disclosure upon request.
- Certifications of Regulant Status Direct record requests to: Licensing Section Individual licensing sections are responsible for preparing Certifications of Regulant Status in accordance with DPOR Licensing and Regulation Procedure #903, Certifications of Regulant Status.
- Complaint Files Direct information requests to: Compliance and Investigations Division The Compliance and Investigations Division is responsible for responding to general inquiries regarding the number and nature of complaints against a specific respondent. Open complaints may be publicly acknowledged when a Department investigation has determined that sufficient evidence exists to establish probable cause that there was a violation of a law or regulation; however, the case file is exempt from disclosure until case closure. Cases where probable cause has been found are disclosed on the Department’s web site. Nothing in this policy shall conflict with the release of complaint information during disciplinary investigations as provided for in the Administrative Process Act.
Direct record requests to: Information Management Section a. Closed case files are subject to public disclosure with the following exclusions: 1) Application Case Files Application file information resulting in licensure shall be transferred to the license application file and handled according to Section V.C.1 of this policy.
Policy Title: Director’s Policy #100-04 Release of Information [POL401-100_04-v16] Effective: 06/05/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-04 Release of Information (Effective 04/01/2015) Page 3 of 7 2) Criminal (Unlicensed Activity) Case Files a) Criminal incident information as defined in § 2.2-3706.A of the Code of Virginia and closed unlicensed cases may be exempt from public disclosure when the release is likely to jeopardize an ongoing investigation or the safety of an individual; cause a suspect to flee or evade detection; or result in the destruction of evidence. No exclusion applies when disclosure is not likely to cause the above-referenced damage. b) Criminal incident information as defined in § 2.2-3706.A of the Code of Virginia and closed unlicensed cases may be exempt from public disclosure when the release is likely to jeopardize an ongoing investigation or the safety of an individual; cause a suspect to flee or evade detection; or result in the destruction of evidence. No exclusion applies when disclosure is not likely to cause the above-referenced damage. c) The identity of any individual providing information about a crime or criminal activity under a promise of anonymity shall not be disclosed. 3) Alternative Dispute Resolution Files All memoranda, work products or other materials contained in the case file of a mediator are confidential and all materials in the case file of a mediation program pertaining to a specific mediation are confidential. Any communication made in or in connection with mediation, that relates to the dispute, including communications to schedule mediation, whether made to a mediator, a mediation program, a party, or any other person is confidential. Confidential materials and communications are not subject to the provisions of the Virginia Freedom of Information Act, nor discovery in any judicial or administrative proceeding unless permitted under § 2.2-4119 of the Code of Virginia. b. The Information Management Section is responsible for preparing closed disciplinary and fair housing complaint files in response to FOIA requests. Prior to releasing closed files, information exempt from public disclosure pursuant to Section V.E of this policy shall be removed or redacted. Unless specifically requested by an involved party, e-mail addresses contained in closed case files shall be disclosed. c. Open case files are exempt from public disclosure under the provisions of § 54.1-108.3 of the Code of Virginia. Nothing in this policy shall conflict with the release of complaint information during complaint investigations as provided for in the Administrative Process Act. d. Orders (final and consent) and written settlement agreements resulting from a voluntary alternative dispute resolution proceeding e.g., conciliation, mediation or facilitation are subject to public disclosure unless the involved parties agree in writing that the agreement is to remain confidential and the respective board determines that disclosure is not required to further the purposes of the law. e. Due to the public forum in which an informal fact-finding conference is held, IFF transcripts contained in case files (both open and closed) are subject to public disclosure. Open file IFF transcripts may be released by Adjudication Section staff.
- Contracts and Procurement Records Direct record requests to: Procurement Section of Administrative and Financial Services Division Procurement and contract records may be released in accordance with § 2.2-4342 of the Code of Virginia.
- Electronic Mail Direct record request to: Custodian of Record All documents sent or received on the state electronic mail system and any associated attachments are subject to public disclosure. Specific exclusions shall apply in accordance with § 54.1-108 and §§ 2.2-3705.1 through 2.2-3706 of the Code of Virginia and any applicable board or agency policies. When responding to Policy Title: Director’s Policy #100-04 Release of Information [POL401-100_04-v16] Effective: 06/05/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-04 Release of Information (Effective 04/01/2015) Page 4 of 7 requests for electronic mail, the content of the e-mail transmission shall be used to determine if the record is subject to any disclosure exemptions.
- Examination Information Direct record requests to: Education and Examinations Section or Information Management Section a. Examination questions, papers, booklets, answer sheets and scoring keys are exempt from public disclosure pursuant to § 54.1-108.1 and § 2.2-3705.1.4 of the Code of Virginia, except in situations where the Department deems that the validity or security of future examinations will not be compromised. At the discretion of the Executive Director, examination information may be released to other state agencies. b. Examination scores may be released to candidates or other jurisdictions (on Certifications of Regulant Status) if permitted by board regulation and policy.
- Financial Records Direct record requests to: Finance Section of Administrative and Financial Services Division Requests for records maintained by the Finance Section shall be submitted to the Budget and Financial Services Director.
- Governor’s Working Papers Direct record requests to: Custodian of Record Reports, projects, correspondence and other documents classified as working papers of the Office of the Governor, Lieutenant Governor, the Attorney General, the members of the General Assembly, or the Division of Legislative Services are not subject to public disclosure. 10. Legal Documents Direct record requests to: Custodian of Record a. Written advice of legal counsel to DPOR or the officers or employees of the Department, and any other related correspondence are protected by attorney-client privilege and therefore, not subject to public disclosure. b. Legal memoranda and other work products compiled specifically for use in litigation or for use in an active administrative investigation concerning a matter that is properly the subject of a closed meeting under § 2.2-3711 are exempt from public disclosure. 11. License Maintenance Records Direct record requests to: Information Management Section License maintenance records such as name and address changes, fee payment records and renewal cards are subject to public disclosure with the redaction of any information exempt from public disclosure per Section V.E of this policy. 12. License Transcripts Direct record requests to: Information Management Section a. License Transcripts summarize the activity associated with the license, certification or registration from initial date of licensure through fee/license expiration date. Usually prepared for court submission, License Transcripts are frequently used as an alternative to Department staff providing personal testimony regarding a specific license or lack thereof. They are prepared by the Information Management Section and authenticated by the appropriate licensing section. Other information prepared by Information Management for court in lieu of testimony include copies of official records (orders, regulation booklets, etc.) authenticated in accordance with § 54.1-112 of the Code of Virginia.
Policy Title: Director’s Policy #100-04 Release of Information [POL401-100_04-v16] Effective: 06/05/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-04 Release of Information (Effective 04/01/2015) Page 5 of 7 b. License Transcripts are available for a fee of $40.00 per requested individual/business entity name; however, no fee shall be charged to organizations providing legal aid to the indigent or governmental/law enforcement agencies participating in an active criminal investigation. c. Upon request (from DPOR staff or a Commonwealth Attorney), License Transcripts may be prepared and authenticated by field investigators and regional supervisors to corroborate investigator testimony. 13. Meeting Minutes and Documents Direct record requests to: Licensing Section or Information Management Section a. Draft minutes of public meetings are available on the Department website and the Commonwealth Calendar no later than ten workdays following conclusion of the meeting (§ 2.2-3707.1 of the Code of Virginia). Final meeting minutes are available within three workdays of final approval of the minutes. b. Documents recorded in or compiled exclusively for use in closed meetings lawfully held pursuant to §
- 2-3711 are not subject to public disclosure. However, no record that is otherwise open to inspection under this chapter shall be deemed exempt by virtue of the fact that it has been reviewed or discussed in a closed meeting. 14. Personnel Records Direct record requests to: Human Resources Section a. All requests for individual employee records shall be handled by the Human Resource Section according to the provisions of the Department of Human Resource Management Policy 6.05 Personnel Records Disclosure, the Virginia Freedom of Information Act and any guidance from the Office of the Attorney General. With the exception of the information listed in the next section, no employee information shall be released to a third party without the written consent of the subject employee. b. Upon disclosure of the following information to a third party, the Human Resource Section shall notify the subject employee of the release of information including the name and address of the individual requesting the information. 1) Employee’s position 2) Employee’s job classification 3) Dates of employment 4) Annual salary, official salary or rate of pay if such pay exceeds $10,000 per year 15. Property Registration Files Direct record requests to: Property Registration Office of the Common Interest Community Section Property registration files are available in electronic format for public disclosure. 16. Recovery Fund Files Direct record requests to: Custodian of Record Copies of Contractor and Real Estate Recovery Fund claim files are available upon request, regardless of case status. 17. Regulant Lists Direct record requests to: Information Management Section Statewide regulant lists for specific boards and occupations are available electronically for distribution on CD, DVD or e-mail.
Policy Title: Director’s Policy #100-04 Release of Information [POL401-100_04-v16] Effective: 06/05/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-04 Release of Information (Effective 04/01/2015) Page 6 of 7 D. OTHER DISCLOSABLE INFORMATION While the Virginia Freedom of Information Act addresses the disclosure of “records”, other “information” shall be available to the public in order to afford them with the consumer protection associated with using appropriately credentialed practitioners. The appropriate licensing section is responsible for responding to general inquiries regarding licenses and licensing requirements. The licensing, certification, and registration information listed below may be released to the public via telephone, facsimile, e-mail or any other form of communication agreed to by both the requester and the Department.
- Last 4 digits only of a licensee’s social security number or Virginia DMV Control Number
- License number
- Date of initial licensure
- Expiration date of license
- License classification
- Method of obtaining license (e.g., exam, reciprocity, comity)
- License classification
- License status
- Address of record (alternate addresses of individual regulants may be disclosed if the physical address required at the time of licensure has been replaced in order to protect regulant privacy) 10. E-mail address (if available) 11. Identity of individuals required as a condition of business licensure (e.g., qualified individuals, designated employees, brokers, compliance agents, responsible management) and the company with which they are affiliated. 12. Bond information
E. OTHER NON-DISCLOSABLE INFORMATION
- 9 character social security numbers or Virginia DMV control numbers (at the Executive Director’s discretion, social security numbers/DMV control numbers may be disclosed on Certifications of Regulant Status)
- Bank routing and account numbers
- Credit/debit card numbers
- Examination scores, pass/fail status or number of times an examination was taken by a candidate/licensee unless a board policy to the contrary exists
- State income, business and estate tax returns and personal property tax returns are exempt from public disclosure.
- Any information that may compromise the privacy or safety of an individual or business (i.e., medical/mental records, scholastic records, etc.) may be disclosed only upon approval of the Director, Deputy Directors, or Information Management Director.
F. PROCEDURE FOR CORRECTING PERSONAL INFORMATION Pursuant to § 2.2-3806.A.5 of the Code of Virginia, in the event that a regulant determines that the Department’s information on that person is inaccurate, obsolete or irrelevant, the individual may submit a written request for correction, removal or amendment to the Information Management Section. The Information Management Director shall be responsible for reviewing the request, determining if corrective action is warranted and coordinating any corrective action and written response to the requester.
Policy Title: Director’s Policy #100-04 Release of Information [POL401-100_04-v16] Effective: 06/05/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-04 Release of Information (Effective 04/01/2015) Page 7 of 7
Virginia Common Interest Community Resale CertificateDoc ID: cic
Commonwealth of Virginia Department of Professional and Occupational Regulation 9960 Mayland Drive, Suite 400 Richmond, VA 23233-1485 804-367-85 www.dpor.virginia.gov Common Interest Community Board COMMON INTEREST COMMUNITY ASSOCIATION RESALE CERTIFICATE Section 55.1-2310 of the Resale Disclosure Act in the Code of Virginia requires this standard resale certificate.
