Law legislative legislature forum

HOA, condo, & co-op Legislative update (Part 2, Nov. 2021)

By Deborah Goonan, Independent American Communities deborahgoonan@gmail.com

Part 2, a summary of notable new laws enacted in several US states in 2021, as well as previews of important bills filed for 2022 legislative session. See also an earlier post,which includes updated reports on previously summarized bills considered and enacted in 2021.

Arizona

Owners now obligated to pay HOA attorney fees for collection of past due fees through a garnishment

HB 2170, Representative Walter Blackman [R], Writs of garnishment; attorney fees

In recent years, HOAs seeking to collect past due fees from owners have been opted to pursue garnishment in lieu of foreclosing on property.

This new law applies to all creditors enforcing collection of debts through garnishment. Read the full text of Chapter 306. HOA attorney fees will now be added to the debt collected through garnishment of wages or other assets.

As noted in the following article, HOAs will now pass along additional collection attorney fees to owners:

New Arizona Laws And Their Impact On Community Associations By Tami L. Seekins, Esq., Travis Law Firm, Sept. 1, 2021

On May 3, 2021, Gov. Ducey signed HB 2170, which amended Arizona’s garnishment statutes. … Previously a judgment creditor, such as an association, could not collect attorneys’ fees related to a garnishment. Therefore, the association bore the full cost of using a garnishment to collect a court judgment. This new law allows associations to request incurred attorneys’ fees for the garnishment, if those fees are allowed by the judgment or contract. In passing this bill, the Arizona legislature acknowledged that the costs to enforce a court judgment against a judgment debtor rightly belongs on the judgment debtor, not on the judgment creditor.

Legislature modifies laws allowing owners and residents to display political signs

SB 1722 Senator Vince Leach [R] Political signs; condominiums; planned communities.

Chapter 221 has been modified to require that HOA, condo, and co-op associations allow an individual to display a political sign up to seventy-one (71) days before an election and extends the time a sign can remain displayed, up to fifteen (15) days after the general election. An HOA-governed community can require a resident to remove the sign for a candidate that does not win the primary election, 15 days after the primary election.

To clarify, and eliminate confusion, state legislation now defines a political sign as follows:

“POLITICAL SIGN” MEANS A SIGN THAT ATTEMPTS TO INFLUENCE THE OUTCOME OF AN ELECTION, INCLUDING SUPPORTING OR OPPOSING THE RECALL OF A PUBLIC OFFICER OR SUPPORTING OR OPPOSING THE CIRCULATION OF A PETITION FOR A BALLOT MEASURE, QUESTION OR PROPOSITION OR THE RECALL OF A PUBLIC OFFICER.

California

Legislation takes aim at CC&Rs that create obstacles to tackling the state’s affordable housing crisis

Assembly Bill No. 721, Bloom. Covenants and restrictions: affordable housing seeks to eliminate property owners’ and HOAs’ enforcement of CC&Rs that limit use of homes and parcels for single family occupancy.

The new law, enacted as Chapter 349 ,is entitled An act to add Section 714.6 to the Civil Code, relating to real property. 

This controversial legislation was approved by the Governor of California on September 28, 2021. Filed with Secretary of State  September 28, 2021.

In part, the legislative intent reads:

Ensuring access to affordable and supportive housing and the production of additional affordable and supportive housing is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. It is the intent of the Legislature that this act therefore apply statewide to all cities and counties, including charter cities, and to all conditions, covenants, restrictions, or private limits on the use of land, whether recorded previous to the effective date of this act or recorded at any time thereafter

State law now prohibits enforcement of local government, private landowner, or HOA restrictions limit the number, size, or location of the residences that may be built on the property, or that restrict the number of persons or families who may reside on the property. Supporters of the law agree that restricting land use to single family detached residences on relatively large lots effectively excludes California residents in need of smaller housing units, often in the form of multifamily dwellings.

Notably, the law states that this section shall only apply to restrictive covenants that restrict the number, size, or location of the residences that may be built on a property or that restrict the number of persons or families who may reside on a property. This section does not apply to any other covenant.

What does this mean with respect to HOA-governed communities?

