Bill Text: IA HF2113 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act relating to the operations and governance of certain common interest communities.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2016-01-26 - Introduced, referred to Judiciary. H.J. 121. [HF2113 Detail]
Download: Iowa-2015-HF2113-Introduced.html
House File 2113 - Introduced HOUSE FILE BY SALMON A BILL FOR 1 An Act relating to the operations and governance of certain 2 common interest communities. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5138YH (3) 86 md/sc PAG LIN 1 1 DIVISION I 1 2 IOWA COMMON INTEREST OWNERSHIP ACT 1 3 Section 1. NEW SECTION. 499C.101 Title. 1 4 This chapter shall be known and cited as the "Iowa Common 1 5 Interest Ownership Act". 1 6 Sec. 2. NEW SECTION. 499C.102 Public policy. 1 7 The general assembly declares that it is the public policy of 1 8 the state that the management and affairs of common interest 1 9 communities be conducted openly, and this chapter shall be 1 10 construed to provide open access to the management of the 1 11 common interest community for the unit owners. 1 12 Sec. 3. NEW SECTION. 499C.103 Definitions. 1 13 As used in this chapter, unless the context otherwise 1 14 requires: 1 15 1. "Assessment" means a sum attributable to each unit and 1 16 due to the unit owners association as may be provided in a 1 17 declaration or in the bylaws. 1 18 2. "Bylaws" means the instruments, however denominated, 1 19 that contain the procedures for conducting the affairs of the 1 20 unit owners association or the executive board regardless of 1 21 the form in which the association is organized, including any 1 22 amendments to such instruments. 1 23 3. "Common element" means: 1 24 a. For a cooperative under chapter 499A or a horizontal 1 25 property regime under chapter 499B, all portions of the common 1 26 interest community other than the units. 1 27 b. For a planned community, any real estate within the 1 28 planned community which is owned or leased by the unit owners 1 29 association, other than a unit. 1 30 c. For all common interest communities, any other interests 1 31 in real estate identified in the declaration for the benefit 1 32 of unit owners. 1 33 4. "Common expenses" means expenditures made by, or 1 34 financial liabilities of, the unit owners association or the 1 35 executive board, together with any allocations to reserves. 2 1 5. a. "Common interest community" means real estate 2 2 described in a declaration with respect to which a person, 2 3 by virtue of the person's ownership of a unit, is obligated 2 4 to pay for a share of real estate taxes, insurance premiums, 2 5 maintenance, or improvement of, or services or other expenses 2 6 related to, common elements, other units, or other real estate 2 7 described in the declaration. "Common interest community" 2 8 includes a cooperative under chapter 499A and a horizontal 2 9 property regime under chapter 499B. 2 10 b. Common interest community does not include: 2 11 (1) A covenant that requires the owners of separate parcels 2 12 of real estate to share costs or other obligations related to a 2 13 wall, driveway, well, or other similar structure, unless all 2 14 such owners consent in writing to the creation of a common 2 15 interest community. 2 16 (2) Real estate described in paragraph "a" if all units are 2 17 owned by a single owner. 2 18 6. "Declarant" means a person or group of persons who, 2 19 as the record title owner of real estate, by a declaration, 2 20 creates a common interest community. 2 21 7. "Declaration" means the instrument, however denominated, 2 22 that creates a common interest community, including any 2 23 amendments to the instrument. 2 24 8. "Executive board" means the body, regardless of name, 2 25 designated in the declaration or bylaws to act on behalf of the 2 26 unit owners association. 2 27 9. "Planned community" means a common interest community 2 28 that is not solely a cooperative under chapter 499A or 2 29 solely a horizontal property regime under chapter 499B, and 2 30 includes property owner or homeowner associations. However, a 2 31 cooperative under chapter 499A or a horizontal property regime 2 32 under chapter 499B may be part of a planned community. 2 33 10. "Rule" means a policy, guideline, restriction, 2 34 procedure, or regulation, however denominated, which is not set 2 35 forth in the declaration or bylaws. 3 1 11. "Unit" means a physical portion of the common interest 3 2 community designated for separate ownership or occupancy or 3 3 as otherwise defined in the statute under which the common 3 4 interest community is organized. 3 5 12. "Unit owner" means a declarant or other person that owns 3 6 a unit, but does not include a person having an interest in a 3 7 unit solely as security for an obligation. In a horizontal 3 8 property regime under chapter 499B or a planned community, 3 9 the declarant is the owner of a unit. In a cooperative under 3 10 chapter 499A, the declarant is the owner of any unit to 3 11 which an interest has been allocated until that unit has been 3 12 conveyed to another person. 