General Assembly Raised Bill No. 6620
January Session, 2011 LCO No. 4820
*04820_______JUD*
Referred to Committee on Judiciary
Introduced by:
(JUD)
General Assembly
Raised Bill No. 6620
January Session, 2011
LCO No. 4820
*04820_______JUD*
Referred to Committee on Judiciary
Introduced by:
(JUD)
AN ACT CONCERNING CONDOMINIUMS AND COMMON INTEREST OWNERSHIP COMMUNITIES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective January 1, 2012) (a) For the purposes of this section and sections 2 to 4, inclusive, of this act:
(1) "Board of directors" means a board of directors, as defined in section 47-68a of the general statutes, of a condominium;
(2) "Commissioner" means the Commissioner of Consumer Protection;
(3) "Community association manager" means a community association manager, as defined in section 20-450 of the general statutes;
(4) "Common interest community" means a common interest community, as defined in section 47-202 of the general statutes;
(5) "Condominium" means a condominium, as defined in section 47-68a of the general statutes;
(6) "Executive board" means an executive board, as defined in section 47-202 of the general statutes, of a common interest community; and
(7) "Unit owner" means a unit owner, as defined in section 47-68a or 47-202 of the general statutes.
(b) There is established an Office of Condominium Ombudsman within the Department of Consumer Protection. The Office of Condominium Ombudsman shall be under the direction of the Commissioner of Consumer Protection, or the commissioner's designee.
(c) With respect to the Office of Condominium Ombudsman, the Commissioner of Consumer Protection, or the commissioner's designee may:
(1) Investigate and resolve complaints concerning unit owners, boards of directors, executive boards, community association managers and managing agents of condominiums or common interest communities;
(2) Analyze the laws regarding condominiums and common interest communities and make recommendations to the Governor and the General Assembly for legislation;
(3) Publish information concerning laws and regulations related to condominiums and common interest communities; and
(4) Refer any complaint received by the office to the appropriate law enforcement agency for prosecution, if deemed appropriate by the commissioner.
(d) The Commissioner of Consumer Protection may adopt regulations, in accordance with chapter 54 of the general statutes, to implement this section and sections 2 to 4, inclusive, of this act.
Sec. 2. (NEW) (Effective January 1, 2012) (a) Any unit owner or group of unit owners may file a request with the Office of Condominium Ombudsman that the commissioner or the commissioner's designee review the complaint of the unit owner or group of unit owners regarding alleged violations of any provision of chapter 825 or 828 of the general statutes, as the case may be, or a bylaw of a condominium association or common interest community association concerning the budget and appropriation of condominium association or common interest community association funds, the calling and conduct of condominium association or common interest community association meetings, or access to public records of the condominium association or common interest community association, provided (1) the complaint of the unit owner or group of unit owners was reviewed through the dispute resolution process established in section 3 of this act, or (2) the unit owner or group of unit owners has filed a sworn affidavit that the condominium association or common interest community association has not established such dispute resolution process. Such request shall be in writing, on such form as the commissioner may prescribe, and shall be accompanied by a fee of thirty-five dollars. Upon receipt of such request and after a determination by the commissioner or the commissioner's designee that such complaint presents a colorable claim of a violation of any of said provisions of statute or bylaws and that such complaint was not filed with malicious intent to unjustly vex or trouble the condominium association, common interest community association or any other person, the commissioner, or the commissioner's designee, shall notify the condominium association or common interest community association that is the subject of the complaint of such request and the fee required by this subsection. Not later than thirty days after receiving notice of the complaint from the commissioner, or the commissioner's designee, the condominium association or common interest community association shall pay to the commissioner a fee of thirty-five dollars. If such condominium association or common interest community association fails to pay such fee not later than thirty days after the date of such notice, the commissioner shall assess a penalty of one hundred dollars against such condominium association or common interest community association, in addition to such thirty-five-dollar fee.
(b) The commissioner, or the commissioner's designee, may mediate a complaint pursuant to a request filed under subsection (a) of this section.
