North Dakota 2025-2026 Regular Session

North Dakota Senate Bill SB2394 Compare Versions

Only one version of the bill is available at this time.

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1	1	25.1130.01000
2	2	Sixty-ninth
3	3	Legislative Assembly
4	4	of North Dakota
5	5	Introduced by
6	6	Senators Wanzek, Sickler, Dwyer
7	7	A BILL for an Act to create and enact a new chapter to title 47 of the North Dakota Century
8	8	Code, relating to association community bylaws and board of directors.
9	9	BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
10	10	SECTION 1. A new chapter to title 47 of the North Dakota Century Code is created and
11	11	enacted as follows:
12	12	Definitions.
13	13	As used in this chapter:
14	14	1."Association" means a nonprofit corporation, nonprofit limited liability company, or
15	15	other entity of owners created to own or operate portions of an association community,
16	16	in which membership is based upon owning or possessing an interest in real property.
17	17	2."Board" means the board of directors with the duty of managing and governing the
18	18	association.
19	19	3."Financial disclosure" means the accounting records of the association which are kept,
20	20	disclosed, and made available in accordance with this chapter.
21	21	4."Member" means an individual owning or possessing an interest in real property
22	22	governed by an association.
23	23	Bylaws - Requirements.
24	24	1.The operation of an association must be governed by the articles of incorporation and
25	25	the bylaws.
26	26	2.The association shall adopt bylaws upon formation to govern the management and
27	27	regulation of the association. The bylaws of an association shall:
28	28	a.Adopt and describe the form of the board, including the powers, duties, and
29	29	manner of selection and removal.
30	30	b.Provide for member meetings.
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32	32	SENATE BILL NO. 2394
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59	59	c.Provide for a written inquiry process for members, under which the board shall
60	60	issue a response to any inquiry within thirty days.
61	61	d.Require the adoption of an annual budget.
62	62	e.Require the adoption of a formal reserve fund.
63	63	f.Require financial disclosures and compiled financial statements under generally
64	64	accepted accounting principles.
65	65	g.Require a member to carry adequate insurance to cover the replacement cost of
66	66	all exterior and interior structures under member ownership.
67	67	h.Provide for a method of amending the bylaws.
68	68	3.An association shall consult legal counsel at least once every seven years to ensure
69	69	the association's compliance with this chapter and the bylaws and to review the
70	70	bylaws.
71	71	4.Financial disclosures and statements must be made available to a member upon
72	72	request.
73	73	Board - Duties.
74	74	1.The board must consist of at least three members and shall meet at least quarterly.
75	75	Notice of a meeting must be given in the manner provided under section 10 - 33 - 68.
76	76	2.The board shall adopt the annual budget at least fourteen days before the start of the
77	77	association's fiscal year. The annual budget must include:
78	78	a.Estimated revenues;
79	79	b.Detailed and classified expenses, including expenses for:
80	80	(1)Maintenance;
81	81	(2)Insurance; and
82	82	(3)Taxes; and
83	83	c.Reserve accounts for capital expenditures and deferred maintenance.
84	84	3.The board shall manage a formal reserve fund to provide for necessary capital
85	85	expenditures and deferred maintenance costs for all real property elements under
86	86	association ownership. The amount to be reserved must be calculated using a formula
87	87	based upon the estimated remaining useful life and estimated replacement cost or
88	88	deferred maintenance expense of a deferred item. The association shall adjust
89	89	replacement reserve assessments annually to reflect adjustments needed for inflation,
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123	123	changes in estimates, or extension of the useful life of a reserve item caused by
124	124	deferred maintenance. Capital expenditure and deferred maintenance accounts must
125	125	include funds for purposes of:
126	126	a.Roof replacement;
127	127	b.Exterior and interior building painting and maintenance;
128	128	c.Pavement resurfacing; and
129	129	d.Any other item that has a deferred maintenance expense or replacement cost
130	130	that exceeds ten thousand dollars.
131	131	4.The board shall obtain the signature of at least two board members for any
132	132	expenditure of the board over ten thousand dollars.
133	133	5.The board shall maintain adequate insurance to cover the replacement cost for all real
134	134	property elements held by the association. Insurance must be updated annually to
135	135	adjust for inflation.
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