Potentially, an affordable housing organization can acquire lots or existing housing units in HOA-governed communities, then proceed with the legal process of amending land use restrictions to allow for additional housing units on that property. For example, an owner might choose to convert a single family home into a duplex with two rental units, keeping rents within the legal definition of affordable housing.

Pending the inevitable legal challenges of the provisions of Chapter 349, HOA restrictions that allow for only single family dwellings may prove to be unenforceable.

An HOA retains its legal right to enforce most of its other covenants and restrictions, including those related to aesthetics, architectural standards, landscape standards, etc. Covenants related to the HOA’s right to collect fees and assessments for common maintenance remain fully enforceable. Any existing covenants capping monthly rents will also remain intact.

At the local government level, developers must still comply with local building and safety codes, which, in fact, often limit the number of residents per dwelling, as well as the size of each dwelling, based upon local zoning ordinances.

To fully understand the potential impact of AB 721, now Chapter 349, it’s important to recognize the larger goal of California’s state Legislature to tackle obstacles to the creation of affordable housing. Two of the most important pieces of legislation passed this year include SB 9 and SB 10.

In California, it’s now easier to convert a single family home to a duplex property

In fulfillment of his campaign promise to alleviate the affordable housing crisis in his state, California Governor Gavin Newsom has launched an initiative to increase the supply of housing units in or near employment centers within cities and towns. Newsom and fellow affordable housing advocates have long maintained that increasing the supply of housing in cities will help millions of Californians. Historically, many residents of the state have been forced to purchase or rent more affordable housing in far-flung suburban or rural locations, which means they’ve had to endure long commutes to work.

SB 9, California State Senate President pro Tempore Toni G. Atkins, the California Housing Opportunity and More Efficiency (HOME) Act creates a streamlined process for homeowners to divide their single family home into a duplex or build a 2-family home on their existing lot. The law also provides for an owner’s right to split a single family lot into two lots.

Notably, the law requires local governments to limit use of lot splits to residential uses only.

According to the law, an owner seeking to create a duplex must “sign an affidavit stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the urban lot split.

In addition, the new housing units must be rented for longer than 30 days at a time, thus preventing mass development of short term rental units in residential zones. Likewise, construction projects cannot displace tenants, particularly in rent-controlled housing.

Urban infill and lots near transit can be rezoned for up to ten housing units

SB 10, sponsored by Senator Scott Wiener (D-San Francisco), makes it easier local government to “upzone” buildable lots located near public transit centers or areas ripe for urban infill. By relaxing CEQA (California Environmental Quality Act) standards, lot owners and developers can transform a single family zoned lot to a building site allowing up to 10 residential units or mixed-use units, constructed in one or more structures.

In addition, a qualified urban parcel may also include up to two Accessory Dwelling Units (ADUs) or Junior ADUs. The caveat — local government participation is not required; it remains completely voluntary.

To the extent that many of California’s larger HOA-governed communities are situated within or adjacent to cities or unincorporated areas, and considering Chapter 349 prohibitions on “single family occupancy” Covenants and Restrictions, owners and residents of HOA-governed communities are likely to see a gradual transformation to more densely populated neighborhoods, including more residents who rent rather than own their homes.

HOA election legislation, changes

AB 502, Davies. Common interest developments: election requirements, is now law.

This bill was first drafted by the California Legislative Action Committee of Community Associations Institute (CAI-CLAC).

CAI-CLAC’s original objective was to make election by acclamation a requirement for every HOA (or condo or co-op) board election, if the number of candidates running for the board is the same or less than the number of vacancies on the board.

In practice, many HOAs repeatedly avoided conducting an election for new board members by intentionally limiting the number of candidates running for election (or re-election). For example, if there were three board seats up for election, the HOA board would vote in a closed meeting to stop accepting board member nominations as soon as three candidates were named. Then the HOA would automatically “call” the election, without ever sending and election notification or distributing election ballots.

Per Marjorie Murray of the homeowner advocacy group, California Homeowner Association Law, AB 502 was amended during the legislative session, to limit the use of election by acclamation, and to ensure that HOAs continue to conduct an election at least once every three years.

