Introduced Version
House Bill 3101 History
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H. B. 3101
(By Delegates Ferro, Storch and Walters)
[Introduced
March 25, 2013
; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact §36B-1-103, §36B-1-104, §36B-1-108,
§36B-1-201, §36B-1-203 and §36B-1-204 of the Code of West
Virginia, 1931, as amended; to amend said code by adding
thereto three new sections, designated §36B-1-115, §36B-1-116
and §36B-1-208; to amend and reenact §36B-2-109, §36B-2-112,
§36B-2-116, §36B-2-117 and §36B-2-119 of said code; to amend
said code by adding thereto two new sections, designated
§36B-2-123 and §36B-2-124; to amend and reenact §36B-3-102,
§36B-3-103, §36B-3-105, §36B-3-106, §36B-3-108, §36B-3-110,
§36B-3-112, §36B-3-116 and §36B-3-118 of said code; to amend
said code by adding thereto five new sections, designated
§36B-3-120, §36B-3-121, §36B-3-122, §36B-3-123 and §36B-3-124;
and to amend and reenact §36B-4-103, §36B-4-109, §36B-4-112,
§36B-4-116 and §36B-4-117 of said code, all relating to updating the Uniform Common Interest Ownership Act; and
providing for applicability of the chapter.
Be it enacted by the Legislature of West Virginia:
That §36B-1-103, §36B-1-104, §36B-1-108, §36B-1-201,
§36B-1-203 and §36B-1-204 of the Code of West Virginia, 1931, as
amended, be amended and reenacted; that said code be amended by
adding thereto three new sections, designated §36B-1-115,
§36B-1-116 and §36B-1-208; that §36B-2-109, §36B-2-112, §36B-2-116,
§36B-2-117 and §36B-2-119 of said code be amended and reenacted;
that said code be amended by adding thereto two new sections,
designated §36B-2-123 and §36B-2-124; that §36B-3-102, §36B-3-103,
§36B-3-105, §36B-3-106, §36B-3-108, §36B-3-110, §36B-3-112,
§36B-3-116 and §36B-3-118 of said code be amended and reenacted;
that said code be amended by adding thereto five new sections,
designated §36B-3-120, §36B-3-121, §36B-3-122, §36B-3-123 and
§36B-3-124; and that §36B-4-103, §36B-4-109, §36B-4-112, §36B-4-116
and §36B-4-117 of said code be amended and reenacted, all to read
as follows:
ARTICLE 1. GENERAL PROVISIONS.
§36B-1-103. Definitions.
In the declaration and bylaws (section one hundred six,
article three of this chapter), unless specifically provided
otherwise or the context otherwise requires, and in this chapter: In this chapter:
(1) "Affiliate of a declarant" means any person who controls,
is controlled by, or is under common control with a declarant. For
purposes of this definition: A person "controls" a declarant if
the person: (i) Is a general partner, officer, director or
employer of the declarant; (ii) directly or indirectly or acting in
concert with one or more other persons, or through one or more
subsidiaries, owns, controls, holds with power to vote, or holds
proxies representing, more than twenty percent of the voting
interest in the declarant; (iii) controls in any manner the
election of a majority of the directors of the declarant; or (iv)
has contributed more than twenty percent of the capital of the
declarant. A person "is controlled by" a declarant if the
declarant: (i) Is a general partner, officer, director or employer
of the person; (ii) directly or indirectly or acting in concert
with one or more other persons, or through one or more
subsidiaries, owns, controls, holds with power to vote, or holds
proxies representing, more than twenty percent of the voting
interest in the person; (iii) controls in any manner the election
of a majority of the directors of the person; or (iv) has
contributed more than twenty percent of the capital of the person.
Control does not exist if the powers described in this paragraph
are held solely as security for an obligation and are not exercised.
(2) "Allocated interests" means the following interests
allocated to each unit: (i) In a condominium, the undivided
interest in the common elements, the common expense liability, and
votes in the association; (ii) in a cooperative, the common expense
liability and the ownership interest and votes in the association;
and (iii) in a planned community, the common expense liability and
votes in the association.
(3) "Assessment" means the sum attribute to each unit and due
to the association pursuant to section one hundred-fifteen, article
three of this chapter.
_____(3) (4) "Association" or "unit owners' association" means the
unit owners' association organized under section one hundred one,
article three of this chapter.
(5) "Bylaws" means instruments, however denominated, that
contain the procedures for conduct of the affairs of the
association regardless of the form in which the association is
organized, including any amendments to the instruments.
_____(4) (6) "Common elements" means: (i) In a condominium or
cooperative, all portions of the common interest community other
than the units; and (ii) in a planned community, any real estate
within a planned community owned or leased by the association,
other than a unit; and (iii) in all common interest communities, any other interests in real estate for the benefit of unit owners
which are subject to te declaration.
(5) (7) "Common expenses" means expenditures made by, or
financial liabilities of, the association, together with any
allocations to reserves.
(6) (8) "Common expense liability" means the liability for
common expenses allocated to each unit pursuant to section one
hundred seven, article two of this chapter.
(7) (9) "Common interest community" means real estate
described to the declaration with respect to which a person, by
virtue of his or her ownership of a unit, is obligated to pay for
a share of real estate taxes, insurance premiums, maintenance, or
improvement of, or service or other expenses related to, common
elements, other units, or other real estate described in a the
declaration: Provided, That any resort owner which, prior to the
effective date of this article, began the development of a resort
and imposed fees or assessments upon owners of real estate in the
resort for maintenance and care of the roads, streets, alleys,
sidewalks, parks, common areas and common facilities in and around
the resort, for fire and police protection and for such other
services as may be made available to owners of real estate, may
also impose the same fees and assessments to be used for the same
or similar purposes upon persons purchasing real estate in the resort after the effective date of this article without creating a
common interest community.
The term does not include an arrangement described in sections
two hundred-nine and two hundred-ten of this article. For purposes
of this paragraph, "Ownership of a unit" does not include holding
a leasehold interest of less than twenty years in a unit, including
renewal options.
(8) (10)"Condominium" means a common interest community in
which portions of the real estate are designated for separate
ownership and the remainder of the real estate is designated for
common ownership solely by the owners of those portions. A common
interest community is not a condominium unless the undivided
interest in the common elements are vested in the unit owners.
(9) (11) "Conversion building" means a building that at any
time before creation of the common interest community was occupied
wholly or partially by persons other than purchasers and persons
who occupy with the consent of purchasers.
(10) (12) "Cooperative" means a common interest community in
which the real estate is owned by an association, each of whose
members is entitled by virtue of his or her ownership interest in
the association to exclusive possession of a unit.
(11) (13) "Dealer" means a person in the business of selling
units for his or her own account.
(12) (14) "Declarant" means any person or group of persons
acting in concert who: (i) As part of a common promotional plan,
offers to dispose of his or the interest of the person or group of
persons in a unit not previously disposed of; or (ii) reserves or
succeeds to any special declarant right.
(13) (15) "Declaration" means any the instruments, however
denominated, that create a common interest community, including any
amendments to those the instruments.
(14) (16) "Development rights" means any right or combination
of rights reserved by a declarant in the declaration to: (i) Add
real estate to a common interest community; (ii) create units,
common elements or limited common elements within a common interest
community; (iii) subdivide units or convert units into common
elements; or (iv) withdraw real estate from a common interest
community.
(15) (17) "Dispose" or "disposition" means a voluntary
transfer to a purchaser of any legal or equitable interest in a
unit, but the term does not include the transfer or release of a
security interest.
(16) (18)"Executive board" means the body, regardless of name,
designated in the declaration or bylaws to act on behalf of the
association.
(17) (19) "Identifying number" means a symbol or address that identifies only one unit in a common interest community.
(18) (20) "Leasehold common interest community" means a common
interest community in which all or a portion of the real estate is
subject to a lease, the expiration or termination of which will
terminate the common interest community or reduce its size.
(19) (21) "Limited common element" means a portion of the
common elements allocated by the declaration or by operation of
subdivision (2) or (4), section one hundred two, article two of
this chapter for the exclusive use of one or more but fewer than
all of the units.
(20) (22) "Master association" means an organization described
in section one hundred twenty, article two of this chapter, whether
or not it is also an association described in section one hundred
one, article three of this chapter.
(21) (23) "Offering" means any advertisement, inducement,
solicitation or attempt to encourage any person to acquire any
interest in a unit, other than as security for an obligation. An
advertisement in a newspaper or other periodical of general
circulation, or in any broadcast medium to the general public, of
a common interest community not located in this state, is not an
offering if the advertisement states that an offering may be made
only in compliance with the law of the jurisdiction in which the
common interest community is located.
(22) (24) "Person" means an individual, corporation, business
trust, estate, trust, partnership, limited liability company,
association, joint venture, public corporation, government,
governmental subdivision, or agency, or instrumentality, or any
other legal or commercial entity. In the case of a land trust, the
corpus of which is real estate, however, "person" the term means
the beneficiary of the trust rather than the trust or the trustee.
(23) (25) "Planned community" means a common interest
community that is not a condominium or a cooperative. A
condominium or cooperative may be part of a planned community.
(24) (26) "Proprietary lease" means an agreement with the
association pursuant to which a member is entitled to exclusive
possession of a unit in a cooperative.
(25) (27) "Purchaser" means a person, other than a declarant
or a dealer, who that by means of a voluntary transfer acquires a
legal or equitable interest in a unit other than: (i) A leasehold
interest (including renewal options) of less than twenty years; or
(ii) as security for an obligation.
(26) (28) "Real estate" means any leasehold or other estate or
interest in, over, or under land, including structures, fixtures
and other improvements and interest that by custom, usage or law
pass with a conveyance of land though not described in the contract
of sale or instrument of conveyance. "Real estate" The term includes parcels with or without upper or lower boundaries, and
spaces that may be filled with air or water.
(29) "Record" means information that is inscribed on a
tangible medium or that is stored in an electronic or other medium
and is retrievable in perceivable form.
_____(27) (30) "Residential purposes" means use for dwelling or
recreational purposes, or both.
(31) "Rule" means a policy, guideline, restriction, procedure,
or regulation of an association, however dominated, which is not
set forth in the declaration or bylaws and which governs the
conduct of persons or the use or appearance of property.
_____(28) (32) "Resort" means a destination location which consists
of: (i) One or more persons offering recreational facilities and
services such as skiing, golf, tennis or boating to the general
public and commercial facilities such as retail stores, restaurants
and hotels or other lodging accommodations; and (ii) at least one
hundred residential units, a majority of which are used as vacation
or second homes rather than primary residences.
(29) (33) "Resort owner" means any person owning or operating
substantially all of the recreational facilities located within a
resort, or the predecessor in title of any such person.
(30) (34) "Security interest" means an interest in real estate
or personal property, created by contract or conveyance, which secures payment or performance of an obligation. The term includes
a lien created by a mortgage, deed of trust, trust deed, security
deed, contract for deed, land sales contract, lease intended as
security, assignment of lease or rents intended as security, pledge
of an ownership interest in an association, and any other
consensual lien or title retention contract intended as security
for an obligation.
