Introduced Version
HOUSE BILL No. 1401
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 32-25.5.
Synopsis: Homeowners association governance. Amends as follows
the statute governing homeowners associations: (1) Provides that for
each meeting of the homeowners association (HOA) board, the board
must provide at least four days advance written notice of the meeting
to members of the HOA and requires the notice must include: (A) a
meeting agenda; and (B) in the case of the notice for annual meeting,
a statement of the right of HOA members to demand a special meeting
of the members, including a statement of the statutorily required
number of members needed to demand a special meeting. (2) Provides
that a member of an HOA is considered to be in attendance at a
meeting of the HOA if the member attends by remote or virtual means
in accordance with the procedures for remote meetings set forth in the
statute governing nonprofit corporations. (3) Provides that an HOA's
governing documents may not require the attendance of more than 25%
of the members at a meeting to constitute a quorum. (4) Authorizes an
HOA to assess a fine for a member's violation of a covenant if the HOA
first: (A) adopts a schedule of fines for specified violations; and (B) in
the case of a violation by a member, provides to the member a notice
setting forth the violation, the amount of the fine, and the date on which
the fine will be assessed. (5) Amends provisions governing the
resolution of disputes between HOAs and members to specify that if a
claimant under those provisions is an HOA and the claim involves a
member's violation of the covenants of the HOA, the board may: (A)
assess a fine under the bill's provisions authorizing the assessment of
fines or enforce a fine previously assessed under that authority; and (B)
seek to recover from the other party any court costs or attorney's fees
incurred in connection with the claim.
Effective: July 1, 2025.
Olthoff
January 13, 2025, read first time and referred to Committee on Judiciary.
2025 IN 1401—LS 7683/DI 101 Introduced
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
HOUSE BILL No. 1401
A BILL FOR AN ACT to amend the Indiana Code concerning
property.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 32-25.5-3-2, AS AMENDED BY P.L.1-2010,
2 SECTION 128, IS AMENDED TO READ AS FOLLOWS
3 [EFFECTIVE JULY 1, 2025]: Sec. 2. (a) In addition to any other
4 meeting held by a board, a board shall hold a special meeting of the
5 members of a homeowners association if at least ten percent (10%) of
6 the members of the homeowners association submit to the board at
7 least one (1) written demand for the special meeting that:
8 (1) describes the purpose for which the meeting is to be held; and
9 (2) is signed by the members requesting the special meeting.
10 (b) If a board does not send out a notice of the date, time, and place
11 for a special meeting not more than thirty (30) days after the date the
12 board receives a valid written demand for the special meeting under
13 subsection (a), a member of the homeowners association who signed
14 the written demand may:
15 (1) set the date, time, and place for the special meeting; and
16 (2) send out the notice for the special meeting to the other
17 members.
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1 (c) In the meeting notice of the board's annual meeting, the
2 board shall include a written statement that:
3 (1) notifies homeowners association members of the right to
4 demand a special meeting of the members under this section;
5 and
6 (2) states the number of members required to demand a
7 special meeting, as determined under subsection (a);
8 in accordance with section 3(g) of this chapter.
9 SECTION 2. IC 32-25.5-3-3, AS AMENDED BY P.L.164-2016,
10 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
11 JULY 1, 2025]: Sec. 3. (a) A homeowners association shall prepare an
12 annual budget.
13 (b) The annual budget must reflect:
14 (1) the estimated revenues and expenses for the budget year; and
15 (2) the estimated surplus or deficit as of the end of the current
16 budget year.
17 (c) The homeowners association shall provide each member of the
18 homeowners association with:
19 (1) a:
20 (A) copy of the proposed annual budget; or
21 (B) written notice that a copy of the proposed annual budget
22 is available upon request at no charge to the member; and
23 (2) a written notice of the amount of any increase or decrease in
24 a regular annual assessment paid by the members that would
25 occur if the proposed annual budget is approved;
26 before the homeowners association meeting held under subsection (d).
27 (d) Subject to subsection (f), a homeowners association budget must
28 be approved at a meeting of the homeowners association members by
29 a majority of the members of the homeowners association in attendance
30 at a meeting called and conducted in accordance with the requirements
31 of the homeowners association's governing documents.
32 (e) For purposes of this section, a member of a homeowners
33 association is considered to be in attendance at a meeting if the
34 member attends:
35 (1) in person;
36 (2) by proxy; or
37 (3) by remote or virtual means in accordance with the
38 procedures set forth in IC 23-17-10-1(d) through
39 IC 23-17-10-1(f); or
40 (3) (4) by any other means allowed under:
41 (A) state law; or
42 (B) the governing documents of the homeowners association.