Murray explains, in a recent news release:

FIRST of all: “acclamation” can be used only ONCE every three years.  HOAs still have to hold elections regularly.  [See Civil Code Section 5103(a)

SECOND: an association is NOT REQUIRED to use acclamation when the number of candidates equals the number of vacancies.  AB502, when introduced, required HOAs to use acclamation when the candidates equaled the number of vacancies.  CCHAL got the author to CHANGE the bill so that the use of acclamation is no longer mandatory but is a CHOICE.

THIRD: the decision to use acclamation is NO LONGER SECRET: THE BOARD MUST VOTE ON IT.  Under existing law, the decision to use acclamation was done in secret.  There was no accountability to voters.  The Inspector of Elections, the property manager, and the incumbent board could decide over the phone whether to cancel elections and seat candidates by acclamation.

No longer.

New Civil Code 5103(D) REQUIRES the incumbent board to VOTE IN A PROPERLY-NOTICED OPEN MEETING on whether to seat directors by acclamation.  No longer is using acclamation a secret decision.  It must be transparent. The board vote is NOT a rubber stamp.  The board could, theoretically, vote NOT to seat the candidates.

Remember: homeowners have the right to sue in small claims court to challenge elections that violate the election statutes, including these new REQUIREMENTS ON THE USE OF ACCLAMATION. The LAW says the court SHALL VOID an election that violates the LAWS on HOA elections and also lets a homeowner to recover legal fees for consulting an attorney.

Colorado

SIGNS, FLAGS, ARTIFICIAL TURF, SOLAR PANELS, AND ASSOCIATION RECORDS NEW LAWS FOR COMMUNITY ASSOCIATIONS, by David Closson, Altitude Community Law, Sept. 1, 2021

Good news: CO Legislature gets serious about protecting First Amendment free expression rights, property rights for residents of HOA-governed communities

Two important new laws signed by Governor Jared Polis

Homeowner Freedom of Expression (HB 21-1310)

With this bill, state law has been completely rewritten, protecting the rights of HOA-governed community residents to display virtually any non-commercial flag or sign on their properties. In planned communities, HOAs cannot prohibit such displays on privately-owned lots. In condominium communities, the condo association must allow display of flags or signs from limited common elements (porch or balcony) and windows of the unit which are viewable from outside.

The statute provides for the rights of resident to display any type of sign, not merely political signs normally displayed during election seasons.

According to the Colorado Common Interest Ownership Act (CCIOA), an owners association can only enforce “content neutral” regulations with regard to the number, location, placement, or size of flags, flag poles, and signs.

What’s great about the amended law is that it’s exactly the sort of regulation that housing consumers want and need — it repeals previously legal onerous powers of homeowners and condominium associations to dictate the type of flags and signs residents could display.

Homeowner Governance Protections (HB 21-1229)

This bill partially expands the rights of homeowners in several ways:

First, an HOA can no longer prevent a property owner from using artificial turf in their back yard. The law also protects the right of homeowners to choose drought tolerant vegetation, thereby allowing residents to conserve water and grow plants that are adapted to arid climates. At this time, although HOAs cannot prohibit water wise landscapes outright, associations still reserve the right to regulate the type, number, and placement of plants and hardscape features.

Second, the statute now clarifies that, although HOAs can regulate the dimension, placement and appearance of solar panels, those regulations cannot have the effect of increasing the owner’s installation cost by more than 10%, nor can HOA rules result in a reduction of efficiency of more than 10%. An HOA must bow respond to an owner’s request to install solar panels within 60 days. If the review board does not respond to the owner’s request within 60 days, the application is deemed to be approved as submitted.

Third, CCIOA makes new transparency requirements of HOAs, and adds enforcement mechanisms for homeowners. The statute now includes financial penalties for HOAs that fail to produce official records within 30 days of a member’s request. Specifically, the association is subject to a fine of $50 per day, up to $500, retroactive to the 11th business day from initial request. However, the HOA is ultimately liable to compensate a homeowner for any actual damages related to the Association’s failure to timely comply with records requests, when those damages exceed the cost of $50 per day penalties accrued.

Likewise, an Association must now specifically disclose to buyers the type and amount of all pre-sale charges and transfer fees.

