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Regular Session, 2014
SENATE BILL NO. 397
BY SENATOR MILLS
CONDOMINIUMS. Provides relative to the Louisiana Condominium Act. (8/1/14)
AN ACT1
To amend and reenact R.S. 9:1123.106(A) and (B) and 1123.108 and to enact R.S.2
9:1122.109, relative to the Louisiana Condominium Act; to provide for transfer of3
association control; to provide for the association; to provide for the adoption of4
bylaws; to provide for records; to provide for certain procedures, terms, and5
conditions; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 9:1123.106(A) and (B) and 1123.108 are hereby amended and8
reenacted and R.S. 9:1122.109 is hereby enacted to read as follows: 9
§1122.109. Transfer of association control10
A. If unit owners other than the developer own fifteen percent or more11
of the units in a condominium, such unit owners are entitled to elect at least12
one-third of the persons who shall manage and regulate the condominium. Unit13
owners other than the developer are entitled to elect at least a majority of the14
persons who shall manage and regulate the condominium, when any one of the15
following events occur:16
(1) The passage of three years after fifty percent of the units have been17 SB NO. 397
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conveyed to purchasers.1
(2) The passage of three months after ninety percent of the units have2
been conveyed to purchasers.3
(3) When all the units have been completed, and more than one has been4
conveyed to purchasers, and none of the others are being offered for sale by the5
developer in the ordinary course of business.6
(4) When more than one unit has been conveyed to purchasers and none7
of the others are being constructed or offered for sale by the developer in the8
ordinary course of business.9
(5) When the developer files a petition seeking protection in bankruptcy.10
B. At the time that unit owners other than the developer elect a majority11
of the persons to manage and regulate the condominium, the developer shall12
relinquish control of the association, and the unit owners shall accept control.13
Within ninety days of such election, the developer shall deliver to the14
association, at the developer's expense, all property of the unit owners and of15
the association that is held or controlled by the developer, including but not16
limited to the following items, if applicable:17
(1)(a) The original or a copy of the recorded declaration and all18
amendments thereto. If a copy is provided, it shall be certified by affidavit of the19
developer or an officer or agent of the developer as being a complete copy of the20
actual recorded declaration.21
(b) A certified copy of the articles of incorporation of the association.22
(c) A copy of the bylaws.23
(d) A copy of all minutes and all books and records of the association,24
if any.25
(e) Any rules adopted by the association.26
(2) The financial records, including financial statements of the27
association, and source documents from the incorporation or establishment of28
the association through the date of turnover.29 SB NO. 397
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(3) Association funds or control thereof.1
(4) All tangible personal property that is property of the association,2
which is represented by the developer to be part of the common elements or3
which is ostensibly part of the common elements, and an inventory of that4
property.5
(5) A copy of the plans and specifications utilized in the construction or6
remodeling of improvements, the supplying of equipment to the condominium,7
and the construction and installation of all mechanical components serving the8
improvements and the site, together with an affidavit from the developer or the9
developer's agent or an architect or engineer authorized to practice in this state10
that such plans and specifications represent, to the best of his knowledge and11
belief, the actual plans and specifications utilized in the construction and12
improvement of the condominium and for the construction and installation of13
the mechanical components serving the improvements.14
(6) A list of the names and addresses of all contractors, subcontractors,15
and suppliers utilized in the construction or remodeling of the improvements16
and in the landscaping of the condominium or association property which the17
developer had knowledge of at any time in the development of the18
condominium.19
(7) Insurance policies.20
(8) Copies of any certificates of occupancy that may have been issued for21
the condominium property.22
(9) Any other permits applicable to the condominium property which23
have been issued by governmental bodies and are in force or were issued within24
one year prior to the date the unit owners other than the developer took control25
of the association.26
(10) All written warranties of the contractor, subcontractors, suppliers,27
and manufacturers, if any, that are still effective.28
(11) A roster of unit owners and their addresses and telephone numbers,29 SB NO. 397
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if known, as shown on the developer's records.1
(12) Leases of the common elements and other leases to which the2
association is a party.3
(13) Employment contracts or service contracts in which the association4
is one of the contracting parties or service contracts in which the association or5
the unit owners have an obligation or responsibility, directly or indirectly, to6
pay some or all of the fee or charges of the person or persons performing the7
service.8
(14) All other contracts to which the association is a party.9
(15) A report included in the official records, under seal of an architect10
or engineer authorized to practice in this state, attesting to required11
maintenance, useful life, and replacement costs of the following applicable12
common elements:13
(a) Roof.14
(b) Structure.15
(c) Fireproofing and fire protection systems.16
(d) Elevators.17
(e) Heating and cooling systems.18
(f) Plumbing.19
(g) Electrical systems.20
(h) Swimming pool or spa and equipment.21
(i) Seawalls.22
(j) Pavement and parking areas.23
(k) Drainage systems.24
(l) Painting.25
(m) Irrigation systems.26
C. During the period prior to the time that the developer relinquishes27
control of the association pursuant to Subsection B of this Section, if any28
provision of this Part is violated by the association, the developer shall be29 SB NO. 397
