HOA, Condo, Co-op legislative updates across the U.S. (June 2018)

By Deborah Goonan, Independent American Communities

California

In preparation for its next drought, California has moved in the direction of mandating water conservation through water districts with oversight at the state level. The goal is to reduce indoor water consumption from an average of 90 gallons per day per resident to 55 gallons by 2022. The state will set new standards for outdoor water consumption by 2021.

State regulatory agencies are authorized to fine water management districts that fail to meet water conservation goals.

At this stage, it remains unclear how California’s ambitious water conservation goals will be met.

Get ready to save water: Permanent California restrictions approved by Gov. Jerry Brown

May 31, 2018 12:21 PM

Updated May 31, 2018 12:57 PM

Excerpt:

Gov. Jerry Brown signed a pair of bills Thursday to set permanent overall targets for indoor and outdoor water consumption.

Assembly Bill 1668 by Assemblywoman Laura Friedman, D-Glendale, and Senate Bill 606 from state Sen. Bob Hertzberg, D-Los Angeles, give water districts more flexibility than the strict cuts mandated under Brown’s emergency drought order and will eventually allow state regulators to assess thousands of dollars in fines against jurisdictions that do not meet the goals.

Read AB 1668

Read SB 606

Glass cup of water
(Pixabay.com free image)

Indiana

A proposed Solar Energy bill would generally prohibit an association-governed community from preventing installation, penalizing a member for installation, or requiring the removal of solar energy panels.

However, the bill only applies to governing documents adopted or amended after June 30, 2018. It also gives associations some authority to regulate the placement of solar equipment, as long as its restrictions don’t prevent “maximum” energy efficiency or increase the cost of installation by more than 10%.

The bill has passed in the Senate, but has stalled in the House Judiciary committee.

Read SB 207

Solar Panels

Maryland

An attempt to reduce the percentage of member votes required to amend condominium declarations (Covenants, conditions, & restrictions) from 80% to 60%, under certain circumstances, failed to gain traction in the state Legislature.

See HB 179 and full text as proposed.

Also dead for this session, a bill that proposed a developer must appoint one non-developer affiliate (homeowner) member once 25% of units have been sold and conveyed to owners.

See HB 0564

However, the Legislature did manage to pass a bill that prevents a developer from limiting liability for warranty claims, by way of adding restrictive language to governing documents. The new law will curb abusive tactics of developers, which include requiring arbitration and other pre-suit requirements that, in effect, limit the amount of time a construction defect claim can be filed under the warranty.

Unfortunately, the new law only applies to contracts executed on or after October 1, 2018. That means current condo owners who previously purchased their units and “agreed” to one-sided governing contracts in favor of a developer are, frankly, out of luck.

Maryland Legislature Bans Developer Restrictions on Condominium Warranty Claims

April 4, 2018

Thomas Schild Law Group LLC

Legislation to prevent condominium developers from imposing restrictions on condominium warranty claims was passed by the Maryland General Assembly during the final days of the legislative session in April, 2018.  In recent years, condominium developers have put provisions in condominium bylaws and sales contracts to limit the ability to condominium associations and unit owners to sue the developer for construction defects.

The new law amends the Maryland Condominium Act to make unenforceable any provisions which shorten the time for filing suit, require arbitration claims to be filed sooner than the time allowed to file suit, or operate to prevent a claim to be brought within the applicable statute of limitations.  This protects the legal rights of condo associations and owners to seek monetary compensation for construction deficiencies related to a developer’s failure to comply with applicable building codes; approved plans and specifications; product manufacturer’s installation instructions; and implied statutory warranties.

Read more:

http://marylandcondominiumlaw.net/2018/04/04/maryland-legislature-bans-developer-restrictions-on-condominium-warranty-claims/

See also:
Governor Hogan Approves New Law Preventing Developers From Limiting Condo Owners’ Rights of Action for Construction Defects

See Senate Bill 258 and House Bill 77 , which will become New Section 11-134.1 of the Maryland Condominium Act

Michigan

The Legislature has considered amendments to the Condominium Act that would allow for electronic transmission of documents with consent of members (making it easier to provide access to records), and would allow condo boards to make board decisions by majority written vote, without a meeting. (Making board decisions less transparent.)

