CHARLESTON – Critics of a bill introduced in the House of Delegates would take away some major consumer protection rights for homeowners.
House Bill 3558 was introduced February 23. It would provide an exception to the provisions of Uniform Common Interest Ownership Act for planned communities. It passed out of the House Economic Development and Tourism Committee on February 23. It was scheduled for its first reading in the House on February 24.
In short, the bill would allow homeowners associations to opt in or out of UCIOA, which is codified as Chapter 36B in state code, with a simple vote.
Sadd
“House Bill 3558 is a horrible law for developers, purchasers and owners of homes in West Virginia,” attorney Mark Sadd told The West Virginia Record. “It removes protections for both the developer and homeowners who pay money to homeowners associations to maintain roads, amenities, swimming pools and similarly common-owned facilities.
“Whole purpose of this act is to protect buyers and homeowners from developers who want take advantage of people who are buying the most important asset in their lives.”
Sadd, an attorney for Lewis Gianola in Charleston, said his firm represents 75 homeowners’ associations across the state.
“None of my clients are asking for this bill,” he said. “It removes all of the protections and causes of action against abusive developers. Lenders would go nuts. There’s not stability. It would affect how homes are taxed, and some homeowners conceivably could be double taxed for roads.”
The president of the West Virginia Organization of Homeowners Associations agrees.
“Transparency is being thrown away at the expense of the homeowners,” Nance Briscoe told The Record. “I’m shocked. I’m livid. They’re taking advantage of homeowners who don’t know any better. The developers know better. I’m just livid.
“The most important thing in this bill, as short as it is, it removes consumer protection laws for our communities. What are these legislators thinking? It seems as if they’re only making sure the house will sell and leave the homeowners to their own devices.”
Briscoe said the UCIOA is guidebook for HOAs that is important because “West Virginia is the Wild West of HOAs.” She said the current law provides a clear, fair and efficient structure for creating, managing and operating a common interest community in West Virginia.
She said the bill would “effectively eliminate” the state’s UCIOA for planned communities “because no developer will ever opt-in to UCIOA.”
“The law (UCIOA) is there for you,” she said. “This bill they’re trying to pass removes transparency. Its intended consequence, in my opinion, is that it’s going to decrease the property value.
“If this bill is passed, when it kicks in, homeowners are going to find out there’s no requirement for an annual budget. It kicks out the protection and guidance of (the UCIOA). It takes away any guarantees of fairness from the homeowners association.”
Delegate Jordan Maynor (R-Raleigh) authored the bill, but he isn’t one of the sponsors. Delegate Gary Howell (R-Mineral) is the primary sponsor. Delegates Wayne Clark (R-Jefferson), Mike Hornby (R-Berkeley), Anita Hall (R-McDowell), Todd A. Kirby (R-Raleigh), Bob Fehrenbacher (R-Wood) and Mickey Petitto (R-Harrison) are co-sponsors.
Maynor did not return calls and messages from The Record seeking comment for the story. Clark offered to speak about the bill but wanted to do so after The Record spoke to Maynor, who is the only delegate listed above who is not a member of the Committee on Economic Development and Tourism, which is where the bill originated.
Sadd represents the Glade Springs Village Property Owners Association in a lawsuit against Justice Holdings, which is owned by Gov. Jim Justice. In 2021, Raleigh Circuit Judge Robert A. Burnside issued an order granting a $6.6 million summary judgment in favor of the property owners.
The case began in late 2019 when Justice Holdings filed a civil complaint against the association seeking amounts due under a loan agreement. Justice Holdings claimed original developer Cooper Land Development Inc. agreed to loan the association $15 million to fund the construction and installation of water, sewer and electric utilities in the development. Justice Holdings is the successor developer to Cooper Land.
In April 2020, the property owners association filed a counterclaim seeking judgment against Justice Holdings for unpaid assessments on lots the company repurchased.
“Since July 31, 2014, Justice Holdings had been ‘offsetting’ its statutory and contractual assessment obligations to GSVPOA … with regard to the Justice Lots against the claimed indebtedness under the loan agreement,” Burnside’s order states. “GSVPOA thus also seeks summary judgment against Justice Holdings for the unpaid, offset assessments, including interest at the rate of 10 percent per annum.
“In addition, GSVPOA seeks judgment against Justice Holdings for reimbursement of $545,000.00 representing payments from GSVPOA accounts tendered to Justice Holdings by the Justice-appointed board under the loan agreement.”
In October 2020, Burnside ruled the Uniform Common Interest Ownership Act applied to Glade Springs Village from its inception, and he ruled the provision that would have exempted the developer from assessment liability was invalid.
Thus, that order granted GSVPOA summary declaratory judgment and said the association was entitled to monetary judgments for unpaid assessments against Justice Holdings and that those judgments should include an amount equal to the unpaid annual assessments on the lots within Glade Springs Village.
Justice Holdings has appealed the ruling to the state Supreme Court. It has been accepted for oral arguments, but no date has been set.
Sadd declined to comment on the pending case, but he did say the bill, if applied retroactively, could render such a case as moot.
“Only foolish and dishonest developers are the ones who would have a problem with the current law,” Sadd said. “This bill would eliminate all protection of homeowners and home purchasers who buy into a homeowners’ association. The UCOIA is an important consumer protection law that has been adopted in many states in the country.
“West Virginia would be the first state to gut it, and it would remove many protections for both the developer and the homeowners against abuse by each other. The fact that it could be retroactive is shocking.”
Maynor was appointed to the House of Delegates in 2021 by Justice. Elmer Coppoolse – general manager of The Resort at Glade Springs, Chief Operating Officer of The Greenbrier Resort which also is owned by Justice and majority owner and CEO of Emco Glade Springs Hospitality – hosted a fundraiser for Maynor’s 2022 re-election campaign on March 25, 2022, at Glade Springs Resort, according to campaign finance records. Coppoolse also donated $1,000 to Maynor’s campaign at that event, according to records.
