Bill Text: IA HF2041 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to reinstatement of lapsed use restrictions within a common interest community and including applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-01-22 - Subcommittee: Heartsill, Baltimore and Wolfe. H.J. 129. [HF2041 Detail]
Download: Iowa-2017-HF2041-Introduced.html
House File 2041 - Introduced HOUSE FILE BY MOMMSEN A BILL FOR 1 An Act relating to reinstatement of lapsed use restrictions 2 within a common interest community and including 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5569YH (3) 87 md/jh PAG LIN 1 1 Section 1. NEW SECTION. 564B.1 Definitions. 1 2 As used in this chapter, unless the context otherwise 1 3 requires: 1 4 1. "Common interest community" means real estate described 1 5 in a declaration with respect to which a person, by virtue of 1 6 the person's ownership of a parcel, is obligated to pay for a 1 7 share of real estate taxes, insurance premiums, maintenance, 1 8 improvements, services, or other expenses related to common 1 9 elements or other real estate described in the declaration. 1 10 2. "Declaration" means a duly recorded instrument and any 1 11 amendments thereto, however denominated, that establish the 1 12 common interest community and use restrictions for the common 1 13 interest community, and that subject the common interest 1 14 community to administration by an owners' association in which 1 15 the parcel owners are required to be members. 1 16 3. "Executive board" means the body, however denominated, 1 17 designated to act on behalf of the owners' association. 1 18 4. "Owners' association" means an entity responsible for 1 19 administration of a common interest community in which the 1 20 voting membership is made up of parcel owners and in which 1 21 membership is a mandatory condition of parcel ownership. 1 22 5. "Parcel" means a physical portion of the common interest 1 23 community designated for separate ownership. 1 24 6. "Parcel owner" means the record owner of legal title to 1 25 a parcel or, if the parcel is subject to a contract for deed, 1 26 the vendee of the real estate contract. "Parcel owner" does 1 27 not include a person having an interest in a parcel solely as 1 28 security for an obligation. 1 29 7. "Use restrictions" means the same as defined in section 1 30 614.24, subsection 5. 1 31 Sec. 2. NEW SECTION. 564B.2 Reinstatement of use 1 32 restrictions. 1 33 1. Parcel owners in a common interest community having 1 34 five hundred or more parcels may reinstate use restrictions in 1 35 a declaration that have become unenforceable by operation of 2 1 section 614.24 in the manner provided in this chapter. 2 2 2. The proposal to reinstate use restrictions may contain 2 3 fewer than all of the use restrictions that have become 2 4 unenforceable. The proposal must not amend or modify any use 2 5 restriction sought to be reinstated. 2 6 3. Use restrictions reinstated pursuant to this chapter 2 7 shall affect the same parcels as were affected at the time the 2 8 use restrictions became unenforceable. 2 9 Sec. 3. NEW SECTION. 564B.3 Procedure to reinstate use 2 10 restrictions by recorded agreement. 2 11 1. Use restrictions may be reinstated upon the filing 2 12 with the recorder of each county in which the common interest 2 13 community is located a reinstatement agreement that contains 2 14 the complete text of the use restrictions being reinstated 2 15 and is executed by the owners of a majority of the affected 2 16 parcels. The executive board shall file the reinstatement 2 17 agreement within thirty days after a majority of the owners of 2 18 the affected parcels have executed the reinstatement agreement. 2 19 2. The reinstated use restrictions filed by the executive 2 20 board shall have annexed a certification by the executive board 2 21 that the reinstatement agreement was executed by the owners of 2 22 a majority of the affected parcels. 2 23 3. Immediately after recording the reinstatement agreement, 2 24 the executive board shall mail or hand deliver to each parcel 2 25 owner a complete copy of the recorded agreement. 2 26 Sec. 4. NEW SECTION. 564B.4 Procedure to reinstate use 2 27 restrictions by vote of parcel owners. 2 28 1. Use restrictions may be reinstated by vote of the parcel 2 29 owners in the manner provided in this section. 2 30 2. A proposal to reinstate use restrictions may be initiated 2 31 by either of the following: 2 32 a. The executive board. 2 33 b. A petition signed by owners of at least ten percent of 2 34 the affected parcels. Such petition shall include the text of 2 35 the use restrictions proposed to be reinstated. 3 1 3. If a proposal is initiated under subsection 2, the 3 2 executive board shall give notice, by mail or hand delivery, 3 3 to the persons who own the affected parcels as of the close of 3 4 business on the business day preceding the day on which notice 3 5 is given. If notice is given by mail, the notice is deemed 3 6 given on the date of mailing. The notice shall contain the 3 7 following information: 3 8 a. The complete text of the proposed use restrictions to be 3 9 submitted to the affected parcel owners for approval. 3 10 b. A graphic depiction of the property and parcels affected 3 11 by the reinstated use restrictions. 3 12 c. The place, date, and time of the meeting at which the 3 13 reinstatement of the use restrictions will be considered and 3 14 voted upon, or instructions for an action by written ballot, 3 15 including the last date that a written ballot will be accepted. 