Chapter 246
2009 -- H 5906 SUBSTITUTE A AS
AMENDED
Enacted 11/10/09
A N A C T
RELATING TO PROPERTY - CONDOMINIUM MANAGEMENT
Introduced By: Representatives Serpa, Silva, Mattiello, and Vaudreuil
Date Introduced: February 26, 2009
It is enacted by the General
Assembly as follows:
SECTION 1. Sections 34-36.1-3.0.1, 34-36.1-3.0.2,
34-36.1-3.16 and 34-36.1-3.21 of the
General Laws in Chapter
34-36.1 entitled "Condominium Law" are hereby amended to read as
follows:
34-36.1-3.01.
Organization of unit owners' association. -- A
unit owners' association
must be organized no later than the date the first unit in
the condominium is conveyed to a
purchaser. The membership of the association at all times shall
consist exclusively of all the unit
owners or, following termination of the condominium, of all
former unit owners entitled to
distributions of proceeds under section 34-36.1-2.18, or their
heirs, successors, or assigns. The
association shall be organized as a profit or nonprofit
corporation or as an unincorporated
association. In the case of an unincorporated association, a
certificate evidencing the names of the
executive board members and mailing address for the association
shall be recorded with the
municipal land records department for the city or town in which
the condominium is located,
which shall be updated as often as necessary to reflect any
changes in the composition of the
executive board.
34-36.1-3.02.
Powers of unit owners' association. -- (a) Except as provided in
subsection (b), and subject to the provisions of the
declaration, the association, even if
unincorporated, may:
(1) Adopt and amend
bylaws and rules and regulations;
(2) Adopt and amend
budgets for revenues, expenditures, and reserves and collect
assessments for common expenses from unit owners;
(3) Hire and discharge
managing agents and other employees, agents and independent
contractors;
(4) Institute, defend,
or intervene in litigation or administrative proceedings in its own
name on behalf of itself or two (2) or more unit owners on
matters affecting the condominium;
(5) Make contracts and
incur liabilities;
(6) Regulate the use,
maintenance, repair, replacement and modification of common
elements;
(7) Cause additional
improvements to be made as a part of the common elements;
(8) Acquire, hold,
encumber, and convey in its own name any right, title
or interest to
real or personal property, but common elements may be
conveyed or subjected to a security
interest or mortgage only pursuant to section 34-36.1-3.12;
(9) Grant easements,
leases, licenses and concessions through or over the common
elements;
(10) Impose and receive
any payments, fees, or charges for the use, rental, or operation
of the common elements other than limited common
elements described in section 34-36.1-
2.02(2) and (4) and for services provided to unit
owners;
(11) Impose charges for
late payment of assessments and, after notice and an opportunity
to be heard, levy reasonable fines for violations of the
declaration, bylaws, and rules and
regulations of the association as provided in section
34-36.1-3.20;
(12) Impose reasonable
charges for the preparation and recordation of amendments to
the declaration, resale certificates required by section
34-36.1-4.09 or statements of unpaid
assessments;
(13) Provide for the
indemnification of its officers and executive board and maintain
directors' and officers' liability insurance;
(14) Assign Borrow
funds including the right to assign and/or pledge its right to future
income, including the right to receive common expense
assessments, but only to the extent the
declaration expressly so provides;
(15) Exercise any other
powers conferred by the declaration or bylaws;
(16) Exercise all other
powers that may be exercised in this state by legal entities of the
same type as the association; and
(17) Exercise any other
powers necessary and proper for the governance and operation of
the association.
(b) The declaration may
not impose limitations on the powers of the association to deal
with the declarant that are more
restrictive than the limitations imposed on the power of the
association to deal with other persons.
34-36.1-3.16.
Lien for assessments. -- (a) The
association has a lien on a unit for any
assessment levied against that unit or fines imposed against its
unit owner from the time the
assessment or fine becomes due. The association's lien may be
foreclosed in accordance with and
subject to the provisions of section 34-36.1-3.21. Unless the
declaration otherwise provides,
attorney's fees, charges, late charges, fines, and interest
charged pursuant to section 34-36.1-
3.02(a)(10) -- (12) are
enforceable as assessments under this section. If an assessment is payable
in installments, the full amount of the assessment is a
lien from the time the first installment
thereof becomes due.
(b) (1) A lien under this section is prior to all other liens and
encumbrances on a unit
except:
(i)
Liens and encumbrances recorded before the recordation of the declaration and
not
subordinated to the declaration,
(ii) A first mortgage
or deed of trust on the unit recorded before the date on which the
assessment sought to be enforced became delinquent, and
(iii) Liens for real
estate taxes and other governmental assessments or charges against the
unit.
