| 1 | 1 | | |
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| 2 | 2 | | FIRST REGULAR SESSION |
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| 3 | 3 | | SENATE BILL NO. 481 |
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| 4 | 4 | | 103RD GENERAL ASSEMBLY |
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| 5 | 5 | | INTRODUCED BY SENATOR BERNSKOETTER. |
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| 6 | 6 | | 1491S.01I KRISTINA MARTIN, Secretary |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | To amend chapter 442, RSMo, by adding thereto six new sections relating to binding agreements |
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| 9 | 9 | | running with land. |
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| 10 | 10 | | |
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| 11 | 11 | | Be it enacted by the General Assembly of the State of Missouri, as follows: |
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| 12 | 12 | | Section A. Chapter 442, RSMo, is amended by add ing thereto 1 |
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| 13 | 13 | | six new sections, to be known as sections 442.621, 442.626, 2 |
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| 14 | 14 | | 442.631, 442.636, 442.641, and 442.646, to read as follows:3 |
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| 15 | 15 | | 442.621. 1. Sections 442.621 to 442.646 shall be 1 |
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| 16 | 16 | | known and may be cited as the "Missouri Homeowners' 2 |
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| 17 | 17 | | Association Act". 3 |
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| 18 | 18 | | 2. As used in sections 442.621 to 442.646, the 4 |
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| 19 | 19 | | following terms mean: 5 |
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| 20 | 20 | | (1) "Allocated interests", the common expense 6 |
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| 21 | 21 | | liability and votes in the association; 7 |
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| 22 | 22 | | (2) "Assessment", the sum attributable to each lot and 8 |
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| 23 | 23 | | due to the associati on based upon the lot's common expense 9 |
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| 24 | 24 | | liability or other moneys owed to the association under 10 |
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| 25 | 25 | | sections 442.621 to 442.646 or the governing documents of 11 |
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| 26 | 26 | | the association; 12 |
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| 27 | 27 | | (3) "Association", the lot owners' association; 13 |
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| 28 | 28 | | (4) "Board of directors", the governing body, 14 |
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| 29 | 29 | | regardless of name, that has the power to act on behalf of 15 |
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| 30 | 30 | | the association as designated in the governing documents; 16 SB 481 2 |
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| 31 | 31 | | (5) "Common expense", expenditures made by, or the 17 |
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| 32 | 32 | | financial liabilities of, the association including, but not 18 |
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| 33 | 33 | | limited to, any allocation to reserves; 19 |
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| 34 | 34 | | (6) "Common expense liability", liability for common 20 |
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| 35 | 35 | | expenses allocated to each lot; 21 |
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| 36 | 36 | | (7) "Common ground", any real property, other than a 22 |
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| 37 | 37 | | lot, that is within a planned community and that is owned or 23 |
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| 38 | 38 | | leased by the association; 24 |
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| 39 | 39 | | (8) "Declarant", a person or group of persons acting 25 |
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| 40 | 40 | | in concert that: 26 |
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| 41 | 41 | | (a) As part of a common promotional plan, offers to 27 |
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| 42 | 42 | | dispose of the interest of the person or group of persons in 28 |
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| 43 | 43 | | a lot not previously dispos ed of; or 29 |
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| 44 | 44 | | (b) Reserves or succeeds to any declarant right; 30 |
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| 45 | 45 | | (9) "Declaration", the recorded instrument, however 31 |
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| 46 | 46 | | denominated, that creates a planned community; 32 |
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| 47 | 47 | | (10) "Governing documents", the declaration, articles 33 |
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| 48 | 48 | | of incorporation, bylaws , and rules and regulations of the 34 |
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| 49 | 49 | | association; 35 |
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| 50 | 50 | | (11) "Lot", a physical portion of the planned 36 |
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| 51 | 51 | | community designated for separate ownership or occupancy as 37 |
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| 52 | 52 | | depicted on the plats of the planned community or as more 38 |
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| 53 | 53 | | particularly described in a declar ation; 39 |
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| 54 | 54 | | (12) "Lot owner", a declarant or other person who owns 40 |
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| 55 | 55 | | a lot, except that the term shall not include a person 41 |
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| 56 | 56 | | having an interest in a lot solely as security for an 42 |
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| 57 | 57 | | obligation; 43 |
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| 58 | 58 | | (13) "Planned community", real property described in a 44 |
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| 59 | 59 | | declaration that sets forth the duties and obligations of 45 |
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| 60 | 60 | | the association and lot owners. For the purposes of 46 |
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| 61 | 61 | | sections 442.621 to 442.646, no cooperative, timeshare, or 47 |
