2025 -- H 5825

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LC002028

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO PROPERTY -- CONDOMINIUM LAW

     Introduced By: Representatives Speakman, and Alzate

     Date Introduced: February 28, 2025

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 34-36.1-1.03, 34-36.1-2.07 and 34-36.1-3.03 of the General Laws

in Chapter 34-36.1 entitled "Condominium Law" are hereby amended to read as follows:

     34-36.1-1.03. Definitions.

     In the declaration and bylaws, unless specifically provided otherwise or the context

otherwise requires, and in this chapter:

     (1) “Affiliate of a declarant” means any person who controls, is controlled by, or is under

common control with a declarant.

     (i) A person “controls” a declarant if the person:

     (A) Is a general partner, officer, director, or employer of the declarant,

     (B) 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 twenty percent (20%) of the voting interest in the declarant,

     (C) Controls in any manner the election of a majority of the directors of the declarant, or

     (D) Has contributed more than twenty percent (20%) of the capital of the declarant.

     (ii) A person “is controlled by” a declarant if the declarant:

     (A) Is a general partner, officer, director, or employer of the person,

     (B) 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 twenty percent (20%) of the voting interest in the person,

     (C) Controls in any manner the election of a majority of the directors of the person, or

     (D) Has contributed more than twenty percent (20%) of the capital of the person.

     (iii) Control does not exist if the powers described in this subdivision are held solely as

security for an obligation and are not exercised.

     (2) “Allocated interests” means the undivided interest in the common elements, the

common expense liability, and votes in the association allocated to each unit.

     (3) “Annual budget” means a financial plan that outlines expected income and expenses

for a year which determines the annual or monthly condominium fee for unit owners.

     (4) “Association” or “unit owners’ association” means the unit owners’ association

organized under § 34-36.1-3.01.

     (4)(5) “Capital expense” means money spent by the association to maintain common

expense, such as land, buildings and equipment.

     (6) “Common elements” means all portions of a condominium other than the units.

     (5)(7) “Common expenses” means expenditures made by or financial liabilities of the

association, together with any allocations to reserves. This includes, but is not limited to:

     (i) Insurance;

     (ii) Shared utilities; or

     (iii) Site and building maintenance.

     (6)(8) “Common expense liability” means the liability for common expenses allocated to

each unit pursuant to § 34-36.1-2.07.

     (7)(9)(i) “Condominium” means real estate, portions of which are designated for separate

ownership and the remainder of which is designated for common ownership solely by the owners

of those portions. Real estate is not a condominium unless the undivided interests in the common

elements are vested in the unit owners.

     (ii) Provided that each unit owner has a vested, undivided interest in the common elements

greater that 0.0 percent, no minimum percentage interest in the common elements is otherwise

required by this chapter.

     (8)(10) “Condominium fees” means the amount of money each unit owner contributes

toward common expenses.

     (11) “Conversion building” means a building that at any time before creation of the

condominium was occupied wholly or partially by persons other than purchasers and persons who

occupy with the consent of purchasers.

     (9)(12) “Declarant” means any person or group of persons acting in concert who:

     (i) As part of a common promotional plan, offers to dispose of his, her or its interest in a

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unit not previously disposed of; or

     (ii) Reserves or succeeds to any special declarant right.

     (10)(13) “Declaration” means any instruments, however denominated, that create a

condominium, and any amendments to those instruments.

     (14) “Deed-restricted unit” means any unit that qualifies as low- and moderate-income

housing as set forth in § 45-53-3.

     (11)(15) “Development rights” means any right or combination of rights reserved by a

declarant in the declaration to:

     (A) Add real estate to a condominium,

     (B) Create units, common elements, or limited common elements within a condominium,

     (C) Subdivide units or convert units into common elements, or

     (D) Withdraw real estate from a condominium.

     (12)(16) “Person with a disability” means any person who is unable to engage in any

substantial gainful activity by reason of any medically determinable physical or mental impairment

which can be expected to result in death or has lasted or can be expected to last for a continuous

period of not less than twelve (12) months or any person having an impairment of mobility or vision

which is expected to be of at least twelve (12) months duration, and is a substantial impediment to

his or her ability to live independently.

     (13)(17) “Dispose” or “disposition” means a voluntary transfer to a purchaser of any legal

or equitable interest in a unit, but does not include the transfer or release of a security interest.

     (14)(18) “Executive board” means the body, regardless of name, designated in the

declaration to act on behalf of the association.

     (15)(19) [Deleted by P.L. 1999, ch. 83, § 80, and P.L. 1999, ch. 130, § 80 which enacted

identical amendments to this section.]

     (16)(20) “Identifying number” means a symbol or address that identifies only one unit in a

condominium.