3 13 13. "Unit owners association" means an association, 3 14 regardless of name, organized as a for=profit or nonprofit 3 15 corporation, trust, limited liability company, partnership, 3 16 unincorporated association, or any other form of organization 3 17 authorized by the laws of this state, the membership of 3 18 which consists solely of unit owners except following 3 19 termination of the common interest community, at which time the 3 20 association shall consist of all former unit owners entitled 3 21 to distributions of proceeds or their heirs, successors, or 3 22 assigns. 3 23 Sec. 4. NEW SECTION. 499C.104 Variation by agreement. 3 24 Except as expressly provided in this chapter, the provisions 3 25 of this chapter may not be varied by agreement, and rights 3 26 conferred by it may not be waived. 3 27 Sec. 5. NEW SECTION. 499C.105 Applicability. 3 28 Unless otherwise provided by law: 3 29 1. This chapter applies to common interest communities 3 30 within this state having eight or more units. 3 31 2. Any portion of a declaration, bylaws, covenant, or 3 32 other contractual provision existing prior to July 1, 2016, 3 33 that violates or is inconsistent with this chapter is not 3 34 enforceable. However, nothing in this chapter shall be 3 35 construed to invalidate other provisions of the declaration, 4 1 bylaws, covenant, or contractual provision of those common 4 2 interest communities established before July 1, 2016. 4 3 3. The provisions of this chapter shall prevail over any 4 4 conflicting provision of law under which a common interest 4 5 community or unit owners association is organized. 4 6 Sec. 6. NEW SECTION. 499C.201 Unit owners association ==== 4 7 powers and duties. 4 8 1. Except as otherwise provided in this chapter, a unit 4 9 owners association shall do all of the following: 4 10 a. Adopt bylaws and amend such bylaws. 4 11 b. Adopt budgets, collect assessments for common expenses 4 12 from unit owners, and invest funds of the association, if 4 13 applicable. 4 14 2. Unless otherwise limited by a declaration or bylaws, a 4 15 unit owners association shall have authority to do any of the 4 16 following: 4 17 a. Adopt and amend rules for operation of the unit owners 4 18 association. 4 19 b. Hire, employ, and discharge employees, agents, and 4 20 independent contractors. 4 21 c. Institute, defend, or intervene in litigation, 4 22 arbitration, mediation, or governmental administrative 4 23 proceedings on behalf of the unit owners association or for two 4 24 or more unit owners on matters affecting the common interest 4 25 community. 4 26 d. Make contracts and incur liabilities. 4 27 e. Regulate the use, maintenance, repair, replacement, and 4 28 modification of common elements. 4 29 f. Cause additional improvements to be made to the common 4 30 elements of the common interest community. 4 31 g. Acquire, hold, encumber, and convey any right, title, or 4 32 interest to real estate or personal property. 4 33 h. Grant easements, leases, licenses, and concessions 4 34 through or over the common elements of the common interest 4 35 community. 5 1 i. Impose and receive any payments, fees, or charges for the 5 2 use, rental, or operation of the common elements, other than 5 3 limited common elements as defined in section 499B.2, and for 5 4 services provided to unit owners. 5 5 j. Impose charges for late payment of assessments and, 5 6 after notice and an opportunity to be heard, impose reasonable 5 7 monetary penalties for violations of the declaration, bylaws, 5 8 and rules of the association. 5 9 k. Impose reasonable charges for the preparation and 5 10 recording of statements of unpaid assessments. 5 11 l. Provide for the indemnification of its officers and 5 12 executive board, including maintenance of liability insurance 5 13 for directors and officers of the unit owners association. 5 14 m. Assign its right to future income, including the right 5 15 to receive assessments. 5 16 n. Exercise powers conferred by the declaration or bylaws. 5 17 o. Exercise all other powers that may be exercised in this 5 18 state by organizations of the same type as the unit owners 5 19 association. 5 20 p. Suspend any right or privilege of a unit owner who fails 5 21 to pay an assessment. The unit owners association shall not, 5 22 however, deny a unit owner or other occupant access to the 5 23 owner's unit, suspend a unit owner's right to vote, prevent a 5 24 unit owner from seeking election as a director or officer of 5 25 the association, or withhold services provided to a unit or a 5 26 unit owner by the association if the effect of withholding the 5 27 service would be to endanger the health, safety, or property 5 28 of any person. 