Bill Text: IA HF2010 | 2013-2014 | 85th General Assembly | Introduced


Bill Title: A bill for an act relating to the operations of certain common interest communities.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2014-01-15 - Subcommittee, Brandenburg, Heartsill, and Meyer. H.J. 79. [HF2010 Detail]

Download: Iowa-2013-HF2010-Introduced.html
House File 2010 - Introduced HOUSE FILE 2010 BY S. OLSON A BILL FOR An Act relating to the operations of certain common interest 1 communities. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5095YH (3) 85 md/sc
H.F. 2010 Section 1. NEW SECTION . 499A.201 Applicability. 1 This chapter shall apply to cooperatives established under 2 this chapter unless otherwise provided in chapter 499C. 3 Sec. 2. NEW SECTION . 499B.1A Applicability. 4 This chapter shall apply to horizontal property regimes 5 established under this chapter unless otherwise provided in 6 chapter 499C. 7 Sec. 3. Section 499B.15, subsection 2, Code 2014, is amended 8 by striking the subsection. 9 Sec. 4. NEW SECTION . 499B.21 Board of administration —— 10 meetings and records. 11 1. For horizontal property regimes with eight or more 12 apartments, if the form of administration is a board of 13 administration, the board of administration shall comply with 14 the requirements of chapter 499C. 15 2. For horizontal property regimes with seven or less 16 apartments, if the form of administration is a board of 17 administration, the board of administration shall comply 18 with the requirements of section 499C.401, subsection 2, and 19 sections 499C.402 and 499C.403. 20 Sec. 5. NEW SECTION . 499C.101 Title. 21 This chapter shall be known and cited as the “Iowa Common 22 Interest Ownership Act” . 23 Sec. 6. NEW SECTION . 499C.102 Public policy. 24 The general assembly declares that it is the public policy of 25 the state that the management and affairs of common interest 26 communities be conducted openly, and this chapter shall be 27 construed to provide open access to the management of the 28 common interest community for the unit owners. 29 Sec. 7. NEW SECTION . 499C.103 Definitions. 30 As used in this chapter, unless the context otherwise 31 requires: 32 1. “Bylaws” means the instruments, however denominated, 33 that contain the procedures for conducting the affairs of the 34 unit owners association or the executive board regardless of 35 -1- LSB 5095YH (3) 85 md/sc 1/ 15
H.F. 2010 the form in which the association is organized, including any 1 amendments to such instruments. 2 2. “Common element” means: 3 a. For a cooperative under chapter 499A or a horizontal 4 property regime under chapter 499B, all portions of the common 5 interest community other than the units. 6 b. For a planned community, any real estate within the 7 planned community which is owned or leased by the unit owners 8 association, other than a unit. 9 c. For all common interest communities, any other interests 10 in real estate identified in the declaration for the benefit 11 of unit owners. 12 3. a. “Common interest community” means real estate 13 described in a declaration with respect to which a person, 14 by virtue of the person’s ownership of a unit, is obligated 15 to pay for a share of real estate taxes, insurance premiums, 16 maintenance, or improvement of, or services or other expenses 17 related to, common elements, other units, or other real estate 18 described in the declaration. “Common interest community” 19 includes a cooperative under chapter 499A and a horizontal 20 property regime under chapter 499B. 21 b. Common interest community does not include: 22 (1) A covenant that requires the owners of separate parcels 23 of real estate to share costs or other obligations related to a 24 wall, driveway, well, or other similar structure, unless all 25 such owners consent in writing to the creation of a common 26 interest community. 27 (2) Real estate described in paragraph “a” if all units are 28 owned by a single owner. 29 4. “Declarant” means a person or group of persons who, 30 as the record title owner of real estate, by a declaration, 31 creates a common interest community. 32 5. “Declaration” means the instrument, however denominated, 33 that creates a common interest community, including any 34 amendments to the instrument. 35 -2- LSB 5095YH (3) 85 md/sc 2/ 15
