HOA, Condo, Co-op legislation highlights (July 2017)

By Deborah Goonan, Independent American Communities

California

 

SB-407: Common interest developments: noncommercial solicitation. (July 18)

The bill has passed the Assembly and is now in the Senate.

CA SB 407, as amended, clarifies that a common interest community’s governing documents may not prohibit a member’s right to “peacefully assembly and freely communicate” on association property for various political purposes, to include campaigns for public office as well as matters relating to association elections.

SB 407 proposes that a member can enforce those rights by filing a complaint in civil or small claims court, and the court could impose a $500 penalty on the association or its management agent. Specifically:

A member or resident of a common interest development who is prevented by the association or its agents from engaging in any of the activities described in this section may bring a civil or small claims court action to enjoin the enforcement of a governing document, including a bylaw and operating rule, that violates this section. The court may assess a civil penalty of not more than five hundred dollars ($500) for each violation.

The latest version of the bill can be seen here:

http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB407

 

SB-561 Fallen Leaf Lake Community Services District: elections.(2017-2018)

SB-561 is an interesting bill in that it seeks to change voting rights for a public unit of government (a Community services District). Currently, as with any other public unit of government, each registered resident of the community is legally entitled to cast one vote in regular elections.

But according to Legislative analysis summary, SB-561 would create a land ownership voting district:

Senate Bill 561 authorizes qualified voters of the FLLCSD to be any of the following:  Voters who are residents of the district.  Voters that either own a real property interest within the district or have been designated by the owner of a real property interest. A real property interest includes either ownership of a fee simple interest in real property or ownership of a United State Forest Service Recreation Permit for land within the district.

Land owners are clearly behind SB-561:

Purpose of the bill. According to the author, “FLLCSD serves the Tahoe basin community that surrounds Fallen Leaf Lake. The District has over three hundred vacation cabins and one resort, the Stanford Sierra Camp. About one half of the cabins are located on Forest Service property, and those cabin owners have Forest Service Recreational Permits. The balance of the cabins and the resort are on fee simple property. The roads into Fallen Leaf are not plowed during the winter, and as a consequence nearly all the cabins as well as Stanford Camp are shuttered and not used during the winter. The result is that almost none of the cabin owners can claim Fallen Leaf Lake as their domicile. Under current law that means that they cannot vote in FLLCSD elections, nor can they serve on the FLLCSD Board. In sum, the number of voters who qualify under current law is not enough to fill FLLCSD Board positions, and creates an electorate that is not representative of the community as a whole.”

However, the California Legislature remains skeptical, citing Constitutional issues:

Constitutional? The California Constitution provides that the right to vote or serve in elected office may not be conditioned on a landownership qualification. Despite this prohibition, some special districts are landowner-voting districts where individuals can vote in a district election by owning a real property interest within the district’s boundaries. In 1973, the U.S. Supreme Court ruled in Salyer Land Co. v. Tulare Lake Basin Water Storage District 410 U.S. 719 (1973) that the California statute requiring a landownership qualification did not violate the Equal Protection clause of the U.S. Constitution. The court ruled there was no violation because those districts do not exercise normal governmental authority and their activities disproportionately affect landowners. There is question to whether fire protection services in particular could be considered an activity that disproportionately affects landowners. The constitutionality of allowing landowners to sit on the FLLCSD board is unclear.

Source: http://leginfo.legislature.ca.gov/faces/billAnalysisClient.xhtml

Tracking link for SB-561

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB561

 

AB-690: Common interest developments: managers: conflicts of interest.

On July 24, 2017, AB-690 was Approved by the Governor.

California AB-690 is intended to prevent fee gouging and conflicts of interest by requiring management companies to disclose financial relationships to association contractors and vendors. The new law also requires disclosure of the origin and purpose of service fees charged to common interest community association members.

