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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, [ or ] 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
five ] 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 five
] years; however, at the end of any [ two-year five-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).