The 2024 Restrictive Covenants Referendum is intended to update and modernize our highest-level governing documents: the Restrictive Covenants, also known as the Declaration of Restrictions. 

The Board of Directors is slated to launch the Referendum on March 6. Feedback from the February 8 Town Hall has been taken into consideration. 

Town Hall PowerPoint

---

Lake Currents Articles

1. About the Referendum
2. ​Coffee & Conversations and the Town Hall
3. Frequently Asked Question About the Referendum
4. Referendum Legal Language

Members should check their emails and spam folders on March 11, emails will come from Vote-Now.com
Beginning March 11, Members may vote:​

• Online with a proxy ballot​ at Vote-Now.com​
• Vote with a proxy ballot​ via Phone​
• Vote with a paper proxy ballot​ Vote in-person at the ​June 10 Special Meeting ​of the Membership

Q1: Shall the Membership authorize a Capitalization Fee, equal to the annual assessment, to be assessed (as a “buy-in” for new residents) when a private home or lot is acquired as a residence?

Simple Explanation: The amendment creates the ability for LOWA to collect a one-time Capitalization Fee, equal to the amount of the annual assessment. New owners will “buy in” to the community by contributing toward paying for our capital expenses, which total over $2 million per year. New and existing owners will also pay the fee for lots they acquire that are subject to the LOWA Tenant Fee. LOWA will keep the funds collected by this fee in a separate restricted reserve account to ensure that they are spent on capital expenses, referred to as the Capital Contribution Fund. LOWA anticipates that this fee will generate a reliable source of funds, approximately $590,000 a year, assuming 280 lot purchases per year.

Consequences if NOT Passed: As the revenue from New Construction and Renovation (NCR) fees declines due to buildout, LOWA will not have a reliable source of funds to cover major capital expenses other than the Annual Assessment, resulting in higher annual assessment fees for members. 

---

Questions & Answers:

1. Why do we need this fee?
   1. Because the New Construction and Renovation fees, which are collected when a member builds or renovates a house, are expected to fall sharply in coming years as the number of buildable lots drops to near zero.
2. What is a capital expense?
   1. Anything related to the repair or replacement of LOWA’s existing assets including infrastructure, as well as purchase of new assets or real property.
3. Who will pay the fee?
   1. New members buying into the community. Also, any current member or entity purchasing a home or lot as an investment or subject to the LOWA Tenant Fee.
4. When will it be collected?
   1. At the closing table or otherwise upon acquisition of the lot (defined as building or land), paid for by or on behalf of the new owner.
5. How will the Capital Contribution Fund (CCF) be used?
   1. Repair or Replacement of existing assets.
      1. Costs  ≈ $2,000,000 annually
   2. Purchase of new assets.
   3. Purchase of real property.
   4. Reduce future increases to the assessment.
6. Are there any exemptions to the fee?
   1. Yes, there are three, when the lot is transferred to a trust, when the lot is acquired by inheritance, and when the lot is acquired by an existing member for their personal use as a residence not subject to the LOWA Tenant Fee.
7. Doesn’t LOWA already have a similar fee?
   1. This Capitalization Fee would help replace the New Construction and Renovation (NCR) Fee which is currently collected for development on private lots and additions to existing homes; and which has declined substantially as LOWA approaches full build-out.
       

---

Question 1: Actual Legal Language:
Declarations 12.D (d): Capitalization Fee(1)      

At the closing or otherwise upon acquisition where record title to a lot is being conveyed, a Capitalization Fee shall be paid by or on behalf of the new Owner(s) of the lot to the Association, and designated herein and referred to as the Capital Contribution Fund in an amount equal to the annual assessment levied on that lot by the Association for that fiscal year pursuant to the Declaration.
This Capital Contribution Fund will be used to supplement the Association’s capital reserve funds, including funding, in whole or in part, all capital projects, and for the costs of maintenance, repair, replacement and improvement of the Association’s property, including but not limited to Association property such the lakes, dams, stormwater and drainage systems, clubhouse, golf course, golf course food and beverage facility, playgrounds and other recreational amenities, and for funding capital component, asset, and real property expenditures.
(2)       This Capitalization Fee will not be required in the following circumstances:

• if the lot is transferred to a Trust under which the current Owner will continue as the primary occupant or resident of the lot; or
• if the lot is acquired pursuant to a bequest, inheritance, or transfer on death deed; or
• if the lot is acquired by an existing member of the Association as their residence.

Q2: Shall the Membership approve restrictions on short-term rentals, which is defined as any rental lease for fewer than 30 days? 