3 16 d. A statement that the use restrictions will be reinstated 3 17 if parcel owners who own a majority of the affected parcels 3 18 vote to approve reinstatement. 3 19 4. The use restrictions contained in the proposal shall be 3 20 reinstated upon approval by the owners of a majority of the 3 21 affected parcels by a vote at a meeting conducted in the manner 3 22 described in section 564B.5, or by written ballot as described 3 23 in section 564B.6, and shall be effective in accordance with 3 24 section 564B.7. 3 25 5. There shall be one vote per parcel, regardless of the 3 26 number of parcel owners who own such parcel. If a parcel is 3 27 owned by more than one person, all owners must vote to approve 3 28 or the vote shall not be counted as a vote for approval. 3 29 Sec. 5. NEW SECTION. 564B.5 Meetings to reinstate use 3 30 restrictions. 3 31 1. A meeting on the matter of voting to reinstate use 3 32 restrictions shall not be held less than fourteen days or more 3 33 than sixty days after the last notice is given under section 3 34 564B.4, subsection 3. 3 35 2. The parcel owners entitled to vote at the meeting are the 4 1 owners of affected parcels as of the date of the meeting. 4 2 3. a. The parcel owners have the right to vote in person 4 3 or by proxy. 4 4 b. To be valid, a proxy must be dated, must state the place, 4 5 date, and time of the meeting for which the proxy was given, 4 6 and must be signed by the parcel owner. If a parcel is owned by 4 7 more than one person, each parcel owner must sign the proxy for 4 8 such proxy to be valid. 4 9 c. A proxy is effective only for the specific meeting for 4 10 which the proxy was originally given. 4 11 d. A proxy is revocable at any time at the discretion of any 4 12 parcel owner who executed the proxy. 4 13 e. If the proxy form expressly so provides, any proxy holder 4 14 may appoint, in writing, a substitute to act in the proxy 4 15 holder's place. 4 16 4. A quorum shall be met if parcel owners who own a majority 4 17 of the affected parcels are present at the meeting, either in 4 18 person or by proxy. 4 19 Sec. 6. NEW SECTION. 564B.6 Action by written ballot. 4 20 1. A vote to reinstate use restrictions may be taken without 4 21 a meeting if the executive board includes a written ballot 4 22 with the notice and other documents required to be given under 4 23 section 564B.4, subsection 3. 4 24 2. A written ballot must set forth the use restrictions 4 25 proposed to be reinstated and provide an opportunity to vote 4 26 for or against reinstatement. 4 27 3. One written ballot shall be provided for each parcel, 4 28 regardless of the number of parcel owners who own such parcel. 4 29 4. The deadline for the written ballot to be received in 4 30 order to be counted shall be at least fourteen days, but not 4 31 more than sixty days, after the notice containing the written 4 32 ballot is given. 4 33 5. A written ballot that has been cast shall not be revoked 4 34 by any person. 4 35 Sec. 7. NEW SECTION. 564B.7 Recording and notice of 5 1 recording. 5 2 1. Within thirty days after a majority of the parcel 5 3 owners have voted to approve the reinstatement of the use 5 4 restrictions, the executive board shall file the reinstated 5 5 use restrictions with the recorder of each county in which the 5 6 common interest community is located. 5 7 2. The reinstated use restrictions filed by the executive 5 8 board shall have annexed a certification by the executive board 5 9 that the reinstated use restrictions were approved by a vote of 5 10 the owners of a majority of the affected parcels. 5 11 3. Immediately after recording the reinstated use 5 12 restrictions, the executive board shall mail or hand deliver to 5 13 each parcel owner a complete copy of the recorded reinstated 5 14 use restrictions. 5 15 Sec. 8. NEW SECTION. 564B.8 Effect of reinstated use 5 16 restrictions. 5 17 1. The reinstated use restrictions shall be effective upon 5 18 recordation with respect to each affected parcel, regardless of 5 19 whether an owner of an affected parcel approved the reinstated 5 20 use restrictions. 5 21 2. The reinstated use restrictions shall not be given 5 22 retroactive effect with respect to any affected parcel. 5 23 3. A reinstated use restriction shall not be enforced 5 24 against a parcel if each of the following are true: 5 25 a. A parcel owner made a good=faith investment that would be 5 26 impaired by such enforcement. 5 27 b. The good=faith investment described in paragraph "a" 5 28 was made after the use restriction became unenforceable by 5 29 operation of section 614.24 and before reinstatement under this 5 30 chapter. 5 31 Sec. 9. Section 614.24, Code 2018, is amended by adding the 5 32 following new subsection: 5 33 NEW SUBSECTION. 4A. If use restrictions are reinstated 5 34 pursuant to chapter 564B, the recording date for purposes of 5 35 the twenty=one=year limitation in subsection 1 shall be the 6 1 date the reinstated use restrictions are recorded under section 6 2 564B.3 or 564B.7. 6 3 Sec. 10. APPLICABILITY. This Act applies to common interest 6 4 communities created prior to, and still in existence on, July 6 5 1, 2018, and created on or after July 1, 2018. 6 6 EXPLANATION 6 7 The inclusion of this explanation does not constitute agreement with 6 8 the explanation's substance by the members of the general assembly. 