By Deborah Goonan, Independent American Communities
This update includes brief commentary on amendments to NH Condominium Act, the new SC HOA Act, and the 2020 solar rooftop mandate in California.
Three new amenmendments to the Condominium Act:
HB 1519 AN ACT relative to the conduct of condominium unit owners’ associations votes without a meeting.
In New Hampshire, condominium associations can range in size from 2 units to hundreds of units. Many small condo associations exist in older row homes, brownstones, or large historic homes divided into multifamily properties in past generations. Condo owners in these small associations tend to conduct annual elections at a meeting with a voice vote or raise of hands.
However, larger associations are more likely to vote by secret ballot. HB 1519 now requires the use of tally sheets when counting ballots at an annual meeting. If a recount is requested, one or more board members, plus another member of the association, must be present for the examination and recount of ballots. The intent, it seems, is to prevent fraudulent elections or miscounting of ballots due to human error.
At least one HOA attorney is advising his condo association clients to avoid election by secret ballot, and to stick to a show of hands or voice vote. That may be practical for small communities, but less realistic and less efficient for larger condo associations.
HB 1521 AN ACT relative to the definition of an emergency for a special assessment in a condominium.
This new section of the Act addresses the right of a condo board to enact an emergency special assessment. It defines emergency as a “situation that requires immediate action by the board of directors where a danger to the structural integrity of the common areas is discovered or to the life and safety of property unit owners or as required by a court order or to respond to any legal or administrative proceeding brought against the association that could not have been reasonably foreseen by the board in preparing and distributing the annual operating budget.”
In other words, the new definition of “emergency” is very broad, and allows the board more freedom to impose special assessments for any repair or service, without allowing unit owners to veto the assessment by a 2/3 vote of all members.
On the surface, this appears to be a reasonable amendment. However, one can foresee situations where certain condo boards may allow conditions to deteriorate to the point of imminent danger or threat to health and safety, in order to declare an emergency assessment.
HB 1601 AN ACT relative to a declarant’s options for condominium expansion.
This law was enacted to close a loophole for real estate developers (Declarants), in response to a ruling in favor of the Declarant in Condominiums at Lilac Lane v. Monument Garden, LLC.
In this particular dispute, the condo association objected to the developer’s ongoing control of the association. The Declarant exploited NH as written at the time, to avoid having to turn over control of the association to the unit owners. (See source articles for an explanation of how the developer took advantage of the loophole.)
Attorneys claim that the new language in the law closes loopholes, and obligates developers to hand over the reins of power after 5 years, or 10 years by amendment to condominium documents.
The new law also prevents a developer from breaking a promise to provide certain “improvements” such as a community swimming pool. The law was obviously a reaction to condo owners who complained that they were promised a swimming pool at the time of purchase, but the developer never delivered on that promise.
However, the law creates new powers for the condo board, and greater restrictions on unit owners. HB 1601 states an “Improvement means any addition to condominium land, facilities, or amenities other than condominium units.”
This overly-broad definition can include a birdhouse, a lawn ornament, a flowerpot on the porch, holiday decorations, or any other object “added” to common land. It’s easy to see that this addition to the Condominium Act creates new enforcement obligations for condo boards and managers, and reduces freedom for condo owners, who generally don’t own a private parcel of land, or the exterior surfaces of their condos.
As of May 2018, common interest communities are subject to the South Carolina Homeowners Association Act.
Prior statutes govern condominiums and nonprofit corporations, but the HOA Act regulates planned communities of both single family homes and condominiums, where payment of assessments is a mandatory obligation.
New HOA statutes provides for the following:
ByLaws must be recorded as official County records by January 10, 2019, to be enforceable.
Rules and Regulations must be recorded as public records (also with the County) by January 10th of each year, to remain enforceable. All members must have access to the HOA’s list of Rules and Regulations.
Magistrates Court, also known as Small Claims Court, will now handle HOA disputes involving damages up to $7,500.
SC Department of Consumer Affairs (DCA) will serve as an Ombudsman, authorized to take HOA complaints — either homeowner complaints against the HOA, or HOA complaints against the owner. Although the DCA isn’t authorized to enforce complaints, it is required to publish them annually for the benefit of the Governor, the General Assembly, and all housing consumers.
The homeowner’s name and identifying information will be redacted from (not included in) the public record. The HOA or its management company information is always included in the public record of a complaint.
The DCA will not investigate or arbitrate complaints, nor will it issue any public policy statements related to the HOA Act.
Here’s the sole action SC DCA will take, upon receipt of a complaint:
Upon receiving a homeowner’s or homeowners association’s complaint, the department shall provide the complaint to the homeowners association or the homeowner complained against in a manner that verifies receipt of such complaint by the homeowners association or homeowner, so the homeowner, board, or homeowners association may determine if the homeowner, board, or homeowners association desires to make a response to the complaint.
The DCA will also publish educational materials about HOAs and common interest communities.
The Wild West, Tamed a Bit (HOA Ninjas)
South Carolina Legislative Update: Bill Affecting HOAs and Condos Signed Into Law (Black Slaughter Black)
The California Energy Commission created a new building code, approved by the California Building Standards Commission in December. As of 2020, all new construction will be required to include rooftop solar panels.
Note that the CEC is not a legislative body, but state agency, whose members are appointed by the Governor of California.
Although solar panels may be used to save energy and reduce harmful fossil fuel emissions, critics say that the effect of residential rooftop solar panels is minimal. Plus, the cost to include solar panels will significantly increase the sale price of new homes.
Those who favor solar energy say that future savings on energy bills more than make up for the up-front costs of construction.