Bill Text: DE SB352 | 2025-2026 | 153rd General Assembly | Draft
Bill Title: An Act To Amend Title 25 Of The Delaware Code Relating To The Delaware Uniform Common Interest Ownership Act.
Sponsorship: Partisan Bill (Democrat 2)
Status: (Introduced) 2026-06-24 - Introduced and Assigned to Executive Committee in Senate [SB352 Detail]
Download: Delaware-2025-SB352-Draft.html
|
SPONSOR: |
Sen. Cruce & Rep. K. Johnson |
DELAWARE STATE SENATE
153rd GENERAL ASSEMBLY
SENATE BILL NO. 352
AN ACT TO AMEND TITLE 25 OF THE DELAWARE CODE RELATING TO THE DELAWARE UNIFORM COMMON INTEREST OWNERSHIP ACT.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend § 81-103, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows and by redesignating Delaware Code provisions accordingly:
In this chapter and documents prepared to create a common interest community pursuant to this chapter, unless specifically provided otherwise herein or therein, terms shall have the meaning attributed to them in this section:
(23) “Fully funded,” or any variation thereof with respect to a repair and replacement reserve, means a repair and replacement reserve which that contains that a balance of funds which that meets both of the following:
(i) When supplemented by a fixed, budgeted annual addition, will meet fully, without supplementation by borrowed funds or special assessments, the cost of each projected repair and replacement noted in the reserve study no later than the date when each such repair or replacement is projected to be required by the reserve study, and study.
(ii) With all budgeted contributions and expenditures for repairs and replacements projected out no less than 20 years, 30 years or the minimum timeframe stated in the RSS, whichever is greater, will never fall below a positive balance.
(39) “Repair and replacement reserve” means a reserve fund maintained by the executive board of a condominium or cooperative solely for the repair and replacement of common elements, and for no other purpose, including operating budget shortfalls or other expenditures appropriately addressed by a contingency reserve.
(40) “Reserve study” means an analysis, analysis that complies with the RSS, by 1 or more independent engineering, architectural, or construction contractors or other qualified persons, performed or updated within the last 5 years, in accordance with the timeframes in § 81-327 of this title, of the remaining useful life and the estimated cost to replace each separate system and component of the common elements, the ongoing costs and timing of a façade inspection or structural inspection, if required, as well as any corrective maintenance and timing described in the most recent façade inspection and structural inspection under § 81-327 of this title, if applicable, the purpose of which analysis by 1 or more independent engineering, architectural, or construction contractors or other qualified persons, is to inform the executive board and the association of a condominium or cooperative of the amount which should be maintained from year to year in a fully funded repair and replacement reserve to minimize the need for special assessments.
(41) “Reserve Study Standards” or “RSS” means the most recent version of the Reserve Study Standards created by the Community Associations Institute.
Section 2. Amend Subchapter III, Chapter 81, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 81-327. Inspection requirements; incorporation of inspections into the reserve study; other reserve study requirements.
(a) For purposes of this section:
(1) “Building” means a building within a condominium or cooperative containing units or common elements, used for residential purposes.
(2) “Façade inspection” means an inspection of the building façade, conducted by a registered design professional in accordance with most recently published American Society of Civil Engineers ("'ASCE") Guideline for Condition Assessment of the Building Envelope or other recognized equivalent standards.
(3) “Grade plane” means a reference plane representing the average of finished ground level adjoining the building at exterior walls. Where the finished ground level slopes away from the exterior walls. the reference plane is established by the lowest points within the area between the building and the lot line or, where the lot line is more than 6 feet from the building, between the building and a point 6 feet from the building.
(4) “Letter of adequacy” means documentation prepared in accordance with the most recent version of the Reserve Study Standards that offers proof that the common interest community’s reserves are fully funded.
(5) “Primary load bearing system” or “PLBS” means the assemblage of structural components within a building comprised of columns, beams, or bracing that by contiguous interconnection form a path by which external and internal forces applied to the building are delivered to the foundation.
(6) “Structural inspection” means an inspection of the building structure, conducted by a registered design professional in accordance with the most recently published American Society of Civil Engineers ("'ASCE") Guideline for Structural Condition Assessment of Existing Buildings or other recognized equivalent standards.
(7) “Registered design professional” means a person licensed by this State to conduct a façade inspection, if the inspection sought is a façade inspection, or a structural inspection, if the inspection sought is a structural inspection.
(b)(1) An association shall obtain a façade inspection for all buildings that are 4 stories or taller.
(2) For any building less than 4 stories tall, the association shall obtain façade inspections for all balconies and decks on the second and third stories of that building.
(3) For purposes of subsection (b) of this section, “stories” are measured from the lowest elevation of grade plane around the perimeter of the building.
(c) Unless subject to a county or municipal requirement that establishes the timing for a façade inspection, an association shall obtain an initial façade inspection for buildings under subsection (b) of this section as follows:
(1) Within 5 years of the date that the building was issued a certificate of occupancy.
