West Virginia-2016-HB4231-Introduced

In the declaration and bylaws (section one hundred six, article three of this chapter), unless specifically provided otherwise or the context otherwise requires, and in this chapter:

(1) "Affiliate of a declarant" means any person who controls, is controlled by, or is under common control with a declarant. For purposes of this definition:

(A) A person "controls" a declarant if the person: (i) Is a general partner, officer, director or employer of the declarant; (ii) directly or indirectly or acting in concert with one or more other persons, or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than twenty percent of the voting interest in the declarant; (iii) controls in any manner the election of a majority of the directors of the declarant; or (iv) has contributed more than twenty percent of the capital of the declarant.

(B) A person "is controlled by" a declarant if the declarant: (i) Is a general partner, officer, director or employer of the person; (ii) directly or indirectly or acting in concert with one or more other persons, or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than twenty percent of the voting interest in the person; (iii) controls in any manner the election of a majority of the directors of the person; or (iv) has contributed more than twenty percent of the capital of the person; and

(C) Control does not exist if the powers described in this paragraph are held solely as security for an obligation and are not exercised.

(2) "Allocated interests" means the following interests allocated to each unit:

(A) In a condominium, the undivided interest in the common elements, the common expense liability, and votes in the association;

(B) In a cooperative, the common expense liability, and the ownership interest, and votes in the association; and

(3) “Assessment” means the sum attributable to each unit and due to the association pursuant to section one hundred fifteen, article three of this chapter.

~~(3)~~ (4) "Association" or "unit owners association" means the unit owners association organized under section one hundred one, article three of this chapter.

(5) “Bylaws” means instruments, however denominated, that contain the procedures for conduct of the affairs of the association regardless of the form in which the association is organized, including any amendments to the instruments.

~~(4)~~ (6) "Common elements" means:

(A) In the case of: (i) A condominium or cooperative, all portions of the common interest community other than the units; and

(ii) In A planned community, any real estate within a planned community which is owned or leased by the association, other than a unit; and

(B) In all common interest communities, any other interests in real estate for the benefit of unit owners which are subject to the declaration.

~~(5)~~ (7) "Common expenses" means expenditures made by, or financial liabilities of, the association, together with any allocations to reserves.

~~(6)~~ (8) "Common expense liability" means the liability for common expenses allocated to each unit pursuant to section one hundred seven, article two of this chapter.

~~(7)~~ (9) "Common interest community" means real estate described in a declaration with respect to which a person, by virtue of his the person’s ownership of a unit, is obligated to pay for a share of real estate taxes, insurance premiums, maintenance, or improvement of, or service or other expenses related to, common elements, other units, or other real estate described in a the declaration: Provided, That any resort owner which, prior to the effective date of this article, began the development of a resort and imposed fees or assessments upon owners of real estate in the resort for maintenance and care of the roads, streets, alleys, sidewalks, parks, common areas and common facilities in and around the resort, for fire and police protection and for such other services as may be made available to owners of real estate, may also impose the same fees and assessments to be used for the same or similar purposes upon persons purchasing real estate in the resort after the effective date of this article without creating a common interest community. The term does not include an arrangement described in sections two hundred nine and two hundred ten of this article. For purposes of this paragraph, ownership of a unit does not include holding a leasehold interest of less than twenty years in a unit, including renewal options.

~~(8)~~ (10)”Condominium" means a common interest community in which portions of the real estate are designated for separate ownership and the remainder of the real estate is designated for common ownership solely by the owners of those portions. A common interest community is not a condominium unless the undivided interest in the common elements are vested in the unit owners.

~~(9)~~ (11) "Conversion building" means a building that at any time before creation of the common interest community was occupied wholly or partially by persons other than purchasers and persons who that occupy with the consent of purchasers.

~~(10)~~ (12) "Cooperative" means a common interest community in which the real estate is owned by an association, each of whose members is entitled by virtue of his or her ownership interest in the association to exclusive possession of a unit.

~~(11)~~ (13) "Dealer" means a person in the business of selling units for his or her own account.

~~(12)~~ (14) "Declarant" means any person or group of persons acting in concert who: (i)(A) As part of a common promotional plan, offers to dispose of his or the interest of the person or group of persons in a unit not previously disposed of; or (ii)(B) reserves or succeeds to any special declarant right.

~~(13)~~ (15) "Declaration" means any the instruments, however denominated, that create a common interest community, including any amendments to those the instruments.

~~(14)~~ (16) "Development rights" means any right or combination of rights reserved by a declarant in the declaration to: (i)(A) Add real estate to a common interest community; (ii)(B) create units, common elements or limited common elements within a common interest community; (iii) (C) subdivide units or convert units into common elements; or (iv) (D) withdraw real estate from a common interest community.

~~(15)~~ (17) "Dispose" or "disposition" means a voluntary transfer to a purchaser of any legal or equitable interest in a unit, but the term does not include the transfer or release of a security interest.

~~(16)~~ (18) "Executive board" means the body, regardless of name, designated in the declaration or bylaws to act on behalf of the association.

~~(17)~~ (19) "Identifying number" means a symbol or address that identifies only one unit in a common interest community.

~~(18)~~ (20) "Leasehold common interest community" means a common interest community in which all or a portion of the real estate is subject to a lease, the expiration or termination of which will terminate the common interest community or reduce its size.

~~(19)~~ (21) "Limited common element" means a portion of the common elements allocated by the declaration or by operation of subdivision (2) or (4), section one hundred two, article two of this chapter for the exclusive use of one or more but fewer than all of the units.

~~(20)~~ (22) "Master association" means an organization described in section one hundred twenty, article two of this chapter, whether or not it is also an association described in section one hundred one, article three of this chapter.

~~(21)~~ (23) "Offering" means any advertisement, inducement, solicitation or attempt to encourage any person to acquire any interest in a unit, other than as security for an obligation. An advertisement in a newspaper or other periodical of general circulation, or in any broadcast medium to the general public, of a common interest community not located in this state, is not an offering if the advertisement states that an offering may be made only in compliance with the law of the jurisdiction in which the common interest community is located.

~~(22)~~ (24) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, governmental subdivision, or agency, or instrumentality, or any other legal or commercial entity. In the case of a land trust, the corpus of which is real estate, however, "person" the term means the beneficiary of the trust rather than the trust or the trustee.

~~(23)~~ (25) "Planned community" means a common interest community that is not a condominium or a cooperative. A condominium or cooperative may be part of a planned community.

~~(24)~~ (26) "Proprietary lease" means an agreement with the association pursuant to which a member is entitled to exclusive possession of a unit in a cooperative.

~~(25)~~ (27) "Purchaser" means a person, other than a declarant or a dealer, who that by means of a voluntary transfer acquires a legal or equitable interest in a unit other than: (i)(A) A leasehold interest (including renewal options) of less than twenty years; or (ii)(B) as security for an obligation.

~~(26)~~ (28) "Real estate" means any leasehold or other estate or interest in, over, or under land, including structures, fixtures and other improvements and interest that by custom, usage or law pass with a conveyance of land though not described in the contract of sale or instrument of conveyance. "Real estate" The term includes parcels with or without upper or lower boundaries, and spaces that may be filled with air or water.

(29) “Record”, used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

~~(27)~~ (30) "Residential purposes" means use for dwelling or recreational purposes, or both.

(31) “Rule” means a policy, guideline, restriction, procedure, or regulation of an association, however denominated, which is not set forth in the declaration or bylaws and which governs the conduct of persons or the use or appearance of property.

~~(28)~~ (32) "Resort" means a destination location which consists of: (i)(A) One or more persons offering recreational facilities and services such as skiing, golf, tennis or boating to the general public and commercial facilities such as retail stores, restaurants and hotels or other lodging accommodations; and (ii)(B) at least one hundred residential units, a majority of which are used as vacation or second homes rather than primary residences.

~~(29)~~ (33) "Resort owner" means any person owning or operating substantially all of the recreational facilities located within a resort, or the predecessor in title of any such person.

~~(30)~~ (34) "Security interest" means an interest in real estate or personal property, created by contract or conveyance, which secures payment or performance of an obligation. The term includes a lien created by a mortgage, deed of trust, trust deed, security deed, contract for deed, land sales contract, lease intended as security, assignment of lease or rents intended as security, pledge of an ownership interest in an association, and any other consensual lien or title retention contract intended as security for an obligation.

~~(31)~~ (35) "Special declarant rights" means rights reserved for the benefit of a declarant to:

(i)(A) Complete improvements indicated on plans and plans filed with the declaration pursuant to section one hundred nine, article two of this chapter or, in a cooperative, to complete improvements described in the public offering statement pursuant to subdivision (2), subsection (a), section one hundred three, article four of this chapter;

(ii) (B) exercise any development right pursuant to section one hundred ten, article two of this chapter;

(iii)(C) maintain sales offices, management offices, signs advertising the common interest community, and models pursuant to section one hundred fifteen, article two of this chapter;

(iv)(D) use easements through the common elements for the purpose of making improvements within the common interest community or within real estate which may be added to the common interest community pursuant to section one hundred sixteen, article two of this chapter;

(v)(E) make the common interest community subject to a master association pursuant to section one hundred twenty, article two of this chapter;

(vi)(F) merge or consolidate a common interest community with another common interest community of the same form of ownership pursuant to section one hundred twenty-one, article two of this chapter; or

(vii)(G) appoint or remove any officer of the association or any master association or any executive board member during any period of declarant control pursuant to subsection (d), section one hundred three, article three of this chapter;

(H) Control any construction, design review, or aesthetic standards committee or process;

(ix)(I) Attend meetings of the unit owners and, except during an executive session, the executive board; or

(J) Have access to the records of the association to the same extent as a unit owner.

~~(32)~~ (36) "Time share" means a right to occupy a unit or any of several units during five or more separated time periods over a period of at least five years, including renewal options, whether or not coupled with an estate or interest in a common interest community or a specified portion thereof.

~~(33)~~ (37) "Unit" means a physical portion of the common interest community designated for separate ownership or occupancy, the boundaries of which are described pursuant to subdivision (5), subsection (a), section one hundred five, article two of this chapter. If a unit in a cooperative is owned by a unit owner or is sold, conveyed, voluntarily or involuntarily encumbered or otherwise transferred by a unit owner, the interest in that unit which is owned, sold, conveyed, encumbered, or otherwise transferred is the right to possession of that unit under a proprietary lease, coupled with the allocated interests of that unit, and the association’s interest in that unit is not thereby affected.

(34) (38) "Unit owner" means a declarant or other person who that owns a unit, or a lessee of a unit in a leasehold common interest community whose lease expires simultaneously with any lease, the expiration or termination of which will remove the unit from the common interest community, but does not include a person having an interest in a unit solely as security for an obligation. In a condominium or planned community, the declarant is the owner of any unit created by the declaration. In a cooperative, the declarant is treated as the owner of any unit to which allocated interests have been allocated pursuant to section one hundred seven, article two of this chapter) until that unit has been conveyed to another person.