(31) (35) "Special declarant rights" means rights reserved for
the benefit of a declarant to: (i) Complete improvements indicated
on plans and plans filed with the declaration (section one hundred
nine, article two of this chapter) or, in a cooperative, to
complete improvements described in the public offering statement
pursuant to subdivision (2), subsection (a), section one hundred
three, article four of this chapter; (ii) exercise any development
right (section one hundred ten, article two of this chapter); (iii)
maintain sales offices, management offices, signs advertising the
common interest community, and models (section one hundred fifteen,
article two of this chapter); (iv) use easements through the common
elements for the purpose of making improvements within the common
interest community or within real estate which may be added to the
common interest community (section one hundred sixteen, article two
of this chapter); (v) make the common interest community subject to
a master association (section one hundred twenty, article two of this chapter); (vi) merge or consolidate a common interest
community with another common interest community of the same form
of ownership (section one hundred twenty-one, article two of this
chapter); or (vii) appoint or remove any officer of the association
or any master association or any executive board member during any
period of declarant control (subsection (d), section one hundred
three, article three of this chapter); (viii) control any
construction, design review, or aesthetic standards committee or
process; (ix) attend meetings of the unit owners and, except during
an executive session, the executive board; or (x) have access to
the records of the association to the same extent as a unit owner.
_____(32) (36) "Time share" means a right to occupy a unit or any
of several units during five or more separated time periods over a
period of at least five years, including renewal options, whether
or not coupled with an estate or interest in a common interest
community or a specified portion thereof.
(33) (37) "Unit" means a physical portion of the common
interest community designated for separate ownership or occupancy,
the boundaries of which are described pursuant to subdivision (5),
subsection (a), section one hundred five, article two of this
chapter. If a unit in a cooperative is owned by a unit owner or is
sold, conveyed, voluntarily or involuntarily encumbered or
otherwise transferred by a unit owner, the interest in that unit which is owned, sold, conveyed, encumbered, or otherwise
transferred is the right to possession of that unit under a
proprietary lease, coupled with the allocated interests of that
unit, and the association's interest in that unit is not thereby
affected.
(34) (38) "Unit owner" means a declarant or other person who
that owns a unit, or a lessee of a unit in a leasehold common
interest community whose lease expires simultaneously with any
lease, the expiration or termination of which will remove the unit
from the common interest community, but does not include a person
having an interest in a unit solely as security for an obligation.
In a condominium or planned community, the declarant is the owner
of any unit created by the declaration. In a cooperative, the
declarant is treated as the owner of any unit to which allocated
interests have been allocated (section one hundred seven, article
two of this chapter) until that unit has been conveyed to another
person.
§36B-1-104. No variation by agreement.
Except as expressly provided in this chapter, provisions
herein the effect of its provisions may not be varied by agreement,
and rights conferred may not be waived. Except as otherwise
provided in section two hundred seven of this article, a declarant
may not act under a power of attorney, or use any other device, to evade the limitations or prohibitions of this chapter or the
declaration.
§36B-1-108. Supplemental general principles of law applicable.
The principles of law and equity, including the law of
corporations, and unincorporated associations and any other form of
organization authorized by the laws of this state, the law of real
property estate, and the law relative to capacity to contract,
principal and agent, eminent domain, estoppel, fraud,
misrepresentation, duress, coercion, mistake, receivership,
substantial performance, or other validating or invalidating cause
supplement the provisions of this chapter, except to the extent
inconsistent with this chapter.
§36B-1-115. Relation to Electronic Signatures in Global and
National Commerce Act.
__________This chapter modifies, limits and supersedes the federal
Electronic Signature in Global and National Commerce Act, 15 U.S.C.
section 7001, et seq., but does not modify , limit, or supersede
section 101(c) of that act, 15 U.S.C. section 7001(c), or authorize
electronic delivery of any of the notices described in section
103(b) of that act, 15 U.S.C. section 7003(b).
§36B-1-116. Severability.
__________If any provision of this chapter or the application thereof to
any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this chapter which
can be given effect without the invalid provisions or applications,
and to this end the provisions of this chapter are severable.
§36B-1-201. Applicability to new common interest communities.
Except as otherwise provided in sections 1-202 and 1-203, this
chapter applies to all common interest communities created within
this state after the effective date of this chapter. The provisions
of chapter fifty-three, acts of the Legislature, 1963, chapter one
hundred twenty-nine, acts of the Legislature, 1980, and chapter
thirty-eight, acts of the Legislature, 1984, do not apply to common
interest communities created after the effective date of this
chapter. Amendments to this chapter apply to all common interest
communities created after the effective date of this chapter or
made subject to this chapter by amendment of the declaration of the
common interest community, regardless of when the amendment to this
chapter becomes effective.
§36B-1-203. Exception for small and limited expense liability
planned communities.
(a) If a planned community:
(1) Contains no more than twelve units and is not subject to
any development rights; or
(2) Provides, in its declaration, that the annual average
common expense liability of all units restricted to residential purposes, exclusive of optional user fees and any insurance
premiums paid by the association, may not exceed $300 as adjusted
pursuant to section 1-114 (adjustment of dollar amounts), it is
subject only to sections 1-105 (separate titles and taxation),
1-106 (applicability of local ordinances, regulations and building
codes) and 1-107 (eminent domain) unless the declaration provides
that this entire chapter is applicable.
____________________________________________(b) The exemption provided in subdivision (2), subsection (a)
of this article applies only if:
____________________________________________(1) The declarant reasonably believes in good faith that the
maximum stated assessment will be sufficient to pay the expenses of
the planned community; and
____________________________________________(2) The declaration provides that the assessment may not be
increased above the limitation in subdivision (2), subsection (a)
of this article
during the period of declarant control without the
consent of all unit owners.
____________________________________________(c) If the exemption provided in subdivision (2), subsection
(a) of this article
was included in a declaration recorded prior to
July 1, 2013:
____________________________________________(1) The sum stated in that declaration shall adjust pursuant
to section one hundred fourteen of this article (adjustment of
dollar amounts);
____________________________________________(2) The annual average common expense liability of the units may exceed $300, as adjusted pursuant to section one hundred
fourteen of this article
, if the limitation in the declaration
prevents the association from: (i) Fulfilling any duty to maintain
real estate owned or leased by the association or improvements
thereto, or (ii) Fulfilling any other duty imposed on the
association by the declaration, articles, bylaws or applicable law;
and
____________________________________________(3) If the declarant no longer owns any unit, the declaration
may be amended by sixty-seven percent of the units to allow the
association to meet its actual financial needs, notwithstanding any
provision in the declaration to the contrary. An amendment made in
accordance with this subsection will not cause the community to be
subject to any greater provisions of this chapter than set forth in
subdivision (2), subsection (a) of this article.
____________________________________________(d) Any declarant electing the exemption provided in
subdivision (2), subsection (a) of this article
shall record with
the declaration the predevelopment budget which is the basis for
its subdivision (2), subsection (c) of this article
determination
of post-development annual average common expense liability.
§36B-1-204. Applicability to preexisting common interest
communities.
(a) Except as provided in section 1-205, Same; exception for
small preexisting cooperatives and planned communities, sections 1-105 (separate titles and taxation), 1-106 (Applicability of local
ordinances, regulations and building codes), 1-107 (Eminent
domain), 2-103 (Construction and validity of declaration and
bylaws), 2-104 (Description of units), 2-121 (Merger or
consolidation of common interest communities), 3-102(a)(1) through
(6) and (11) through (16) (Powers of unit owners' association),
3-111 (Tort and contract liability), 3-116 (Lien for assessments),
3-118 (Association records), 4-109 (Resales of units), and 4-117
(Effect of violation on rights of action; attorney's fees), and
section 1-103 (Definitions) to the extent necessary in construing
any of those sections, apply to all common interest communities
created in this state before the effective date of this chapter;
but those sections apply only with respect to events and
circumstances occurring after the effective date of this chapter
and do not invalidate existing provisions of the declaration,
bylaws or plats or plans of those common interest communities.
Except for a cooperative or planned community described in section
1-205 (Same-Exception for small preexisting cooperatives and
planned communities), or a nonresidential common interest community
described in section 1-207, (Same; Exception for Small Preexisting
Cooperatives and Planned Communities), the following apply to a
common interest community created in this state before the
effective date of this article:
_______________(1) Section 1-105 (Separate Titles and Taxation);
_______________(2) Section 1-106 (Applicability of Local Ordinances,
Regulations, and Building Codes);
_______________(3) Section 1-107 (Eminent Domain);
_______________(4) Section 1-206 (Amendments to Governing Instruments);
_______________(5) Section 2-102 (Unit Boundaries);
_______________(6) Section 2-103 (Construction and Validity of Declaration
and Bylaws);
_______________(7) Section 2-104 (Description of Units);
_______________(8) Section 2-117(h) and (i) (Amendments to Declaration);
_______________(9) Section 2-121 (Merger or Consolidation of Common Interest
Communities);
_______________(10) Section 2-124 (Termination Following Catastrophe);
_______________(11) Section 3-102(a)(1) through (6) and (11) through (16)
(Powers of Unit Owners' Association);
_______________(12) Section 3-103 (Executive Board Members and Officers);
_______________(13) Section 3-111 (Tort and Contract Liability);
_______________(14) Section 3-116 (Lien for Assessments);
_______________(15) Section 3-118 (Association Records);
_______________(16) Section 3-124 (Litigation Involving Declarant);
_______________(17) Section 4-109 (Resales of Units);
_______________(18) Section 4-117 (Effect of Violation on Rights of Action;
Attorney's Fees); and
_______________(19) Section 1-103 (Definitions) to the extent necessary to
construe any of those sections.
_______________(b) The sections described in subsection (a) apply only to
events and circumstances occurring after the effective date of this
chapter and do not invalidate existing provisions of the
declaration, by laws, or plats or plans of those common interest
communities.
_______________(b) (c) The provisions of chapter one hundred fifty-three,
Acts of the Legislature, 1063, chapter one hundred twenty-nine,
Acts of the Legislature, 1980, or of chapter thirty-eight, Acts of
the Legislature, 1984, do not apply to condominiums or other common
interest communities created after the effective date of this
chapter and do not invalidate any amendment to the declaration,
rules, bylaws, plats and plans and code of regulations of any
condominium or common interest community created before the
effective date of this chapter if the amendment would be permitted
by this chapter. The amendment must be adopted in conformity with
the procedures and requirements specified by those instruments and
by chapter one hundred fifty-three, Acts of the Legislature, 1963.
If the amendment grants to any person any rights, powers or
privileges permitted by this chapter, all correlative obligations,
liabilities and restrictions in this chapter also apply to that
person.
(c) (d) This chapter does not apply to condominiums or units
located outside this state, but the public offering statement
provisions, (sections 4-102 through 4-109) apply to all contracts
for the disposition thereof signed in this state by any party
unless exempt under section 4-101(b).
(d) (e) The provisions of this chapter shall apply to all
condominiums or common interest communities to the extent such
provisions conflict or are inconsistent with the provisions of
chapter one hundred fifty-three, Acts of the Legislature, 1963:
Provided, That the provisions of this chapter shall not modify,
limit or nullify any rights, duties or obligations created or
existing under any declaration, bylaws or plats or plans of
condominiums created in this state before the effective date of
this chapter.
§36B-1-208. Other Exemption Real Estates Arrangements.
_______________(a) An arrangement between the associations for two or more
common interest communities to share the costs of real estate
taxes, insurance premiums, services, maintenance or improvements of
real estate, or other activities specified in their arrangement or
declarations does not create a separate common interest community.
_______________(b) An arrangement between an association and the owner of
real estate that is not part of a common interest community to
share the costs of real estate taxes, insurance premiums, services, maintenance or improvements of real estate, or other activities
specified in their arrangement or declarations does not create a
separate common interest community. However, assessments against
the units in the common interest community required by the
arrangement must be included in the periodic budget for the common
interest community and the arrangement must be disclosed in all
public offering statements and resale certificates required by this
chapter.
ARTICLE 2. CREATION, ALTERATION AND TERMINATION OF COMMON
INTEREST COMMUNITIES.
§36B-2-109. Plats and plans.