The unit being purchased is in a development subject to the Virginia Condominium Act, the Virginia Property Owners’ Association Act or the Virginia Real Estate Cooperative Act. Properties subject to these acts are considered “common interest communities” under the law and are governed by common interest community owners’ associations (“association”). Units in common interest communities are subject to the Virginia Resale Disclosure Act that requires disclosure of information about the common interest community and its association on this resale certificate.
Under the Resale Disclosure Act, the Common Interest Community Board establishes the fees that may be charged for preparation and delivery of the resale certificate. No association may collect these fees unless the association (i) is registered with the Common Interest Community Board; (ii) is current in filing the most recent annual report and fee with the Common Interest Community Board pursuant to § 55.1-1835; and (iii) provides the option to receive the resale certificate electronically.
Important Notice for Purchasers The contract to purchase a unit in a common interest community association is a legally binding document. The purchaser may have the right to cancel the contract after receiving the resale certificate.
The purchaser is responsible for examining the information contained in and provided with this resale certificate.
The purchaser may request an update of the resale certificate from the association. $ 5(6$/(Y 07/01/2023 Common Interest Community Board/RESALE CERTIFICATE Page 1 of 25 RESALE CERTIFICATE Name of Development: Location of Development (County/City): Association Name: Association Address: Lot Address, Number, or Reference: Date Prepared: The following disclosures are being made pursuant to § 55.1-2310 of the Virginia Resale Disclosure Act.
Contact information: ᄏ Contact information for the preparer of the resale certificate and any managing agent is attached. See Appendix 1.
Governing documents and any rules and regulations: ᄏ A copy of the association governing documents and rules and regulations are attached. See Appendix 2.
Restraints on alienation: There ᄏ is ᄏ is not any restraint on free alienability of any of the units. See Appendix 3.
Association assessments: ᄏ The association levies assessments payable by the owners to the association for common expenses. See Appendix 4.
Association fees: The association ᄏ does ᄏ does not charge fees to the owner of the unit. See Appendix 5.
Other entity or facility assessments, fees, or charges.
The owner ᄏ is ᄏ is not liable to any other entity or facility for assessments, fees, or other charges due to ownership of the unit. See Appendix 6.
Association approved additional or special assessments: The association ᄏ does ᄏ does not have other approved additional or special assessments due and payable to the association. See Appendix 7. $ 5(6$/(Y 07/01/2023 Common Interest Community Board/RESALE CERTIFICATE Page 2 of 25
Capital expenditures approved by the association: The association ᄏ does ᄏ does not have approved capital expenditures for the current and succeeding fiscal years. See Appendix 8.
Reserves for capital expenditures: The association ᄏ does ᄏ does not have reserves for capital expenditures. See Appendix 9.
The association ᄏ has ᄏ has not designated some portion of those reserves for a specific project(s). See Appendix 9. 10. Balance sheet and income and expense statement: The association’s most recent balance sheet ᄏ is ᄏ is not attached. See Appendix 10.
The association’s most recent income and expense statement ᄏ is ᄏ is not attached. See Appendix 10. 11. Current operating budget of the association: ᄏ The association’s current operating budget is attached. See Appendix 11. 12. Reserve study: A copy of the association’s ᄏ current reserve study or ᄏ summary of the current reserve study is attached.
See Appendix 12. 13. Unsatisfied judgements and pending actions: There ᄏ are ᄏ are not unsatisfied judgements or pending actions in which the association is a party that could have a material impact on the association, the owners, or the unit being sold. See Appendix 13. 14. Insurance coverage: The association ᄏ does ᄏ does not provide insurance coverage for the benefit of the owners, including fidelity coverage. See Appendix 14.
The association ᄏ does ᄏ does not recommend or require that owners obtain insurance coverage. See Appendix 14. 15. Written notice from the association: The association ᄏ has ᄏ has not given or received written notice(s) that any existing uses, occupancies, alterations or improvements in or to the unit being sold or to the limited elements assigned thereto violate a provision of the governing documents or rules and regulations. See Appendix 15. 16. Written notice from a governmental agency: The Board ᄏ has ᄏ has not received written notice(s) from a governmental agency of a violation of environmental, health, or building code with respect to the unit being sold, the limited elements assigned thereto, or a portion of the common interest community that has not been cured. See Appendix 16. $ 5(6$/(Y Common Interest Community Board/RESALE CERTIFICATE Page 3 of 25 17. Board meeting minutes: ᄏ A copy of any approved minutes of meetings of the Board held during the last six months is attached. See Appendix 17. ᄏ Not applicable. See Appendix 17. 18. Association meeting minutes: A copy of any approved or draft minutes of the most recent association meeting ᄏ is ᄏ is not attached.
See Appendix 18. 19. Leasehold estates: There ᄏ is ᄏ is not an existing leasehold estate affecting a common area or common element in the common interest community. See Appendix 19. 20. Occupancy limitations: The association ᄏ does ᄏ does not have any limitation(s) in the governing documents on the number or age of persons who may occupy the unit as a dwelling. See Appendix 20. 21. United States flag restrictions: The association ᄏ does ᄏ does not have any restriction(s), limitation(s), or prohibition(s) on the right of an owner to display the flag of the United States, including any reasonable restrictions as to size, time, place, and manner of placement or display of such flag. See Appendix 21. 22. Solar energy restrictions: The association ᄏ does ᄏ does not have any restriction(s), limitation(s), or prohibition(s) on the right of an owner to install or use solar energy collection devices on the owner’s unit or limited element. See Appendix 22. 23. Sign restrictions: The association ᄏ does ᄏ does not have any restriction(s), limitation(s), or prohibition(s) on the size, placement, or duration of display of political, for sale, or any other signs on the property. See Appendix 23. 24. Parking or vehicle restrictions: The association ᄏ does ᄏ does not have any parking or vehicle restriction(s), limitation(s), or prohibition(s) in the governing documents or rules and regulations. See Appendix 24. 25. Home-based business restrictions: The association ᄏ does ᄏ does not have any restriction(s), limitation(s), or prohibition(s) on the operation of a home-based business that otherwise complies with all applicable local ordinances. See Appendix 25.
Common Interest Community Board/RESALE CERTIFICATE $ 5(6$/(Y Page 4 of 25 26. Rental restrictions: The association ᄏ does ᄏ does not have any restriction(s), limitation(s), or prohibition(s) on an owner’s ability to rent the unit. See Appendix 26. 27. [Real Estate Cooperatives Only] Accountant’s statement: An accountant’s statement as to the deductibility for federal income tax purposes by the owner of real estate taxes and interest paid by the association ᄏ is ᄏ is QRW attached. See Appendix 27. 28. Pending sales or encumbrances: There ᄏ is ᄏ is not a pending sale(s) or encumbrance of common elements. See Appendix 28. 29. Secondary mortgage market agency approvals: There ᄏ is ᄏ is not any known project approval(s) currently in effect issued by secondary mortgage market agencies. See Appendix 29. 30. Certification: ᄏ The association has filed with the Common Interest Community Board the annual report required by law.
See Appendix 30. $ 5(6$/(Y Common Interest Community Board/RESALE CERTIFICATE Page 5 of 25
APPENDIX 1
The name, address, and phone numbers of the preparer of the resale certificate and any managing agent are required to be disclosed under § 55.1-2310.A.1. of the Resale Disclosure Act.
Preparer of the resale certificate:
Name:
Company
Mailing Address
Phone Number
Managing Agent:
Name:
Company
CIC Manager License No. (if applicable)
Mailing Address
Phone Number
ᄏ Not applicable. The association does not have a managing agent.
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 6 of 25 APPENDIX 2
The governing documents and any rules and regulations of the association are required to be disclosed under § 55.1-2310.A.2. of the Resale Disclosure Act.
The following are attached in this Appendix:
ᄏ Association governing documents (required)
ᄏ Rules and regulations
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 7 of 25 APPENDIX 3
A statement disclosing any restraint(s) on the alienability (e.g., transfer, sale, or lease) of the unit for which the resale certificate is being issued is required under § 55.1-2310.A.3. of the Resale Disclosure Act.
ᄏ Article/Section ________________________________________________________ creates a right(s) of first refusal or other restraint(s) on free alienability of the unit.
ᄏ Not applicable.
APPENDIX 4
A statement of the amount and payment schedules of assessments and any unpaid assessments currently due and payable to the association is required under § 55.1-2310.A.4. of the Resale Disclosure Act.
ᄏ The association levies assessments, payable according to the following schedule:
ᄏ monthly, in the amount of $ ______________ ᄏ quarterly, in the amount of $ ______________ ᄏ periodic, ____________________, in the amount of $_____________ Describe interval
Current assessment due: $ Due Date
Unpaid assessments: $
ᄏ The association levies an assessment in the amount of $_____________ upon transfer of a unit.
APPENDIX 5
A statement of any other fees due and payable by the owner of the unit is required under § 55.1-2310.A.5. of the Resale Disclosure Act.
ᄏ Other fees due: $ Description
ᄏ Unpaid fees: $ Description
ᄏ Not applicable. There are no other fees due and payable by the owner of the unit.
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 8 of 25 APPENDIX 6
A statement of any other entity or facility to which the owner of the unit being sold may be liable for assessments, fees, or other charges due to the ownership of the unit is required under § 55.1-2310.A.6. of the Resale Disclosure Act.
Entity/Facility Name Amount Due
ᄏ Not applicable.
APPENDIX 7
A statement of the amount and payment schedule of any approved additional or special assessment and any unpaid approved additional or special assessment currently due and payable is required under § 55.1-2310.A.7. of the Resale Disclosure Act.
ᄏ Additional or special assessment due: $ Due Date
ᄏ Unpaid additional or special assessment due: $
ᄏ Not applicable.
APPENDIX 8
A statement of any capital expenditures approved by the association for the current and succeeding fiscal years is required under § 55.1-2310.A.8. of the Resale Disclosure Act.
ᄏ Capital expenditures approved by the association for the current and succeeding fiscal years are:
ᄏ Not applicable
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 9 of 25 APPENDIX 9
A statement of the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects is required under § 55.1-2310.A.9. of the Resale Disclosure Act.
Total amount of association reserves $_________________________________________
Amount of total reserves designated for specific projects (attach list or complete below):
Specific Project Amount Designated
The amount of any reserves for specified projects is contained in Appendix 12.
ᄏ Not applicable.
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 10 of 25 APPENDIX 10
The most recent balance sheet and income and expense statement, if any, of the association are required to be disclosed under § 55.1-2310.A.10. of the Resale Disclosure Act.
ᄏ The most recent balance sheet and income and expense statement for the association are attached.
ᄏ The most recent balance sheet and income and expense statement for the association are not attached.
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 11 of 25 APPENDIX 11
The current operating budget of the association is required to be disclosed under § 55.1-2310.A.11. of the Resale Disclosure Act.
ᄏ The current operating budget of the association is attached.
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 12 of 25 APPENDIX 12
The current reserve study, or a summary of such study, is required to be disclosed under § 55.1-2310.A.12. of the Resale Disclosure Act.
ᄏ The current reserve study of the association is attached.
ᄏ A summary of the current reserve study of the association is attached.
ᄏ Not applicable. A reserve study is not yet required.