Florida

Following the sudden collapse of a condominium building in Surfside, task force, HOA-industry attorneys call for new building safety rules

In response to the collapse of Champlain Towers South, a high rise condominium near Miami Beach, the Florida Bar convened a task force to recommend legislative changes for the 2022 session.

According to several reports, the task force includes structural engineers, architects, insurance-industry experts, community association managers, HOA industry attorneys, and real-estate professionals.

Notably absent from the task force: housing consumers and condominium owners who will be directly impacted by the task force’s recommendations. Also absent from the task force, former Florida House Representative Julio Robaina (R), and former Senator Rene Garcia, both notable advocates that sponsored bills for condominium law and safety reform.

Ironically, HOA attorney John Adams of Becker Law, one of the state’s largest lawfirms representing condo associations, has an influential seat at the table on the FL Bar’s task force.

The Condominium Life Safety Advisory Task Force has provided Legislators with the following recommendations:

  • Structural inspections and engineer reports filed every five years
  • Authorizing condo boards to borrow money to make safety repairs, without requiring a vote of unit owners
  • Mandating that condominium associations fund their reserves by at least 50% (but not full funding)
  • Increasing the number of owner voting interests needed to waive reserve funds. Current state law allows a simple majority to vote against saving money for future repairs in a reserve fund. The task force recommends increasing the threshold for eliminating a reserve fund to 75% of voting interests.
  • Realtors suggest that condo boards be required by law to share engineering reports with current unit owners and prospective condo buyers.

IAC agrees that structural inspections and engineer reports would help volunteer condo boards better understand the condition of their high rise building. And unit owners and buyers absolutely need to be fully informed on the structural integrity of property they currently own or intend to purchase.

But the task force’s suggestions don’t go far enough. For starters, when a condo association commissions a required engineering report, it ought to be required by law to file the report with the County Recorder, making the information part of public record.

Additionally, there’s no valid reason to allow condo owners to waive reserves requirements, at least not for essential life safety components of the building. That portion of the reserve fund should be fully funded, ideally with developer and owner contributions that begin when the building is constructed, and continue uninterrupted each year after.

Unfortunately, requiring a fully funded reserve 20, 30, or 40 years after the fact would put a high financial burden on current unit owners to meet an impossible standard. Realistically, condo owners are going to need public or private financial assistance to preserve their property, or they will have to be offered acceptable buyout terms in the inevitable termination of their condo association. The task force did not address these realities, but has merely proposed kicking the can down the road, by enabling condo owners to put off saving money for future maintenance, repair, and reconstruction.

References:

SKLAR RECOGNIZED FOR HIS WORK CHAIRING THE CONDOMINIUM LIFE SAFETY ADVISORY TASK FORCE (Florida Bar News, Oct. 12, 2021)

Florida Task Force Recommends New Safety Rules for Condos
By Sara MarcusWednesday, October 13, 2021 at 11:11 am

In this next referenced article, it’s refreshing to see that this summer’s tragic condo collapse has finally resulted in some serious media attention and pushback against aggressive condo and HOA law firms that regularly lobby AGAINST health, safety, anti-abuse and anti-corruption legislation.

Becker & Poliakoff law firm the ‘nemesis’ of condo safety reformers
By Brittany Wallman, South Florida Sun-Sentinel, Sept. 29, 2021

This article is well worth a full read. Here’s a teaser from the report:

Led by [Attorney Donna] Berger, the Becker condo lobby also stepped into battle against a bill that would have required, among other things, structural inspections for condos every five years.

The bill, proposed by then-Sen. Rene Garcia, now a Miami-Dade County commissioner, contained a litany of things the firm opposed, including term limits for condo board members, and a law making it illegal for condo boards to “abuse” unit owners.

Berger told the Sun Sentinel at the time , in 2006, that the bill was so “provocative” it would only anger people.

The bill said: “Every 5 years the board of administration shall have the condominium buildings inspected by a professional engineer or professional architect registered in the state for the purpose of determining that the building is structurally and electrically safe.” It failed.

Former Rep. [Julio] Robaina wrung his hands in late June, when the Champlain collapsed in Surfside, wondering if his failed proposals would have saved 98 lives.

He told the Sun Sentinel that Becker’s firm stymied his efforts to pass a bill requiring coastal condo safety certifications every 10 years. Currently Broward and Miami-Dade counties require inspections 40 years after construction, and every 10 years thereafter.

