Title of Regulation: 18VAC48-60. Common Interest Community Board Management Information Fund Regulations (amending 18VAC48-60-13, 18VAC48-60-17, 18VAC48-60-60; adding 18VAC48-60-14, 18VAC48-60-15, 18VAC48-60-25, 18VAC48-60-55; repealing 18VAC48-60-20, 18VAC48-60-30, 18VAC48-60-40, 18VAC48-60-50).

Statutory Authority: § 54.1-2349 of the Code of Virginia.

Public Hearing Information:

November 12, 2019 - 10 a.m. - Department of Professional and Occupational Regulation, Perimeter Center, 9960 Mayland Drive, Suite 200, Board Room 1, Richmond, Virginia 23233

Public Comment Deadline: December 27, 2019.

Agency Contact: Trisha Henshaw, Executive Director, Common Interest Community Board, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone (804) 367-8510, FAX (866) 490-2723, or email cic@dpor.virginia.gov.

Basis: Section 54.1-2349 of the Code of Virginia specifies the Common Interest Community Board may prescribe regulations that shall be adopted, amended, or repealed in accordance with the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia) to accomplish the purpose of Article 1 (§ 54.1-2345 et seq.) of Chapter 23.3 of Title 54.1 of the Code of Virginia.

Purpose: In 2008, the General Assembly transferred authority over the Common Interest Community Management Information Fund and corresponding regulations from the Real Estate Board to the newly created Common Interest Community (CIC) Board. The board determined a comprehensive review was necessary to ensure that the regulation complements current statutory requirements, provides minimal burdens on regulants while still protecting the public, achieves its intended objective in the most efficient, cost-effective manner, is clearly written and understandable, and reflects current Department of Professional and Occupational Regulation (DPOR) procedures and policies.

The General Assembly created the fund to be used at the discretion of the board to promote the improvement and more efficient operation of common interest communities through research and education. CIC associations are required by statute to finance the fund on an annual basis through the filing of annual reports with the board and payment of fees.

Moneys from the fund support the operations of the Office of the Common Interest Community Ombudsman. The Ombudsman's office protects the public welfare through fulfilling its statutory obligations to (i) assist association members in understanding their rights and the processes available to them according to the laws and regulations governing common interest communities; (ii) provide members and other citizens with information concerning common interest communities upon request; and (iii) receive notices of final adverse decision from association members and members of the public. The fund also supports the functions of the board, which protects the public welfare, in part, by enforcing the requirements of statute.

Unlike most DPOR regulatory programs, the board's association registration program does not grant a license or other authorization for an association to operate or exist. However, the General Assembly has imposed on associations certain obligations tied to registration with the board. The public welfare will be enhanced by (i) changing the name of the regulation to more accurately reflect its objective; (ii) providing greater specificity as to what constitutes association registration and how registration is obtained, maintained, and renewed; and (iii) providing notice as to the potential consequences for failure to comply with registration requirements.

Requirements pertaining to registration of CIC associations are spread out across multiple chapters of the Code of Virginia. Members of the public, including association governing board members, often contact the board's office as they are unsure of registration requirements, in particular, where registration requirements are established. In a given month, the board's office receives 15 to 20 inquiries pertaining to why associations must register, where to find registration requirements, and what can happen if an association does not register. An anticipated benefit of the changes proposed by this action is that statutory registration requirements for associations will be more clearly outlined and referenced in a single source. Another anticipated benefit of this action is that the process for initial registration and registration renewal will be clearer to the public. The existing regulation does little in way of outlining procedurally how to achieve initial registration and registration renewal. Consequently, the board's office receives inquiries regarding processes for registration or renewal of a registration, and there is the risk of inconsistent application of these processes without clear provisions in the regulation.

Substance: The proposed amendments will change the title of the regulation to Common Interest Community Association Registration Regulations, which more accurately reflects the purpose of the regulation. The amendments also make the following substantive changes:

Repealing 18VAC48-60-20, which permits an association to submit a State Corporation Commission annual report to satisfy the annual reporting requirement, and 18VAC48-60-30, 18VAC48-60-40, and 18VAC48-60-50, which outline timeframes for registration of condominium associations, cooperative associations, and property owner associations, and consolidating those provisions into a single new section.

Amending:

1. 18VAC48-60-13 to add several new definitions: "annual report," "board," "common interest community," "contact person," "property owners' association," "registration," and "renew."

2. 18VAC48-60-17 to more clearly outline procedures for renewal of a registration and establish a one-year renewal period.

3. 18VAC48-60-60 to clarify the difference between initial registration and renewal fees and that the fee schedule is based on number of lots or units subject to the association's declaration.

Adding:

1. 18VAC48-60-14 to outline general association registration requirements and consequences for associations that fail to register in accordance with the chapter.