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 13 of 25 APPENDIX 13
A statement of any unsatisfied judgments against the association and the nature and status of any pending actions in which the association is a party and that could have a material impact on the association, the owners, or the unit being sold are required under § 55.1-2310.A.13. of the Resale Disclosure Act.
ᄏ There are unsatisfied judgements against the association or pending action(s) in which the association is a party and that could have a material impact on the association, the owners, or the unit being sold. Describe below.
ᄏ Not applicable.
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 14 of 25 APPENDIX 14
A statement describing any insurance coverage provided by the association for the benefit of the owners, including fidelity coverage, and any other insurance coverage recommended or required to be obtained by the owners is required under § 55.1-2310.A.14. of the Resale Disclosure Act.
ᄏ Insurance coverage provided by the association for the benefit of the owners, including fidelity coverage:
Description of insurance Certificate of Insurance or other documentation attached. See Article/Section ________________________ Certificate of Insurance or other documentation attached. See Article/Section ________________________ Certificate of Insurance or other documentation attached. See Article/Section ________________________
ᄏ Any other insurance coverage recommended or required to be obtained by the owners can be found in Article/Section ________________________________________________.
ᄏ Not applicable.
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 15 of 25 APPENDIX 15
A statement as to whether the board has given or received written notice that any existing uses, occupancies, alterations, or improvements in or to the unit being sold or to the limited elements assigned thereto violate any provision of the governing documents or rules and regulations together with any copies of that notice (s) is required under § 55.1-2310.A.15. of the Resale Disclosure Act.
ᄏ Written notice(s) attached.
ᄏ Not applicable
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 16 of 25 APPENDIX 16
A statement as to whether the board has received written notice from a governmental agency of any violation of environmental, health, or building codes with respect to the unit being sold, the limited elements assigned thereto, or any other portion of the common interest community that has not been cured is required under § 55.1-2310.A.16. of the Resale Disclosure Act.
ᄏ Written notice(s) attached.
ᄏ Not applicable.
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 17 of 25 APPENDIX 17
A copy of any approved minutes of meetings of the board held during the last six months is required to be disclosed under § 55.1-2310.A.17. of the Resale Disclosure Act.
ᄏ A copy of any approved minutes of meetings of the board held during the last six months are attached.
ᄏ Not applicable
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 18 of 25 APPENDIX 18
A copy of any approved or draft minutes of the most recent association meeting is required to be disclosed under § 55.1-2310.A.18. of the Resale Disclosure Act.
ᄏ A copy of any approved or draft minutes of the most recent association meeting are attached.
ᄏ Not applicable
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 19 of 25 APPENDIX 19
A statement of the remaining term of any leasehold estate affecting a common area or common element, as those terms are defined in §§ 55.1-1800, 55.1-1900, and 55.1-2100 in the common interest community and the provisions governing any extension or renewal of such leasehold are required under § 55.1-2310.A.19. of the Resale Disclosure Act.
ᄏ Not applicable
ᄏ The remaining term of the leasehold estate established in the attached document(s) is ___________.
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 20 of 25 APPENDIX 20
A statement of any limitation(s) in the governing documents on the number or age of persons who may occupy a unit as a dwelling is required under § 55.1-2310.A.20. of the Resale Disclosure Act.
ᄏ Article/Section __________ of the ____________________* describes any limitation(s) on the number or age of persons who may occupy the unit as a dwelling.
ᄏ Not applicable
- Include applicable reference, i.e., governing documents, rules, regulations, resolutions, architectural guidelines
APPENDIX 21
A statement setting forth any restriction(s), limitation(s), or prohibition(s) on the right of any owner to display the flag of the United States, including reasonable restrictions as to size, time, place, and manner of placement or display of such flag is required under § 55.1-2310.A.21. of the Resale Disclosure Act.
ᄏ Article/Section __________ of the ____________________* describes any restriction(s), limitation(s), or prohibition(s) on the right of any owner to display the flag of the United States, including reasonable restrictions as to size, time, place, and manner of placement or display of such flag.
ᄏ Not applicable * Include applicable reference, i.e., governing documents, rules, regulations, resolutions, architectural guidelines
APPENDIX 22
A statement setting forth any restriction(s), limitation(s), or prohibition(s) on the right of any owner to install or use solar energy collection devices on the owner’s unit or limited element is required under § 55.1-2310.A.22. of the Resale Disclosure Act.
ᄏ Article/Section __________ of the ____________________* describes any restriction(s), limitation(s), or prohibition(s) on the right of any owner to install or use solar energy collection devices on the owner’s unit or limited element.
ᄏ Not applicable
- Include applicable reference, i.e., governing documents, rules, regulations, resolutions, architectural guidelines
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 21 of 25 APPENDIX 23
A statement setting forth any restriction(s), limitation(s), or prohibition(s) on the size, placement, or duration of display of political, for sale, or any other signs on the property is required under § 55.1-2310.A.23. of the Resale Disclosure Act.
ᄏ Article/Section __________ of the ____________________* describes any restriction(s), limitation(s), or prohibition(s) on the size, placement, or duration of display of political, for sale, or any other signs on the property.
ᄏ Not applicable
- Include applicable reference, i.e., governing documents, rules, regulations, resolutions, architectural JXLGHOLQHV
APPENDIX 24
A statement identifying any parking or vehicle restriction(s), limitation(s), or prohibition(s) in the governing documents or rules and regulations is required under § 55.1-2310.A.24. of the Resale Disclosure Act.
ᄏ Article/Section __________ of the ____________________* describes any parking or vehicle restriction(s), limitation(s), or prohibition(s).
ᄏ Not applicable
- Include applicable reference, i.e., governing documents, rules, regulations, resolutions, architectural JXLGHOLQHV
APPENDIX 25
A statement setting forth any restriction(s), limitation(s), or prohibition(s) on the operation of a home-based business that otherwise complies with all applicable local ordinances is required under § 55.1-2310.A.25. of the Resale Disclosure Act.
ᄏ Article/Section __________ of the ____________________* describes any restriction(s), limitation(s), or prohibition(s) on the operation of a home-based business that otherwise complies with all applicable local ordinances.
ᄏ Not applicable * Include applicable reference, i.e., governing documents, rules, regulations, resolutions, architectural guidelines
APPENDIX 26
A statement setting forth any restriction(s), limitation(s), or prohibition(s) on an owner’s ability to rent the unit is required under § 55.1-2310.A.26. of the Resale Disclosure Act.
ᄏ Article/Section __________ of the ____________________* describes any restriction(s), limitation(s), or prohibition(s) on the owner’s ability to rent the unit.
ᄏ Not applicable
- Include applicable reference, i.e., governing documents, rules, regulations, resolutions, architectural guidelines
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 22 of 25 APPENDIX 27
REAL ESTATE COOPERATIVES ONLY
In a real estate cooperative, an accountant’s statement, if any was prepared, as to the deductibility for federal income tax purposes by the owner of real estate taxes and interest paid by the association is required under § 55.1-2310.A.27. of the Resale Disclosure Act.
ᄏ An accountant’s statement as to the deductibility for federal income tax purposes by the owner of real estate taxes and interest paid by the association is attached.
ᄏ Not applicable
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 23 of 25 APPENDIX 28
A statement describing any pending sale or encumbrance of a common element(s) is required under § 55.1-2310.A.28. of the Resale Disclosure Act.
ᄏ Any documents pertaining to a pending sale or encumbrance of a common element(s) are attached.
ᄏ Not applicable
[ THIS SPACE INTENTIONALLY LEFT BLANK]
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 24 of
25 APPENDIX 29
A statement indicating any known project approvals currently in effect issued by secondary mortgage market agencies is required under § 55.1-2310.A.29. of the Resale Disclosure Act.
The common interest community is known to be currently approved (or mortgages secured by units in the common interest community are eligible for purchase) by the secondary mortgage market agencies checked below:
ᄏ__________________________________________
ᄏ __________________________________________
ᄏ __________________________________________
ᄏ __________________________________________
ᄏ Not applicable
APPENDIX 30
Certification that the association has filed with the Common Interest Community Board the annual report required by law, including the filing number assigned by the Board and the expiration date of such filing are required to be disclosed under § 55.1-2310.A.30. of the Resale Disclosure Act.
ᄏ Certification that the association has filed the required annual report with the Common Interest Community Board is attached. *
______________________________________________________________________________ Association Filing (Registration) number assigned by the CIC Board
Filing (Registration) Expiration date
- A copy of the registration issued by the Common Interest Community Board is sufficient for the certification.
$ 5(6$/( Y Common Interest Community Board/RESALE CERTIFICATE Page 25 of 25
Virginia Reserve Study Guidelines for Common Interest CommunitiesDoc ID: cic
PREFACE
Chapters 33 and 44 of the 2019 Virginia Acts of Assembly, which resulted from the passage of House Bill 2030 and Senate Bill 1538, direct the Common Interest Community Board (“Board”) to “…develop guidelines for the development of reserve studies for capital components, including a list of capital components that should be addressed in a reserve study.”
In accordance with the General Assembly’s directive, the Board convened a committee of industry experts including Board members to assist in developing these guidelines for the development of reserve studies for capital components, as defined in the Code of Virginia. This document reflects the significant input and contributions of those industry professionals experienced in the development of reserve studies for common interest communities, and generally reflects standard and accepted industry practice.
This document is intended to provide useful information and guidance to members of the public, including members of association governing boards and those who provide management services to associations, regarding developing reserves studies. This document is not intended to regulate the development of or define a “standard of care” for reserve studies, and does not prescribe, or proscribe, any specific method for developing such studies.
1Introduction Throughout the United States various forms of real property ownership in which multiple homeowners agree to share in the common ownership of certain real property have emerged for mutual benefit and enjoyment. Developers have employed this approach to, among other things, create neighborhoods, increase density, comply with local zoning and proffer requirements, and allow neighbors to establish shared services, facilities and expenses, take advantage of economies of scale and sustain and enhance property values.
In Virginia, developments of this type are called common interest communities (CICs), and are administered and governed by one of the following: property owners’ association, condominium unit owners’ association, or real estate cooperative association. Generally, in a CIC individuals own a lot or unit in the community and have shared ownership with other owners in the remaining real property, the common area or common elements. Real estate cooperatives are somewhat different in that the real property is owned by a corporation, and the membership of the association is made up of proprietary lessees, who are entitled to exclusive use and possession of a unit through a proprietary lease from the company.
CICs have three general characteristics:
- Property is subject to governing documents that organize the community, provide for the administration of the community and common area or common elements through an association, and establish the rights and obligations of the association, individual owners, and the association’s governing board.
- By virtue of ownership, membership in the association is mandatory and automatic.
- CIC members are required to pay assessments to fund the association and maintain the property.
In a CIC, responsibility for maintenance and upkeep of the property is established by the community’s governing documents. Generally, these responsibilities are divided between the association and the individual lot or unit owners. Items that the association is obligated to maintain, repair, and replace, regardless of whether such items are part of the common area or common elements, and for which the association governing board has determined funding is necessary, are called capital components.
The number and nature of capital components vary from community to community. For some communities there may only be a few components, such as a shared road or entrance feature, signage for the community, and landscaping. Other communities may have significantly more components, including structures such as parking garages or recreational facilities (e.g. 2 exercise rooms, pools, tennis courts). In addition, many communities have stormwater management facilities, which are often required to be installed as a measure to protect the environment. These might take the form of a pond or other waterway in the community.
