Bill Text: IA SF2012 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act relating to the revival of lapsed use restrictions by a common interest community. (See SF 2282.)
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2016-01-13 - Subcommittee, Hogg, Schneider, and Sodders. S.J. 62. [SF2012 Detail]
Download: Iowa-2015-SF2012-Introduced.html
Senate File 2012 - Introduced SENATE FILE BY HART A BILL FOR 1 An Act relating to the revival of lapsed use restrictions by a 2 common interest community. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5063XS (3) 86 jh/sc 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. "Bylaws" means the instruments, however denominated, 1 5 that contain the procedures for conducting the affairs of the 1 6 homeowners' association or the executive board regardless of 1 7 the form in which the homeowners' association is organized, 1 8 including any amendments to such instruments. 1 9 2. a. "Common interest community" means real estate 1 10 described in a declaration with respect to which a person, by 1 11 virtue of the person's ownership of a parcel, is obligated 1 12 to pay for a share of real estate taxes, insurance premiums, 1 13 maintenance, or improvement of, or services or other expenses 1 14 related to, common elements, other parcels, or other real 1 15 estate described in the declaration. "Common interest 1 16 community" includes a cooperative under chapter 499A and a 1 17 horizontal property regime under chapter 499B. 1 18 b. "Common interest community" does not include a covenant 1 19 that requires the owners of separate parcels of real estate to 1 20 share costs or other obligations related to a wall, driveway, 1 21 well, or other similar structure, unless all such owners 1 22 consent in writing to the creation of a common interest 1 23 community. 1 24 3. "Declaration" means a recorded written instrument in the 1 25 nature of covenants running with the land that subject the land 1 26 comprising the common interest community to the jurisdiction 1 27 and control of a homeowners' association in which the owners of 1 28 the parcels are required to be members. 1 29 4. "Executive board" means the body, regardless of name, 1 30 designated in the declaration, formation document, or bylaws to 1 31 act on behalf of the homeowners' association. 1 32 5. "Formation document" means the document filed with the 1 33 secretary of state that creates a business entity, including 1 34 but not limited to articles of incorporation, articles of 1 35 organization, and a certificate of organization. 2 1 6. "Homeowners' association" means an entity responsible 2 2 for the operation of a common interest community in which the 2 3 voting membership is made up of parcel owners and in which 2 4 membership is a mandatory condition of parcel ownership, and 2 5 which is authorized to impose assessments that, if unpaid, may 2 6 become a lien on the parcel. 2 7 7. "Parcel" means a physical portion of the common interest 2 8 community designated for separate ownership or occupancy or 2 9 as otherwise defined in the statute under which the common 2 10 interest community is organized. 2 11 8. "Parcel owner" means the record owner of legal title to 2 12 a parcel or, if the parcel is subject to a contract for deed, 2 13 the vendee of the real estate contract. "Parcel owner" does 2 14 not include a person having an interest in a parcel solely as 2 15 security for an obligation. 2 16 9. "Use restrictions" means the same as defined in section 2 17 614.24, subsection 5. 2 18 Sec. 2. NEW SECTION. 564B.2 Revival of use restrictions. 2 19 Parcel owners in a common interest community may revive use 2 20 restrictions in a declaration that have become unenforceable 2 21 by operation of section 614.24 if all of the following 2 22 requirements are met: 2 23 1. All parcels which will be subject to the revived use 2 24 restrictions were previously subject to the use restrictions. 2 25 2. The affected parcel owners approve the revived use 2 26 restrictions in the manner provided in this chapter. 2 27 Sec. 3. NEW SECTION. 564B.3 Procedure to revive use 2 28 restrictions. 2 29 1. The proposal to revive use restrictions may contain 2 30 less than all of the use restrictions which have become 2 31 unenforceable by operation of section 614.24, but shall not 2 32 modify any use restriction sought to be revived. 2 33 2. The proposal to revive use restrictions in a declaration 2 34 under the terms of this chapter may be initiated by either of 2 35 the following: 3 1 a. The executive board. 3 2 b. The parcel owners, if a petition is signed by parcel 3 3 owners who own at least ten percent of the parcels. Such 3 4 petition shall include the language of the use restrictions 3 5 proposed to be revived. 3 6 3. If a proposal is initiated under subsection 2, the 3 7 executive board shall prepare or cause to be prepared the 3 8 complete text of the proposed use restrictions to be submitted 3 9 to the affected parcel owners for approval. 3 10 4. a. The executive board shall present or cause to be 3 11 presented to all of the affected parcel owners, by mail or hand 3 12 delivery, all of the following: 3 13 (1) A notice containing either the place, date, and time of 3 14 the meeting at which the revival of the use restrictions will 3 15 be considered and voted upon or instructions for an action by 3 16 written ballot, including the last date that a written ballot 3 17 will be accepted. 