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1 (f) Subject to subsection (n), if the number of members of the
2 homeowners association in attendance at a meeting held under
3 subsection (d) does not constitute a quorum as defined in the governing
4 documents of the homeowners association, the board may adopt an
5 annual budget for the homeowners association for the ensuing year in
6 an amount that does not exceed one hundred percent (100%) of the
7 amount of the last approved homeowners association annual budget.
8 However, the board may adopt an annual budget for the homeowners
9 association for the ensuing year in an amount that does not exceed one
10 hundred ten percent (110%) of the amount of the last approved
11 homeowners association annual budget if the governing documents of
12 the homeowners association allow the board to adopt an annual budget
13 under this subsection for the ensuing year in an amount that does not
14 exceed one hundred ten percent (110%) of the amount of the last
15 approved homeowners association annual budget.
16 (g) Subject to subsection (k):
17 (1) the financial records, including all contracts, invoices, bills,
18 receipts, and bank records, of a homeowners association must be
19 available for inspection by each member of the homeowners
20 association upon written request; and
21 (2) the minutes of meetings of the homeowners association board,
22 including the annual meeting, must be available to a member of
23 the homeowners association for inspection upon the homeowners
24 association member's request, which may be submitted:
25 (A) in person;
26 (B) in writing; or
27 (C) by electronic mail.
28 In addition to the right to inspect the meeting minutes of the
29 homeowners association board, a member of a homeowners
30 association has the right to attend any meeting of the homeowners
31 association board, including an annual meeting of the board. For
32 each meeting of the homeowners association board, the board
33 must provide at least four (4) days advance written notice of
34 the meeting to members of the homeowners association. The
35 meeting notice must include an agenda for the meeting. The
36 meeting notice for the annual meeting of the board must also
37 include a statement of the right of homeowners association
38 members to demand a special meeting of the members under
39 section 2 of this chapter, including a statement of the number
40 of members required to demand a special meeting, as
41 determined under section 2(a) of this chapter. The board may
42 provide a written meeting notice required under this
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1 subsection by hand delivery, United States mail, or electronic
2 mail or other electronic means. However, the board of directors
3 may meet in private to discuss delinquent assessments. The board
4 of directors may also meet in private with legal counsel to discuss
5 the initiation of litigation or to discuss litigation that either is
6 pending or has been threatened specifically in writing. As used in
7 this subsection, "litigation" includes any judicial action or
8 administrative law proceeding under state or federal law.
9 A written request for inspection must identify with reasonable
10 particularity the information being requested. A member's ability to
11 inspect records under this section shall not be unreasonably denied or
12 conditioned upon provision of an appropriate purpose for the request.
13 The homeowners association may charge a reasonable fee for the
14 copying of a record requested under this subsection if the homeowners
15 association member requests a written copy of the record.
16 (h) Subject to subsections (j) and (k), if there is a dispute between
17 a homeowner and a homeowners association, the officers of the
18 homeowners association must make all communications concerning the
19 dispute available to the homeowner.
20 (i) Subject to subsections (j) and (k), the following apply:
21 (1) A homeowners association shall make all communications and
22 information concerning a lot available to the owner of the lot or
23 a home on the lot.
24 (2) If a homeowners association initiates communication with any
25 member about another member's lot, the homeowners association
26 must give a copy of that communication to the other member
27 whose lot is the subject of the communication. However, this
28 subdivision does not apply if the communication concerns
29 suspected criminal activity, or activity that is the subject of a law
30 enforcement investigation, involving the member whose lot is the
31 subject of the communication.
32 (j) A homeowners association is not required to make:
33 (1) communications between the homeowners association and the
34 legal counsel of the homeowners association; and
35 (2) other communications or attorney work product prepared in
36 anticipation of litigation;
37 available to the owner of a lot or home.
38 (k) A homeowners association is not required to make available to
39 a member for inspection any of the following:
40 (1) Unexecuted contracts.
41 (2) Records regarding contract negotiations.
42 (3) Information regarding an individual member's association
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1 account to a person who is not a named party on the account.
2 (4) Any information that is prohibited from release under state or
3 federal law.
4 (5) Any records that were created more than two (2) years before
5 the request.
6 (6) Information that:
7 (A) is provided by a member of the homeowners association
8 about another member of the homeowners association; and
9 (B) concerns suspected criminal activity involving the other
10 member.
11 Except as otherwise provided in this article (including subsection (j)
12 and this subsection), other applicable law, or the governing documents
13 of the homeowners association, a homeowners association is not
14 required to retain a record of a written or electronic communication for
15 any specific period of time. However, a homeowners association or a
16 member of the board of a homeowners association shall retain for at
17 least two (2) years after receipt, and during that period shall make
18 available to a member of the homeowners association at the member's
19 request, any written or electronic communication received by the
20 homeowners association or board member that relates to a financial
21 transaction of the homeowners association and that is not otherwise
22 excepted from disclosure under this article or other applicable law.