(c) The commissioner, or the commissioner's designee, may conduct an investigation and make findings and recommendations regarding any matter concerning a violation of chapter 825 of the general statutes, chapter 828 of the general statutes or the bylaws of a condominium association or common interest community association.
(d) After notice and a hearing pursuant to chapter 54 of the general statutes, the commissioner may:
(1) Issue an order to any person found to have violated any provision of chapter 825 or 828 of the general statutes, or the bylaws of the condominium association or common interest community association, requiring such person to cease such violation;
(2) Order any person found to have violated any provision of chapter 825 or 828 of the general statutes, or the bylaws of the condominium association or common interest community association, to make restitution for damages caused by such violation;
(3) Assess a penalty up to two hundred dollars per knowing violation; or
(4) Through the Attorney General, petition the superior court for the judicial district where the violation occurred for the enforcement of any order issued by the commissioner, or for appropriate temporary relief or a restraining order, and shall certify and file in the court a transcript of the entire record of all hearings, including all testimony upon which such order was made and the findings and orders made by the commissioner. The commissioner shall provide written notice of the filing of such petition to the condominium association or common interest community association not later than three business days after the date such petition is filed in the superior court. The court may grant such relief by injunction or otherwise, including temporary relief, as it deems equitable and may make and enter a decree enforcing, modifying and enforcing as so modified, or setting aside, in whole or in part, any order of the commissioner.
(e) Any person aggrieved by a final decision of the commissioner may appeal therefrom in accordance with section 4-183 of the general statutes.
(f) Any fee or penalty collected pursuant to this section shall be deposited in the General Fund.
Sec. 3. (NEW) (Effective from passage) Not later than January 1, 2012, each condominium association or common interest community association shall establish a dispute resolution process for unit owner complaints regarding compliance by the condominium association or common interest community association with any provision of chapter 825 of the general statutes, chapter 828 of the general statutes or a bylaw of a condominium association or common interest community association concerning the budget and appropriation of condominium association or common interest community association funds, the calling and conduct of condominium association or common interest community association meetings, or access to public records of the condominium association or common interest community association. The dispute resolution process shall provide the opportunity for the unit owner to be heard regarding such complaint. Any complaint that is not resolved through the dispute resolution process established under this section may be filed with the Office of Condominium Ombudsman on or after January 1, 2012, pursuant to section 2 of this act.
Sec. 4. (NEW) (Effective January 1, 2012) (a) On January 1, 2012, and annually thereafter, each condominium association and common interest community association shall provide the Commissioner of Consumer Protection a certified copy of the last annual or biennial report of the association filed with the Secretary of the State, and shall pay a fee to the commissioner in an amount of four dollars for each condominium or common interest community unit within such condominium association or common interest community association. Any condominium association or common interest community association that fails to pay such fee shall, in addition to such fee, be assessed a penalty of one hundred dollars for each year such fee was not paid. The Attorney General, upon referral by the commissioner, may bring an action in the superior court to collect such fees and penalties.
(b) All fees and penalties collected pursuant to this section shall be deposited by the commissioner in a separate, nonlapsing fund, which shall be solely used for the operational expenditures of the Office of Condominium Ombudsman and for the administration of the programs performed by said office. The commissioner shall annually review such fund and, upon a finding by the commissioner that the balance of the fund is in excess of the amount necessary to operate said office and such programs, shall order that the annual fee collected pursuant to subsection (a) of this section be suspended or reduced until such time as the balance falls below that amount necessary to operate said office and such programs.
Sec. 5. Section 20-452 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2012):
(a) Any person seeking a certificate of registration shall apply to the department in writing, on a form provided by the department. Such application shall include the applicant's name, residence address, business address, business telephone number and such other information as the department may require.
(b) Each application for a certificate of registration as a community association manager shall be accompanied by an application fee of sixty dollars and a registration fee of [one] four hundred dollars. The department shall refund the registration fee if it refuses to issue a certificate of registration.