§36B-1-104. No variation by agreement.

§36B-1-204. Applicability to preexisting common interest communities.

(a) Except as provided in section 1-205, Same; exception for small preexisting cooperatives and planned communities, sections 1-105 (separate titles and taxation), 1-106 (Applicability of local ordinances, regulations and building codes), 1-107 (Eminent domain), 2-103 (Construction and validity of declaration and bylaws), 2-104 (Description of units), 2-121 (Merger or consolidation of common interest communities), 3-102(a)(1) through (6) and (11) through (16) (Powers of unit owners' association), 3-111 (Tort and contract liability), 3-116 (Lien for assessments), 3-118 (Association records), 4-109 (Resales of units), and 4-117 (Effect of violation on rights of action; attorney's fees), and section 1-103 (Definitions) to the extent necessary in construing any of those sections, apply to all common interest communities created in this state before the effective date of this chapter; but those sections apply only with respect to events and circumstances occurring after the effective date of this chapter and do not invalidate existing provisions of the declaration, bylaws or plats or plans of those common interest communities. Except for a cooperative or planned community described in section two hundred five of this article (same-exception for small preexisting cooperatives and planned communities), or a nonresidential common interest community described in section two hundred seven (same; exception for small preexisting cooperatives and planned communities), the following sections apply to a common interest community created in this state before the effective date of this article:

(1) Section one hundred five of this article (separate titles and taxation);

(2) Section one hundred six of this article (applicability of local ordinances, regulations, and building codes);

(3) Section one hundred seven of this article (eminent domain);

(4) Section two hundred six of this article (amendments to governing instruments);

(5) Section one hundred two, article two of this chapter (unit boundaries);

(6) Section one hundred three, article two of this chapter (construction and validity of declaration and bylaws);

(7) Section one hundred four, article two of this chapter (description of units);

(8) Subsections (h) and (i), section one hundred seventeen, article two (amendment of declaration);

(9) Section one hundred twenty-one, article two of this chapter (merger or consolidation of common interest communities);

(10) Section one hundred twenty-four, articled two of this chapter (termination following catastrophe);

(11) Subdivisions (1) through (6) and (11) through (16), subsection (a), section one hundred two, article three of this chapter (powers and duties of unit owners association);

(12) Section one hundred three, article three of this chapter (executive board members and officers);

(13) Section one hundred eight, article three (meetings);

(14) Section one hundred eleven, article three of this chapter (tort and contract liability);

(15) Section one hundred sixteen, article three of this chapter (lien for assessments);

(16) Section one hundred eighteen, article three of this chapter (association records);

(17) Section one hundred twenty-four, article three of this chapter (litigation involving declarant);

(18) Section one hundred nine, article four of this chapter (resale of units);

(19) Section one hundred seventeen, article four of this chapter (effect of violation on rights of action; attorney’s fees); and

(20) Section one hundred three of this article (definitions) to the extent necessary to construe any of those sections.

(b) The sections described in subsection (a) apply only to events and circumstances occurring after the effective date of this chapter and do not invalidate existing provisions of the declaration, bylaws, or plats or plans of those common interest communities.

~~(b)~~ (c) The provisions of chapter one hundred fifty-three, Acts of the Legislature, 1963, chapter one hundred twenty-nine, Acts of the Legislature, 1980, or of chapter thirty-eight, Acts of the Legislature, 1984, do not apply to condominiums or other common interest communities created after the effective date of this chapter and do not invalidate any amendment to the declaration, rules, bylaws, plats and plans and code of regulations of any condominium or common interest community created before the effective date of this chapter if the amendment would be permitted by this chapter. The amendment must be adopted in conformity with the procedures and requirements specified by those instruments and by chapter one hundred fifty-three, Acts of the Legislature, 1963. If the amendment grants to any person any rights, powers or privileges permitted by this chapter, all correlative obligations, liabilities and restrictions in this chapter also apply to that person.

~~(c)~~ (d) This chapter does not apply to condominiums or units located outside this state, but the public offering statement provisions, (sections 4-102 through 4-109) apply to all contracts for the disposition thereof signed in this state by any party unless exempt under section 4-101(b).

~~(d)~~ (e) The provisions of this chapter shall apply to all condominiums or common interest communities to the extent such provisions conflict or are inconsistent with the provisions of chapter one hundred fifty-three, Acts of the Legislature, 1963: Provided, That the provisions of this chapter shall not modify, limit or nullify any rights, duties or obligations created or existing under any declaration, bylaws or plats or plans of condominiums created in this state before the effective date of this chapter.

§36B-1-206. Amendments to governing instruments.

(a) The declaration must contain:

(1) The names of the common interest community and the association and a statement that the common interest community is either a condominium, cooperative or planned community;

(2) The name of every county in which any part of the common interest community is situated;

(3) A legally sufficient description of the real estate included in the common interest community;

(4) A statement of the maximum number of units that the declarant reserves the right to create;

(5) In a condominium or planned community, a description of the boundaries of each unit created by the declaration, including the unit's identifying number or, in a cooperative, a description, which may be by plats or plans, of each unit created by the declaration, including the unit's identifying number, its size or number of rooms and its location within a building if it is within a building containing more than one unit;

(6) A description of any limited common elements, other than those specified in section 2-102(2) and (4), as provided in section 2-109(b)(10) and, in a planned community, any real estate that is or must become common elements;

(7) A description of any real estate, except real estate subject to development rights, that may be allocated subsequently as limited common elements, other than limited common elements specfied in section 2-102(2) and (4), together with a statement that they may be so allocated;

(8) A description of any development rights ~~(section 1- 103(14))~~ and other special declarant rights ~~(section 1- 103(29))~~ reserved by the declarant, together with a legally sufficient description of the real estate to which each of those rights applies, and a time limit within which each of those rights must be exercised;

(9) If any development right may be exercised with respect to different parcels of real estate at different times, a statement to that effect together with

~~(i)~~ (A) Either a statement fixing the boundaries of those portions and regulating the order in which those portions may be subjected to the exercise of each development right or a statement that no assurances are made in those regards; and

~~(ii)~~ (B) A statement as to whether, if any development right is exercised in any portion of the real estate subject to that development right, that development right must be exercised in all or in any other portion of the remainder of that real estate;

(10) Any other conditions or limitations under which the rights described in paragraph (8) may be exercised or will lapse;

(11) An allocation to each unit of the allocated interests in the manner described in section 2-107;

(12) Any restrictions ~~(i) on use, occupancy and~~ on alienation of the units, including any restrictions on leasing which exceed the restrictions on leasing units which executive boards may impose pursuant to section 3-102(c)(2) 3-120(d) and ~~(ii)~~ on the amount for which a unit may be sold or on the amount that may be received by a unit owner on sale, condemnation, or casualty loss to the unit or to the common interest community, or on termination of the common interest community;

(13) The recording data for recorded easements and licenses appurtenant to or included in the common interest community or to which any portion of the common interest community is or may become subject by virtue of a reservation in the declaration; ~~and~~

(14) Any authorization pursuant to which the association may establish and enforce construction and design criteria and aesthetic standards as provided in sections 3-106 and 3-120; and

~~(14)~~ (15) All matters required by sections 2-106, 2-107, 2- 108, 2-109, 2-115, 2-116 and 3-103(d).

(b) The declaration may contain any other matters the declarant considers appropriate, including any restrictions on the uses of a unit or the number or other qualifications of persons who may occupy units.

§36B-2-106. Leasehold common interest communities..

(a) Plats and plans are a part of the declaration and are required for all common interest communities except cooperatives. Separate plats and plans are not required by this chapter if all the information required by this section is contained in either a plat or plan. Each plat and plan must be clear and legible and contain a certification that the plat or plan contains all information required by this section.

(b) Each plat must show:

(1) The name and a survey or general schematic map of the entire common interest community;

(2) The location and dimensions of all real estate not subject to development rights, or subject only to the development right to withdraw and the location and dimensions of all existing improvements within that real estate;

(3) A legally sufficient description of any real estate subject to development rights, labeled to identify the rights applicable to each parcel, but plats and plans need not designate or label which development rights are applicable to each parcel if that information is clearly delineated in the declaration.

(4) The extent of any encroachments by or upon any portion of the common interest community;

(5) To the extent feasible, a legally sufficient description of all easements serving or burdening any portion of the common interest community;

(6) Except as otherwise provided in subsection (h), the approximate ~~The~~ location and dimensions of any vertical unit boundaries not shown or projected on plans recorded pursuant to subsection (d) and that unit's identifying number;

(7) Except as otherwise provided in subsection (h), the approximate ~~the~~ location with reference to an established datum of any horizontal unit boundaries not shown or projected on plans recorded pursuant to subsection (d) and that unit's identifying number;

(8) A legally sufficient description of any real estate in which the unit owners will own only an estate for years, labeled as "leasehold real estate";

(9) The distance between noncontiguous parcels of real estate comprising the common interest community;

(10) The approximate location and dimensions of limited common elements, including porches, decks, balconies, garages, ~~and~~ or patios, ~~other than parking spaces and the other limited common elements described in sections 2-102(2) and (4)~~ allocated as limited common elements, and show or contain a narrative description of any other limited common elements; and

(11) ~~In the case of~~ For real estate not subject to development rights, all other matters customarily shown on land surveys.

(c) A plat may also show the intended location and dimensions of any contemplated improvement to be constructed anywhere within the common interest community. Any contemplated improvement shown must be labeled either "MUST BE BUILT" or "NEED NOT BE BUILT."

(d) Except as otherwise provided in subsection (h), to the extent not shown or projected on the plats, plans of the units must show or project:

(1) The approximate location and dimensions of the vertical boundaries of each unit and that unit's identifying number;

(2) The approximate location of any horizontal unit boundaries, with reference to an established datum and that unit's identifying number; and

(3) ~~Any~~ The approximate location of any units in which the declarant has reserved the right to create additional units or common elements (section 2- 110(c)), identified appropriately.

(e) Unless the declaration provides otherwise, the horizontal boundaries of part of a unit located outside a building have the same elevation as the horizontal boundaries of the inside part and need not be depicted on the plats and plans.

(f) Upon exercising any development right, the declarant shall record either new plats and plans necessary to conform to the requirements of subsections (a), (b) and (d) or new certifications of plats and plans previously recorded if those plats and plans otherwise conform to the requirements of those subsections.

(g) ~~Any~~ A certification of a plat or plan required by this section or section 2-101(b) must be made by an independent (registered) surveyor, architect or engineer.