     (17)(21) “Land only units” shall mean units designated as land only units on the plats and

plans which units may be comprised entirely or partially of unimproved real property and the air

space above the real property. The boundaries of a land only unit are to be described pursuant to §

34-36.1-2.05(a)(5). Land only units may, but need not, contain a physical structure. The declaration

may provide for the conversion of land only units to other types of units and/or common elements

provided the conversion shall be effective only upon the recording of an amendment to the

declaration which amendment will include new plats and plans identifying any portion of the land

only unit converted to another type of unit and/or common element.

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     (18)(22) “Leasehold condominium” means a condominium in which all or a portion of the

real estate is subject to a lease the expiration or termination of which will terminate the

condominium or reduce its size.

     (19)(23) “Limited common element” means a portion of the common elements allocated

by the declaration or by operation of § 34-36.1-2.02(2) or (4) for the exclusive use of one or more

but fewer than all of the units.

     (20)(24) “Master association” means an organization described in § 34-36.1-2.20, whether

or not it is also an association described in § 34-36.1-3.01.

     (21)(25) “Offering” means any advertisement, inducement, solicitation, or attempt to

encourage any person to acquire any interest in a unit, other than as security for an obligation. An

advertisement in a newspaper or other periodical of general circulation, or in any broadcast medium

to the general public, of a condominium not located in this state, is not an offering if the

advertisement states that an offering may be made only in compliance with the law of the

jurisdiction in which the condominium is located.

     (22)(26)“Person” means a natural person, corporation, business trust, estate, trust,

partnership, association, joint venture, government, governmental subdivision or agency, or other

legal or commercial entity. (In the case of a land trust, however, “person” means the beneficiary of

the trust rather than the trust or the trustee.)

     (23)(27) “Purchaser” means any person, other than a declarant or a person in the business

of selling real estate for his or her own account, who by means of a voluntary transfer acquires a

legal or equitable interest in a unit other than:

     (i) A leasehold interest including renewal options of less than twenty (20) years, or

     (ii) As security for an obligation.

     (24)(28) “Real estate” means any leasehold or other estate or interest in, over, or under

land, including structures, fixtures, and other improvements and interests which by custom, usage,

or law pass with a conveyance of land though not described in the contract of sale or instrument of

conveyance. “Real estate” includes parcels with or without upper or lower boundaries, and spaces

that may be filled with air or water.

     (25)(29) “Residential purposes” means use for dwelling or recreational purposes, or both.

     (30) “Special assessment” means an unexpected expense that is not included in the

association annual budget.

     (26)(31) “Special declarant rights” means rights reserved for the benefit of a declarant to:

     (i) Complete improvements indicated on plats and plans filed with the declaration, (§ 34-

36.1-2.09),

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     (ii) To exercise any development right, (§ 34-36.1-2.10),

     (iii) To maintain sales offices, management offices, signs advertising the condominium,

and models, (§ 34-36.1-2.15),

     (iv) To use easements through the common elements for the purpose of making

improvements within the condominium or within real estate which may be added to the

condominium, (§ 34-36.1-2.16),

     (v) To make the condominium part of a larger condominium or a planned community, (§

34-36.1-2.21),

     (vi) To make the condominium subject to a master association, (§ 34-36.1-2.20),

     (vii) Or to appoint or remove any officer of the association or any master association or

any executive board member during any period of declarant control, (§ 34-36.1-3.03(d)).

     (27)(32) “Time share” means a right to occupy a unit or any of several units during five (5)

or more separated time periods over a period of at least five (5) years, including renewal options,

whether or not coupled with an estate or interest in a condominium or a specified portion thereof.

     (28)(33) “Unit” means a physical portion of the condominium designated for separate

ownership or occupancy, the boundaries of which are described pursuant to § 34-36.1-2.05(a)(5).

     (29)(34) “Unit owner” means a declarant or other person who owns a unit, or a lessee of a

unit in a leasehold condominium whose lease expires simultaneously with any lease, the expiration

or termination of which will remove the unit from the condominium, but does not include a person

having an interest in a unit solely as security for an obligation.

     34-36.1-2.07. Allocation of common element interest, votes, and common expense

liabilities.

     (a) The declaration shall allocate a fraction or percentage of undivided interests in the

common elements and in the common expenses of the association, and a portion of the votes in the

association, to each unit including land only units and state the formulas used to establish those

allocations. Those allocations may not discriminate in favor of units owned by the declarant, but

may discriminate in favor of units subject to a housing restriction as set forth in § 34-39.1-3. Except

as set forth in § 34-36.1-1.03(7), no minimum percentage interest in the common elements is

otherwise required.

     (1) Notwithstanding subsection (a) of this section, in associations where the minority, less

than fifty percent (50%), of the units are deed restricted units, increases in monthly common

expenses may not exceed five percent (5%) of the previous year’s monthly common expenses.