(2) Within 60 days after there is observable damage to the façade.
(3) If a building was issued a certificate of occupancy before [the effective date of this Act], then an initial façade inspection must within 2 years of [the effective date of this Act].
(d) Unless subject to a county or municipal requirement that establishes the timing for a façade inspection, the association shall obtain subsequent façade inspections at least once every 5 years from the date of the previous façade inspection.
(e) An association shall obtain a structural inspection for all buildings that are either of the following:
(1) Have primary load bearing system made of concrete, masonry, steel, or heavy timber.
(2) Use structural slabs over unconditioned space.
(f) Unless subject to a county or municipal requirement that establishes the timing for a structural inspection, an association shall obtain an initial structural inspection for buildings under subsection (e) of this section as follows:
(1) Within 2 years of the date that the building was issued a certificate of occupancy.
(2) Within 60 days after there is observable damage to the PLBS.
(3) If a building was issued a certificate of occupancy before [the effective date of this Act], then an initial structural inspection must within 15 years of [the effective date of this Act].
(g) Unless subject to a county or municipal requirement that establishes the timing for a structural inspection, the association shall obtain subsequent structural inspections as follows:
(1) Within 10 years after a preceding structural inspection during the first 20 years following issuance of a certificate of occupancy.
(2) Within 5 years after a preceding structural inspection if the building is more than 20 years old.
(h) An association shall provide all façade inspection reports and structural inspection reports to the person conducting that association’s reserve study for incorporation into the reserve study.
(i) When a common interest community is under declarant control, both of the following:
(1) A reserve study must be updated as follows:
a. Annually, when material changes are made to the common elements.
c. At competition of construction, before common interest community control passes to the association.
(2) A letter of adequacy must be provided before common interest community control passes to the association.
(3) The declarant shall make available the reserve study and letter of adequacy to unit owners and prospective unit owners.
(j) When a common interest community is under association control, a reserve study must be updated at least every 3 years or as specified in the most recently prepared reserve study.
Section 3. Amend § 81-417, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 81-417. Effect of violations on rights of action; attorneys’ fees. fees; Department of Justice.
(c)(1) The Consumer Protection Unit of the Department of Justice may enforce this chapter.
(2) A violation of this chapter is deemed an unlawful practice under § 2513 of Title 6 and a violation of Subchapter II of Chapter 25 of Title 6.
Section 4. Amend § 81-117, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 81-117. Exception for small condominiums and cooperatives.
If a condominium or cooperative contains no more than 20 units and is not subject to any development rights expanding it to include more than 20 units, it is subject only to §§ 81-106 (Applicability of local ordinances, regulations, and building codes) and codes), 81-107 of this title (Eminent domain), and 81- 327 (Inspection requirements; incorporation of inspections into the reserve study; other reserve study requirements), but to no other sections of this chapter unless the declaration provides that the entire chapter is applicable. The bylaws of any such condominium or cooperative, and any amendments thereto, shall be recorded.
Section 5. Amend § 81-119, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 81-119. Applicability to preexisting common interest communities and approved common interest communities.
Except as provided in § 81-120 (Exception for small preexisting cooperatives and planned communities), and § 81-124 and except as limited by § 81-122 of this title hereof, §§ 81-105, 81-106, 81-107, 81-127, 81-203, 81-204, 81-217(i), 81-221, 81-301, 81-302(a)(1) through (6) and (11) through (17), 81-302(f), 81-302(g), 81-303, 81-306, 81-307(a), 81-308A, 81-309(a), 81-310, 81-311, 81-314, 81-315, 81-316, 81-318, 81-321, 81-322 [repealed], 81-323, 81-324, 81- 327, 81-409, and 81-417 of this title, and § 81-103 of this title to the extent any definitions are necessary in construing any of the foregoing sections to the extent the definitions do not conflict with the declaration, apply to all common interest communities and approved common interest communities created in this State before the effective date; but those sections apply only with respect to events and circumstances occurring after the effective date, and do not invalidate existing provisions of the declaration, bylaws, code of regulations, declaration plan, or plats or plans of those preexisting common interest communities and approved common interest communities that do not conflict with this chapter. With respect to all common interest communities, such existing provisions of those declarations, bylaws, codes of regulations, declaration plans, plats or plans, and subsequent amendments thereto adopted subsequent to the effective date of this chapter in strict accordance with those existing provisions, and not in conflict with the Unit Property Act (Chapter 22 of this title), shall be controlling in the event of any express conflict between those existing provisions (as duly amended) and the provisions of this chapter.