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB690

 

Illinois

As introduced, SB0948 would amend the common interest ownership act and condominium act in two ways. First, it would require all members of an association to receive a copy of the annual budget 25-60 days prior to the board’s vote to adopt that budget. Second, the bill proposes narrow limitations on when an association board can conduct a closed meeting.

Several additional amendments have been proposed, including the following:

  • Changing licensing requirements for community association managers, eliminating the licensure requirement for management companies
  • Requires that certain information be included in seller disclosure to prospective buyers, including the association’s collection policy, as well as an accurate statement of all assessment obligations, including special assessments
  • An award of attorney fees to an association member that is deemed to be the prevailing party in litigation with the association.

The bill is currently stalled in rules committee in the House.

http://www.ilga.gov/legislation/BillStatus.asp?DocTypeID=SB&DocNum=948&GAID=14&SessionID=91&LegID=103116

 

Michigan

HB 4503 AND SB 329 both propose that short term rentals – such as AirBnB vacation rentals – would be considered a valid residential use.

As seen in the following post:

HB 4503 and SB 329: Recent Skirmishes Regarding Short-Term Rentals and Their Effect on Community Associations

On April 25, 2017, two identical bills were introduced in the state House (House Bill No. 4503) and the Senate (Senate Bill No. 329) which both proposed to mandate that a municipality treat a short-term rental, such as an AirBNB rental, as a residential use and not a commercial use. In relevant part, both SB 329 and HB 4503 state that a short-term rental such as AirBNB would be “a permitted use in all residential zones” and that such use would “not be subject to a special use or conditional use permit or procedure different from those required for other dwellings in the same zone[,]” and that such use would “not be a commercial use of property.” This would prevent municipalities from precluding such use…

In short, both of these controversial bills would prevent municipal government collection of 6% hotel or bed taxes applicable to commercial use of property.

 

New Hampshire

HB 501 has been signed by NH Governor Sununu. It requires condominium boards to record minutes of meetings and provide access to unit owners within 15 days.

HB 502 has also been approved by the Governor, and requires that certain financial information be made available to condo unit owners: an annual profit and loss statement; contracts, mortgages, loans and other debts of the association; a list of employees of the association and their salaries.

Full details available here:

https://meeb.com/assets/HB501.pdf

https://meeb.com/assets/HB502.pdf

 

New Jersey

S-2492 was approved by Governor Christie after unanimous approval in both houses. The new law permits any association member to run for election to the board of a common interest community (HOA, condo, or cooperative association).

For a link to the complete text of the bill, see the following news release:

Christie signs Radburn bill to democratize elections, vetoes others

http://www.northjersey.com/story/news/new-jersey/2017/07/13/christie-signs-radburn-bill-democratize-elections-vetoes-others/477354001/

 

New York

New York State and City legislators are considering several bills that would require approval of applications for condos or cooperatives within 45 days, and, if the application is rejected, would require a written explanation of the reason for rejection. If the association fails to respond to an application, the applicant is automatically approved after 45 days.

The bills are somewhat controversial. Realtors and buyers contend that the regulations would help prevent housing discrimination. But attorneys and management companies that work for association governed communities say the requirements are unnecessary, unreasonable, and burdensome.

 

Does New York City need an Admissions Clock?

Pending legislation may put a timer on admissions.

Lisa Prevost
ISSUE June 2017

pp. 20-27
ABSTRACT
Several pending bills want to cap the amount of time a board has to consider an application.

Are lawmakers looking for solutions to problems that don’t exist? Or are co-op boards treating would-be-buyers badly?

It depends on whom you ask. But those are the two chief issues that come up almost every year as new bills are offered up at the New York State Legislature and the New York City Council. The bills now being considered would require boards to act on purchase applications within a set time frame. Some would also require boards to disclose a reason for rejecting an applicant. While proponents say the laws are necessary to protect buyers and sellers from a prolonged or discriminatory process, those intimately familiar with the co-op application and review process counter that the laws are impractical and potentially damaging to co-ops.

….