     (2) In associations where the minority, less than fifty percent (50%), of the units are deed

restricted units and an association must impose a special assessment to cover unforeseen costs not

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included in the association’s approved annual budget for common expenses, the special assessment

attributed to deed-restricted units is limited to fifty percent (50%) of the full assessment. The fifty

percent (50%) limitation is calculated based on what the per unit share would have had the cost

been equally distributed across units in the association. Associations must allow owners of deed-

restricted units the option to enter into a monthly payment plan, at no additional charge, where the

payment is not in excess of one-twelfth (1/12) of the special assessment.

     (b) If units may be added to or withdrawn from the condominium, the declaration must

state the formulas to be used to reallocate the allocated interests among all units included in the

condominium after the addition or withdrawal.

     (c) The declaration may provide: (i) That different allocations of votes shall be made to the

units on particular matters specified in the declaration; (ii) For cumulative voting only for the

purpose of electing members of the executive board; and (iii) For the class voting on specified

issues affecting the class if necessary to protect valid interests of the class. A declarant may not

utilize cumulative or class voting for the purpose of evading any limitation imposed on declarants

by this chapter, nor may units constitute a class because they are owned by a declarant.

     (d) Except for minor variations due to rounding, the sum of the undivided interests in the

common elements and common expense liabilities allocated at any time to all the units must each

equal one if stated as fractions or one hundred percent (100%) if stated as percentages. In the event

of discrepancy between an allocated interest and the results derived from application of the

pertinent formula, the allocated interest prevails.

     (e) The common elements are not subject to partition, and any purported conveyance,

encumbrance, judicial sale, or other voluntary or involuntary transfer of an undivided interest in

the common elements made without the unit to which that interest is allocated, is void.

     (f) Subject to the provisions of the declaration and other provisions of law, and except as

provided in § 34-36.1-2.12 which provides for the relocation of boundaries between adjoining units,

the owners of any two (2) or more units may apply for a reallocation of their respective allocated

interests to the executive board; but their application shall not attempt to alter common element

interests except as they relate to the proposed reallocation of unit interests. Unless the executive

board determines within thirty (30) days, that the reallocations are unreasonable, the association

shall prepare an amendment that identifies the units involved, states the reallocations, is executed

by those unit owners, contains words of conveyance between them, and upon recordation, is

indexed in the name of the grantor and the grantee.

     34-36.1-3.03. Executive board members and officers.

     (a) Except as provided in the declaration, the bylaws, subsection (b), or in other provisions

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of this chapter, the executive board may act in all instances on behalf of the association. In the

performance of their duties, the officers and members of the executive board are required to

exercise:

     (1) If appointed by the declarant, the care required of fiduciaries of the unit owners; and

     (2) If elected by the unit owners, ordinary and reasonable care.

     (b) The executive board may not act on behalf of the association to amend the declaration

(§ 34-36.1-2.17), to terminate the condominium, or to elect members of the executive board or

determine the qualifications, powers and duties, or terms of office of executive board members, but

the executive board may fill vacancies in its membership for the unexpired portion of any term.

     (c) Within thirty (30) days after adoption of any proposed budget for the condominium, the

executive board shall provide a summary of the budget to all the unit owners, and shall set a date

for a meeting of the unit owners to consider ratification of the budget not less than fourteen (14)

nor more than thirty (30) days after mailing of the summary. Unless at that meeting a majority of

all the unit owners or any larger vote specified in the declaration reject the budget, the budget is

ratified, whether or not a quorum is present. In the event the proposed budget is rejected, the

periodic budget last ratified by the unit owners shall be continued until such time as the unit owners

ratify a subsequent budget proposed by the executive board.

     (d)(1) Subject to subsection (e), the declaration may provide for a period of declarant

control of the association, during which period a declarant, or persons designated by him, may

appoint and remove the officers and members of the executive board. Regardless of the period

provided in the declaration, a period of declarant control terminates no later than the earlier of:

     (i) Sixty (60) days after conveyance of eighty percent (80%) of the units which may be

created to unit owners other than a declarant;

     (ii) Two (2) years after all declarants have ceased to offer units for sale in the ordinary

course of business; or

     (iii) Two (2) years after any development right to add new units was last exercised.

     (2) A declarant may voluntarily surrender the right to appoint and remove officers and

members of the executive board before terminations of that period, but in that event he or she may

require, for the duration of the period of declarant control, that specified actions of the association

or executive board, as described in a recorded instrument executed by the declarant, be approved

by the declarant before they become effective.

     (e) Not later than sixty (60) days after conveyance of twenty-five percent (25%) of the units

which may be created to unit owners other than a declarant, at least one member and not less than

twenty-five percent (25%) of the members of the executive board must be elected by unit owners

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other than the declarant. Not later than sixty (60) days after conveyance of fifty percent (50%) of

the units which may be created to unit owners other than a declarant, not less than one-third (⅓) of

the members of the executive board must be elected by unit owners other than the declarant.

