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(f) Professional management. Many condominiums are small enough and their common areas so minimal that professional management is not necessary. VA does not have a requirement for professional management of condominiums. The powers given to the owners' association by the declaration and bylaws are fundamentally for “use control” and maintenance of the undivided interest all of the owners have in the common areas. These powers normally include management which may, if desired, be delegated to a professional manager. However, if the board of directors wants professional management, the management agreement must be terminable for cause upon 30 days' notice, and run for a reasonable period of from 1 to 3 years and be renewable for consent of the association and the management. (Management contracts negotiated by the declarant should not exceed 2 years.)
(g) Commercial areas. With respect to existing and proposed condominiums, commercial areas within condominium developments are acceptable, but such deve interests will be considered in value.
credit in the CRV valuation may be given for such offsite amenities.
(ii) Each member of the offsite facility corporation or association must be entitled to a representative vote at meetings of the offsite facility corporation or association. If the individual condominium owners' association is a member of the offsite facility corporation or association, each condominium owners' association must be entitled to 4 representative vote at meetings of the offsite facility corporation or association.
(iii) Each member must agree by acceptance of the unit deed to pay a share of the expenses of the offsite facility corporation or association as assessed by the corporation or association for upkeep, insurance, reserve fund for replacements, maintenance and operation of the offsite facility. The share of said expenses shall be determined equitably. Failure to pay such assessment must result in a lien against the individual unit in the same manner as unpaid assessments by the association of owners of the condominium. If each condominium owners' association is a member of the offsite facility in lieu of individual unit owners, failure of the condominium owners' association to pay its equitable assessment to the offsite facility must result in an enforceable lien.
(3) Declarant payment of offsite facility in a series project. Until the declarant has completed all of the intended condominium phases in a total condominium development or established each condominium regime by filing a separate declaration in a series development, the balance of the total sum of the expenses of the offsite facility not covered by the assessment against the unit owners should be assessed against and be payable by the declarant com mencing on the first day of the first month after the first unit is conveyed to a homeowner in the first phase. If this balance is not paid, it must be come a lien against those parcels of land in the development area which are owned by the declarant. The collection of such debt and enforcement of such lien may be by foreclosure or such other remedies afforded the corporation or association under local law.
(Authority: 38 U.S.C. 501, 3703(c)(1), 3710(a)(6)) (Approved by the Office of Management and Budget under control number 2900-0448) [44 FR 47342, Aug. 13, 1979, as amended at 50 FR 5980, Feb. 13, 1985; 50 FR 26359, June 26, 1985; 55 FR 34913, Aug. 27, 1990)
$36.4362 Requirement of construction
warranty. Each certificate of reasonable value issued by the Secretary relating to a proposed or newly constructed dwelling unit, except those covering one-family residential units in condominium housing developments or projects within the purview of $$ 36.4356 through 36.4360a, shall be subject to the express condition that the builder, seller, or the real party in interest in the transaction shall deliver to the veteran constructing or purchasing such dwelling with the aid of a guaranteed or insured loan a warranty, in the form prescribed by the Secretary, that the property has been completed in substantial conformity with the plans and specifications upon which the Secretary based the valuation of the property, including any modifications thereof, or
changes or variations therein, approved sured under 38 U.S.C. Chapter 37 unles in writing by the Secretary, and no the veteran certifies, in such form certificate of guaranty or insurance the Secretary shall prescribe, that credit shall be issued unless a copy of (1) Neither he/she, nor anyone al such warranty duly receipted by the thorized to act for him her, will refu purchaser is submitted with the loan to sell or rent, after the making of papers.
bona fide offer, or refuse to negotiat [40 FR 34595, Aug. 18, 1975, as amended at 44
for the sale or rental of, or otherwi FR 47343, Aug. 13, 1979)
make unavailable or deny the dwellii
or property covered by this loan to ai 836.4363 Nondiscrimination and equal
person because of race, color, religio opportunity in housing certification
sex, or national origin; requirements.
