House Study Bill 158 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON LUNDGREN) A BILL FOR An Act relating to access to unit owners associations 1 financial information and meeting minutes. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1053YC (2) 90 ko/ns
H.F. _____ Section 1. NEW SECTION . 499C.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. Bylaws means the instruments, however denominated, that 4 contain the procedures for conducting the affairs of a unit 5 owners association or an executive board regardless of the form 6 in which the association is organized, including any amendments 7 to such instruments. 8 2. Common element means: 9 a. For a cooperative under chapter 499A or a horizontal 10 property regime under chapter 499B, all portions of the common 11 interest community other than the units. 12 b. For a planned community, any real estate within the 13 planned community which is owned or leased by the unit owners 14 association, other than a unit. 15 c. For all common interest communities, any other interests 16 in real estate for the benefit of unit owners identified in the 17 declaration. 18 3. a. Common interest community means real estate 19 described in a declaration with respect to which a person, 20 by virtue of the persons ownership of a unit, is obligated 21 to pay for a share of real estate taxes, insurance premiums, 22 maintenance, or improvement of, or services or other expenses 23 related to, common elements, other units, or other real estate 24 described in the declaration. Common interest community 25 includes a planned community, a cooperative under chapter 499A, 26 and a horizontal property regime under chapter 499B. 27 b. Common interest community does not include: 28 (1) A covenant that requires the owners of separate parcels 29 of real estate to share costs or other obligations related to a 30 wall, driveway, well, or other similar structure, unless all 31 such owners consent in writing to the creation of a common 32 interest community. 33 (2) Real estate described in paragraph a if all units are 34 owned by a single owner. 35 -1- LSB 1053YC (2) 90 ko/ns 1/ 6
H.F. _____ 4. Declarant means a person or group of persons who, 1 as the record title owner of real estate, by a declaration, 2 creates a common interest community. 3 5. Declaration means the instrument, however denominated, 4 that creates a common interest community, including any 5 amendments to the instrument. 6 6. Executive board means the body, regardless of name, 7 designated in the declaration or bylaws to act on behalf of a 8 unit owners association. 9 7. Planned community means a common interest community 10 that is not solely a cooperative under chapter 499A or solely 11 a horizontal property regime under chapter 499B, and includes 12 property owner or homeowner associations. A cooperative under 13 chapter 499A or a horizontal property regime under chapter 14 499B, however, may be part of a planned community. 15 8. Rule means a policy, guideline, restriction, procedure, 16 or regulation, however denominated, which is not set forth in 17 the declaration or bylaws. 18 9. Unit means a portion of a common interest community 19 designated for separate ownership or occupancy or as otherwise 20 defined in the statute under which the common interest 21 community is organized, including but not limited to an 22 apartment as defined in section 499B.2. 23 10. Unit owner means a declarant or other person that owns 24 a unit, but does not include a person having an interest in a 25 unit solely as security for an obligation. In a horizontal 26 property regime under chapter 499B or a planned community, 27 the declarant is the owner of a unit. In a cooperative under 28 chapter 499A, the declarant is the owner of any unit to 29 which an interest has been allocated until that unit has been 30 conveyed to another person. 31 11. Unit owners association means an association, 32 regardless of name, organized as a for-profit or nonprofit 33 corporation, trust, limited liability company, partnership, 34 unincorporated association, or any other form of organization 35 -2- LSB 1053YC (2) 90 ko/ns 2/ 6
H.F. _____ authorized by the laws of this state, the membership of 1 which consists solely of unit owners except following 2 termination of the common interest community, at which time the 3 association shall consist of all former unit owners entitled 4 to distributions of proceeds or their heirs, successors, or 5 assigns. 6 Sec. 2. NEW SECTION . 499C.2 Records retention. 7 1. A unit owners association shall retain all of the 8 following records for the duration of the existence of the unit 9 owners association: 10 a. Detailed records of receipts and expenditures relating to 11 the operation and administration of the unit owners association 12 and other appropriate accounting records. 13 b. Minutes of all unit owners meetings and executive board 14 meetings, a record of all actions taken by the unit owners or 15 the executive board without a meeting, and a record of all 16 actions taken by a committee of the unit owners association 17 authorized to act for the association. The minutes retained 18 by the unit owners association shall indicate the date, time, 19 and place of the meeting, the names of all persons present 20 at the meeting, and each action taken at the meeting. The 21 minutes shall also include the results of each vote taken at 22 the meeting, including information indicating the vote of each 23 executive board member present at the meeting, and the vote of 24 each executive board member present shall be made public at the 25 open session. 26 c. The unit owners associations original and amended 27 organizational documents, bylaws including all amendments to 28 the bylaws, and all rules and amendments to the rules of the 29 common interest community. 30 d. The unit owners associations annual reports delivered to 31 the secretary of state, if applicable. 32 e. Copies of each contract to which the unit owners 33 association has been or is currently a party. 34 2. A unit owners association shall maintain all financial 35 -3- LSB 1053YC (2) 90 ko/ns 3/ 6