(h) Plats and plans need not show the location and dimensions of the units’ boundaries or their limited common elements if:

(1) The plat shows the location and dimensions of all buildings containing or comprising the units; and

(2) The declaration includes other information that shows or contains a narrative description of the general layout of the units in those buildings and the limited common elements allocated to those units.

§36B-2-112. Relocation of boundaries between adjoining units.

(a) Except in cases of amendments that may be executed by a declarant under section 2-109(f) or 2-110, ~~or by~~ the association under section 1-107, 2-106(d), 2-108(c), 2-112(a), or 2-113, or by certain unit owners under section 2-108(b), 2-112(a), 2-113(b), or 2-118(b), and except as limited by ~~subsection~~ subsections (d),(f), (g) and (h), the declaration, including any plats and plans, may be amended only by vote or agreement of unit owners of units to which at least sixty-seven percent of the votes in the association are allocated, ~~or any larger majority~~ unless the declaration specifies a different percentage for all amendments or for specific subjects of amendment. If the declaration requires the approval of another person as a condition of effectiveness, the amendment is not valid without that approval. ~~The declaration may specify a smaller number only if all of the units are restricted exclusively to nonresidential use.~~

(b) No action to challenge the validity of an amendment adopted by the association pursuant to this section may be brought more than one year after the amendment is recorded.

(c) Every amendment to the declaration must be recorded in every county in which any portion of the common interest community is located and is effective only upon recordation. An amendment, except an amendment pursuant to section 2- 112(a), must be indexed in the grantee's index in the name of the common interest community and the association and in the grantor's index in the name of the parties executing the amendment.

(d) Except to the extent expressly permitted or required by other provisions of this chapter, no amendment may create or increase special declarant rights, increase the number of units, change the boundaries of any unit, or change the allocated interests of a unit, or the uses to which any unit is restricted, in the absence of unanimous consent of the unit owners.

(e) Amendments to the declaration required by this chapter to be recorded by the association must be prepared, executed, recorded, and certified on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association.

(f) An amendment to the declaration may prohibit or materially restrict the permitted uses of or behavior in a unit or the number or other qualifications of persons who may occupy units only by vote or agreement of unit owners of units to which at least eighty percent of the votes in the association are allocated, unless the declaration specifies that a larger percentage of unit owners must vote or agree to that amendment or that the amendment may be approved by unit owners of units having at least eighty percent of the votes of a specified group of units that would be affected by the amendment. An amendment approved under this subsection must provide reasonable protection for a use or occupancy permitted at the time the amendment was adopted.

(g) The time limits specified in the declaration pursuant to section 2-105(a)(8) (contents of the declaration) within which reserved development rights must be exercised may be extended, and additional development rights may be created, if persons entitled to cast at least eighty percent of the votes in the association, including eighty percent of the votes allocated to units not owned by the declarant, agree to that action. The agreement is effective thirty days after an amendment to the declaration reflecting the terms of the agreement is recorded unless all the persons holding the affected special declarant rights, or security interests in those rights, record a written objection within the thirty-day period, in which case the amendment is void, or consent in writing at the time the amendment is recorded, in which case, the amendment is effective when recorded.

(h) A provision in the declaration creating special declarant rights that have not expired may not be amended without the consent of the declarant.

(i) If any provision of this chapter, law, or of the declaration requires the consent of a holder of a security interest in a unit as a condition to the effectiveness of an amendment to the declaration, that consent is deemed granted if a refusal to consent in a record is not received by the association within sixty days after the association delivers notice of the proposed amendment to the holder at an address for notice provided by the holder or mails the notice to the holder by certified mail, return receipt requested, at that address. If the holder has not provided to the association an address for notice, the association shall provide notice to the address in the security interest of record. Notwithstanding this section, an amendment to the declaration that affects the priority of a holder’s security interest or the ability of that holder to foreclose its security interest may not be adopted without that holder’s consent in a record if the declaration requires that consent as a condition to the effectiveness of the amendment: Provided, That this subsection (i) shall not apply to an amendment which:

(A) Permits a unit previously restricted to residential occupancy to be used for nonresidential purposes;

(B) Increases the share of common expenses allocated to the unit in a manner disproportionate to the formula stated in the declaration pursuant to section one hundred eighteen of this article;

(D) Transfers from the association to the unit, the duty to maintain a common element or limited common element previously performed by the association; or

(E) The unit owner is contractually precluded from consenting to the amendment by the terms of a planned unit development rider in a recorded security instrument.

(j) If the declaration contains a provision requiring that amendments to the declaration may be adopted only by vote or agreement of unit owners of units to which more than eighty percent of the votes in the association are allocated, the amendment is approved:

(1) If:

(A) Unit owners of units to which at least eighty percent of the votes in the association are allocated vote for or agree to the proposed amendment;

(B) No unit owner votes against the proposed amendment; and

(C) Notice of the proposed amendment is delivered to the unit owners holding the votes in the association which have not voted or agreed to the proposed amendment and no written objection to the proposed amendment is received by the association within sixty days after the association delivers notice; or

(2) Unit owners of units to which at least eighty percent of the votes in the association are allocated vote for or agree to the proposed amendment but at least one unit owner objects to the proposed amendment and, pursuant to an action brought by the association in the circuit court of the county in which the common interest community is situate against all objecting unit owners, the court finds that the objecting unit owners do not have an interest, different in kind from the interests of the other unit owners, that the voting requirement of the declaration was intended to protect.

§36B-2-118. Termination of common interest community.

(a) Except ~~in the case of~~ for a taking of all the units by eminent domain, (section 1-107) ~~or in the case of~~ foreclosure against an entire cooperative of a security interest that has priority over the declaration, or in the circumstances described in section 2-124, a common interest community may be terminated only by agreement of unit owners of units to which at least eighty percent of the votes in the association are allocated, or any larger percentage the declaration specifies, and with any other approvals required by the declaration. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses.

(b) An agreement to terminate must be evidenced by the execution of a termination agreement, or ratifications thereof, in the same manner as a deed, by the requisite number of unit owners. The termination agreement must specify a date after which the agreement ~~will be~~ is void unless it is recorded before that date. A termination agreement and all ratifications thereof must be recorded in every county in which a portion of the common interest community is situated and is effective only upon recordation.

(c) In the case of a condominium or planned community containing only units having horizontal boundaries described in the declaration, a termination agreement may provide that all of the common elements and units of the common interest community must be sold following termination. If, pursuant to the agreement, any real estate in the common interest community is to be sold following terminatino, the termination agreement must set forth the minimum terms of the sale.

(d) In the case of a condominium or planned community containing any units not having horizontal boundaries described in the declaration, a termination agreement may provide for sale of the common elements, but it may not require that the units be sold following termination, unless the declaration as originally recorded provided otherwise or all the unit owners consent to the sale.

(e) The association, on behalf of the unit owners, may contract for the sale of real estate in a common interest community, but the contract is not binding on the unit owners until approved pursuant to subsections (a) and (b). If any real estate is to be sold following termination, title to that real estate, upon termination, vests in the association as trustee for the holders of all interests in the units. Thereafter, the association has all powers necessary and appropriate to effect the sale. Until the sale has been concluded and the proceeds thereof distributed, the association continues in existence with all powers it had before termination. Proceeds of the sale must be distributed to unit owners and lien holders as their interests may appear, in accordance with subsections (h), (i) and (j). Unless otherwise specified in the termination agreement, as long as the association holds title to the real estate, each unit owner and the unit owner's successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted the unit. During the period of that occupancy, each unit owner and the unit owner's successors in interest remain liable for all the assessments and other obligations imposed on unit owners by this chapter or the declaration.

(f) In a condominium or planned community, if the real estate constituting the common interest community is not to be sold following termination, title to the common elements and, in a common interest community containing only units having horizontal boundaries described in the declaration, title to all the real estate in the common interest community, vests in the unit owners upon termination as tenants in common in proportion to their respective interests as provided in subsection (j), and liens on the units shift accordingly. While the tenancy in common exists, each unit owner and the unit owner's successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted the unit.

(g) Following termination of the common interest community, the proceeds of ~~any~~ a sale of real estate, together with the assets of the association, are held by the association as trustee for unit owners and holders of liens on the units as their interests may appear.

(h) Following termination of a condominium or planned community, creditors of the association holding liens on the units, which were recorded before termination, may enforce those liens in the same manner as any lien holder. All other creditors of the association are to be treated as if they had perfected liens on the units immediately before termination.

(i) In a cooperative, the declaration may provide that all creditors of the association have priority over any interests of unit owners and creditors of unit owners. In that event, following termination, creditors of the association holding liens on the cooperative which were recorded before terminatinon may enforce their liens in the same manner as any lien holder, and any other creditor of the association is to be treated as if he the creditor had perfected a lien against the cooperative immediatley before termination. Unless the declaration provides that all creditors of the association have that priority:

(1) The lien of each creditor of the association which was perfected against the association before termination becomes, upon termination, a lien against each unit owner's interest in the unit as of the date the lien was perfected;

(2) Any other creditor of the association is to be treated upon termination as if the creditor had perfected a lien against each unit owner's interest immediately before termination;

(3) The amount of the lien of an association's creditor described in paragraphs (1) and (2) against each of the unit owner's interest must be proportionate to the ratio which each unit's common expense liability bears to the common expense liability of all the units;

(4) The lien of each creditor of each unit owners which was perfected before termination continues as a lien against that unit owner's unit as of the date the lien was perfected; ~~and~~

(5) The assets of the association must be distributed to all unit owners and all lien holders as their interests may appear in the order described above; and

(6) Creditors of the association are not entitled to payment from any unit owner in excess of the amount of the creditor’s lien against that unit owner’s interest.

(j) The respective interests of unit owners referred to in subsections (e), (f), (g), (h), and (i) are as follows:

(1) Except as otherwise provided in paragraph (2), the respective interests of unit owners are the fair market values of their units, allocated interests, and any limited common elements immediately before the termination, as determined by one or more independent appraisers selected by the association. The decision of the independent appraisers must be distributed to the unit owners and becomes final unless disapproved within thirty days after distribution by unit owners of units to which twenty-five percent of the votes in the association are allocated. The proportion of any unit owner’s interest to that of all unit owners is determined by dividing the fair market value of that unit owner’s unit and its allocated interests by the total fair market values of all the units and their allocated interests.

(2) If any unit or any limited common element is destroyed to the extent that an appraisal of the fair market value thereof before destruction cannot be made, the interests of all unit owners are:

~~(i)~~ (A) In a condominium, their respective common element interests immediately before the termination;

~~(ii)~~ (B) In a cooperative, their respective ownership interests immediately before the termination; and

~~(iii)~~ (C) In a planned community, their respective common expense liabilities immediately before the termination.