H.F. 2010 6. “Executive board” means the body, regardless of name, 1 designated in the declaration or bylaws to act on behalf of the 2 unit owners association. 3 7. “Planned community” means a common interest community 4 that is not solely a cooperative under chapter 499A or 5 solely a horizontal property regime under chapter 499B, and 6 includes property owner or homeowner associations. However, a 7 cooperative under chapter 499A or a horizontal property regime 8 under chapter 499B may be part of a planned community. 9 8. “Rule” means a policy, guideline, restriction, procedure, 10 or regulation, however denominated, which is not set forth in 11 the declaration or bylaws. 12 9. “Unit” means a physical portion of the common interest 13 community designated for separate ownership or occupancy or 14 as otherwise defined in the statute under which the common 15 interest community is organized. 16 10. “Unit owner” means a declarant or other person that owns 17 a unit, but does not include a person having an interest in a 18 unit solely as security for an obligation. In a horizontal 19 property regime under chapter 499B or a planned community, 20 the declarant is the owner of a unit. In a cooperative under 21 chapter 499A, the declarant is the owner of a unit to which an 22 interest has been allocated until that unit has been conveyed 23 to another person. 24 11. “Unit owners association” means an association, 25 regardless of name, organized as a for-profit or nonprofit 26 corporation, trust, limited liability company, partnership, 27 unincorporated association, or any other form of organization 28 authorized by the laws of this state, the membership of 29 which consists solely of unit owners except following 30 termination of the common interest community, at which time the 31 association shall consist of all former unit owners entitled 32 to distributions of proceeds or their heirs, successors, or 33 assigns. 34 Sec. 8. NEW SECTION . 499C.104 Variation by agreement. 35 -3- LSB 5095YH (3) 85 md/sc 3/ 15
H.F. 2010 Except as expressly provided in this chapter, the provisions 1 of this chapter may not be varied by agreement, and rights 2 conferred by it may not be waived. 3 Sec. 9. NEW SECTION . 499C.105 Applicability. 4 Unless otherwise provided by law: 5 1. This chapter applies to common interest communities 6 within this state having eight or more units. 7 2. Any portion of a declaration, bylaws, covenant, or 8 other contractual provision existing prior to July 1, 2014, 9 that violates or is inconsistent with this chapter is not 10 enforceable. However, nothing in this chapter shall be 11 construed to invalidate other provisions of the declaration, 12 bylaws, covenant, or contractual provision of those common 13 interest communities established before July 1, 2014. 14 3. The provisions of this chapter shall prevail over any 15 conflicting provision of law under which a common interest 16 community or unit owners association is organized. 17 Sec. 10. NEW SECTION . 499C.201 Unit owners association —— 18 executive board. 19 1. A unit owners association shall have an executive board. 20 2. Except as otherwise provided in the declaration, 21 the bylaws, subsection 3 of this section, or provisions of 22 the statute under which the common interest community is 23 organized, an executive board acts on behalf of the unit owners 24 association. 25 3. An executive board shall not act on behalf of the unit 26 owners association to amend the declaration, to terminate the 27 common interest community, to elect members of the executive 28 board, or determine the qualifications, powers and duties, or 29 terms of office of executive board members. An executive board 30 may fill vacancies in its membership for the unexpired portion 31 of any term. 32 4. A declaration may provide for a period of declarant 33 control of the unit owners association, during which a 34 declarant, or persons designated by the declarant, may appoint 35 -4- LSB 5095YH (3) 85 md/sc 4/ 15
H.F. 2010 and remove the officers and members of the executive board. 1 For declarations filed on or after July 1, 2014, a period of 2 declarant control shall be clearly defined in the declaration. 3 Sec. 11. NEW SECTION . 499C.401 Meetings. 4 1. Meetings of a unit owners association shall comply with 5 all of the following: 6 a. A unit owners association shall hold a meeting of 7 unit owners annually at a time, date, and place stated in or 8 determined in accordance with the declaration or bylaws. 9 b. A unit owners association shall hold a special meeting 10 of unit owners to address any matter affecting the unit owners 11 association if the association’s president, a majority of the 12 executive board, or a number of unit owners comprising at 13 least forty percent of all votes in the association, unless a 14 different percentage is specified in the bylaws, request that 15 the secretary call the meeting. If the unit owners association 16 does not notify unit owners of a special meeting within thirty 17 days after the required number of unit owners has requested the 18 secretary to call a special meeting, the requesting members may 19 directly notify all unit owners of the meeting. Only matters 20 described in the meeting notice may be considered at a special 21 meeting. 22 c. A unit owners association shall notify each unit owner 23 of the time, date, and place of each annual and special unit 24 owners meeting not less than ten days and not more than sixty 25 days before the meeting date. Each meeting notice shall state 26 the time, date, and place of the meeting and the items on the 27 agenda in a manner reasonably calculated to apprise the unit 28 owners of that information, including but not limited to: 29 (1) A statement of the general nature of any proposed 30 amendment to the declaration or bylaws. 31 (2) A statement describing any budget changes. 32 (3) Any proposal to remove an officer or member of the 33 executive board. 34 d. The requirements relating to the timing of meeting 35 -5- LSB 5095YH (3) 85 md/sc 5/ 15
