797 S.E.2d 750
Va.2017Background
- Saddle Ridge Farms is a six‑lot subdivision (≈86.7 acres) governed by a 1988 recorded Declaration that created an Architectural Control Committee (the Committee), an unincorporated association composed of the lot owners, and granted the Committee "full authority to enforce" the Declaration.
- The Declaration's Paragraph 22 required maintenance of the private road (North Saddle Ridge Court) and apportioned maintenance costs among lot owners; Paragraph 27 provided that "changes cannot be made unless passed by a vote of two‑thirds of the then record owners."
- In 2014 two amendments (the First and Second Amendments) were recorded; both were signed by five of six lot owners (the Condes did not sign). The First Amendment claimed the existence of a Saddle Ridge Farm Homeowners Association (the Association) and asserted the HOA Act governed it. The Association is an unincorporated association (not a registered corporation).
- The Condes sued, seeking declarations that (1) the Declaration required unanimous consent to amend, (2) the Association was not created by the Declaration and lacked authority, and (3) neither the Committee nor the Association qualified as a "property owners' association" under the Virginia Property Owners' Association Act (the Act).
- The trial court held the Declaration was not a "declaration" under the Act, that it did not create the Association, that neither the Committee nor the Association had authority under the Act, and that only the defendants were bound by the 2014 amendments.
- The Supreme Court of Virginia granted appeal on several assignments of error and reviewed (a) whether the Declaration and/or amendments created a "property owners' association" under Code § 55‑509 and (b) whether the amendments could bind all owners when adopted by two‑thirds.
Issues
| Issue | Plaintiff's Argument (Condes) | Defendant's Argument (Other lot owners) | Held |
|---|---|---|---|
| Whether the 1988 Declaration is a "declaration" under the Act (i.e., designates common area and either imposes maintenance duties or authorizes assessments) | Declaration does not create common area, does not impose duty to maintain or authorize assessments; thus not a "declaration" under Act | Declaration (Paragraphs 21/22) designates the road as common area and expressly requires road maintenance with pro rata payments — so it is a "declaration" | The Court held the Declaration qualifies as a "declaration" and the Committee qualifies as a "property owners' association" because the Declaration expressly imposes maintenance duties and authorizes assessments. |
| Whether the Association (as distinct from the Committee) qualifies as a "property owners' association" under the Act | Association is bound and acts as the entity under the Act (amendments claim it was created by Declaration) | Association lacks any express creation, duty, or assessment authority in the Declaration or valid amendments; powers are vested in the Committee | The Court held the Association does NOT qualify as a "property owners' association" because neither the Declaration nor the Second Amendment confers on the Association the duty to maintain or authority to assess; powers are vested in the Committee. |
| Whether the First and Second Amendments could be adopted and bind all owners if approved by two‑thirds of lot owners (not unanimous) | Paragraph 27 allows amendment by two‑thirds of lot owners; thus the five‑of‑six approvals validly bind all owners | Two‑thirds clause applies only to duration/renewal language; other substantive amendments require unanimous consent | The Court held Paragraph 27 applies to changes to the Declaration generally; the two‑thirds vote adopted each amendment and the First and Second Amendments are binding on all lot owners. |
Key Cases Cited
- Dogwood Valley Citizens' Ass'n v. Winkelman, 267 Va. 7, 590 S.E.2d 358 (2004) (definition and requirements for a declaration and property owners' association under the Act)
- Dogwood Valley Citizens' Ass'n v. Shifflett, 275 Va. 197, 654 S.E.2d 894 (2008) (clarifies when recorded instruments and association powers suffice under the Act)
- Anderson v. Lake Arrowhead Civic Ass'n, 253 Va. 264, 483 S.E.2d 209 (1997) (an association with authority to collect fees but no duty to maintain common areas is not a property owners' association under the Act)
- Barris v. Keswick Homes, LLC, 268 Va. 67, 597 S.E.2d 54 (2004) (restrictive covenants may authorize modification by a lesser number than unanimous consent if the covenant so provides)