H.F. _____ statements and tax returns of the unit owners association for 1 the immediately preceding ten years. 2 Sec. 3. NEW SECTION . 499C.3 Right to access exceptions. 3 1. a. Except as provided under subsection 2, all records 4 and documents retained by a unit owners association under 5 section 499C.2 must be available for examination and copying 6 by a unit owner or the unit owners authorized agent during 7 reasonable business hours or at a mutually convenient time and 8 location upon the unit owner or the unit owners authorized 9 agent providing five days notice that reasonably identifies 10 the specific records that are being requested. 11 b. Except as provided under subsection 2, all records and 12 documents retained by a unit owners association under section 13 499C.2 must be available for examination and copying by a 14 bona fide prospective purchaser of a unit or the bona fide 15 prospective purchasers authorized agent during reasonable 16 business hours or at a mutually convenient time and location 17 upon the bona fide prospective purchaser or the bona fide 18 prospective purchasers authorized agent providing two days 19 notice that reasonably identifies the specific records that are 20 being requested. 21 2. Records and documents retained by a unit owners 22 association under section 499C.2 may be withheld from 23 inspection and copying to the extent that the records or 24 documents concern any of the following: 25 a. Personally identifiable information, salary, or medical 26 information relating to specific individuals. 27 b. Information relating to contracts, leases, and other 28 commercial transactions that are currently under negotiation to 29 purchase or provide goods or services. 30 c. Information relating to existing or potential litigation, 31 mediation, arbitration, or governmental administrative 32 proceedings. 33 d. Information relating to existing or potential matters 34 involving governmental administrative proceedings or other 35 -4- LSB 1053YC (2) 90 ko/ns 4/ 6
H.F. _____ proceedings before a government tribunal for enforcement of the 1 declaration, bylaws, or rules. 2 e. Communications with the unit owners association attorney 3 which are otherwise protected by the attorney-client privilege 4 or the attorney work-product doctrine. 5 f. Information that if disclosed would violate another 6 provision of law. 7 g. Records directly related to the personal, health, or 8 financial information of a unit owner if the person requesting 9 the records is not the unit owner that is the subject of the 10 records. 11 3. A unit owners association shall not charge a fee for 12 providing copies of any records or documents under this 13 section, or for supervising the inspection of such records or 14 documents. 15 4. The right to inspect records under this section includes 16 the right to copy records by photocopying or other means and 17 includes the right to receive copies through an encrypted 18 electronic transmission, if available, upon request of the 19 requester. 20 5. A unit owners association shall not be obligated to 21 compile or synthesize information or records under this 22 section. 23 6. Information or records obtained under this section shall 24 not be used for commercial purposes. 25 EXPLANATION 26 The inclusion of this explanation does not constitute agreement with 27 the explanations substance by the members of the general assembly. 28 This bill relates to access to unit owners associations 29 financial information and meeting minutes. 30 Under the bill, a unit owners association is an organization 31 of unit owners in a common interest community, including a 32 planned community, a cooperative under Code chapter 499A, or 33 a horizontal property regime under Code chapter 499B. The 34 bill requires unit owners associations (association) to retain 35 -5- LSB 1053YC (2) 90 ko/ns 5/ 6
H.F. _____ certain records and documents (records) as specified in the 1 bill. 2 All records retained by an association must be available 3 for examination and copying by a unit owner or the unit 4 owners authorized agent during reasonable business hours or 5 at a mutually convenient time and location upon five days 6 notice that reasonably identifies the specific records being 7 requested. All records retained by an association must 8 also be available for examination and copying by a bona fide 9 prospective purchaser of a unit or the prospective purchasers 10 authorized agent upon two days notice. Records that may be 11 excluded from being made available for examination and copying 12 are detailed in the bill. 13 An association is prohibited from charging a fee for either 14 copies of the records or for supervising the inspection of the 15 records. The right to inspect records includes the right to 16 copy records by photocopying or other means and to receive 17 copies via encrypted electronic transmission, if available. 18 An association is not obligated to compile or synthesize 19 records, and the bill prohibits the records from being used for 20 commercial purposes. 21 -6- LSB 1053YC (2) 90 ko/ns 6/ 6