H.F. 2010 notices under paragraph “c” may be reduced or waived for a 1 meeting called to address an emergency. A meeting called to 2 address an emergency shall be limited to matters arising out 3 of the emergency. 4 e. Each unit owner shall be given a reasonable opportunity 5 at any meeting to comment on any matter affecting the common 6 interest community or the unit owners association. 7 f. The declaration or bylaws may allow for meetings of 8 unit owners to be conducted by telephonic, video, or other 9 conferencing method, if such method is consistent with 10 subsection 2, paragraph “g” . 11 2. Meetings of the executive board and meetings of 12 committees of the unit owners association authorized to act for 13 the association shall comply with all of the following: 14 a. Meetings shall be open to the unit owners except during 15 executive sessions. The executive board and committees of the 16 unit owners association authorized to act for the association 17 may hold an executive session only during a regular or special 18 meeting of the board or the committee. No final vote or final 19 action may be taken during an executive session. An executive 20 session may only be held for the following reasons: 21 (1) To consult with the unit owners association’s attorney 22 concerning legal matters governed by attorney-client privilege. 23 (2) To discuss existing or potential litigation or 24 mediation, arbitration, or governmental administrative 25 proceedings. 26 (3) To discuss matters relating to the job performance, 27 compensation, or health records of an individual employee or 28 specific complaints against an individual employee of the 29 unit owners association or against an independent contractor 30 retained by the unit owners association. 31 (4) To discuss contracts, leases, and other commercial 32 transactions for goods or services that are under negotiation, 33 including the review of bids or proposals, if public disclosure 34 of such matters would place the unit owners association at a 35 -6- LSB 5095YH (3) 85 md/sc 6/ 15
H.F. 2010 disadvantage. 1 (5) To discuss personal, health, or financial information 2 relating to a unit owner, a specific employee of the unit 3 owners association, or a specific employee of an independent 4 contractor retained by the unit owners association, including 5 any records of the unit owners association relating to such 6 information. 7 b. For purposes of this section, a gathering of board 8 members at which the board members do not conduct unit owners 9 association business is not a meeting of the executive board. 10 Executive board members shall not use incidental or social 11 gatherings of board members or any other method to evade the 12 meeting and notice requirements of this section. 13 c. During a period of declarant control, the executive board 14 shall meet at least one time each year. At least one of the 15 meetings shall be held at the common interest community or at 16 a place convenient to the unit owners of the common interest 17 community. After termination of the period of declarant 18 control, all executive board meetings shall be held at the 19 common interest community or at a place convenient to the unit 20 owners of the common interest community unless the unit owners 21 amend the bylaws to vary the location of such meetings. 22 d. At each executive board meeting, the executive board 23 shall provide a reasonable opportunity for unit owners to 24 comment on any matter affecting the common interest community 25 and the unit owners association. 26 e. Unless the meeting is included in a schedule given to the 27 unit owners or the meeting is called to address an emergency, 28 the secretary or other officer specified in the bylaws shall 29 give notice of each executive board meeting to each executive 30 board member and to each unit owner. Such notice shall be 31 given at least ten days before the meeting and shall state the 32 time, date, place, and agenda of the meeting. 33 f. If any materials are distributed to the executive board 34 before a meeting, the executive board, upon receipt of the 35 -7- LSB 5095YH (3) 85 md/sc 7/ 15