23 (l) Nothing in this chapter:
24 (1) abrogates or eliminates provisions in homeowners association
25 agreements that permit or require additional disclosure or
26 inspection rights not required by this chapter; or
27 (2) prevents a homeowners association from agreeing to make
28 disclosures or to provide inspection rights not required by this
29 chapter.
30 (m) A homeowners association may not charge a fee for the first
31 hour required to search for a record in response to a written request
32 submitted under this chapter. A homeowners association may charge
33 a search fee for any time that exceeds one (1) hour. The following
34 provisions apply if a homeowners association charges a search fee:
35 (1) The homeowners association shall charge an hourly fee that
36 does not exceed thirty-five dollars ($35) per hour.
37 (2) The homeowners association may charge the fee only for time
38 that the person making the search actually spends in searching for
39 the record.
40 (3) The homeowners association shall prorate the fee to reflect
41 any search time of less than one (1) hour.
42 (4) The total amount of the fee charged by the homeowners
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1 association for a search may not exceed two hundred dollars
2 ($200).
3 (n) The governing documents of a homeowners association may
4 not require the attendance:
5 (1) in person;
6 (2) by proxy;
7 (3) by remote or virtual means; or
8 (4) by any other means allowed under:
9 (A) state law; or
10 (B) the governing documents of the homeowners
11 association;
12 of more than twenty-five percent (25%) of the members at a
13 meeting to constitute a quorum. A homeowners association or the
14 board may not enforce a provision of the governing documents that
15 conflicts with this subsection.
16 SECTION 3. IC 32-25.5-3-12 IS ADDED TO THE INDIANA
17 CODE AS A NEW SECTION TO READ AS FOLLOWS
18 [EFFECTIVE JULY 1, 2025]: Sec. 12. (a) A homeowners association
19 may assess a fine for a member's violation of a covenant described
20 in IC 32-25.5-2-3(2) if the board first adopts a schedule of fines that
21 sets forth:
22 (1) the covenant violations that are subject to a fine;
23 (2) the amount of the fine that applies to each violation
24 identified under subdivision (1); and
25 (3) if any of the fines listed in subdivision (2) will be assessed
26 on an ongoing or recurring basis:
27 (A) for a defined period or a specified number of days; or
28 (B) until the violation is cured or another contingency
29 occurs;
30 a statement of that fact, along with a description of how the
31 fine will be calculated and assessed.
32 (b) If the board will adopt a schedule of fines under this section
33 at a meeting of the board, the board shall give notice of the meeting
34 to members in accordance with the homeowners association's
35 governing documents. The notice must include the proposed
36 schedule of fines.
37 (c) A schedule of fines adopted under this section must be
38 available to any member for inspection upon the member's request,
39 which may be submitted:
40 (1) in person;
41 (2) in writing; or
42 (3) by electronic mail.
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1 (d) The board may, from time to time, amend or repeal a
2 schedule of fines adopted under this section if notice of:
3 (1) the amendment or repeal, including the amended schedule
4 of rates in the case of an amendment; and
5 (2) any meeting held to adopt the amendment or repeal;
6 is given to members in accordance with the homeowners
7 association's governing documents.
8 (e) Members may submit to the board under section 2 of this
9 chapter a written demand for a special meeting of the members of
10 the homeowners association for the purpose of voting to amend a
11 schedule of fines adopted under this section. An amended schedule
12 of fines shall be:
13 (1) adopted as proposed; or
14 (2) revised and adopted;
15 if so approved by a majority of members present at the meeting.
16 (f) After a schedule of fines has been adopted under this section,
17 the board may assess a member a fine for a violation included in
18 the schedule of fines under subsection (a)(1) if the board first
19 provides notice to the member of:
20 (1) the violation for which the fine will be assessed;
21 (2) the amount of the fine;
22 (3) the date on which the fine will be assessed; and
23 (4) if the fine will be assessed on an ongoing or recurring
24 basis:
25 (A) for a defined period or a specified number of days; or
26 (B) until the violation is cured or another contingency
27 occurs;
28 a statement of that fact, along with a description of how the
29 fine will be calculated and assessed.
30 (g) If a member is assessed a fine under this section, the amount
31 of the fine that has accrued must be available to the member upon
32 the member's request, which may be submitted:
33 (1) in person;
34 (2) in writing; or
35 (3) by electronic mail.