5 29 q. Exercise any other powers necessary and proper for the 5 30 governance and operation of the association. 5 31 3. If a tenant of a unit owner violates the declaration, 5 32 bylaws, or rules of the association, in addition to exercising 5 33 any of its powers against the unit owner, the association may 5 34 do any of the following: 5 35 a. Exercise the powers described in subsection 2, paragraph 6 1 "j", against the offending tenant. 6 2 b. After giving notice to the tenant and the unit owner 6 3 and providing each an opportunity to be heard, levy reasonable 6 4 monetary penalties against the tenant for the violation. 6 5 c. Take other action against the tenant for the violation in 6 6 the same manner as the unit owner, acting as landlord, could 6 7 have exercised under the lease or in the manner that the unit 6 8 owners association could lawfully have taken action directly 6 9 against the unit owner, or both. Action under this paragraph 6 10 may only be taken if the tenant or unit owner fails to remedy 6 11 the violation within ten days after notification by the unit 6 12 owners association of the violation. 6 13 4. Unless a lease of a unit otherwise provides, this section 6 14 does not do any of the following: 6 15 a. Affect rights that the unit owner possesses to enforce 6 16 the lease or that the unit owners association has under other 6 17 provisions of law. 6 18 b. In the absence of a violation of the declaration, bylaws, 6 19 or rules, authorize the unit owners association to enforce a 6 20 lease to which the unit owners association is not a party. 6 21 5. An executive board may determine whether to exercise 6 22 the association's power to impose sanctions or commence an 6 23 action for a violation of the declaration, bylaws, or rules, 6 24 including whether to settle any claim for unpaid assessments or 6 25 other claim made by or against the unit owners association. An 6 26 executive board does not have a duty to take enforcement action 6 27 if the executive board determines, following consideration of 6 28 the facts and circumstances presented, any of the following: 6 29 a. The association's legal position does not justify taking 6 30 any or further enforcement action. 6 31 b. The covenant, restriction, or rule being enforced is, or 6 32 is likely to be construed as, inconsistent with law. 6 33 c. Despite the existence of a violation, the violation is 6 34 nonmaterial and does not justify expenditure of the unit owners 6 35 association's resources. 7 1 d. It is not in the unit owners association's best interests 7 2 to pursue an enforcement action. 7 3 6. The failure of an executive board to take action pursuant 7 4 to subsection 5 shall not prevent the executive board from 7 5 taking enforcement action under a similar set of circumstances 7 6 or facts. The authority of an executive board to take action 7 7 under this chapter shall not, however, be exercised in an 7 8 arbitrary or capricious manner. 7 9 Sec. 7. NEW SECTION. 499C.202 Executive board. 7 10 1. A unit owners association shall have an executive 7 11 board and, except as otherwise provided in the declaration, 7 12 the bylaws, subsection 2, or provisions of the statute under 7 13 which the common interest community is organized, an executive 7 14 board acts on behalf of the unit owners association. In 7 15 the performance of their duties, officers and members of the 7 16 executive board appointed by the declarant shall exercise the 7 17 degree of care and loyalty to the unit owners association 7 18 required of a trustee. Officers and members of an executive 7 19 board not appointed by the declarant shall exercise the degree 7 20 of care and loyalty to the unit owners association required 7 21 of an officer or director of a corporation organized under 7 22 chapter 504, and such officers and members are subject to the 7 23 conflict of interest rules governing directors and officers 7 24 under chapter 504. 7 25 2. An executive board shall not act on behalf of the unit 7 26 owners association to amend the declaration, to terminate the 7 27 common interest community, to elect members of the executive 7 28 board, or determine the qualifications, powers and duties, or 7 29 terms of office of executive board members. An executive board 7 30 may fill vacancies in its membership for the unexpired portion 7 31 of any term. 7 32 3. a. Subject to subsection 4, the declaration may 7 33 provide for a period of declarant control of the unit owners 7 34 association during which a declarant, or persons designated by 7 35 the declarant, may appoint and remove the officers and members 8 1 of the executive board. In no case, however, shall a period of 8 2 declarant control continue upon the occurrence of any of the 8 3 following: 8 4 (1) Sixty days after the conveyance of seventy=five percent 8 5 of all units in the common interest community to unit owners 8 6 other than a declarant. 