2023 -- H 6024

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LC001126

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO PROPERTY -- CONDOMINIUM LAW

     Introduced By: Representative Patricia A. Serpa

     Date Introduced: March 01, 2023

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 34-36.1-1.02 and 34-36.1-2.19 of the General Laws in Chapter 34-

36.1 entitled "Condominium Law" are hereby amended to read as follows:

     34-36.1-1.02. Applicability.

     (a)(1) This chapter applies to all condominiums created within this state after July 1, 1982,

except that any condominium created within this state prior to July 1, 1982, may voluntarily accept

the provisions of this chapter in lieu of the provisions under which it was originally organized.

Acceptance shall be evidenced by an agreement in writing executed by and in behalf of the

condominium association and by all of the owners of all of the individual condominium units within

the condominium, in which agreement it is clearly stated that they all accept the provisions of this

chapter in lieu of those in the statute under which the condominium was organized and wish to be

governed in the future by the provisions of this chapter. The agreement shall be recorded in the

land evidence records of each and every town or city where all or any part of the land in the

condominium concerned may be located and shall become effective when first so recorded. The

acceptance shall only apply to the governance of the condominium concerned as to all matters

which are prospective or executory in nature; and nothing herein shall be deemed to abrogate,

amend, limit, effect, or impair the continued effectiveness, legality, or validity of all actions

lawfully taken by or in behalf of the condominium prior to the effective date of the acceptance,

including, but without limitation, the condominium declaration and all amendments thereto, the by-

laws of the condominium and/or of its association, all deeds, mortgages, leases and any further

documents affecting the titles or rights of unit owners, or of the condominium or the prior lawful

acts or deeds of any kind, of the condominium association, its officers, directors, or members.

     (2) Sections 34-36.1-1.05 (separate titles and taxation), 34-36.1-1.06 (applicability of local

ordinances, regulations, and building codes), 34-36.1-1.07 (eminent domain), 34-36.1-2.03

(construction and validity of declaration and bylaws), 34-36.1-2.04 (description of units), 34-36.1-

2.19 (rights of secured lenders), 34-36.1-3.02(a)(1) — (6) and (11) — (17) (powers of unit owners’

association), 34-36.1-3.11 (tort and contract liability), 34-36.1-3.16 (lien for assessments), 34-36.1-

3.18 (association records), 34-36.1-4.09 (resale of units), and 34-36.1-4.17 (effect of violation on

rights of action; attorney’s fees), § 34-36.1-3.20 (enforcement of declaration, bylaws and rules),

and 34-36.1-1.03 (definitions), to the extent necessary in construing any of those sections, apply to

all condominiums created in this state before July 1, 1982; but those sections apply only with

respect to events and circumstances occurring after July 1, 1982 and do not invalidate existing

provisions of the declaration, bylaws, plats, or plans of those condominiums.

     (3) A condominium created as an additional phase by amendment of a condominium

created prior to July 1, 1982, if the original declaration contemplated the amendment, shall be

deemed to be a condominium created prior to July 1, 1982; provided, however, the provisions of

subdivision (a)(2) shall apply as defined therein.

     (4) Section 34-36.1-3.21 (foreclosure of condominium lien) applies, with respect to all

condominiums created in this state prior to June 19, 1991, only with respect to events and

circumstances occurring after June 18, 1991, does not invalidate existing provisions of the

declarations, bylaws, plats, or plans of those condominiums, and applies in all respects to all

condominiums created in this state after June 18, 1991.

     (b) The provisions of the Condominium Ownership Act, chapter 36 of this title, do not

apply to condominiums created after July 1, 1982 and do not invalidate any amendment to the

declaration, bylaws, plats, and plans of any condominium created before July 1, 1982 if the

amendment would be permitted by this chapter. The amendment must be adopted in conformity

with the procedures and requirements specified by those instruments and by chapter 36 of this title.

If the amendment grants to any person any rights, powers, or privileges permitted by this chapter,

all correlative obligations, liabilities, and restrictions in this chapter also apply to that person.

     (c) This chapter does not apply to condominiums or units located outside this state, but the

public offering statement provisions (§§ 34-36.1-4.02 — 34-36.1-4.07) apply to all contracts for

the disposition thereof signed in this state by any party unless exempt under § 34-36.1-4.01(b).

     34-36.1-2.19. Rights of secured lenders.

     (a) The declaration may require that all or a specified number or percentage of the

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mortgagees or beneficiaries of deeds of trust encumbering the units approve specified actions of

the unit owners or the association as a condition to the effectiveness of those actions, but no

requirement for approval may operate to:

     (1) Deny or delegate control over the general administrative affairs of the association by

the unit owners or the executive board, or

     (2) Prevent the association or the executive board from commencing, intervening in, or

settling any litigation or proceedings, or receiving and distributing any insurance proceeds except

pursuant to § 34-36.1-3.13.

     (b) When approval of any actions of the unit owners or the association is required of all or

a specified number or percentage of the unit mortgagees by this chapter or the declaration or bylaws

as a condition to the effectiveness of those actions, written requests for approval shall be mailed by

United States Postal Service regular mail and certified mail return receipt requested to unit

mortgagees at the mailing addresses referenced on mortgage documents recorded in the land

evidence records. If a unit mortgagee fails to provide a written denial of approval to the party

requesting approval within sixty (60) days after the mailing of the request, the unit mortgagee shall

be deemed to have approved the request. All written requests for approval to unit mortgagees shall

reference and contain a copy of this section.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY -- CONDOMINIUM LAW

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     This act would provide that the "rights of secured lenders" provision from § 34-36.1-2.19

be applicable to condominiums created before July 1, 1982 and would create a process for

condominium associations to notify and obtain approval from unit mortgage holders for certain

association actions.

     This act would take effect upon passage.

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