(k) In a condominium or planned community, except as otherwise provided in subsection (l), foreclosure or enforcement of a lien or encumbrance against the entire common interest community does not terminate, of itself, the common interest community, and foreclosure or enforcement of a lien or encumbrance against a portion of the common interest community, other than withdrawable real estate, does not withdraw that portion from the common interest community. Foreclosure or enforcement of a lien or encumbrance against withdrawable real estate, or against common elements that have been subjected to a security interest by the association under section 3-112, does not withdraw, of itself, that real estate from the common interest community, but the person taking title thereto may require from the association, upon request, an amendment excluding the real estate from the common interest community.

(l) In a condominium or planned community, if a lien or encumbrance against a portion of the real estate comprising the common interest community has priority over the declaration and the lien or encumbrance has not been partially released, the parties forclosing the lien or encumbrance, upon foreclosure, may record an instrument excluding the real estate subject to that lien or encumbrance from the common interest community.

§36B-2-119. Rights of secured lenders.

(a) Except as otherwise provided in subsection (b) and ~~subject to the~~ other provisions of ~~the declaration~~ this chapter, the association ~~even if unincorporated,~~ even if not registered: ~~may~~

(1) Shall adopt and may amend bylaws and may adopt and amend rules; ~~and regulations~~

(2) Shall adopt and may amend budgets ~~for revenues, expenditures, and reserves~~ under section 3-123, shall ~~and~~ collect assessments for common expenses from unit owners, and may invest funds of the association;

(3) May hire and discharge managing agents and other employees, agents, and independent contractors;

(4) May institute, defend, or intervene in litigation or in arbitration, mediation, or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the common interest community, subject to section 3-124;

(5) May make contracts and incur liabilities;

(6) May regulate the use, maintenance, repair, replacement, and modification of common elements;

(7) May cause additional improvements to be made as a part of the common elements;

(8) May acquire, hold, encumber, and convey in its own name any right, title, or interest to real estate or personal property, but:

~~(i)~~(A) Common elements in a condominium or planned community may be conveyed or subjected to a security interest only pursuant to section 3-112 ~~section one hundred twelve of this article~~; and

~~(ii)~~(B) Part of a cooperative may be conveyed, or all or part of a cooperative may be subjected to a security interest, only pursuant to section 3-112; ~~section one hundred twelve of this article~~

(9) May grant easements, leases, licenses, and concessions through or over the common elements;

(10) May impose and receive any payments, fees, or charges for:

(A) The use, rental, or operation of the common elements, other than limited common elements described in section 2-102(2)and (4);~~subsections (1) and (4), section one hundred two, article two of this chapter,~~ and

(B) ~~for~~ Services provided to unit owners;

(11) May impose charges for late payment of assessments and, after notice and an opportunity to be heard, may ~~levy~~ impose reasonable fines for violations of the declaration, bylaws, and rules ~~and regulations~~ of the association;

(12) May impose reasonable charges for the preparation and recordation of amendments to the declaration, resale certificates required by section one hundred nine, article four of this chapter, or statements of unpaid assessments;

(13) May provide for the indemnification of its officers and executive board and maintain directors' and officers' liability insurance;

(14) May assign its right to future income, including the right to receive common expense assessments, but only to the extent the declaration expressly so provides;

(15) May exercise any other powers conferred by the declaration or bylaws;

(16) May exercise all other powers that may be exercised in this state by legal entities of the same type as the association;

~~(17)~~ ~~Institute litigation or administrative proceedings in its own name against a unit owner for the collection of dues or assessments that are overdue or in arrears; and~~

~~(18)~~ (17) May exercise any other powers necessary and proper for the governance and operation of the association;

(18) May require that disputes between the association and unit owners or between two or more unit owners regarding the common interest community be submitted to nonbinding alternative dispute resolution as a prerequisite to commencement of a judicial proceeding;

(19) May suspend any right or privilege of a unit owner that fails to pay an assessment, but may not:

(A) Deny a unit owner or other occupant access to the owner’s unit; or

(B) Withhold services provided to a unit or a unit owner by the association if the effect of withholding the service would be to endanger the health, safety, or property of any person; and

(20) The association may, after notice, suspend a unit owner’s right to vote and/or right to seek election as a director or officer of the association for failure of the unit owner to pay assessments. The suspended rights to vote or seek election shall be immediately restored to the unit owner upon payment of all past due or delinquent assessments even if paid during a meeting or election.

(b) The declaration may not ~~impose limitations on~~ limit the power of the association beyond the limitations authorized in subsection(a)(18) to:

(1) Deal with the declarant ~~which are~~ if the limit is more restrictive than the ~~limitations~~ limit imposed on the power of the association to deal with other persons; or

(2) Institute litigation or an arbitration, mediation or administrative proceeding against any person, subject to the following:

(A) The association shall comply with section 124 of this article, if applicable, before instituting any proceeding described in subsection (a) of said section in connection with construction defects; and

(B) The executive board promptly shall provide notice to the unit owners of any legal proceeding in which the association is a party other than proceedings involving enforcement of rules or to recover unpaid assessments or other sums due the association.

(c) If a tenant of a unit owner violates the declaration, bylaws, or rules of the association, in addition to exercising any of its powers against the unit owner, the association may:

(1) Exercise directly against the tenant the powers described in subsection (a)(11);

(2) After giving notice to the tenant and the unit owner and an opportunity to be heard, levy reasonable fines against the tenant for the violation; and

(3) Enforce any other rights against the tenant for the violation which the unit owner as landlord could lawfully have exercised under the lease or which the association could lawfully have exercised directly against the unit owner, or both.

(d) The rights referred to in subsection (c)(3) may be exercised only if the tenant or unit owner fails to cure the violation within ten days after the association notifies the tenant and unit owner of that violation.

(e) Unless a lease otherwise provides, this section does not:

(1) Affect rights that the unit owner has to enforce the lease or that the association has under other law; or

(2) Permit the association to enforce a lease to which it is not a party in the absence of a violation of the declaration, bylaws, or rules.

(f) The executive board may determine whether to take enforcement action by exercising the association’s power to impose sanctions or commencing an action for a violation of the declaration, bylaws, and rules, including whether to compromise any claim for unpaid assessments or other claim made by or against it. The executive board does not have a duty to take enforcement action if it determines that, under the facts and circumstances presented:

(1) The association’s legal position does not justify taking any or further enforcement action;

(2) The covenant, restriction, or rule being enforced is, or is likely to be construed as, inconsistent with law;

(3) Although a violation may exist or may have occurred, it is not so material as to be objectionable to a reasonable person or to justify expending the association’s resources; or

(4) It is not in the association’s best financial or other interests to pursue an enforcement action.

(g) The executive board’s decision under subsection (f) not to pursue enforcement under one set of circumstances does not prevent the executive board from taking enforcement action under another set of circumstances, but the executive board may not be arbitrary or capricious in taking enforcement action.

(h) The executive board shall establish a reasonable method for unit owners to communicate among themselves and with the executive board on matters concerning the association.

§36B-3-103. Executive board members and officers.

(a) Except as otherwise provided in the declaration, the bylaws, subsection (b), or other provisions of this chapter, the executive board ~~may act in all instances~~ acts on behalf of the association. In the performance of their duties, the officers and members of the executive board ~~are required to exercise (i) if~~ appointed by the declarant ~~the care required of fiduciaries of the unit owners~~ shall exercise the degree of care and loyalty to the association required of a trustee. ~~and (ii) if elected by the unit owners, ordinary and reasonable care.~~ Officers and members of the executive board not appointed by the declarant shall exercise the degree of care and loyalty to the association required of an officer or director of a corporation and are subject to the conflict of interest rules governing directors and officers, under West Virginia Code Chapter 31E. The standards of care and loyalty described in this section apply regardless of the form in which the association is organized.

(b) The executive board may not~~: act on behalf of the association:~~

(1) to Amend the declaration except as provided in (section 2-117);

(2) to Terminate the common interest community (section 2-118);

(3) ~~or to~~ Elect members of the executive board but may fill vacancies in its membership for the unexpired portion of any term or, if earlier, until the next regularly scheduled election of executive board members; or

(4) Determine the qualifications, powers, ~~and~~ duties, or terms of office of executive board members (section 3-103(f). ~~), but the executive board may fill vacancies in its membership for the unexpired portion of any term.~~

(c) The executive board shall adopt budgets as provided in section 3-123. Within thirty days after adoption of any proposed budget for the common interest community, the executive board shall provide a summary of the budget to all the unit owners, and shall set a date for a meeting of the unit owners to consider ratification of the budget not less than fourteen nor more than thirty days after mailing of the summary. Unless at that meeting a majority of all unit owners or any larger vote specified in the declaration reject the budget, the budget is ratified, whether or not a quorum is present. In the event the proposed budget is rejected, the periodic budget last ratified by the unit owners must be continued until such time as the unit owners ratify a subsequent budget proposed by the executive board.

(d) Subject to subsection (e), the declaration may provide for a period of declarant control of the association, during which a declarant, or persons designated by ~~him~~ the declarant may appoint and remove the officers and members of the executive board. A declarant may voluntarily surrender the right to appoint and remove officers and members of the executive board before the period ends. In that event, the declarant may require during the remainder of the period that specified actions of the association or executive board, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective. Regardless of the period provided in the declaration, and except as provided in section 2-123(g) (master planned communities), a period of declarant control terminates no later than the ~~earlier~~ earliest of:

(i) Sixty days after conveyance of ~~seventy-five percent~~ three fourths of the units that may be created to unit owners other than a declarant;

(ii) Two years after all declarants have ceased to offer units for sale in the ordinary course of business;

(iii) Two years after any right to add new units was last exercised; or

(iv) The day the declarant, after giving notice in a record to unit owners, records an instrument voluntarily surrendering all rights to control activities of the association. A declarant may voluntarily surrender the right to appoint and remove officers and members of the executive board before termination of that period, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or executive board, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective.

(e) Not later than sixty days after conveyance of ~~twenty-five percent~~ one fourth of the units that may be created to unit owners other than a declarant, at least one member and not less than twenty-five percent of the members of the executive board must be elected by unit owners other than the declarant. Not later than sixty days after conveyance of ~~fifty percent~~ one half of the units that may be created to unit owners other than a declarant, not less than ~~thirty-three and one-third percent~~ one third of the members of the executive board must be elected by unit owners other than the declarant.

(f) Except as otherwise provided in section 2-120(e), not later than the termination of any period of declarant control, the unit owners shall elect an executive board of at least three members, at least a majority of whom must be unit owners. Unless the declaration provides for the election of officers by the unit owners, the ~~The~~ executive board shall elect the officers. The executive board members and officers shall take office upon election or appointment.

