Summary

Topic: Condominiums
Sponsors: Senators Bullard and Steil
Committee: Judiciary

Senate Bill 612 would amend the Condominium Act to add or alter definitions and to prescribe the duties and functions of condo co-owners and mortgagees. The term "affiliate of developer" would mean any person who controls, is controlled by, or is under common control with a developer. A person is controlled by another person if the person is a general partner, officer, member, director, or employee of the persons, directly or indirectly, individually or with 1 or more persons or subsidiaries owns, controls, or holds power to vote more than 20% of the person, controls in any manner the election of a majority of the directors of the person, or has contributed more than 20% of the capital of the person. The term developer does not refer to someone who acquires a condo to fix up and resell.

Legally, a developer can't convey a condo to a residential builder until it is completely finished. If, after 10 years from the start of construction, a developer has not finished a project, he or she has the right to withdraw. If the project is only an expansion the developer can leave after six years.

Mortgagees are not required to appear at co-owner meetings. Their votes for amendments will be solicited through the mail. If the ballot is not returned within 90 days it will be considered a vote of approval. The bill also establishes more exact procedures for when mortgagees have to vote on amendments of condominium documents. It establishes the date the amendment was approved by the co-owners as the 'control date'. In addition, the bill describes the documents that need to be sent to the mortgagees to vote, as well as stating which mortgagees can vote.

Senate Bill 612 also establishes guidelines for legal proceedings for the Association of Co- owners. If a co-owner owes the association money, they can have the lessee pay the association directly for the co-owners debt. This would not violate the individual's lease in any way. If the tenant refuses to pay, the association can issue a statutory notice to quit for non-payment of rent and can force that notice by summary or can initiate proceedings pursuant to subsection (4) (B).

Finally, a person cannot take action against a developer, residential builder, licensed architect, contractor, sales agent or manager arising out of an improvement more than 3 years from the transitional control date or 2 years from the date the cause of action accrues, whichever occurs later.

Senate Bill 613 is tie barred to 612. This bill states that in order for a deed to be redeemed, a purchaser has to prove to the register of deeds that they have paid off any taxes, senior liens, condominium assessments, homeowner association assessments, and community association assessments. Proof can be in the form of affidavits from witnesses and insurance agents or it can be receipts or copies of the canceled checks.