Sec. 6. Subsection (d) of section 20-457 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2012):
(d) All certificates issued under the provisions of sections 20-450 to 20-462, inclusive, as amended by this act, shall expire [annually] biennially on the thirty-first day of January in the even-numbered years. The fee for renewal of a certificate shall be [two] four hundred dollars.
Sec. 7. Subsections (a) and (b) of section 47-261e of the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) The executive board, at least annually, shall adopt a proposed budget for the common interest community for consideration by the unit owners. Not later than thirty days after the adoption of a proposed budget, the executive board shall provide to all unit owners a summary of the budget, including a statement of the amount of any reserves, and a statement of the basis on which such reserves are calculated and funded. Simultaneously, the board shall set a date not less than ten days or more than sixty days after providing the summary for either a meeting of the unit owners or a vote by ballot without a meeting to consider approval of the budget. If, at that meeting or in the vote by ballot, a majority of [all] the unit owners voting or any larger number specified in the declaration votes to reject the budget, the budget shall be rejected. If, at that meeting or in the vote by ballot, a majority of [all] the unit owners voting or any larger number specified in the declaration does not vote to reject the budget, the budget shall be approved. The absence of a quorum at such meeting or participating in the vote by ballot shall not affect rejection or approval of the budget. If a proposed budget is rejected, the budget last approved by the unit owners continues until unit owners approve a subsequent budget.
(b) The executive board, at any time, may propose a special assessment. Not later than thirty days after adoption of a proposed special assessment, the executive board shall provide to all unit owners a summary of the proposed special assessment. Unless the declaration or bylaws otherwise provide, if such special assessment, together with all other special and emergency assessments proposed by the executive board in the same calendar year, do not exceed fifteen per cent of the association's last adopted periodic budget for that calendar year, the special assessment is effective without approval of the unit owners. Otherwise, the board shall set a date not less than ten days or more than sixty days after providing the summary for either a meeting of the unit owners or a vote by ballot without a meeting to consider approval of the special assessment. If, at such meeting or in the balloting, a majority of [all] the unit owners voting or any larger number specified in the declaration votes to reject the special assessment, the special assessment shall be rejected. If, at such meeting or in the balloting, a majority of [all] the unit owners voting or any larger number specified in the declaration does not vote to reject the special assessment, the special assessment shall be approved. The absence of a quorum at such meeting or participating in the vote by ballot shall not affect the rejection or approval of the special assessment.
Sec. 8. Subsection (b) of section 47-255 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(b) In the case of a [building that contains] common interest community having attached units that are divided by either horizontal boundaries described in the declaration, or by vertical boundaries that comprise or are located within common walls between units, the insurance maintained under subdivision (1) of subsection (a) of this section, to the extent reasonably available, shall include the attached units, and all improvements and betterments installed by [unit] owners of the attached units, unless the declaration limits the association's authority to insure all improvements and betterments or the executive board decides, after giving notice and an opportunity for unit owners to comment, not to insure such improvements and betterments. In the case of common interest communities containing more than twelve units, unless the association insures all improvements and betterments, the association shall:
(1) Prepare and maintain a schedule of the standard fixtures, improvements and betterments in the units, including any standard wall, floor and ceiling coverings covered by the association's insurance policy;
(2) Provide such schedule at least annually to the unit owners in order to enable unit owners to coordinate their homeowners insurance coverage with the coverage afforded by the association's insurance policy; and
(3) Include such schedule in any resale certificate prepared pursuant to section 47-270.
Sec. 9. Subsection (i) of section 47-255 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(i) The provisions of this section may be varied or waived in the case of (1) a common interest community all of whose units are restricted to nonresidential use, or (2) any building that consists solely of one entire unit when the declaration or bylaws provide that the maintenance, repair and replacement of an entire freestanding unit is the responsibility of the unit owner.
Sec. 10. Section 47-218 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) The declaration, bylaws or surveys and plans of any common interest community created before January 1, 1984, may be amended to achieve any result permitted by this chapter regardless of what applicable law provided before January 1, 1984. For any common interest community created before January 1, 1984, the plans and certificate of completion described in subsection (b) of section 47-220 and any new survey required to comply with subsection (b) of section 47-220 shall not be required under subsection (i) of section 47-228, as amended by this act.