(g) Notwithstanding any provision of the declaration or bylaws to the contrary, the unit owners, by a two-thirds vote of all persons present and entitled to vote at any meeting of the unit owners at which a quorum is present, may remove any member of the executive board with or without cause, other than a member appointed by the declarant. A declaration may provide for the appointment of specified positions on the executive board by persons other than the declarant during or after the period of declarant control. It also may provide a method for filling vacancies in those positions, other than by election by unit owners. However, after the period of declarant control, appointed members:

(1) May not comprise more than one third of the board; and

(2) Have no greater authority than any other member of the board.

(h) Within thirty days after unit owners other than the declarant elect a majority of the members of the executive board, the declarant shall deliver to the association all property of the unit owners and of the association held by or controlled by the declarant, including without limitation the following items:

(1) The original or a certified copy of the recorded declaration as amended; the association articles of incorporation, if the association is incorporated; bylaws; minute books and other books and records of the association; and any rules which may have been promulgated;

(2) An accounting for association funds and financial statements, from the date the association received funds and ending on the date the period of declarant control ends. The financial statements shall be audited by an independent certified public accountant and shall be accompanied by the accountant's letter, expressing either:

(A) The opinion that the financial statements present fairly the financial position of the association in conformity with generally accepted accounting principles; or

(B) A disclaimer of the accountant's ability to attest to the fairness of the presentation of the financial information in conformity with generally accepted accounting principles, and the reasons therefor. The expense of the audit shall not be paid for or charged to the association;

(3) Association funds or control thereof;

(4) All insurance policies then in force, in which the association or its directors and officers are named as insured persons;

(5) A roster of unit owners and mortgagees and their addresses and telephone numbers, if known, as shown on the declarant's records; and

(6) Contracts in which the association is a contracting party.
(i) During the period of declarant control, the declarant shall, at least every six months, provide the unit owners with a current financial statement of the association. The statement shall be on a cash basis and need not be audited by an independent accountant. It shall include, without limitation:

(1) All income and expenses for the calendar year to date;

(2) All accounts payable and receivable, including the ages of those accounts and showing all sums due to and from the declarant and affiliates of the declarant;

(3) The amount of any funded replacement reserves; and

(4) The balance of any other funds of the association.

§36B-3-105. Termination of contracts and leases of declarant.

~~A meeting of the association must be held at least once each year. Special meetings of the association may be called by the president,~~

(a) The following requirements apply to unit owner meetings:

(1) An association shall hold a meeting of unit owners annually at a time, date, and place stated in or fixed in accordance with the bylaws.

(2) An association shall hold a special meeting of unit owners to address any matter affecting the common interest community or the association if its president, a majority of the executive board, or by unit owners having at least twenty percent, or any lower percentage specified in the bylaws, of the votes in the association request that the secretary call the meeting. ~~Not less than 10 nor more than 60 days in advance of any meeting, the secretary or other officer specified in the bylaws shall cause notice to be hand-delivered or sent prepaid~~ If the association does not notify unit owners of a special meeting within thirty days after the requisite number or percentage of unit owners request the secretary to do so, the requesting members may directly notify all the unit owners of the meeting. Only matters described in the meeting notice required by paragraph (3) may be considered at a special meeting.

(3) An association shall notify unit owners of the time, date, and place of each annual and special unit owners meeting not less than ten days or more than sixty days before the meeting date. Notice may be by any means described in section 3-121 ~~by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit owner~~. The notice of any meeting must state the time, date and place of the meeting and the items on the agenda, including:

(A) A statement of the general nature of any proposed amendment to the declaration or bylaws;

(B) Any budget changes; and

(4) The minimum time to give notice required by paragraph (3) may be reduced or waived for a meeting called to deal with an emergency.

(5) Unit owners must be given a reasonable opportunity at any meeting to comment regarding any matter affecting the common interest community or the association.

(6) The declaration or bylaws may allow for meetings of unit owners to be conducted by telephonic, video, or other conferencing process, if the alternative process is consistent with subsection (b)(7).

(b) The following requirements apply to meetings of the executive board and committees of the association authorized to act for the association:

(1) Meetings must be open to the unit owners except during executive sessions. The executive board and those committees may hold an executive session only during a regular or special meeting of the board or a committee. No final vote or action may be taken during an executive session. An executive session may be held only to:

(A) Consult with the association’s attorney concerning legal matters;

(B) Discuss existing or potential litigation or mediation, arbitration, or administrative proceedings;

(D) Discuss contracts, leases, and other commercial transactions to purchase or provide goods or services currently being negotiated, including the review of bids or proposals, if premature general knowledge of those matters would place the association at a disadvantage; or

(E) Prevent public knowledge of the matter to be discussed if the executive board or committee determines that public knowledge would violate the privacy of any person.

(2) For purposes of this section, a gathering of board members at which the board members do not conduct association business is not a meeting of the executive board. The executive board and its members may not use incidental or social gatherings of board members or any other method to evade the open meeting requirements of this section.

(3) During the period of declarant control, the executive board shall meet at least four times a year. Up until the sale of the 12th unit, at least two of those meetings must be held at the common interest community or at a place convenient to the community. Upon the sale of the 12th unit, all meetings must be held at the commmon interest community or at a place convenient to the community. After termination of the period of declarant control, all executive board meetings must be at the common interest community or at a place convenient to the community unless the unit owners amend the bylaws to vary the location of those meetings.

(4) At each executive board meeting, the executive board shall provide a reasonable opportunity for unit owners to comment regarding any matter affecting the common interest community and the association.

(5) Unless the meeting is included in a schedule given to the unit owners or the meeting is called to deal with an emergency, the secretary or other officer specified in the bylaws shall give notice of each executive board meeting to each board member and to the unit owners. The notice must be given at least ten days before the meeting and must state the time, date, place, and agenda of the meeting.

(6) If any materials are distributed to the executive board before the meeting, the executive board at the same time shall make copies of those materials reasonably available to unit owners, except that the board need not make available copies of unapproved minutes or materials that are to be considered in executive session.

(7) Unless the declaration or bylaws otherwise provide, the executive board may meet by telephonic, video, or other conferencing process if:

(A) The meeting notice states the conferencing process to be used and provides information explaining how unit owners may participate in the conference directly or by meeting at a central location or conference connection; and

(B) The process provides all unit owners the opportunity to hear or perceive the discussion and to comment as provided in paragraph (4).

(8) After termination of the period of declarant control, unit owners may amend the bylaws to vary the procedures for meetings described in paragraph (7).

(9) Instead of meeting, the executive board may act by unanimous consent as documented in a record authenticated by all its members. The secretary promptly shall give notice to all unit owners of any action taken by unanimous consent. After termination of the period of declarant control, the executive board may act by unanimous consent only to undertake ministerial actions or to implement actions previously taken at a meeting of the executive board.

(10) Even if an action by the executive board is not in compliance with this section, it is valid unless set aside by a court. A challenge to the validity of an action of the executive board for failure to comply with this section may not be brought more than sixty days after the minutes of the executive board of the meeting at which the action was taken are approved or the record of that action is distributed to unit owners, whichever is later.

§36B-3-109. Quorum.

(a) Unless prohibited or limited by the declaration or bylaws, unit owners may vote at a meeting in person, by absentee ballot pursuant to subsection (b)(4), by a proxy pursuant to subsection (c) or, when a vote is conducted without a meeting, by electronic or paper ballot pursuant to subsection (d).

(b) At a meeting of unit owners the following requirements apply:

(1) Unit owners who are present in person may vote by voice vote, show of hands, standing, or any other method for determining the votes of unit owners, as designated by the person presiding at the meeting.

(2) If only one of several owners of a unit is present, that owner is entitled to cast all the votes allocated to that unit. If more than one of the owners are present, the votes allocated to the unit may be cast only in accordance with the agreement of a majority in interest of the owners, unless the declaration expressly provides otherwise. There is majority agreement if any one of the owners casts the votes allocated to the unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.

(3) Unless a greater number or fraction of the votes in the association is required by this chapter or the declaration, a majority of the votes cast determines the outcome of any action of the association.

(4) Subject to subsection (a), a unit owner may vote by absentee ballot without being present at the meeting. The association promptly shall deliver an absentee ballot to an owner that requests it if the request is made at least three days before the scheduled meeting. Votes cast by absentee ballot must be included in the tally of a vote taken at that meeting.

(5) When a unit owner votes by absentee ballot, the association must be able to verify that the ballot is cast by the unit owner having the right to do so.

(c) Except as otherwise provided in the declaration or bylaws, the following requirements apply with respect to proxy voting:

(1) Votes allocated to a unit may be cast pursuant to a directed or undirected proxy duly executed by a unit owner.

(2) If a unit is owned by more than one person, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy.

(3) A unit owner may revoke a proxy given pursuant to this section only by actual notice of revocation to the person presiding over a meeting of the association.

(4) A proxy is void if it is not dated or purports to be revocable without notice.

(5) A proxy is valid only for the meeting at which it is cast and any recessed session of that meeting.

(6) A person may not cast undirected proxies representing more than fifteen percent of the votes in the association, unless the undirected proxies are for units under common ownership.

(d) Unless prohibited or limited by the declaration or bylaws, an association may conduct a vote without a meeting. In that event, the following requirements apply:

(1) The association shall notify the unit owners that the vote will be taken by ballot.

(2) The association shall deliver a paper or electronic ballot to every unit owner entitled to vote on the matter.

(3) The ballot must set forth each proposed action and provide an opportunity to vote for or against the action.

(4) When the association delivers the ballots, it shall also:

(A) Indicate the number of responses needed to meet the quorum requirements;

(B) State the percent of votes necessary to approve each matter other than election of directors;

(C) Specify the time and date by which a ballot must be delivered to the association to be counted, which time and date may not be fewer than three days after the date the association delivers the ballot; and

(D) Describe the time, date, and manner by which unit owners wishing to deliver information to all unit owners regarding the subject of the vote may do so.

(5) Except as otherwise provided in the declaration or bylaws, a ballot is not revoked after delivery to the association by death or disability or attempted revocation by the person that case that vote.

(6) Approval by ballot pursuant to this subsection is valid only if the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action.

(e) If the declaration requires that votes on specified matters affecting the common interest community be cast by lessees rather than unit owners of leased units:

(1) This section applies to lessees as if they were unit owners.

(2) Unit owners that have leased their units to other persons may not cast votes on those specified matters; and

(3) Lessees are entitled to notice of meetings, access to records, and other rights respecting these matters as if they were unit owners.

(f) Unit owners must also be given notice of all meetings at which lessees are entitled to vote.

(g) Votes allocated to a unit owned by the association must be cast in any vote of the unit owners in the same proportion as the votes cast on the matter by unit owners other than the association.

§36B-3-111. Tort and contract liability; tolling of limitation period.