(a) Plats and plans are a part of the declaration and are
required for all common interest communities except cooperatives.
Separate plats and plans are not required by this chapter if all
the information required by this section is contained in either a
plat or plan. Each plat and plan must be clear and legible and
contain a certification that the plat or plan contains all
information required by this section.
(b) Each plat must show:
(1) The name and a survey or general schematic map of the
entire common interest community;
(2) The location and dimensions of all real estate not subject
to development rights or subject only to the development right to withdraw and the location and dimensions of all existing
improvements within that real estate;
(3) A legally sufficient description of any real estate
subject to development rights, labeled to identify the rights
applicable to each parcel;
(4) The extent of any encroachments by or upon any portion of
the common interest community;
(5) To the extent feasible, a legally sufficient description
of all easements serving or burdening any portion of the common
interest community;
(6) The location and dimensions of any vertical unit
boundaries not shown or projected on plans recorded pursuant to
subsection (d) and that unit's identifying number;
(7) The location with reference to an established datum of any
horizontal unit boundaries not shown or projected on plans recorded
pursuant to subsection (d) and that unit's identifying number;
(8) A legally sufficient description of any real estate in
which the unit owners will own only an estate for years, labeled as
"leasehold real estate";
(9) The distance between noncontiguous parcels of real estate
comprising the common interest community;
(10) The location and dimensions of limited common elements,
including porches, balconies and patios, other than parking spaces and the other limited common elements described in sections
2-102(2) and (4); and
(11) In the case of real estate not subject to development
rights, all other matters customarily shown on land surveys.
(c) A plat may also show the intended location and dimensions
of any contemplated improvement to be constructed anywhere within
the common interest community. Any contemplated improvement shown
must be labeled either "MUST BE BUILT" or "NEED NOT BE BUILT."
(d) To the extent not shown or projected on the plats, plans
of the units must show or project:
(1) The location and dimensions of the vertical boundaries of
each unit and that unit's identifying number;
(2) Any horizontal unit boundaries, with reference to an
established datum and that unit's identifying number; and
(3) Any units in which the declarant has reserved the right to
create additional units or common elements (section 2- 110(c)),
identified appropriately.
(e) Unless the declaration provides otherwise, the horizontal
boundaries of part of a unit located outside a building have the
same elevation as the horizontal boundaries of the inside part and
need not be depicted on the plats and plans.
(f) Upon exercising any development right, the declarant shall
record either new plats and plans necessary to conform to the requirements of subsections (a), (b) and (d) or new certifications
of plats and plans previously recorded if those plats and plans
otherwise conform to the requirements of those subsections.
(g) Any certification of a plat or plan required by this
section or section 2-101(b) must be made by an independent
(registered) surveyor, architect or engineer.
(h) Plats and plans need not show the location and dimensions
of the units' boundaries or their limited common elements if:
_____(1) The plat shows the location and dimensions of all
buildings containing or comprising the units; and
_____(2) The declaration includes other information that shows or
contains a narrative description of the general layout of the units
in those buildings and the limited common elements allocated to
those units.
§36B-2-112. Relocation of boundaries between adjoining units.
(a) Subject to the provisions of the declaration and other
provisions of law, the boundaries between adjoining units may be
relocated by an amendment to the declaration upon application to
the association by the owners of those units. If the owners of the
adjoining units have specified a reallocation between their units
of their allocated interests, the application must state the
proposed reallocations. Unless the executive board determines,
within thirty days, that the reallocations are unreasonable, the association shall prepare an amendment that identifies the units
involved and states the reallocations. The amendment must be
executed by those unit owners, contain words of conveyance between
them, and, on recordation, be indexed in the name of the grantor
and the grantee, and in the grantee's index in the name of the
association.
(b) Subject to the provisions of the declaration and other
provisions of law, boundaries between units and common elements may
be relocated to incorporate common elements within a unit by an
amendment to the declaration upon application to the association by
the owner of the unit who proposes to relocate a boundary. Unless
the declaration provides otherwise, the amendment may be approved
only if persons entitled to cast at least sixty-seven percent of
the votes in the association, including sixty-seven percent of the
votes allocated to units not owned by the declarant, agree to the
action. The amendment may describe any fees or charges payable by
the owner of the affected unit in connection with the boundary
relocation and the fees and charges are assets of the association.
The amendment must be executed by the unit owner of the unit whose
boundary is being relocated and by the association, contain words
of conveyance between them, and on recordation be indexed in the
name of the unit owner and the association as grantor or grantee,
as appropriate.
_____(b) (c) The association (i) in a condominium or planned
community shall prepare and record plats or plans necessary to show
the altered boundaries between adjoining units and their dimensions
and identifying numbers, and (ii) in a cooperative shall prepare
and record amendments to the declaration, including any plans,
necessary to show or describe the altered boundaries between
adjoining units and their dimensions and identifying numbers.
§36B-2-116. Easement rights.
(a) Subject to the provisions of the declaration, a declarant
has an easement through the common elements as may be reasonably
necessary for the purpose of discharging the declarant's
obligations or exercising special declarant rights, whether arising
under this chapter or reserved in the declaration.
(b) In a planned community, subject Subject to the provisions
of sections 3-102(a)(6) and 3-112, the unit owners have an easement
(i) in the common elements for purposes of access to their units.
(ii) to use the common elements and all real estate that must
become common elements (section 2-105(a)(6)) for all other
purposes.
(c) Subject to the declaration and rules, the unit owners have
a right to use the common elements that are not limited common
elements and all real estate that must become common elements for
the purposes for which they were intended.
§36B-2-117. Amendment of declaration.
(a) Except in cases of amendments that may be executed by a
declarant under section 2-109(f) or 2-110, or by the association
under section 1-107, 2-106(d), 2-108(c), 2-112(a), or 2-113, or by
certain unit owners under section 2-108(b), 2-112(a), 2-113(b), or
2-118(b), and except as limited by subsection subsections (d),(f),
(g) and (h), the declaration, including any plats and plans, may be
amended only by vote or agreement of unit owners of units to which
at least sixty-seven percent of the votes in the association are
allocated, or any larger majority unless the declaration specifies
a different percentage for all amendments or for specific subjects
of amendment. If the declaration requires the approval of another
person as a condition of effectiveness, the amendment is not valid
without that approval. The declaration may specify a smaller
number only if all of the units are restricted exclusively to
nonresidential use.
(b) No action to challenge the validity of an amendment
adopted by the association pursuant to this section may be brought
more than one year after the amendment is recorded.
(c) Every amendment to the declaration must be recorded in
every county in which any portion of the common interest community
is located and is effective only upon recordation. An amendment,
except an amendment pursuant to section 2- 112(a), must be indexed in the grantee's index in the name of the common interest community
and the association and in the grantor's index in the name of the
parties executing the amendment.
(d) Except to the extent expressly permitted or required by
other provisions of this chapter, no amendment may create or
increase special declarant rights, increase the number of units,
change the boundaries of any unit, the allocated interests of a
unit, or the uses to which any unit is restricted, in the absence
of unanimous consent of the unit owners.
(e) Amendments to the declaration required by this chapter to
be recorded by the association must be prepared, executed,
recorded, and certified on behalf of the association by any officer
of the association designated for that purpose or, in the absence
of designation, by the president of the association.
(f) An amendment to the declaration may prohibit or materially
restrict the permitted uses of or behavior in a unit or the number
or other qualifications of persons who may occupy units only by
vote or agreement of unit owners of units to which at least eighty
percent of the votes in the association are allocated, unless the
declaration specifies that a larger percentage of unit owners must
vote or agree to that amendment or that such an amendment may be
approved by unit owners of units having at least eighty percent of
the votes of a specified group of units that would be affected by the amendment. An amendment approved under this subsection must
provide reasonable protection for a use or occupancy permitted at
the time the amendment was adopted.
_______________(g) The time limits specified in the declaration pursuant to
section 2-105(a)(8) (Contents of the Declaration) within which
reserved development rights must be exercised may be extended, and
additional development rights may be created, if persons entitled
to cast at least eighty percent of the votes in the association,
including eighty percent of the votes allocated to units not owned
by the declarant, agree to that action. The agreement is effective
thirty days after an amendment to the declaration reflecting the
terms of the agreement is recorded unless all the persons holding
the affected special declarant rights, or security interests in
those rights, record a written objection within the thirty-day
period, in which case the amendment is void, or consent in writing
at the time the amendment is recorded, in which case, the amendment
is effective when recorded.
_______________(h) A provision in the declaration creating special declarant
rights that have not expired may not be amended without the consent
of the declarant.
_______________(i) If any provision of this chapter, law, or of the
declaration requires the consent of a holder of a security interest
in a unit as a condition to the effectiveness of an amendment to the declaration, that consent is deemed granted if a refusal to
consent in a record is not received by the association within sixty
days after the association delivers notice of the proposed
amendment to the holder at an address for notice provided by the
holder or mails the notice to the holder by certified mail, return
receipt requested, at that address. If the holder has not provided
to the association an address for notice, the association shall
provide notice to the address in the security interest of record.
Notwithstanding this section, an amendment to the declaration that
affects the priority of a holder's security interest or the ability
of that holder to foreclose its security interest may not be
adopted without that holder's consent in a record if the
declaration requires that consent as a condition to the
effectiveness of the amendment: Provided, That this subsection
(i) shall not apply to amendments which: (A) Permit a unit
previously restricted to residential occupancy to be utilized for
nonresidential purposes; (B) increases the share of common expenses
allocated to the unit in a manner disproportionate to the formula
stated in the declaration pursuant to section one hundred eighteen
of this article; (C) terminates the common interest community
pursuant to section one hundred eighteen of this article; (D)
transfers from the association to the unit, the duty to maintain
and common element or limited common element previously performed by the association; or (E) the unit owner is contractually
precluded from consenting to by the terms of a planned unit
development rider in a recorded security instrument.
_______________(j) If the declaration contains a provision requiring that
amendments to the declaration may be adopted only by vote or
agreement of unit owners of units to which more than eighty percent
of the votes in the association are allocated, the amendment is
approved:
_______________(l) If:
_______________(A) Unit owners of units to which at least eighty percent of
the votes in the association are allocated vote for or agree to the
proposed amendment;
_______________(B) No unit owner votes against the proposed amendment; and
_______________(C) Notice of the proposed amendment is delivered to the unit
owners holding the votes in the association which have not voted or
agreed to the proposed amendment and no written objection to the
proposed amendment is received by the association within sixty days
after the association delivers notice; or
_______________(2) Unit owners of units to which at least eighty percent of
the votes in the association are allocated vote for or agree to the
proposed amendment but at least one unit owner objects to the
proposed amendment and, pursuant to an action brought by the
association in a the circuit court of the county in which the common interest community is situate against all objecting unit
owners, the court finds that the objecting unit owners do not have
an interest, different in kind from the interests of the other unit
owners, that the voting requirement of the declaration was intended
to protect.
§36B-2-119. Rights of secured lenders.
(a) The declaration may require that all or a specified number
or percentage of the lenders who hold security interests
encumbering the units or who have extended credit to the
association approve specified actions of the unit owners or the
association as a condition to the effectiveness of those actions,
but no requirement for approval may operate to: (i) Deny or
delegate control over the general administrative affairs of the
association by the unit owners or the executive board, or (ii)
prevent the association or the executive board from commencing,
intervening in, or settling any litigation or proceeding, or (iii)
prevent any insurance trustee or the association from receiving and
distributing any insurance proceeds except pursuant to section
3-113.