36 (h) The assessment of a fine by a homeowners association under
37 this section does not operate as a waiver of the homeowners
38 association's rights to pursue alternative remedies provided for in
39 the homeowners association's governing documents, including any
40 right to injunctive relief or to pursue a claim for damages.
41 SECTION 4. IC 32-25.5-5-4, AS ADDED BY P.L.141-2015,
42 SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
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1 JULY 1, 2025]: Sec. 4. As used in this chapter, "exempt claim" refers
2 to any of the following claims or actions:
3 (1) A claim by the homeowners association for assessments or
4 dues and any action by the association to collect assessments or
5 dues. This subdivision does not include a claim that involves
6 the assessment or enforcement of a fine under IC 32-25.5-3-12
7 by a homeowners association for a member's violation of a
8 covenant of the homeowners association.
9 (2) An action by a party to obtain a temporary restraining order or
10 equivalent emergency equitable relief:
11 (A) to maintain the status quo and preserve the party's ability
12 to enforce the governing documents; or
13 (B) when an emergency condition exists that jeopardizes the
14 health or safety of any of the residents within the community
15 governed by the homeowners association.
16 (3) A suit to which an applicable statute of limitations would
17 expire within the notice period. This subdivision does not apply
18 if a party against which the claim is made agrees to toll the statute
19 of limitations as to the claim for the period reasonably necessary
20 to comply with this chapter.
21 (4) A dispute that is subject to mediation, arbitration, or other
22 alternate dispute resolution under applicable law, contract,
23 warranty agreement, or other instrument.
24 (5) A claim that is substantively identical to a claim:
25 (A) that was previously addressed by the parties; or
26 (B) that was resolved by a judicial determination in favor of
27 one (1) of the parties.
28 SECTION 5. IC 32-25.5-5-10, AS ADDED BY P.L.141-2015,
29 SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
30 JULY 1, 2025]: Sec. 10. A claimant must provide notice of the claim
31 to the respondent, stating plainly and concisely the following
32 information:
33 (1) The nature of the claim, including the date, time, location,
34 persons involved, and the respondent's role in the claim.
35 (2) The basis of the claim, including the provision of the
36 governing documents or other authority out of which the claim
37 arises.
38 (3) What the claimant wants the respondent to do or not to do to
39 resolve the claim.
40 (4) That the respondent has a right to meet with the claimant, if
41 the respondent makes a written request for a meeting not later
42 than ten (10) business days after the date of the notice.
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1 (5) The name and address of the person from whom the
2 respondent must contact to:
3 (A) request a meeting under subdivision (4); or
4 (B) provide notice that the violation on which the claim is
5 based has been cured.
6 (6) If the claimant is a homeowners association and the claim
7 involves a member's violation of the covenants of the
8 homeowners association, a statement that the board may:
9 (A) assess a fine under IC 32-25.5-3-12 for the violation or
10 enforce a fine previously assessed under IC 32-25.5-3-12
11 for the violation; and
12 (B) seek to recover from the other party any court costs or
13 attorney's fees incurred in connection with the claim under
14 this chapter.
15 SECTION 6. IC 32-25.5-5-13, AS ADDED BY P.L.141-2015,
16 SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 JULY 1, 2025]: Sec. 13. (a) If an impasse is reached and:
18 (1) neither party requests mediation or arbitration; or
19 (2) mediation or arbitration does not result in a settlement of the
20 claim;
21 the claimant may begin legal proceedings.
22 (b) If the claimant is a homeowners association and the claim
23 involves a member's violation of the covenants of the homeowners
24 association, the board may:
25 (1) assess a fine under IC 32-25.5-3-12 for the violation or
26 enforce a fine previously assessed under IC 32-25.5-3-12 for
27 the violation; and
28 (2) seek to recover from the other party any court costs or
29 attorney's fees incurred in connection with the claim under
30 this chapter.
31 SECTION 7. IC 32-25.5-5-16, AS ADDED BY P.L.141-2015,
32 SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
33 JULY 1, 2025]: Sec. 16. The board, on behalf of the homeowners
34 association, and without the consent of the members of the
35 homeowners association, may do any of the following:
36 (1) Negotiate settlements of claims or legal proceedings under
37 this chapter.
38 (2) Execute settlement agreements, waivers, releases of claims, or
39 any other documents resulting from application of this chapter.
40 (3) If a claim under this chapter involves a member's violation
41 of the covenants of the homeowners association:
42 (A) assess a fine under IC 32-25.5-3-12 for the violation or
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1 enforce a fine previously assessed under IC 32-25.5-3-12
2 for the violation; and
3 (B) seek to recover from the other party any court costs or
4 attorney's fees incurred in connection with the claim.
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