Simple Explanation:  The amendment prevents members from renting their property for fewer than 30 days starting September 1, 2025, which will essentially end the practice of lot owners using a property as an Airbnb or similar. The Board may adopt reasonable rules for monitoring and regulating short-term rentals, procedures for enforcement, or pertaining to short-term rentals from member to member and/or their family (for example, for special family occasions or events). If during any short-term rental an owner, member, tenant, or guest is found by the Board to be in violation of the Rules or Regulations of the Association, or otherwise creates a disturbance, nuisance or annoyance, the Board may prohibit the use of the lot for short-term rentals. 
Consequences if NOT Passed: LOWA will move further away from the single-family nature of our community it was intended to be when originally developed. We would expect to see more short-term rental properties as other nearby lake communities continue to prohibit them. 

---

Questions & Answers:

1. Why is LOWA attempting to control Short-Term Rentals (STRs)?
   1. In Virginia, STRs are considered residential use. If we believe that this use doesn’t meet the single-family nature of our community, then the membership needs to take action to prohibit it.
   2. Some STR properties are associated with nuisances such as late-night noise and unauthorized watercraft and other violations of our Restrictive Covenants and Regulations.
2. Can I let my non-resident family or friends use my home temporarily for various reasons such as vacations or holiday visits?
   1. Yes, if your home is not being used for transient or hotel like purposes.
3. What will the consequences be if a member rents their home as a Short-Term Rental?
   1. Like any lot violation, LOWA can seek an injunction against the lot owner in appropriate Orange County Court. If Referendum question #3 is passed, then the Association will be able to assess violation charges in an effort to obtain compliance without going to court. (e.g. $50 for a single offense or $10 per day for any offense of a continuing nature (up to 90 days), see Referendum Question # 3.
4. Will this result in a decrease in tenant fees?
   1.  If STRs were completely restricted the impact could be as much as $14,000 per year. Member-to-Member and other permitted STRs would reduce that impact.
5. Does Orange County currently regulate short-term rentals?
   1. Yes. They regulate short-term rentals for tax revenue purposes. Visit OrangeCountyVA.gov for more information. Other localities in Virginia, such as Fairfax County, have also adopted various restrictions on short-term rentals.
6. Does this mean that after September 2025 I won't be able to rent a home in LOW for a weekend family event or other occasion?
   1. No.  The Board will be able to create exceptions (for example, member-to-member rentals) that would permit such uses beyond 2025.  These exceptions would be created through the same LOWA rule-making process for all amendments to the Regulations - introduction, advertisement, public comment, review by Rules Committee, LOWA attorney, other committees as applicable, Board discussion and vote.
7. Does this mean that LOWA won't address problem properties until 2025?
   1. No.  If a property is a continuing problem and is cited by Security, the Code Administrator or the Sheriff's Office, and those violations are sustained by the Legal Compliance Committee (LCC) through their Hearing Process, the Board would have the authority to begin a process to revoke their permission to continue as a short-term Rental Property.
8. What protects a responsible owner of a rental property from repeated complaints to Security about any little annoyance in an effort to ban that property?
   1. The process of revocation is not triggered by complaints to Security or other enforcement official.  The process is triggered by a finding by LCC that a substantive violation occurred.  Evidence of the violation would be presented and the owner has an opportunity to speak in their defense.  Even if the owner was found to be in violation, it would not trigger a revocation process by the Board unless the Board determined that such action was necessary to remedy the problems.
       

---

Question 2- Actual Legal Language:

Declarations 8.A(u): Short-Term Leasing Restriction:

Beginning September 1, 2025, no lot or portion thereof, including any guest house, may be leased or rented for transient or hotel-like use or for any period fewer than thirty (30) days in duration without the prior written approval of the Board of Directors, in its sole discretion, which approval the Board of Directors shall not be obligated to give. Transient or hotel-like purposes or for any period fewer than thirty (30) days shall include, by way of example and not limitation, use of lots for any time-share operation or program or for any short-term lodging for which the lot owner is compensated or reimbursed in any fashion, including but not limited to uses such as “Airbnb,” home exchanges or rentals provided under such services as Airbnb, VRBO, Vacasa, Flipkey, Hometogo, Couchsurfing, Housetrip, Wimdu, HomeAway, or any other rental platform.

In the event that the Board provides prior written approval pursuant to this subsection (u), tenants or their agents are not permitted to sublet all or any portion of the lot or guest house they are leasing.

Effective immediately, notwithstanding the Board’s written approval pursuant to this subsection (u), if given, or during the period of delay prior to the effective date of the prohibition contained in this subsection (u), if an owner, member, tenant, lessee, or guest of a lot at any time during any short-term tenancy or stay as described herein is found to be in violation of any provision of this Declaration or the Rules or Regulations of the Association, or in violation of any applicable local, state, or federal law or regulation, or otherwise creates a disturbance, nuisance or annoyance to another resident in the community, the Board may, in addition to all remedies and authorities provided to it by this Declaration and the Rules and Regulations, prohibit the use of the lot for short-term rentals as described herein.

