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2012 SESSION
12104235DBe it enacted by the General Assembly of Virginia:
1. That § 55-509.2 of the Code of Virginia is amended and reenacted and that the Code of Virginia is amended by adding a section numbered 55-509.1:1 as follows:
§ 55-509.1:1. Limitation on certain contracts and leases by declarant.
A. If entered into any time prior to the expiration of the period of declarant control contemplated by the governing documents, no contract or lease entered into with the declarant or any entity controlled by the declarant, management contract, employment contract, or lease of recreational or parking areas or facilities that is directly or indirectly made by or on behalf of the association, its board of directors, or the lot owners as a group shall be entered into for a period in excess of two years. Any such contract or agreement entered into on or after July 1, 2012, may be terminated without penalty by the association or its board of directors upon not less than 90 days' written notice to the other party given not later than 60 days after the expiration of the period of declarant control contemplated by the governing documents. Any such contract or agreement may be renewed for periods not in excess of two years; however, at the end of any two-year period the association or its board of directors may terminate any further renewals or extensions thereof.
B. If entered into at any time prior to the expiration of the period of declarant control contemplated by the governing documents, any contract, lease, or agreement, other than those subject to the provisions of subsection A, may be entered into by or on behalf of the association, its board of directors, or the lot owners as a group if such contract, lease, or agreement is bona fide and is commercially reasonable to the association at the time entered into under the circumstances.
§ 55-509.2. Documents to be provided by declarant upon transfer of control.
Unless previously provided to the board of directors of the
association, once the majority of the members of the board of directors other than the declarant are
owners of improved lots in the association and the declarant no longer holds a
majority of the votes in the association, the declarant shall provide to the
board of directors or its designated agent the following: (i) all association
books and records held by or controlled by the declarant, including without
limitation, minute books and rules and regulations and all amendments thereto
which may have been promulgated; (ii) a statement of receipts and expenditures
from the date of the recording of the association documents to the end of the
regular accounting period immediately succeeding the first election of the
board of directors by the home owners, not to exceed sixty 60
days after the date of the election, such statement being prepared in an
accurate and complete manner, utilizing the accrual method of accounting; (iii)
the number of lots subject to the
declaration, (iv) the number of lots that
may be subject to the declaration upon completion of
development, (v) a
copy of the latest available approved plans and specifications for all
improvements in the project or as-built plans if available; (iv) (vi) all
association insurance policies which are currently in force; (v) (vii) written
unexpired warranties of the contractors, subcontractors, suppliers, and
manufacturers, if any, relative to all common area improvements; (vi) (viii) any
contracts in which the association is a contracting party; and
(vii) (ix)
a list of manufacturers of paints, roofing materials and other similar
materials if specified for use on the association property; and (x)
the number of members of
the board of directors and number of such directors appointed by the declarant together with names and contact information of members of the board of
directors.
If the association is managed by a common interest community
manager in which the declarant, or its principals, have no pecuniary interest
or management role, then such common interest community manager shall have the
responsibility to provide the documents and information required by clauses
(i), (ii), (iv) (vi),
and (vi) (viii).