(b) A lender who has extended credit to an association secured
by an assignment of income (section 3-102(14)) or an encumbrance on
the common elements (section 3-112) may enforce its security
agreement in accordance with its terms, subject to the requirements of this chapter and other law. Requirements that the association
must deposit its periodic common charges before default with the
lender to which the association's income has been assigned, or
increase its common charges at the lender's direction by amounts
reasonably necessary to amortize the loan in accordance with its
terms, do not violate the prohibitions on lender approval contained
in subsection (a).
§36B-2-123. Master planned communities.
__________(a) The declaration for a common interest community may state
that it is a master planned community if the declarant has reserved
the development right to create at least five-hundred units that
may be used for residential purposes, and at the time of the
reservation that declarant owns or controls more than five-hundred
acres on which the units may be built.
__________(b) If the requirements of subsection (a) are satisfied, the
declaration for the master planned community need not state a
maximum number of units and need not contain any of the information
required by section 2-105(a)(3) through (14) until the declaration
is amended under subsection (c).
__________(c) When each unit in a master planned community is conveyed
to a purchaser, the declaration must contain:
__________(i) A sufficient legal description of the unit and all
portions of the master planned community in which any other units have been conveyed to a purchaser; and
__________(ii) All the information required by section 2-105(a)(3)
through (14) with respect to that real estate.
__________(d) The only real estate in a master planned community subject
to this chapter are units that have been declared or which are
being offered for sale and any other real estate described pursuant
to subsection (c). Other real estate that is or may become part of
the master planned community is only subject to other law and to
any other restrictions and limitations that appear of record.
__________(e) If the public offering statement conspicuously identifies
the fact that the community is a master planned community, the
disclosure requirements contained in article four apply only with
respect to units that have been declared or are being offered for
sale in connection with the public offering statement and to the
real estate described pursuant to subsection (c).
__________(f) Limitations in this chapter on the addition of unspecified
real estate-(section 2-122) do not apply to a master planned
community.
__________(g) The period of declarant control of the association for a
master planned community terminates in accordance with any
conditions specified in the declaration or otherwise at the time
the declarant, in a recorded instrument and after giving notice in
a record to all the unit owners, voluntarily surrenders all rights to control the activities of the association.
§36B-2-124. Termination following catastrophe.
__________If substantially all the units in a common interest community
have been destroyed or are uninhabitable and the available methods
for giving notice under section 3-121 of a meeting of unit owners
to consider termination under section 2-118 will not likely result
in receipt of the notice, the executive board or any other
interested person may commence an action in the circuit court of
the county in which the common interest community is situate
seeking to terminate the common interest community. During the
pendency of the action, the court may issue whatever orders it
considers appropriate, including appointment of a receiver. After
a hearing, the court may terminate the common interest community or
reduce its size and may issue any other order the court considers
to be in the best interest of the unit owners and persons holding
an interest in the common interest community.
ARTICLE 3. MANAGEMENT OF THE COMMON INTEREST COMMUNITY.
§36B-3-102. Powers of unit owners' association.
(a) Except as provided in subsection (b), and subject to the
provisions of the declaration, the association, even if
unincorporated, may:
(1) Adopt and amend bylaws and rules and regulations;
(2) Adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit
owners;
(3) Hire and discharge managing agents and other employees,
agents, and independent contractors;
(4) Institute, defend, or intervene in litigation or
administrative proceedings in its own name on behalf of itself or
two or more unit owners on matters affecting the common interest
community;
(5) Make contracts and incur liabilities;
(6) Regulate the use, maintenance, repair, replacement, and
modification of common elements;
(7) Cause additional improvements to be made as a part of the
common elements;
(8) Acquire, hold, encumber, and convey in its own name any
right, title, or interest to real estate or personal property, but:
(i) Common elements in a condominium or planned community may be
conveyed or subjected to a security interest only pursuant to
section one hundred twelve of this article; and (ii) part of a
cooperative may be conveyed, or all or part of a cooperative may be
subjected to a security interest, only pursuant to section one
hundred twelve of this article;
(9) Grant easements, leases, licenses, and concessions through
or over the common elements;
(10) Impose and receive any payments, fees, or charges for the
use, rental, or operation of the common elements, other than
limited common elements described in subsections (1) and (4),
section one hundred two, article two of this chapter, and for
services provided to unit owners;
(11) Impose charges for late payment of assessments and, after
notice and an opportunity to be heard, levy reasonable fines for
violations of the declaration, bylaws, rules, and regulations of
the association;
(12) Impose reasonable charges for the preparation and
recordation of amendments to the declaration, resale certificates
required by section one hundred nine, article four of this chapter,
or statements of unpaid assessments;
(13) Provide for the indemnification of its officers and
executive board and maintain directors' and officers' liability
insurance;
(14) Assign its right to future income, including the right to
receive common expense assessments, but only to the extent the
declaration expressly so provides;
(15) Exercise any other powers conferred by the declaration or
bylaws;
(16) Exercise all other powers that may be exercised in this
state by legal entities of the same type as the association;
(17) Institute litigation or administrative proceedings in its
own name against a unit owner for the collection of dues or
assessments that are overdue or in arrears; and
(18) Exercise any other powers necessary and proper for the
governance and operation of the association;
(19) May require that disputes between the association and
unit owners or between two or more unit owners regarding the common
interest community be submitted to nonbinding alternative dispute
resolution as a prerequisite to commencement of a judicial
proceeding;
__________(20) May suspend any right or privilege of a unit owner that
fails to pay an assessment, but may not:
__________(A) Deny a unit owner or other occupant access to the owner's
unit; or
__________(B) Withhold services provided to a unit or a unit owner by
the association if the effect of withholding the service would be
to endanger the health, safety, or property of any person; and
__________(21) The association may, after notice, suspend a unit owner's
right to vote and/or right to seek election as a director or
officer of the association for failure of the unit owner to pay
assessments. The suspend rights to vote or seek election shall be
immediately restored to the unit owner upon payment of all past due
or delinquent assessment even if paid during a meeting or election.
(b) The declaration may not impose limitations on limit the
power of the association beyond the limitions authorized in
subsection (a)(18) to:
__________(1) Deal with the declarant which are if the limit is more
restrictive than the limitations limit imposed on the power of the
association to deal with other persons
; or
__________(2) Institute litigation or an arbitration, mediation or
administrative proceeding against any person, subject to the
following:
__________(A) The association shall comply with section 124 of this
article, if applicable, before instituting any proceeding described
in subsection (a) of said section in connection with construction
defects; and
__________(B) The executive board promptly shall provide notice to the
unit owners of any legal proceeding in which the association is a
party other than proceedings involving enforcement of rules or to
recover unpaid assessments or other sums due the association.
__________(c) If a tenant of a unit owner violates the declaration,
bylaws, or rules of the association, in addition to exercising any
of its powers against the unit owner, the association may:
__________(1) Exercise directly against the tenant the powers described
in subsection (a)(11);
__________(2) After giving notice to the tenant and the unit owner and an opportunity to be heard, levy reasonable fines against the
tenant for the violation; and
__________(3) Enforce any other rights against the tenant for the
violation which the unit owner as landlord could lawfully have
exercised under the lease or which the association could lawfully
have exercised directly against the unit owner, or both.
__________(d) The rights referred to in subsection (c)(3) may be
exercised only if the tenant or unit owner fails to cure the
violation within ten days after the association notifies the tenant
and unit owner of that violation.
__________(e) Unless a lease otherwise provides, this section does not:
__________(1) Affect rights that the unit owner has to enforce the lease
or that the association has under other law; or
__________(2) Permit the association to enforce a lease to which it is
not a party in the absence of a violation of the declaration,
bylaws, or rules.
__________(f) The executive board may determine whether to take
enforcement action by exercising the association's power to impose
sanctions or commencing an action for a violation of the
declaration, bylaws, and rules, including whether to compromise any
claim for unpaid assessments or other claim made by or against it.
The executive board does not have a duty to take enforcement action
if it determines that, under the facts and circumstances presented:
__________(1) The association's legal position does not justify taking
any or further enforcement action;
__________(2) The covenant, restriction, or rule being enforced is, or
is likely to be construed as, inconsistent with law;
__________(3) Although a violation may exist or may have occurred, it is
not so material as to be objectionable to a reasonable person or to
justify expending the association's resources; or
__________(4) It is not in the association's best financial or other
interests to pursue an enforcement action.
__________(g) The executive board's decision under subsection (f) not to
pursue enforcement under one set of circumstances does not prevent
the executive board from taking enforcement action under another
set of circumstances, but the executive board may not be arbitrary
or capricious in taking enforcement action.
__________(h) The executive board shall establish a reasonable method
for unit owners to communicate among themselves and with the
executive board on matters concerning the association.
§36B-3-103. Executive board members and officers.
(a) Except as otherwise provided in the declaration, the
bylaws, subsection (b), or other provisions of this chapter, the
executive board may act in all instances acts on behalf of the
association. In the performance of their duties, the officers and
members of the executive board are required to exercise (i) if appointed by the declarant the care required of fiduciaries of the
unit owners shall exercise the degree of care and loyalty to the
association required of a trustee. and (ii) if elected by the unit
owners, ordinary and reasonable care.
(b) Officers and members of the executive board not appointed
by the declarant shall exercise the degree of care and loyalty to
the association required of an officer or director of a corporation
organized, and are subject to the conflict of interest rules
governing directors and officers, under West Virginia Code Chapter
31E. The standards of care and loyalty described in this section
apply regardless of the form in which the association is organized.
__________(b) (c) The executive board may not; act on behalf of the
association:
(1) to Amend the declaration except as provided in (section
2-117);
(2) Amend the bylaws;
__________(3) to Terminate the common interest community (section
2-118);
(4) or to Elect members of the executive board but may fill
vacancies in its membership for the unexpired portion of any term
or, if earlier, until the next regularly scheduled election of
executive board members; or
(5) Determine the qualifications, powers, and duties, or terms of office of executive board members (section 3-103(f). ), but the
executive board may fill vacancies in its membership for the
unexpired portion of any term.
(c) The executive board shall adopt budgets as provided in
section 3-123. Within thirty days after adoption of any proposed
budget for the common interest community, the executive board shall
provide a summary of the budget to all the unit owners, and shall
set a date for a meeting of the unit owners to consider
ratification of the budget not less than fourteen nor more than
thirty days after mailing of the summary. Unless at that meeting
a majority of all unit owners or any larger vote specified in the
declaration reject the budget, the budget is ratified, whether or
not a quorum is present. In the event the proposed budget is
rejected, the periodic budget last ratified by the unit owners must
be continued until such time as the unit owners ratify a subsequent
budget proposed by the executive board.
(d) Subject to subsection (e), the declaration may provide for
a period of declarant control of the association, during which a
declarant, or persons designated by him the declarant may appoint
and remove the officers and members of the executive board. A
declarant may voluntarily surrender the right to appoint and remove
officers and members of the executive board before the period ends.
In that event, the declarant may require during the remainder of the period that specified actions of the association or executive
board, as described in a recorded instrument executive by the
declarant, be approved by the declarant before they become
effective. Regardless of the period provided in the declaration,
and except as provided in section 2-123(g) (Master Planned
Communities), a period of declarant control terminates no later
than the earlier earliest of:
(i) Sixty days after conveyance of seventy-five percent
three-fourths of the units that may be created to unit owners other
than a declarant;
(ii) Two years after all declarants have ceased to offer units
for sale in the ordinary course of business;
(iii) Two years after any right to add new units was last
exercised; or
__________(iv) The day the declarant, after giving notice in a record to
unit owners, records an instrument voluntarily surrendering all
rights to control activities of the association. A declarant may
voluntarily surrender the right to appoint and remove officers and
members of the executive board before termination of that period,
but in that event the declarant may require, for the duration of
the period of declarant control, that specified actions of the
association or executive board, as described in a recorded
instrument executed by the declarant, be approved by the declarant before they become effective.
