Rhode Island 2025 Regular Session

Rhode Island Senate Bill S0724 Compare Versions

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

Old	New	Differences
1	1
2	2
3	3
4	4
5	5	2025 -- S 0724
6	6	========
7	7	LC002029
8	8	========
9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO PROPERTY -- CONDOMINIUM LAW
16	16	Introduced By: Senators Valverde, Gu, Kallman, Murray, Lauria, and Ujifusa
17	17	Date Introduced: March 07, 2025
18	18	Referred To: Senate Housing & Municipal Government
19	19
20	20
21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. Sections 34-36.1-1.03, 34-36.1-2.07 and 34-36.1-3.03 of the General Laws 1
23	23	in Chapter 34-36.1 entitled "Condominium Law" are hereby amended to read as follows: 2
24	24	34-36.1-1.03. Definitions. 3
25	25	In the declaration and bylaws, unless specifically provided otherwise or the context 4
26	26	otherwise requires, and in this chapter: 5
27	27	(1) “Affiliate of a declarant” means any person who controls, is controlled by, or is under 6
28	28	common control with a declarant. 7
29	29	(i) A person “controls” a declarant if the person: 8
30	30	(A) Is a general partner, officer, director, or employer of the declarant, 9
31	31	(B) Directly or indirectly or acting in concert with one or more other persons, or through 10
32	32	one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, 11
33	33	more than twenty percent (20%) of the voting interest in the declarant, 12
34	34	(C) Controls in any manner the election of a majority of the directors of the declarant, or 13
35	35	(D) Has contributed more than twenty percent (20%) of the capital of the declarant. 14
36	36	(ii) A person “is controlled by” a declarant if the declarant: 15
37	37	(A) Is a general partner, officer, director, or employer of the person, 16
38	38	(B) Directly or indirectly or acting in concert with one or more other persons, or through 17
39	39	one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, 18
40	40	more than twenty percent (20%) of the voting interest in the person, 19
41	41
42	42
43	43	LC002029 - Page 2 of 11
44	44	(C) Controls in any manner the election of a majority of the directors of the person, or 1
45	45	(D) Has contributed more than twenty percent (20%) of the capital of the person. 2
46	46	(iii) Control does not exist if the powers described in this subdivision are held solely as 3
47	47	security for an obligation and are not exercised. 4
48	48	(2) “Allocated interests” means the undivided interest in the common elements, the 5
49	49	common expense liability, and votes in the association allocated to each unit. 6
50	50	(3) “Annual budget” means a financial plan that outlines expected income and expenses 7
51	51	for a year which determines the annual or monthly condominium fee for unit owners. 8
52	52	(4) “Association” or “unit owners’ association” means the unit owners’ association 9
53	53	organized under § 34-36.1-3.01. 10
54	54	(4)(5) “Capital expense” means money spent by the association to maintain common 11
55	55	expense, such as land, buildings and equipment. 12
56	56	(6) “Common elements” means all portions of a condominium other than the units. 13
57	57	(5)(7) “Common expenses” means expenditures made by or financial liabilities of the 14
58	58	association, together with any allocations to reserves. This includes, but is not limited to: 15
59	59	(i) Insurance; 16
60	60	(ii) Shared utilities; or 17
61	61	(iii) Site and building maintenance. 18
62	62	(6)(8) “Common expense liability” means the liability for common expenses allocated to 19
63	63	each unit pursuant to § 34-36.1-2.07. 20
64	64	(7)(9)(i) “Condominium” means real estate, portions of which are designated for separate 21
65	65	ownership and the remainder of which is designated for common ownership solely by the owners 22
66	66	of those portions. Real estate is not a condominium unless the undivided interests in the common 23
67	67	elements are vested in the unit owners. 24
68	68	(ii) Provided that each unit owner has a vested, undivided interest in the common elements 25
69	69	greater that 0.0 percent, no minimum percentage interest in the common elements is otherwise 26
70	70	required by this chapter. 27
71	71	(8)(10) “Condominium fees” means the amount of money each unit owner contributes 28
72	72	toward common expenses. 29
73	73	(11) “Conversion building” means a building that at any time before creation of the 30
74	74	condominium was occupied wholly or partially by persons other than purchasers and persons who 31
75	75	occupy with the consent of purchasers. 32
76	76	(9)(12) “Declarant” means any person or group of persons acting in concert who: 33