(a) In a condominium or planned community, portions of the common elements may be conveyed or subjected to a security interest by the association if persons entitled to cast at least eighty percent of the votes in the association, including eighty percent of the votes allocated to units not owned by a declarant, or any larger percentage the declaration specifies, agree to that action; but all owners of units to which any limited common element is allocated must agree in order to convey that limited common element or subject it to a security interest. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses. Proceeds of the sale are an asset of the association, but the proceeds of the sale of limited common elements must be distributed equitably among the owners of units to which the limited common elements were allocated.

(b) Part of a cooperative may be conveyed and all or part of a cooperative may be subjected to a security interest by the association if persons entitled to cast at least eighty percent of the votes in the association, including eighty percent of the votes allocated to units not owned by a declarant, or any larger percentage the declaration specified, agree to that action; but, if fewer than all of the units or limited common elements are to be conveyed or subjected to a security interest, then all unit owners of those units, or the units to which those limited common elements are allocated, must agree in order to convey those units or limited common elements or subject them to a security interest. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses. Proceeds of the sale are an asset of the association. Any purported conveyance or other voluntary transfer of an entire cooperative, unless made pursuant to section 2-118, is void.

(c) An agreement to convey common elements in a condominium or planned community, or to subject them to a security interest, or in a cooperative, an agreement to convey any part of a cooperative or subject it to a security interest, must be evidenced by the execution of an agreement, or ratifications thereof, in the same manner as a deed, by the requisite number of unit owners. The agreement must specify a date after which the agreement will be void unless recorded before that date. The agreement and all ratifications thereof must be recorded in every county in which a portion of the common interest community is situate, and is effective only upon recordation.

(d) The association, on behalf of the unit owners, may contract to convey an interest in a common interest community pursuant to subsection (a), but the contract is not enforceable against the association until approved pursuant to subsections (a), (b), and (c). Thereafter, the association has all powers necessary and appropriate to effect the conveyance or encumbrance, including the power to execute deeds or other instruments.

(e) Unless made pursuant to this section, any purported conveyance, encumbrance, judicial sale, or other voluntary transfer of common elements or of any other part of a cooperative is void.

(f) A conveyance or encumbrance of common elements or of a cooperative pursuant to this section does not deprive any unit of its rights of access and support.

(g) Unless the declaration otherwise provides, ~~a conveyance or encumbrance of common elements pursuant to this section does not affect the priority or validity of preexisting encumbrances~~ if the holders of first security interests on eighty percent of the units that are subject to security interests on the day the unit owners’ agreement under subsection (c) is recorded:

(1) A conveyance of common elements pursuant to this section terminates both the undivided interests in those common elements allocated to the units and the security interests in those undivided interests held by all persons holding security interests in the units; and

(2)An encumbrance of common elements pursuant to this section has priority over all preexisting encumbrances on the undivided interests in those common elements held by all persons holding security interests in the units.

(h) The consents by holders of first security interests on units described in subsection (g), or a certificate of the secretary affirming that those consents have been received by the association, may be recorded at any time before the date on which the agreement under subsection (c) becomes void. Consents or certificates so recorded are valid from the date they are recorded for purposes of calculating the percentage of consenting first security interest holders, regardless of later sales or encumbrances on those units. Even if the required percentage of first security interest holders so consent, a conveyance or encumbrance of common elements does not affect interests having priority over the declaration, or created by the association after the declaration was recorded.

(i) In a cooperative, the association may acquire, hold, encumber, or convey a proprietary lease without complying with this section.

§36B-3-113. Insurance.

(a) Commencing not later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent reasonably available and subject to reasonable deductibles:

(1) Property insurance on the common elements and, in a planned community, also on property that must become common elements, insuring against ~~all~~ risks of direct physical loss commonly insured against ~~or, in the case of a conversion building, against fire and extended coverage perils. The total amount of~~ which insurance, after application of any deductibles, must be not less than eighty percent of the actual cash value of the insured property at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations, and other items normally excluded from property policies; ~~and~~

(2) Commercial general liability insurance, including medical payments insurance, in an amount determined by the executive board but not less than any amount specified in the declaration, covering all occurrences commonly insured against ~~for death,~~ bodily injury, and property damage arising out of or in connection with the use, ownership, or maintenance of the common elements and, in cooperatives, also of all units; and

(3) Fidelity insurance.

(b) In the case of a building ~~that is part of a cooperative or~~ that contains units ~~having~~ divided by horizontal boundaries described in the declaration, or vertical boundaries that comprise common walls between units, the insurance maintained under subsection (a)(1), to the extent reasonably available, must include the units, but need not include improvements and betterments installed by unit owners.

(c) If the insurance described in subsections (a) and (b) is not reasonably available, the association promptly shall cause notice of that fact to be ~~hand-delivered or sent prepaid by United States mail~~ given to all unit owners. The declaration may require the association to carry any other insurance, and the association ~~in any event~~ may carry any other insurance it considers appropriate to protect the association or the unit owners.

(d) Insurance policies carried pursuant to subsections (a) and (b) must provide that:

(1) Each unit owner is an insured person under the policy with respect to liability arising out of ~~his~~ the owner’s interest in the common elements or membership in the association;

(2) The insurer waives its right to subrogation under the policy against any unit owner or member of ~~his~~ the owner’s household;

(3) No act or omission by ~~any~~ a unit owner, unless acting within the scope of ~~his~~ the owner’s ~~scope of his~~ authority on behalf of the association, ~~will~~ voids the policy or be is a condition to recovery under the policy; and

(4) If, at the time of a loss under the policy, there is other insurance in the name of a unit owner covering the same risk covered by the policy, the association’s policy provides primary insurance.

(e) Any loss covered by the property policy under subsections (a)(1) and (b) must be adjusted with the association, but the insurance proceeds for that loss are payable to any insurance trustee designated for that purpose, or otherwise to the association, and not to any holder of a security interest. The insurance trustee or the association shall hold any insurance proceeds in trust for the association, unit owners, and lien holders as their interests may appear. Subject to ~~the provisions of~~ subsection (h), the proceeds must be disbursed first for the repair or ~~restoration~~ replacement of the damaged property, and the association, unit owners, and lien holders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the property has been completely repaired or ~~restored~~ replaced, or the common interest community is terminated.

(f) An insurance policy issued to the association does not prevent a unit owner from obtaining insurance for ~~his~~ the owner’s own benefit.

(g) An insurer that has issued an insurance policy under this section shall issue certificates or memoranda of insurance to the association and, upon ~~written~~ request made in a record, to any unit owner or holder of a security interest. The insurer issuing the policy may not cancel or refuse to renew it until 30 thirty days after notice of the proposed cancellation or nonrenewal has been mailed to the association, each unit owner and each holder of a security interest to whom a certificate or memorandum of insurance has been issued at their respective last known addresses.

(h) Any portion of the common interest community for which insurance is required under this section which is damaged or destroyed must be repaired or replaced promptly by the association unless:

~~(i)~~ (1) The common interest community is terminated, in which case section 2-118 applies;

~~(ii)~~ (2) Repair or replacement would be illegal; ~~under any state or local statute or ordinance governing health or safety,~~ or

~~(iii)~~ (3) Eighty percent of the unit owners, including every owner of a unit or assigned limited common element that will not be rebuilt, vote not to rebuild.

(i) The cost of repair or replacement in excess of insurance proceeds, deductibles, and reserves is a common expense. If the entire common interest community is not repaired or replaced:

~~(i)~~(1) The insurance proceeds attributable to the damaged common elements must be used to restore the damaged area to a condition compatible with the remainder of the common interest community; and

~~(ii)~~(2) Except to the extent that other persons will be distributees (section 2-105(a)(12)(ii)):

(A) The insurance proceeds attributable to units and limited common elements that are not ~~rebuilt~~ repaired or replaced must be distributed to the owners of those units and the owners of the units to which those limited common elements were allocated, or to lien holders, as their interests may appear; and

(B) The remainder of the proceeds must be distributed to all the unit owners or lien holders, as their interests may appear, as follows:

~~(1)~~(i) In a condominium, in proportion to the common element interests of all the units; and

~~(2)~~(ii) In a cooperative or planned community, in proportion to the common expense liabilities of all the units.

(j) If the unit owners vote not to rebuild any unit, that unit’s allocated interests are automatically reallocated upon the vote as if the unit had been condemned under section 1-107(a), and the association promptly shall prepare, execute, and record an amendment to the declaration reflecting the reallocations.

~~(i)~~ (k) ~~The provisions of~~ This section may be varied or waived in the case of a common interest community all of whose units are restricted to nonresidential use.

§36B-3-114. Surplus Funds.

(a) The association has a statutory lien on a unit for any assessment ~~levied against~~ attributable to that unit or fines imposed against its unit owner ~~from the time the assessment or fine becomes due~~. Unless the declaration otherwise provides, reasonable attorney’s fees and costs, other fees, charges, late charges, fines, and interest charged pursuant to section 3-102(a)(10), (11), and (12), and any other sums due to the association under the declaration, this chapter, or as a result of an administrative, arbitration, mediation, or judicial decision are enforceable in the same manner as unpaid assessments under this section. If an assessment is payable in installments, the lien is for the full amount of the assessment ~~is a lien~~ from the time the first installment thereof becomes due.

(b) A lien under this section is prior to all other liens and encumbrances on a unit except:

~~(i)~~(1) Liens and encumbrances recorded before the recordation of the declaration and, in a cooperative, liens and encumbrances ~~which~~ that the association creates, assumes, or takes subject to;

~~(ii)~~(2) Except as otherwise provided in subsection (c), a first security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent, or, in a cooperative, the first security interest encumbering only the unit owner’s interest and perfected before the date on which the assessment sought to be enforced became delinquent,; and

~~(iii)~~(3) Liens for real estate taxes and other governmental assessments or charges against the unit or cooperative.

(c) ~~The~~ A lien under this section is also prior to all security interests described in subsection (b)(2) ~~clause (ii) above~~ to the extent of both the common expense assessments based on the periodic budget adopted by the association pursuant to section 3-115(a) which would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce the lien and reasonable attorney’s fees and costs incurred by the association in foreclosing the association’s lien. ~~This subsection~~ Subsection (b) and this subsection ~~does~~ do not affect the priority of mechanics’ or materialmen’s liens, or the priority of liens for other assessments made by the association. ~~(The lien under this section is not subject to the provisions of (insert appropriate reference to state homestead, dower and curtesy, or other exemptions).)~~ A lien under this section shall be void, as to creditors, and subsequent purchasers for valuable consideration without notice, until and except from the time that it is duly admitted to record in all counties wherein the unit situate. This followings our recording statute.

~~(c)~~(d) Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same property, those liens have equal priority.

~~(d)~~(e) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within three years after the full amount of the assessments becomes due.

~~(e)~~(f) This section does not prohibit actions against unit owners to recover sums for which subsection (a) creates a lien or prohibit an association from taking a deed in lieu of foreclosure.

