Chapter 246

2009 -- H 5906 SUBSTITUTE A AS AMENDED

Enacted 11/10/09

 

A N A C T

RELATING TO PROPERTY - CONDOMINIUM MANAGEMENT

     

     Introduced By: Representatives Serpa, Silva, Mattiello, and Vaudreuil

     Date Introduced: February 26, 2009

 

It is enacted by the General Assembly as follows:

 

     SECTION 1. Sections 34-36.1-3.0.1, 34-36.1-3.0.2, 34-36.1-3.16 and 34-36.1-3.21 of the

General Laws in Chapter 34-36.1 entitled "Condominium Law" are hereby amended to read as

follows:

 

     34-36.1-3.01. Organization of unit owners' association. -- A unit owners' association

must be organized no later than the date the first unit in the condominium is conveyed to a

purchaser. The membership of the association at all times shall consist exclusively of all the unit

owners or, following termination of the condominium, of all former unit owners entitled to

distributions of proceeds under section 34-36.1-2.18, or their heirs, successors, or assigns. The

association shall be organized as a profit or nonprofit corporation or as an unincorporated

association. In the case of an unincorporated association, a certificate evidencing the names of the

executive board members and mailing address for the association shall be recorded with the

municipal land records department for the city or town in which the condominium is located,

which shall be updated as often as necessary to reflect any changes in the composition of the

executive board.

 

     34-36.1-3.02. Powers of unit owners' association. -- (a) Except as provided in

subsection (b), and subject to the provisions of the declaration, the association, even if

unincorporated, may:

      (1) Adopt and amend bylaws and rules and regulations;

      (2) Adopt and amend budgets for revenues, expenditures, and reserves and collect

assessments for common expenses from unit owners;

      (3) Hire and discharge managing agents and other employees, agents and independent

contractors;

      (4) Institute, defend, or intervene in litigation or administrative proceedings in its own

name on behalf of itself or two (2) or more unit owners on matters affecting the condominium;

      (5) Make contracts and incur liabilities;

      (6) Regulate the use, maintenance, repair, replacement and modification of common

elements;

      (7) Cause additional improvements to be made as a part of the common elements;

      (8) Acquire, hold, encumber, and convey in its own name any right, title or interest to

real or personal property, but common elements may be conveyed or subjected to a security

interest or mortgage only pursuant to section 34-36.1-3.12;

      (9) Grant easements, leases, licenses and concessions through or over the common

elements;

      (10) Impose and receive any payments, fees, or charges for the use, rental, or operation

of the common elements other than limited common elements described in section 34-36.1-

2.02(2) and (4) and for services provided to unit owners;

      (11) Impose charges for late payment of assessments and, after notice and an opportunity

to be heard, levy reasonable fines for violations of the declaration, bylaws, and rules and

regulations of the association as provided in section 34-36.1-3.20;

      (12) Impose reasonable charges for the preparation and recordation of amendments to

the declaration, resale certificates required by section 34-36.1-4.09 or statements of unpaid

assessments;

      (13) Provide for the indemnification of its officers and executive board and maintain

directors' and officers' liability insurance;

      (14) Assign Borrow funds including the right to assign and/or pledge its right to future

income, including the right to receive common expense assessments, but only to the extent the

declaration expressly so provides;

      (15) Exercise any other powers conferred by the declaration or bylaws;

      (16) Exercise all other powers that may be exercised in this state by legal entities of the

same type as the association; and

      (17) Exercise any other powers necessary and proper for the governance and operation of

the association.

      (b) The declaration may not impose limitations on the powers of the association to deal

with the declarant that are more restrictive than the limitations imposed on the power of the

association to deal with other persons.

 

     34-36.1-3.16. Lien for assessments. -- (a) The association has a lien on a unit for any

assessment levied against that unit or fines imposed against its unit owner from the time the

assessment or fine becomes due. The association's lien may be foreclosed in accordance with and

subject to the provisions of section 34-36.1-3.21. Unless the declaration otherwise provides,

attorney's fees, charges, late charges, fines, and interest charged pursuant to section 34-36.1-

3.02(a)(10) -- (12) are enforceable as assessments under this section. If an assessment is payable

in installments, the full amount of the assessment is a lien from the time the first installment

thereof becomes due.

      (b) (1) A lien under this section is prior to all other liens and encumbrances on a unit

except:

      (i) Liens and encumbrances recorded before the recordation of the declaration and not

subordinated to the declaration,

      (ii) A first mortgage or deed of trust on the unit recorded before the date on which the

assessment sought to be enforced became delinquent, and

      (iii) Liens for real estate taxes and other governmental assessments or charges against the

unit.

