House of Representatives

HB 2098

homeowners' associations; amendments

Sponsors: Representatives Jarrett, Voss, Senator Smith: Representative Anderson

dpa	Committee on Counties & Municipalities
x	Committee on Judiciary
	Caucus and COW
	As Passed the House

The proposed Strike-everything amendment to HB 2098 makes numerous changes to the statutes that regulate Condominium and Planned Community Associations. In addition, the proposed strike-everything amendment conforms the language of the two Acts with respect to the affected sections of law.

History

Community associations are commonly referred to as homeowners' associations [HOAs], even though they technically are governed by two different chapters of law. Title 33, Chapter 9, the Condominium Act, applies to all condominiums created after January 1, 1986. Title 33, Chapter 16, first enacted in 1994, applies to all planned communities [single-family homes].

The proposed strike-everything amendment to HB 2098 makes numerous changes to the Condominium and Planned Community Association provisions of law.

Provisions

The proposed Strike-everything amendment provides for the following:

· Exempts condominium and planned community associations from the Nonprofit Corporations Code and clarifies they are subject to their respective codes. [10-11602]

· Defines affiliate of a declarant, declarant [developer], member, special declarant rights, unit and unit owner, and conforms their language in both HOA Acts. [33-1802]

Appeal Committee

· Stipulates that after proper notice and an opportunity to be heard, the HOA Board of Directors may impose reasonable monetary penalties on its members for violations of the declarations, bylaws or rules. [33-1243]

· After the Board's decision, and upon request of the affected member, the Board shall refer the issue to an Appeal Committee. This Committee must be appointed within two months after the Board is elected, and no Board member may serve. [33-1243 and 33-1803]

· After notice and a hearing, the Appeal Committee shall make a decision, which shall be reported to both the Board and the affected member. The decision is deemed final unless either party files a civil court action, in which case the determination of the Appeal Committee is admissible, relevant evidence. [33-1243 and 33-1803]

Proper Notice and Open Board Meetings

· Provides authority for the Board's presiding officer to establish time limits for speakers and to limit the amount of time allocated to each speaker. [33-1248 and 33-1804]

· Clarifies that Board meetings may be closed in order to discuss past litigation or other matters relating to enforcement of the HOA's documents or rules. [33-1248 and 33-1804]

· Eliminates the ability for an HOA's bylaws to provide alternatives to statutory meeting notice requirements. [33-1248 and 33-1804]

· Mandates that declarant controlled HOAs must adhere to the statutory meeting notice requirements. [33-1248 and 33-1804]

Proxy Voting

· Conforms the Planned Community Association proxy voting statutes to the Condominium Association proxy voting statutes. [33-1809]

· Requires the proxy to be signed by the unit owner. [33-1250 and 1809]

· Stipulates that a proxy may be revoked by written notice before or at the meeting or by the unit owner's verbal revocation while attending the meeting. [33-1250 and 33-1809]

· Requires the Board to allow unit owners or lessees to attend and observe the counting of the written ballots and proxies, as well as the announcement of the results. The Board must retain all written ballots and proxies for at least 30 days after the announcement of the results. [33-1250 and 33-1809]

Assessments and Liens

· Unless limitations in the HOA documents would result in a lower amount, limits the regular assessment to 20% greater than the preceding fiscal year. A majority of the unit owners to whom a majority of the votes are allocated may approve a greater dollar increase. [33-1256]

· Limits the lien to any unpaid assessment, late charge and related interest levied against the unit. Eliminates the ability to lien the unit for any monetary penalty imposed against the unit owner. [33-1256 and 33-1807]

· Stipulates that a monetary penalty is not a lien, but rather a claim that is enforceable through court action. Upon recordation of a court judgement, the monetary penalty becomes a lien against the unit, the priority of which is based on the date of recordation. [33-1256 and 33-1807]

· Makes the HOA liable for not less than $1,000 or treble the actual damages [whichever is more], plus attorney's fees and court costs for failing to remove a lien that was fully satisfied. [33-1256 and 33-1807]

· Prohibits an association from terminating utility services to a unit owner, including water and electricity. [33-1256 and 33-1807]

Financial and Other Records

· States that all financial and other records of the association are open and reasonably available for review by any unit owner or owner's agent. [33-1258 and 33-1805]

· Specifies the HOA is not required to disclose financial and other records if the disclosure would result in a violation of local, state or federal law. [33-1258 and 33-1805]

· Allows the Board to charge the reasonable cost of preparing and reproducing the copies of the records. Permits the Board to limit a request for copies to one per calendar quarter. [33-1258 and 33-1805]

· Requires the HOA to make documents available for review by a prospective purchaser [who presents a written offer to purchase a condominium unit]. [33-1260 and 33-1806]

· Establishes the disclosure statement shall include a statement that all owners are eligible to serve on the Board of Directors of the association. [33-1260 and 33-1806]

· Upon request of a prospective purchaser, requires the HOA to permit review of minutes of meetings and to attend the related meetings as well. [33-1260 and 33-1806]

The strike-everything amendment was adopted in the Committee on Counties and Municipalities and further amended as follows:

· Stipulates that the decision of the Appeal Committee may be entered as admissible evidence in a court action.

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· 45th Legislature

· First Regular Session 3 February 28, 2001

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