Court Rules Vague HOA Assessment Provisions Unenforceable

A Virginia court ruled that an association's right to charge assessments can fail when its declaration says nothing about how much or what the money is for. The ruling involved an association not covered by Virginia's Property Owners' Association Act, so check whether yours is.

What if your HOA couldn't legally collect assessments because the declaration was too vague about what they could charge?

On February 3, 2026, the Virginia Court of Appeals ruled exactly that in Terrace View Property Owner's Association v. Jannah. The court held that an HOA's assessment clause was "invalid and unenforceable because it is too indefinite": it said nothing about how much the association could charge or what the money was for.

Many declarations tie assessments to a budget or a formula, which is the kind of language this ruling looks for. But an older or loosely drafted declaration may have the same gap, and in Virginia that could give owners a defense against collection. The only way to know is to read the assessment section of the declaration you are being asked to sign onto.

Terrace View Property Owner's Association is the owners' association for the Terrace View subdivision in Forest, Virginia. In 2022 it imposed an "Association Fee" on lots owned by Shekar and Barbara Jannah. The Jannahs refused to pay and asked the circuit court to declare that the association had no authority to collect it. The circuit court agreed, and the association appealed.

The problem: The declaration authorized the POA to "establish and collect assessments" but provided no specifics about:

• How much the association could charge
• What purposes the assessments would fund
• How assessment amounts would be determined

The court's ruling: The Virginia Court of Appeals affirmed, holding the assessment provision "invalid and unenforceable because it is too indefinite." Without a clear mechanism for determining amounts and purposes, the association couldn't legally compel payment.

With no Virginia Supreme Court ruling on point, the Court of Appeals borrowed a test from North Carolina (Beech Mountain Property Owners' Ass'n v. Seifart, 1980): the declaration itself has to contain some standard for working out the amount and the purpose of an assessment. The amount does not have to be a dollar figure. A court can look outside the declaration, for example at a budget or an actual cost, but only if the declaration's own words point it there. The court called that pointer a "textual anchor", citing a 2008 North Carolina case (Willow Bend Homeowners Ass'n v. Robinson). In practice, the assessment clause has to give a clear basis for determining:

Both elements must be present for an assessment provision to be enforceable

Two Required Elements

1. Amount: The declaration must specify how much can be charged, or provide a formula or mechanism for determining the amount. This could be a specific dollar figure, a per-square-foot calculation, or a reference to an annual budget process.

2. Purpose: The declaration must specify what the assessments will fund. Common purposes include maintenance of common areas, insurance, reserve contributions, and management fees.

What the Court Rejected

Terrace View POA tried several arguments to save its assessment authority:

• Bylaws as a substitute: The association pointed to bylaws requiring its board to set assessments and maintain the common property. The court held that was not enough: a duty that can be changed by amending the bylaws is not one the declaration imposes, and the declaration itself set no process for fixing the amount.
• A 2024 change to the Act: TVPOA pointed to a 2024 amendment to Va. Code § 55.1-1805 (2024 Va. Acts ch. 685), which says the Act does not stop an association from using assessments to pay its contractual or legal obligations. The court held that the change helps only an association that already qualifies under the Act, so it did not rescue TVPOA.
• Prior payment and board service: The association argued the Jannahs had paid assessments before, that Mr. Jannah had served on the board and enforced them, and that they had sold a lot subject to the declaration. The court held those facts did not matter to whether the association could legally levy the assessments.

GoverningDocs recommends checking the assessment section of any CC&Rs before buying, specifically looking for clear language on how amounts are calculated and what purposes they fund.

This ruling flips the typical HOA risk narrative. Usually, buyers worry about what the HOA can charge. This case shows that sometimes the question is whether they can enforce it at all.

When This Matters

• Older communities: Declarations drafted 30-40+ years ago may have vague language that wouldn't pass modern standards.
• Developer-drafted documents: Some developers used boilerplate language without legal review, creating enforceability gaps.
• Small or informal HOAs: Communities formed without professional legal assistance are more likely to have problematic language.

Additional Implications from the Case

The court also found that TVPOA didn't qualify as a "property owners association" under Virginia's Property Owners Association Act (POAA). That matters because the Act's collection tools, such as a lien for unpaid assessments that the association has to file to make effective (Va. Code § 55.1-1833), are only available to associations the Act covers.

This is a state-specific nuance, but it highlights the importance of understanding whether your HOA operates under general common law or specific statutory authority.

Professionally drafted declarations often tie assessments to a formula or an annual budget. Older declarations, and those written without a lawyer, are where gaps are more likely, so read the assessment section closely before you rely on it.

Key questions to ask when reviewing assessment provisions

When reviewing a declaration's assessment provisions, look for answers to these questions:

Questions to Ask

• How are assessments calculated? Look for formulas (e.g., "based on square footage"), reference to a budget process, or specific dollar amounts.
• What purposes can assessments fund? Look for enumerated categories like maintenance, insurance, reserves, and utilities.
• Are there limits on board discretion? Look for caps on increases, requirements for owner approval, or restrictions on special assessments.
• Is there a formula or cap? Some declarations limit annual increases to a percentage or tie assessments to an index.

Red Flag Language

Watch for vague phrases like:

• "May levy assessments as needed"
• "Shall have the right to establish and collect assessments"
• "When and as due"
• "At the board's discretion"

Related: How to Review HOA Documents Before Buying →