(2) He/she recognizes that any restri (a) Any request for a master certifi
tive covenant on the property relatii cate of reasonable value on proposed or to race, color, religion, sex or nation existing construction, and any request origin is illegal and void and any su for appraisal of individual existing covenant is specifically disclaimed; al housing not previously occupied, which
(3) He/she understands that civil a is received on or after November 21,
tion for preventive relief may 1 1962, will not be assigned for appraisal
brought by the Attorney General of t] prior to receipt of a certification from
United States in any appropriate U. the builder, sponsor or other seller, in
District Court against any person r the form prescribed by the Secretary,
sponsible for a violation of the applic that neither it nor anyone authorized
ble law. to act for it will decline to sell any property included in such request to a [28 FR 7673, July 27, 1963, as amended at prospective purchaser because of his or
FR 13032, July 13, 1971; 40 FR 34595, Aug. 1 her race, color, religion, sex or national origin.
$36.4364 Correction of structural d (b) On requests for appraisal of indi- 8
fects. vidual proposed construction received on or after November 21, 1962, the pre (a) The purpose of this section is 1 scribed nondiscrimination certification specify the types of assistance that tl will be required if the builder is to sell Secretary may render pursuant to the veteran the lot on which the dwell U.S.C. 1827 to an eligible borrower wł ing is to be constructed, but will not be has been unable to secure satisfactoi required if:
correction of structural defects in (1) The veteran owns the lot; or
dwelling encumbered by a mortgage s (2) The lot is being acquired by the curing a guaranteed, insured or diret veteran from a seller other than the loan, and the terms and conditioi builder and there is no identity of in- under which such assistance will ! terest between the builder and the sell- rendered. er of the lot.
(b) A written application for assis (c) Each builder, sponsor or other ance in the correction of structural de seller requesting approval of site and fects shall be filed by a borrower unde subdivision planning shall be required a guaranteed, insured or direct loa to furnish a certification, in the form with the Director of the Department prescribed by the Secretary, that nei- Veterans Affairs office having loan ju ther it nor anyone authorized to act for risdiction over the area in which th it will decline to sell any property in- dwelling is located. The applicatio cluded in such request to a prospective must be filed not later than 4 year purchaser because of his or her race, after the date on which the first direct color, religion, sex or national origin. guaranteed or insured mortgage loa. Site and subdivision analysis will not on the dwelling was made, guarantee be commenced by the Department of or insured by the Secretary. A bor Veterans Affairs prior to receipt of rower under a direct, guaranteed or in such certification.
sured mortgage loan on the sami (d) No commitment shall be issued dwelling which was made, guaranteet and no loan shall be guaranteed or in- or insured subsequent to the first such
loan shall be entitled to file an application if it is filed within 4 years of the date on which such first loan was made, guaranteed or insured by the Secretary.
(c) An applicant for assistance under this section must establish that:
(1) The applicant is the owner of a one- to four-family dwelling which was inspected during construction by the Department of Veterans Affairs or the Federal Housing Administration.
(2) The applicant is an original veteran-borrower on an outstanding guaranteed, insured or direct loan secured by a mortgage on such dwelling which was made, guaranteed or insured on or after May 8, 1968. The Secretary may, however, recognize an applicant who is not the original veteran-borrower but who contracted to assume such borrower's personal obligation thereunder, if the Secretary determines that such recognition would be in the best interests of the Government in the particular case.
(3) There exists in such dwelling a structural defect, not the result of fire, earthquake, flood, windstorm,
windstorm o r
or waste, which seriously affects the livability of the dwelling.
(4) The applicant has made reasonable efforts to obtain correction of such structural defect by the builder, seller, or other person or firm responsible for the construction of the dwelling.
(d) In those instances in which the Secretary determines that assistance under this section is appropriate and necessary the Secretary may take any of the following actions:
(1) Pay such amount as is reasonably necessary to correct the defect, or
(2) Pay the claim of the borrower for reimbursement of the borrower's expenses for correcting or obtaining correction of the defect, or
(3) Acquire title to the property upon terms acceptable to the borrower and the holder of the guaranteed or insured
er, or other persons arising out of the structural defect or defects.
