D R A F T
FOR APPROVAL
AMENDMENTS TO UNIFORM COMMON
INTEREST OWNERSHIP ACT
NATIONAL CONFERENCE OF
COMMISSIONERS
ON UNIFORM STATE LAWS
MEETING IN ITS ONE-HUNDRED-AND-SEVENTEENTH YEAR
BIG SKY, MONTANA
JULY 18 - JULY 25, 2008
AMENDMENTS TO UNIFORM COMMON
INTEREST OWNERSHIP ACT
WITHOUT PREFATORY NOTE AND WITH PARTIAL NEW COMMENTS
Copyright 82008
By
NATIONAL CONFERENCE OF
COMMISSIONERS
ON UNIFORM STATE LAWS
![]()
The
ideas and conclusions set forth in this draft, including the proposed statutory
language and any comments or reporter=s notes, have not been passed upon by the National
Conference of Commissioners on Uniform State Laws or the Drafting
Committee. They do not necessarily
reflect the views of the Conference and its Commissioners and the Drafting
Committee and its Members and Reporter.
Proposed statutory language may not be used to ascertain the intent or
meaning of any promulgated final statutory proposal.
DRAFTING COMMITTEE ON AMENDMENTS TO
UNIFORM COMMON INTEREST OWNERSHIP ACT
The Committee appointed by and
representing the National Conference of Commissioners on Uniform State Laws in
amending this Act consists of the following
individuals:
CARL H. LISMAN, 84 Pine
St., P.O. Box 728, Burlington, VT 05402, Chair
OWEN L. ANDERSON, University of Oklahoma College of
Law, 300 Timberdell Rd., Norman, OK 73019
MARION W. BENFIELD, JR., 10
Overlook Circle, New Braunfels, TX 78132
DAVID D. BIKLEN, 153 N.
Beacon St., Hartford, CT 06105
ELLEN F. DYKE, Legal
Department 52/923, 10400 Fernwood Rd., Bethesda, MD 20817
JOHN S. GILLIG, P.O. Box
4285, 91 C Michael Davenport Blvd., Frankfort, KY 40604
DALE G. HIGER, 1302 Warm
Springs Ave., Boise, ID 83712
DONALD E. MIELKE, 7472 S.
Shaffer Ln., Suite 100, Littleton, CO 80127
HIROSHI SAKAI, 3773 Diamond
Head Circle, Honolulu, HI 96815
NATHANIEL STERLING, 4180 Oak Hill Ave., Palo Alto,
CA 94306
YVONNE L. THARPES, Legislature of the Virgin
Islands, P.O. Box 1690, St. Thomas, VI 00804
NORA WINKELMAN, Office of General Counsel, 333
Market St., 17th Flr., Harrisburg, PA 17101
LEE YEAKEL, Western
District of Texas, P.O. Box 164196, Austin, TX 78716‑4196
WILLIAM R. BREETZ, JR., Connecticut Urban Legal
Initiative, 35 Elizabeth St. Rm K‑202, Hartford, CT 06105, National
Conference Reporter
EX OFFICIO
MARTHA LEE
WALTERS, Oregon Supreme Court, 1163 State St.,
Salem, OR 97301‑2563, President
WILLIAM H. HENNING, University of Alabama, Box
870382, Tuscaloosa, AL 35487‑0382, Division Chair
AMERICAN
BAR ASSOCIATION ADVISOR
GARY A. POLIAKOFF, 3111 Stirling Rd., Ft. Lauderdale, FL 33312‑6525, ABA Advisor
REBECCA ANDERSON
FISCHER, 633 17th St., Suite 3000, Denver, CO 80202, ABA Section Advisor
EXECUTIVE DIRECTOR
JOHN A. SEBERT, 111 N. Wabash Ave, Suite 1010, Chicago, IL 60602, Executive Director
Copies of this Act may be obtained from:
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
111 N. Wabash Ave., Suite 1010
Chicago, Illinois 60602
312/450-6600
www.nccusl.org
AMENDMENTS TO UNIFORM COMMON INTEREST OWNERSHIP ACT
TABLE OF CONTENTS