See SB 941

Another bill proposes to prohibit local governments from restricting certain dog breeds. While the bill does not affect association-governed communities, some attorneys believe SB 741 should be amended to also prevent private communities from restricting ownership of pet dogs of certain breeds.

See SB 741

SB 741 Prohibits Local Government from Regulating Dog Breeds

By Joyleih and Sophia, the Legal Beagles –

New legislation was introduced in Michigan’s Senate in January, which simply reads as follows:

“Sec. 1. (1) A local unit of government shall not enact or enforce an ordinance, policy, resolution, or rule that regulates a dog based upon breed or perceived breed. However, this act does not prohibit a local unit of government from enacting an ordinance, policy, resolution, or rule that places restrictions or imposes additional requirements on dogs or dog owners.

(2) As used in this act, “local unit of government” means a county, city, village, or township.”

Some local governments do in fact restrict certain breeds currently, such as Waterford and Muskegon Heights.

Throughout our firm’s practice of community association law in the State of Michigan for over 45 years, we have regularly dealt with pet issues in condominiums and subdivisions, the large majority of which involved dogs. And we can testify to the fact that those issues are not limited to certain breeds or could even be said to mainly involve certain breeds.

As many of our readers are aware, this issue arises regularly because boards of directors of an association will from time to time propose amending the governing documents of the association to include a restriction on certain dog breeds. While their intent may be to protect the residents, unfortunately it has the effect of unreasonably limiting certain dog owners’ housing choices.

It would benefit Michigan residents if this bill were also to prohibit condominium associations from restricting dog breeds in the condominium’s governing documents. This might be added to Section 46 of the Michigan Condominium Act (MCL 559.146).

Read more:

http://meisner-law.com/sb-741-prohibits-local-government-from-regulating-dog-breeds/

Michigan Legislature is currently adjourned until July 25, 2018.

RULE blackboard authority
Pixabay.com free image

Missouri

According to several reports, Missouri Legislature has passed a bill that would prohibit deed restrictions in HOAs from an outright ban on political signs. The St. Louis Post-Dispatch reports that the bill’s sponsor (Kurt Bahr – R) orginally filed the bill in 2012.

Fox News2 Now reports that the bill awaits the Governor Eric Greiten’s signature, and that HOAs will still retain some limited power to restrict size, time, and placement of political signs.

See the following references:

Missouri bill could end some political sign bans (Fox2 Now)

Some subdivisions ban political signs, but that could change under bill OK’d by Missouri lawmakers

By Mark Schlinkmann St. Louis Post-Dispatch

May 14, 2018

Drivers and pedestrians are used to seeing the numerous political signs which pop up on front lawns in the weeks leading up to elections.

But not in some suburban subdivisions, where they’re banned by rules enforced by homeowners’ associations.

That would change in time for the Nov. 6 general election under a bill passed last week by the Missouri Legislature.

If signed by Gov. Eric Greitens, the measure will prohibit deed restrictions, covenants and similar binding agreements that bar the display of political signs.

Read more:

http://www.stltoday.com/news/local/govt-and-politics/some-subdivisions-ban-political-signs-but-that-could-change-under/article%E2%80%942e7bb2c7-3309-544f-b865-6ed3b259a938.html

HB 1887 was approved by Governor Greitens on June 1, 2018.

Vote button

New York

In 2017, New York state enacted Section 727 of Business Corporate Law, requiring board members of incorporated condominium and cooperative associations to disclosure conflicts of interest. This year, the bill was corrected to include unincorporated associations.

Conflict of Interest Disclosure Statute Broadened to Include Nearly All New York Condominiums

Cozen O’Connor
April 26, 2018

As this firm has previously advised, as of September 2017, New York Business Corporation Law (BCL) Section 727 requires condominiums and cooperatives incorporated pursuant to the BCL (and the Not-for-Profit Corporation Law) to issue an annual report to all of its owners/shareholders. The report, signed by each board member/director, must disclose whether any contracts were made, entered into, or otherwise voted on by the board where one or more of the directors was an interested member/director. Most New York City condominiums were not impacted because the vast majority are not incorporated pursuant to the BCL or the Not-for-Profit Corporation Law, but rather the New York Real Property Law.