(f) The borrower shall not be entitled, as a matter of right, to receive the assistance in the correction of structural defects provided in this section. Any determination made by the Secretary in connection with a borrower's application for assistance shall be final and conclusive and shall not be subject to judicial or other review. Authority to act for the Secretary under this section is delegated to the Under Secretary for Benefits.
(g) For the purpose of this section, the term "structural defects seriously affecting livability” shall in no event be deemed to include (1) defects of any nature in a dwelling in respect to which the applicant for assistance under this section was the builder or general contractor, or (2) structural features, improvements, amenities, or equipment which were not taken into account in the Secretary's determination of reasonable value. (33 FR 16088, Nov. 1, 1968, as amended at 36 FR 321, Jan. 9, 1971; 40 FR 34595, Aug. 18, 1975; 61 FR 28059, June 4, 1996)
836.4365 Advertising and Solicitation
Requirements. Any advertisement or solicitation in any form (e.g., written, electronic, oral) from a private lender concerning housing loans to be guaranteed or insured by the Secretary:
(a) Must not include information falsely stating or implying that it was issued by or at the direction of VA or any other department or agency of the United States, and
(b) Must not include information falsely stating or implying that the lender has an exclusive right to make loans guaranteed or insured by VA.
(Authority: 38 U.S.C. 3703, 3704) [67 FR 9402, Mar. 1, 2002)
LOANS UNDER 38 U.S.C. 3703
(e) To the extent of any expenditure made by the Secretary pursuant to paragraph (d) of this section the Secretary shall be subrogated to any legal rights the borrower or applicant described in paragraph (c)(2) of this section may have against the builder, sell
SOURCE: Sections 36.4370 to 36.4375 appear at 13 FR 7281, Nov. 27, 1948, unless otherwise noted.
(c) Where loans are transferred wit recourse or under a guaranty or repui chase agreement no insurance cred will be transferred or insurance at count affected and no reports will i required.
(d) In all cases of transfer of loan from one insured financial institutid to another insured institution, excej as provided in paragraph (c) of this se tion, a report on a prescribed form ex cuted by the parties and showing the agreement with regard to the transf of insurance credits shall be made 1 the Secretary.
836.4370 Insured loan and insurance
account. (a) Loans otherwise eligible may be insured when purchased by a lender eligible under 38 U.S.C. 3703(a) if the purchaser (lender) submits with the loan report evidence of an agreement, general or special, made prior to the closing of the loan, to purchase such loan subject to its being insured.
(b) A current account shall be maintained in the name of each insured lender or purchaser. The account shall be credited with the appropriate amounts available for the payment of losses on insured loans made or purchased. The account shall be debited with appropriate amounts on account of transfers, purchases under $ 36.4318, or payment of losses. The Secretary may on 6 months' notice close any lender's insurance account. Such account after expiration of the 6-month period shall be available only as to loans embraced therein.
(c) Amounts received or recovered by the Secretary or the holder with respect to a loan after payment of an insured claim thereon will not restore any amount to the holder's insurance account. (13 FR 7281, Nov. 27, 1948, as amended at 24 FR 2657, Apr. 7, 1959]
$36.4373 Debits and credits to insu
ance account under $ 36.4318. In the event that an insured loan transferred under the provisions $36.4318, there shall be charged to ti insurance account of the transferor sum equal to the amount paid tran feror on account of the indebtedne less the current market value of th property transferred as security theri for as determined by an appraiser de ignated by the Secretary, or th amount chargeable to such insuranc account in the event of a transfe under $36.4372, whichever sum is th greater. The credit to the insurance au count of the transferee will be com puted in accordance with 836.4372(a).
$36.4372 Transfer of insured loans.
(a) In cases involving the transfer from one insured financial institution to another insured institution of loans which are transferred without recourse, guaranty, or repurchase agreement, if no payment on any loan included in the transfer is past due more than one calendar month at the time of transfer there shall be transferred from the insurance account of the transferor to the insurance account of the transferee an amount equal to the original percentage credited to the insurance account in respect to each loan being transferred applied to the unpaid balance of such loans, or to the purchase price, whichever is the lesser.
(b) Transfers between insurance accounts in a manner or under conditions not provided in paragraph (a) of this section must have the prior approval of the Secretary.