3 18 (2) A copy of the complete text of the use restrictions 3 19 proposed to be revived. 3 20 (3) The existing declaration, formation document, and 3 21 bylaws of the homeowners' association. 3 22 (4) A graphic depiction of the property and the parcels to 3 23 be governed by the revived use restrictions. 3 24 (5) A statement that the use restrictions will be revived 3 25 if parcel owners who own a majority of the affected parcels 3 26 approve revival. 3 27 b. The parcel owners entitled to receive notice and the 3 28 materials described in paragraph "a" are the owners of affected 3 29 parcels as of the close of business on the business day 3 30 preceding the day on which notice is given. 3 31 5. The use restrictions contained in the proposal shall be 3 32 revived if the owners of a majority of the affected parcels 3 33 approve the revived use restrictions by a vote at a meeting of 3 34 the affected parcel owners conducted in the manner described in 3 35 section 564B.4 or in an action by written ballot as described 4 1 in section 564B.5, and shall be effective in accordance with 4 2 section 564B.7. 4 3 Sec. 4. NEW SECTION. 564B.4 Meetings to revive use 4 4 restrictions. 4 5 1. A vote to revive use restrictions shall not be held 4 6 unless the parcel owners described in section 564B.3, 4 7 subsection 4, paragraph "b", received the notice and documents 4 8 specified in section 564B.3, subsection 4, not less than 4 9 fourteen days or more than sixty days before such a vote. 4 10 2. A quorum shall be met if parcel owners who own a majority 4 11 of the affected parcels are present at the meeting, either in 4 12 person or by proxy. 4 13 3. The parcel owners entitled to vote at the meeting are the 4 14 owners of affected parcels as of the date of the meeting. 4 15 4. At the meeting, there shall be one vote per parcel, 4 16 regardless of the number of parcel owners who own such parcel. 4 17 5. a. The parcel owners have the right to vote in person 4 18 or by proxy. 4 19 b. To be valid, a proxy must be dated, shall state the date, 4 20 time, and place of the meeting for which the proxy was given, 4 21 and shall be signed by the parcel owner. If a parcel is owned 4 22 by more than one person, each owner of the parcel shall sign 4 23 the proxy for such proxy to be valid. 4 24 c. A proxy is effective only for the specific meeting for 4 25 which the proxy was originally given. 4 26 d. A proxy is revocable at any time at the discretion of a 4 27 parcel owner who executed the proxy. 4 28 e. If the proxy form expressly so provides, any proxy holder 4 29 may appoint, in writing, a substitute to act in the proxy 4 30 holder's place. 4 31 Sec. 5. NEW SECTION. 564B.5 Action by written ballot. 4 32 1. A vote to revive use restrictions may be taken without a 4 33 meeting if the executive board delivers a written ballot with 4 34 the notice and other documents required to be delivered under 4 35 section 564B.3, subsection 4, to the owners of every affected 5 1 parcel. 5 2 2. A written ballot shall set forth the use restrictions 5 3 proposed to be revived and provide an opportunity to vote for 5 4 or against revival. 5 5 3. One written ballot shall be provided for each parcel, 5 6 regardless of the number of parcel owners who own such parcel. 5 7 4. The deadline for the written ballot to be received to 5 8 be counted shall be at least fourteen days, but not more than 5 9 sixty days, after the written ballot was delivered. 5 10 5. A written ballot that has been cast shall not be revoked. 5 11 Sec. 6. NEW SECTION. 564B.6 Recording and notice of 5 12 recording. 5 13 1. No later than thirty days after the parcel owners have 5 14 approved the revival of the use restrictions, the executive 5 15 board shall file the revived use restrictions with the recorder 5 16 of each county in which the land comprising the common interest 5 17 community is located. 5 18 2. Immediately after recording the revived use 5 19 restrictions, the executive board shall mail or deliver, or 5 20 shall cause to be mailed or delivered, a complete copy of the 5 21 revived use restrictions to each parcel owner. 5 22 Sec. 7. NEW SECTION. 564B.7 Effect of revived use 5 23 restrictions. 5 24 1. The revived use restrictions shall be effective upon 5 25 recordation with respect to each affected parcel, regardless 5 26 of whether an owner of an affected parcel approved the revived 5 27 use restrictions. 5 28 2. The revived use restrictions shall not be given 5 29 retroactive effect with respect to any affected parcel. 5 30 3. A use restriction revived under this chapter shall not be 5 31 enforced against a parcel if each of the following are true: 5 32 a. A parcel owner made a good=faith investment that would be 5 33 impaired by such enforcement. 5 34 b. The good=faith investment described in paragraph "a" was 5 35 made after the use restriction was unenforceable under section 6 1 614.24 and before the use restriction was revived pursuant to 6 2 this chapter. 6 3 Sec. 8. Section 614.24, Code 2016, is amended by adding the 6 4 following new subsection: 6 5 NEW SUBSECTION. 4A. If use restrictions are revived 6 6 pursuant to chapter 564B, the recording date for purposes of 6 7 the twenty=one year limitation in subsection 1 shall be the 6 8 date the revived use restrictions are recorded under section 6 9 564B.6, subsection 1. 