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responsible for such violation and shall be liable to third parties.1
D. In any claim against a developer by an association alleging a defect2
in design, structural elements, construction, or any mechanical, electrical, fire3
protection, plumbing, or other element that requires a licensed professional for4
design or installation, such defect must be examined and certified by an5
appropriately licensed engineer, design professional, contractor, or otherwise6
licensed individual or entity.7
* * *8
§1123.106. Bylaws9
A. The administration and operation of the condominium shall be governed10
by the bylaws.11
B. The bylaws shall provide for the include but not be limited to the12
following:13
(1) The form and manner of administration of the condominium.14
(2) The percentage of voting interests required to constitute a quorum15
at a meeting.16
(3) Public meetings of the association if a quorum is required. However,17
a meeting shall not be public for any of the following reasons:18
(a) To seek legal advice from the association's attorney.19
(b) For legal advice to be rendered by the association's attorney.20
(c) To discuss personnel matters.21
(4) Adequate notice of all association meetings, which shall identify all22
agenda items, shall be posted conspicuously on the condominium's property at23
least forty-eight hours before the meeting except in an emergency.24
(5) An annual meeting of the unit owners.25
(6) The election of persons to manage and regulate the condominium.26
* * *27
§1123.108. Association records; required records; inspection28
A. The association shall keep financial records sufficiently detailed to enable29 SB NO. 397
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the association to comply with Section 1124.107. All financial and other records1
shall be made reasonably available for examination by any unit owner and his2
authorized agents.3
B. From the inception of the association, the association shall maintain4
all of the following items, if applicable, which shall constitute the official records5
of the association:6
(1) A copy of the plans, permits, warranties, and other items provided7
by the developer pursuant to R.S. 9:1122.109.8
(2) A photocopy of the recorded condominium declaration and each9
amendment to each declaration.10
(3) A photocopy of the recorded bylaws of the association and each11
amendment to the bylaws.12
(4) A certified copy of the articles of incorporation of the association and13
each amendment to the articles of incorporation.14
(5) A copy of all minutes of each meeting of the association and the unit15
owners. Such minutes shall be retained for at least seven years.16
(6) A current roster of all unit owners and their mailing addresses, unit17
identifications, voting rights, and if known, telephone numbers.18
(7) All current insurance policies of the association and condominium19
operated by the association.20
(8) A current copy of any management agreement, lease, or other21
contract to which the association is a party or under which the association or22
the unit owners have an obligation or responsibility.23
(9) Bills of sale or transfer for all property owned by the association.24
(10) Accounting records for the association and separate accounting25
records for the condominium. All accounting records shall be maintained for26
at least seven years. The accounting records shall include but are not limited27
to the following:28
(a) Accurate, itemized, and detailed records of all receipts and29 SB NO. 397
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expenditures.1
(b) A current account and a monthly, bimonthly, or quarterly statement2
of the account for each unit designating the name of the unit owner, the due3
date and amount of each assessment, the amount paid upon the account, and the4
balance due.5
(c) All audits, reviews, accounting statements, and financial reports of6
the association or condominium.7
(d) All contracts for work to be performed. Bids for work to be8
performed shall also be considered official records and shall be maintained for9
a period of one year.10
(11) Ballots, sign-in sheets, voting proxies, and all other papers relating11
to voting by unit owners, which shall be maintained for a period of one year12
from the date of the election, vote, or meeting to which the document relates.13
(12) All rental records, when the association is acting as the agent for the14
rental of a unit.15
(13) A copy of the current rules of the association.16
(14) All other records of the association that related to the operation of17
the association.18
C. (1) The official records of the association shall be maintained within19
the state.20
(2) All financial records and other records of the association shall be21
made available to a unit owner or authorized representative for inspection22
within five business days after receipt of written request by the association. The23
right to inspect the records of the association includes the right to make or24
obtain copies at the expense to the unit owner or authorized representative.25
D. Within ninety days after the end of the fiscal year, or annually on a26
date provided in the bylaws, the association shall prepare and complete, or27
cause to be prepared and completed by a third party, a financial report for the28
preceding fiscal year. Within twenty-one days after the financial report is29 SB NO. 397
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completed or received by the association from the third party, but not later than1
one hundred and twenty days after the end of the fiscal year or other date as2
provided in the bylaws, the association shall mail to each unit owner at the3
address last furnished to the association by the unit owner, or hand deliver to4
each unit owner, a copy of the financial report, or a notice that a copy of the5
financial report will be mailed or hand delivered to the unit owner, without6
charge, upon receipt of a written request from the unit owner.7
E. All funds collected by an association shall be maintained separately8
in the association's name. For investment purposes only, reserve funds may be9
commingled with operating funds of the association. Commingled operating10
and reserve funds shall be accounted for separately, and a commingled account11
shall not, at any time, be less than the amount identified as reserve funds.12
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Michelle Ducharme.