“That bill never even moved, there was no support from the House, and it wasn’t just Becker & Poliakoff, but other law firms, saying there was an undue burden financially on the associations,” Robaina said.’

Maryland

New meeting requirements and guidelines for HOAs

HB1023 – Virtual meetings, enables a homeowners association, including a condominium or cooperative association, to hold a meeting by teleconference, video conference, or “similar electronic means,” not defined. A vote may take place at a virtual meeting, provided ballots and proxy forms are included with official advance notice of the meeting. All members must be provided with instructions on how to join the meeting, and must be able to hear all discussions.

The new law does not require a special reason to hold a meeting virtually rather than in-person. Also changed in the statutes: regardless of what’s written in the governing documents, an Association does not need to accept votes from the floor, as long as there is at least one candidate already running for each open seat on the board. This amendment limits the rights of owners whose bylaws may have allowed for nominations from the floor.

These amendments also open the door for potential misconduct, because owners that cannot attend a meeting in person cannot easily witness the counting of ballots or proxies.

HB593 Meeting Requirements, Enacted under Article II, Section 17(c) of the Maryland Constitution – Chapter 500

This law clarifies that ‘unless bylaws provide otherwise,’ an official meeting of an owners’ council requires a 25% quorum (based upon total number of members in the owners’ association); if an ‘additional’ meeting is needed to conduct business, a majority of owners present at an official meeting must approve said meeting. Additionally, the statute requires at least 15 day’s gap between the meetings, and a 10-day notice period. Meeting notices may be posted on the HOA’s website or in a local newspaper.

Note that the law still defers to the HOA bylaws as the default standard for setting a quorum. In other words, an HOA’s quorum may be more or less than 25%, as specified in their bylaws.

Reserve Studies to be required every 5 years in two Counties

HB 567 Reserve Studies, enacted in Chapter 433 APPLIES ONLY TO CONDOMINIUM, COOPERATIVE, OR HOMEOWNERS ASSOCIATIONS IN PRINCE GEORGE’S COUNTY ESTABLISHED AFTER OCTOBER 1, 2020, OR MONTGOMERY COUNTY, ESTABLISHED AFTER OCTOBER 1, 2021.

This law requires owners’ associations in the applicable counties to conduct a reserve study every five (5) years. The law was originally enacted last year for Prince George’s County. This year Montgomery County was added as a second County requiring periodic Reserve Studies.

The statute defines a reserve study as

a study of the reserves required for
future major repairs and replacement of the common elements of a cooperative housing
corporation that:
(1) Identifies each structural, mechanical, electrical, and plumbing component of the common elements and any other components that are the responsibility
of the cooperative housing corporation to repair and replace;
(2) States the normal useful life and the estimated remaining useful life of
each identified component;
(3) States the estimated cost of repair or replacement of each identified
component; and
(4) States the estimated annual reserve amount necessary to accomplish
any identified future repair or replacement.

The statute also outlines the necessary qualification of a reserve study specialist, including the requirement that the person conducting the study “Is currently designated as a reserve specialist by the Community Association Institute or as a professional reserve analyst by the Association of Professional Reserve Analysts.”

The law requires that any unit owner be permitted to view and copy each reserve study, but does not address access of this valuable information by the general public, or even prospective buyers of HOA-governed property.

Maryland law requires the owners’ association to fully fund the reserves, as recommended in the most recent reserve study. Owners cannot override this requirement by amending their governing documents. The HOA/condo/co-op board has full authority to levy assessments to cover necessary costs.

On the surface, these new mandatory reserve funding requirements appear to be sensible. However, property owners may find themselves at the mercy of private organizations — notably, trade groups in the real estate industry that directly benefit from managing HOAs requiring expensive maintenance, repair, and replacement projects.

Furthermore, the HOA board or council maintains full control over the selection of the management company and reserve specialist, giving owners at large no voice in the process of planning for future repair and replacement of components of common property.

Homeowners, condo association must now allow portable basketball hoops, low-impact landscapes, and composting


HB 1347, Portable Basketball Apparatuses, Chapter 143

As of May 2021, an owners’ association must allow the installation and use of a portable basketball hoop on property that is privately-owned or set aside for exclusive use by a condo unit. Parents and basketball players will applaud this new law.

