Master Deed & By-Laws Resource Page

This page is designed to serve as a resource for all AKW co-owners and provide all the information you need about the proposed amendments to the By-Laws. Through this page you can access each of the proposed amendments, explanations of each, plus a list of frequently asked questions.

Proposed Amendments

What is this amendment about?
This Amendment does three (3) things. First, it improves on and adds to five key definitions that are used throughout the By-Laws. Secondly, it corrects the map of the storage units that are part of each apartment. And finally, it describes how the By-Laws and the rules that support them are enforced.

Why are the changes needed?

• The definitions were inaccurate or unclear.
• The storage unit map was outdated and inaccurate.
• Enforcement provisions needed to conform to current Virginia law.

Why does it matter?

• Everyone benefits from definitions that are clear, correct, and legally defensible.
• The space within the walls of the ground-floor storage space is jointly owned, but the fenced-in storage units themselves are assigned to individual units. Record-keeping about the assigned ground floor storage spaces has been haphazard. The amendment corrects and updates the assignments.
• Up to now, except for delinquent accounts, the Association has had no way of enforcing the By-Laws and the policies and rules that apply them to day-to-day life at AKW. Recent changes to the Virginia Condominium Act support new enforcement actions and tools, but these would have to be developed by the Board of Directors once this Amendment has been ratified.

What is this amendment about?
The Second Amendment includes five (5) specific changes to certain administrative and financial provisions in the current Master Deed and By-Laws.

Why is this needed?

• Conform to current Virginia law and regulatory (VA) requirements.
• Clarify the Association’s rights to abate damage to common elements
• Clarify owner maintenance and repair responsibilities
• Improve long-term funding of common element replacement and repair

Why does this matter?

• Based on more recent Virginia law, it gives the Board the right of access to individual units to abate conditions that threaten damage to common property as well as other units.
• As a safeguard, it requires contractors for major projects to be bonded.
• Based on the Master Deed, it provides a detailed table and a diagram of balconies that make clear what the Association is responsible for maintaining and repairing and what individual unit owners are responsible for.
• It seeks to ensure that the Association’s Reserve funds remain adequate to address the needs of a 50-year-old property by means of an equitable mechanism for ensuring new owners add to the Association’s Reserve fund.
• It seeks to ensure that any provision in the condominium documents which are inconsistent with U.S. Department of Veteran Affairs loan programs will not apply to any unit financed by those programs.

What is a Reserve Enhancement Contribution?
Amendment 2 to AKW’s Master Deed and By Laws propose something called a “Reserve Enhancement Contribution” (Article X, section b). It requires new owners (with some exceptions) to pay the equivalent of one month’s condo fee in addition to the current month’s fee — to be deposited to AKW’s Reserve funds.

Why is it needed?
You could say it is a matter of ownership generational equity as well as a preventative measure for our future Reserve liquidity.

The original Master Deed and By Laws required the first generation of buyers at AKW to pay the equivalent of 3 months of condo fees (in addition to the current month’s fee). The purpose of this requirement was to provide operating liquidity but also to fund the initial Reserve account.

Fast forward ten years. In 1984, the Reserve fund stood at roughly $550,000 – the equivalent of $1.4 million in today’s dollars – a large sum for a building that was then only ten years old. Fast forward again to 2023, and our Reserve fund holds $1.2 million but the building is now forty years older.

A few of those original owners still live among us – along with many others who have made this their long-term home. Year by year, generation after generation of co-owners has steadily contributed to our Reserves – hundreds of thousands of dollars.

But lifestyles and home ownership expectations change. Fewer AKW owners intend to make this their long-term home. And yet they benefit from the years of Reserve contributions from all those who have gone before. This provision is intended to make an equitable addition to the contributions of the preceding fifty years. And it will help to maintain a Reserve fund that is capable of paying for the needs of a fifty-year-old property.

Who doesn’t have to pay?
The exceptions include transfers of ownership between existing Co-Owners, Estates, Trusts, and foreclosing mortgage lenders and anyone who buys such a foreclosed property. Anyone else who acquires a unit would be required to make this additional payment.

Won’t it affect the sales or our units?
The proposed contribution is one that many other Associations in our area have adopted – especially those whose properties are older – and their units manage to sell.

By contrast, ugly and ill-kept hallways, failing heating and cooling systems, unreliable elevators, failing pipes, and an under-funded Reserve Account are all likely to have a more negative effect on sales at AKW.

AKW has always stood out for having a “gold standard” for Reserve funding – never needing to impose a special assessment or to mortgage our building to pay for major repairs and replacements. By contrast, a history of these adverse actions will make a property less desirable and will depress sales – scaring off potential buyers and lenders.

