Restricts increases in monthly common expenses and limit special assessments to cover unforeseen costs not included in condo association’s approved annual budget for common expenses in associations where the minority of the units are deed-restricted units
The changes proposed in HB 5825 could reshape the financial landscape for condominium associations, particularly benefiting owners of deed-restricted units who are often more vulnerable to financial stress. By capping expense increases and assessing special charges, the legislation aims to provide greater financial predictability and stability for these homeowners. Legislative discussions around this bill have highlighted its potential impact on affordability and housing security for residents living in deed-restricted properties. There is a strong emphasis on the bill’s role in aiding low- and moderate-income residents, as the financial protections put in place could provide necessary relief in managing unexpected costs that may arise from association fees.
House Bill 5825 introduces significant amendments to the Rhode Island Condominium Law, specifically targeting the management of condominium associations. The bill aims to enhance the financial oversight of these associations by restricting the increase of monthly common expenses to a maximum of five percent per year in cases where less than fifty percent of the units are deemed deed-restricted. Moreover, it seeks to limit the imposition of special assessments, which are sudden charges that condo owners may face to cover unexpected costs not accounted for in the approved budget. Importantly, the bill mandates that any special assessment levied against deed-restricted units cannot exceed fifty percent of the total assessment, ensuring a fairer cost distribution among owners based on their unit type.
Despite the bill's protective intentions, it has also drawn opposition from some property management groups and condominium associations who argue that the limitations on financial management could hamper their ability to adequately fund essential maintenance or improvements to common areas. Critics fear that constraining the financial flexibility of associations could lead to deferred maintenance, ultimately affecting property values and the quality of living conditions within condominium developments. There are concerns that unforeseen costs might still arise, and without the ability to adjust assessments more freely, associations could struggle to maintain the properties to acceptable standards while remaining compliant with the new limitations.