(e) Not later than sixty days after conveyance of twenty-five
percent one-fourth of the units that may be created to unit owners
other than a declarant, at least one member and not less than
twenty-five percent of the members of the executive board must be
elected by unit owners other than the declarant. Not later than
sixty days after conveyance of fifty percent one-half of the units
that may be created to unit owners other than a declarant, not less
than thirty-three and one-third percent one third of the members of
the executive board must be elected by unit owners other than the
declarant.
(f) Except as otherwise provided in section 2-120(e), not
later than the termination of any period of declarant control, the
unit owners shall elect an executive board of at least three
members, at least a majority of whom must be unit owners. Unless
the declaration provides for the election of officers by the unit
owners, the The executive board shall elect the officers. The
executive board members and officers shall take office upon
election or appointment.
(g) Notwithstanding any provision of the declaration or bylaws
to the contrary, the unit owners, by a two-thirds vote of all
persons present and entitled to vote at any meeting of the unit
owners at which a quorum is present, may remove any member of the executive board with or without cause, other than a member
appointed by the declarant. A declaration may provide for the
appointment of specified positions on the executive board by
persons other than the declarant during or after the period of
declarant control. It also may provide a method for filling
vacancies in those positions, other than by election by unit
owners. However, after the period of declarant control, appointed
members:
__________(1) may not comprise more than one third of the board; and
__________(2) have no greater authority than any other member of the
board.
§36B-3-105. Termination of contracts and leases of declarant.
(a) If entered into before Within two years after the
executive board elected by the unit owners pursuant to ection
3-103(f) takes office, the association may terminate without
penalty, upon not less than ninety days' notice to the other party,
any of the following if it was entered into before the executive
board was elected:
(i) Any management, maintenance, operations, or contract,
employment contract, or lease of recreational or parking areas or
facilities; or
(ii) Any other contract or lease between the association and
a declarant or an affiliate of a declarant.; or
(iii) any contract or lease that is not bona fide or was
unconscionable to the unit owners at the time entered into under
the circumstances then prevailing, may be terminated
_______________(b) The association may terminate without penalty by the
association at any time after the executive board elected by the
unit owners pursuant to section 3-103(f) takes office upon not less
than ninety days' notice to the other party, any contract or lease
that is not bona fide or was unconscionable to the unit owners at
the time entered into.
_______________(c) This section does not apply to:
(i) Any lease the termination of which would terminate the
common interest community or reduce its size, unless the real
estate subject to that lease was included in the common interest
community for the purpose of avoiding the right of the association
to terminate a lease under this section; or
(ii) A proprietary lease.
§36B-3-106. Bylaws.
(a) The bylaws of the association must provide:
(1) The number of members of the executive board and the
titles of the officers of the association;
(2) Election by the executive board of president, treasurer,
secretary, and any other officers of the association the bylaws
specify;
(3) The qualifications, powers and duties, terms of office,
and manner of electing and removing executive board members and
officers and filling vacancies;
(4) Which, if any, of its powers the executive board or
officers may delegate to other persons or to a managing agent;
(5) Which of its officers may prepare, execute, certify, and
record amendments to the declaration on behalf of the association;
and
(6) A method for amending the bylaws;
(7) Any provision necessary to satisfy requirements in this
chapter or the declaration concerning meetings, voting, quorums,
and other activities of the association; and
_______________(8) Any matter required by law of this state other than this
chapter to appear in the bylaws of organizations of the same type
as the association.
(b) Subject to the provisions of the declaration and this
chapter, the bylaws may provide for any other necessary or
appropriate matters, the association deems necessary and
appropriate, including matters that could be adopted as rules.
§36B-3-108. Meetings.
A meeting of the association must be held at least once each
year. Special meetings of the association may be called by the
president,
(a) The following requirements apply to unit owner meetings:
_______________(1) An association shall hold a meeting of unit owners
annually at a time, date, and place stated in or fixed in
accordance with the bylaws.
_______________(2) An association shall hold a special meeting of unit owners
to address any matter affecting the common interest community or
the association if its president, a majority of the executive
board, or by unit owners having at least twenty percent, or any
lower percentage specified in the bylaws, of the votes in the
association request that the secretary call the meeting. Not less
than ten nor more than sixty days in advance of any meeting, the
secretary or other officer specified in the bylaws shall cause
notice to be hand-delivered or sent prepaid If the association does
not notify unit owners of a special meeting with thirty days after
the requisite number or percentage of unit owners request the
secretary to do so, the requesting members may directly notify all
the unit owners of the meeting. Only matters described in the
meeting notice required by paragraph (3) of this section may be
considered at a special meeting.
_______________(3) An association shall notify unit owners of the time, date,
and place of each annual and special unit owners meeting not less
than ten days or more than sixty days before the meeting date.
Notice may be by any means described in section 3-121 by United States mail to the mailing address of each unit or to any other
mailing address designated in writing by the unit owner. The
notice of any meeting must state the time, date and place of the
meeting and the items on the agenda, including:
(A) A statement of the general nature of any proposed
amendment to the declaration or bylaws;
(B) Any budget changes; and
(C) Any proposal to remove an officer or member of the
executive board.
(4) The minimum time to give notice required by subdivision
(3) of this section may be reduced or waived for a meeting called
to deal with an emergency.
_______________(5) Unit owners must be given a reasonable opportunity at any
meeting to comment regarding any matter affecting the common
interest of the community or the association.
_______________(6) The declaration or bylaws may allow for meetings of unit
owners to be conducted by telephonic video, or other conferencing
process, if the alternative process is consistent with subsection
(b)(7) of this section.
_______________(b) The following requirements apply to meetings of the
executive board and committees of the association authorized to act
for the association:
_______________(1) Meetings must be open to the unit owners except during executive sessions. The executive board and those committees may
hold an executive session only during a regular or special meeting
of the board or a committee. No final vote or action may be taken
during an executive session. An executive session may be held only
to:
_______________(A) Consult with the association's attorney concerning legal
matters;
_______________(B) Discuss existing or potential litigation or mediation,
arbitration, or administrative proceedings;
_______________(C) Discuss labor or personnel matters;
_______________(D) Discuss contracts, leases, and other commercial
transactions to purchase or provide goods or services currently
being negotiated, including the review of bids or proposals, if
premature general knowledge of those matters would place the
association at a disadvantage; or
_______________(E) Prevent public knowledge of the matter to be discussed if
the executive board or committee determines that public knowledge
would violate the privacy of any person.
_______________(2) For purposes of this section, a gathering of board members
at which the board members do not conduct association business is
not a meeting of the executive board. The executive board and its
members may not use incidental or social gatherings of board
members or any other method to evade the open meeting requirements of this section.
_______________(3) During the period of declarant control, the executive
board shall meet at least four times a year. At least one of those
meetings must be held at the common interest community or at a
place convenient to the community. After termination of the period
of declarant control, all executive board meetings must be at the
common interest community or at a place convenient to the community
unless the unit owners amend the bylaws to vary the location of
those meetings.
_______________(4) At each executive board meeting, the executive board shall
provide a reasonable opportunity for unit owners to comment
regarding any matter affecting the common interest community and
the association.
_______________(5) Unless the meeting is included in a schedule given to the
unit owners or the meeting is called to deal with an emergency, the
secretary or other officer specified in the bylaws shall give
notice of each executive board meeting to each board member and to
the unit owners. The notice must be given at least ten days before
the meeting and must state the time, date, place, and agenda of the
meeting.
_______________(6) If any materials are distributed to the executive board
before the meeting, the executive board at the same time shall make
copies of those materials reasonably available to unit owners, except that the board need not make available copies of unapproved
minutes or materials that are to be considered in executive
session.
_______________(7) Unless the declaration or bylaws otherwise provide, the
executive board may meet by telephonic, video, or other
conferencing process if:
_______________(A) The meeting notice states the conferencing process to be
used and provides information explaining how unit owners may
participate in the conference directly or by meeting at a central
location or conference connection; and
_______________(B) The process provides all unit owners the opportunity to
hear or perceive the discussion and to comment as provided in
subdivision (4) of this subsection.
_______________(8) After termination of the period of declarant control, unit
owners may amend the bylaws to vary the procedures for meetings
described in subdivision (7) of this subsection.
_______________(9) Instead of meeting, the executive board may act by
unanimous consent as documented in a record authenticated by all
its members. The secretary promptly shall give notice to all unit
owners of any action taken by unanimous consent. After termination
of the period of declarant control, the executive board may act by
unanimous consent only to undertake ministerial actions or to
implement actions previously taken at a meeting of the executive board.
_______________(10) Even if an action by the executive board is not in
compliance with this section, it is valid unless set aside by a
court. A challenge to the validity of an action of the executive
board for failure to comply with this section may not be brought
more than sixty days after the minutes of the executive board of
the meeting at which the action was taken are approved or the
record of that action is distributed to unit owners, whichever is
later.
§36B-3-110. Voting; proxies; ballots.
_______________(a) Unless prohibited or limited by the declaration or bylaws,
unit owners may vote at a meeting in person, by absentee ballot
pursuant to subsection (b)(4), by a proxy pursuant to subsection
(c) or, when a vote is conducted without a meeting, by electronic
or paper ballot pursuant to subsection (d).
_______________(b) At a meeting of unit owners the following requirements
apply:
_______________(1) Unit owners who are present in person may vote by voice
vote, show of hands, standing, or any other method for determining
the votes of unit owners, as designated by the person presiding at
the meeting.
_______________(a) (2) If only one of several owners of a unit is present at
a meeting of the association, that owner is entitled to cast all the votes allocated to that unit. If more than one of the owners
are present, the votes allocated to that unit may be cast only in
accordance with the agreement of a majority in interest of the
owners, unless the declaration expressly provides otherwise. There
is majority agreement if any one of the owners casts the votes
allocated to that the unit without protest being made promptly to
the person presiding over the meeting by any of the other owners of
the unit.
(3) Unless a greater number or fraction of the votes in the
association is required by this chapter or the declaration, a
majority of the votes cast determines the outcome of any action of
the association.
_______________(4) Subject to subsection (a), a unit owner may vote by
absentee ballot without being present at the meeting. The
association promptly shall deliver an absentee ballot to an owner
that requests it if the request is made at least three days before
the scheduled meeting. Votes cast by absentee ballot must be
included in the tally of a vote taken at that meeting.
_______________(5) When a unit owner votes by absentee ballot, the
association must be able to verify that the ballot is cast by the
unit owner having the right to do so.
(c) Except as otherwise provided in the declaration or
bylaws, the following requirements apply with respect to proxy voting:
_______________(b) (1) Votes allocated to a unit may be cast pursuant to a
directed or undirected proxy duly executed by a unit owner.
(2) If a unit is owned by more than one person, each owner of
the unit may vote or register protest to the casting of votes by
the other owners of the unit through a duly executed proxy.
(3) A unit owner may revoke a proxy given pursuant to this
section only by actual notice of revocation to the person presiding
over a meeting of the association.
(4) A proxy is void if it is not dated or purports to be
revocable without notice.
(5) A proxy terminates one year after its date, unless it
specifies a shorter term is valid only for the meeting at which it
is cast and any recessed session of that meeting.
(6) A person may not cast undirected proxies representing more
than 15 percent of the votes in the association, unless the
undirected proxies are for units under common ownership.
_______________(d) Unless prohibited or limited by the declaration or bylaws,
an association may conduct a vote without a meeting. In that
event, the following requirements apply:
_______________(1) The association shall notify the unit owners that the vote
will be taken by ballot.
