Virginia’s New Nonstock Corporation Act: Why Your Declaration Now Outranks Your Bylaws

Why this fix was needed

The revised Act adds new default rules for all nonstock corporations. Two of them cause trouble for HOAs:

• Dues and assessments.** A new section (Va. Code § 13.1-837.1) says a corporation may charge its members dues, assessments, and fees *to the extent its articles or bylaws authorize them*.
• Membership.** Another new section (§ 13.1-837.2) says membership can be ended or suspended for the reasons and in the way the articles or bylaws provide. It also says bylaws can let members resign.

Those rules fit a typical nonprofit, like a garden club or trade association. People join because they want to, and the bylaws set the terms.

An HOA doesn’t work that way. Your obligation to pay assessments comes from the **recorded declaration**, which runs with the land. You’re a member because you own the lot or unit, not because you signed up. Read literally, the new default rules invite bad arguments. One is *“the bylaws never authorized this special assessment, so I don’t owe it.”* Another is *“the bylaws let members resign, so I resign, and I’m done paying.”*

Community Associations Institute’s Virginia Legislative Action Committee raised the problem during session. Lawmakers adopted an amendment to keep covenants on top.

What the new rule actually says

The fix is in the Act’s special section for community associations, **Va. Code § 13.1-814.1**. Paraphrased, the version effective January 1, 2027 does three things:

1. Declaration controls on money and membership.** If a community association’s declaration or condominium instruments conflict with its articles or bylaws on (i) a member’s liability for dues, assessments, and fees, or (ii) membership, including resignation or suspension, the declaration or condominium instruments control.
2. The corporate statute can’t override your covenants.** Nothing in the Nonstock Corporation Act invalidates or supersedes a provision of a community association’s declaration or condominium instruments.
3. The pre-1986 grandfather clause stays.** Associations that existed on or before January 1, 1986 can still follow their original bylaws on director elections, bylaw amendments, and major property dispositions, unless they opt into the current statutory rules.

The old subsection that let community associations put certain provisions in their bylaws instead of their articles was removed. The revised Act now lets bylaws carry more of that authority for every nonstock corporation, so a special HOA exception isn’t needed.

The part that’s easy to get wrong

The headline, “your declaration now outranks your bylaws,” is true, but only on two subjects:

• Covered:** member liability for dues, assessments, and fees, and membership status (including resignation and suspension).
• Not covered:** everything else. Director elections, quorum, meeting procedures, officer duties, and the board’s general powers are still governed by your articles, bylaws, the Nonstock Corporation Act, and the POAA or Condominium Act, in whatever order those laws already set.

Two more limits:

• It applies only to incorporated associations** that meet the Act’s definition of a community association. That means a nonstock corporation that owns or controls real estate under a recorded declaration requiring owners to be members. An unincorporated association isn’t governed by the Nonstock Corporation Act at all.
• It doesn’t repeal owner protections.** The notice, hearing, and collection rules in the POAA and Condominium Act still apply. The declaration outranking the bylaws doesn’t let a board skip them.

Other changes boards should know about

The rewrite also adds tools that can be used *against* a board. Boards should plan for them:

• Derivative proceedings.** A new article (Article 7.2) lets a member sue on the corporation’s behalf. Usually the member must first send a written demand and wait 90 days, unless the board rejects the demand sooner or waiting would cause irreparable harm. A court may dismiss the case if disinterested directors review the demand in good faith and conclude the suit isn’t in the corporation’s best interest.
• Court removal of directors.** Under new § 13.1-861.1, members can ask a circuit court to remove a director who engaged in fraud, grossly abused the position, or intentionally harmed the corporation, where removal is in the corporation’s best interest. The court can also bar that director from reelection for a set period.
• Membership rules keyed to bylaws.** Outside the dues-and-membership carve-out, more of the Act now defers to what your bylaws say. That makes a careful bylaw review worth the time.

Board checklist before January 1, 2027

• Pull all three documents:** the recorded declaration (or condominium instruments), the articles of incorporation, and the current bylaws, with every amendment.
• Map where assessment authority lives.** Note every place that authorizes regular assessments, special assessments, fees, late charges, and interest.
• Flag conflicts** between the declaration and the corporate documents on dues, fees, or membership. After January 1 the declaration controls, but written inconsistencies still invite disputes and slow collections.
• Check for any resignation language** in the bylaws. Make sure it can’t be read as a way for an owner to leave the association or stop paying.
• Review suspension procedures** against the POAA or Condominium Act notice-and-hearing requirements.
• Adopt a written process for derivative demands:** who receives them, how the board decides whether it has enough disinterested directors, and how it documents a good-faith review.
• Ask your insurance broker** whether your D&O policy covers derivative claims and court removal proceedings.
• If you were formed before 1986,** confirm with counsel whether you’re still relying on the grandfather clause.
• Brief your management company** so its collection and membership letters don’t cite bylaws alone when the declaration is the real authority.

FAQ

• When does Virginia’s revised Nonstock Corporation Act take effect?

January 1, 2027. The changes come from SB 246 and HB 439, both enacted in the 2026 session.

• Does my Virginia HOA need to amend its bylaws?

The law doesn’t require an amendment. The declaration-controls rule works automatically. Many boards will still want counsel to clean up conflicting language so owners, managers, and courts aren’t reading two different rules.

• Can a Virginia homeowner resign from the HOA to avoid paying assessments?

No. Membership and liability for assessments come from the recorded declaration. Under the revised § 13.1-814.1, the declaration controls over any resignation provision in the bylaws.

• Does the declaration now override the bylaws on everything?

No. The priority rule covers only member liability for dues, assessments, and fees, and membership (including resignation and suspension). Other governance topics are unchanged.

• Does this apply to condominium associations?

Yes, if the condominium association is incorporated as a Virginia nonstock corporation. The statute refers specifically to condominium instruments alongside declarations.

• Can Virginia HOA members now sue on behalf of the association?

Yes. Starting January 1, 2027, members can bring derivative proceedings. In most cases they must first make a written demand on the association and wait 90 days.

Keep your governing documents and deadlines in one place

A rule like this is easy to miss until a collection dispute puts it in front of a judge. My Front Yard helps boards keep governing documents organized and track upcoming compliance dates, so a January 1 effective date doesn’t catch anyone off guard. [See how it works →]

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*Sources: Va. Code § 13.1-814.1 (eff. Jan. 1, 2027); Va. Code §§ 13.1-837.1, 13.1-837.2, 13.1-861.1 and Article 7.2 (eff. Jan. 1, 2027); HB 439 (2026 Acts ch. 393) and SB 246 (2026 Acts ch. 394); CAI Advocacy, 2026 Virginia End of Legislative Session Report; Whiteford, 2026 Virginia Legislative Updates for Common Interest Communities.*