2. 18VAC48-60-15 to outline the specific registration timeframes for (i) condominium unit owner associations, (ii) proprietary lessee associations (cooperatives), and (iii) property owner associations.

3. 18VAC48-60-25 to outline the requirement for associations to notify the board of changes in contact person's address, change of governing board members, and any other changes to association information reported on an annual report.

4. 18VAC48-60-55 to outline general requirements pertaining to fees paid to the board, including the nonrefundability of fees.

Issues: The primary advantages to the public are that the amendments clarify and update the regulation to better complement statutory requirements and incorporate current agency practice.

The amended regulation title more clearly communicates the purpose and function of the regulation. Associations subject to the Property Owners' Association Act, Condominium Act, or Real Estate Cooperative Act are required by law to file annual reports with the board and register. The amendments clearly establish how registration is to occur, how registration is renewed and maintained, and penalties for failing to register as required. The amendments also provide definitions for terms such as "registration," and "annual report," which are undefined in statute. The amended regulation also incorporates current agency practice, particularly regarding processes for renewal of a registration.

Associations are already required to register with the board and file annual reports. The amendments add no new requirements for registration or renewal of a registration. There are no identifiable disadvantages to the public.

DPOR and the board will primarily benefit from having a regulation that more clearly reflects statutory requirements and current agency practice. An anticipated advantage is that associations, both registered and unregistered, will have a better understanding of the requirement to register and will be more inclined to comply. There are no identifiable disadvantages to the agency or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Common Interest Community Board (Board) proposes to clarify language regarding the registration process, filing fees, renewals, and information updates.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. This regulation establishes when and how common interest community associations (property owners' associations, condominium unit owners' associations, and proprietary lessees' associations in cooperatives) are to register with the Board by filing an annual report, registration application filing fees, procedures for renewing registrations, and requirements for updating registration information.

The Board proposes to improve the clarity of the regulatory language by adding definitions, creating a new section on registration requirements, consolidating several existing sections regarding registration timeframes into a single section, removing outdated language, clarifying procedures for renewal of a registration, and addressing statutory requirements for associations to pay an annual fee to the Board based on associations' gross assessment income. According to the Board, the proposed changes reflect current practices and do not create any new requirements. Thus, no significant economic impact is expected from the proposed amendments other than improving the language of the regulation to reflect the current practices.

Businesses and Entities Affected

This regulation applies to common interest community associations. There were 6,349 associations registered with the Board in February 2019. However, this number likely understates the true number of affected entities due to nonregistration by some associations.

Localities Particularly Affected. The proposed amendments do not disproportionately affect particular localities.

Projected Impact on Employment. The proposed amendments would not affect employment.

Effects on the Use and Value of Private Property. The proposed amendments would not affect the use and value of private property.

Real Estate Development Costs. The proposed amendments would not affect real estate development costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The proposed amendments do not create costs and other effects on small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed amendments do not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendments do not adversely affect businesses.

Localities. The proposed amendments do not adversely affect localities.

Other Entities. The proposed amendments do not adversely affect other entities.

Agency's Response to Economic Impact Analysis: The Common Interest Community Board concurs with the economic impact analysis.

Summary:

The proposed amendments (i) add several definitions; (ii) add a new section that comprehensively outlines association registration requirements, including penalties for failing to comply; (iii) consolidate the provisions of several existing sections regarding registration timeframes into a single section; (iv) remove language indicating that associations may submit the State Corporation Commission annual report in lieu of an annual report form to the board; and (v) establish procedures for renewal of a registration, including a one-year timeframe.

CHAPTER 60
COMMON INTEREST COMMUNITY BOARD MANAGEMENT INFORMATION FUND ASSOCIATION REGISTRATION REGULATIONS

18VAC48-60-13. Definitions.

"Annual report" means the proper filing with the board of a completed, board-prescribed form submitted with the appropriate fee, and other required documentation for registration or renewal of an association.

"Association" shall be as have the meaning defined in § 55-528 § 54.1-2345 of the Code of Virginia.

"Board" shall have the meaning defined in § 54.1-2345 of the Code of Virginia.

"Common interest community" shall have the meaning defined in § 54.1-2345 of the Code of Virginia.

"Contact person" means the individual designated by an association to receive communications and notices from the board on behalf of the association.

"Governing board" shall be as have the meaning defined in § 54.1-2345 of the Code of Virginia.

"Property owners' association" shall have the meaning defined in § 55.1-1800 of the Code of Virginia.

"Registration" means the proper filing of an annual report with the board by an association and issuance of a certificate of filing by the board to an association in accordance with § 54.1-2349 A 8 of the Code of Virginia.

"Renew" means the process of filing an annual report with the board for continuance of a registration.

18VAC48-60-14. Association registration, generally.