[ARTICLE] 1GENERAL PROVISIONS
[PART] 1DEFINITIONS AND OTHER
GENERAL PROVISIONS
SECTION 1-101. SHORT TITLE................................................................................................. 1
SECTION 1-102. APPLICABILITY............................................................................................. 1
SECTION 1-103. DEFINITIONS................................................................................................. 1
SECTION 1-104. NO VARIATION
BY AGREEMENT............................................................ 10
SECTION 1-105. SEPARATE TITLES
AND TAXATION...................................................... 10
SECTION 1-106. APPLICABILITY OF
LOCAL ORDINANCES, REGULATIONS, AND BUILDING CODES........................................................................................................................................... 11
SECTION 1-107. EMINENT DOMAIN..................................................................................... 11
SECTION 1-108. SUPPLEMENTAL
GENERAL PRINCIPLES OF LAW APPLICABLE. 13
SECTION 1-109. CONSTRUCTION
AGAINST IMPLICIT REPEAL.................................... 13
SECTION 1-110. UNIFORMITY OF
APPLICATION AND CONSTRUCTION..................... 13
SECTION 1-111. SEVERABILITY............................................................................................ 13
SECTION 1-112. UNCONSCIONABLE
AGREEMENT OR TERM OF CONTRACT........ 14
SECTION 1-113. OBLIGATION OF
GOOD FAITH................................................................ 14
SECTION 1-114. REMEDIES TO BE
LIBERALLY ADMINISTERED................................. 14
SECTION 1-115. ADJUSTMENT OF
DOLLAR AMOUNTS................................................. 15
[PART] 2APPLICABILITY
SECTION 1-201. APPLICABILITY TO
NEW COMMON INTEREST COMMUNITIES....... 16
SECTION 1-202. EXCEPTION FOR
SMALL COOPERATIVES......................................... 16
SECTION 1-203. EXCEPTION FOR
SMALL AND LIMITED EXPENSE LIABILITY PLANNED COMMUNITIES............................................................................................................... 16
SECTION 1-204. APPLICABILITY TO
PRE-EXISTING COMMON INTEREST COMMUNITIES 17
SECTION 1-205. SAME; EXCEPTION FOR APPLICABILITY
TO SMALL PRE-
EXISTING COOPERATIVES AND PLANNED COMMUNITIES............................... 18
SECTION 1-206. AMENDMENTS TO
GOVERNING INSTRUMENTS............................... 19
SECTION 1-207. APPLICABILITY TO NONRESIDENTIAL AND MIXED-USE
COMMON INTEREST COMMUNITIES........................................................................ 19
SECTION 1-208. APPLICABILITY TO
OUT-OF-STATE COMMON INTEREST COMMUNITIES 21
SECTION 1-209.
OTHER EXEMPT REAL ESTATE ARRANGEMENTS.......................... 21
SECTION 1-210.
OTHER EXEMPT COVENANTS.............................................................. 21
[ARTICLE] 2CREATION, ALTERATION, ANDTERMINATION OF
COMMON INTEREST COMMUNITIES
SECTION
2-101. CREATION OF COMMON INTEREST
COMMUNITIES......................... 23
SECTION 2-102.