      (2) The lien is also prior to any mortgage or deed of trust described in subdivision

(b)(1)(ii) of this section to the extent of the common expense assessments based on the periodic

budget adopted by the association pursuant to section 34-36.1-3.15(a) which would have become

due in the absence of acceleration during the six (6) months immediately preceding the

foreclosure of the interest of the unit owner by the holder of any such mortgage or deed of trust,

including any costs and reasonable attorney's fees not to exceed two thousand five hundred

dollars ($2,500), incurred in the collection of any delinquent assessment or other charges by legal

proceedings or otherwise and all costs of foreclosure held pursuant to section 34-36.1-3.21,

including, but not limited to, publication, advertising and auctioneer costs, said foreclosure costs

not to exceed five thousand dollars ($5,000) (for a total aggregate of attorney's fees and costs of

seven thousand five hundred dollars ($7,500)).

      (3) The priority amount under subdivision (b)(2) above shall not include any amounts

attributable to special assessments, late charges, fines, penalties, and interest assessed by the

association.

      (4) When any portion of the unit owner's share of the common expenses has been

delinquent for at least sixty (60) days the association shall first send a notice stating the amount of

the delinquency to the unit owner by certified mail, return receipt requested, and first class mail.

The association shall also send a notice by certified mail, return receipt requested, and first class

mail, stating the amount of the delinquency to the holder of the first mortgage or deed of trust as

it appears in the land evidence records at the address appearing in the mortgage or deed of trust or

such other address as the first mortgagee may provide in writing to the association.

      (5) The failure of the association to send the first mortgagee the notice of sixty (60) days

delinquency of common expense assessments, as described in subsection (b)(4) above, shall not

affect the priority of the lien for up to six (6) months common expense assessments, but the

priority amount shall not include any costs or attorney's fees.

      (6) This subsection does not affect the priority of mechanics' or materialmen's liens, or

the priority of liens for other assessments made by the association.

      (c) Unless the declaration otherwise provides, if two (2) or more associations have liens

for assessments created at any time on the same real estate, those liens have equal priority.

      (d) Recording of the declaration constitutes record notice and perfection of the lien. No

further recordation of any claim of lien for assessment under this section is required but is

permitted.

      (e) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien

are instituted within six (6) years after the full amount of the assessments becomes due.

      (f) This section does not prohibit actions to recover sums for which subsection (a)

creates a lien or prohibit an association from taking a deed in lieu of foreclosure.

      (g) A judgment or decree in any action brought under this section must include costs and

reasonable attorney's fees for the prevailing party.

      (h) The association, upon written request shall furnish to a unit owner or the holder of a

first mortgage or deed of trust granted with respect to such unit owner's unit a recordable

statement setting forth the amount of unpaid assessments against his or her unit. The statement

must be furnished within ten (10) business days after receipt of the request and is binding on the

association, the executive board, and every unit owner.

      (i) The association may take action for failure of a unit owner to pay any assessment or

other charges pursuant to this section. The delinquent unit owner shall be obligated to pay all

expenses of the executive board, including reasonable attorney's fees, incurred in the collection of

the delinquent assessment or other charges by legal proceedings or otherwise, such attorney's fees

and other charges also being a lien on the unit. The delinquent unit owner shall also be obligated

to pay any amounts paid by the executive board for taxes or on account of superior liens or

otherwise to protect its lien, which expenses and amounts, together with accrued interest, shall be

deemed to constitute part of the delinquent assessment and shall be collectible as such.

 

     34-36.1-3.21. Foreclosure of condominium lien. -- (a) (1) If a condominium unit owner

shall default in the payment of any assessment, fine, or any other charge which is a lien on the

unit in favor of the association or its assigns, then it shall be lawful for the association or its

assigns, through its executive board, to sell the unit of any defaulting unit owner and the benefit

and equity of redemption of the defaulting unit owner and his or her heirs, executors,

administrators, and assigns therein, at public auction upon the premises or at such other place, if

any, as may be designated for that purpose by the association or its assigns.