Stormwater management facilities, if part of the common area or common elements, are the responsibility of the association to maintain. A list of typical common area or common elements components is located at Appendix C. This list is not exhaustive, and does not reflect every type of component that may be found in a community.
In order to ensure capital components are properly maintained, repaired, and timely replaced, associations establish a reserve fund consisting of a budgeted portion of monies collected from assessments imposed on lot or unit owners. Funds in reserve are set aside for the dedicated purpose of paying for costs to repair and replace capital components when the need arises. In this sense, a reserve fund is like a “piggy bank.” By establishing and funding a reserve, associations can lessen the potential of having to impose costly special assessments to pay for repairing or replacing capital components.
Toward this end, Virginia law requires the governing board of an association to conduct a study, called a reserve study, periodically to determine the necessity and amount of reserves required to repair, replace and restore the capital components. A reserve study is a capital budget planning tool used to determine the physical status and repair or replacement cost of a community’s capital components, and an analysis of an association’s funding capacity to maintain, repair, and replace capital components.
Sections 55-79.83:1, 55-471.1, and 55-514.1 of the Code of Virginia state, in part1: Except to the extent otherwise provided in the [governing documents], the [governing board] shall:
- Conduct at least once every five years a study to determine the necessity and amount of reserves required to repair, replace, and restore the capital components, as defined in [applicable section of the Code of Virginia];
- Review the results of that study at least annually to determine if reserves are sufficient; and
- Make any adjustments the [governing board] deems necessary to maintain reserves, as appropriate.
In addition, these provisions in the Code stipulate that: 1 Note: These provisions of the Code of Virginia will be recodified effective October 1, 2019. See Appendix A for the complete sections of the Code. 3 To the extent that the reserve study conducted in accordance with this section indicates a need to budget for reserves, the association budget shall include, without limitation:
- The current estimated replacement cost, estimated remaining life, and estimated useful life of the capital components as defined in [applicable section of the Code of Virginia];
- As of the beginning of the fiscal year for which the budget is prepared, the current amount of accumulated cash reserves set aside to repair, replace, or restore capital components and the amount of the expected contribution to the reserve fund for that year;
- A statement describing the procedures used for estimation and accumulation of cash reserves pursuant to this section; and
- A statement of the amount of reserves recommended in the study and the amount of current cash for replacement reserves.
Because an association governing board has a fiduciary duty to manage association funds and property, establishing a reserve fund and making provision in the association budget for reserves is important. The information provided by a reserve study aids association members in understanding the physical condition of the property, and the financial condition of the association, in order to allow for adequate planning. A reserve study can serve as an important tool for the association to balance and optimize long-term property values and costs for members, as reserve planning helps assure property values by protecting against decline in value due to deferred maintenance and inability to keep up with aging components.
By establishing a reserve fund and maintaining sufficient reserves, a governing board can reduce the need to impose special assessments on association members when it comes time to replace capital components, particularly if the replacement cost is high. Even if a community only has a limited number of components, such as a simple road or driveway, setting aside funds in advance will help guard against financial shock when repair or replacement is needed. In addition, it creates a more equitable balance between newer owners in a community, and older owners, as newer owners will not have to assume the burden of the cost to repair or replace older components in the community.
Moreover, a reserve study is beneficial to purchasers of property in a CIC. A reserve study can aid in the evaluation of the value of property being purchased by knowing the condition of the capital components, and show a more accurate and complete picture of the association’s financial position to handle the expense of maintaining the capital components. 4 In addition to establishing a reserve fund for capital components, associations should also consider establishing an operating reserve for budget overages. An operating reserve provides the association with funds in case of unexpected budget overages or unforeseen operating expenses. Replacement reserve funds should not be used to cover unanticipated operating expenses.
The Basics of Reserve Studies Components of a Reserve Study There are two components of a reserve study: (i) a physical analysis and (ii) a financial analysis. The physical analysis provides information about the physical status and the repair or replacement cost of components the association is obligated to maintain. The physical analysis entails conducting an inventory of components, an assessment of component condition, and life and valuation estimates. The financial analysis assesses the association’s reserve income and expenses, by examining the reserve fund status, measured in cash or percent funded, and recommending an appropriate contribution for the fund.
Types of Reserve Studies Reserve studies can be grouped into four types, each of which reflects differing levels of service. The Community Associations Institute (CAI) identifies the following four levels of service.
- Full Study: A full reserve study is the most comprehensive level of service. A full study involves performing: (i) a component inventory, (ii) a condition assessment (based upon on-site visual observations), and (iii) life and valuation estimates of components; then determining (iv) the reserve fund status, and (v) a funding plan.
- Update, With-Site-Visit/On-site Review: A reserve study update which involves performing (i) a component inventory (verification only, not quantification), (ii) condition assessment (based upon on-site visual observation), and (iii) life and valuation estimates of components; then determining (iv) the reserve fund status, and (v) a funding plan.
- Update, No-Site-Visit/Off Site Review: A reserve study update with no on-site visual observations in which involves performing (i) life and valuation estimates of components; then determining (ii) the reserve fund status, and (iii) a funding plan.
- Preliminary, Community Not Yet Constructed: A reserve study prepared before construction that is generally used for budget estimates. It is based on design documents such as the architectural and engineering plans, and involves performing (i) a component inventory, (ii) life and valuation estimates of components; then determining (iii) a funding plan. 5 Contents of a Reserve Study A reserve study should consist of the following: A summary of the community, including the number of units, physical description, and the financial condition of the reserve fund; A projection of the reserve starting balance, recommended reserve contributions, projected reserve expenses, and the projected ending reserve fund balance for typically a 30-year period; but at least a minimum of 20 years; A tabular listing of the component inventory, component quantity or identifying descriptions, useful life, remaining useful life, and current replacement cost; A description of the methods and objectives utilized in computing the fund status in the development of the funding plan; Source(s) utilized to obtain component repair or replacement cost estimates; and A description of the level of service by which the reserve study was prepared and the fiscal year for the reserve study was prepared.
Governing Board Action Steps to Providing for Adequate Reserves
In order to provide for reserves adequately, an association should employ a systematic approach involving specific action steps. First, the association’s governing board should resolve to have a reserve study by passing a resolution that a reserve study be performed and commit the association to taking action to ensure the study is conducted.
Communities that have been operating without a reserve study are not in compliance with Virginia law and must undertake to schedule and implement a reserve study. The statutes require the governing board of an association to conduct a reserve study at least once every five years, and review the results of the study annually in conjunction with budget development.
Second, the governing board should identify the reserve study products needed. A governing board may contract for the preparation of the physical analysis, financial analysis, and operating budget by professionals, or may elect to produce one or more of these items on its own. The governing board may also choose to perform part of the work, and have a professional perform the rest.
Third, the governing board should establish a work plan, specifying the nature of the tasks to be performed, before conducting the study. The work plan should establish (i) the types 6 of components to be included or excluded; (ii) the timeframe for funding common area or common elements components; and (iii) budget for conducting the study.
Identifying components to include. Components that the association is obligated to maintain, repair, or restore should not be excluded from the reserve study, even if the components are not part of the common area or common elements. Components for which individual lot or unit owners are responsible should be excluded from the study. The community’s governing documents establish those components that are the responsibility of the association to maintain, and those for which owners are individually responsible. Governing documents may contain a maintenance responsibilities chart which can be useful for this purpose. In addition, local governments may have information or documents on file (e.g. subdivision documents, easements) regarding the community which can help identify components, including components for which the local government, and not the association, are responsible. (See Appendix C for a list of components that are typically addressed in reserve studies.)
Timeframe. There is not universal agreement of the appropriate timeframe for a reserve study. A good approach is to forecast for a time period that will include the replacement year of the component with the longest estimated useful life. Professionals recommend that the study include all components that will fail before the building itself. “Life-of-the-building” components such as the building foundation and structure are generally excluded from the reserve study budget. However, if there is reason to expect an item will wear out before the building does, or the item may wear out within the time span of the reserve study, then the item should be included as an item in the study.
Careful consideration should be given to the timing of the initial reserve study. In a community governed by a property owners’ association, the initial study should take place after the first time a capital component is put into use. In a community governed by a condominium unit owners’ association, the initial study should be completed as soon as practicable prior to the transfer of declarant control, and may be in conjunction with the association’s preparation of the structural warranty statement.
Budget Available for the Study. Another consideration is funds available to conduct the study. In order to comply with reserve study requirements, associations should, on an annual basis, include in the annual budget funds adequate to enable either a study, or engagement of outside professionals to complete the study, once every five years.
Next, the governing board needs to identify the components that must be included in the reserve study. The governing board should identify documents, including the community’s 7 governing documents (i.e. declaration, bylaws), the most accurate drawings of the development, and the maintenance history of major common area and common elements components. If “as built” plans exist, these would be the best source of information about the nature of the major components. The maintenance history should include the actual dollar cost figures of that maintenance. An association should consider creating a “permanent” maintenance history file for each major component.
The governing board should also take into account that existing components may be outdated and may not meet current code requirements, and that components may need to be replaced with newer products that comply with code requirements.
Finally, once the study has been completed, the governing board needs to accept, disclose, and implement the results of the study. The governing board reviews and accepts the results of the reserve study, and incorporates this information into the association budget plan.
State law specifies that to the extent a reserve study indicates a need to budget reserves, the association budget shall include, without limitation: (i) the current estimated replacement cost, estimated remaining life, and estimated useful life of the capital components;
(ii) the current amount, as of the beginning of the fiscal year for which the budget is prepared, of accumulated cash reserves set aside to repair, replace, or restore capital components and the amount of the expected contribution to the reserve fund for that fiscal year;
(iii) a statement describing the procedures used for estimation and accumulation of cash reserves; and
(iv) a statement of the amount of reserves recommended in the study and the amount of current cash for replacement reserves.
Association governing boards are also required by state law to review the results of the reserve study at least once annually to determine if reserves are sufficient, and make any adjustments they deem necessary to maintain reserves.
Conducting a Physical Analysis
The goals of a physical analysis are to (i) estimate useful and remaining life of major components; and (ii) estimate current replacement cost of major components. The analysis lists 8 and estimates replacement costs and timing for replacement of components whose repair or replacement is funded through association reserves. The study determines when such repairs or replacements will be needed and what repair and replacement will cost. The major steps in conducting a physical analysis are:
- Identify components.
- Specify quantities.
- Inspect components; define scope and methodology for inspection.
- Determine useful life; document maintenance assumptions.
- Assess remaining life; determine replacement year.
- Determine cost of replacement.
There are a number of professional firms that perform reserve studies for CICs in Virginia. This explanation of how to perform a physical analysis will help associations to contract for this service and interpret the study results. For associations that cannot, or do not wish to, hire a professional reserve study preparer, this explanation will provide guidelines for governing board members who decide to perform their own physical analysis. As with other decisions it makes in the conduct of managing association business, governing boards must carefully consider the pros and cons of choosing to undertake their own study, and should consider seeking legal advice before proceeding.