On the other hand, residents who dislike the inevitable sounds of an active basketball game will not be happy. Presumably, HOAs can still enact and enforce rules and regulations regarding nuisance behavior and excessive noise in early morning or late evening hours. The potential for neighborhood conflict is apt to be more prevalent in condominium associations, where homes are attached or homes are in close proximity.

HB 322, Low-impact landscaping, Chapter 368

As of October 2021, no homeowners or condominium association can enact or enforce restrictions or rules that prevent a resident from installing a low-impact landscape. Low-impact gardening includes plants that use less water, help replenish natural habitats for pollinators, and reduce the use of chemical fertilizers and weed control substances.

Notably, this law applies not only to owners of fee simple homes with private lots, it also applies to owners of condominium units who do not own their lots, but maintain exclusive use of their front and back yards. According to the statute, the owner must properly maintain the landscape, and the HOA can still govern certain aesthetic requirements that do not, in effect, make low-impact landscaping impractical or impossible.

HB 248, Composting, Chapter 459

In this case, the statute creates separate rights for owners of property governed by condominium vs. homeowners associations.

For owners of property in a homeowners’ association, who own or have exclusive use of a lot, the HOA must not prohibit or enforce strict limitations on the owners right to compost on their property. The owner must follow all state and local laws and ordinances pertaining to the composting that takes place at a private dwelling. An owner also has the option of contracting with a private company to collect and compost organic waste.

For condominium associations, an HOA must simply allow a property owner to contract with a private composting company to collect and process organic waste materials. The condo association need not allow onsite composting.


Multifamily homeowners, condo associations must allow electrical vehicle charging stations

HB 110, Chapter 455 and SB 144, Chapter 456

The amended law specifies that a unit owners’ association must not prohibit or willfully delay the installation and use of an electrical vehicle charging station for a deeded parking space, or parking that is dedicated to the exclusive use of a particular unit.

The unit owner must agree to pay all installation, maintenance, repair, removal, and additional insurance costs, as well as the electrical utility bill by way of a separate meter.

Although the association maintains some limited rights to govern the aesthetics of the installation, and any impact to surrounding common property, it must approve an owner’s application within 60 days, barring any delays due to requests for additional information. After the deadline date, the owner’s application is deemed officially approved.

New Hampshire

Taxpayers seek legislative solutions to help pay for maintenance and replacement of private roads

New Hampshire Private Road Taxpayers Allilance (NHPVRTA) is currently seeking sponsors for two proposed bills for the 2022 legislative session. The proposed legislation would alleviate double taxation and offset significant financial burdens of residential homeowners whose properties are accessed by private roads.

NHPVRTA has been advocating for similar legislation since at least 2019.

The first Legislative Service Request (LSR) LSR-2022-2951 is sponsored by Sen. Regina Birdsell (Hampstead). The proposed bill would require home and land developers to create a Capital Reserve Fund of no less than 50% of the cost to replace private roadways. This bill would apply to private road owners and HOAs going forward — with the goal of ensuring that real estate developers provide owners with a substantial head start in establishing a reserve fund to pay for future road replacement.

A second piece of legislation was filed by Sen. Sharon Carson (Londonderry), with no number assigned. This bill is a second attempt to create a municipal tax credit for property owners to offset their cost of maintenance and replacement costs for “certain enumerated services such as snow removal, lighting, repairs, replacement, fire hydrants, sewer and water,” as long as the local municipality accepts no legal responsibility for doing so. The HOA would have to file for the tax credit each year. (Source: Concord Monitor – subscription required)

IAC is beginning to see more grass roots efforts to de-privatize what ought to be public services, which are already paid for by taxpayers. The ultimate answer is to shift unrealistic “private” infrastructure burdens back to where they belong — with municipal and county governments. The tax credit proposal is one step in that direction, because, ultimately, local governments will probably find it more cost effective to provide public services rather than issue sizable tax credits to property owners.

