Pub. 12 2021 Issue 3 20 West Virginia Banker Collateral Concerns: Common Interest Ownership Communities By Matthew Kingery, Lewis & Glasser PLLC T aking collateral in a common interest community should involve heightened due diligence because of the relative complexities associated with common interest communities and how liens attach to units. As a lender, you want to ensure you obtain the lien priority you desire. Accordingly, special attention should be paid to the Uniform Common Interest Ownership Act (UCIOA) and how it treats liens. Lenders should utilize title attorneys who are experienced with UCIOA, which West Virginia adopted in 1986. UCIOA applies to all common interest communities created in West Virginia after the effective date of the Act. Pre-existing communities are also subject to certain provisions of UCIOA, including the lien for assessments under W.Va. Code § 36B-3- 116. Of note, UCIOA does not apply to a planned community in which all units are restricted exclusively to nonresidential use unless the Declaration, described below, provides that UCIOA does apply (W.Va. Code § 36B-1-207). UCIOA is outlined in Chapter 36B of the West Virginia Code. Common interest communities are real estate for which a person, by virtue of their ownership of a unit, described below, is obligated to pay for real estate taxes, insurance premiums, maintenance or improvement of other real estate described in a Declaration (W.Va. Code § 36B-1-103(7)). A Declaration is an instrument that creates the common interest community and can be found of record in the county clerk’s office of the county in which the real estate is located (W.Va. Code § 36B-1-103(13)). Importantly, the Declaration may require that all or a specified number or percentage of the lenders who hold security interests encumbering the units approve specified actions of the unit owners or the association as a condition to the effectiveness of those actions (W.Va. Code § 36B-2-119). Lender approvals are often associated with larger condominiums developed for commercial and residential use, with the intent to lease units. Under UCIOA, almost every common interest community in West Virginia is required to have a homeowners association. The membership of the association, at all times, consists exclusively of all unit owners (W.Va. Code § 36B-3-101). The association is responsible for paying expenses associated with the common elements, described below, through assessments levied against each unit. The assessments are based on the allocated interest attributed to each unit. Units