77	77	(i) As part of a common promotional plan, offers to dispose of his, her or its interest in a 34
78	78
79	79
80	80	LC002029 - Page 3 of 11
81	81	unit not previously disposed of; or 1
82	82	(ii) Reserves or succeeds to any special declarant right. 2
83	83	(10)(13) “Declaration” means any instruments, however denominated, that create a 3
84	84	condominium, and any amendments to those instruments. 4
85	85	(14) “Deed-restricted unit” means any unit that qualifies as low- and moderate-income 5
86	86	housing as set forth in § 45-53-3. 6
87	87	(11)(15) “Development rights” means any right or combination of rights reserved by a 7
88	88	declarant in the declaration to: 8
89	89	(A) Add real estate to a condominium, 9
90	90	(B) Create units, common elements, or limited common elements within a condominium, 10
91	91	(C) Subdivide units or convert units into common elements, or 11
92	92	(D) Withdraw real estate from a condominium. 12
93	93	(12)(16) “Person with a disability” means any person who is unable to engage in any 13
94	94	substantial gainful activity by reason of any medically determinable physical or mental impairment 14
95	95	which can be expected to result in death or has lasted or can be expected to last for a continuous 15
96	96	period of not less than twelve (12) months or any person having an impairment of mobility or vision 16
97	97	which is expected to be of at least twelve (12) months duration, and is a substantial impediment to 17
98	98	his or her ability to live independently. 18
99	99	(13)(17) “Dispose” or “disposition” means a voluntary transfer to a purchaser of any legal 19
100	100	or equitable interest in a unit, but does not include the transfer or release of a security interest. 20
101	101	(14)(18) “Executive board” means the body, regardless of name, designated in the 21
102	102	declaration to act on behalf of the association. 22
103	103	(15)(19) [Deleted by P.L. 1999, ch. 83, § 80, and P.L. 1999, ch. 130, § 80 which enacted 23
104	104	identical amendments to this section.] 24
105	105	(16)(20) “Identifying number” means a symbol or address that identifies only one unit in a 25
106	106	condominium. 26
107	107	(17)(21) “Land only units” shall mean units designated as land only units on the plats and 27
108	108	plans which units may be comprised entirely or partially of unimproved real property and the air 28
109	109	space above the real property. The boundaries of a land only unit are to be described pursuant to § 29
110	110	34-36.1-2.05(a)(5). Land only units may, but need not, contain a physical structure. The declaration 30
111	111	may provide for the conversion of land only units to other types of units and/or common elements 31
112	112	provided the conversion shall be effective only upon the recording of an amendment to the 32
113	113	declaration which amendment will include new plats and plans identifying any portion of the land 33
114	114	only unit converted to another type of unit and/or common element. 34
115	115
116	116
117	117	LC002029 - Page 4 of 11
118	118	(18)(22) “Leasehold condominium” means a condominium in which all or a portion of the 1
119	119	real estate is subject to a lease the expiration or termination of which will terminate the 2
120	120	condominium or reduce its size. 3
121	121	(19)(23) “Limited common element” means a portion of the common elements allocated 4
122	122	by the declaration or by operation of § 34-36.1-2.02(2) or (4) for the exclusive use of one or more 5
123	123	but fewer than all of the units. 6
124	124	(20)(24) “Master association” means an organization described in § 34-36.1-2.20, whether 7
125	125	or not it is also an association described in § 34-36.1-3.01. 8
126	126	(21)(25) “Offering” means any advertisement, inducement, solicitation, or attempt to 9
127	127	encourage any person to acquire any interest in a unit, other than as security for an obligation. An 10
128	128	advertisement in a newspaper or other periodical of general circulation, or in any broadcast medium 11
129	129	to the general public, of a condominium not located in this state, is not an offering if the 12
130	130	advertisement states that an offering may be made only in compliance with the law of the 13
131	131	jurisdiction in which the condominium is located. 14
132	132	(22)(26)“Person” means a natural person, corporation, business trust, estate, trust, 15
133	133	partnership, association, joint venture, government, governmental subdivision or agency, or other 16
134	134	legal or commercial entity. (In the case of a land trust, however, “person” means the beneficiary of 17
135	135	the trust rather than the trust or the trustee.) 18