H.F. 2010 materials, shall make copies reasonably available to unit 1 owners, except that the executive board is not required to make 2 available copies of unapproved minutes or materials that are to 3 be considered during an executive session. 4 g. Unless otherwise provided in the declaration or bylaws, 5 the executive board may conduct a meeting by telephonic, video, 6 or other conferencing method if all of the following conditions 7 are met: 8 (1) The meeting notice states the conferencing method to 9 be used and provides information explaining how unit owners 10 may participate in the conference directly or by meeting at a 11 central location or conference connection. 12 (2) The process provides all unit owners the opportunity 13 to hear or perceive the discussion and to comment on matters 14 before the executive board. 15 h. Following termination of the period of declarant control, 16 unit owners may amend the bylaws to vary the procedures for 17 meetings described in paragraph “g” . 18 i. In lieu of a meeting, the executive board may act by 19 unanimous consent if such action is documented in a record 20 authenticated by all executive board members. The secretary 21 shall give prompt notice to all unit owners of any action 22 taken by unanimous consent. After termination of the period 23 of declarant control, an executive board may act by unanimous 24 consent only to undertake ministerial actions or to implement 25 actions previously taken at a meeting of the executive board. 26 j. Unless otherwise restricted by this chapter or the common 27 interest community’s bylaws, an executive board may determine 28 rules of procedure for the executive board. 29 k. An executive board may remove any person from a meeting 30 of the executive board upon a finding by a majority of the 31 board members that the person is being disruptive to the 32 meeting. An executive board may bar any person from meetings 33 of the executive board or other meetings of the common interest 34 community for a period of up to one year if the person has 35 -8- LSB 5095YH (3) 85 md/sc 8/ 15
H.F. 2010 been twice removed from a meeting within the preceding twelve 1 months. 2 l. An action by an executive board that is not in compliance 3 with this section is valid unless invalidated by a court. A 4 challenge to the validity of an action of the executive board 5 for failure to comply with this section shall not be brought 6 more than sixty days after the minutes of the executive board 7 of the meeting at which the action was taken are approved 8 or the record of that action is distributed to unit owners, 9 whichever is later. 10 Sec. 12. NEW SECTION . 499C.402 Association records. 11 1. A unit owners association shall retain all of the 12 following: 13 a. Detailed records of receipts and expenditures relating to 14 the operation and administration of the unit owners association 15 and other appropriate accounting records. 16 b. Minutes of all unit owners meetings and executive board 17 meetings, a record of all actions taken by the unit owners or 18 the executive board without a meeting, and a record of all 19 actions taken by a committee in place of the executive board on 20 behalf of the unit owners association. The minutes retained 21 by the unit owners association shall indicate the date, time, 22 and place of the meeting, the names of all persons present 23 at the meeting, and each action taken at the meeting. The 24 minutes shall also include the results of each vote taken at 25 the meeting, including information indicating the vote of each 26 executive board member present at the meeting. The vote of 27 each executive board member present shall be made public at the 28 open session. 29 c. The names of all unit owners in a form that permits 30 preparation of a list of the names of all owners and the 31 regular mail or electronic mail address at which the unit 32 owners association communicates with them, and the number of 33 votes each unit owner is entitled to cast. 34 d. The unit owners association’s original and amended 35 -9- LSB 5095YH (3) 85 md/sc 9/ 15
H.F. 2010 organizational documents, bylaws, including all amendments to 1 the bylaws, and all rules of the common interest community 2 currently in effect. 3 e. All financial statements and tax returns of the unit 4 owners association for the past three years. 5 f. A list of the names and addresses of the current 6 executive board members and officers. 7 g. The unit owners association’s most recent annual report 8 delivered to the secretary of state, if applicable. 9 h. Copies of each contract to which the unit owners 10 association is currently a party. 11 i. Records of executive board or committee actions relating 12 to requests for design or architectural approval from unit 13 owners. 14 j. Ballots, proxies, and other records related to voting by 15 unit owners for one year after the election, action, or vote. 16 2. Except as provided under subsections 3 and 4, all records 17 retained by a unit owners association must be available for 18 examination and copying by a unit owner or the unit owner’s 19 authorized agent during reasonable business hours or at a 20 mutually convenient time and location upon providing a five 21 days’ notice that reasonably identifies the specific records 22 that are being requested. 