New Jersey

High rise apartment and condominium buildings will require regular inspections

S-4103, safety inspections of older buildings

In keeping with a nationwide trend to prevent another sudden condominium collapse, such as the tragedy that occurred this summer in Surfside, Florida, Sen. Samuel Thompson, R-Middlesex, introduced a bill that would require that the New Jersey Department of Community Affairs establish an inspection program in which all multistory buildings 40 years and older would be inspected at least every five years. That would include condominiums and housing cooperatives, as well as apartment, office, or multi-use buildings in the state.

Following DCA notification of deficiencies, the owners of any building found to be in need of repairs or modifications to meet current building safety codes would have 150 days to take corrective action,.

New York

Governor signs law requiring qualified condo and co-op buildings to pay their service staff a prevailing wage

A7434A, Prevailing wage; tax abatements

New York law was recently amended to tie unit owner property tax abatements to a legal requirement to pay their building’s service workers a prevailing wage.

To qualify for a tax abatement, a condo or co-op unit owner must certify, through the board of managers, that the unit in the building is their primary residence. Other criteria apply, as explained on this page from the NYC Department of Finance.

The building’s certification of tax abatement status and its requirement to pay prevailing wages must be made part of public record.

The prevailing wage requirement now applies to buildings that meet the following criteria:


Qualified property” means (i) a property with an average unit assessed value of less than or equal to sixty thousand dollars; or (ii) a property with an average unit assessed value of more than sixty thousand dollars and less than or equal to one hundred thousand dollars, and less than thirty dwelling units; or (III) a property with respect to which an applicant has submitted and affidavit certifying that all building service employees employed to to be employed at the propert shall receive the applicable prevailing wage for the duration of such property’s tax abatement.

North Carolina

Legislature permits expanded use of electronic meetings and e-voting

HB 320 (short title: “Modernize Remote Business Access”).

This 13-page bill was recently signed by the Governor, as of September 20, 2021. It provides corporations, including condominium and homeowners associations, the right to decide ‘in their sole discretion’ to hold meetings by electronic means, rather than in person.

HOA board members may also choose to conduct a vote without a meeting, providing each unit owner the choice of voting by written ballot or electronic ballot. An HOA must provide the choice unless ALL members agree to e-voting.

The law clarifies requirements that organizations must follow to ensure all member are able to participate in meetings and voting by electronic means. For example, all members must receive advance notice of meetings, instructions explaining how to join an online meeting or teleconference, and must be able to hear and be heard by all members present at the meeting.

This amended law is one of many similar legislative actions across the country, in response to expiring pandemic-related emergency orders, which now expands the rights of HOA and condo boards to conduct meetings and votes by electronic means has been beyond the rare emergency situation.

While proponents of this new law claim that electronic meetings and e-voting can increase unit owner participation in governance of the community association, critics lament that avoiding in-person meetings and voting further erodes already limited transparency in HOAs.


Pennsylvania

House Urban Affairs Committee works on Comprehensive Community Living Reform Bill Package

Rep. Rosemary Brown has introduced several bills aimed at helping owners of HOA-governed property by increasing accountability of HOA boards and managers.

HB 1795 proposes the following reforms:

  • A majority of unit owners would be required to affirmatively approve any amendments to the community’s bylaws.
  • For all communities with more than 100 units, an independent third party, hired to oversee board elections, would be required to collect, tally, and certify written or electronic ballots. A majority voting interest of all unit owners may opt out of this requirement only by amending their bylaws, under new bylaw amendment requirements as noted above.
  • The HOA-governing board would be required to conduct a “meet the candidates” opportunity, so that unit owners would be able to know something about the members running for a seat on the HOA board. (IAC often hears from owners that were not given an opportunity to meet or learn about HOA board candidates.)
  • Creates an enforceable penalty for individuals who interfere with HOA election procedures as delineated by state law. Specifically, if found guilty of violating state law, an individual can be fined up to $10,000, or sentenced to up to 5 years in prison, or both.
  • Designates a Declarant’s (developer) or Executive Board Member’s willful violation of meeting and election procedures to be an ‘unfair trade practice,’ subject to prosecution by the state Attorney General.
  • If investigation results in a conviction, the court may also award punitive damages and recovery of attorney fees for unit owners.