DIGEST
Mills (SB 397)
Present law provides relative to the La. Condominium Act.
Proposed law provides for transfer of control of the association from the developer to the
unit owners.
Proposed law provides that if unit owners other than the developer own 15% or more of the
units in a condominium, the unit owners other than the developer are entitled to elect at least
one-third of the persons to manage and regulate the condominium.
Proposed law provides that unit owners other than the developer are entitled to elect at least
a majority of the persons to manage and regulate the condominium when any of the
following events occur:
(1)Three years after 50% of the units have been conveyed to purchasers.
(2)Three months after 90% of the units have been conveyed to purchasers.
(3)When all the units have been completed, some of them have been conveyed to
purchasers, and none of the others are being offered for sale by the developer in the
ordinary course of business.
(4)When some of the units have been conveyed to purchasers and none of the others are
being constructed or offered for sale by the developer in the ordinary course of
business.
(5)When the developer files a petition seeking protection in bankruptcy. SB NO. 397
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law provides that at the time that unit owners other than the developer elect a
majority of the persons authorized to manage the affairs of the association, the developer
shall relinquish control of the association, and the unit owners shall accept control. Within
90 days of such election, the developer shall deliver to the association, at the developer's
expense, all property of the unit owners and of the association which is held or controlled
by the developer, including but not limited to the following items, if applicable:
(1)(a)The original or a copy of the recorded declaration and all amendments
thereto. If a copy is provided, it shall be certified by affidavit of the
developer or an officer or agent of the developer as being a complete copy
of the actual recorded declaration.
(b)A certified copy of the articles of incorporation of the association.
(c)A copy of the bylaws.
(d)A copy of all minutes and all books and records of the association, if any.
(e)Any rules and regulations that have been adopted by the association.
(2)The financial records, including financial statements of the association, and source
documents from the incorporation of the association through the date of turnover.
(3)Association funds or control thereof.
(4)All tangible personal property that is property of the association, which is
represented by the developer to be part of the common elements or which is
ostensibly part of the common elements, and an inventory of that property.
(5)A copy of the plans and specifications utilized in the construction or remodeling of
improvements and the supplying of equipment to the condominium and in the
construction and installation of all mechanical components serving the improvements
and the site with an affidavit from the developer or the developer's agent or an
architect or engineer authorized to practice in this state that such plans and
specifications represent, to the best of his or her knowledge and belief, the actual
plans and specifications utilized in the construction and improvement of the
condominium property and for the construction and installation of the mechanical
components serving the improvements.
(6)A list of the names and addresses of all contractors, subcontractors, and suppliers
utilized in the construction or remodeling of the improvements and in the
landscaping of the condominium or association property which the developer had
knowledge of at any time in the development of the condominium.
(7)Insurance policies.
(8)Copies of any certificates of occupancy that may have been issued for the
condominium property.
(9)Any other permits applicable to the condominium property which have been issued
by governmental bodies and are in force or were issued within one year prior to the
date the unit owners other than the developer took control of the association.
(10)All written warranties of the contractor, subcontractors, suppliers, and
manufacturers, if any, that are still effective.
(11)A roster of unit owners and their addresses and telephone numbers, if known, as
shown on the developer's records. SB NO. 397
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(12)Leases of the common elements and other leases to which the association is a party.
(13)Employment contracts or service contracts in which the association is one of the
contracting parties or service contracts in which the association or the unit owners
have an obligation or responsibility, directly or indirectly, to pay some or all of the
fee or charge of the person or persons performing the service.
(14)All other contracts to which the association is a party.
(15)A report included in the official records, under seal of an architect or engineer
authorized to practice in this state, attesting to required maintenance, useful life, and
replacement costs of the common elements.
Proposed law provides that if, during the period prior to the time that the developer
relinquishes control of the association, certain provisions of law are violated by the
association, the developer is responsible for such violation and shall be liable for such
violation or violations to third parties.