23 3. Records retained by a unit owners association may be 24 withheld from inspection and copying to the extent that they 25 concern: 26 a. Personally identifiable information, salary, and medical 27 records relating to specific individuals. 28 b. Information relating to contracts, leases, and other 29 commercial transactions to purchase or provide goods or 30 services, that are currently under negotiation. 31 c. Information relating to existing or potential litigation, 32 mediation, arbitration, or governmental administrative 33 proceedings. 34 d. Information relating to existing or potential matters 35 -10- LSB 5095YH (3) 85 md/sc 10/ 15
H.F. 2010 involving governmental administrative proceedings or other 1 proceedings before a government tribunal for enforcement of the 2 declaration, bylaws, or rules. 3 e. Communications with the unit owners association attorney 4 which are otherwise protected by the attorney-client privilege 5 or the attorney work-product doctrine. 6 f. Information that if disclosed would violate another 7 provision of law. 8 g. Records of an executive session of the executive board. 9 However, upon the completion of a matter that is the subject of 10 an executive session held under section 499C.401, subsection 11 2, paragraph “a” , subparagraphs (1) through (4), such records 12 of the executive session shall be available for inspection as 13 provided in this section. 14 h. Records directly related to the personal, health, or 15 financial information of a unit owner, if the person requesting 16 the records is not the unit owner that is the subject of the 17 records. 18 4. A unit owners association may charge a reasonable fee 19 for providing copies of any records under this section and for 20 supervising the inspection of such records. 21 5. The right to inspect records under this section includes 22 the right to copy records by photocopying or other means and 23 includes the right to receive copies through an electronic 24 transmission, if available, upon request of the requester. 25 6. A unit owners association is not obligated to compile or 26 synthesize information or records under this section. 27 7. Information or records obtained under this section shall 28 not be used for commercial purposes. 29 Sec. 13. NEW SECTION . 499C.403 Notice to unit owners. 30 1. A unit owners association or an executive board, as 31 applicable, shall deliver each notice required to be given by 32 the association or board under this chapter to the regular mail 33 address or electronic mail address provided by each unit owner. 34 If a regular mail address or electronic mail address is not 35 -11- LSB 5095YH (3) 85 md/sc 11/ 15
H.F. 2010 provided by the unit owner, the notice may be delivered using 1 any of the following methods: 2 a. Hand delivery to the unit owner. 3 b. Mailing by regular mail or certified mail as defined in 4 section 618.15 to the address of the unit. 5 c. Any other method reasonably calculated to provide notice 6 to the unit owner. 7 2. The ineffectiveness of a good-faith effort to deliver 8 notice under subsection 1 does not invalidate an action taken 9 at a meeting or an action taken by other means. 10 Sec. 14. NEW SECTION . 499C.501 Cause of action —— attorney 11 fees. 12 A declarant, unit owners association, unit owner, or any 13 other person subject to this chapter may bring an action to 14 enforce a right granted or obligation imposed by this chapter, 15 the declaration, or the bylaws. In any action brought under 16 this chapter, the court may award reasonable attorney fees to 17 the prevailing party. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 This bill creates the “Iowa Common Interest Ownership Act,” 22 new Code chapter 499C. The bill provides that it is the 23 public policy of the state that the management and affairs of 24 common interest communities be conducted openly and that the 25 new Code chapter is to be construed to provide open access to 26 the management of the common interest community for the unit 27 owners. 28 New Code chapter 499C defines “common interest community” 29 to mean real estate described in a declaration with respect to 30 which a person, by virtue of the person’s ownership of a unit, 31 is obligated to pay for a share of real estate taxes, insurance 32 premiums, maintenance, or improvement of, or services or other 33 expenses related to, common elements, other units, or other 34 real estate described in the declaration. The bill specifies 35 -12- LSB 5095YH (3) 85 md/sc 12/ 15