136	136	(23)(27) “Purchaser” means any person, other than a declarant or a person in the business 19
137	137	of selling real estate for his or her own account, who by means of a voluntary transfer acquires a 20
138	138	legal or equitable interest in a unit other than: 21
139	139	(i) A leasehold interest including renewal options of less than twenty (20) years, or 22
140	140	(ii) As security for an obligation. 23
141	141	(24)(28) “Real estate” means any leasehold or other estate or interest in, over, or under 24
142	142	land, including structures, fixtures, and other improvements and interests which by custom, usage, 25
143	143	or law pass with a conveyance of land though not described in the contract of sale or instrument of 26
144	144	conveyance. “Real estate” includes parcels with or without upper or lower boundaries, and spaces 27
145	145	that may be filled with air or water. 28
146	146	(25)(29) “Residential purposes” means use for dwelling or recreational purposes, or both. 29
147	147	(30) “Special assessment” means an unexpected expense that is not included in the 30
148	148	association annual budget. 31
149	149	(26)(31) “Special declarant rights” means rights reserved for the benefit of a declarant to: 32
150	150	(i) Complete improvements indicated on plats and plans filed with the declaration, (§ 34-33
151	151	36.1-2.09), 34
152	152
153	153
154	154	LC002029 - Page 5 of 11
155	155	(ii) To exercise any development right, (§ 34-36.1-2.10), 1
156	156	(iii) To maintain sales offices, management offices, signs advertising the condominium, 2
157	157	and models, (§ 34-36.1-2.15), 3
158	158	(iv) To use easements through the common elements for the purpose of making 4
159	159	improvements within the condominium or within real estate which may be added to the 5
160	160	condominium, (§ 34-36.1-2.16), 6
161	161	(v) To make the condominium part of a larger condominium or a planned community, (§ 7
162	162	34-36.1-2.21), 8
163	163	(vi) To make the condominium subject to a master association, (§ 34-36.1-2.20), 9
164	164	(vii) Or to appoint or remove any officer of the association or any master association or 10
165	165	any executive board member during any period of declarant control, (§ 34-36.1-3.03(d)). 11
166	166	(27)(32) “Time share” means a right to occupy a unit or any of several units during five (5) 12
167	167	or more separated time periods over a period of at least five (5) years, including renewal options, 13
168	168	whether or not coupled with an estate or interest in a condominium or a specified portion thereof. 14
169	169	(28)(33) “Unit” means a physical portion of the condominium designated for separate 15
170	170	ownership or occupancy, the boundaries of which are described pursuant to § 34-36.1-2.05(a)(5). 16
171	171	(29)(34) “Unit owner” means a declarant or other person who owns a unit, or a lessee of a 17
172	172	unit in a leasehold condominium whose lease expires simultaneously with any lease, the expiration 18
173	173	or termination of which will remove the unit from the condominium, but does not include a person 19
174	174	having an interest in a unit solely as security for an obligation. 20
175	175	34-36.1-2.07. Allocation of common element interest, votes, and common expense 21
176	176	liabilities. 22
177	177	(a) The declaration shall allocate a fraction or percentage of undivided interests in the 23
178	178	common elements and in the common expenses of the association, and a portion of the votes in the 24
179	179	association, to each unit including land only units and state the formulas used to establish those 25
180	180	allocations. Those allocations may not discriminate in favor of units owned by the declarant, but 26
181	181	may discriminate in favor of units subject to a housing restriction as set forth in § 34-39.1-3. Except 27
182	182	as set forth in § 34-36.1-1.03(7), no minimum percentage interest in the common elements is 28
183	183	otherwise required. 29
184	184	(1) Notwithstanding subsection (a) of this section, in associations where the minority, less 30
185	185	than fifty percent (50%), of the units are deed restricted units, increases in monthly common 31
186	186	expenses may not exceed five percent (5%) of the previous year’s monthly common expenses. 32
187	187	(2) In associations where the minority, less than fifty percent (50%), of the units are deed 33
188	188	restricted units and an association must impose a special assessment to cover unforeseen costs not 34
189	189
190	190
191	191	LC002029 - Page 6 of 11
192	192	included in the association’s approved annual budget for common expenses, the special assessment 1