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| 62 | 62 | | condominium is a planned community, except that a 48 SB 481 3 |
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| 63 | 63 | | cooperative, timeshare, or condomi nium may be part of a 49 |
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| 64 | 64 | | planned community, or a declaration may expressly provide 50 |
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| 65 | 65 | | that a cooperative, timeshare, or condominium shall be a 51 |
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| 66 | 66 | | planned community subject to sections 442.621 to 442.646. 52 |
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| 67 | 67 | | 442.626. 1. Sections 442.621 to 442.6 46 shall apply 1 |
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| 68 | 68 | | to all planned communities and all events and circumstances 2 |
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| 69 | 69 | | related to such planned communities occurring on and after 3 |
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| 70 | 70 | | January 1, 2026. 4 |
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| 71 | 71 | | 2. Sections 442.621 to 442.646 shall not be construed 5 |
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| 72 | 72 | | to invalidate existing provisions of the declaration, 6 |
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| 73 | 73 | | bylaws, articles of incorporation, or plats of such planned 7 |
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| 74 | 74 | | communities. 8 |
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| 75 | 75 | | 3. Nothing in sections 442.621 to 442.646 shall 9 |
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| 76 | 76 | | impact, hinder, impair, alter, or affect the rights of a 10 |
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| 77 | 77 | | declarant to administer, develop, construct, convey any 11 |
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| 78 | 78 | | rights related to development rights or declarant rights, or 12 |
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| 79 | 79 | | convey real property subject to the declaration, including, 13 |
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| 80 | 80 | | but not limited to, the authority to alter the housing 14 |
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| 81 | 81 | | product or style, remove or add real property from or to the 15 |
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| 82 | 82 | | planned community, or convert a portion of the planned 16 |
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| 83 | 83 | | community from a lot to common ground or from common ground 17 |
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| 84 | 84 | | to a lot. 18 |
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| 85 | 85 | | 4. Nothing in sections 442.621 to 442.646 shall 19 |
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| 86 | 86 | | impact, hinder, impair, alter, or affect the rights of a 20 |
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| 87 | 87 | | holder of a security interest in real property within a 21 |
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| 88 | 88 | | planned community, provided that the security interest is 22 |
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| 89 | 89 | | recorded prior to recording of the declaration or any 23 |
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| 90 | 90 | | modifications or amendments to the declaration. 24 |
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| 91 | 91 | | 5. Except as expressly provided in sections 442.621 to 25 |
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| 92 | 92 | | 442.646, the effect of such sections shall not be varied by 26 |
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| 93 | 93 | | agreement, and rights conferred by such sections shall not 27 |
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| 94 | 94 | | be waived. 28 SB 481 4 |
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| 95 | 95 | | 6. For all purposes, each lot constitutes a separate 29 |
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| 96 | 96 | | parcel of real property and shall be separately assessed and 30 |
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| 97 | 97 | | taxed consistent with such parcel's restricted use. The 31 |
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| 98 | 98 | | personal property of an association, if any, shall not be 32 |
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| 99 | 99 | | subject to taxation under chapter 137, and common ground 33 |
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| 100 | 100 | | shall not be subject to separate assessment or taxation. 34 |
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| 101 | 101 | | 442.631. 1. Unless a declaration otherwise provides, 1 |
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| 102 | 102 | | consent of the declarant is required for any amendment to 2 |
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| 103 | 103 | | any governing document that would impact, hinder, impair, 3 |
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| 104 | 104 | | alter, or affect the rights of a declarant to administer, 4 |
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| 105 | 105 | | develop, construct, convey any rig hts related to development 5 |
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| 106 | 106 | | rights or declarant rights, or convey real property subject 6 |
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| 107 | 107 | | to the declaration, including, but not limited to, the 7 |
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| 108 | 108 | | authority to alter the housing product or style, remove or 8 |
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| 109 | 109 | | add real property from or to the planned community, or 9 |
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| 110 | 110 | | convert a portion of the planned community from a lot to 10 |
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| 111 | 111 | | common ground or from common ground to a lot. 11 |
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| 112 | 112 | | 2. The declaration may be amended under the procedures 12 |
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| 113 | 113 | | as contained in the declaration. 13 |
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| 114 | 114 | | 3. If a declaration is silent, a planned commu nity has 14 |
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| 115 | 115 | | multiple declarations with differing amendment procedures, 15 |
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| 116 | 116 | | or any provision in a declaration specifying a percentage 16 |
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| 117 | 117 | | larger than sixty-seven percent of the votes in the 17 |