$36.4374 Payment of insurance.
(a) Upon the continuance of a defaul for the period specified in 836.4316, th holder may proceed to establish the ne loss, after giving the notice prescribe in 836.4317 if security is available. Th net loss shall be reported to the Sec retary with proper claim, whereupo the holder shall be entitled to paymen of the claim within the amount the available for such payment under th payee's related insurance account. Sub ject to the provisions of the paragrap) (b) of this section and to $ 36.4370(b): supplemental claim for any balance o an insurance loss may be filed at any time within 5 years after the date o the original claim.
(b) The basis of the claim for an in sured loss shall consist in the unreal ized principal or the amount paid foi the obligation, if less, plus unrealized interest to the date of claim or the date of sale whichever is earlier, and those expenses, if any, allowable under $36.4313, but subject to proper credits because of payments, set-off, proceeds of security or otherwise, provided that if there is no liquidation of security the claim shall not include an accrual of interest for a period in excess of 6 months from the date of the first ancured default. [13 FR 7742, Dec. 15, 1948]
$36.4375 Reports of insured institu
tions. An insured financial institution shall make such reports respecting its insurance accounts as the Secretary may from time to time require, not more frequently than semiannually.
FEDERALLY ASSISTED CONSTRUCTION CONTRACTS-NONDISCRIMINATION IN EMPLOYMENT-EXECUTIVE ORDERS 11246 AND 11375
AUTHORITY: Sections 36.4390 to 36.4393 issued under 72 Stat. 1114 (38 U.S.C. 501).
Sections 36.4390 through 36.4393 are promulgated to achieve the aims of the applicable provisions of Executive Orders 11246 and 11375 and the regulations of the Secretary of Labor with respect to federally assisted construction con
(b) The provisions of Executive Orders 11246 and 11375 and the rules and regulations of the Secretary of Labor are applicable to:
(1) Each Master Certificate of Reasonable Value or extension or modification thereof relating to proposed construction issued on or after July 22, 1963;
(2) Each individual Certificate of Reasonable Value or extension or modification thereof relating to proposed construction issued on or after July 22, 1963, except as provided in paragraph (c)(2) of this section;
(3) Each Special Conditions Letter or modification thereof issued on or after July 22, 1963, in respect to site approval of land to be improved by a builder, sponsor or developer for the construction of housing thereon;
(4) Each direct loan fund reservation commitment or extension thereof issued to builders on or after July 22, 1963;
(c) The provisions of Executive Orders 11246 and 11375 and the rules and regulations of the Secretary of Labor are not applicable to:
(1) Grants under chapter 21, title 38, U.S.C.;
(2) Individual Certificates of Reasonable Value issued on or after July 22, 1963, if:
(i) The certificate relates to existing properties, either previously occupied or unoccupied; or
(ii) The certificate relates to proposed construction and
(a) A veteran was named in the request for appraisal, or
(6) A veteran contracted for the construction or purchase of the home prior to issuance of the certificate, or
(c) The property was listed in the Schedule of Reasonable Values on an outstanding Master Certificate of Reasonable Value issued prior to July 22, 1963;
(3) Any contract or subcontract for construction work not exceeding $10,000;
(4) Any other contract or subcontract which is exempted or excepted by the regulations of the Secretary of Labor. [29 FR 2862, Feb. 29, 1964, as amended at 31 FR 8745, June 24, 1966; 40 FR 34595, Aug. 18, 1975)
(40 FR 34595, Aug. 18, 1975)
(a) For the purposes of the home loan guaranty and insurance and direct loan programs of the Department of Veterans Affairs, the term "applicant for Federal assistance" or "applicant” in Part III of Executive Order 11246, shall mean the builder, sponsor or developer of land to be improved by such builder, sponsor or developer for the purpose of constructing housing thereon for sale to eligible veterans with financing which is to be guaranteed or insured or made under the provisions of 38 U.S.C. chapter 37, or the builder, sponsor or developer of housing to be constructed for sale to eligible veterans with financing which is to be guaranteed or insured or made under the provisions of 38 U.S.C. chapter 37.