Identify Components
For each community, the list of major components is unique. Lists from other communities or industry publications may serve as a general guide, but are rarely usable without modification and addition. An inaccurate or incomplete list of components can materially distort an association’s long-term funding plan. Professionals recommend that items be placed on the list of components for the reserve budget if these components meet all of the following criteria: The item is the responsibility of the association to maintain or replace, rather than the responsibility of individual homeowners; The item costs over a certain amount to replace (amount to be determined by the governing board)2; and The estimated remaining useful life of the item is greater than one year; and the estimated remaining useful life of the item is less than 30 years at the time of the study. 2 One possible guideline is to include items that cost 1% or more of the total association budget. Another possible guideline is to include items that cost over $500 or $1,000 to replace, including groups of related items (e.g. gates in the development) that cost over $1,000 to replace. The dollar amount or percentage to use as a guideline should be discussed and adopted by the governing board. 9 There is often no one document with a comprehensive list of components for a development. Therefore, it is not easy to identify components accurately, although it is nonetheless essential that the association develop an accurate list of all items for which repair or replacement must be budgeted.
The list of components to include depends upon the physical characteristics of the development, as well as upon the legal allocation of responsibility among owners, the association, and local government. Appendix C provides a list of items that might be listed as components for association reserves. However, this list is not exhaustive of all possible items.
A community’s governing documents can help provide a list of components. Governing documents, including the declaration for the community, typically provide a general description of the common areas or common elements of the development. In a condominium, the governing documents, called condominium instruments, describe that which is part of each unit and what is outside of the unit. Governing documents usually specify the allocation of responsibilities between the association and individual owners, and can serve as a guide to the components to be included in a reserve study.
The developer’s reserve budget should list components the builder identified while planning the project. Such items as streets, roofs, exterior paint, and recreation areas are usually included in the developer’s original reserve budget. However, governing documents and the developer’s budget may not always account for all components for which the association is responsible. A site analysis by knowledgeable individuals should produce a comprehensive list of items for which the association is, or might be responsible.
Local governments and utility companies can often help to identify capital components by stating where their responsibility for certain components ends, and that of the association begins. For instance, the governing documents or developer budget may be unclear about whether sidewalks along the edge of a development belong to or are the responsibility of the community or the locality. If the sidewalks are an association responsibility, then sidewalks are components which should be included in the reserve budget; if not, then the budget need not account for repair and replacement.
Quantifying Components Although existing maps and construction drawings of a development may serve as a guide to component quantities, a detailed site and building analysis is the best way to obtain an accurate count of these items. For some components, such streets, roofs, and fences, the square or linear footage must be measured in order to describe the quantity; while for other items, such as utility room doors, it may be sufficient to know the number required. The approved plans and 10 specifications on file with the locality, and the as-built plans, if different from those filed with the local government, can be an excellent source of information for these quantities.3 For components that are actually made up of a number of items, the nature and quantity of the constituent parts should be stated (e.g., the metal flashing for a shake roof as well as the square footage of shingles). It is common to overlook the “extra” pieces that are in fact necessary to the construction of essential items such as roofs, siding, and irrigation systems.
Once the number and constituent parts of each component are detailed, it is necessary to give some consideration to the quality and specifications of those parts. For instance, is the asphalt two inches thick, or four inches thick? Is the roof a two-ply roof? What grade of paint was used? An accurate description of the materials is essential to proper reserves. If significant in dollar amount, quantities of the same type of component existing in very different conditions should be noted separately (e.g., the square footage of siding with western or southern exposure as compared to the square footage with eastern or northern exposure).
Determining Useful Life and Remaining Life of Components Useful life (UL) is typically defined as the number of years the component is expected to serve its intended purpose if given regular and proper maintenance. If the association fails to provide proper maintenance, then it may become difficult to anticipate the useful life of components.
One estimate of useful life is material manufacturer’s warranty. This estimate presumes, usually in writing in the fine print of the warranty, that the product was installed with the purported quality of materials and according to the manufacturer’s specifications. Sometimes components may have been installed with lesser quality materials or inferior workmanship, thereby making the effective useful life shorter. When no knowledgeable inspection is made of the materials and installation, the manufacturer’s warranty may not be an accurate description of the useful life of the component.
There are also commercially available manuals that have estimates of useful life.
Published data may not be consistent with the location, exposure, or type of a particular component. The estimated life of a street as predicted from national data may well be lower than that of a street in a comparatively mild climate, but the estimated life of exterior paint as predicted from national averages may be higher than that of paint on buildings in windy or coastal areas. In using published estimates, it is necessary to consider how the specific case in question may differ from the average case considered by the manual’s author. Useful life estimates may vary considerably from manual to manual, so consulting more than one manual 3 The drawings filed when the development was begun represent builder plans, but may not reflect the development as actually constructed. Therefore, they can be useful, but should verified by physical inspection. 11 may guard against the risk of underestimating or overestimating the life of a component. The source(s) of component useful life estimates should be identified specifically.
Remaining useful life (RUL) is generally defined as the expected number of years the component will continue to serve its intended purpose prior to repair or replacement. If the development is new and the developer-prepared estimates are correct, the remaining useful life might be estimated simply by subtracting the age of the development from the useful life of each component. The older the components, the less accurate this method will be.
Some of the factors that affect the remaining useful life of a component are (i) current age, (ii) apparent physical condition, and (iii) past maintenance record (or absence of maintenance). The current age of the component may be determined from association records.
The apparent current condition must be determined through physical inspection, preferably by someone familiar with the component. Records of past maintenance must be compared with recommended maintenance in order to determine whether the item has been properly maintained or may wear out sooner than expected due to inadequate care.
In determining the remaining useful life of a component, a certain level of continued preventative maintenance may be assumed. These maintenance assumptions should be explicitly stated so that proper maintenance can be continued through the component’s remaining life.
The remaining life of a component implicitly specifies the year in which it may be repaired or replaced. The effective age of a component is the difference between the component’s useful life (UL) and remaining useful life (RUL). A budget timeline can be used to show the replacement year for each component. This timeline can serve as a schedule for expected replacement of components and can be updated or changed when the physical analysis is updated, or as components last for shorter or longer periods than expected.
Sample Replacement Schedule
Component Age in Years as of Estimated Estimated Year to Replace 12/31/2018 Useful Life (UL) Remaining (Effective Age) Useful Life (RUL) Stormwater 3 5 2 2021 management facility Paving 4 7 3 2022 (slurry coat) Roofing 11 15 4 2023 (wood shingle)
12Determining Replacement Cost Replacement costs can be obtained from manufacturers or their representatives for some items, and from local licensed contractors on others. It is important to remember that the cost of component replacement should also include the cost of removing the existing component, along with the cost of obtaining permits and compliance with local building requirements, if applicable. It is also important to take into consideration that some existing components may be outdated and may not meet current code requirements. These components may need to be replaced with newer products that comply with code requirements, which may factor into replacement cost.
There are a number of recognized cost estimating manuals available with pricing information that can be used. Cost estimates are generally comparable among manuals for the same geographic area, so there is less need to consult multiple manuals for replacement costs than for estimates for useful life. However, there are some considerations to factor in when using these manuals to determine costs. The majority of professionals performing reserve studies for associations obtain cost estimates from a database based on the experience of these professionals. Cost estimates derived from this data may vary significantly from estimates based on manuals alone. Accordingly, associations performing their own study may want to obtain additional supporting data for their manual cost estimates from other sources, such as contractors, material suppliers, etc. This collection of data should then be considered in conjunction with the results of an inspection by a reasonably qualified person when making a final determination of replacement cost.
It is important to determine the specific geographic area for which the manual offers a cost average. If a manual has national averages, it may underestimate the cost of labor in certain areas, such urban areas. It is also important to determine the base year in which the manual’s cost estimates were made. The current replacement cost for components is not shown in the manual, and should be adjusted for inflation since the time cost data was obtained.
Documenting Maintenance Assumptions An important adjunct to determining UL and RUL of a component is to document the type and schedule of maintenance that is assumed for the component to survive that life. For example, if the 20-year life expectancy of a roof is based upon annual cleaning of the roof and gutters, the association will be able to take action to help ensure that all the roofs will indeed last.
Documentation of maintenance assumptions can lead to improved maintenance throughout the project and thereby lower replacement costs. On the other hand, ignoring maintenance assumptions, or improper maintenance, can put the replacement schedule and costs in jeopardy.
A properly prepared physical analysis will lead to a better maintenance program for the association. Clear and concise maintenance suggestions are a useful supplement to a 13 professionally prepared physical analysis. These suggestions may save more than the cost of the original study on future repairs and replacements.
Using Component Data to Develop the Funding Analysis Once charts of replacement schedule and future replacement costs are completed, the physical analysis is finished. The next step is to determine how much will be spent in each year for all components, and that step is part of the financial analysis.
Conducting a Financial Analysis The goals of a financial analysis are to (i) establish funding goals; (ii) identify annual funding requirements; and (iii) disclose limitations and assumptions. Once the estimated useful life, estimated remaining life, and estimated current replacement costs of components are identified, the association is ready to develop a plan for funding the reserve account.
In preparing the funding plan, the association will have to make decisions about the amount of current assessments and the need for special assessments, balanced against projected liability. The financial viability of the association will depend a great deal upon the ability of the association to replace components as they wear out, and not to defer major maintenance items.
A product of the financial analysis process is the development of a funding plan (cash flow forecast or projection) to estimate future reserve cash receipts and disbursements. This is most easily presented in a spread sheet format. All supporting assumptions and methodology should be carefully documented.
The major steps in conducting a financial analysis are:
- Obtain component information (from physical analysis).
- Determine funding goal.
- Calculate replacement fund liability.
- Identify reserve account asset (cash balance).
- Estimate annual association reserve fund income (from regular assessments).
- Project expenditures and reserve fund needs, including regular and special assessments.
- Prepare statement of limitations and assumptions.
- Disclose reserve study information in association budget.
As an association completes these steps, the governing board will make major policy decisions.
Professionals may be able to advise the governing board on key decisions, but it is important for the governing board to understand each of these decisions, since they independently affect the overall results of the funding plan. Because the amount of regular assessments and the need for 14 special assessments should be indicated in the plan, these decisions will affect monthly costs and property values.
Determine Funding Goal Determination of the funding strategy, including establishment of the funding goal, is one of the most important fiscal decisions to be made by the governing board. The association budget should clearly indicate estimated revenues and expenses, describe the funding goal, and indicate current status in meeting the goal.
The funding plan should show the funds required to replace each component as it comes to the end of its useful life, and indicate how the association will fund the replacements. The association should decide how much should be raised through regular assessments for the reserve account each year, and how much should be raised by special assessment, if any. In addition, the association should consider how much cash will remain in the reserve account at the end of the planning period relative to the projected balance needed at that date.
Associations will have to make difficult policy choices in determining the funding goal.
Many associations underfund reserves. This is due to lack of attention to reserve budgets in the past, and underestimation of replacement costs. An ideal goal for an association is to eliminate any deficit or shortage in reserve fund by building up the reserve fund to where the cash in the replacement reserve account is at least equal to the estimated value of accumulated wear of all major components. However, this goal may not be within reach of many associations in the short term, except through special assessments.
Funding Models There are at least four basic funding models. All of these funding models have appropriate application. Furthermore, if done correctly, all of these models adequately fund the reserves. Full Funding Model – (Also called the Component Method.) This is the most conservative funding model. It funds each component as its own line item budget.