However, on April 18, 2018, New York Governor Andrew Cuomo signed a correction bill making BCL Section 727 applicable to condominiums created pursuant to the New York Real Property Law. As a result, BCL Section 727 is now applicable to essentially all New York City condominiums.

Read more:

https://www.jdsupra.com/legalnews/conflict-of-interest-disclosure-statute-27704/

South Carolina

The Legislature briefly considered Anti-SLAPP legislation aimed at preventing real estate developers from suing private citizens who speak in opposition to new development.

Free speech should include criticism of development, Mount Pleasant officials urge Statehouse

By David Slade, The Post and Courier

April 23, 2018

When a developer sued Mount Pleasant in 2016 over a zoning decision, a half-dozen town residents who had spoken critically about the development received subpoenas and became unwilling participants in the case.

“That just happens to be one example where lawsuits can be used to stifle public participation,” said David Shimp, who was among those receiving the notices.

“Merely because, with several neighbors, we had the audacity to discuss this issue in public with elected lawmakers, we got slapped with subpoenas,” he said.

Read more:

https://www.postandcourier.com/news/free-speech-should-include-criticism-of-development-mount-pleasant-officials/article_963f1798-44c4-11e8-b002-d722baf3f7c3.html

See HB 4897

Read the text here

http://www.scstatehouse.gov/sess122_2017-2018/bills/4897.htm

South Carolina now has a new Homeowners Association Act. The law adds pre-sale disclosure requirements, requires all governing documents to be filed with the County Recorder (including Bylaws and Rules), and clarifies that all association-governed community boards must provide members access to records, even if the association is not incorporated.

Homeowners now have the option of settling some minor monetary disputes in Magistrate’s court.

The Act also creates an Ombudsman, with limited authority to provide educational resources and record certain complaints against homeowners and condominium associations. The Ombudsman will have no authority to enforce statues or arbitrate disputes.

See the following article for a brief summary:

South Carolina Legislative Update: Bill Affecting HOAs and Condos Signed Into Law (Black ,Slaughter, & Black)

Read the full text of AB 3886

HOA planned community aerial view
(pixabay.com free image)

Utah

A new law in Utah creates several new requirements for HOAs, among them: to provide easy access to governing documents for both members and home buyers, preferably on a website; to provide member access to official records upon written request, subject to a $500 fine for non-compliance; to complete a reserve study and analysis every 6 years or less, and then fund that reserve, subject to a 51% veto by members.

The law also creates specific conditions and exemptions with regard to rental restrictions in the association, and prohibits a community association management agent from commingling association funds with any other account.

Tips for buying a home in an HOA

FRIDAY , MARCH 23, 2018 – 12:00 AM

BRENDA NELSON, Special to the Standard-Examiner

The Utah Legislature recently passed a bill that will make it easier for homebuyers and sellers to get important information about homeowners’ associations.

House Bill 454 requires HOAs to provide homeowners access to the community’s governing documents. The sellers can then give the information to buyers to use when researching the home’s condition.

“It helps facilitate real estate transactions,” said bill sponsor Utah Rep. Gage Froerer in a legislative committee hearing. “It provides guidance on how an owner can obtain HOA records required for sales transactions.”

When purchasing a property that is subject to a homeowners’ association, buyers should research both the house and its HOA community.

“When we’re dealing with HOAs, it’s important to have the minutes of the HOA so we know if there are any pending assessments, if there are any unpaid balances,” Froerer said during the hearing.

The newly passed bill requires the HOA to post its governing documents free of charge on a website, or if the association doesn’t have a website, to make physical copies available to homeowners.

Read more:

http://www.standard.net/frontpage/2018/03/23/Tips-for-buying-a-home-in-an-HOA.html

Virginia

A new law in Virginia makes significant changes to pre-sale disclosure requirements for homeowners and condominium associations. For the first time in Virginia history, associations must disclose important information that is the source of many controversies and disputes.

For example, the seller’s disclosure form must specify if the association is still under Declarant (developer) control, whether there are rental restrictions in the association, and if the association prohibits parking of certain types of vehicles. Pet restrictions and limitations on operating a home base business must also be disclosed.

The law also caps fees that can be charged for disclosure documents.

For a summary of changes, see the following article:

Big Changes Coming Soon to Resale Disclosure Requirements and Fees (Inman & Strickler, PLC)

Read HB923

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