6 9 This bill relates to the ability of a common interest 6 10 community to reinstate lapsed use restrictions. 6 11 The bill defines "common interest community" as real estate 6 12 described in a declaration with respect to which a person, by 6 13 virtue of the person's ownership of a parcel, is obligated 6 14 to pay for a share of real estate taxes, insurance premiums, 6 15 maintenance, improvements, services, or other expenses related 6 16 to common elements or other real estate described in the 6 17 declaration. 6 18 The bill references the definition of "use restriction" in 6 19 Code section 614.24, which is a limitation or prohibition on 6 20 the rights of a landowner to make use of the landowner's real 6 21 estate, including limitations or prohibitions on commercial 6 22 uses, rental use, parking and storage of recreational vehicles 6 23 and their attachments, ownership of pets, outdoor domestic 6 24 uses, construction and use of accessory structures, building 6 25 dimensions and colors, building construction materials, and 6 26 landscaping. "Use restriction" does not include an easement 6 27 granting a person an affirmative right to use land in the 6 28 possession of another person, including but not limited to an 6 29 easement for pedestrian or vehicular access, reasonable ingress 6 30 and egress, solar access, utilities, supporting utilities, 6 31 parking areas, bicycle paths, and water flow, an agreement 6 32 between two or more parcel owners providing for the sharing of 6 33 costs and other obligations for real estate taxes, insurance 6 34 premiums, and for maintenance, repair, improvements, services, 6 35 or other costs related to two or more parcels of real estate 7 1 regardless of whether the parties to the agreement are owners 7 2 of individual lots or incorporated or unincorporated lots 7 3 or have ownership interests in common areas in a horizontal 7 4 property regime or residential housing development, or an 7 5 agreement between two or more parcel owners for the joint use 7 6 and maintenance of driveways, party walls, landscaping, fences, 7 7 wells, roads, common areas, waterways, or bodies of water. 7 8 Under Code section 614.24, an action arising or existing 7 9 by reason of the provisions of any contract providing for use 7 10 restrictions in and to real estate may not be maintained after 7 11 21 years from the recording of the contract unless a claimant 7 12 has filed a verified claim with the county recorder within the 7 13 21=year period. Therefore, if an owners' association or other 7 14 claimant does not file a verified claim regarding a common 7 15 interest community's declaration before the expiration of the 7 16 21=year period, the use restrictions in the declaration become 7 17 unenforceable. 7 18 The bill enacts new Code chapter 564B to provide a mechanism 7 19 for common interest communities with 500 or more parcels, 7 20 as defined in the bill, to reinstate use restrictions which 7 21 have become barred by operation of Code section 614.24. Use 7 22 restrictions may be reinstated upon the filing with the 7 23 county recorder of a reinstatement agreement that contains the 7 24 complete text of the use restrictions being reinstated and 7 25 is executed by owners of a majority of the affected parcels. 7 26 Use restrictions may also be reinstated after an affirmative 7 27 vote by a majority of the affected parcel owners, either at 7 28 a meeting or by written ballot. A proposal for a vote to 7 29 reinstate use restrictions may be brought by the executive 7 30 board of the owners' association or by petition of parcel 7 31 owners who own at least 10 percent of the affected parcels. 7 32 The bill specifies the form of the notice the executive 7 33 board shall provide to parcel owners regarding a proposal for a 7 34 vote to reinstate use restrictions. The proposal may be voted 7 35 upon at a meeting which shall be held no less than 14 days and 8 1 no more than 60 days after notice is provided to the parcel 8 2 owners. The proposal may also be voted on by written ballot. 8 3 If the vote is by written ballot, the notice must specify when 8 4 ballots are due, which must be no earlier than 14 days and no 8 5 later than 60 days after the written ballots are delivered. 8 6 Upon proper notice, if the owners of a majority of the 8 7 affected parcels in the common interest community approve 8 8 the reinstatement of lapsed use restrictions, the lapsed use 8 9 restrictions are reinstated as to all parcels in the common 8 10 interest community. 8 11 The reinstated use restrictions become effective upon 8 12 recordation. The reinstated use restrictions are not given 8 13 retroactive applicability. Reinstated use restrictions 8 14 cannot be enforced against a parcel if a parcel owner made 8 15 a good=faith investment that would be impaired by such 8 16 enforcement and such investment was made while the use 8 17 restriction was unenforceable under Code section 614.24 and 8 18 before the use restriction was reinstated under new Code 8 19 chapter 564B. 8 20 The bill provides that if use restrictions are reinstated 8 21 under new Code chapter 564B, the 21=year limitation period 8 22 under Code section 614.24 begins as of the recordation date of 8 23 the reinstated use restrictions. 8 24 The bill applies to common interest communities created 8 25 prior to, and still in existence on, July 1, 2018, and created 8 26 on or after July 1, 2018. LSB 5569YH (3) 87 md/jh