In matters and as to issues where neither such existing provisions of the declaration, bylaws, code of regulations, declaration plan, or plats or plans (as duly amended) of preexisting common interest communities or approved common interest communities nor the Unit Property Act (Chapter 22 of this title) expressly addresses the matter or issue, the provisions of this chapter shall control. As to any such preexisting common interest community or approved common interest community prior to the effective date: (i) this chapter shall not operate to terminate or allow the termination of existing contractual obligations created prior to the effective date, including, but not limited to contracts for units for preexisting common interest communities or approved common interest community projects; (ii) this chapter shall not invalidate the declaration, code of regulations, bylaws, declaration plan, or plats or plans of such common interest community that do not conflict with this chapter; (iii) the Unit Property Act (Chapter 22 of this title), and not this chapter shall govern all obligations of a declarant created under the Unit Property Act (Chapter 22 of this title); (iv) unless the declarant or other person with the right to do so elects to conform the requirements of this chapter in exercising any development right or special declarant rights, this chapter is not applicable to the procedures for the exercise of any such development rights or special declarant rights; (v) this chapter does not require that the preexisting declaration, code of regulations, bylaws, declaration plans, or plats or plans or other governing documents, including, but not limited to certificates or articles of incorporation, formation or otherwise of any preexisting common interest community or approved common interest community be amended to, or otherwise to comply with, the requirements of this chapter; and (vi) except for §§ 81-409 and 81-417 of this title, subchapter IV of this chapter is not applicable to any such preexisting common interest community or approved common interest community. Without limiting the generality of any other provision of this chapter, and notwithstanding any other provision of this chapter, any condominium created under the Unit Property Act for which future expansions are provided under its declaration made pursuant to the Unit Property Act shall remain governed by the Unit Property Act and not this chapter with respect to all of such future sections, phases or other expansion rights.
Any preexisting common interest community or approved common interest community has the right to amend its declaration, code of regulations, bylaws, declaration plans, or plats or plans or other governing documents, including, but not limited to certificates or articles of incorporation, formation or otherwise to comply with any or all of the requirements of this chapter, or a preexisting common interest community or approved common interest community may select particular additional sections of this chapter to apply to that community without adopting the entire chapter.
Section 6. Amend § 81-120, Title 25 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
§ 81-120. Exception for small preexisting cooperatives and planned communities.
If a cooperative or planned community created within this State before the effective date of this chapter, contains no more than 20 units and is not subject to any development rights expanding it to include more than 20 units, or the annual average common expense liability of each unit restricted to residential purposes, exclusive of optional user fees and any insurance premiums paid by the association, does not exceed $500, as adjusted pursuant to this section, it is subject only to §§ 81-105 (Separate titles and taxation), 81-106 (Applicability of local ordinances, regulations, and building codes), and codes), 81-107 of this title (Eminent domain), and 81- 327 (Inspection requirements; incorporation of inspections into the reserve study; other reserve study requirements), but to no other sections of this chapter unless the declaration is amended in conformity with applicable law and with the procedures and requirements of the declaration to take advantage of the provisions of §§ 81-121 of this title, in which case all the sections enumerated in § 81-119 of this title apply to that cooperative or planned community. Commencing with the July 1 next following the effective date of this chapter and each July 1 thereafter, the $500 maximum assessment specified in this section may be increased by an amount not in excess of 3 percent over the amount so calculated for the previous year. The bylaws of any such cooperative or planned community, and any amendments thereto, shall be recorded.
Section 7. This Act takes effect 1 year after enactment into law.
SYNOPSIS
This Act strengthens requirements relating to reserve studies to ensure common interest communities have adequate reserves to provide for reliable and timely repairs and replacement projects. Reserve studies are budget planning tools to be used by common interest communities to identify components in a community for which the association is responsible for repair and replacement, the useful and remaining life of those components, the estimated cost of repair and replacement, the current status of money available to complete those repairs and replacements, and establishes a funding plan to offset the anticipated costs without reliance on special assessments. The goal of this is to ensure maintenance and repair is done in a timely manner to prevent loss of property value and, in the most severe cases, loss of life.
Guidelines for the preparation of reserve studies are established by the Community Associations Institute. This Act updates the timeframe from which projected expenses must be calculated, requires façade and structural inspections to be conducted on certain buildings, and those inspections and the maintenance needs identified in those inspection reports, to be incorporated into the reserve study, and for reserve studies to be conducted more often in certain circumstances. This Act requires small condominiums and cooperatives under § 81-117, preexisting common interest communities and approved common interest communities under § 81-119, and small preexisting cooperatives under § 81-120 to comply with the inspection and reserve study requirements.
This Act also gives the Consumer Protection Unit of the Department of Justice the ability to enforce violations of the Delaware Uniform Common Interest Ownership Act. Under current law, enforcement requires private enforcement through lawsuits or alternative dispute resolution.
This Act takes effect 1 year after its enactment into law. This Act also makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.
This Act is based on recommendations provided by the New Castle County Council Common Interest Community Task Force, which was motivated by the tragedy of the Champlain Tower South condominium collapse in Surfside, Florida, in which 98 people died.
Author: Senator Cruce