193	193	attributed to deed-restricted units is limited to fifty percent (50%) of the full assessment. The fifty 2
194	194	percent (50%) limitation is calculated based on what the per unit share would have had the cost 3
195	195	been equally distributed across units in the association. Associations must allow owners of deed-4
196	196	restricted units the option to enter into a monthly payment plan, at no additional charge, where the 5
197	197	payment is not in excess of one-twelfth (1/12) of the special assessment. 6
198	198	(b) If units may be added to or withdrawn from the condominium, the declaration must 7
199	199	state the formulas to be used to reallocate the allocated interests among all units included in the 8
200	200	condominium after the addition or withdrawal. 9
201	201	(c) The declaration may provide: (i) That different allocations of votes shall be made to the 10
202	202	units on particular matters specified in the declaration; (ii) For cumulative voting only for the 11
203	203	purpose of electing members of the executive board; and (iii) For the class voting on specified 12
204	204	issues affecting the class if necessary to protect valid interests of the class. A declarant may not 13
205	205	utilize cumulative or class voting for the purpose of evading any limitation imposed on declarants 14
206	206	by this chapter, nor may units constitute a class because they are owned by a declarant. 15
207	207	(d) Except for minor variations due to rounding, the sum of the undivided interests in the 16
208	208	common elements and common expense liabilities allocated at any time to all the units must each 17
209	209	equal one if stated as fractions or one hundred percent (100%) if stated as percentages. In the event 18
210	210	of discrepancy between an allocated interest and the results derived from application of the 19
211	211	pertinent formula, the allocated interest prevails. 20
212	212	(e) The common elements are not subject to partition, and any purported conveyance, 21
213	213	encumbrance, judicial sale, or other voluntary or involuntary transfer of an undivided interest in 22
214	214	the common elements made without the unit to which that interest is allocated, is void. 23
215	215	(f) Subject to the provisions of the declaration and other provisions of law, and except as 24
216	216	provided in § 34-36.1-2.12 which provides for the relocation of boundaries between adjoining units, 25
217	217	the owners of any two (2) or more units may apply for a reallocation of their respective allocated 26
218	218	interests to the executive board; but their application shall not attempt to alter common element 27
219	219	interests except as they relate to the proposed reallocation of unit interests. Unless the executive 28
220	220	board determines within thirty (30) days, that the reallocations are unreasonable, the association 29
221	221	shall prepare an amendment that identifies the units involved, states the reallocations, is executed 30
222	222	by those unit owners, contains words of conveyance between them, and upon recordation, is 31
223	223	indexed in the name of the grantor and the grantee. 32
224	224	34-36.1-3.03. Executive board members and officers. 33
225	225	(a) Except as provided in the declaration, the bylaws, subsection (b), or in other provisions 34
226	226
227	227
228	228	LC002029 - Page 7 of 11
229	229	of this chapter, the executive board may act in all instances on behalf of the association. In the 1
230	230	performance of their duties, the officers and members of the executive board are required to 2
231	231	exercise: 3
232	232	(1) If appointed by the declarant, the care required of fiduciaries of the unit owners; and 4
233	233	(2) If elected by the unit owners, ordinary and reasonable care. 5
234	234	(b) The executive board may not act on behalf of the association to amend the declaration 6
235	235	(§ 34-36.1-2.17), to terminate the condominium, or to elect members of the executive board or 7
236	236	determine the qualifications, powers and duties, or terms of office of executive board members, but 8
237	237	the executive board may fill vacancies in its membership for the unexpired portion of any term. 9
238	238	(c) Within thirty (30) days after adoption of any proposed budget for the condominium, the 10
239	239	executive board shall provide a summary of the budget to all the unit owners, and shall set a date 11
240	240	for a meeting of the unit owners to consider ratification of the budget not less than fourteen (14) 12
241	241	nor more than thirty (30) days after mailing of the summary. Unless at that meeting a majority of 13
242	242	all the unit owners or any larger vote specified in the declaration reject the budget, the budget is 14