(b) Except as otherwise provided in subsections (i) and (j) of section 47-236, an amendment to the declaration, bylaws or surveys and plans authorized by subsection (a) of this section shall be adopted in conformity with any procedures and requirements for amending the instruments specified by those instruments or, if there are none, in conformity with the amendment procedures of this chapter. If an 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.
Sec. 11. Section 47-228 of the general statutes is amended by adding subsection (i) as follows (Effective October 1, 2011):
(NEW) (i) If the unit owners of a common interest community created before January 1, 1984, elect to be governed by the provisions of this chapter, no new survey or plan and no certificate of completion described in subsection (b) of section 47-220 shall be required for any unit if the delivery of a public offering statement would not be required under either this chapter or chapter 825 if the unit were to be sold.
Sec. 12. Subsection (e) of section 47-257 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(e) If any common expense is caused by the [wilful] misconduct, failure to comply with a written maintenance standard promulgated by the association or [gross] negligence of any unit owner or tenant or a guest or invitee of a unit owner or tenant, the association may, after notice and hearing, assess the portion of that common expense in excess of any insurance proceeds received by the association under its insurance policy, whether that portion results from the application of a deductible or otherwise, exclusively against that owner's unit.
Sec. 13. Section 47-261b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) (1) For the purposes of this section, "internal business operating procedures" means a specific procedure or set of procedures established by the executive board to administer the affairs of the association which do not authorize the imposition of fines or late fees upon unit owners.
(2) At least ten days before adopting, amending or repealing any rule, the executive board shall give all unit owners notice of: (1) The executive board's intention to adopt, amend or repeal a rule and shall include with such notice the text of the proposed rule or amendment, or the text of the rule proposed to be repealed; and (2) the date on which the executive board will act on the proposed rule, amendment or repeal after considering comments from unit owners.
(b) Following adoption, amendment or repeal of a rule, the association shall give all unit owners notice of its action and include with such notice a copy of any new or amended rule.
(c) Subject to the provisions of the declaration, an association may adopt rules to establish and enforce construction and design criteria and aesthetic standards. If an association adopts such rules, the association shall adopt procedures for enforcement of those rules and for approval of construction applications, including a reasonable time within which the association must act after an application is submitted and the consequences of its failure to act.
(d) A rule regulating display of the flag of the United States must be consistent with federal law. In addition, the association may not prohibit display, on a unit or on a limited common element adjoining a unit, of the flag of this state, or signs regarding candidates for public or association office or ballot questions, but the association may adopt rules governing the time, place, size, number and manner of those displays.
(e) Unit owners may peacefully assemble on the common elements to consider matters related to the common interest community, but the association may adopt rules governing the time, place and manner of those assemblies.
(f) An association may adopt rules that affect the use of or behavior in units that may be used for residential purposes, only to:
(1) Implement a provision of the declaration;
(2) Regulate any behavior in or occupancy of a unit which violates the declaration or adversely affects the use and enjoyment of other units or the common elements by other unit owners; or
(3) Restrict the leasing of residential units to the extent those rules are reasonably designed to meet underwriting requirements of institutional lenders that regularly make loans secured by first mortgages on units in common interest communities or regularly purchase those mortgages, provided no such restriction shall be enforceable unless notice thereof is recorded on the land records of each town in which any part of the common interest community is located. Such notice shall be indexed by the town clerk in the grantor index of such land records in the name of the association.
(g) An association's internal business operating procedures need not be adopted as rules.
(h) Each rule of the association must be reasonable.
Sec. 14. (NEW) (Effective October 1, 2011) No member of a board of directors, as defined in section 47-68a of the general statutes, shall be criminally liable for any conduct performed by the member on behalf of the association of unit owners, as defined in section 47-68a of the general statutes, provided such conduct is within the scope of such member's authority.