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| 118 | 118 | | association to amend the declaration is hereby declared void 18 |
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| 119 | 119 | | as contrary to public policy, and until amended, such 19 |
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| 120 | 120 | | provision shall be deemed to specify a percentage of sixty - 20 |
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| 121 | 121 | | seven percent of the votes in the association. 21 |
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| 122 | 122 | | 4. A unanimous vote of the lot owners is required to 22 |
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| 123 | 123 | | amend any declaration to change the allocated interest of a 23 |
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| 124 | 124 | | lot. A unanimous vote of the lot owners is not required to 24 |
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| 125 | 125 | | change or add a restriction that may be more burdensome. 25 SB 481 5 |
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| 126 | 126 | | 5. No action to challenge the validity of an amendment 26 |
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| 127 | 127 | | to the declaration shall be brought more than one year after 27 |
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| 128 | 128 | | the amendment to the declaration is recorded. 28 |
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| 129 | 129 | | 6. If an amendment to the declaration is proposed by 29 |
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| 130 | 130 | | the board of directors and an insufficient number of votes 30 |
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| 131 | 131 | | are obtained to decide the question within ninety days of 31 |
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| 132 | 132 | | distributing the amendment to the lot owners, the 32 |
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| 133 | 133 | | declaration may be amended if the association provides a 33 |
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| 134 | 134 | | notice to all lot owners containing a copy of the proposed 34 |
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| 135 | 135 | | amendment and a statement that the proposed amendment will 35 |
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| 136 | 136 | | be deemed approved by that lot owner unless one -third of the 36 |
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| 137 | 137 | | votes in the association submit a vote to reject the 37 |
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| 138 | 138 | | proposed amendment within sixty days of the date of the 38 |
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| 139 | 139 | | notice. 39 |
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| 140 | 140 | | 7. The board of directors is authorized to amend 40 |
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| 141 | 141 | | governing documents to correct drafting or technical errors. 41 |
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| 142 | 142 | | 442.636. 1. An owners' association shall be organized 1 |
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| 143 | 143 | | prior to conveyance of the first lot in the planned 2 |
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| 144 | 144 | | community. The association shall be organized as a mutual 3 |
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| 145 | 145 | | benefit nonprofit corporation under chapter 355 no later 4 |
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| 146 | 146 | | than one year from the d ate of transfer of control from the 5 |
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| 147 | 147 | | declarant. For an association not incorporated under 6 |
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| 148 | 148 | | chapter 355 before January 1, 2026, the board of directors 7 |
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| 149 | 149 | | shall be authorized to form such corporation, and the 8 |
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| 150 | 150 | | nonprofit corporation shall be deemed to be the s uccessor to 9 |
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| 151 | 151 | | the unincorporated association. No assignment agreement or 10 |
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| 152 | 152 | | other legal instrument shall be required to effectuate the 11 |
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| 153 | 153 | | assignment of duties and obligations. If a declaration 12 |
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| 154 | 154 | | contains the same provisions as required under chapter 355 13 |
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| 155 | 155 | | for bylaws of the association, the association need not 14 |
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| 156 | 156 | | adopt bylaws, except that the amendment procedure of the 15 |
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| 157 | 157 | | declaration shall govern all provisions of such declaration. 16 SB 481 6 |
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| 158 | 158 | | 2. After transition of control of the association from 17 |
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| 159 | 159 | | the declarant under the provisions of the declaration, if an 18 |
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| 160 | 160 | | election of the board of directors is not held because of a 19 |
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| 161 | 161 | | lack of quorum of the members, the board of directors shall 20 |
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| 162 | 162 | | call a special meeting of the association to conduct the 21 |
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| 163 | 163 | | election. Such special meeting shall have a quorum 22 |
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| 164 | 164 | | requirement of ten percent of the votes in the association. 23 |
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| 165 | 165 | | If such special meeting is not held because of a lack of 24 |
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| 166 | 166 | | quorum, the board of directors shall call a second special 25 |
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| 167 | 167 | | meeting to conduct the election with no quorum requirement. 26 |
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| 168 | 168 | | No action to challenge an election shall be brought more 27 |
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| 169 | 169 | | than thirty days from the date of the election. 28 |
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| 170 | 170 | | 3. To ensure that the board of directors is not 29 |
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| 171 | 171 | | vacated in whole or part, the term of a director expires 30 |