(2) The lien is also
prior to any mortgage or deed of trust described in subdivision
(b)(1)(ii) of this section to
the extent of the common expense assessments based on the periodic
budget adopted by the association pursuant to section
34-36.1-3.15(a) which would have become
due in the absence of acceleration during the six (6)
months immediately preceding the
foreclosure of the interest of the unit owner by the holder of
any such mortgage or deed of trust,
including any costs and reasonable attorney's fees not to
exceed two thousand five hundred
dollars ($2,500), incurred in the collection of any delinquent
assessment or other charges by legal
proceedings or otherwise and all costs of foreclosure held
pursuant to section 34-36.1-3.21,
including, but not limited to, publication, advertising and
auctioneer costs, said foreclosure costs
not to exceed five thousand dollars ($5,000) (for a total
aggregate of attorney's fees and costs of
seven thousand five hundred dollars ($7,500)).
(3) The priority amount
under subdivision (b)(2) above shall not include any
amounts
attributable to special assessments, late charges, fines,
penalties, and interest assessed by the
association.
(4) When any portion of
the unit owner's share of the common expenses has been
delinquent for at least sixty (60) days the association shall
first send a notice stating the amount of
the delinquency to the unit owner by certified mail,
return receipt requested, and first class mail.
The association shall also send a notice by certified
mail, return receipt requested, and first class
mail, stating the amount of the delinquency to the holder
of the first mortgage or deed of trust as
it appears in the land evidence records at the address
appearing in the mortgage or deed of trust or
such other address as the first mortgagee may provide in
writing to the association.
(5) The failure of the
association to send the first mortgagee the notice of sixty (60) days
delinquency of common expense assessments, as described in
subsection (b)(4) above, shall not
affect the priority of the lien for up to six (6) months
common expense assessments, but the
priority amount shall not include any costs or attorney's
fees.
(6) This subsection
does not affect the priority of mechanics' or materialmen's
liens, or
the priority of liens for other assessments made by the
association.
(c) Unless the
declaration otherwise provides, if two (2) or more associations have liens
for assessments created at any time on the same real
estate, those liens have equal priority.
(d) Recording of the declaration
constitutes record notice and perfection of the lien. No
further recordation of any claim of lien for assessment under
this section is required but is
permitted.
(e) A lien for unpaid
assessments is extinguished unless proceedings to enforce the lien
are instituted within six (6) years after the full amount
of the assessments becomes due.
(f) This section does
not prohibit actions to recover sums for which subsection (a)
creates a lien or prohibit an association from taking a deed
in lieu of foreclosure.
(g) A judgment or
decree in any action brought under this section must include costs and
reasonable attorney's fees for the prevailing party.
(h) The association,
upon written request shall furnish to a unit owner or the holder of a
first mortgage or deed of trust granted with respect to
such unit owner's unit a recordable
statement setting forth the amount of unpaid assessments
against his or her unit. The statement
must be furnished within ten (10) business days after
receipt of the request and is binding on the
association, the executive board, and every unit owner.
(i)
The association may take action for failure of a unit owner to pay any
assessment or
other charges pursuant to this section. The delinquent unit
owner shall be obligated to pay all
expenses of the executive board, including reasonable
attorney's fees, incurred in the collection of
the delinquent assessment or other charges by legal
proceedings or otherwise, such attorney's fees
and other charges also being a lien on the unit. The
delinquent unit owner shall also be obligated
to pay any amounts paid by the executive board for taxes
or on account of superior liens or
otherwise to protect its lien, which expenses and amounts,
together with accrued interest, shall be
deemed to constitute part of the delinquent assessment and
shall be collectible as such.
34-36.1-3.21.
Foreclosure of condominium lien. -- (a) (1) If a condominium unit owner
shall default in the payment of any assessment, fine, or
any other charge which is a lien on the
unit in favor of the association or its assigns, then it
shall be lawful for the association or its
assigns, through its executive board, to sell the unit of any
defaulting unit owner and the benefit
and equity of redemption of the defaulting unit owner and
his or her heirs, executors,
administrators, and assigns therein, at public auction upon the
premises or at such other place, if
any, as may be designated for that purpose by the association
or its assigns.
