Legislative Update - Connecticut Condominium/HOA 2013
The 2013 Legislative Session convened on January 9th and will adjourn at midnight on June 5th. On February 6, 2013 Governor Malloy delivered his Fiscal Year 2014 - 2015 Biennial Budget Address to a joint session of the General Assembly. His budget proposes to spend $44 billion over the next biennium, approximately $1.8 billion less than current services. His agenda builds on the investments made over the past two years in job creation and education without proposing any new taxes. However, it extends several previously enacted tax increases scheduled to expire at the end of the fiscal year. The Governor's budget proposal follows through on his commitment to create a new Department of Housing. The programs that currently support housing in Connecticut are recommended for transfer to and consolidation within the Department of Housing. The Governor continues to sustain the high level of affordable housing maintained over the past two years.
The Governor’s ambitious agenda includes priority issues ranging from creating new jobs, getting the state's fiscal house in order and gun control resulting from the Sandy Hook shootings. On April 4, 2013 the General Assembly approved, and the Governor signed a historic, and far-reaching gun control bill that some say is "the toughest in the nation" in response to the Newtown school massacre. This bipartisan legislation is a result of months of emotional debate and public hearings and addresses the issues of gun violence, mental health and school security. The Legislature will now shift its focus to the state budget and a deficit of over $91.3 million for the current fiscal year and a projected deficit of nearly $1 billion in each of the next two years.
In addition to dealing with these monumental issues, the Legislature is considering over 2,000 bills during this long five month session. The Judiciary and Insurance Committees have considered several bills that affect the condominium industry. Some of these condominium industry related bills have received public hearings and are currently being worked on by the Judiciary Committee. These bills would have to be approved by the Judiciary Committee prior to its April 19th deadline in order to be considered by the full General Assembly.
The following is a summary of the content and status of some of the priority pieces of legislation:
1.) HB 6513, "An Act Concerning the Budget and Special Assessment Approval Process in Common Interest Communities." This bill was introduced by Representative Arthur O'Neill (Republican, Southbury) and Senator Rob Kane (Republican, Watertown). It proposes to revise voting requirements governing the rejection or approval of proposed budgets and special assessments by unit owners in common interest communities. The bill allows a minority of one-third of unit owners to reject an approved budget. Current law requires a majority. It ultimately grants extensive voting power to a minority of unit owners within a common interest community. The condominium industry testified in opposition to the bill at the Judiciary public hearing on March 25, 2013. In order to be considered by the full General Assembly, the bill must be approved by the Judiciary Committee prior to its April 19, 2013 deadline. Members of the Legislative Action Committee are currently working with Representative O'Neill and Senator Kane to modify this proposal.
2.) HB 6662, "An Act Concerning the Recoupment of Moneys Owed to a Unit Owners' Association Due to Nonpayment of Assessments." This proposal was introduced by the Judiciary Committee. The purpose of the bill is to extend the number of months for which common expense assessments due to a common interest unit owners' association may be counted for purposes of a lien from six months to twelve months; and to provide greater statutory protections to unit owners' associations seeking reimbursement for unpaid assessments that are incurred during the pendency of a foreclosure action. The proposal was heard for a public hearing by the Judiciary Committee on March 25, 2013. The condominium industry testified in support of this legislation at the public hearing with a suggested amendment to make the priority lien "evergreen" which is every six months until foreclosure is completed. The industry stated: "if the Connecticut General Assembly does not make it clear that the priority lien is meant to protect associations and their unit owners, Connecticut associations will be severely impacted." The condominium association will continue to work with various members of the Judiciary Committee on passage out of committee by its April 19th deadline, and ultimate passage prior to the Legislature's June 5th adjournment. The Insurance and Real Estate Committee also approved a bill this session regarding the statutory lien for assessments on condominium units.
3.) SB 1101, "An Act Permitting the Affixing of Security Cameras to Units Within a Common Interest Community." This proposal was introduced by the Judiciary Committee and would allow the unit owner of a common interest community to affix a security camera to the exterior of his or her unit. Senator Witkos (Republican, Canton) and Senator Doyle (Democrat, Wethersfield) are both proponents of this bill. It was heard for a public hearing on March 25, 2013 by the Judiciary Committee. The condominium industry testified in opposition for the following reasons: 1.) the exterior surfaces of the buildings are typically common elements that are owned by all unit owners, collectively; 2.) the bill does not take into account the association's obligation to maintain, repair and replace the exterior surfaces of the buildings; and 3.) associations already have the power to permit owners to install cameras and to set conditions on such work as needed to meet the needs of the community. As of this writing, the bill has not been passed out of committee.
4.) HB 6666, An Act Establishing Two Pilot Programs for the Mediation of Condominium Related Disputes and Relieving a Community Association Manager of any Responsibility for Certifying that a Condominium Unit Owner is Compliant with a Municipal Ordinance Requiring the Installation of Carbon Monoxide Detectors and Smoke Detectors. This bill, which received a public hearing by the Judiciary Committee on March 25th, would establish pilot programs within the Probate Court system and the Judicial Branch for the mediation of disputes that arise between condominium unit owners and associations, and relieve community association managers from any obligation to certify that a condominium unit owner has complied with a municipal ordinance requiring the installation of carbon monoxide detectors and smoke detectors. The condominium industry has a neutral position on this proposal, however, they have expressed concerns regarding the training and fees language contained in the final provision of the bill. The association believes that all hearing officers, probate judges and staff involved in the processing of complaints for the PILOT Program must be trained about common interest community law. In addition, the association believes that the fees should be non-refundable and non-waiveable or the State of Connecticut will bear the burden of funding a new program. Since the bill has not yet been approved by the Judiciary Committee, the industry will continue to work with various legislators on final language.
As of this writing, it is difficult to predict the fate of these condominium related bills. While the condominium industry continues to work with legislative decision makers on final language, these bills still have to be approved by the Judiciary committee prior to its April 19th deadline. Since the Legislature recently passed a comprehensive gun control bill, the focus will now shift to resolving the state budget deficit. Many bills, including those related to condominiums, could conceivably get lost in the budget debate and die on the calendar. There is also the possibility of a budget stalemate which could promote the passage of non-budget related bills, with little controversy, before the June 5th adjournment.
Prepared by Lori J. Samele-Bates, Law offices of Brown Rudnick on behalf of Imagineers LLC
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