8 7 (2) Two years after all declarants have ceased to offer 8 8 units for sale in the ordinary course of business. 8 9 (3) Two years after the addition of any number of new units 8 10 to the common interest community. 8 11 (4) The date the declarant, after giving written notice 8 12 to all unit owners, records an instrument voluntarily 8 13 surrendering all rights to control activities of the unit 8 14 owners association. 8 15 b. A declarant may voluntarily surrender the right to 8 16 appoint and remove officers and members of the executive board 8 17 before termination of the period under paragraph "a". However, 8 18 the declarant may retain, for the duration of the period of 8 19 declarant control, approval authority for specified actions of 8 20 the unit owners association or executive board, as described in 8 21 a recorded instrument executed by the declarant. 8 22 4. a. Not later than sixty days after conveyance of 8 23 twenty=five percent of the units to unit owners other than a 8 24 declarant, at least one member, and not less than twenty=five 8 25 percent of the members of the executive board, must be elected 8 26 by unit owners other than the declarant. 8 27 b. Not later than sixty days after conveyance of fifty 8 28 percent of the units to unit owners other than a declarant, not 8 29 less than one=third of the members of the executive board must 8 30 be elected by unit owners other than the declarant. 8 31 5. Following the termination of any period of declarant 8 32 control under this section, the unit owners shall elect an 8 33 executive board of at least three members, at least a majority 8 34 of whom must be unit owners. The executive board members shall 8 35 elect officers of the executive board. The executive board 9 1 members and officers shall take office upon election. This 9 2 subsection shall not apply to a common interest community if 9 3 all the units of the community are owned by one owner. 9 4 6. Notwithstanding any provision of the declaration or 9 5 bylaws to the contrary, the unit owners, by a two=thirds vote 9 6 of all persons present and entitled to vote at any meeting of 9 7 the unit owners at which a quorum is present, may remove any 9 8 member of the executive board with or without cause, other than 9 9 a member appointed by the declarant. 9 10 Sec. 8. NEW SECTION. 499C.401 Meetings. 9 11 1. Meetings of a unit owners association shall comply with 9 12 all of the following: 9 13 a. A unit owners association shall hold a meeting of 9 14 unit owners annually at a time, date, and place stated in or 9 15 determined in accordance with the declaration or bylaws. 9 16 b. A unit owners association shall hold a special meeting 9 17 of unit owners to address any matter affecting the unit owners 9 18 association if the association's president, a majority of the 9 19 executive board, or a number of unit owners comprising at 9 20 least forty percent of all votes in the association, unless a 9 21 different percentage is specified in the bylaws, request that 9 22 the secretary call the meeting. If the unit owners association 9 23 does not notify unit owners of a special meeting within thirty 9 24 days after the required number of unit owners has requested the 9 25 secretary to call a special meeting, the requesting members may 9 26 directly notify all unit owners of the meeting. Only matters 9 27 described in the meeting notice may be considered at a special 9 28 meeting. 9 29 c. A unit owners association shall notify each unit owner 9 30 of the time, date, and place of each annual and special unit 9 31 owners meeting not less than ten days and not more than sixty 9 32 days before the meeting date. Each meeting notice shall state 9 33 the time, date, and place of the meeting and the items on the 9 34 agenda in a manner reasonably calculated to apprise the unit 9 35 owners of that information, including but not limited to: 10 1 (1) A statement of the general nature of any proposed 10 2 amendment to the declaration or bylaws. 10 3 (2) A statement describing any budget changes. 10 4 (3) Any proposal to remove an officer or member of the 10 5 executive board. 10 6 d. The requirements relating to the timing of meeting 10 7 notices under paragraph "c" may be reduced or waived for a 10 8 meeting called to address an emergency. A meeting called to 10 9 address an emergency shall be limited to matters arising out 10 10 of the emergency. 10 11 e. Each unit owner shall be given a reasonable opportunity 10 12 at any meeting to comment on any matter affecting the common 10 13 interest community or the unit owners association or only on 10 14 the emergency being addressed, if applicable. 10 15 f. The declaration or bylaws may allow for meetings of 10 16 unit owners to be conducted by telephonic, video, or other 10 17 conferencing methods, if such methods are consistent with 10 18 subsection 2, paragraph "g". 