If your homeowners association has started levying assessments you never agreed to pay, you may have more legal recourse than you think. A recent Virginia Court of Appeals decision demonstrates that not all associations claiming HOA or POA status actually qualify as such under state law. If the association doesn’t legally qualify as an HOA or POA, its assessment powers will be limited by contract law. In Terrace View Property Owner’s Association, Inc. v. Jannah, decided February 3, 2026, the Virginia Court of Appeals sided with homeowners who challenged their association’s authority to collect fees, holding that the association did not qualify as a POA and that the vague language in its governing documents did not create an enforceable financial obligation.
The opinion lays out the following factual background. The Terrace View Subdivision in Forest, Virginia, was developed in 2000. When the subdivision was created, the developer recorded a Declaration of Protective Covenants that authorized (but did not require) the creation of a property owners association. The Declaration gave the developers the right to transfer common areas to Terrace View POA, and stated that the association “shall have the right to establish and collect assessments,” with lot owners deemed to have “agreed to pay same when and as due” by purchasing property in the subdivision.
The developer incorporated Terrace View POA in 2005, but the association remained inactive for nearly a decade. It wasn’t until 2014 that the corporation registered with Virginia’s Common Interest Community Board. Terrace View also adopted bylaws stating that its board of directors had a duty to “fix the amount of the annual
In 2022, Terrace View imposed an “Association Fee” on Shekar and Barbara Jannah, who owned multiple lots in the subdivision. The Jannahs refused to pay and filed a declaratory judgment action, arguing that Terrace View was not a valid POA under Virginia law and had no authority to levy assessments. They also sought a declaration that Terrace View could not enforce any restrictive covenants against them. This turned out to be a winning strategy.
The trial court entered summary judgment in the Jannahs’ favor, and the Court of Appeals affirmed. Here’s why:
1. Terrace View Isn’t a Valid POA
Under Virginia law, to qualify as a property owners association under the Virginia Property Owners Association Act, an entity must satisfy a two-prong test established by the Virginia Supreme Court. The association must have both (1) the power to collect assessments; and (2) a corresponding duty to maintain common areas. (See Dogwood Valley Citizens Association v. Winkleman, 267 Va. 7, 14 (2004)). Both requirements must be “expressly stated in a recorded instrument.” The court emphasized that the duty to maintain common areas must be “imposed” on the association. Voluntary assumption of maintenance responsibilities is insufficient. (See Anderson v. Lake Arrowhead Civic Association, 253 Va. 264, 272 (1997)). A duty is only truly “imposed” if it cannot be eliminated simply by amending the association’s bylaws.
Terrace View’s Declaration failed this test. While it gave the association the right to collect assessments, it did not impose any duty to maintain common areas. That duty appeared only in Terrace View’s bylaws, which could be amended at any time by its board of directors. Because the maintenance obligation could be eliminated through a simple bylaw amendment, it wasn’t truly “imposed” within the meaning of the statute.
The court rejected Terrace View’s argument that a 2024 amendment to the POAA had relaxed these requirements. Tracing the legislative history, the court found that the amendment merely clarified that valid POAs could use assessment funds to pay for legal obligations and contractual duties. It did nothing to change what makes an entity a valid POA in the first place. In other words, the amendment addressed what existing POAs can spend money on, not what an organization needs to qualify as a POA.
2. The Declaration’s Assessment Provisions Were Not Enforceable
Terrace View presented an alternative argument: even if Terrace View wasn’t a valid POA, it could still collect assessments based on contract principles. After all, the Declaration stated that lot owners “agreed to pay” assessments “when and as due.” This argument might work in appropriate circumstances, but here, the court rejected it because the assessment provision was too indefinite to constitute an enforceable contractual provision.
Under Virginia law, a contract must be “definite and certain as to its terms and requirements” and must “spell out the essential commitments and agreements.” The court looked to decisions from other jurisdictions and identified a two-part definiteness test for assessment covenants: the covenant must contain ascertainable standards for both (1) the amount of the assessment and (2) the purpose for which assessments will be used.
The Declaration here failed both prongs. It did not specify any amount that could be assessed. It simply said the association would have “the right to establish” assessments, leaving the amount entirely to the association’s discretion. The Declaration also said nothing about what assessment revenues could be used for. Its language shed no light on where or how assessment revenue would be funneled. As the court noted, “declaring that someone ‘shall have the right’ to do something does little to inform contracting parties how they will exercise that right.”
Without standards governing either the amount or purpose of assessments, a reasonable purchaser could not ascertain from the Declaration what financial obligations came with buying a lot in the subdivision. The assessment provision was therefore held void for indefiniteness.