_______________(2) The association shall deliver a paper or electronic ballot to every unit owner entitled to vote on the matter.
_______________(3) The ballot must set forth each proposed action and provide
an opportunity to vote for or against the action.
_______________(4) When the association delivers the ballots, it shall also:
_______________(A) Indicate the number of responses needed to meet the quorum
requirements;
_______________(B) State the percent of votes necessary to approve each
matter other than election of directors;
_______________(C) Specify the time and date by which a ballot must be
delivered to the association to be counted, which time and date may
not be fewer than three days after the date the association
delivers the ballot; and
_______________(D) Describe the time, date, and manner by which unit owners
wishing to deliver information to all unit owners regarding the
subject of the vote may do so.
_______________(5) Except as otherwise provided in the declaration or bylaws,
a ballot is not revoked after delivery to the association by death
or disability or attempted revocation by the person that case that
vote.
_______________(6) Approval by ballot pursuant to this subsection is valid
only if the number of votes cast by ballot equals or exceeds the
quorum required to be present at a meeting authorizing the action.
_______________(c) (e) If the declaration requires that votes on specified matters affecting the common interest community be cast by lessees
rather than unit owners of leased units:
(i) The provisions of subsections (a) and (b) apply This
section applies to lessees as if they were unit owners that have
leased their units to other persons may not cast votes on those
specified matters;
(ii) Unit owners who have leased their units to other persons
may not cast votes on those specified matters; and
(iii) Lessees are entitled to notice of meetings, access to
records, and other rights respecting these matters as if they were
unit owners.
(f) Unit owners must also be given notice in the manner
provided in section 3-108, of all meetings at which lessees are
entitled to vote.
(d) (g) No votes Votes allocated to a unit owned by the
association may must be cast in any vote of the unit owners in the
same proportion as the votes case on the matter by unit owners
other than the association.
§36B-3-112. Conveyance or encumbrance of common elements.
(a) In a condominium or planned community, portions of the
common elements may be conveyed or subjected to a security interest
by the association if persons entitled to cast at least eighty
percent of the votes in the association, including eighty percent of the votes allocated to units not owned by a declarant, or any
larger percentage the declaration specifies, agree to that action;
but all owners of units to which any limited common element is
allocated must agree in order to convey that limited common element
or subject it to a security interest. The declaration may specify
a smaller percentage only if all of the units are restricted
exclusively to nonresidential uses. Proceeds of the sale are an
asset of the association.
(b) Part of a cooperative may be conveyed and all or part of
a cooperative may be subjected to a security interest by the
association if persons entitled to cast at least eighty percent of
the votes in the association, including eighty percent of the votes
allocated to units not owned by a declarant, or any larger
percentage the declaration specified, agree to that action; but, if
fewer than all of the units or limited common elements are to be
conveyed or subjected to a security interest, then all unit owners
of those units, or the units to which those limited common elements
are allocated, must agree in order to convey those units or limited
common elements or subject them to a security interest. The
declaration may specify a smaller percentage only if all of the
units are restricted exclusively to nonresidential uses. Proceeds
of the sale are an asset of the association. Any purported
conveyance or other voluntary transfer of an entire cooperative, unless made pursuant to section 2-118, is void.
(c) An agreement to convey common elements in a condominium or
planned community, or to subject them to a security interest, or in
a cooperative, an agreement to convey any part of a cooperative or
subject it to a security interest, must be evidenced by the
execution of an agreement, or ratifications thereof, in the same
manner as a deed, by the requisite number of unit owners. The
agreement must specify a date after which the agreement will be
void unless recorded before that date. The agreement and all
ratifications thereof must be recorded in every county in which a
portion of the common interest community is situated, and is
effective only upon recordation.
(d) The association, on behalf of the unit owners, may
contract to convey an interest in a common interest community
pursuant to subsection (a), but the contract is not enforceable
against the association until approved pursuant to subsections (a),
(b), and (c). Thereafter, the association has all powers necessary
and appropriate to effect the conveyance or encumbrance, including
the power to execute deeds or other instruments.
(e) Unless made pursuant to this section, any purported
conveyance, encumbrance, judicial sale, or other voluntary transfer
of common elements or of any other part of a cooperative is void.
(f) A conveyance or encumbrance of common elements or of a cooperative pursuant to this section does not deprive any unit of
its rights of access and support.
(g) Unless the declaration otherwise provides, a conveyance or
encumbrance of common elements pursuant to this section does not
affect the priority or validity of preexisting encumbrances if the
holders of first security interests on eighty percent of the units
that are subject to security interests on the day the unit owners'
agreement under subsection (c) is recorded consent in writing:
_______________(1) A conveyance of common elements pursuant to this section
terminates both the undivided interests in those common elements
allocated to the units and the security interests in those
undivided interests held by all persons holding security interests
in the units; and
_______________(2)An encumbrance of common elements pursuant to this section
has priority over all preexisting encumbrances on the undivided
interests in those common elements held by all persons holding
security interests in the units.
_______________(h) The consents by holders of first security interests on
units described in subsection (g), or a certificate of the
secretary affirming that those consents have been received by the
association, may be recorded at any time before the date on which
the agreement under subsection (c) becomes void. Consents or
certificates so recorded are valid from the date they are recorded for purposes of calculating the percentage of consenting first
security interest holders, regardless of later sales or
encumbrances on those units. Even if the required percentage of
first security interest holders so consent, a conveyance or
encumbrance of common elements does not affect interests having
priority over the declaration, or created by the association after
the declaration was recorded.
_______________(h) (i) In a cooperative, the association may acquire, hold,
encumber, or convey a proprietary lease without complying with this
section.
§36B-3-116. Lien for assessments.
(a) The association has a lien on a unit for any assessment
levied against that unit or fines imposed against its unit owner
from the time the assessment or fine becomes due. Unless the
declaration otherwise provides, fees, charges, late charges, fines
and interest charged pursuant to section 3- 102(a)(10), (11) and
(12) are enforceable as assessments under this section. If an
assessment is payable in installments, the full amount of the
assessment is a lien from the time the first installment thereof
becomes due.
(b) A lien under this section is prior to all other liens and
encumbrances on a unit except: (i) Liens and encumbrances recorded
before the recordation of the declaration and, in a cooperative, liens and encumbrances which the association creates, assumes, or
takes subject to; (ii) a first security interest on the unit
recorded before the date on which the assessment sought to be
enforced became delinquent, or, in a cooperative, the first
security interest encumbering only the unit owner's interest and
perfected before the date on which the assessment sought to be
enforced became delinquent; and (iii) liens for real estate taxes
and other governmental assessments or charges against the unit or
cooperative. The lien is also prior to all security interests
described in clause (ii) above to the extent of the common expense
assessments based on the periodic budget adopted by the association
pursuant to section 3-115(a) which would have become due in the
absence of acceleration during the six months immediately preceding
institution of an action to enforce the lien. This subsection
does not affect the priority of mechanics' or materialmen's liens,
or the priority of liens for other assessments made by the
association. (The lien under this section is not subject to the
provisions of (insert appropriate reference to state homestead,
dower and curtesy, or other exemptions)).
(c) Unless the declaration otherwise provides, if two or more
associations have liens for assessments created at any time on the
same property, those liens have equal priority.
(d) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within three years
after the full amount of the assessments becomes due.
(e) This section does not prohibit actions to recover sums for
which subsection (a) creates a lien or prohibit an association from
taking a deed in lieu of foreclosure.
(f) A judgment or decree in any action brought under this
section must include costs and reasonable attorney's fees for the
prevailing party.
(g) The association upon written request shall furnish to a
unit owner a statement setting forth the amount of unpaid
assessments against the unit. If the unit owner's interest is real
estate, the statement must be in recordable form. The statement
must be furnished within ten business days after receipt of the
request and is binding on the association, the executive board, and
every unit owner.
(h) For the purpose of perfecting and preserving its lien, the
association shall give notice to the unit owner in the manner set
forth in section one (§56-2-1), article two, chapter fifty-six of
this code, or by registered or certified mail, return receipt
requested, and in a form reasonably calculated to inform the owner
of his or her liability for payment of the assessment. The lien
shall be discharged as to subsequent purchasers for value without
notice unless the association shall cause to be recorded a notice of the lien in the office of the clerk of the county commission of
any county wherein any part of the condominium is located. The
notice shall contain:
(1) A legally sufficient description of the unit;
(2) The name or names of the owners of the unit;
(3) The amount of unpaid assessments due together with the
date when each fell due; and
(4) The date of recordation.
The clerk of the county commission in whose office the notice
is recorded shall index the notice in the appropriate deed books
and lien books in the name of the unit owners and of the
association. The cost of recordation shall be assessed against any
unit owner found to be delinquent in a subsequent proceeding to
enforce the lien.
Upon payment of the assessment, the association shall execute
a written release of the lien in the manner set forth in section
one (§38-12-1), article twelve, chapter thirty-eight of this code.
This release shall be recorded, at the expense of the association,
in the office of the clerk of the county commission wherein the
notice of the lien was filed.
(i) At any time before the association has disposed of a unit
in a cooperative or entered into a contract for its disposition
under the power of sale, the unit owners or the holder of any subordinate security interest may cure the unit owner's default and
prevent sale or other disposition by tendering the performance due
under the security agreement, including any amounts due because of
exercise of a right to accelerate, plus the reasonable expenses of
proceeding to foreclosure incurred to the time of tender, including
reasonable attorney's fees of the creditor.
(h) In a cooperative, upon nonpayment of an assessment on a
unit, the unit owner may be evicted in the same manner as provided
by law in the case of an unlawful holdover by a commercial tenant,
and the lien may be foreclosed as provided by this section.
_______________(i) For the purpose of facilitating requests to the
association by trustees and judicially appointed commissioners, the
association shall at all times record its notice address in either
the office of the West Virginia Secretary of State, or in the
office of the clerk of the county commission of each county in
which the common interest community is located.
§36B-3-118. Association records.
_______________(a) An association must retain the following:
_______________(1) Detailed records of receipts and expenditures affecting
the operation and administration of the association and other
appropriate accounting records;
_______________(2) Minutes of all meetings of its unit owners and executive
board other than executive sessions, a record of all actions taken by the unit owners or executive board without a meeting, and a
record of all actions taken by a committee in place of the
executive board on behalf of the association;
_______________(3) The names of unit owners in a form that permits
preparation of a list of the names of all owners and the addresses
at which the association communicates with them, in alphabetical
order showing the number of votes each owner is entitled to cast;
_______________(4) Its original or restated organizational documents, if
required by law other than this chapter, bylaws and all amendments
to them, and all rules currently in effect;
_______________(5) All financial statements and tax returns of the
association for the past three years;
_______________(6) A list of the names and addresses of its current executive
board members and officers;
_______________(7) Its most recent annual report delivered to the Secretary
of State, if any;
_______________(8) Financial and other records sufficiently detailed to
enable the association to comply with section 4-109;
_______________(9) Copies of current contracts to which it is a party;
_______________(10) Records of executive board or committee actions to
approve or deny any requests for design or architectural approval
from unit owners; and
_______________(11) Ballots, proxies, and other records related to voting by unit owners for one year after the election, action, or vote to
which they relate.
_______________(b) Subject to subsections (c) and (d), all records retained
by an association must be available for examination and copying by
a unit owner or the owner's authorized agent;
_______________(1) During reasonable business hours or at a mutually
convenient time and location; and
_______________(2) Upon five days notice in a record reasonably identifying
the specific records of the association requested.