243	243	ratified, whether or not a quorum is present. In the event the proposed budget is rejected, the 15
244	244	periodic budget last ratified by the unit owners shall be continued until such time as the unit owners 16
245	245	ratify a subsequent budget proposed by the executive board. 17
246	246	(d)(1) Subject to subsection (e), the declaration may provide for a period of declarant 18
247	247	control of the association, during which period a declarant, or persons designated by him, may 19
248	248	appoint and remove the officers and members of the executive board. Regardless of the period 20
249	249	provided in the declaration, a period of declarant control terminates no later than the earlier of: 21
250	250	(i) Sixty (60) days after conveyance of eighty percent (80%) of the units which may be 22
251	251	created to unit owners other than a declarant; 23
252	252	(ii) Two (2) years after all declarants have ceased to offer units for sale in the ordinary 24
253	253	course of business; or 25
254	254	(iii) Two (2) years after any development right to add new units was last exercised. 26
255	255	(2) A declarant may voluntarily surrender the right to appoint and remove officers and 27
256	256	members of the executive board before terminations of that period, but in that event he or she may 28
257	257	require, for the duration of the period of declarant control, that specified actions of the association 29
258	258	or executive board, as described in a recorded instrument executed by the declarant, be approved 30
259	259	by the declarant before they become effective. 31
260	260	(e) Not later than sixty (60) days after conveyance of twenty-five percent (25%) of the units 32
261	261	which may be created to unit owners other than a declarant, at least one member and not less than 33
262	262	twenty-five percent (25%) of the members of the executive board must be elected by unit owners 34
263	263
264	264
265	265	LC002029 - Page 8 of 11
266	266	other than the declarant. Not later than sixty (60) days after conveyance of fifty percent (50%) of 1
267	267	the units which may be created to unit owners other than a declarant, not less than one-third (⅓) of 2
268	268	the members of the executive board must be elected by unit owners other than the declarant. 3
269	269	(f) Not later than the termination of any period of declarant control, the unit owners shall 4
270	270	elect an executive board of at least three (3) members, at least a majority of whom must be unit 5
271	271	owners. The executive board shall elect the officers. The executive board members and officers 6
272	272	shall take office upon election. 7
273	273	(g) Notwithstanding any provision of the declaration or bylaws to the contrary, the unit 8
274	274	owners, by a two-thirds (⅔) vote of all persons present and entitled to vote at any meeting of the 9
275	275	unit owners at which a quorum is present, may remove any member of the executive board with or 10
276	276	without cause, other than a member appointed by the declarant. 11
277	277	(h) Any executive board established after June 30, 2026, containing deed-restricted units 12
278	278	within its association, shall be comprised of members proportionate with the number of deed-13
279	279	restricted units and market-rate units. Any calculation yielding a fractional person on the board 14
280	280	shall be allocated to a market-rate owner. 15
281	281	SECTION 2. Chapter 34-36.1 of the General Laws entitled "Condominium Law" is hereby 16
282	282	amended by adding thereto the following section: 17
283	283	34-36.1-13. Allocation of common element interest, votes and common expense 18
284	284	liabilities. 19
285	285	(a) To increase transparency of operations and association management, every association 20
286	286	established under chapter 36.1 of title 34, is hereby required to do the following: 21
287	287	(1) Register as an association with the department of housing by December 31, 2026, or 22
288	288	within thirty (30) days of establishment; and 23
289	289	(2) Submit the following materials within thirty (30) days of adoption or amendment: 24
290	290	(i) Annual budget, including monthly and annual condominium fees; 25
291	291	(ii) Board list and officers; 26
292	292	(iii) All financial documents including, condominium fees for the last five (5) years, 27
293	293	funding reserves and any tax filing information; 28
294	294	(iv) Date of next officer election; and 29
295	295	(v) Association by-laws and any other relevant governing documents. 30
296	296	(b) Failure to comply with this section is subject to the jurisdiction of the department of 31