10 19 2. Meetings of the executive board and meetings of 10 20 committees of the unit owners association, authorized to act 10 21 for the unit owners association, shall comply with all of the 10 22 following: 10 23 a. Meetings shall be open to the unit owners except during 10 24 executive sessions. The executive board and committees of the 10 25 unit owners association authorized to act for the association 10 26 may hold an executive session only during a regular or special 10 27 meeting of the board or the committee. No final vote or final 10 28 action may be taken during an executive session. An executive 10 29 session may only be held for the following reasons: 10 30 (1) To consult with the unit owners association's attorney 10 31 concerning legal matters governed by attorney=client privilege. 10 32 (2) To discuss existing or potential litigation or 10 33 mediation, arbitration, or governmental administrative 10 34 proceedings. 10 35 (3) To discuss matters relating to the job performance, 11 1 compensation, or health records of an individual employee or 11 2 specific complaints against an individual employee of the 11 3 unit owners association or against an independent contractor 11 4 retained by the unit owners association. 11 5 (4) To discuss contracts, leases, and other commercial 11 6 transactions for goods or services that are under negotiation, 11 7 including the review of bids or proposals, if public disclosure 11 8 of such matters would place the unit owners association at a 11 9 disadvantage. 11 10 (5) To discuss personal, health, or financial information 11 11 relating to a unit owner, a specific employee of the unit 11 12 owners association, or a specific employee of an independent 11 13 contractor retained by the unit owners association, including 11 14 any records of the unit owners association relating to such 11 15 information. 11 16 b. Executive board members shall not use incidental or 11 17 social gatherings of board members or any other method to 11 18 evade the meeting and notice requirements of this section. 11 19 For purposes of this section, a gathering of board members at 11 20 which the board members do not conduct unit owners association 11 21 business is not a meeting of the executive board. 11 22 c. During a period of declarant control, the executive board 11 23 shall meet at least one time each year. At least one of the 11 24 meetings shall be held at the common interest community or at 11 25 a place convenient to the unit owners of the common interest 11 26 community. After termination of the period of declarant 11 27 control, all executive board meetings shall be held at the 11 28 common interest community or at a place convenient to the unit 11 29 owners of the common interest community unless the unit owners 11 30 amend the bylaws to vary the location of such meetings. 11 31 d. Unless the meeting is called to address an emergency, 11 32 at each executive board meeting, the executive board shall 11 33 provide a reasonable opportunity for unit owners to comment on 11 34 any matter affecting the common interest community and the unit 11 35 owners association. 12 1 e. Unless the meeting is included in a schedule given to the 12 2 unit owners or the meeting is called to address an emergency, 12 3 the secretary or other officer specified in the bylaws shall 12 4 give notice of each executive board meeting to each executive 12 5 board member and to each unit owner. Such notice shall be 12 6 given at least ten days before the meeting and shall state the 12 7 time, date, place, and agenda of the meeting. 12 8 f. If any materials are distributed to the executive board 12 9 before a meeting, the executive board, upon receipt of the 12 10 materials, shall make copies reasonably available to unit 12 11 owners, except that the executive board is not required to make 12 12 available copies of unapproved minutes or materials that are to 12 13 be considered during an executive session. 12 14 g. Unless otherwise provided in the declaration or bylaws, 12 15 the executive board may conduct a meeting by telephonic, 12 16 video, or other conferencing methods if all of the following 12 17 conditions are met: 12 18 (1) The meeting notice states the conferencing method to 12 19 be used and provides information explaining how unit owners 12 20 may participate in the conference directly or by meeting at a 12 21 central location or conference connection. 12 22 (2) The process provides all unit owners the opportunity 12 23 to hear or perceive the discussion and to comment on matters 12 24 before the executive board. 12 25 h. Following termination of the period of declarant control, 12 26 unit owners may amend the bylaws to vary the procedures for 12 27 meetings described in paragraph "g". 