Title of Regulation: 18VAC48-60. Common Interest Community Board Management Information Fund Regulations (amending 18VAC48-60-20, 18VAC48-60-60; adding 18VAC48-60-13, 18VAC48-60-17).

Statutory Authority: §§ 54.1-201, 54.1-2349 and 55-530 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comments: Public comments may be submitted until April 29, 2009.

Effective Date: May 15, 2009.

Agency Contact: Trisha Henshaw, Executive Director, Common Interest Community Board, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone (804) 367-8510, FAX (804) 527-4298, or email cic@dpor.virginia.gov.

Basis: Section 54.1-2349 states in part that the board shall have the power and duty to promulgate regulations to carry out the requirements of Chapter 23.3 (§ 54.1-2345 et seq.) of Title 54.1 of the Code of Virginia. In addition, § 55-530 I states in part that the board may prescribe regulations to accomplish the purposes of Chapter 29 (§§ 55-528 et seq.) of Title 55 of the Code of Virginia. Section 54.1-201 E states in part that regulatory boards shall promulgate regulations in accordance with the Administrative Process Act necessary to assure continued competence, to prevent deceptive or misleading practices by practitioners, and to effectively administer the regulatory system administered by the regulatory board. The regulation is discretionary but necessary to standardize the process whereby associations file annual reports and registrations are renewed.

Purpose: The regulation will be amended to standardize the renewal date of association registrations as one year from the date of issuance or renewal. Currently the regulation states that the renewal date will be immediately after the annual meeting date. This has been problematic because annual meeting dates change often, which means that associations may have to file more than one annual report per year and pay more than one renewal fee per year. This has become especially burdensome with the increase in renewal fees and the addition of fees as a result of the implementation of Chapters 851 and 871 of the 2008 Acts of Assembly, which where the result of HB 516 and SB 301, respectively. This action, in part, established an additional assessment that must be paid by each association with its annual report filing, and established a recovery fund fee that must be paid with the first annual report filing after the implementation of the new law. By making this change to the regulation, it will establish consistency in renewal for associations because they will be required to renew at the same time every year; it will ensure that the board is notified of changes in governing boards, addresses, or other changes that are typically only reported on annual report forms, regardless of whether the changes occur in conjunction with an annual meeting; and will protect associations and members of the associations by eliminating the possibility of being required to file more than one annual report, thus paying multiple filing fees per annum.

Rationale for Using Fast-Track Process: Currently, associations may have to file more than one annual report per annum. This could occur if an association moved its annual meeting date from September to May, for example. The association would initially come up for renewal in October, which is the month following the annual meeting date and in accordance with the requirements in the regulations. The association would indicate on the annual report filing form the change in annual meeting date to May. The registration expiration date (meaning the next date that the annual report must be filed) would be changed to June in accordance with the current regulations. This means that the registration would only be active for eight months before the association’s registration expired and the association would be required to file the annual report (and pay the associated fees) again. The recommended changes would establish that all registrations are valid for one year regardless of the date of annual meeting, while still ensuring that the board is notified of important changes within an association (address, members of the governing board, contact persons, etc.). Finally, the regulations include the requirement that the annual assessment be submitted with the annual report filing in accordance with §§ 55-79.93.1 C, 55-516.1 C, and 55-504.1 C of the Code of Virginia. These sections were changed as a result of the implementation of Chapters 851 and 871 of the 2008 Acts of Assembly.

Substance: The amendments standardize the renewal date of association registrations as one year from the date of issuance or renewal and include the requirement that the annual assessment be submitted with the annual report filing in accordance with §§ 55-79.93.1 C, 55-516.1 C, and 55-504.1 C of the Code of Virginia.

Issues: The primary advantage to associations and members is that the proposed regulatory change eliminates the possibility that an association would have to file an annual report and pay the renewal fee and assessment more than once per year. This permits cost savings for the association, and ultimately the members of the association (home and property owners).