~~(f)~~(g) A judgment or decree in any action brought under this section must include costs and reasonable attorney’s fees for the prevailing party and shall relate back for purposes of priority to the date the association lien was recorded in the county clerk’s office, and shall bear interest at the rate set by the association for the original lien, not to exceed eighteen percent pursuant to section 36B-3-115(b).

~~(g)~~(h) The association upon ~~written~~ request made in a record shall furnish to a unit owner, a statement setting forth the amount of unpaid assessments against the unit. If the unit owner’s interest is real estate, the statement must be in recordable form. The statement must be furnished within ten business days after receipt of the request and is binding on the association, the executive board, and every unit owner. The trustee or trustees under a record deed of trust encumbering a unit, or judicially appointed commissioner charged with the sale of a unit, has the same rights under this paragraph as the owner of the encumbered unit.

(h) For the purpose of perfecting and preserving its lien, the association shall given notice to the unit owner in the manner set forth in section one, article two, chapter fifty-six of this code, or by registered or certified mail, return receipt requested, and in a form reasonably calculated to inform the owner of his liability for payment of the assessment. The lien shall be discharged as to subsequent purchasers for value without notice unless the association shall cause to be recorded a notice of the lien in the office of the clerk of the county commission of any county wherein any part of the condominium is located. The notice shall contain:

~~(1) A legally sufficient description of the unit;~~

~~(2) The name or names of the owners of the unit;~~

~~(3) The amount of unpaid assessments due together with the date when each fell due; and~~

~~(4) the date of the recordation.~~

The clerk of the county commission in whose office the notice is recorded shall index the notice in the appropriate deedbooks and lien books in the name of the unit owners and of the association. The cost of recordation shall be assessed against any unit owner found to be delinquent in a subsequent proceeding to enforce the lien.

Upon payment of the assessment, the association shall execute a written release of the lien in a manner set forth in section one, article twelve, chapter thirty-eight of this code. This release shall be recorded, at the expense of the association, in the clerk of the county commission wherein the notice of the lien was filed.

(i) At any time before the association has disposed of a unit in a cooperative or entered into a contract for its disposition under the power of sale, the unit owners or the holder of any subordinate security interest may cure the unit owner’s default and prevent the sale or other disposition by tendering the performance due under the security agreement, including any amounts due because of exercise of a right to accelerate, plus the reasonable expenses of proceeding to foreclosure incurred to the time of tender, including reasonable attorney fee’s of the creditor. In a cooperative, upon nonpayment of an assessment on a unit, the unit owner may be evicted in the same manner as provided by law in the case of an unlawful holdover by a commercial tenant, and the lien may be foreclosed as provided by this section.

(j) For the purpose of facilitating requests to the association by trustees and judicially appointed commissioners, the association shall at all times record its notice address in either the office of the West Virginia Secretary of State, or in the office of the clerk of the county commission of each county in which the common interest community is located.

(k) The association’s lien may be foreclosed as provided in this subsection and subsection (p) of this section:

(1) In a condominium or planned community, the association’s lien must be foreclosed in like manner as a mortgage on real estate;

(2) In a cooperative whose unit owners’ interests in the units are real estate, the association’s lien must be foreclosed in like manner as a mortgage on real estate or by power of sale under subsection (l); and

(3) In a cooperative whose unit owners’ interests in the units are personal property, the association’s lien must be foreclosed in like manner as a security interest; and

(4) In a foreclosure under [insert reference to state power of sale statute], the association shall give the notice required by statute or, if there is no such requirement, reasonable notice of its action to all lien holders of the unit whose interest would be affected:

(l) If the unit owner’s interest in a unit in a cooperative is real estate, the following requirements apply:

(1) The association, upon nonpayment of assessments and compliance with this subsection, may sell that unit at a public sale or by private negotiation, and at any time, date, and place. The association shall give to the unit owner and any lessee of the unit owner reasonable notice in a record of the time, date, and place of any public sale or, if a private sale is intended, of the intention of entering into a contract to sell and of the time and date after which a private disposition may be made. The same notice must also be sent to any other person that has a recorded interest in the unit which would be cut off by the sale, but only if the recorded interest was on record seven weeks before the date specified in the notice as the date of any public sale or seven weeks before the date specified in the notice as the date after which a private sale may be made. The notices required by this subsection may be sent to any address reasonable in the circumstances. A sale may not be held until five weeks after the sending of the notice. The association may buy at any public sale and, if the sale is conducted by a fiduciary or other person not related to the association, at a private sale.

(2) Unless otherwise agreed, the unit owner is liable for any deficiency in a foreclosure sale.

(3) The proceeds of a foreclosure sale must be applied in the following order:

(A) The reasonable expenses of sale;

(B) The reasonable expenses of securing possession before sale; the reasonable expenses of holding, maintaining, and preparing the unit for sale, including payment of taxes and other governmental charges and premiums on insurance; and, to the extent provided for by agreement between the association and the unit owner, reasonable attorney’s fees, costs, and other legal expenses incurred by the association;

(D) Satisfaction in the order of priority of any subordinate claim of record; and

(E) Remittance of any excess to the unit owner.

(4) A good faith purchaser for value acquires the unit free of the association’s debt that gave rise to the lien under which the foreclosure sale occurred and any subordinate interest, even though the association or other person conducting the sale failed to comply with this section. The person conducting the sale shall execute a conveyance to the purchaser sufficient to convey the unit and stating that it is executed by the person after a foreclosure of the association’s lien by power of sale and that the person was empowered to make the sale. Signature and title or authority of the person signing the conveyance as grantor and a recital of the facts of nonpayment of the assessment and of the giving of the notices required by this subsection are sufficient proof of the facts recited and of the authority to sign. Further proof of authority is not required even though the association is named as grantee in the conveyance.

(5) At any time before the association has disposed of a unit in a cooperative or entered into a contract for its disposition under the power of sale, the unit owners or the holder of any subordinate security interest may cure the unit owner’s default and prevent sale or other disposition by tendering the performance due under the security agreement, including any amounts due because of exercise of a right to accelerate, plus the reasonable expenses of proceeding to foreclosure incurred to the time of tender, including reasonable attorney’s fees and costs of the creditor.

(m) In an action by an association to collect assessments or to foreclose a lien on a unit under this section, the court may appoint a receiver to collect all sums alleged to be due and owing to a unit owner before commencement or during pendency of the action. The receivership is governed by [insert state law generally applicable to receiverships]. The court may order the receiver to pay any sums held by the receiver to the association during pendency of the action to the extent of the association’s common expense assessments based on a periodic budget adopted by the association pursuant to section 3-115.

(n) An association may not commence an action to foreclose a lien on a unit under this section unless:

(1) The unit owner, at the time the action is commenced, owes a sum equal to at least three months of common expense assessments based on the periodic budget last adopted by the association pursuant to section 3-115(a) and the unit owner has failed to accept or comply with a payment plan offered by the association; and

(2) The executive board votes to commence a foreclosure action specifically against that unit.

(o) Unless the parties otherwise agree, the association shall apply any sums paid by unit owners that are delinquent in paying assessments in the following order:

(1) Unpaid assessments;

(2) Late charges;

(3) Reasonable attorney’s fees and costs and other reasonable collection charges; and

(4) All other unpaid fees, charges, fines, penalties, interest, and late charges.

(p) If the only sums due with respect to a unit are fines and related sums imposed against the unit, a foreclosure action may not be commenced against the unit unless the association has a judgment against the unit owner for the fines and related sums and has perfected a judgment lien against the unit under [insert reference to state statute on perfection of judgments].

(q) Every aspect of a foreclosure, sale, or other disposition under this section, including the method, advertising, time, date, place, and terms, must be commercially reasonable.

§36B-3-117. Other liens.

(a) An association must retain the following:

(1) Detailed records of receipts and expenditures affecting the operation and administration of the association and other appropriate accounting records;

(2) Minutes of all meetings of its unit owners and executive board other than executive sessions, a record of all actions taken by the unit owners or executive board without a meeting, and a record of all actions taken by a committee in place of the executive board on behalf of the association;

(3) The names of unit owners in a form that permits preparation of a list of the names of all owners and the addresses at which the association communicates with them, in alphabetical order showing the number of votes each owner is entitled to cast;

(4) Its original or restated organizational documents, if required by law other than this chapter, bylaws and all amendments to them, and all rules currently in effect;

(5) All financial statements and tax returns of the association for the past three years;

(6) A list of the names and addresses of its current executive board members and officers;

(7) Its most recent annual report delivered to the Secretary of State, if any;

(8) Financial and other records sufficiently detailed to enable the association to comply with section 4-109;

(9) Copies of current contracts to which it is a party;

(10) Records of executive board or committee actions to approve or deny any requests for design or architectural approval from unit owners; and

(11) Ballots, proxies, and other records related to voting by unit owners for one year after the election, action, or vote to which they relate.

(b) Subject to subsections (c) and (d), all records retained by an association must be available for examination and copying by a unit owner or the owner’s authorized agent;

(1) During reasonable business hours or at a mutually convenient time and location; and

(2) Upon five days’ notice in a record reasonably identifying the specific records of the association requested.

(1) Personnel, salary, and medical records relating to specific individuals;

(2) Contracts, leases, and other commercial transactions to purchase or provide goods or services, currently being negotiated;

(3) Existing or potential litigation or mediation, arbitration, or administrative proceedings;

(4) Existing or potential matters involving federal, state, or local administrative or other formal proceedings before a governmental tribunal for enforcement of the declaration, bylaws, or rules;

(5) Communications with the association’s attorney which are otherwise protected by the attorney-client privilege or the attorney work-product doctrine;

(6) Information the disclosure of which would violate law other than this chapter;

(7) Records of an executive session of the executive board; or

(8) Individual unit files other than those of the requesting owner.

(d) An association may charge a reasonable fee for providing copies of any records under this section and for supervising the unit owner’s inspection.

(e) A right to copy records under this section includes the right to receive copies by photocopying or other means, including copies through an electronic transmission if available upon request by the unit owner.

(f) An association is not obligated to compile or synthesize information.

(g) Information provided pursuant to this section may not be used for commercial purposes.

§36B-3-120. Rules.

(a) The following requirements apply to an association’s authority under subdivision 3-102(a)(4) to institute and maintain a proceeding alleging a construction defect with respect to the common interest community, whether by litigation, mediation, arbitration, or administratively, against a declarant or an employee, independent contractor, or other person directly or indirectly providing labor or materials to a declarant:

(1) Subject to subsection (e), before the association institutes a proceeding described in this section, it shall provide notice in a record of its claims to the declarant and those persons that the association seeks to hold liable for the claimed defects. The text of the notice may be in any form reasonably calculated to give notice of the general nature of the association’s claims, including a list of the claimed defects. The notice may be delivered by any method of service and may be addressed to any person if the method of service used:

(A) Provides actual notice to the person named in the claim; or

(B) Would be sufficient to give notice to the person in connection with commencement of an action by the association against the person.