12 28 i. In lieu of a meeting, the executive board may act by 12 29 unanimous consent if such action is documented in a record 12 30 authenticated by all executive board members. The secretary 12 31 shall give prompt notice to all unit owners of any action 12 32 taken by unanimous consent. After termination of the period 12 33 of declarant control, an executive board may act by unanimous 12 34 consent only to undertake ministerial actions or to implement 12 35 actions previously taken at a meeting of the executive board. 13 1 j. Unless otherwise restricted by this chapter or the common 13 2 interest community's bylaws, an executive board may determine 13 3 rules of procedure for the executive board. 13 4 k. An executive board may remove any person from a meeting 13 5 of the executive board upon a finding by a majority of the 13 6 board members that the person is being disruptive to the 13 7 meeting. An executive board may bar any person from meetings 13 8 of the executive board or other meetings of the common interest 13 9 community for a period of up to one year if the person has 13 10 been twice removed from a meeting within the preceding twelve 13 11 months. 13 12 l. An action by an executive board that is not in compliance 13 13 with this section is valid unless invalidated by a court. A 13 14 challenge to the validity of an action of the executive board 13 15 for failure to comply with this section shall not be brought 13 16 more than sixty days after the minutes of the executive board 13 17 meeting at which the action was taken are approved or the 13 18 record of that action is distributed to unit owners, whichever 13 19 is later. 13 20 Sec. 9. NEW SECTION. 499C.402 Association records. 13 21 1. A unit owners association shall retain all of the 13 22 following: 13 23 a. Detailed records of receipts and expenditures relating to 13 24 the operation and administration of the unit owners association 13 25 and other appropriate accounting records. 13 26 b. Minutes of all unit owners meetings and executive board 13 27 meetings, a record of all actions taken by the unit owners or 13 28 the executive board without a meeting, and a record of all 13 29 actions taken by a committee in place of the executive board on 13 30 behalf of the unit owners association. The minutes retained 13 31 by the unit owners association shall indicate the date, time, 13 32 and place of the meeting, the names of all persons present 13 33 at the meeting, and each action taken at the meeting. The 13 34 minutes shall also include the results of each vote taken at 13 35 the meeting, including information indicating the vote of each 14 1 executive board member present at the meeting. The vote of 14 2 each executive board member present shall be made public at the 14 3 open session. 14 4 c. The names of all unit owners in a form that permits 14 5 preparation of a list of the names of all owners and the 14 6 regular mail and electronic mail addresses at which the unit 14 7 owners association communicates with them, and the number of 14 8 votes each unit owner is entitled to cast. 14 9 d. The unit owners association's original and amended 14 10 organizational documents, bylaws including all amendments to 14 11 the bylaws, and all rules of the common interest community 14 12 currently in effect. 14 13 e. All financial statements and tax returns of the unit 14 14 owners association for the past three years. 14 15 f. A list of the names and addresses of the current 14 16 executive board members and officers. 14 17 g. The unit owners association's most recent annual report 14 18 delivered to the secretary of state, if applicable. 14 19 h. Copies of each contract to which the unit owners 14 20 association is currently a party. 14 21 i. Records of executive board or committee actions relating 14 22 to requests for design or architectural approval from unit 14 23 owners. 14 24 j. Ballots, proxies, and other records related to voting by 14 25 unit owners for one year after the election, action, or vote. 14 26 2. Except as provided under subsections 3 and 4, all records 14 27 retained by a unit owners association must be available for 14 28 examination and copying by a unit owner or the unit owner's 14 29 authorized agent during reasonable business hours or at a 14 30 mutually convenient time and location upon providing a five 14 31 days' notice that reasonably identifies the specific records 14 32 that are being requested. 14 33 3. Records retained by a unit owners association may be 14 34 withheld from inspection and copying to the extent that they 14 35 concern: 15 1 a. Personally identifiable information, salary, and medical 15 2 records relating to specific individuals. 15 3 b. Information relating to contracts, leases, and other 15 4 commercial transactions to purchase or provide goods or 15 5 services, that are currently under negotiation. 15 6 c. Information relating to existing or potential litigation, 15 7 mediation, arbitration, or governmental administrative 15 8 proceedings. 15 9 d. Information relating to existing or potential matters 15 10 involving governmental administrative proceedings or other 15 11 proceedings before a government tribunal for enforcement of the 15 12 declaration, bylaws, or rules. 