6 10 Sec. 9. APPLICABILITY. This Act applies to common interest 6 11 communities created prior to, and still in existence on, July 6 12 1, 2016, and created on or after July 1, 2016. 6 13 EXPLANATION 6 14 The inclusion of this explanation does not constitute agreement with 6 15 the explanation's substance by the members of the general assembly. 6 16 This bill relates to the ability of a common interest 6 17 community to revive lapsed use restrictions. 6 18 The bill defines "common interest community" as real 6 19 estate described in a declaration with respect to which a 6 20 person, by virtue of the person's ownership of a parcel, is 6 21 obligated to pay for a share of real estate taxes, insurance 6 22 premiums, maintenance, or improvement of, or services or other 6 23 expenses related to, common elements, other parcels, or other 6 24 real estate described in the declaration. "Common interest 6 25 community" includes a cooperative under Code chapter 499A and a 6 26 horizontal property regime under Code chapter 499B. 6 27 The bill references the definition of "use restriction" in 6 28 Code section 614.24, which is a limitation or prohibition on 6 29 the rights of a landowner to make use of the landowner's real 6 30 estate, including limitations or prohibitions on commercial 6 31 uses, rental use, parking and storage of recreational vehicles 6 32 and their attachments, ownership of pets, outdoor domestic 6 33 uses, construction and use of accessory structures, building 6 34 dimensions and colors, building construction materials, and 6 35 landscaping. "Use restriction" does not include an easement 7 1 granting a person an affirmative right to use land in the 7 2 possession of another person, including but not limited to an 7 3 easement for pedestrian or vehicular access, reasonable ingress 7 4 and egress, solar access, utilities, supporting utilities, 7 5 parking areas, bicycle paths, and water flow, an agreement 7 6 between two or more parcel owners providing for the sharing of 7 7 costs and other obligations for real estate taxes, insurance 7 8 premiums, and for maintenance, repair, improvements, services, 7 9 or other costs related to two or more parcels of real estate 7 10 regardless of whether the parties to the agreement are owners 7 11 of individual lots or incorporated or unincorporated lots 7 12 or have ownership interests in common areas in a horizontal 7 13 property regime or residential housing development, or an 7 14 agreement between two or more parcel owners for the joint use 7 15 and maintenance of driveways, party walls, landscaping, fences, 7 16 wells, roads, common areas, waterways, or bodies of water. 7 17 Under Code section 614.24, an action arising or existing 7 18 by reason of the provisions of any contract providing for use 7 19 restrictions in and to real estate may not be maintained after 7 20 21 years from the recording of the contract unless a claimant 7 21 has filed a verified claim with the county recorder within 7 22 the 21=year period. Therefore, if a homeowners' association 7 23 or other claimant does not file a verified claim regarding a 7 24 common interest community's declaration before the expiration 7 25 of the 21=year period, the use restrictions in the declaration 7 26 become unenforceable. 7 27 The bill enacts new Code chapter 564B to provide a mechanism 7 28 for common interest communities to revive use restrictions 7 29 which have become barred by operation of Code section 614.24. 7 30 A proposal to revive use restrictions may be brought by the 7 31 executive board of the homeowners' association or by petition 7 32 of parcel owners who own at least 10 percent of the affected 7 33 parcels. 7 34 The bill specifies the form of the notice the executive board 7 35 shall provide to parcel owners regarding a proposal for the 8 1 revival of use restrictions. The proposal may be voted upon at 8 2 a meeting which shall be held no less than 14 days and no more 8 3 than 60 days after notice was provided to the parcel owners. 8 4 The proposal may also be voted on by written ballot. If the 8 5 vote is by written ballot, the notice must specify when ballots 8 6 are due, which must be no earlier than 14 days and no later than 8 7 60 days after the written ballots were delivered. 8 8 Upon proper notice, if the owners of a majority of the 8 9 affected parcels in the common interest community approve the 8 10 revival of lapsed use restrictions, the lapsed use restrictions 8 11 are revived as to all parcels in the common interest community. 8 12 The revived use restrictions become effective upon 8 13 recordation. The revived use restrictions are not given 8 14 retroactive applicability. Revived use restrictions may not be 8 15 enforced against a parcel if a parcel owner made a good=faith 8 16 investment that would be impaired by such enforcement and such 8 17 investment was made while the use restriction was unenforceable 8 18 under Code section 614.24 and before the use restriction was 8 19 revived under new Code chapter 564B. 8 20 The bill provides that if use restrictions are revived under 8 21 new Code chapter 564B, the 21=year limitation period under Code 8 22 chapter 614.24 begins as of the recordation date of the revived 8 23 use restrictions. 8 24 The bill applies to common interest communities created 8 25 prior to, and still in existence on, July 1, 2016, and created 8 26 on or after July 1, 2016. LSB 5063XS (3) 86 jh/sc