      (2) The association must first mail written notice of the time and place of sale to the

defaulting unit owner, at his or her last known address and the holder of the first mortgage or

deed of trust of record at the address for service required by subdivision 34-36.1-3.16(b)(4), both

by certified mail, return receipt requested, at least twenty (20) days prior to publishing said

notice; second, the association must publish the same at least once each week for two (2)

successive weeks in a public newspaper. The time of sale shall be at least fifteen (15) days after

the publication of the first notice in a public newspaper. Publication shall be as follows:

      (i) If the condominium is situated in the city of Central Falls, in a public newspaper

published daily in the city of Pawtucket;

      (ii) If the condominium is situated in the town of North Providence, in a public

newspaper published daily in the city of Providence;

      (iii) If the condominium is situated in any of the towns of Cumberland, Lincoln,

Smithfield or North Smithfield, in a public newspaper published daily in either the city of

Pawtucket, Woonsocket, or Providence;

      (iv) If the condominium is situated in the county of Providence elsewhere than in the

above last named cities and towns, in a public newspaper published daily in the city of

Providence;

      (v) If the condominium is situated in the county of Newport, in a public newspaper

published daily in the city of Newport; but if there be no such newspaper so published, then in

some public newspaper published anywhere in the county of Newport;

      (vi) If the condominium is situated in any of the counties of Bristol, Kent, or

Washington, in a public newspaper published daily in the city or town in which the condominium

is situated; or in some public newspaper published daily in the county in which the condominium

is situated or in a public newspaper published daily in the city of Providence.

      (3) The sale may be adjourned from time to time, provided that publishing of the notice

shall be continued, together with a notice of the adjournment or adjournments, at least once each

week in the same newspaper; and third, the association must mail written notice of the same to

any person or entity having an interest of record in the unit, recorded not later than thirty (30)

days prior to the date originally scheduled for the sale, including without limitation, the holder of

any mortgage or deed of trust with respect to the unit, to the address of the person or entity may

have provided for that purpose in the land evidence records or at any other address the person or

entity may have provided the association in writing, such notice to be given by regular or certified

mail, return receipt requested, at least ten (10) days prior to the date originally scheduled for such

sale; and in his or her or their own name or names, or as the attorney or attorneys of the

defaulting unit owner (for that purpose by these presents duly authorized and appointed with full

power of substitution and revocation) to make, execute, and deliver to the purchaser or purchasers

at the sale a good and sufficient deed or deeds of the defaulted condominium unit, in fee simple,

and to receive the proceeds of the sale or sales, and from the proceeds to retain all sums secured

by the lien in favor of the association as of the date of such sale together with all expenses

incident to such sale or sales, or for making deeds hereunder, and for fees of counsel and

attorneys, and all costs or expenses incurred in the exercise of such powers, and all taxes,

assessments, and premiums for insurance, if any, either theretofore paid by the association, or its

assigns, or then remaining unpaid upon the defaulted condominium unit, rendering and paying the

surplus of the proceeds of sale, if any there be, over and above the amounts to be retained, and

paid to other encumbrances of record, together with a true and particular account of such sale or

sales, expenses, and charges, to the defaulting unit owner, or his or her heirs, executors,

administrators or assigns. The sale or sales shall forever be a perpetual bar against the defaulting

unit owner and his or her heirs, executors, administrators and assigns, and all persons claiming

the defaulted condominium unit, so sold, by, through or under him, her, them or any of them.

      (4) Within seven (7) days after the foreclosure sale, the association shall send an

additional written notice to the holder of the first mortgage or deed of trust of record as appears in

the land evidence records, as provided in subdivision 34-36.1-3.16(b)(4) by certified mail, return

receipt requested, and first class mail, identifying the name of the highest bidder and the amount

of the bid.

      (b) Any foreclosure sale held by the association pursuant to subsection (a) above, and the

title conveyed to any purchaser or purchasers pursuant to such sale, shall be subject to any lien or

encumbrance entitled to a priority over the lien of the association pursuant to section 34-36.1-

3.16(b).

      (c) Any foreclosure sale held by the association pursuant to subsection (a) above, shall

be subject to a thirty (30) day right of redemption running in favor of the holder of the first

mortgage or deed of trust of record. The right of redemption shall be exercised by tendering

payment to the association in full of all assessments due on the unit together with all attorney's

fees and costs incurred by the association in connection with the collection and foreclosure

process within thirty (30) days of the date of the post-foreclosure sale notice sent by the

association pursuant to subdivision (a)(4) above. Otherwise, the right of redemption shall

terminate thirty (30) days from the date of the post-foreclosure sale notice sent by the association

pursuant to subdivision (a)(4) above.

      (d) Upon request the association shall provide to any person or entity having an interest

of record in the unit: (1) an itemized statement of the amounts owed the association by the

defaulting unit owner, separating common expense assessments referred to in section 34-36.1-

3.16(b)(2) from interest, attorney's fees, fines and other charges secured by the lien of the

association; and (2) a copy of the most recent periodic budget adopted by the association pursuant

to section 34-36.1-3.15(a).

 

     SECTION 2. This act shall take effect upon passage.

     

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LC01818/SUB A

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