Chapter 421 of the 2022 Virginia Acts of Assembly (Senate Bill 740) required the Department of Professional and Occupational Regulation (DPOR) to convene a Work Group to study the adequacy of current laws pertaining to standards for structural integrity and for maintaining reserves to repair, replace, or restore capital components in common interest communities. At the conclusion of the study, DPOR was required to report Work Group findings and provide recommendations, including legislative recommendations, to the Chairs of the House Committee on General Laws and the Senate Committee on General Laws and Technology no later than April 1, 2023.

SCOPE OF STUDY

Topics considered by the Work Group, as Senate Bill 740 mandated, include:

• Development of common interest communities, including initial budget reserve funding, the filing of "as built" plans and specifications with the locality and delivery of such plans to common interest community associations, along with other transition documents, and increasing requirements for the issuance of certificates of occupancy;

• Governing documents;

• Reserve study requirements, including requirements for the frequency of such studies, the qualification of persons conducting such studies, and disclosure of such studies to purchasers and existing owners;

• Budget requirements;

• Authority of association boards to budget for reserves, expend funds for reserve projects, make special or additional assessments, and borrow funds to pay for projects;

• Liability of associations and executive boards;

• Inspections, including the authority of local governments to require inspections, funding for inspections, the scope, nature, and schedule of inspections, and qualifications of building inspectors;

• Insurance coverage, including the scope of coverage, availability of products, adequacy or need for new or alternate products, feasibility of insurance inspections, and cost;

• Education of association board members and owners;

• Judicial remedies, including an option to petition a court to authorize an assessment or alternative funding; and

• Common interest community association management, including manager qualifications and self-management versus professional management.

WORK GROUP MEMBERSHIP

Senate Bill 740 specified the composition of the Work Group:

• Common Interest Community Board member(s);
• Representatives of local governments;
• Local and state building officials;
• Common interest community property owners;
• Developers and builders;
• Common interest community managers;
• Community association attorneys;
• Reserve specialists;
• Professional engineers;
• Auditors;
• Representatives of financial institutions;
• Insurance professionals;
• Attorneys with experience representing individuals with property or personal injury claims;
• Office of the Common Interest Community Ombudsman; and
• Volunteer community leaders.

DEPARTMENT OF PROFESSIONAL AND OCCUPATIONAL REGULATION

DPOR is an executive branch agency that oversees 18 regulatory boards and programs. DPOR’s policy boards—plus the Board for Professional and Occupational Regulation (BPOR)(*1)—are comprised of practitioners and citizens appointed by the governor, and are responsible for regulating certain professions and occupations, as determined by the General Assembly.

DPOR issues professional credentials—licenses, certificates, or registrations—in the least intrusive, least burdensome and most efficient way. The agency’s goal is to ensure the minimum competency necessary to practice without harming the public. Policy boards determine the minimum standards necessary to enter a profession, and qualify applicants based on a combination of education, experience, and examination. DPOR’s employees serve more than 300,000 individuals and businesses across several hundred license types, ranging from architects and contractors to cosmetologists and professional wrestlers. DPOR’s regulatory boards represent varied and diverse expertise and perspective; however, given the broad scope of this study and the responsibility typically authorized to the boards to develop policy, DPOR relied on the Work Group member experience and subject-matter knowledge coordinated and curated by the academic facilitator whose research and presentation of relevant information and data in development of the recommendations presented in this report.
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(*1) BPOR is a nine-member policy board appointed by the Governor to, among other things, advise the Governor and the DPOR Director on matters relating to the regulation of professions and occupations (see § 54.1-310 of the Code of Virginia). BPOR did not contribute to or review this report as SB 740 specifically referenced DPOR’s and the Work Group’s roles in this study and report.