_______________(c) Records retained by an association may be withheld from
inspection and copying to the extent that they concern:
_______________(1) Personnel, salary, and medical records relating to
specific individuals;
_______________(2) Contracts, leases, and other commercial transactions to
purchase or provide goods or services, currently being negotiated;
_______________(3) Existing or potential litigation or mediation,
arbitration, or administrative proceedings;
_______________(4) Existing or potential matters involving federal, state, or
local administrative or other formal proceedings before a
governmental tribunal for enforcement of the declaration, bylaws,
or rules;
_______________(5) Communications with the association's attorney which are
otherwise protected by the attorney-client privilege or the attorney work-product doctrine;
_______________(6) Information the disclosure of which would violate law
other than this chapter;
_______________(7) Records of an executive session of the executive board; or
_______________(8) Individual unit files other than those of the requesting
owner.
_______________(d) An association may charge a reasonable fee for providing
copies of any records under this section and for supervising the
unit owner's inspection.
_______________(e) A right to copy records under this section includes the
right to receive copies by photocopying or other means, including
copies through an electronic transmission if available upon request
by the unit owner.
_______________(f) An association is not obligated to compile or synthesize
information.
_______________(g) Information provided pursuant to this section may not be
used for commercial purposes.
§36B-3-120. Rules.
_______________(a) Before adopting, amending or repealing any rule, the
executive board shall give all unit owners notice of:
_______________(1) Its intention to adopt, amend, or repeal a rule and
provide the text of the rule or the proposed change; and
_______________(2) A date on which the executive board will act on the proposed rule or amendment after considering comments from unit
owners.
_______________(b) Following adoption, amendment, or repeal of a rule, the
association shall notify the unit owners of its action and provide
a copy of any new or revised rule.
_______________(c) An association may adopt rules to establish and enforce
construction and design criteria and aesthetic standards if the
declaration so provides. If the declaration so provides, the
association shall adopt procedures for enforcement of those
standards and for approval of construction applications, including
a reasonable time within which the association must act after an
application is submitted and the consequences of its failure to
act.
_______________(d) A rule regarding displaying of the flag of the United
States must be consistent with federal law. In addition, the
association may not prohibit display on a unit or on a limited
common element adjoining a unit of the flag of this state, or signs
regarding candidates for public or association office or ballot
questions, but the association may adopt rules governing the time,
place, size, number, and manner of those displays.
_______________(e) Unit owners may peacefully assemble on the common elements
to consider matters related to the common interest community, but
the association may adopt rules governing the time, place, and manner of those assemblies.
_______________(f) An association may adopt rules that affect the use of or
behavior in units that may be used for residential purposes, only
to:
_______________(1) Implement a provision of the declaration;
_______________(2) Regulate any behavior in or occupancy of a unit which
violates the declaration or adversely affects the use and enjoyment
of other units or the common elements by other unit owners; or
_______________(3) Restrict the leasing of residential units to the extent
those rules are reasonably designed to meet underwriting
requirements of institutional lenders that regularly make loans
secured by first mortgages on units in common interest communities
or regularly purchase those mortgages.
_______________(g) An association's internal business operating procedures
need not be adopted as rules.
_______________(h) Every rule must be reasonable.
§36B-3-121. Notice to unit owners.
_______________(a) An association shall deliver any notice required to be
given by the association under this chapter to any mailing or
electronic mail address a unit owner designates. Otherwise, the
association may deliver notices by:
_______________(1) Hand delivery to each unit owner;
_______________(2) Hand delivery, United States mail postage paid, or commercially reasonable delivery service to the mailing address of
each unit;
_______________(3) Electronic means, if the unit owner has given the
association an electronic address; or
_______________(4) Any other method reasonably calculated to provide notice
to the unit owner.
_______________(b) The ineffectiveness of a good faith effort to deliver
notice by an authorized means does not invalidate action taken at
or without a meeting.
§36B-3-122. Removal of officers and directors.
_______________(a) Notwithstanding any provision of the declaration or bylaws
to the contrary, unit owners present in person, by proxy, or by
absentee ballot at any meeting of the unit owners at which a quorum
is present, may remove any member of the executive board and any
officer elected by the unit owners, with or without cause, if the
number of votes cast in favor of removal exceeds the number of
votes cast in opposition to removal, but:
_______________(1) A member appointed by the declarant may not be removed by
a unit owner vote during the period of declarant control;
_______________(2) A member appointed under subdivision 3-103(g) may be
removed only by the person that appointed that member; and
_______________(3) The unit owners may not consider whether to remove a
member of the executive board or an officer elected by the unit owners at a meeting of the unit owners unless that subject was
listed in the notice of the meeting.
_______________(b) At any meeting at which a vote to remove a member of the
executive board or an officer is to be taken, the member or officer
being considered for removal must have a reasonable opportunity to
speak before the vote.
§36B-3-123. Adoption of budgets; Special assessments.
_______________(a) The executive board, at least annually, shall adopt a
proposed budget for the common interest community for consideration
by the unit owners. Not later than thirty days after adoption of
a proposed budget, the executive board shall provide to all the
unit owners a summary of the budget, including any reserves, and a
statement of the basis on which any reserves are calculated and
funded. Simultaneously, the board shall set a date not less than
ten days or more than sixty days after providing the summary for a
meeting of the unit owners to consider ratification of the budget.
Unless at that meeting a majority of all unit owners or any larger
number specified in the declaration reject the budget, the budget
is ratified, whether or not a quorum is present. If a proposed
budget is rejected, the budget last ratified by the unit owners
continues until unit owners ratify a subsequent budget.
_______________(b) The executive board, at any time, may propose a special
assessment. Except as otherwise provided in subsections (c) and (d), the assessment is effective only if the executive board
follows the procedures for ratification of a budget described in
subsection (a) and the unit owners do not reject the proposed
assessment.
_______________(c) If the executive board determines by a two-thirds vote
that a special assessment is necessary to respond to an emergency:
_______________(1) The special assessment becomes effective immediately in
accordance with the terms of the vote;
_______________(2) Notice of the emergency assessment must be provided
promptly to all unit owners; and
_______________(3) The executive board may spend the funds paid on account of
the emergency assessment only for the purposes described in the
vote.
_______________(d) The board may not levy a special assessment for the
purpose of circumventing the annual budget requirements of
subsection (a).
§36B-3-124. Litigation involving declarant.
_______________(a) The following requirements apply to an association's
authority under subdivision 3-102(a)(4) to institute and maintain
a proceeding alleging a construction defect with respect to the
common interest community, whether by litigation, mediation,
arbitration, or administratively, against a declarant or an
employee, independent contractor, or other person directly or indirectly providing labor or materials to a declarant:
_______________(1) Subject to subsection (e), before the association
institutes a proceeding described in this section, it shall provide
notice in a record of its claims to the declarant and those persons
that the association seeks to hold liable for the claimed defects.
The text of the notice may be in any form reasonably calculated to
give notice of the general nature of the association's claims,
including a list of the claimed defects. The notice may be
delivered by any method of service and may be addressed to any
person if the method of service used:
_______________(A) Provides actual notice to the person named in the claim;
or
_______________(B) Would be sufficient to give notice to the person in
connection with commencement of an action by the association
against the person.
_______________(2) Subject to subsection (e), the association may not
institute a proceeding against a person until forty-five days after
the association sends notice of its claim to that person.
_______________(3) During the period described in subdivision (2), the
declarant and any other person to which the association gave notice
may present to the association a plan to repair or otherwise remedy
the construction defects described in the notice. If the
association does not receive a timely remediation plan from a person to which it gave notice, or if the association does not
accept the terms of any plan submitted, the association may
institute a proceeding against the person.
_______________(4) If the association receives one or more timely remediation
plans, the executive board shall consider promptly those plans and
notify the persons to which it directed notice whether the plan is
acceptable as presented, acceptable with stated conditions, or not
accepted.
_______________(5) If the association accepts a remediation plan from a
person the association seeks to hold liable for the claimed defect,
or if a person agrees to stated conditions to an otherwise
acceptable plan, the parties shall agree on a period for
implementation of the plan. The association may not institute a
proceeding against the person during the time the plan is being
diligently implemented.
_______________(6) Except as otherwise provided in subdivision 4-116(d) for
warranty claims, any statute of limitation affecting the
association's right of action against a declarant or other person
is tolled during the period described in subdivision (2) and during
any extension of that time because a person to which notice was
directed has commenced and is diligently pursuing the remediation
plan.
_______________(b) After the time described in subsection (a)(2) expires, whether or not the association agrees to any remediation plan, a
proceeding may be instituted by:
_______________(1) The association against a person to which notice was
directed which fails to submit a timely remediation plan, the plan
of which is not acceptable, or which fails to pursue diligent
implementation of that plan; or
_______________(2) A unit owner with respect to the owner's unit and any
limited common elements assigned to that unit, regardless of any
action of the association.
_______________(c) This section does not preclude the association from making
repairs necessary to mitigate damages or to correct any defect that
poses a significant and immediate health or safety risk.
_______________(d) Subject to the other provisions of this subsection, the
determination of whether and when the association may institute a
proceeding described in this subsection may be made by the
executive board. The declaration may not require a vote by any
number or percent of unit owners as a condition to institution of
a proceeding.
_______________(e) This subsection does not prevent an association from
seeking equitable relief at any time without complying with
subsection (a)(1) or (2).
ARTICLE 4. PROTECTION OF PURCHASERS.
§36B-4-103. Public offering statement; general provisions.
(a) Except as provided in subsection (b), a public offering
statement must contain or fully and accurately disclose:
(1) The name and principal address of the declarant and of the
common interest community and a statement that the common interest
community is either a condominium, cooperative or planned
community;
(2) A general description of the common interest community,
including to the extent possible, the types, number, and
declarant's schedule of commencement and completion of construction
of buildings and amenities that the declarant anticipates including
in the common interest community;
(3) The number of units in the common interest community;
(4) Copies and a brief narrative description of the
significant features of the declaration, other than any plats and
plans and any other recorded covenants, conditions, restrictions
and reservations affecting the common interest community; the
bylaws and any rules or regulations of the association; copies of
any contracts and leases to be signed by purchasers at closing and
a brief narrative description of any contracts or leases that will
or may be subject to cancellation by the association under section
3-105;
(5) Any current balance sheet and a projected budget for the
association, either within or as an exhibit to the public offering statement, for one year after the date of the first conveyance to
a purchaser and thereafter the current budget of the association,
a statement of who prepared the budget and a statement of the
budget's assumptions concerning occupancy and inflation factors.
