HLS 11RS-470 REENGROSSED
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Regular Session, 2011
HOUSE BILL NO. 227
BY REPRESENTATIVES THIBAUT, GREENE, AND HARDY
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
CONDOMINIUMS: Requires condominium associations to carry a fidelity bond
AN ACT1
To enact R.S. 9:1123.113, relative to condominiums; to require condominium associations2
to maintain a fidelity bond; to provide for a coverage amount; to establish a3
minimum coverage amount; to provide for compliance through a managing agent4
who maintains a bond; to require proof of the bond to be maintained on the premises5
of the condominium; to require inspection of the proof upon request; to require6
written or electronic notice of the bond; and to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 9:1123.113 is hereby enacted to read as follows: 9
ยง1123.113. Fidelity bond required10
A. Any unit owners' association collecting assessments for common11
expenses shall obtain and maintain a blanket fidelity bond covering the officers,12
directors, and persons employed by the unit owners' association, and any managing13
agent and employees of the managing agent.14
B. The bond shall provide coverage in an amount equal to the lesser of one15
million dollars or the amount of reserve balances of the unit owners' association plus16
one-fourth of the aggregate annual assessment of the unit owners' association. The17
minimum coverage amount shall be ten thousand dollars.18
C. Any unit owners' association whose managing agent maintains its own19
bond shall be in compliance with this Section, provided that the managing agent's20 HLS 11RS-470 REENGROSSED
HB NO. 227
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bond meets the requirements set forth in this Section, and that the association is1
named as an additional insured under the managing agent's bond.2
D.(1) The unit owners' association or the managing agent shall maintain3
proof of the bond required by this Section on the premises of the condominium at all4
times.5
(2) The unit owners' association or the managing agent shall make the proof6
available for inspection by a member of the condominium unit owners' association7
upon request of the member.8
(3) The unit owners' association or the managing agent shall also provide9
every member of the unit owners' association with written or electronic notice of the10
bond as well as a statement notifyin g the member that the member has a right to11
inspect the proof of the bond required by this Section.12
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Thibaut HB No. 227
Abstract: Requires condominium unit owners' associations to maintain a fidelity bond;
requires the condominium unit owners' association to maintain proof of the bond
and to present the proof for inspection upon request of a member of the
condominium unit owners' association.
Proposed law requires any condominium unit owners' association collecting assessments for
common expenses to obtain and maintain a blanket fidelity bond covering the officers,
directors, and persons employed by the unit owners' association and any managing agent and
employees of the managing agent.
Proposed law requires the bond to provide coverage in an amount equal to the lesser of
$1,000,000 or the amount of reserve balances of the unit owners' association plus 1/4 of the
aggregate annual assessment of the unit owners' association.
Proposed law provides that the minimum coverage amount shall be $10,000.
Proposed law provides that any unit owners' association whose managing agent maintains
its own bond shall be in compliance with proposed law, provided that the managing agent's
bond meets the requirements set forth in proposed law, and that the association is named as
an additional insured under the managing agent's bond.
Proposed law requires the unit owners' association or the managing agent to maintain proof
of the bond required by proposed law on the premises of the condominium at all times. HLS 11RS-470 REENGROSSED
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are additions.
Proposed law requires the unit owners' association or the managing agent to make the proof
of the fidelity bond available for inspection by a member of the condominium unit owners'
association upon request of the member.
Proposed law requires the unit owners' association or the managing agent to also provide
every member of the unit owners' association with written or electronic notice of the fidelity
bond as well as a statement notifying the member that the member has a right to inspect the
proof of the bond required by proposed law.
(Adds R.S. 9:1123.113)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Commerce to the original
bill.
1. Made a technical correction.
House Floor Amendments to the engrossed bill.
1. Required the unit owners' association or the managing agent to maintain proof
of the fidelity bond on the premises of the condominium at all times.
2. Required the unit owners' association or the managing agent to make the proof
of the fidelity bond available for inspection by a member of the condominium
unit owners' association upon request of the member.
3. Required the unit owners' association or the managing agent to provide every
member of the unit owners' association with written or electronic notice of the
fidelity bond as well as a statement notifying the member that the member has
a right to inspect the proof of the bond.