This method is required in some states; however, Virginia does not require this method. The goal of this model is to attain and maintain the reserves at or near 100%. For example, if a community has a component with a 10-year life and a $10,000 replacement cost, it should have $3,000 set aside for its replacement after three years. In this case, $3,000 equals full funding. Note that this model may not account for inflation. Baseline Funding Model – (Also called a Minimum Funded Model.) The goal of this model is to keep the reserve cash balance above zero. This means that at any time during the funding period the reserve balance does not drop below zero dollars. 15 This is the least conservative model. An association using this model must understand that even a minor reduction in a component’s remaining useful life can result in a deficit in the reserve cash balance. Associations can implement this model more safely by conducting annual reserve updates that include field observations. Threshold Funding Model – (Also called the Cash Flow Method.) This model is based on the Baseline Funding concept. However, in this model the minimum cash reserve balance is established at some predetermined dollar amount. Associations should take into consideration that depending on the mix of common area or common elements major components this model may be more or less conservative than the fully funded model. Statutory Funding Model – This model is based on local statutes. To use it, associations set aside a specific minimum amount of reserves as required by statutes.
At this time, Virginia statutes are silent on which funding model an association may choose.
Each of the funding models depends on an analysis of cash flows into and out of the reserve fund over the next 30 years. Assessment calculations are then made sufficient to reach the governing board’s funding goals.
An association may wish to include information in a reserve study report about full funding to provide in effect a funding measuring stick for the association.
Calculate the Reserve Deficit The association should employ the accrual method to estimate fund contributions and expenses. This will ensure payments to the reserve account remain level, and that sufficient funds will be available when expenses come due. With respect to revenues, this estimate includes regular and special assessments, as well as the after-tax interest income earned on accumulated cash reserves. Expenses can be accrued by spreading the eventual replacement cost of each component over its total useful life or obtaining an estimate of annual component wear.
For instance, if a component currently valued at $10,000 has a useful life of ten years, then one can estimate the annual wear, or the annual provision for the replacement fund, at $1,000. By year five, this component would then have accrued a liability of $5,000, assuming no inflation. (If the association fully funded its reserves, then this $5,000 would already be in the reserve account by the end of the fifth year.) After estimated revenues and expenses are established, this information can be used to calculate the required estimated reserves for components, and calculate any deficit or shortage in the reserve fund. 16 Begin by determining the accrued fund balance for each component. This can be calculated according to the following formula: Replacement Cost divided by Useful Life (UL) times Effective Age. For example, consider a roofing component with a replacement cost of $30,000, a useful life of 15 years, and an effective age of 11 years:
𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡 𝑥 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐴𝑔𝑒 𝑈𝑠𝑒𝑓𝑢𝑙 𝐿𝑖𝑓𝑒 (𝑈𝐿)
$30,000 𝑥 11 = $2,000 𝑥 11 = $22,000 15
Analyze each component in this manner, and then total together the accrued fund balance for components to determine the projected reserve fund balance. Then determine the reserve deficit by calculating the difference between the projected reserve fund balance and the estimated cash balance in the reserve fund. Once the reserve deficit (if any) is established, this information can be used to determine the amount of reserve deficit per lot or unit. In addition, the reserve balance funding percentage can be determined.
Component Replacement Replacement Useful Life Effective Age Desired Fund Cost (UL) (years) Balance (years) Stormwater management facility $10,000 5 3 $6,000 Paving $14,000 7 4 $8,000 Roofing $30,000 15 11 $22,000
Total Reserve Balance (current) $36,000 Estimated Cash Reserves $22,000 (current) Reserve Deficit (current) $14,000 Reserve Deficit per unit $400 ($14,000 ÷ 35 units) Percentage of Funding 61%
Desired Fund Balance = Replacement Cost/Useful Life (UL) x Effective Age
Reserve Deficit = Total Reserve Balance – Estimated Cash Reserves
Percentage Funding = Estimated Cash Reserves / Reserve Deficit x 100
17 Although this approach is relatively simple, there are challenges posed by the fact that it does not factor the effects of interest or of inflation. Interest rates and inflation play a significant role in whether a reserve fund can meet its goals. An alternative reserve deficit model, which does take into account interest and inflation, is as follows4:
𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡 𝑅𝑒𝑝𝑙𝑎𝑐𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡 × 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐴𝑔𝑒 × 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐴𝑔𝑒 𝐶𝑜𝑠𝑡 𝑈𝑠𝑒𝑓𝑢𝑙 𝐿𝑖𝑓𝑒 (𝑈𝐿) 𝑈𝑠𝑒𝑓𝑢𝑙 𝐿𝑖𝑓𝑒 (𝑈𝐿)𝐷𝑒𝑠𝑖𝑟𝑒𝑑 𝐵𝑎𝑙𝑎𝑛𝑐𝑒= (𝑅𝑒𝑝𝑙𝑎𝑐𝑚𝑒𝑛𝑡 × 𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝐴𝑔𝑒) + ( (𝑅𝑈𝐿)) − ( (𝑅𝑈𝐿)) 𝑈𝑠𝑒𝑓𝑢𝑙 𝐿𝑖𝑓𝑒 (𝑈𝐿) (1 + 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑅𝑎𝑡𝑒)𝑅𝑒𝑚𝑎𝑖𝑛𝑖𝑛𝑔 𝐿𝑖𝑓𝑒 (1 + 𝐼𝑛𝑓𝑙𝑎𝑡𝑖𝑜𝑛 𝑅𝑎𝑡𝑒)𝑅𝑒𝑚𝑎𝑖𝑛𝑖𝑛𝑔 𝐿𝑖𝑓𝑒
Assuming an inflation rate of 3% and interest rate of 5% after taxes, the following are calculated.
Component Replacement Replacement Useful Life Effective Age Desired Fund Cost (UL) (years) Balance (years) Stormwater management facility $10,000 5 3 $5,787 Paving $14,000 7 4 $7,590 Roofing $30,000 15 11 $22,553
Total Reserve Balance (current) $33,930 Estimated Cash Reserves $22,000 (current) Reserve Deficit (current) $11,930 Reserve Deficit per unit $340 ($11,930 ÷ 35 units) Percentage of Funding 65%
This approach, though more complicated, may be more reflective of the true amount of the reserve deficit (assuming the interest and inflation rates are accurate). In most cases, the difference between these approaches is not material; however, with some mixes of common area or common elements major components the difference can be quite noticeable and failure to properly take interest and inflation into account can unfairly lead to unrealistically high calculations of the reserve deficit.
Many associations take the approach of an unfunded & special assessment model. The association does not have reserve balances that will cover expected replacement costs, and the only recourse is to schedule special assessments to cover component replacement costs when they are due. Lack of information about needed special assessments can pose a problem for owners. One-time costs impose an additional financial burden on owners, and can be a considerable hardship on those with limited or fixed incomes who may be unable to pay. This
4 See Appendix H for more detail on calculating using this formula. 18approach is the riskiest, and could jeopardize the financial viability of the association if assessments cannot be raised when needed.
Another approach is a mixed model in which the cash needs for replacement of components are met through a combination of regular and planned special assessments. The degree to which an association can meet its cash needs through regular as opposed to special assessments may be an indicator of the association’s financial viability.
When considering an alternative source of funding, such as a special assessment, the governing board should refer to the community’s governing documents and applicable law to ensure the association has the authority to impose assessments to cover component replacement costs that may come due.
The association’s choice of the funding goal or strategy will have a direct effect on the cash required of each individual owner. The strategy, and the degree to which the association has funded its reserves, should affect property value as well. (If an association shows a $5,000 unfunded reserve deficit per unit, this amount reasonably should be reflected in the sales price.) Estimate Association Reserve Fund Income Ideally, the replacement reserve account should be built through regular (usually monthly) assessments paid by association members. A specific dollar amount of regular association payments should be earmarked for reserves, and deposited into a reserve account as they are collected. Financing of replacement reserves from regular assessments is desirable.
First, it spreads the responsibility for replacements over time, rather than allocating costs to owners who happen to be in the association in the year a particular component comes due for repair or replacement. This funding approach provides a more equitable distribution of the costs of aging components. Second, it provides individual owners with more certainty as to the true costs of the property.
Income from regular assessments should be calculated for each year, based on the number of lots or units, and the level assessment per lot/unit. In communities with several rates for different types or sizes of units, the expected income should be calculated for each class of unit and then added. Assessment increases, if any, should be estimated by year. A method for calculating the amount to contribute to the reserve account follows. Under normal economic circumstances this approach should yield a good approximation. However, associations may wish to obtain the assistance of a professional firm to fine tune estimates to take into account inflation and interest rates. 19 Component Replacement Estimated Annual Cost Useful Life Contribution (UL) (years) Stormwater management facility $10,000 5 $2,000 Paving $14,000 7 $2,000 Roofing $30,000 15 $2,000
Total Annual Contribution $6,000 Add 10% for Contingencies $600 Total Annual Contribution $6,600 Number of Units in Community 48 Annual Contribution per Unit $138 Monthly Contribution per Unit $11.46
State law requires an association’s governing board to review reserve study results at least annually to determine if reserves are sufficient – according to the governing board, and to make adjustments necessary to maintain reserves. Changes in interest rates or inflation rates, or unusual changes in the prices of components, may make it advisable to raise or lower the monthly amount assessed to fund reserves. These periodic “course corrections” can promote the stability of the reserve account, and decrease the likelihood of financial shocks when the next reserve study is performed.
Project Expenditures and Reserve Funding Needs
The physical analysis provides the estimates for expected expenditures by year for each component. Adding these component requirements together, by year, gives the estimate of needed funds over time. Association members should be aware of the limitations of expenditure forecasting and of the reality that the overall funding plan is only as good as the initial estimates of replacement costs and the time of replacement needs.
An important policy issue for a governing board is the decision over whether to use replacement costs, or estimated future costs. Use of an inflation rate will generally result in higher estimates of future costs. If the governing board uses replacement costs, it is essential the board revise the plan annually based upon updated current replacement costs, plus currently required or anticipated expenditures. The annual cost for each component would be calculated by dividing the unfunded replacement cost by the remaining useful life. This approach is valid only if repeated each year.
20 If the board chooses to use an inflation rate, it would apply an average long-term cost inflation rate to all components from the time of the study until the year of replacement (based on recent average component cost data). To keep this plan current, it is important to annually review and update projected expenditures, inflation factors and other assumptions. As with the replacement cost approach, the inflation rate approach is valid only if repeated each year.
There are several ways to select an inflation rate for estimating component costs for future years. These include: (i) Federal Bureau of Labor Statistics; (ii) published information from construction cost estimating companies; and (iii) Marshall & Swift. The interest rate assumption is an important decision for the governing board, and should be explicitly disclosed in the financial analysis. Because of their effect on estimating future costs, replacement cost information and inflation rate assumptions should be reviewed annually, and the projections adjusted as necessary.
Following is a sample chart showing calculations for future replacement costs. In a real situation, it may be necessary to add additional years of inflation in order to account for old pricing information. The sample chart assumes the pricing information on all components is up-to-date.
Component Quantity & Unit Cost Replacement Year to Future Cost to Units Cost (2019) Replace Replace Painting, exterior stucco 15,875 sq. ft. .63 $10,000 2021 $10,941 Paving, slurry coat 35,000 sq. ft. .40 $14,000 2022 $16,022 Roofing, wood shingle 10,715 sq. ft. 2.80 $30,000 2023 $35,913
(Future replacement cost was calculated with an annual 4.6% inflation rate.)
Estimate Interest Earnings of Reserve Account Over Financial Analysis Period
Reserve funds deposited in certificates of deposit or money market accounts will generate interest income to increase the reserves. For forecasting purposes, it is necessary to choose an interest rate. For planning purposes, a lower interest rate is more conservative than a higher one.
Interest rates can be pegged to current bank rates or CD rates. Income from the reserve and operating accounts is taxable to an association, even if the association is established as a non-profit organization. A governing board should adjust the interest rate assumption to account for applicable federal and state taxes.