UNIT BOUNDARIES.................................................................................... 23
SECTION 2-103. CONSTRUCTION AND VALIDITY OF DECLARATION AND
BYLAWS.......................................................................................................................... 24
SECTION 2-104. DESCRIPTION OF
UNITS.......................................................................... 24
SECTION 2-105. CONTENTS OF
DECLARATION.............................................................. 24
SECTION 2-106. LEASEHOLD COMMON
INTEREST COMMUNITIES........................... 27
SECTION 2-107. ALLOCATION OF
ALLOCATED INTERESTS........................................ 28
SECTION 2-108. LIMITED COMMON
ELEMENTS.............................................................. 29
SECTION 2-109. PLATS AND PLANS................................................................................... 30
SECTION 2-110. EXERCISE OF
DEVELOPMENT RIGHTS.............................................. 33
SECTION 2-111. ALTERATIONS OF
UNITS......................................................................... 34
SECTION 2-112. RELOCATION OF
UNIT BOUNDARIES................................................... 34
SECTION 2-113. SUBDIVISION OF
UNITS............................................................................ 36
[SECTION 2-114. EASEMENT FOR
ENCROACHMENTS................................................. 36
[SECTION 2-114. MONUMENTS AS
BOUNDARIES........................................................... 36
SECTION 2-115. USE FOR SALES
PURPOSES................................................................ 37
SECTION 2-116. EASEMENT RIGHTS.................................................................................. 37
SECTION 2-117. AMENDMENT OF
DECLARATION.......................................................... 38
SECTION 2-118. TERMINATION OF
COMMON INTEREST COMMUNITY....................... 41
SECTION 2-119. RIGHTS OF SECURED
LENDERS.......................................................... 46
SECTION 2-120. MASTER
ASSOCIATIONS........................................................................ 46
SECTION 2-121. MERGER OR
CONSOLIDATION OF COMMON INTEREST COMMUNITIES 48
SECTION 2-122. ADDITION OF
UNSPECIFIED REAL ESTATE....................................... 49
SECTION 2-123. MASTER PLANNED
COMMUNITIES...................................................... 49
SECTION 2-124.
TERMINATION FOLLOWING CATASTROPHE...................................... 50
[ARTICLE] 3MANAGEMENT OF THE
COMMON INTEREST COMMUNITY
SECTION 3-101. ORGANIZATION OF
UNIT OWNERS ASSOCIATION............................ 52
SECTION 3-102. POWERS AND
DUTIES OF UNIT OWNERS ASSOCIATION.............. 52
SECTION 3-103. EXECUTIVE BOARD
MEMBERS AND OFFICERS.............................. 58
SECTION 3-104. TRANSFER OF
SPECIAL DECLARANT RIGHTS................................. 61
SECTION 3-105. TERMINATION OF
CONTRACTS AND LEASES OF DECLARANT... 64
SECTION 3-106. BYLAWS....................................................................................................... 65
SECTION 3-107. UPKEEP OF COMMON
INTEREST COMMUNITY................................. 66
SECTION 3-108. MEETINGS................................................................................................... 66
SECTION 3-109. QUORUMS QUORUM................................................................................ 71
SECTION 3-110. VOTING; PROXIES;
BALLOTS................................................................. 71
SECTION 3-111. TORT AND CONTRACT
LIABILITY; TOLLING OF LIMITATION PERIOD 75
SECTION 3-112. CONVEYANCE OR
ENCUMBRANCE OF COMMON ELEMENTS.... 76
SECTION 3-113. INSURANCE................................................................................................ 78
SECTION 3-114. SURPLUS FUNDS...................................................................................... 82
SECTION 3-115. ASSESSMENTS
FOR COMMON EXPENSES..................................... 83
SECTION 3-116. LIEN FOR ASSESSMENTS;
SUMS DUE THE ASSOCIATION; ENFORCEMENT 84
SECTION 3-117. OTHER LIENS............................................................................................. 90
SECTION 3-118. ASSOCIATION
RECORDS........................................................................ 91
SECTION 3-119. ASSOCIATION AS
TRUSTEE................................................................... 93
SECTION 3-120.
RULES.......................................................................................................... 94
SECTION 3-121.
NOTICE TO UNIT OWNERS...................................................................... 95
SECTION 3-122.
REMOVAL OF OFFICERS AND DIRECTORS....................................... 96
SECTION 3-123.
ADOPTION OF BUDGETS........................................................................ 97
SECTION 3-124.