(2) Subject to subsection (e), the association may not institute a proceeding against a person until forty-five days after the association sends notice of its claim to that person.

(3) During the period described in subdivision (2), the declarant and any other person to which the association gave notice may present to the association a plan to repair or otherwise remedy the construction defects described in the notice. If the association does not receive a timely remediation plan from a person to which it gave notice, or if the association does not accept the terms of any plan submitted, the association may institute a proceeding against the person.

(4) If the association receives one or more timely remediation plans, the executive board shall consider promptly those plans and notify the persons to which it directed notice whether the plan is acceptable as presented, acceptable with stated conditions, or not accepted.

(5) If the association accepts a remediation plan from a person the association seeks to hold liable for the claimed defect, or if a person agrees to stated conditions to an otherwise acceptable plan, the parties shall agree on a period for implementation of the plan. The association may not institute a proceeding against the person during the time the plan is being diligently implemented.

(6) Except as otherwise provided in subdivision 4-116(d) for warranty claims, any statute of limitation affecting the association’s right of action against a declarant or other person is tolled during the period described in subdivision (2) and during any extension of that time because a person to which notice was directed has commenced and is diligently pursuing the remediation plan.

(b) After the time described in subsection (a)(2) expires, whether or not the association agrees to any remediation plan, a proceeding may be instituted by:

(1) The association against a person to which notice was directed which fails to submit a timely remediation plan, the plan of which is not acceptable, or which fails to pursue diligent implementation of that plan; or

(2) A unit owner with respect to the owner’s unit and any limited common elements assigned to that unit, regardless of any action of the association.

(c) This section does not preclude the association from making repairs necessary to mitigate damages or to correct any defect that poses a significant and immediate health or safety risk.

(d) Subject to the other provisions of this subsection, the determination of whether and when the association may institute a proceeding described in this subsection may be made by the executive board. The declaration may not require a vote by any number or percent of unit owners as a condition to institution of a proceeding.

(e) This subsection does not prevent an association from seeking equitable relief at any time without complying with subsection (a)(1) or (2).

ARTICLE 4. PROTECTION OF PURCHASERS.

§36B-4-101. Applicability; waiver.

(a) Except as provided in subsection (b), a public offering statement must contain or fully and accurately disclose:

(1) The name and principal address of the declarant and of the common interest community and a statement that the common interest community is ~~either~~ a condominium, cooperative or planned community;

(2) A general description of the common interest community, including to the extent possible, the types, number, and declarant's schedule of commencement and completion of construction of buildings and amenities that the declarant anticipates including in the common interest community;

(3) The number of units in the common interest community;

(4) Copies and a brief narrative description of the significant features of the declaration, other than any plats and plans and any other recorded covenants, conditions, restrictions and reservations affecting the common interest community; the bylaws and any rules ~~or regulations~~ of the association; copies of any contracts and leases to be signed by purchasers at closing and a brief narrative description of any contracts or leases that will or may be subject to cancellation by the association under section 3-105;

(5) The financial information required by subsection (b). Any current balance sheet and a projected budget for the association, either within or as an exhibit to the public offering statement, for one year after the date of the first conveyance to a purchaser and thereafter the current budget of the association, a statement of who prepared the budget and a statement of the budget's assumptions concerning occupancy and inflation factors. The budget must include, without limitation:

~~(i) A statement of the amount or a statement that there is no amount, included in the budget as a reserve for repairs and replacement;~~

~~(ii) A statement of any other reserves;~~

~~(iii) The projected common expense assessment by category of expenditures for the association; and~~

~~(iv) The projected monthly common expense assessment for each type of unit;~~

(6) Any services not reflected in the budget that the declarant provides, or expenses that he or she pays and which he or she expects may become at any subsequent time a common expense of the association and the projected common expense assessment attributable to each of those services or expenses for the association and for each type of unit;

(7) Any initial or special fee due from the purchaser or seller at the time of sale, ~~closing,~~ together with a description of the purpose and method of calculating the fee;

(8) A description of any liens, defects, or encumbrances on or affecting the title to the common interest community;

(9) A description of any financing offered or arranged by the declarant;

(10) The terms and significant limitations of any warranties provided by the declarant, including statutory warranties and limitations on the enforcement thereof or on damages;

(11) A statement that:

~~(i)~~ (A) Within fifteen days after receipt of a public offering statement a purchaser, before conveyance, may cancel any contract for purchase of a unit from a declarant;

~~(ii)~~ (B) If a declarant fails to provide a public offering statement to a purchaser before conveying a unit, that purchaser may recover from the declarant ten percent of the sales price of the unit plus ten percent of the share, proportionate to his or her common expense liability, of any indebtedness of the association secured by security interests encumbering the common interest community: Provided, That purchaser is required to show that he or she has been actually damaged as a result of the failure to provide such offering statement and that his or her action to recover such damage and the penalty provided in this paragraph is instituted within three years from the date on which purchaser's right of action shall have accrued; and

~~(iii)~~ (C) If a purchaser receives the public offering statement more than fifteen days before signing a contract, he or she ~~cannot~~ may not cancel the contract;

(12) A statement of any unsatisfied judgments or pending ~~suits~~ action against the association and the status of any pending ~~suits~~ action material to the common interest community of which a declarant has actual knowledge;

(13) A statement that any deposit made in connection with the purchase of a unit will be held in an escrow account until closing and will be returned to the purchaser if the purchaser cancels the contract pursuant to section 4-108, together with the name and address of the escrow agent;

(14) Any restraints on alienation of any portion of the common interest community and any restrictions:

~~(i)~~ (A) On use, occupancy, and alienation of the units; and ~~(ii)~~ (B) On the amount for which a unit may be sold or on the amount that may be received by a unit owner on sale, condemnation or casualty loss to the unit or to the common interest community or on termination of the common interest community;

(15) A description of the insurance coverage provided for the benefit of unit owners;

(16) Any current or expected fees or charges to be paid by unit owners for the use of the common elements and other facilities related to the common interest community;

(17) The extent to which financial arrangements have been provided for completion of all improvements that the declarant is obligated to build pursuant to section 4-119 (declarant's obligation to complete and restore);

(18) A brief narrative description of any zoning and other land use requirements affecting the common interest community;

(19) ~~All~~ Any other unusual and material circumstances, features and characteristics of the common interest community and the units; ~~and~~

(20) In a cooperative, whether ~~(i) Whether~~ the unit owners will be entitled, for federal, state and local income tax purposes, to a pass through of deductions for payments made by the association for real estate taxes and interest paid the holder of a security interest encumbering the cooperative, and ~~(ii)~~ a statement as to the effect on every unit owner if the association fails to pay real estate taxes or payments due the holder of a security interest encumbering the cooperative; and

(21) A description of any arrangement described in section 1-209 binding the association.

(b) The public offering statement must contain any current balance sheet and a projected budget for the association, either within or as an exhibit to the public offering statement, for one year after the date of the first conveyance to a purchaser, and thereafter the current budget of the association, a statement of who prepared the budget, and a statement of the budget’s assumptions concerning occupancy and inflation factors. The budget must include:

(A) A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement;

(B) A statement of any other reserves;

(D) The projected monthly common expense assessment for each type of unit.

~~(b)~~ (c) If a common interest community composed of not more than twelve units is not subject to any development ~~rights~~ right and no power is reserved to a declarant to make the common interest community part of a larger common interest community, group of common interest communities, or other real estate, a public offering statement may ~~but need not~~ include the information otherwise required by ~~paragraphs~~ subdivisions (9), (10), (15), (16), (17), (18) and (19) of subsection (a) of this section and the narrative descriptions of documents required by subsection (a)(4).

~~(c)~~ (d) A declarant promptly shall amend the public offering statement to report any material change in the information required by this section.

§36B-4-108. Purchaser's right to cancel.

(a) Except in the case of a sale in which delivery of a public offering statement is required, or unless exempt under section 4-101(b), a unit owner shall furnish to a purchaser before ~~execution of any contract for sale of a unit, or otherwise by conveyance, a copy of the declaration (other than any plats and plans),~~ the earlier of conveyance or transfer of the right to possession of a unit, a copy of the declaration, other than any plats and plans, the bylaws, the rules or regulations of the association, and a certificate containing:

(1) A statement disclosing the effect on the proposed disposition of any right of first refusal or other restraint on the free alienability of the unit held by the association;

(2) A statement setting forth the amount of the ~~monthly~~ periodic common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner;

(3) A statement of any other fees payable by the owner of the unit being sold; ~~unit owners;~~

(4) A statement of any capital expenditures ~~anticipated~~ approved by the association for the current and ~~two next~~ succeeding fiscal years;

(5) A statement of the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects;

(6) The most recent regularly prepared balance sheet and income and expense statement, if any, of the association;

(7) The current operating budget of the association;

(8) A statement of any unsatisfied judgments against the association and the status of any pending suits in which the association is a defendant;

(9) A statement describing any insurance coverage provided for the benefit of unit owners;

(10) A statement as to whether the executive board has ~~knowledge that any~~ given or received notice in a record that any existing uses, occupancies, alterations or improvements in or to the unit or to the limited common elements assigned thereto violate any provision of the declaration;

(11) A statement as to whether the executive board has ~~knowledge of any violations of the health~~ received notice in a record from a governmental agency of any violation of environmental, health, or building codes with respect to the unit, the limited common elements assigned thereto, or any other portion of the common interest community which has not been cured;

(12) A statement of the remaining term of any leasehold estate affecting the common interest community and the provisions governing any extension or renewal thereof;

(13) A statement of any restrictions in the declaration affecting the amount that may be received by a unit owner upon sale, condemnation, casualty loss to the unit or the common interest community, or termination of the common interest community; ~~and~~

(14) In a cooperative, an accountant's statement, if any was prepared, as to the deductibility for federal income tax purposes by the unit owner of real estate taxes and interest paid by the association;

(15) A statement describing any pending sale or encumbrance of common elements; and

(16) A statement disclosing the effect on the unit to be conveyed of any restrictions on the owner’s right to use or occupy the unit or to lease the unit to another person.

(b) The association, within ten days after a request by a unit owner, shall furnish a certificate containing the information necessary to enable the unit owner to comply with this section. A unit owner providing a certificate pursuant to subsection (a) is not liable to the purchaser for any erroneous information provided by the association and included in the certificate.

(c) A purchaser is not liable for any unpaid assessment or fee greater than the amount set forth in the certificate prepared by the association. A unit owner is not liable to a purchaser for the failure or delay of the association to provide the certificate in a timely manner, but the purchase contract is voidable by the purchaser until the certificate has been provided and for five days thereafter or until conveyance, whichever first occurs.

§36B-4-112. Conversion buildings.