Proposed law provides that in any claim against a developer by an association alleging a
defect in design, structural elements, construction, or any mechanical, electrical, fire
protection, plumbing, or other element that requires a licensed professional for design or
installation, such defect must be examined and certified by an appropriately licensed
engineer, design professional, contractor, or otherwise licensed individual or entity.
Present law provides that the administration and operation of the condominium shall be
governed by the bylaws.
Present law provides that the bylaws shall provide for the administration of the
condominium.
Proposed law retains present law and adds that the bylaws shall include but not be limited
to the following:
(1)The form and manner of administration of the condominium.
(2)The percentage of voting interests required to constitute a quorum at a meeting.
(3)Public meetings of the association if a quorum is required. However, a meeting shall
not be public for any of the following reasons:
(a)To seek legal advice from the association's attorney.
(b)For legal advice to be rendered by the association's attorney.
(c)To discuss personnel matters.
(4)Adequate notice of all association meetings, which shall identify all agenda items,
shall be posted conspicuously on the condominium's property at least forty-eight
hours before the meeting except in an emergency.
(5)An annual meeting of the unit owners.
(6)The election of persons to manage and regulate the condominium.
Present law provides that the association shall keep financial records sufficiently detailed
to enable the association to comply with the law concerning resale of units. SB NO. 397
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law provides that from the inception of the association, the association shall
maintain the following items, if applicable, which shall constitute the official records of the
association:
(1)A copy of the plans, permits, warranties, and other items provided by the developer.
(2)A photocopy of the recorded condominium declaration and each amendment to each
declaration.
(3)A photocopy of the recorded bylaws of the association and each amendment to the
bylaws.
(4)A certified copy of the articles of incorporation of the association and each
amendment to the articles of incorporation.
(5)A copy of all minutes of each meeting of the association. Such minutes shall be
retained for at least seven years.
(6)A current roster of all unit owners and their mailing addresses, unit identifications,
voting rights, and if known, telephone numbers.
(7)All current insurance policies of the association and condominium operated by the
association.
(8)A current copy of any management agreement, lease, or other contract to which the
association is a party or under which the association or the unit owners have an
obligation or responsibility.
(9)Bills of sale or transfer for all property owned by the association.
(10)Financial records for the association and separate accounting records for the
condominium. All accounting records shall be maintained for at least seven years.
The accounting records shall include but are not limited to the following:
(a)Accurate, itemized, and detailed records of all receipts and expenditures.
(b)A current account and a monthly, bimonthly, or quarterly statement of the
account for each unit designating the name of the unit owner, the due date
and amount of each assessment, the amount paid upon the account, and the
balance due.
(c)All audits, reviews, accounting statements, and financial reports of the
association or condominium.
(d)All contracts for work to be performed. Bids for work to be performed shall
also be considered official records and shall be maintained for a period of
one year.
(11)Ballots, sign-in sheets, voting proxies, and all other papers relating to voting by unit
owners, which shall be maintained for a period of one year from the date of the
election, vote, or meeting to which the document relates.
(12)All rental records, when the association is acting as the agent for the rental of a unit.
(13)A copy of the current rules of the association.
(14)All other records of the association that related to the operation of the association. SB NO. 397
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law provides that the official records of the association shall be maintained within
the state.
Proposed law provides that all financial records and other records of the association shall be
made available to a unit owner or authorized representative for inspection within five
business days after receipt of written request by the association. The right to inspect the
records of the association includes the right to make or obtain copies at the expense to the
unit owner or authorized representative.
Proposed law provides that within 90 days after the end of the fiscal year, or annually on a
date provided in the bylaws, the association shall prepare and complete, or cause to be
prepared and completed by a third party, a financial report for the preceding fiscal year.
Within 21 days after the financial report is completed or received by the association from
the third party, but not later than 120 days after the end of the fiscal year or other date as
provided in the bylaws, the association shall mail to each unit owner at the address last
furnished to the association by the unit owner, or hand deliver to each unit owner, a copy of
the financial report or a notice that a copy of the financial report will be mailed or hand
delivered to the unit owner, without charge, upon receipt of a written request from the unit
owner.
Proposed law provides that all funds collected by an association shall be maintained
separately in the association's name. For investment purposes only, reserve funds may be
commingled with operating funds of the association. Commingled operating and reserve
funds shall be accounted for separately, and a commingled account shall not, at any time,
be less than the amount identified as reserve funds.
Effective August 1, 2014.
(Amends R.S. 9:1123.106(A) and (B) and 1123.108; adds R.S. 9:1122.109)