The budget must include, without limitation:
(i) A statement of the amount or a statement that there is no
amount, included in the budget as a reserve for repairs and
replacement;
(ii) A statement of any other reserves;
(iii) The projected common expense assessment by category of
expenditures for the association; and
(iv) The projected monthly common expense assessment for each
type of unit;
(6) Any services not reflected in the budget that the
declarant provides, or expenses that he or she pays and which he or
she expects may become at any subsequent time a common expense of
the association and the projected common expense assessment
attributable to each of those services or expenses for the
association and for each type of unit;
(7) Any initial or special fee due from the purchaser at
closing, together with a description of the purpose and method of
calculating the fee;
(8) A description of any liens, defects, or encumbrances on or affecting the title to the common interest community;
(9) A description of any financing offered or arranged by the
declarant;
(10) The terms and significant limitations of any warranties
provided by the declarant, including statutory warranties and
limitations on the enforcement thereof or on damages;
(11) A statement that:
(i) Within fifteen days after receipt of a public offering
statement a purchaser, before conveyance, may cancel any contract
for purchase of a unit from a declarant;
(ii) If a declarant fails to provide a public offering
statement to a purchaser before conveying a unit, that purchaser
may recover from the declarant ten percent of the sales price of
the unit plus ten percent of the share, proportionate to his or her
common expense liability, of any indebtedness of the association
secured by security interests encumbering the common interest
community: Provided, That purchaser is required to show that he or
she has been actually damaged as a result of the failure to provide
such offering statement and that his or her action to recover such
damage and the penalty provided in this paragraph is instituted
within three years from the date on which purchaser's right of
action shall have accrued; and
(iii) If a purchaser receives the public offering statement more than fifteen days before signing a contract, he or she cannot
cancel the contract;
(12) A statement of any unsatisfied judgments or pending suits
against the association and the status of any pending suits
material to the common interest community of which a declarant has
actual knowledge;
(13) A statement that any deposit made in connection with the
purchase of a unit will be held in an escrow account until closing
and will be returned to the purchaser if the purchaser cancels the
contract pursuant to section 4-108, together with the name and
address of the escrow agent;
(14) Any restraints on alienation of any portion of the common
interest community and any restrictions: (i) On use, occupancy,
and alienation of the units; and (ii) on the amount for which a
unit may be sold or on the amount that may be received by a unit
owner on sale, condemnation or casualty loss to the unit or to the
common interest community or on termination of the common interest
community;
(15) A description of the insurance coverage provided for the
benefit of unit owners;
(16) Any current or expected fees or charges to be paid by
unit owners for the use of the common elements and other facilities
related to the common interest community;
(17) The extent to which financial arrangements have been
provided for completion of all improvements that the declarant is
obligated to build pursuant to section 4-119 (Declarant's
Obligation to Complete and Restore);
(18) A brief narrative description of any zoning and other
land use requirements affecting the common interest community;
(19) All unusual and material circumstances, features and
characteristics of the common interest community and the units; and
(20) In a cooperative: (i) Whether the unit owners will be
entitled, for federal, state and local income tax purposes, to a
pass through of deductions for payments made by the association for
real estate taxes and interest paid the holder of a security
interest encumbering the cooperative; and (ii) a statement as to
the effect on every unit owner if the association fails to pay real
estate taxes or payments due the holder of a security interest
encumbering the cooperative.
(21) a description of any arrangement described in section
1-209 binding the association.
_______________(b) The public offering statement must contain any current
balance sheet and a projected budget for the association, either
within or as an exhibit to the public offering statement, for one
year after the date of the first conveyance to a purchaser, and
thereafter the current budget of the association, a statement of who prepared the budget, and a statement of the budget's
assumptions concerning occupancy and inflation factors. The budget
must include:
_______________(A) a statement of the amount, or a statement that there is no
amount, included in the budget as a reserve for repairs and
replacement;
_______________(B) A statement of any other reserves;
_______________(C) The proposed common expense assessment by category of
expenditures for the association; and
_______________(D) The projected monthly common expense assessment for each
type of unit.
_______________(b) (c) If a common interest community composed of not more
than twelve units is not subject to any development rights right
and no power is reserved to a declarant to make the common interest
community part of a larger common interest community, group of
common interest communities, or other real estate, a public
offering statement may but need not include the information
otherwise required by paragraphs subsection (a)(9), (10), (15),
(16), (17), (18) and (19) of subsection (a) and the narrative
descriptions of documents required by subsection (a)(4).
(c) (d) A declarant promptly shall amend the public offering
statement to report any material change in the information required
by this section.
§36B-4-109. Resales of units.
(a) Except in the case of a sale in which delivery of a public
offering statement is required, or unless exempt under section
4-101(b), a unit owner shall furnish to a purchaser before
execution of any contract for sale of a unit, or otherwise before
conveyance, a copy of the declaration (other than any plats and
plans), the bylaws, the rules or regulations of the association,
and a certificate containing:
(1) A statement disclosing the effect on the proposed
disposition of any right of first refusal or other restraint on the
free alienability of the unit;
(2) A statement setting forth the amount of the monthly common
expense assessment and any unpaid common expense or special
assessment currently due and payable from the selling unit owner;
(3) A statement of any other fees payable by unit owners;
(4) A statement of any capital expenditures anticipated by the
association for the current and two next succeeding fiscal years;
(5) A statement of the amount of any reserves for capital
expenditures and of any portions of those reserves designated by
the association for any specified projects;
(6) The most recent regularly prepared balance sheet and
income and expense statement, if any, of the association;
(7) The current operating budget of the association;
(8) A statement of any unsatisfied judgments against the
association and the status of any pending suits in which the
association is a defendant;
(9) A statement describing any insurance coverage provided for
the benefit of unit owners;
(10) A statement as to whether the executive board has
knowledge that any alterations or improvements to the unit or to
the limited common elements assigned thereto violate any provision
of the declaration;
(11) A statement as to whether the executive board has
knowledge of any violations of the health or building codes with
respect to the unit, the limited common elements assigned thereto,
or any other portion of the common interest community;
(12) A statement of the remaining term of any leasehold estate
affecting the common interest community and the provisions
governing any extension or renewal thereof;
(13) A statement of any restrictions in the declaration
affecting the amount that may be received by a unit owner upon
sale, condemnation, casualty loss to the unit or the common
interest community, or termination of the common interest
community; and
(14) In a cooperative, an accountant's statement, if any was
prepared, as to the deductibility for federal income tax purposes by the unit owner of real estate taxes and interest paid by the
association;
_______________(15) A statement describing any pending sale or encumbrance of
common elements; and
_______________(16) A statement disclosing the effect on the unit to be
conveyed of any restrictions on the owner's right to use or occupy
the unit or to lease the unit to another person.
(b) The association, within ten days after a request by a unit
owner, shall furnish a certificate containing the information
necessary to enable the unit owner to comply with this section. A
unit owner providing a certificate pursuant to subsection (a) is
not liable to the purchaser for any erroneous information provided
by the association and included in the certificate.
(c) A purchaser is not liable for any unpaid assessment or fee
greater than the amount set forth in the certificate prepared by
the association. A unit owner is not liable to a purchaser for the
failure or delay of the association to provide the certificate in
a timely manner, but the purchase contract is voidable by the
purchaser until the certificate has been provided and for five days
thereafter or until conveyance, whichever first occurs.
§36B-4-112. Conversion buildings.
(a) A declarant of a common interest community containing
conversion buildings, and any dealer who intends to offer units in such a common interest community, shall give each of the
residential tenants and any residential subtenant in possession of
a portion of a conversion building notice of the conversion and
provide those persons with the public offering statement no later
than one hundred twenty days before the tenants and any subtenant
in possession are required to vacate. The notice must set forth
generally the rights of tenants and subtenants under this section
and must be hand delivered to the unit or mailed by prepaid United
States mail to the tenant and subtenant at the address of the unit
or any other mailing address provided by a tenant. No tenant or
subtenant may be required to vacate upon less than one hundred
twenty days' notice, except by reason of nonpayment of rent, waste,
or conduct that disturbs other tenants' peaceful enjoyment of the
premises, and the terms of the tenancy may not be altered during
that period. Failure to give notice as required by this section is
a defense to an action for possession.
(b) For sixty days after delivery or mailing of the notice
described in subsection (a), the person required to give the notice
shall offer to convey each unit or proposed unit occupied for
residential use to the tenant who leases that unit. If a tenant
fails to purchase the unit during that sixty day period, the
offeror may not offer to dispose of an interest in that unit during
the following one hundred eighty days at a price or on terms more favorable to the offeree than the price or terms offered to the
tenant. This subsection does not apply to any unit in a conversion
building if that unit will be restricted exclusively to
nonresidential use or the boundaries of the converted unit do not
substantially conform to the dimensions of the residential unit
before conversion.
(c) If a seller, in violation of subsection (b), conveys a
unit to a purchaser for value who has no knowledge of the
violation, the recordation of the deed conveying the unit or, in a
cooperative, the conveyance of the unit, extinguishes any right a
tenant may have under subsection (b) to purchase that unit if the
deed states that the seller has complied with subsection (b), but
the conveyances does not affect the right of a tenant to recover
damages from the seller for a violation of subsection (b).
(d) If a notice of conversion specifies a date by which a unit
or proposed unit must be vacated and otherwise complies with the
provisions of applicable law, the notice also constitutes a notice
to vacate specified by that statute.
_______________(d) (e) Nothing in this section permits termination of a lease
by a declarant in violation of its terms.
§36B-4-116. Statute of limitations for warranties.
(a) A judicial proceeding for breach of any obligation arising
under section 4-113 or 4-114 must be commenced within six years after the cause of action accrues, but the parties may agree to
reduce the period of limitation to not less than two years. With
respect to a unit that may be occupied for residential use, an
agreement to reduce the period of limitation must be evidenced by
a separate instrument executed by the purchaser.
(b) Subject to subsection (c), a cause of action for breach of
warranty of quality, regardless of the purchaser's lack of
knowledge of the breach, accrues:
(1) As to a unit, at the time the purchaser to whom the
warranty is first made enters into possession if a possessory
interest was conveyed or at the time of acceptance of the
instrument of conveyance if a nonpossessory interest was conveyed;
and
(2) As to each common element, at the time the common element
is completed or, if later, as to (i) a common element that may be
added to the common interest community or portion thereof, at the
time the first unit therein is conveyed to a bona fide purchaser,
or (ii) a common element within any other portion of the common
interest community, at the time the first unit is conveyed to a
bona fide purchaser.
(c) If a warranty of quality explicitly extends to future
performance or duration of any improvement or component of the
common interest community, the cause of action accrues at the time the breach is discovered or at the end of the period for which the
warranty explicitly extends, whichever is earlier.
(d) During the period of declarant control, the association
may authorize an independent committee of the executive board to
evaluate and enforce any warranty claims involving the common
elements, and to compromise those claims. Only members of the
executive board elected by unit owners other than the declarant and
other persons appointed by those independent members may serve on
the committee, and the committee's decision must be free of any
control by the declarant or any member of the executive board or
officer appointed by the declarant. All costs reasonably incurred
by the committee, including attorney's fees, are common expenses,
and must be added to the budget annually adopted by the association
under section 3-115. If the committee is so created, the period of
limitation for a warranty claim considered by the committee begins
to run from the date of the first meeting of the committee.
§36B-4-117. Effect of violations on rights of action; attorney's
fees.
(a) If a declarant or any other person subject to this chapter
fails to comply with any of its provisions or any provision of the
declaration or bylaws, any person or class of persons adversely
affected by the failure to comply has a claim for appropriate
relief. A declarant, association, unit owner, or any other person subject to this chapter may bring an action to enforce a right
granted or obligation imposed by this chapter, the declaration, or
the bylaws. Punitive damages may be awarded for a willful failure
to comply with this chapter. The court in an appropriate case, may
award reasonable attorney's fees and costs.
_____(b) Parties to a dispute arising under this chapter, the
declaration, or the bylaws may agree to resolve the dispute by any
form of binding or nonbinding alternative dispute resolution, but:
_____(1) A declarant may agree with the association to do so only
after the period of declarant control has expired unless the
agreement is made with an independent committee of the executive
board elected pursuant to subdivision 4-116(d); and
_____(2) An agreement to submit to any form of binding alternative
dispute resolution must be in a record authenticated by the
parties.
NOTE: The purpose of this bill is to update the Uniform Common
Interest Ownership Act.
§36B-1-115, §36B-1-116, §36B-1-208, §36B-2-123, §36B-2-124,
§36B-3-120, §36B-3-121, §36B-3-122, §36B-3-123 and §36B-3-124 are
new; therefore, they have been completely underscored.
§36B-3-118 has been completely rewritten; therefore, it has
been completely underscored.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would be added.
This bill is recommended for passage in the 2013 Regular
Session by the Commission on Interstate Cooperation.