The Board may, through the Association’s established rule-making procedures, adopt reasonable rules, regulations, and policies for monitoring and regulating short term rentals and procedures for enforcement of this subsection (u). Such rules and regulations may include those pertaining to short-term rentals from member to member and/or their family (for example, for special family occasions or events).

Q3: Shall the Membership establish Board authority to assess charges for violations of the Declarations (Restrictive Covenants), and Rules and Regulations as authorized and limited in the Virginia Code?

Simple Explanation: The amendment enables LOWA to assess violation charges, also known as fines, which are currently defined and limited by the Commonwealth of Virginia as:  $50 for a single offense or $10 per day for any offense of a continuing nature (up to 90 days). LOWA expects to see lot violations resolved sooner because of this change; especially violations such as unkempt lots with trash, junk or debris, or unregistered vehicles. The violation charges will also enable us to have true consequences for violations of our rules and regulations both on private lots and in our common areas, for example, noise violations. Examples of common area violations are prohibited dumping, or unruly or disruptive behavior. LOWA used to have these charges but discontinued them because of a 2012 Virginia Supreme Court ruling requiring that such charges be expressly defined in the Restrictive Covenants (Declaration of Restrictions.) This will also allow most minor traffic violations to be handled administratively by the LCC, rather than referred to Orange County General District Court for formal prosecution. 

Consequences if NOT Passed: LOWA will need to continue to spend excessive time, money and resources on enforcement of lot violations and violations of rules and regulations. We will have to spend significant legal fees and rely on court action for resolution of such violations. Members may see their property values decline because of the number of lots in disrepair due to LOWA’s limited ability to enforce our covenants and regulations. LOWA Security will continue to send minor traffic violations to Orange County General District Court, which could result in higher fines, driver’s license points, and higher insurance rates for members and their guests. 

---

Questions & Answers:

1. Why do we need this fee?
   1. LOWA currently lacks the ability to provide true consequences for lot violations and violations of the rules and regulations on common areas such as roads, parks, beaches and the Main Gate.
   2. It has been equated to not “having any teeth” with respect to enforcement.
2. Where is the fee defined and what is the maximum amount?
   1. The fee is defined in the Virginia Property Owner’s Association Act (VPOAA), the Board cannot raise this fee above the State defined rates.
   2. It is currently defined as: $50 for a single offense or $10 per day for any offense of a continuing nature (up to 90 days).
3. What if a member is experiencing hardship and cannot correct the violations on their lot?
   1. Members will first receive a warning letter regarding the violation. Members are encouraged to contact the Covenant Inspector if there is a hardship. The Covenant Enforcement Department would work with the member to develop a schedule for resolving the violation.
4. Will the charges be assessed immediately upon violation?
   1. If it is a lot violation, then we will follow this process:
      1. First the Department makes a courtesy call or email.
      2. Then the Department issues a warning letter.
      3. Then if the violation is still not resolved the Covenant Enforcement Department will issue a summons for a hearing to go before Legal and Compliance Committee, who may issue the charge of either $50 or $10 / day (up to 90 days).
      4. If the violation(s) have not been corrected, then the member may be summoned to be heard by the LOWA Board.
      5. Continuing violations are likely to result in legal action.
   2. Violations of regulations on roadways and common areas are usually enforced by Security. If it is a moving violation or an intentional violation of our rules and regulations in common areas (such as disorderly conduct or damaging property), then the charge will be immediate.
      1. Currently LOWA sends moving violations to the Orange County General District Court, and the resulting fines and fees go to Orange County, not LOW.
5. What happens if a member does not pay the violation charges?
   1. If the LCC finds the member guilty, the charge will be added to the lot account. Unpaid fees can lead to a member becoming “not in good standing.”
6. Didn’t we use to have these fees?
   1. LOWA used to have these charges, but due to a Virginia Supreme Court ruling, a strong argument exists that, although the Commonwealth of Virginia allows associations to assess charges for violations, associations may not do so unless the associations authority to assess these charges are expressed in the recorded Declaration defined as their highest governing document. LOWA needs to add language to the Declaration of Restrictions to support its authority to assess charges for violations of the Restrictive Covenants and rules and regulations.
       

---

Question 3- Actual Legal Language:
Declarations 12.H.
In addition to all the remedies and authorities provided to it by this Declaration, the Bylaws, the Articles, the Rules and Regulations, and the laws of the Commonwealth of Virginia, the Board of Directors has the authority to adopt policies, procedures, rules and regulations permitting the Association to levy and assess any violation charges established by the Virginia Property Owners’ Association Act of the Code of Virginia, 1950, as amended (“Act”) or any other applicable statute and permitting the Association to suspend rights to use facilities for non-payment of assessments, also in accordance with the Act or any other applicable statute.