297	297	housing pursuant to § 42-64.34-2. 32
298	298	SECTION 3. Section 42-64.34-2 of the General Laws in Chapter 42-64.34 entitled "The 33
299	299	Department of Housing" is hereby amended to read as follows: 34
300	300
301	301
302	302	LC002029 - Page 9 of 11
303	303	42-64.34-2. Powers and duties. 1
304	304	(a) The department of housing shall be the state’s lead agency for housing, homelessness, 2
305	305	and community development in the state of Rhode Island. 3
306	306	(b) The secretary of housing shall have the following powers and duties: 4
307	307	(1) All powers and duties pursuant to this chapter; 5
308	308	(2) To supervise the work of the department of housing and to act as its chief administrative 6
309	309	officer; 7
310	310	(3) To coordinate the administration and financing of various departments or offices within 8
311	311	the department of housing; 9
312	312	(4) To serve as the governor’s chief advisor and liaison to federal policymakers on housing, 10
313	313	homelessness, and community development as well as the principal point of contact on any such 11
314	314	related matters; 12
315	315	(5) To coordinate the housing, homelessness, and community development programs of 13
316	316	the state of Rhode Island and its departments, agencies, commissions, corporations, and 14
317	317	subdivisions; 15
318	318	(6) To employ such personnel and contracts for such consulting services as may be required 16
319	319	to perform the powers and duties conferred upon the secretary of housing; 17
320	320	(7) To oversee and direct the administration of funds that may be appropriated from time 18
321	321	to time to the department of housing; and 19
322	322	(8) Creation of a written guide for consumers relating to the rights and duties of landlords 20
323	323	and tenants pursuant to chapter 18 of title 34, which the secretary shall update at minimum on an 21
324	324	biennial basis. The guide shall be posted on the website of the department of housing and shall be 22
325	325	published in both English and Spanish; and 23
326	326	(9) Coordinate a central depository of information regarding condominium associations, 24
327	327	investigate complaints related to condominium associations in accordance with chapter 35 of title 25
328	328	42 ("administrative procedures"). 26
329	329	(c) In addition to such other powers as may otherwise be delegated elsewhere to the 27
330	330	department of housing, the department is hereby expressly authorized, by and through the secretary 28
331	331	of housing: 29
332	332	(1) To purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and 30
333	333	otherwise deal in and with, real or personal property, or any interest in real or personal property, 31
334	334	wherever situated; 32
335	335	(2) To accept any gifts or grants or loans of funds or property or financial or other aid in 33
336	336	any form from the federal government or any agency or instrumentality of the federal government, 34
337	337
338	338
339	339	LC002029 - Page 10 of 11
340	340	or from the state or any agency or instrumentality of the state, or from any other source and to 1
341	341	comply, subject to the provisions of this chapter, with the terms and conditions of the gifts, grants, 2
342	342	or loans; 3
343	343	(3) Subject to the provisions of § 37-2-1 et seq., to negotiate and to enter into contracts, 4
344	344	agreements, and cooperative agreements with agencies and political subdivisions of the state, not-5
345	345	for-profit corporations, for-profit corporations, and other partnerships, associations, and persons 6
346	346	for any lawful purpose necessary and desirable to effectuate the purposes of the department of 7
347	347	housing; and 8
348	348	(4) To carry out this chapter and perform the duties of the general laws and public laws 9
349	349	insofar as those provisions relate to any regulatory areas within the jurisdiction of the department 10
350	350	of housing. 11
351	351	SECTION 4. This act shall take effect on July 1, 2026. 12
352	352	========
353	353	LC002029
354	354	========
355	355
356	356
357	357	LC002029 - Page 11 of 11
358	358	EXPLANATION
359	359	BY THE LEGISLATIVE COUNCIL
360	360	OF
361	361	A N A C T
362	362	RELATING TO PROPERTY -- CONDOMINIUM LAW
363	363	***
364	364	This act would restrict increases in monthly common expenses and limit special 1
365	365	assessments to cover unforeseen costs not included in the condo association’s approved annual 2
366	366	budget for common expenses in associations where the minority of the units are deed-restricted 3
367	367	units. 4
368	368	This act would take effect on July 1, 2026. 5
369	369	========
370	370	LC002029
371	371	========
372	372