H.F. 2010 that a common interest community does not include a covenant 1 that requires the owners of separate parcels of real estate 2 to share certain costs or other obligations, unless all such 3 owners consent in writing to the creation of a common interest 4 community, and does not include community where all units are 5 owned by a single owner. 6 The bill defines cooperatives under Code chapter 499A and 7 horizontal property regimes under Code chapter 499B to be 8 common interest communities. The bill specifies that unless 9 otherwise provided by law new Code chapter 499C applies to 10 all common interest communities established within this state 11 having eight or more units. However, the bill provides that 12 for horizontal property regimes with seven or less apartments, 13 if the form of administration is a board of administration, the 14 board of administration must comply with the requirements of 15 new Code section 499C.401(2), regarding meeting requirements, 16 and new Code sections 499C.402 and 499C.403, relating to 17 records and notice. 18 The bill does not, except as specifically provided, allow 19 for the provisions of new Code chapter 499C to be varied by 20 agreement, and rights conferred by new Code chapter 499C may 21 not be waived. 22 The bill also provides that any portion of a declaration, 23 bylaws, covenant, or other contractual provision existing prior 24 to July 1, 2014, that violates or is inconsistent with new Code 25 chapter 499C is not enforceable. However, nothing in new Code 26 chapter 499C shall be construed to invalidate other provisions 27 of the declaration, bylaws, covenant, or contractual provisions 28 of those common interest communities established before July 29 1, 2014. The bill specifies that the provisions of new Code 30 chapter 499C shall prevail over any conflicting provision of 31 law under which a common interest community or unit owners 32 association is organized. 33 The bill requires each unit owners association, as defined 34 in the bill, to have an executive board. The bill defines an 35 -13- LSB 5095YH (3) 85 md/sc 13/ 15
H.F. 2010 executive board as the body, regardless of name, designated 1 in the declaration or bylaws to act on behalf of the unit 2 owners association. However, the bill provides that an 3 executive board shall not act on behalf of the unit owners 4 association to amend the declaration, to terminate the common 5 interest community, to elect members of the executive board, or 6 determine the qualifications, powers and duties, or terms of 7 office of executive board members. The bill provides, however, 8 that an executive board may fill vacancies in its membership 9 for the unexpired portion of any term. 10 The bill provides that a declaration (the instrument that 11 creates the common interest community) may provide for a period 12 of declarant control of the unit owners association, during 13 which a declarant (the person or group of persons who creates 14 the common interest community), or persons designated by the 15 declarant, may appoint and remove the officers and members of 16 the executive board. The bill specifies that for declarations 17 filed on or after July 1, 2014, a period of declarant control 18 shall be clearly defined in the declaration. 19 The bill establishes requirements relating to meetings of 20 unit owners associations, executive boards, and committees 21 of such entities including requirements for the contents 22 of meeting notices, allowable actions during meetings, 23 requirements relating to unit owner comments, and the manner 24 in which meetings may be conducted. The bill also specifies 25 the manner and the reasons for which certain meetings may be 26 called. 27 The bill enacts requirements relating to the retention of 28 records by unit owners associations and specifies the records 29 retained by a unit owners association that may be withheld from 30 inspection and copying. 31 The bill requires a unit owners association or executive 32 board, as applicable, to deliver each notice required to be 33 given by the association under new Code chapter 499C to the 34 regular mail address or electronic mail address provided by 35 -14- LSB 5095YH (3) 85 md/sc 14/ 15
H.F. 2010 each unit owner. If a regular mail or electronic mail address 1 is not provided by the unit owner, the unit owners association 2 may deliver the notice by a different method specified in 3 the bill. The bill provides that the ineffectiveness of a 4 good-faith effort to deliver notice does not invalidate an 5 action taken at a meeting or an action taken by other means. 6 The bill provides that a declarant, unit owners association, 7 unit owner, or any other person subject to new Code chapter 8 499C may bring an action to enforce a right granted or 9 obligation imposed by the Code chapter, the declaration, or the 10 bylaws. In any such action, the court may award reasonable 11 attorney fees to the prevailing party. 12 -15- LSB 5095YH (3) 85 md/sc 15/ 15
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