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| 172 | 172 | | upon the election of a replacement. Any provision in a 31 |
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| 173 | 173 | | governing document that purports to specify a date when a 32 |
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| 174 | 174 | | term of a member of the board expires is hereby declared 33 |
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| 175 | 175 | | void as contrary to public policy and is null and void. 34 |
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| 176 | 176 | | 4. In the absence of a board of directors, ten percent 35 |
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| 177 | 177 | | of the lot owners may call a special meeting to conduct an 36 |
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| 178 | 178 | | election and any quorum requirement shall be suspended. The 37 |
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| 179 | 179 | | newly elected board shall be deemed to be the board of 38 |
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| 180 | 180 | | directors of the association unless suit is filed within 39 |
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| 181 | 181 | | sixty days of the election. In such event, a court of 40 |
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| 182 | 182 | | competent supervision shall appoint a receiver with 41 |
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| 183 | 183 | | experience in management of an association during the 42 |
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| 184 | 184 | | pendency of the case. 43 |
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| 185 | 185 | | 442.641. 1. (1) After transition of control of the 1 |
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| 186 | 186 | | association from the declarant under the provisions of the 2 |
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| 187 | 187 | | declaration, the board of directors, at least annually, 3 |
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| 188 | 188 | | shall adopt a proposed budget for the planned community for 4 |
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| 189 | 189 | | consideration by the lot owners. No later than thirty days 5 SB 481 7 |
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| 190 | 190 | | after adoption of a proposed bud get, the board of directors 6 |
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| 191 | 191 | | shall provide to all lot owners a copy of the proposed 7 |
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| 192 | 192 | | budget including, but not limited to, any reserves and a 8 |
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| 193 | 193 | | statement of the basis upon which any reserves are 9 |
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| 194 | 194 | | calculated and funded. 10 |
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| 195 | 195 | | (2) At the same time as the copy of the proposed 11 |
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| 196 | 196 | | budget is provided under subdivision (1) of this subsection, 12 |
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| 197 | 197 | | the board of directors shall set a date at least fourteen 13 |
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| 198 | 198 | | days after but no later than thirty days after providing the 14 |
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| 199 | 199 | | summary for a meeting of the lot owners to consider 15 |
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| 200 | 200 | | ratification of the budget. Unless at such meeting a 16 |
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| 201 | 201 | | majority of all lot owners or any larger number specified in 17 |
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| 202 | 202 | | the declaration reject the budget, the budget shall be 18 |
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| 203 | 203 | | deemed ratified regardless of whether a quorum is present. 19 |
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| 204 | 204 | | If a proposed budget is rejected, the current budget shall 20 |
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| 205 | 205 | | continue until lot owners ratify a subsequent budget. 21 |
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| 206 | 206 | | 2. Any provision in a governing document that purports 22 |
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| 207 | 207 | | to specify a maximum rate of assessments, or a limitation on 23 |
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| 208 | 208 | | the amount an assessment may be increased, is hereby 24 |
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| 209 | 209 | | declared void as contrary to public policy. 25 |
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| 210 | 210 | | 3. The association shall be entitled to recover from 26 |
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| 211 | 211 | | the lot owner any costs and reasonable attorney's fees 27 |
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| 212 | 212 | | incurred in connection with the collection of delinquent 28 |
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| 213 | 213 | | assessments. A judgment or decree in any action brought 29 |
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| 214 | 214 | | under this section shall include costs and reasonable 30 |
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| 215 | 215 | | attorney's fees for the prevailing party with the amount of 31 |
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| 216 | 216 | | the unpaid assessments not to be considered by the court in 32 |
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| 217 | 217 | | determining the reasonableness of such attorney 's fees and 33 |
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| 218 | 218 | | costs. Upon request of any party, the court shall provide 34 |
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| 219 | 219 | | its basis for its determination of the award of attorney's 35 |
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| 220 | 220 | | fees and costs. Any application for execution upon a 36 |
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| 221 | 221 | | judgment shall include any postjudgment attorney's fees and 37 SB 481 8 |
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| 222 | 222 | | costs incurred, which shall be recoverable unless otherwise 38 |
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| 223 | 223 | | determined by the court by motion submitted by the owner 39 |
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| 224 | 224 | | within thirty days of the date of service of such 40 |
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| 225 | 225 | | application. 41 |