15 13 e. Communications with the unit owners association attorney 15 14 which are otherwise protected by the attorney=client privilege 15 15 or the attorney work=product doctrine. 15 16 f. Information that if disclosed would violate another 15 17 provision of law. 15 18 g. Records of an executive session of the executive board. 15 19 However, upon the completion of a matter that is the subject of 15 20 an executive session held under section 499C.401, subsection 15 21 2, paragraph "a", subparagraphs (1) through (4), such records 15 22 of the executive session shall be available for inspection as 15 23 provided in this section. 15 24 h. Records directly related to the personal, health, or 15 25 financial information of a unit owner, if the person requesting 15 26 the records is not the unit owner that is the subject of the 15 27 records. 15 28 4. A unit owners association may charge a reasonable fee 15 29 for providing copies of any records under this section and for 15 30 supervising the inspection of such records. 15 31 5. The right to inspect records under this section includes 15 32 the right to copy records by photocopying or other means and 15 33 includes the right to receive copies through an electronic 15 34 transmission, if available, upon request of the requester. 15 35 6. A unit owners association is not obligated to compile or 16 1 synthesize information or records under this section. 16 2 7. Information or records obtained under this section shall 16 3 not be used for commercial purposes. 16 4 Sec. 10. NEW SECTION. 499C.403 Notice to unit owners. 16 5 1. A unit owners association or an executive board, as 16 6 applicable, shall deliver each notice required to be given by 16 7 the association or board under this chapter to the regular mail 16 8 address or electronic mail address provided by each unit owner. 16 9 If a regular mail address or electronic mail address is not 16 10 provided by the unit owner, the notice may be delivered using 16 11 any of the following methods: 16 12 a. Hand delivery to the unit owner. 16 13 b. Mailing by certified mail, as defined in section 618.15, 16 14 or by regular mail to the address of the unit. 16 15 c. Any other method reasonably calculated to provide notice 16 16 to the unit owner. 16 17 2. The ineffectiveness of a good=faith effort to deliver 16 18 notice under subsection 1 does not invalidate an action taken 16 19 at a meeting or an action taken by other means. 16 20 Sec. 11. NEW SECTION. 499C.501 Cause of action ==== attorney 16 21 fees. 16 22 A declarant, unit owners association, unit owner, or any 16 23 other person subject to this chapter may bring an action to 16 24 enforce a right granted or obligation imposed by this chapter, 16 25 the declaration, or the bylaws. In any action under this 16 26 chapter, the court may award reasonable attorney fees to the 16 27 prevailing party. 16 28 DIVISION II 16 29 CORRESPONDING CHANGES 16 30 Sec. 12. NEW SECTION. 499A.201 Applicability. 16 31 This chapter shall apply to cooperatives established under 16 32 this chapter unless otherwise provided in chapter 499C. 16 33 Sec. 13. NEW SECTION. 499B.1A Applicability. 16 34 This chapter applies to horizontal property regimes 16 35 established under this chapter unless otherwise provided in 17 1 chapter 499C. 17 2 Sec. 14. Section 499B.15, subsection 2, Code 2016, is 17 3 amended by striking the subsection. 17 4 Sec. 15. NEW SECTION. 499B.22 Board of administration ==== 17 5 meetings and records. 17 6 1. For horizontal property regimes with eight or more 17 7 apartments, if the form of administration is a board of 17 8 administration, the board of administration shall comply with 17 9 the requirements of chapter 499C. 17 10 2. For horizontal property regimes with seven or less 17 11 apartments, if the form of administration is a board of 17 12 administration, the board of administration shall comply 17 13 with the requirements of section 499C.401, subsection 2, and 17 14 sections 499C.402 and 499C.403. 17 15 EXPLANATION 17 16 The inclusion of this explanation does not constitute agreement with 17 17 the explanation's substance by the members of the general assembly. 17 18 Division I of this bill creates an Iowa common interest 17 19 ownership Act, new Code chapter 499C. The bill provides that 17 20 it is the public policy of the state that the management and 17 21 affairs of common interest communities be conducted openly and 17 22 that the new Code chapter is to be construed to provide open 17 23 access to the management of the common interest community for 17 24 the unit owners. 