     (f) Not later than the termination of any period of declarant control, the unit owners shall

elect an executive board of at least three (3) members, at least a majority of whom must be unit

owners. The executive board shall elect the officers. The executive board members and officers

shall take office upon election.

     (g) Notwithstanding any provision of the declaration or bylaws to the contrary, the unit

owners, by a two-thirds (⅔) vote of all persons present and entitled to vote at any meeting of the

unit owners at which a quorum is present, may remove any member of the executive board with or

without cause, other than a member appointed by the declarant.

     (h) Any executive board established after June 30, 2026, containing deed-restricted units

within its association, shall be comprised of members proportionate with the number of deed-

restricted units and market-rate units. Any calculation yielding a fractional person on the board

shall be allocated to a market-rate owner.

     SECTION 2. Chapter 34-36.1 of the General Laws entitled "Condominium Law" is hereby

amended by adding thereto the following section:

     34-36.1-13. Allocation of common element interest, votes and common expense

liabilities.

     (a) To increase transparency of operations and association management, every association

established under chapter 36.1 of title 34, is hereby required to do the following:

     (1) Register as an association with the department of housing by December 31, 2026, or

within thirty (30) days of establishment; and

     (2) Submit the following materials within thirty (30) days of adoption or amendment:

     (i) Annual budget, including monthly and annual condominium fees;

     (ii) Board list and officers;

     (iii) All financial documents including, condominium fees for the last five (5) years,

funding reserves and any tax filing information;

     (iv) Date of next officer election; and

     (v) Association by-laws and any other relevant governing documents.

     (b) Failure to comply with this section is subject to the jurisdiction of the department of

housing pursuant to § 42-64.34-2.

     SECTION 3. Section 42-64.34-2 of the General Laws in Chapter 42-64.34 entitled "The

Department of Housing" is hereby amended to read as follows:

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     42-64.34-2. Powers and duties.

     (a) The department of housing shall be the state’s lead agency for housing, homelessness,

and community development in the state of Rhode Island.

     (b) The secretary of housing shall have the following powers and duties:

     (1) All powers and duties pursuant to this chapter;

     (2) To supervise the work of the department of housing and to act as its chief administrative

officer;

     (3) To coordinate the administration and financing of various departments or offices within

the department of housing;

     (4) To serve as the governor’s chief advisor and liaison to federal policymakers on housing,

homelessness, and community development as well as the principal point of contact on any such

related matters;

     (5) To coordinate the housing, homelessness, and community development programs of

the state of Rhode Island and its departments, agencies, commissions, corporations, and

subdivisions;

     (6) To employ such personnel and contracts for such consulting services as may be required

to perform the powers and duties conferred upon the secretary of housing;

     (7) To oversee and direct the administration of funds that may be appropriated from time

to time to the department of housing; and

     (8) Creation of a written guide for consumers relating to the rights and duties of landlords

and tenants pursuant to chapter 18 of title 34, which the secretary shall update at minimum on an

biennial basis. The guide shall be posted on the website of the department of housing and shall be

published in both English and Spanish; and

     (9) Coordinate a central depository of information regarding condominium associations,

investigate complaints related to condominium associations in accordance with chapter 35 of title

42 ("administrative procedures").

     (c) In addition to such other powers as may otherwise be delegated elsewhere to the

department of housing, the department is hereby expressly authorized, by and through the secretary

of housing:

     (1) To purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and

otherwise deal in and with, real or personal property, or any interest in real or personal property,

wherever situated;

     (2) To accept any gifts or grants or loans of funds or property or financial or other aid in

any form from the federal government or any agency or instrumentality of the federal government,

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or from the state or any agency or instrumentality of the state, or from any other source and to

comply, subject to the provisions of this chapter, with the terms and conditions of the gifts, grants,

or loans;

     (3) Subject to the provisions of § 37-2-1 et seq., to negotiate and to enter into contracts,

agreements, and cooperative agreements with agencies and political subdivisions of the state, not-

for-profit corporations, for-profit corporations, and other partnerships, associations, and persons

for any lawful purpose necessary and desirable to effectuate the purposes of the department of

housing; and

     (4) To carry out this chapter and perform the duties of the general laws and public laws

insofar as those provisions relate to any regulatory areas within the jurisdiction of the department

of housing.

     SECTION 4. This act shall take effect on July 1, 2026.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY -- CONDOMINIUM LAW

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     This act would restrict increases in monthly common expenses and limit special

assessments to cover unforeseen costs not included in the condo association’s approved annual

budget for common expenses in associations where the minority of the units are deed-restricted

units.

     This act would take effect on July 1, 2026.

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