(2) The association
must first mail written notice of the time and place of sale to the
defaulting unit owner, at his or her last known address and the
holder of the first mortgage or
deed of trust of record at the address for service
required by subdivision 34-36.1-3.16(b)(4), both
by certified mail, return receipt requested, at least
twenty (20) days prior to publishing said
notice; second, the association must publish the same at
least once each week for two (2)
successive weeks in a public newspaper. The time of sale shall
be at least fifteen (15) days after
the publication of the first notice in a public
newspaper. Publication shall be as follows:
(i)
If the condominium is situated in the city of
published daily in the city of
(ii) If the condominium
is situated in the town of
newspaper published daily in the city of
(iii) If the
condominium is situated in any of the towns of
(iv)
If the condominium is situated in the
above last named cities and towns, in a public newspaper
published daily in the city of
(v) If the condominium
is situated in the
published daily in the city of
some public newspaper published anywhere in the
(vi)
If the condominium is situated in any of the counties of
is situated; or in some public newspaper published daily
in the county in which the condominium
is situated or in a public newspaper published daily in
the city of
(3) The sale may be
adjourned from time to time, provided that publishing of the notice
shall be continued, together with a notice of the
adjournment or adjournments, at least once each
week in the same newspaper; and third, the association
must mail written notice of the same to
any person or entity having an interest of record in the
unit, recorded not later than thirty (30)
days prior to the date originally scheduled for the sale,
including without limitation, the holder of
any mortgage or deed of trust with respect to the unit, to
the address of the person or entity may
have provided for that purpose in the land evidence
records or at any other address the person or
entity may have provided the association in writing, such
notice to be given by regular or certified
mail, return receipt requested, at least ten (10) days
prior to the date originally scheduled for such
sale; and in his or her or their own name or names, or as
the attorney or attorneys of the
defaulting unit owner (for that purpose by these presents duly
authorized and appointed with full
power of substitution and revocation) to make, execute, and
deliver to the purchaser or purchasers
at the sale a good and sufficient deed or deeds of the
defaulted condominium unit, in fee simple,
and to receive the proceeds of the sale or sales, and
from the proceeds to retain all sums secured
by the lien in favor of the association as of the date
of such sale together with all expenses
incident to such sale or sales, or for making deeds hereunder,
and for fees of counsel and
attorneys, and all costs or expenses incurred in the exercise
of such powers, and all taxes,
assessments, and premiums for insurance, if any, either
theretofore paid by the association, or its
assigns, or then remaining unpaid upon the defaulted condominium
unit, rendering and paying the
surplus of the proceeds of sale, if any there be, over and
above the amounts to be retained, and
paid to other encumbrances of record, together with a true and particular account of such
sale or
sales, expenses, and charges, to the defaulting unit owner,
or his or her heirs, executors,
administrators or assigns. The sale or sales shall forever be a
perpetual bar against the defaulting
unit owner and his or her heirs, executors, administrators
and assigns, and all persons claiming
the defaulted condominium unit, so sold, by, through or
under him, her, them or any of them.
(4) Within seven (7)
days after the foreclosure sale, the association shall send an
additional written notice to the holder of the first mortgage or
deed of trust of record as appears in
the land evidence records, as provided in subdivision
34-36.1-3.16(b)(4) by certified mail, return
receipt requested, and first class mail, identifying the name
of the highest bidder and the amount
of the bid.
(b) Any foreclosure
sale held by the association pursuant to subsection (a) above, and the
title conveyed to any purchaser or purchasers pursuant to
such sale, shall be subject to any lien or
encumbrance entitled to a priority over the lien of the
association pursuant to section 34-36.1-
3.16(b).
(c) Any foreclosure
sale held by the association pursuant to subsection (a) above, shall
be subject to a thirty (30) day right of redemption
running in favor of the holder of the first
mortgage or deed of trust of record. The right of redemption
shall be exercised by tendering
payment to the association in full of all assessments due on
the unit together with all attorney's
fees and costs incurred by the association in connection
with the collection and foreclosure
process within thirty (30) days of the date of the
post-foreclosure sale notice sent by the
association pursuant to subdivision (a)(4) above. Otherwise, the
right of redemption shall
terminate thirty (30) days from the date of the
post-foreclosure sale notice sent by the association
pursuant to subdivision (a)(4) above.
(d) Upon request the
association shall provide to any person or entity having an interest
of record in the unit: (1) an itemized statement of the
amounts owed the association by the
defaulting unit owner, separating common expense assessments
referred to in section 34-36.1-
3.16(b)(2) from interest,
attorney's fees, fines and other charges secured by the lien of the
association; and (2) a copy of the most recent periodic budget
adopted by the association pursuant
to section 34-36.1-3.15(a).
SECTION 2. This act shall take effect upon passage.
=======
LC01818/SUB A
=======