Sec. 15. Section 47-253 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) A unit owner is not liable, solely by reason of being a unit owner, for injury or damage arising out of the condition or use of the common elements. Neither the association nor any unit owner except the declarant is liable for that declarant's torts in connection with any part of the common interest community which that declarant has the responsibility to maintain.
(b) An action alleging a wrong done by the association, including an action arising out of the condition or use of the common elements, may be maintained against the association and not against any unit owner. If the wrong occurred during any period of declarant control and the association gives the declarant reasonable notice of and an opportunity to defend against the action, the declarant who then controlled the association is liable to the association or to any unit owner for (1) all tort losses not covered by insurance suffered by the association or that unit owner, and (2) all costs that the association would not have incurred but for a breach of contract or other wrongful act or omission.
(c) The declarant is liable to the association for all funds of the association collected during the period of declarant control which were not properly expended.
(d) Whenever the declarant is liable to the association under this section, the declarant is also liable for all expenses of litigation, including reasonable attorney's fees, incurred by the association. Any statute of limitation affecting the association's right of action against a declarant under this chapter is tolled until the period of declarant control terminates. A unit owner is not precluded from maintaining an action contemplated by this section because he is a unit owner or a member or officer of the association. Liens resulting from judgments against the association are governed by section 47-259.
(e) No member of the executive board shall be criminally liable for any conduct performed by the member on behalf of the association, provided such conduct is within the scope of such member's authority.
This act shall take effect as follows and shall amend the following sections:
Section 1 January 1, 2012 New section
Sec. 2 January 1, 2012 New section
Sec. 3 from passage New section
Sec. 4 January 1, 2012 New section
Sec. 5 January 1, 2012 20-452
Sec. 6 January 1, 2012 20-457(d)
Sec. 7 October 1, 2011 47-261e(a) and (b)
Sec. 8 October 1, 2011 47-255(b)
Sec. 9 October 1, 2011 47-255(i)
Sec. 10 October 1, 2011 47-218
Sec. 11 October 1, 2011 47-228
Sec. 12 October 1, 2011 47-257(e)
Sec. 13 October 1, 2011 47-261b
Sec. 14 October 1, 2011 New section
Sec. 15 October 1, 2011 47-253
This act shall take effect as follows and shall amend the following sections:
Section 1
January 1, 2012
New section
Sec. 2
January 1, 2012
New section
Sec. 3
from passage
New section
Sec. 4
January 1, 2012
New section
Sec. 5
January 1, 2012
20-452
Sec. 6
January 1, 2012
20-457(d)
Sec. 7
October 1, 2011
47-261e(a) and (b)
Sec. 8
October 1, 2011
47-255(b)
Sec. 9
October 1, 2011
47-255(i)
Sec. 10
October 1, 2011
47-218
Sec. 11
October 1, 2011
47-228
Sec. 12
October 1, 2011
47-257(e)
Sec. 13
October 1, 2011
47-261b
Sec. 14
October 1, 2011
New section
Sec. 15
October 1, 2011
47-253
Statement of Purpose:
To: (1) Establish an Office of Condominium Ombudsman to provide a means of resolving disputes between condominium owners and condominium associations; (2) require that the budget of a common interest community be approved by a majority of the unit owners voting instead of a majority of all unit owners; (3) provide that insurance requirements apply to common interest communities having units divided by either horizontal or vertical boundaries, and provide that such insurance be maintained on behalf of attached units; (4) exclude stand-alone units from insurance requirements when the declaration and bylaws indicate that the maintenance, repair and replacement of entire freestanding units are the responsibility of the unit owner; (5) exempt certain common interest communities created before January 1, 1984, that elect to be governed by the Common Interest Ownership Act, from the requirement to obtain new surveys, plans and certificates of completion when adding units if a public offering statement is not otherwise required; (6) allow an assessment against a unit owner for common expenses caused by ordinary misconduct or negligence, rather than wilful misconduct or gross negligence as currently provided; (7) define the "internal business operating procedures" that are not required to be adopted as rules; and (8) prohibit criminal prosecutions of members of condominium board of directors or executive boards of common interest communities unless such members are acting outside the scope of their authority.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]