LITIGATION INVOLVING THE DECLARANT........................................... 98
[ARTICLE] 4PROTECTION OF
PURCHASERS
SECTION 4-101. APPLICABILITY;
WAIVER....................................................................... 101
SECTION 4-102. LIABILITY FOR PUBLIC OFFERING STATEMENT
REQUIREMENTS......................................................................................................... 101
SECTION 4-103. PUBLIC OFFERING
STATEMENT; GENERAL PROVISIONS........... 102
SECTION 4-104. SAME; COMMON
INTEREST COMMUNITIES SUBJECT TO DEVELOPMENT RIGHTS........................................................................................................................................ 107
SECTION 4-105. SAME; TIME SHARES............................................................................. 109
SECTION 4-106. SAME; COMMON
INTEREST COMMUNITIES CONTAINING CONVERSION BUILDINGS........................................................................................................................................ 109
SECTION 4-107. SAME; COMMON
INTEREST COMMUNITY SECURITIES................. 109
SECTION 4-108. PURCHASER'S RIGHT
TO CANCEL.................................................... 110
SECTION 4-109. RESALES OF UNITS............................................................................... 111
SECTION 4-110. ESCROW OF
DEPOSITS....................................................................... 113
SECTION 4-111. RELEASE OF LIENS............................................................................... 113
SECTION 4-112. CONVERSION
BUILDINGS..................................................................... 114
SECTION 4-113. EXPRESS
WARRANTIES OF QUALITY............................................... 115
SECTION 4-114. IMPLIED
WARRANTIES OF QUALITY................................................... 116
SECTION 4-115. EXCLUSION OR MODIFICATION OF IMPLIED
WARRANTIES
OF QUALITY.................................................................................................................. 117
SECTION 4-116. STATUTE OF
LIMITATIONS FOR WARRANTIES................................ 118
SECTION 4-117. EFFECT OF VIOLATIONS ON RIGHTS OF ACTION;
ATTORNEY=S FEES.................................................................................................... 119
SECTION 4-118. LABELING OF
PROMOTIONAL MATERIAL......................................... 120
SECTION 4-119. DECLARANT'S
OBLIGATION TO COMPLETE AND RESTORE...... 120
SECTION 4-120. SUBSTANTIAL
COMPLETION OF UNITS............................................. 120
AMENDMENTS TO UNIFORM COMMON INTEREST OWNERSHIP ACT
[ARTICLE] 1
GENERAL PROVISIONS
[PART] 1
DEFINITIONS AND OTHER GENERAL PROVISIONS
SECTION 1‑101.
SHORT TITLE. This [act] may be cited as the Uniform Common
Interest Ownership Act.
SECTION 1‑102.
APPLICABILITY. Applicability of this [act] is governed by
[Part] 2 of this [article].
SECTION 1‑103.
DEFINITIONS. In the declaration and bylaws (Section 3‑106),
unless specifically provided otherwise or the context otherwise requires, and
in In this [act]:
(1) AAffiliate of a declarant@ means any person who controls, is controlled by, or
is under common control with a declarant.
(A) A person Acontrols@ a declarant if the person:
(i) is a general
partner, officer, director, or employer of the declarant,;
(ii) directly
or indirectly or acting in concert with one or more other persons, or through
one or more subsidiaries, owns, controls, holds with power to vote, or holds
proxies representing, more than 20 percent of the voting interest in the
declarant,;
(iii)
controls in any manner the election of a majority of the directors of
the declarant,; or
(iv) has
contributed more than 20 percent of the capital of the declarant.
(B) A person Ais
controlled by@ a declarant if the declarant:
(i) is a
general partner, officer, director, or employer of the person,;
(ii) directly
or indirectly or acting in concert with one or more other persons, or through
one or more subsidiaries, owns, controls, holds with power to vote, or holds
proxies representing, more than 20 percent of the voting interest in the person,;
(iii)
controls in any manner the election of a majority of the directors of
the person,; or
(iv) has
contributed more than 20 percent of the capital of the person.
Control
does not exist if the powers described in this paragraph are held solely as
security for an obligation and are not exercised.
(2) AAllocated interests@ means
the following interests allocated to each unit:
(i)(A) In in
a condominium, the undivided interest in the common elements, the common
expense liability, and votes in the association;
(ii)(B) in a
cooperative, the common expense liability, and the ownership
interest, and votes in the association; and
(iii)(C) in a planned
community, the common expense liability and votes in the association.