Though it may be difficult to accurately project future component cost increases or future interest earned on reserve cash balances, it is nonetheless important to use these factors for calculations in the financial analysis, and to update them each year. This is particularly true for associations that have chosen to rely in part on special assessments.
21As component replacement comes due in future years, it will draw against reserve funds.
The initial reserve account, augmented by regular contributions from routine homeowner assessment payments, should provide sufficient funding to pay for replacements as they are needed. In some cases, though, the reserve account will not be enough. The cash flow analysis will identify instances where expenditure projections for a given year exceed projected reserve cash balances. In these cases, additional funds from special assessments (or other sources, if any) would be needed to increase the reserve accounts to desired levels.
Some replacement expenses will be impossible to estimate. This may be due to unexpected breakage or destruction, failure in a “life-of-the-project” system, reduced useful life of a component, or other unexpected component cost. A line item in the cost estimates might be established as a contingency. This amount might be limited to 3% to 5% of the first-year budget in a new community. In a conversion, or established communities with incomplete documentation, larger contingency levels may be necessary. One useful way to establish estimates for contingency funding in established communities is to review prior year spending for contingency-type replacements or continuing repairs. For instance, if there is routine work done annually on underground utilities, then some funds for expected annual levels might be budgeted under the contingency category.
Appendix F contains a sample financial analysis which summarizes these income and cost concepts. The rows of the spreadsheet show individual component costs and association income sources. The columns show the years included in the financial analysis. The sample assumes a funding plan period of 30 years and mixed funding model which uses regular and special assessments to maintain a positive cash balance. Because the model is not fully funded, inflation factors are employed in determining component costs.
Statement of Limitations and Assumptions The funding analysis should document (i) all limitations to the estimate, (ii) assumptions made in order to conduct the estimates, (iii) the model used to make the estimates.
Disclose Reserve Study Information in the Annual Budget; Updating An association, once it has successfully completed a reserve study (both physical and financial analysis), can use the resulting information in its annual budget. Indeed, state law requires that to the extent a reserve study indicates the need for an association to budget reserves, the budget must include:
- The current estimated replacement cost, estimated remaining life, and estimated useful life of the capital components;
- The current amount of accumulated cash reserves set aside, to repair, replace, or restore the capital components and the amount of the expected contribution to the reserve fund 22 for the fiscal year (as of the beginning of the fiscal year for which the budget is prepared);
- A statement describing the procedures used for estimation and accumulation of cash reserves; and
- A statement of the amount of reserves recommended in the study and the amount of current cash for replacement reserves.
An association governing board is required to review the results of the reserve study at least annually to determine if reserves are sufficient, and make appropriate adjustments to ensure reserves are maintained. How often, though, does the reserve study need to be updated?
Annual updates of the financial analysis can be carried out at the same time as preparation of the operating budget, and can call for required adjustments within the original planning period. The assumptions in the reserve study (e.g. remaining life and cost of components) should be reviewed and updated as necessary. The frequency of updates of component data will depend on the soundness of the original data and estimates, the preparer’s recommendations, and the association’s ability to adequately maintain its components. Even though the methodology calls for a financial study covering a time frame of twenty years or more, annual planning and periodic reviews of the reserve study can rely on updated estimates.
Hiring a Professional to Perform a Reserve Study Members of an association governing board must decide whether to conduct a reserve study by themselves, or hire qualified professionals to perform the task. Some associations elect to hire outside consultants to perform certain tasks, but not others. In making this decision, a governing board should consider several factors, to include:
- The level of expertise within the board or the community for this kind of study;
- The willingness of board or community members to volunteer their time;
- The cost of hiring outside consultants to conduct the reserve study;
- Whether a previous reserve study is available for use as a guideline;
- The quality of existing documentation of components and replacement costs;
- The association’s previous history regarding special assessments;
- The current financial state of the association’s reserve account; and
- The degree to which board members can be held personally liable for a defective reserve study.
If the governing board wishes to have all or part of the study performed by professionals, it must still make several important decisions. These include interviewing and hiring the consultants, assisting them in obtaining community data, reviewing the work product delivered by the consultants, and following up on consultants’ recommendations for the reserve funding 23 account. Should a governing board elect to use consultants, the following should be established by the board: Identification of common area or common elements components, exclusive use components, quasi-structural components, and life-of-the-project components (with the assistance of association management); The interest rate for estimating income earned on reserve balances; and The funding goal of the reserve study, including the degree to which reserves are to be funded by annual assessments, and the need for special assessments.
As the governing board is accountable for quality of the study itself, it should carefully specify the work tasks and carefully review potential consultants with respect to previous experience, price, and recommendations from other communities. Following are some or all of the work tasks that may be performed by professionals.
Physical Analysis Products for Consultants Quantification of components; Documentation of maintenance assumptions and recommendations; Identification of useful life and remaining life of components, and replacement year; and Estimation of replacement cost in current and future dollars.
Financial Analysis Products for Consultants Spreadsheet modeling of reserve funding, and development of solution(s) meeting the funding goals of the association; Calculation of cash balance of reserve account by year; Estimation and explanation of reserve deficit; Recommendation of needed increases in reserve portion of assessment; Preparation of statement of limitations and assumptions of reserve analysis; and Preparation of reserve study information for association budget.
After determining the work tasks, the board must select the consultants or contractors, if any, who will perform all or part of the work. Possible outcomes of this decision-making process include: Hiring an independent engineering, appraisal, or construction cost-estimating firm to perform the physical analysis, and hiring an independent accountant experienced with community associations to produce the financial analysis and association budget; Hiring an organization with staff expertise to perform an integrated component and financial analysis; 24 The type of assistance that will be needed depends upon the nature of the product desired, the budget, and expertise available to the governing board. The governing board is ultimately responsible for the reserves study disclosures. The board should also consider its potential legal liability if the study does not meet statutory information requirements.
Recommendations from other community associations can often be helpful in determining which company or companies to hire for the reserve study. Organizations of CICs and related professionals can also be a resource to find qualified professionals. It is helpful to talk with people who have worked with any firm or consultant under consideration and to examine samples of related work.
The governing board should interview several companies and obtain samples of their work in order to get a sense of each company’s qualifications, experience, and pricing structures.
Appendix E contains partial lists of questions a governing board may use to ask a reserve study preparer as part of the interview process. The questions may be used in interviews with potential consultants, or used a written request for proposal, along with a clear specification of the work tasks to be performed. Answers to these questions, as well as price, should help in the selection of any needed professionals.
Information the Governing Board Should Provide Before it can provide a cost estimate, a consulting firm will need information from the governing board regarding the community and the scope of work. The governing board should provide potential consultants with the following: The size of the community – area and number of lots/units; Types of improvements in the common area/common elements – pools, clubhouses, etc.; Which portions of the reserve study the consulting firm is being asked to perform; A list and definition of major components; A statement of board policy about major components for which it is not requesting an estimate of replacement costs; Maintenance records, warranties, and other information regarding the condition of components; Information on planned changes or additions to major components; Copy of as-built construction drawings, if they exist; A copy of the previous reserve study, if one was conducted; Estimated replacement cash balance at beginning of next (nearest) fiscal year; A copy of the current or proposed association budget; A board estimate of long-term interest rate to be earned on reserve account cash balance; and Anticipated reserve expenses for the remaining year. 25 In some cases, a consulting firm might need further information to make its estimate. It will save time to ascertain a company’s information requirements before the actual interview takes place.
Potential Problems Many associations, especially if conducting a reserve study for the first time, may find they are lacking certain information that is necessary to complete the study. If so, they will need to retrieve and document this information either before the study is begun, or during the study itself. Here is a list of the more common problems that can be addressed during the course of doing a reserve study: The association does not have an established master list of major components; If a master list of components exists, it does not include all significant common area/common elements components listed in the governing documents or developer’s drawings; Information on remaining life and current replacement cost has not been prepared for all major components; The association does not have a documented maintenance schedule and related assumptions for each major component; “Life-of-the-project” components are not mentioned in assumptions, or included in reserve budgeting; The association budget does not contain reserve study information or assumptions; There is no policy to distinguish reserve expenditures from operating expenses; No reserve funding goal has been established; There is no separate bank account(s) for reserve funds; No previous physical analysis or financial analysis has been conducted; The reserve deficit is staying constant or increasing over time; Special assessments are required to fund major repairs; and Current income from assessments does not equal or exceed dollar value of annual component wear. 26 Resources Used in Developing the Guidelines California Department of Real Estate. (August 2010). Reserve Study Guidelines for Homeowner Association Budgets. State of California.
Community Associations Institute. (2018). Reserve Specialist (RS) Designation: National Reserve Study Standards. Community Associations Institute. https://www.caionline.org/pages/default.aspx.
Foundation for Community Association Research (FCAR). (2014). Best Practices: Reserve Studies/Management. Foundation for Community Association Research. Falls Church, Virginia.
Moss, J. R. (2018). Virginia Common Interest Communities: A Resource for Volunteer Leaders, Members, Managing Agents and Business Partners (2nd ed.). Jeremy Moss.
Nevada Department of Business and Industry. (2003). Reserve Study Guidelines. Prepared by the Lied Institute for Real Estate Studies. UNLV. State of Nevada. 27 Additional Resources Community Associations Institute. (1994). A Guide to Replacement Reserve Funds and Long-Term Reserve Funding. Community Associations Institute. Falls Church, Virginia.
Community Associations Institute. (2013). Reserve Funds: How and Why Community Associations Invest Assets. 2nd Edition. CAI Press. Falls Church, Virginia. 28
Department Public Service Hours PolicyDoc ID: cic
DIRECTOR’S POLICY #100-14
PUBLIC SERVICE HOURS
Effective Date: September 24, 2009
Jay DeBoer I am approving this document Approved By: 2009.09.24 14:56:42 -04'00'
I. PURPOSE: The purpose of this policy is to establish public service hours for the Department of Professional and Occupational Regulation.
II. POLICY STATEMENT: The Department of Professional and Occupational Regulation public service hours are 8:15 a.m. to 5:00 p.m. Monday through Friday with the exception of those days when state offices are closed due to holidays, inclement weather, emergencies, or as otherwise lawfully directed.
III. DEFINITIONS: N/A
IV. RELATED DOCUMENTS: N/A
V. GENERAL PROVISIONS:
A. PUBLIC SERVICE HOURS ESTABLISHED BY THE DIRECTOR
The Director of the Department of Professional and Occupational Regulation shall establish the Department’s public service hours in accordance with operational and customer service guidelines set for state agencies.
Policy Title: Director’s Policy #100-14 Public Service Hours Effective: 09/24/2009 Submitted By: Dawn Waters, Policy, Planning & Public Records Director Guidance Document: Yes Supersedes: Director’s Policy #100-14 Public Service Hours (Effective 05/21/2003) Page 1 of 1
Department of Professional Regulation Public Display PolicyDoc ID: cic
DIRECTOR’S POLICY #100-17 POSTING INFORMATION IN PUBLIC ACCESS AREAS Effective Date: June 8, 2017
Digitally signed by Jay W. DeBoer Approved By: Reason:documentI am approving this Date: 2017.06.08 13:55:45 -04'00' I. PURPOSE: The purpose of this policy is to identify the types of information and promotional materials that may be displayed in the Department’s public access areas.