17 25 New Code chapter 499C defines "common interest community" 17 26 to mean real estate described in a declaration with respect 17 27 to which a person, by virtue of the person's ownership of a 17 28 unit, is obligated to pay for a share of real estate taxes, 17 29 insurance premiums, maintenance, or improvement of, or services 17 30 or other expenses related to, common elements, other units, or 17 31 other real estate described in the declaration. Cooperatives 17 32 under Code chapter 499A and horizontal property regimes under 17 33 Code chapter 499B are also defined to be common interest 17 34 communities. The bill specifies that a common interest 17 35 community does not include a covenant that requires the owners 18 1 of separate parcels of real estate to share certain costs or 18 2 other obligations, unless all such owners consent in writing 18 3 to the creation of a common interest community, and does not 18 4 include a community where all units are owned by a single 18 5 owner. 18 6 The bill does not allow for the provisions of new Code 18 7 chapter 499C to be varied by agreement, and rights conferred by 18 8 new Code chapter 499C may not be waived. 18 9 The bill specifies that unless otherwise provided by law new 18 10 Code chapter 499C applies to all common interest communities 18 11 established within this state having eight or more units. 18 12 However, the bill provides that for horizontal property regimes 18 13 with seven or fewer apartments, if the form of administration 18 14 is a board of administration, the board of administration must 18 15 comply with specified requirements of new Code chapter 499C 18 16 regarding meetings, records, and notice. 18 17 The bill establishes requirements and procedures for common 18 18 interest communities, unit owners associations, and executive 18 19 boards. 18 20 The bill provides that the membership of a unit owners 18 21 association shall at all times consist exclusively of all unit 18 22 owners except following termination of the common interest 18 23 community, at which time the unit owners association shall 18 24 consist of all former unit owners entitled to distributions 18 25 of proceeds or their heirs, successors, or assigns. The bill 18 26 requires each unit owners association to have an executive 18 27 board. A unit owners association must be organized as a 18 28 for=profit or nonprofit corporation, trust, limited liability 18 29 company, partnership, unincorporated association, or any 18 30 other form of organization authorized by the laws of this 18 31 state. The bill provides that the requirements of new Code 18 32 chapter 499C relating to a unit owners association preempt 18 33 any conflicting provision of the statute under which the unit 18 34 owners association is organized. 18 35 The bill specifies the duties and powers of a unit owners 19 1 association, including powers of the unit owners association 19 2 for enforcement of the provisions of declaration, bylaws, or 19 3 rules. 19 4 The bill specifies the duties and powers of an executive 19 5 board. An executive board, except as otherwise provided in the 19 6 declaration, the bylaws, or other provision of law, acts on 19 7 behalf of the unit owners association. The bill specifies the 19 8 duty of care required for members and officers of the executive 19 9 board. 19 10 The bill establishes requirements relating to meetings of 19 11 unit owners associations, executive boards, and committees 19 12 of such entities including requirements for the contents 19 13 of meeting notices, allowable actions during meetings, 19 14 requirements relating to unit owner comments, and the manner 19 15 in which meetings may be conducted. The bill also specifies 19 16 the manner and the reasons for which certain meetings may be 19 17 called. 19 18 The bill enacts requirements relating to the retention of 19 19 records by unit owners associations and specifies the records 19 20 retained by a unit owners association which may be withheld 19 21 from inspection and copying. 19 22 The bill requires a unit owners association or executive 19 23 board, as applicable, to deliver each notice required to be 19 24 given by the association under new Code chapter 499C to the 19 25 regular mail address or electronic mail address provided by 19 26 each unit owner. If a regular mail or electronic mail address 19 27 is not provided by the unit owner, the unit owners association 19 28 may deliver the notice by a different method specified in 19 29 the bill. The bill provides that the ineffectiveness of a 19 30 good=faith effort to deliver notice does not invalidate an 19 31 action taken at a meeting or an action taken by other means. 19 32 The bill provides that a declarant, unit owners association, 19 33 unit owner, or any other person subject to new Code chapter 19 34 499C may bring an action to enforce a right granted or 19 35 obligation imposed by the Code chapter, the declaration, or the 20 1 bylaws. In any such action, the court may award reasonable 20 2 attorney fees to the prevailing party. 20 3 Division II of the bill makes corresponding changes relating 20 4 to the enactment of new Code chapter 499C. LSB 5138YH (3) 86 md/sc