(3) AAssessment@
means the sum attributable to each unit and due to the association pursuant to
Section 3-115.
(3)(4) AAssociation@ or Aunit owners= owners
association@ means the unit owners= owners
association organized under Section 3‑101.
(5) ABylaws@ means the instruments, however denominated, that
contain the procedures for conduct of the affairs of the association regardless
of the form in which the association is organized, including any amendments to
the instruments.
(4)(6) ACommon elements@ means:
(i)(A) in the case
of:
(A)(i) a
condominium or cooperative, all portions of the common interest community other
than the units; and
(B)(ii) a planned
community, any real estate within a planned community which is owned or leased
by the association, other than a unit; and
(ii)(B) in all
common interest communities, any other interests in real estate for the benefit
of unit owners which are subject to the declaration.
(5)(7) ACommon expenses@ means expenditures made by, or financial
liabilities of, the association, together with any allocations to reserves.
(6)(8) ACommon expense liability@ means the liability for common expenses allocated
to each unit pursuant to Section 2‑107.
(7)(9) ACommon interest community@ means real estate described in a declaration with
respect to which a person, by virtue of his the person=s
ownership of a unit, is obligated to pay for a share of real estate
taxes, insurance premiums, maintenance, or improvement of, or services or
other expenses related to, common elements, other units, or other real
estate described in a that declaration. The term does not
include an arrangement described in Section 1-209 or 1B210. For
purposes of this paragraph, AOwnership
ownership of a unit@ does not include holding a leasehold interest of
less than [20] years in a unit, including renewal options.
(8)(10) ACondominium@ means a common interest community in which portions
of the real estate are designated for separate ownership and the remainder of
the real estate is designated for common ownership solely by the owners of
those portions. A common interest
community is not a condominium unless the undivided interests in the common
elements are vested in the unit owners.
(9)(11) AConversion building@ means
a building that at any time before creation of the common interest community
was occupied wholly or partially by persons other than purchasers and persons
who occupy with the consent of purchasers.
(10)(12) ACooperative@ means a common interest community in which the real
estate is owned by an association, each of whose members is entitled by virtue
of his the member=s
ownership interest in the association to exclusive possession of a unit.
(11)(13) ADealer@ means a person in the business of selling units for
his the person=s own
account.
(12)(14) ADeclarant@ means any person or group of persons acting in
concert who:
(i)(A) as part of a
common promotional plan, offers to dispose of his or its the
interest of the person or group of persons in a unit not previously
disposed of;or
(ii)(B) reserves or
succeeds to any special declarant right [,; or
(iii)(C) applies for
registration of a common interest community under [Article] 5].
(13)(15) ADeclaration@ means any the instruments,
however denominated, that creates a common interest community, including
any amendments to those that instruments instrument.
(14)(16) ADevelopment rights@ means
any right or combination of rights reserved by a declarant in the declaration
to:
(i)(A) add real
estate to a common interest community;
(ii)(B) create
units, common elements, or limited common elements within a common interest
community;
(iii)(C) subdivide
units or convert units into common elements; or
(iv)(D) withdraw
real estate from a common interest community.
(15)(17) ADispose@ or Adisposition@ means a voluntary transfer to a purchaser of any
legal or equitable interest in a unit, but the term does not include the
transfer or release of a security interest.
(16)(18) AExecutive board@ means the body, regardless of name, designated in
the declaration or bylaws to act on behalf of the association.
(17)(19) AIdentifying number@ means
a symbol or address that identifies only one unit in a common interest
community.
(18)(20) ALeasehold common interest community@ means a common interest community in which all or a
portion of the real estate is subject to a lease the expiration or termination
of which will terminate the common interest community or reduce its size.
(19)(21) ALimited common element@ means
a portion of the common elements allocated by the declaration or by operation
of Section 2‑102(2) or (4) for the exclusive use of one or more but fewer
than all of the units.
(20)(22) AMaster association@ means
an organization described in Section 2‑120, whether or not it is also an
association described in Section 3‑101.
(23) ANonresidential purposes@ means use for a purpose other than a residential
purpose.