HB 1840 would make new real estate disclosure requirements, to help ensure that buyers are more fully informed of the existence of an owners’ association, and the governance structure of that organization.

Specifically, the disclosure would require that the Declarant or unit owner (in the case of resale) provide a current copy of the governing documents to a buyer before executing an agreement of sale. The disclosure packet would also contain a de facto Buyer Beware warning that most HOA disputes are regarded as civil actions, with the exception of provable cases of HOA fraud.

The HOA can only charge “actual costs” for providing the disclosure packet, meaning that state law would disallow price gouging for production of governing documents.

As for enforcement, the bill states that if the association fails to provide the required pre-sale disclosure packet, it may not legally enforce the unit owner to pay its fees and assessments.

HB 1839 would allow municipalities and HOA-governed common interest communities to enter into joint purchasing or service agreements, under the assumption that such agreements may offer better efficiencies and cost savings to property owners. Such cooperative agreements would not be subject to competitive bidding requirements.


HR 69 (a Resolution) would establish a Joint State Government Commission to study all HOA-governed common interest communities in Pennsylvania. The last study was conducted more than 10 years ago.

The official short title is: A Resolution directing the Joint State Government Commission to conduct a study on the impact of common interest ownership communities on local governments and the Commonwealth, the challenges facing residents and governing bodies of common interest ownership communities and opportunities for the Commonwealth to assist local governments and common interest ownership communities to deliver adequate services to their residents at an affordable cost.

Several pressing concerns are addressed in this Resolution, including a common interest ownership’s ability to adequately maintain, repair, or rebuild essential infrastructure without public assistance; as well as public safety concerns regarding response time of emergency personnel and the ability of law enforcement agencies to inform residents of public threats

Management trade group’s Pennsylvania Legislative Action Committee opposes reform package, citing disagreement with enforcement provisions

It appears that Community Associations Institute (CAI) Keystone and Rep. Rosemary Brown disagree on the need for enforcement of fair trade practices and fair HOA election procedures. So far, however, a majority of representatives on the House Urban Affairs Committee agree that HOA reform laws are meaningless without “teeth” to ensure compliance. IAC agrees!

True to form, CAI uses the same old arguments against holding certain unethical HOA board members accountable for willful misconduct, non-transparent meetings, rigged HOA elections, and fraudulent behavior. CAI downplays common reports of rogue HOA governing boards, and insists that legal threats of fines or time in prison for behaviors such as cheating on HOA elections, or making major financial commitments in secret meetings will discourage owners from volunteering to serve their communities.

Nonsense. Holding the HOA board accountable to members is more likely to encourage board candidates with a true spirit of community service — the kind of leaders who would never dream of using their power to exploit their neighbors.

Consider the facts.

For at least the past three decades, state laws have granted HOA boards substantial power and authority over their association of property owners, including the power to enforce restrictions with fines, and to compel owners to pay ever-increasing HOA fees, under threat of aggressive collection tactics. So-called ‘modern’ HOA boards also have the ultimate power to file property liens, and then foreclose on homes and condos to collect alleged HOA debts — even though nearly all HOA liens are just a tiny fraction of the property’s market value.

In return, at the very least, homeowners deserve full transparency, fair elections, and democratic voting practices from their HOAs. Only when the law holds leaders accountable can we begin to replace dishonest and self-interested board members with honest leaders committed to serving their community with integrity.

See the following references for CAI’s stance opposing HOA governed community reform, as well as the House Urban Affairs Committee member votes on holding HOAs accountable to Pennsylvania housing consumers. Hopefully, the majority of PA’s legislature continues to ignore CAI’s tired old rants, and will firmly promote meaningful HOA reform.

Sources:

House Urban Affairs Committee Focuses on Comprehensive Community Living Reform Bill Package, Says Brown  SEP. 28,

Video of committee meeting where Rep. Brown and a majority of her colleagues vote to add enforcement “teeth” to current HOA bills.

https://fb.watch/8E9Qk5PFFE/

Blog post of CAI’s Legislative Action Committee, dissing Rep. Brown’s bill for its strict enforcement proposals, to include criminal charges.

CAI Keystone – PENNSYLVANIA LEGISLATIVE ALERT September 27, 2021 11:26 AM
Screen captures from this alert:

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