A. Within the meaning and intent of § 54.1-2349 A 8 of the Code of Virginia, an association is registered upon acceptance by the board of an annual report and issuance of a certificate of filing by the board in accordance with 18VAC48-60-15 and 18VAC48-60-17.

B. In accordance with §§ 55.1-1808 and 55.1-1990 of the Code of Virginia, for any condominium unit owners' association or property owners' association that does not have a current registration with the board in accordance with §§ 55.1-1835 and 55.1-1980 of the Code of Virginia, the disclosure packet or resale certificate, as applicable, is deemed not available.

C. A property owners' association that is not (i) registered with the board, (ii) current in filing the most recent annual report with the board, and (iii) current in paying any assessment made by the board pursuant to § 54.1-2354.5 of the Code of Virginia is prohibited from collecting fees for disclosure packets authorized by §§ 55.1-1810 and 55.1-1811 of the Code of Virginia.

D. In accordance with §§ 54.1-2351 and 54.1-2352 of the Code of Virginia, the board may take action against the governing board of an association that fails to register in accordance with this chapter, which action may include issuance of a cease and desist order and an affirmative order to file an annual report or assessment of a monetary penalty of not more than $1,000.

18VAC48-60-15. Timeframe for association registration and annual report.

A. Within 30 days after the date of termination of the declarant control period, a condominium unit owners' association shall register with the board by filing the annual report required by § 55.1-1980 of the Code of Virginia and shall file an annual report every year thereafter.

B. Within 30 days after the date of termination of the declarant control period, a proprietary lessees' association shall register with the board by filing the annual report required by § 55.1-2182 of the Code of Virginia and shall file an annual report every year thereafter.

C. Within the meaning and intent of § 55.1-1835 of the Code of Virginia, a property owners' association shall register with the board by filing an annual report within 30 days of recordation of the declaration and shall file an annual report every year thereafter.

18VAC48-60-17. Association registration expiration and renewal.

A. An association registration shall expire one year from the last day of the month in which it was issued or renewed.

B. Prior to the expiration date on the registration, the board shall mail a renewal notice to the registered association's contact person named in the board's records. Failure to receive a renewal notice from the board does not relieve the association of the obligation to renew by filing the annual report with the applicable fee.

C. Each association shall renew its registration by filing an annual report with the board. A registration shall be renewed and considered current upon submittal to receipt and processing by the board office of the completed annual report and applicable fees along with the renewal fee pursuant to 18VAC48-60-60. An association shall notify the board office, in writing, within 30 days of any of the following:

1. Change of address;

2. Change of members of the governing board; and

3. Any other changes in information that was reported on the association's previous annual report filing.

D. An association that does not renew registration within 12 months after expiration of the registration may not renew and must submit a new common interest community association registration application by filing the annual report and applicable registration fee.

E. The governing board of an association that fails to comply with registration requirements in this chapter may be subject to action by the board in accordance with 18VAC48-60-14 D.

18VAC48-60-20. Annual report by association. (Repealed.)

Each association annual report shall be on the form designated by the board or shall be a copy of the annual report filed with the State Corporation Commission. Such report shall be accompanied by the fee established by this chapter.

18VAC48-60-25. Maintenance of registration.

An association shall notify the board office, in writing, within 30 days of any of the following:

1. Change of address of contact person;

2. Change of members of the governing board; and

3. Any other changes in information reported on the association's annual report.

18VAC48-60-30. Annual report by condominium association. (Repealed.)

Within 30 days after the date of termination of the declarant control period, and every year thereafter, an association shall file an annual report with the board.

18VAC48-60-40. Annual report by cooperative association. (Repealed.)

Within 30 days after the date of termination of the declarant control period, and every year thereafter, an association shall file an annual report with the board.

18VAC48-60-50. Annual report by property owners' association. (Repealed.)

Within the meaning and intent of § 55-516.1 of the Code of Virginia, within 30 days of the creation of the association, and every year thereafter, the association shall file an annual report with the board.

18VAC48-60-55. Fees, generally.

All fees are nonrefundable and shall not be prorated. The date on which the fee is received by the board or its agent will determine whether the fee is on time. Checks or money orders shall be made payable to the Treasurer of Virginia.

18VAC48-60-60. Registration fee and renewal fees.

A. The following fee schedule is based upon the size of number of lots or units subject to the declaration for each residential common interest community association. The application fee is different than the annual renewal fee. All fees are nonrefundable.

Number of Lots/Units Lots or Units	Application 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	$170

The application fee for registration B. Notwithstanding subsection A of this section, the registration and renewal fee of a residential common interest community an association received on or before June 30, 2020, shall be $10 regardless of size the number of lots or units subject to the declaration. For annual renewal of a residential common interest community registration received on or before June 30, 2020, the fee shall be $10 regardless of size.