Bills Galore: Pending legislation
New York State Senate Bill 2540
http://bit.ly/Bill2540

Sponsored by Senator Kemp Hannon (R – 6th District)
Requires co-ops to act on applications to purchase within 45 days.
NY State Senate Bill 4551
http://bit.ly/Bill4551

Sponsored by Senator James Sanders Jr. (D – 10th District)
Requires co-ops to provide a written reason when rejecting a purchase application.
NY State Assembly Bill 03813
http://bit.ly/Bill03813

Sponsored by Assemblyman N. Nick Perry (D – 38th District)
Requires co-ops to act on applications to purchase within 45 days.
NY City Council Int. 1467
http://bit.ly/Int1467

Sponsored by Councilmembers Jumaane D. Williams (D – Dist. 45) and Brad S. Lander (D – Dist. 39)
Requires co-ops to act on applications to purchase within 45 days.
NY City Council Int. 1458
http://bit.ly/Int1458

Sponsored by Councilmembers Brad S. Lander (D- Dist. 39) and Jumaane D. Williams (D – Dist. 45)
Requires co-ops to provide a written reason when rejecting a purchase application.

Source article : (may require subscription)

https://www.habitatmag.com/Publication-Content/Legal-Financial/2017/2017-July/Discrimination-Price-Tag

 

 

Pennsylvania

After passing in the House following several amendments, PA HB 595 died in Senate.

A bill that started out providing broad consumer protection for owners in all types of association-governed communities, under the State Attorney General, was amended to limit the types of complaints that would be handled by the Bureau of Consumer Protection. Furthermore, HB 595 created several obstacles likely to prevent homeowners from filing a complaint in the first place.

Those obstacles included:

A requirement that the member be in “good standing” with the association, in order to file a complaint against that association (a provision that invites potential abuse by the association, possibly fabricating covenant violations or late assessment payments to declare the owner not in good standing)

A requirement for the member to exhaust all internally-mandated Alternative Dispute Resolution (ADR – either mediation or arbitration) prior to filing a complaint with the Bureau of Consumer Protection

See previous article for details.

 

Rhode Island

The Governor of Rhode Island recently signed S0198 into law, creating a higher standard of transparency with regard to condominium association coverage for insurance claims involving damage to privately owned units.

The amended portion of the bill reads as follows:

(i) In the event a unit owner sustains damage to the owner’s unit as a result of an event 22 that is covered under the insurance coverage purchased in accordance with this section, then upon 23 written request to the condominium association, the unit owner shall be entitled to a written copy 24 from the condominium association of the insurance company damage appraisal or any damage 25 appraisal in regard to damage to the owner’s unit, within fourteen (14) calendar days of the date 26 of the unit owner’s request, or within fourteen (14) days of the association’s receipt of the damage 27 appraisal, whichever is later. If coverage for the damage to a unit is denied for any reason or is 28 deemed to be valued below the policy deductible, then the unit owner shall also be entitled to 29 receive, from the association, a copy of the letter detailing the determination.

https://legiscan.com/RI/bill/S0198/2017

 

South Carolina

South Carolina’s Legislature mulled a bill to create a state Ombudsman for Homeowners Associations. The bill gained little traction, despite public demand for assistance with HOA issues.

The bill is likely to be reintroduced next session, and can be tracked here.

https://legiscan.com/SC/bill/H3065/2017

Longs neighborhood upset with HOA, new bill in Senate could help

 

Tennessee

Another state flag law passed, SB0469:

https://legiscan.com/TN/bill/SB0469/2017

Although association-governed communities cannot deny display of a flag outright. But, as usual, the law includes the standard industry-written caveat that the HOA can still regulate how the flag can be displayed.

New Tenn. law restricts HOA bylaws against flying American flags

 

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One Reply to “HOA, Condo, Co-op legislation highlights (July 2017)”

  1. I wish Virginia took that hard a stance on management companies as California (per your article and reading the statutes). I am sick of dealing with similar issues.

    Like

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