II. POLICY STATEMENT: Only those informational materials produced by the Department of Professional and Occupational Regulation or another state, local or federal authority associated with one of the Department’s programs may be displayed in DPOR’s public access areas. All other information and items (including but not limited to awards and certificates presented to the Department) may be displayed at the Director’s discretion. The Communications Director shall coordinate the placement of information. Nothing in this policy shall permit placement of materials in any public area DPOR shares with other building tenants.
III. DEFINITIONS: Public Access Areas For the purposes of this policy, DPOR public access areas are located on the fourth floor in the reception area and the sitting area outside of the reception area, and on the first floor in the DPOR Customer Assistance suite. DPOR public access areas do not include Perimeter Center Conference Center waiting areas, hallways or rooms.
IV. RELATED DOCUMENTS: N/A
V. GENERAL PROVISIONS:
A. EXCEPTIONS The following items are exempt from the criteria set forth in this policy.
- A photograph of the governor
- The pictorial history of the Department’s Directors
- Employee Recognition plaques and photographs B. REQUESTS Requests to display information and promotional materials shall be submitted to the Communications Director for consideration. Only those items produced by the organizations included in the Policy Statement with the intent of increasing public awareness and/or educating regulants may be displayed in the Department’s public access areas.
C. REMOVAL OF INFORMATION AND MATERIALS Information shall be displayed until the materials are no longer current or for a length of time established by the Communications Director.
Policy Title: Director’s Policy #100-17 Posting Information in Public Access Areas [POL401-100_17-v4] Effective: 06/08/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-17 Posting Information in Public Access Areas (Effective 10/31/2011) Page 1 of 1
Name and Address Change PolicyDoc ID: cic
LICENSING & REGULATION POLICY #300-11 REGULANT NAME & ADDRESS CHANGES Effective Date: June 13, 2017
Digitally signed by Jay W. DeBoer Approved By: Reason:documentI am approving this Date: 2017.06.14 15:13:48 -04'00' I. PURPOSE: The purpose of this policy is to ensure consistent processing of name and address changes received by the Department of Professional and Occupational Regulation.
II. POLICY STATEMENT: DPOR shall accurately record all requests for name and address changes in a timely manner and in accordance with established EAGLES address definitions, licensing and enforcement systems data entry standards, and United States Postal Service Address Standards.
III. DEFINITIONS: N/A
IV. RELATED DOCUMENTS: Data Entry Standards USPS Address Standards
V. GENERAL PROVISIONS:
A. WRITTEN REQUESTS REQUIRED
- Name and address change requests may be submitted by mail (including e-mail) or facsimile on a DPOR Name Change Form, DPOR Address Change Form or other written format. On-line address changes may be performed by the regulant on the Department’s website. Telephone requests for name and address changes shall not be accepted.
- Individual name change requests must be accompanied by a copy of a marriage certificate, divorce decree, court order, or other official documentation that provides legal proof of the name change.
- Business name change requests must be accompanied by all information required by the appropriate board regulations for changing a business name (based on State Corporation Commission or locality business requirements).
B. REQUESTS NOT INITIALLY RECEIVED BY THE APPROPRIATE LICENSING SECTION
- Any regulatory board receiving a request for a name and/or address change not related to the profession or occupation handled by that section shall forward the request to the appropriate licensing section for processing.
- Compliance and Investigations Division personnel who determine that a regulant’s name, main address and/or physical location is different from the name and address of record shall inform the regulant that a written request for the change with required documentation must be submitted to the appropriate licensing section at the Department of Professional and Occupational Regulation. The licensee’s record shall be changed only upon receipt of written notification.
- Name and/or address changes submitted to the Education and Examinations Section will be posted to the candidate’s record, then forwarded to the appropriate licensing section to ensure three-year retention in the section’s daily files.
Policy Title: Licensing & Regulation Policy #300-01 Regulant Name & Address Changes [POL406-300_01-v7] Effective: 06/13/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Licensing & Regulation Policy #300-01 Regulant Name & Address Changes (Effective 10/09/2009) Page 1 of 1
Expedited Licensing for Military SpousesDoc ID: cic
LICENSING & REGULATION POLICY #300-03 EXPEDITED LICENSING OF MILITARY SPOUSES Effective Date: October 7, 2016 Approved By: DigitallyReason: signedI am approvingby Jay W.thisDeBoerdocument Date: 2016.10.07 15:00:50 -04'00' I. PURPOSE: The purpose of this policy is to document the requirements that must be met for military spouses to qualify for expedited processing of license applications under the provisions of § 54.1-119 of the CodeofVirginia.
II. POLICY STATEMENT: Pursuant to § 54.1-119 of the CodeofVirginia, the Department of Professional and Occupational Regulation shall expedite the processing of applications for military spouses that meet the qualifications set forth in statute.
III. DEFINITIONS: Expedited processing Processing of applications under the provisions of § 54.1-119 of the Code of Virginiais performed as soon as practicable and not based on order of receipt.
IV. RELATED DOCUMENTS: n/a
V. GENERAL PROVISIONS:
A. APPLICABILITY This policy applies to those applicants who hold a license, certificate, registration, permit or other authorization in another jurisdiction where the Virginia Board has deemed the entry requirements to be substantially equivalent to those in Virginia.
B. REQUIREMENTS The Department shall expedite the processing of applications for individuals that meet the following criteria.
- The applicant shall submit a complete application.
- The applicant must hold the same or similar license, certificate, registration, permit, or other authorization required for the practice of any business, profession or occupation issued by another jurisdiction based on requirements in such other jurisdiction that are substantially equivalent to those required in Virginia.
- The applicant shall not have engaged in any act that would constitute grounds for disciplinary action.
- The applicant’s spouse must be the subject of a military transfer to the Commonwealth of Virginia.
- If the board is unable to complete the review of the documentation provided by the applicant or make a final determination regarding substantial equivalency within 20 days of receipt of a completed application, the board shall issue a temporary license, permit or certificate provided the applicant otherwise meets the qualifications set forth in subsection A of §54.1-119 of the CodeofVirginia. A temporary license, permit or certificate shall be valid for twelve months or until the permanent license, permit or certificate is issued, whichever occurs first. Temporary licenses, permits or certificates shall not be renewed or reinstated.
C. NON-QUALIFIED APPLICANTS Applicants applying under the provisions of §54.1-119 of the CodeofVirginiathat do not appear to meet all requirements for expedited processing shall have their application reviewed, receive notification of deficiencies and be scheduled for any administrative proceedings in an expeditious manner.
D. EXEMPTIONS The provisions of §54.1-119 of the CodeofVirginia do not apply to Branch Pilot licenses issued by other jurisdictions as they are not deemed substantially equivalent.
Policy Title: Licensing & Regulation Policy #300-03 Expedited Licensing of Military Spouses [POL406-300_03-v4] Effective: 10/07/2016 Submitted By: Mary Broz-Vaughan, Communications Director Guidance Document: Yes Supersedes: Licensing & Regulation Policy #300-03 Expedited Licensing of Military Spouses (Effective 07/01/2016) Page 1 of 1
Internet Website Content GuidelinesDoc ID: cic
DIRECTOR’S POLICY #100-11 INTERNET WEBSITE Effective Date: June 8, 2017
Digitally signed by Jay W. DeBoer Reason: I am approving this Approved By: document Date: 2017.06.08 13:43:38 -04'00' I. PURPOSE: The purpose of this policy is to provide clear and concise Internet website content guidelines to the Department of Professional and Occupational Regulation employees and contractors to ensure continuous access to accurate information through consistent management of the Department’s website, including authorized placement and removal of information.
II. POLICY STATEMENT: The Department’s Internet website shall present information about the Department’s mission, regulations and services provided to regulants and the public. To the extent possible, the Department shall provide data and on-line services to regulants and the general public. The contents of the Department’s Internet website are the property of the Department of Professional and Occupational Regulation and are subject to the Virginia Freedom of Information Act.
III. DEFINITIONS: Data services Regulant information available for public disclosure, including but not limited to license status and disciplinary actions.
Internet A global web of interconnected networks and computers.
Hyperlink/link In hypertext systems, such as the World Wide Web, a link is a reference or connection to another document or Internet site.
Online services Interactive transactions offered to regulants and the general public.
Web coordinator An individual within the Communications and Board Operations Division responsible for website updates, security and maintenance as well as ensuring website availability to the Department and the general public.
Website A site (location) on the World Wide Web. Each website contains a home or main page that typically serves as an index or table of contents to other documents stored on the site. The site may also contain additional documents, files and links to other sites. Each site is owned and managed by an individual, company or organization.
Website liaison An individual designated within each operational unit to review and prepare website information relevant to the work unit.
IV. RELATED DOCUMENTS: N/A
V. GENERAL PROVISIONS:
A. WEBSITE FORMAT The Department Communications Director shall be responsible for the layout and content of the DPOR website.
Web site page templates shall be developed or provided by the Communications Director in consultation with the site vendor.
B. GENERAL
- The Communications Director shall oversee the Department’s website to ensure that the information on the site is professional, clear, accurate, current and concise.
- Each operational unit shall designate a website liaison responsible for the accuracy of the unit’s website
Policy Title: Director’s Policy #100-11 Internet Website [POL401_100-11_v6] Effective 06/08/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-11 Internet Web Site (Effective 02/25/2010) Page 1 of 2information. The website liaison shall consult with the Communications Director prior to submitting any substantive website changes to the Web Coordinator.
- The Department’s Internet website and its document collection may include hyperlinks to sites on the World Wide Web or Internet. Links that have value as educational, reference or research tools or relate to the mission of the Department and the Commonwealth of Virginia may be included on the Department’s website.
Any proposed links shall be submitted for approval to the Communications Director.
- Data and online services shall be developed by the Information Systems Division in cooperation with the appropriate operational units and shall not be subject to the content review and approval provisions of this policy.
- Applications and other forms developed in accordance with Information Management Procedure #1002 Forms Design shall not be subject to the content review and approval provisions of this policy. Requests to post applications and forms shall be submitted to the Forms Design Analyst or Web Coordinator with a copy to the appropriate operational unit.
C. CHANGES TO THE DEPARTMENT WEBSITE
- Each operational unit shall perform periodic reviews of the information on the Department’s website.
- The unit’s website liaison shall e-mail new or revised information to the DPOR Web Coordinator. Substantive changes to website content shall be reviewed by the Communications Director prior to submittal to the Web Coordinator.
- The Web Coordinator will transfer files to the Department’s website. If necessary, links to access the information will be added or modified by the Web Coordinator. E-mail notification shall be sent to the website liaison when the new information is available to the public.
- Web content files shall be supplied in an Internet ready form as an HTML document, Adobe Acrobat .pdf format, or graphic format such as .jpd, .gif or .bmp. Forms and license applications shall be available in Adobe .pdf format only.
D. RETENTION OF INFORMATION ON THE DEPARTMENT’S WEBSITE
- Information may remain on the Department’s website for as long as it is current.
- Any unique information available only on the Department’s website (and not in any other format) shall be printed by the unit’s website liaison and forwarded to the Information Management Section for retention in a state archives file. Website information that is a duplication of a public record available in another format does not require separate record retention consideration.
Policy Title: Director’s Policy #100-11 Internet Website [POL401_100-11_v6] Effective 06/08/2017 Submitted By: Dawn Waters, Information Management Director Guidance Document: Yes Supersedes: Director’s Policy #100-11 Internet Web Site (Effective 02/25/2010) Page 2 of 2
Executive Summary
The enhanced compliance analysis of Department of Professional and Occupational Regulation guidance documents has achieved an overall reduction of 21.6% across 35 documents.