The primary advantage to the board is that the process for renewing association registrations will be much more consistent because the renewal dates will be static. In addition, the board will receive more timely notification of changes to the association because the notification will not be limited to once per year; instead the board should be notified whenever changes occur. This will hopefully reduce costs because often renewal notices are mailed to incorrect addresses as the board is not currently required to be notified of a change in address. Finally, it is anticipated that there will be a reduction in calls because associations are often confused and frustrated about the change in expiration date from one renewal to the next.

The Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Common Interest Community Board (Board) proposes to amend its Common Interest Community Management Information Fund Regulations to specify that that association registration is valid for one full year and, pursuant to legislative mandate, renewal fees must be submitted at the same time as the association’s annual report.

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

Estimated Economic Impact. Current regulations require common interest community (CIC) associations to renew their registration certificates the month following each annual meeting. The Department of Professional and Occupational Regulation (DPOR) reports that this requirement has proven to be problematic for some CIC associations that do not hold their annual meetings on approximately the same date each year. These associations might be liable for providing more than one annual report (and paying more than one annual renewal fee) within the span of a year.

To solve this problem, the Board proposes to eliminate the current requirement that associations renew their certificates after their annual meeting. Instead, association registrations will expire one year from the last day of the month that they were issued. The Board also proposes to specify that an association’s most current annual report, as well as a statutorily required annual assessment, must be submitted to the Board along with the association’s renewal fee.

No regulated entity is likely to incur costs on account of these regulatory changes. Indeed, some CIC associations, those that do not have set annual meeting dates, will be able to eliminate the costs associated with having to submit more than one annual report (and renewal fee).

Businesses and Entities Affected. These proposed regulations will affect all property owner’s associations, condominium associations and cooperative owner’s associations. DPOR reports that there are currently 4,050 such associations registered by the Board; all of these entities would likely meet the definition of small business.

Localities Particularly Affected. No locality will be particularly affected by this proposed regulatory action.

Projected Impact on Employment. This regulatory action will likely have no impact on employment in the Commonwealth.

Effects on the Use and Value of Private Property. This regulatory action will likely have no effect on the use or value of private property in the Commonwealth.

Small Businesses: Costs and Other Effects. Small businesses in the Commonwealth are unlikely to incur any costs on account of this regulatory action.

Small Businesses: Alternative Method that Minimizes Adverse Impact. Small businesses in the Commonwealth are unlikely to incur any costs on account of this regulatory action.

Real Estate Development Costs. This regulatory action will likely have no effect on real estate development costs in the Commonwealth.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 36 (06). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB’s best estimate of these economic impacts.

Agency's Response to the Department of Planning and Budget's Economic Impact Analysis: Concur with the approval.

Summary:

The amendments specify that an association's registration is valid for one year from the date of issuance or renewal and require that the annual assessment required by §§ 55-79.93.1 C, 55-516.1 C, and 55-504.1 C of the Code of Virginia be submitted at the same time as the association's annual report and annual fee.

CHAPTER 60
COMMON INTEREST COMMUNITY BOARD MANAGEMENT INFORMATION FUND REGULATIONS

18VAC48-60-13. Definitions.

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

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

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

An association registration shall expire one year from the last day of the month in which it was issued or renewed. A registration shall be renewed upon submittal to the board office of the completed annual report and applicable fees. 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.

18VAC48-60-20. Annual report by association.

"Association" shall be as defined in § 55-528 of the Code of Virginia. 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, as well as the annual assessment required pursuant to §§ 55-79.93:1 C, 55-516.1 C, and 55-504.1 C of the Code of Virginia.

18VAC48-60-60. Registration fee.

The following fee schedule is based upon the size of each residential common interest community. The application fee is different than the annual renewal fee. All fees are nonrefundable.

Number of Lots/Units	Application 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

Registration certificates are renewable the month following the association's annual meeting.

FORMS (18VAC48-60)

Community Association Registration Application, ASSOCANRPT (eff. 09/04/08).

CIC Annual Renewal Report, CICANRENRPT (eff. 09/04/08).

Declarant Annual Report for Condominium, condo annual report (eff. 09/04/08).

Governing Board Change Form, BODCHG (eff. 11/25/08).

Time-Share Annual Report, TSANRPT (eff. 09/04/08).