Even the modest Improvement in the flow of money to AKW’s Reserve fund is the best possible course of action to maintain and enhance the value of our homes.

What is this amendment about?
The Third Amendment includes eleven (11) proposed changes to the Master Deed and By-Laws. These focus on improving Association administration (Board membership) and financial management (contracting requirements, signature requirements, limits on additions to common elements) as well as changes to individual units.

Why is it needed?

• Conform to current Virginia law.
• Correct outdated official building plans (First Floor, Parking)
• Clarify use of parking
• Improve Board accountability for spending (limits, signatures, contracting)
• Safeguard common elements in individual unit alterations.

Why does it matter?

• It safeguards common elements by limiting changes (additions, demolitions) to the property as described in the Master Deed unless approved by 2/3 of the ownership percentages.
• As a sound business practice, it requires competitive bidding of construction and repair contracts estimated to cost more than $100,000.
• It limits the authority of the Board to undertake any addition (e.g., solar panels) to the base common elements whose cost would exceed 15% of the annual budget unless it is approved by a majority of the co-owners.
• As a sound financial control, it establishes signature requirements for checks, etc.
• It establishes a process for the removal of a member of the Board of Directors, when necessary.
• As a safeguard against damage to the common elements as well as to other individual units, it requires a process for Board review and approval of certain types of changes to units.

What is this amendment about?
The Fourth Amendment includes a single amendment that sets forth changes in the Association’s and individual owner’s insurance coverage, how insurance deductibles and proceeds are handled, and how major building losses or damages are to be addressed.

Why is it needed?

• To conform the By-Laws to current Virginia law.
• To update the By-Laws in light of current insurance industry requirements and practice.
• To improve and clarify the process for addressing insured losses.

Why does it matter?

• In keeping with current law, it establishes requirements for insurance types and coverage by the Association and for individual unit owners.
• It sets out a process for dealing with catastrophic loss to the property, including criteria for determining the extent of restoration.

What is this amendment about?
The Fifth Amendment puts all the changes in the prior four (4) amendments into one single document and adopts the Amended and Restated Master Deed and By-Laws in total.

Why is it needed?
It merely combines into a single continuous, more easily readable document all the changes in the preceding four separate Amendment documents.

FAQs

GENERAL QUESTIONS

A title document used for joint properties like condominium which creates both the owner units and the jointly owned interests that compose the property.

By-laws are the rules for governing how a condominium association administers and governs the day-to-day operations of the property. The condominium By-Laws are used to outline procedures and rules for how the Council of Co-Owners operates.

As part of its role in administering AKW, the Council of Co-Owners — you and your fellow Co-Owners — has the power to add to and change the By-Laws.

Several years ago, AKW’s Board of Directors created a Master Deed/By-Laws Committee of volunteer Co-Owners to work with our counsel to update our By-Laws to agree with the Virginia Condominium Act and make other improvements.

The current Amendments being presented to you are the result of several years of work by the current members of the Committee and approval by the Board of Directors.

You do. It will take two-thirds (2/3rds) of the ownership percentage (not units) voted by the Council of Co-Owners.

The By-Laws are being updated to conform with the Virginia Condominium Act and to make other improvements.

The laws governing condominium associations in Virginia have changed significantly since our original documents were recorded in 1974. In fact, AKW condominium documents have been changed six (6) times since they were recorded (not including the proposed 2023 amendments). Some of those changes were made to take into account new realities — for example, to allow cable installation or the use of electronic means for official communications and voting. Some of those changes were made to make our governing documents conform to the current state of Virginia law and other regulations. The proposed changes should also help the Board of Directors and AKW’s management team to better address the emerging needs of the Council of Co-Owners and our property.

VOTING PROCESS

Any unit owner – resident or non-resident – may vote as long as they are no more than 60 days delinquent on amounts owed to the Council of Co-Owners. Changes to the Master Deed and By-Laws must also be approved by the mortgage holders.

Voting is not by a count of units in AKW but by a count of ownership percentage belonging to each type of unit. So, for a change to be approved, 66 2/3 % must be recorded as voting in favor for each Amendment.

No, you must vote “Yes” or “No” on each amendment in its entirety. So you must consider whether one particular item that you might disagree with is worth sacrificing all the other changes in the amendment.

You may vote using the paper Ratification form that will be provided to you (and will also be available in the management office throughout the voting period) or by using an electronic Ratification form (with an electronic signature).

Voting will begin on May 9, 2023, after the Town Hall Meeting and will continue for 12 weeks, or longer, until the Amendments have been approved or rejected by 66 2/3 % of eligible voting percentages.