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| 226 | 226 | | 4. An association is not subject to the limitation on 42 |
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| 227 | 227 | | the number of small claims petitions that may be filed as 43 |
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| 228 | 228 | | provided in subdivision (2) of subsection 1 of section 44 |
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| 229 | 229 | | 482.330, and any judgment thereafter entered, so long as the 45 |
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| 230 | 230 | | lot owner was personally served, shall be enforceable as a 46 |
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| 231 | 231 | | judgment entered by an associate circu it court under chapter 47 |
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| 232 | 232 | | 517. 48 |
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| 233 | 233 | | 5. If a lot is occupied by a tenant and the lot owner 49 |
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| 234 | 234 | | is delinquent in payment of assessments in excess of sixty 50 |
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| 235 | 235 | | days, the association may demand payment of subsequent 51 |
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| 236 | 236 | | rental payments until the lot owner is no longer d elinquent, 52 |
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| 237 | 237 | | the association releases the tenant, or the tenant is no 53 |
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| 238 | 238 | | longer in possession of the lot. The demand to the tenant 54 |
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| 239 | 239 | | shall be in writing, with a copy to the lot owner, sent via 55 |
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| 240 | 240 | | first-class United States mail, postage prepaid, or hand 56 |
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| 241 | 241 | | delivery. A tenant is immune from any claim by the lot 57 |
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| 242 | 242 | | owner related to the rent timely paid to the association 58 |
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| 243 | 243 | | after the association has made written demand. If the 59 |
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| 244 | 244 | | tenant fails to make payment to the association, the 60 |
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| 245 | 245 | | association may issue notice and evict under chapter 534. 61 |
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| 246 | 246 | | The tenant does not, by virtue of payment, have any rights 62 |
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| 247 | 247 | | of a lot owner to vote in an election or examine the books 63 |
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| 248 | 248 | | and records of the association. 64 |
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| 249 | 249 | | 6. After transition of control of the association 65 |
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| 250 | 250 | | under the provisions of t he declaration, the board of 66 |
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| 251 | 251 | | directors may propose a special assessment or an amended 67 |
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| 252 | 252 | | budget so long as the board of directors follows the 68 SB 481 9 |
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| 253 | 253 | | procedures in subsection 1 of this section and the lot 69 |
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| 254 | 254 | | owners do not reject such special assessment. 70 |
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| 255 | 255 | | 7. No action to challenge an assessment levied under 71 |
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| 256 | 256 | | the procedures provided for in this section shall be brought 72 |
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| 257 | 257 | | more than sixty days from the first date the assessment is 73 |
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| 258 | 258 | | due. 74 |
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| 259 | 259 | | 8. After transition of control of the association 75 |
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| 260 | 260 | | under the provisions of the declaration, if the board of 76 |
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| 261 | 261 | | directors determines that a special assessment is necessary 77 |
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| 262 | 262 | | to respond to an emergency to the health or safety of lot 78 |
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| 263 | 263 | | owners or occupants: 79 |
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| 264 | 264 | | (1) The special assessment shall become effective 80 |
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| 265 | 265 | | immediately in accordanc e with the terms of the vote; 81 |
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| 266 | 266 | | (2) The notice of the emergency assessment shall be 82 |
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| 267 | 267 | | provided promptly to all lot owners; and 83 |
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| 268 | 268 | | (3) The board of directors may spend the moneys paid 84 |
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| 269 | 269 | | on account of the emergency assessment only for the purposes 85 |
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| 270 | 270 | | described in the vote. 86 |
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| 271 | 271 | | 442.646. 1. If a declaration compels binding 1 |
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| 272 | 272 | | arbitration as provided in sections 435.350 to 435.470, the 2 |
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| 273 | 273 | | disclosure requirement of section 435.460 shall be an 3 |
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| 274 | 274 | | exhibit to the declaration. 4 |
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| 275 | 275 | | 2. Subject to the declaration and any additional 5 |
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| 276 | 276 | | requirements or conditions, disputes between lot owners or 6 |
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| 277 | 277 | | between two or more lot owners regarding a matter related to 7 |
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| 278 | 278 | | the planned community may be required to be submitted to 8 |
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| 279 | 279 | | nonbinding dispute resolution as a prerequisit e to 9 |
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| 280 | 280 | | commencement of a judicial proceeding. 10 |
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| 281 | 281 | | |
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