Imagineers Summer 2011 Newsletter

CT Legislative End of the Session Wrap-Up - Condominium / HOA

Several bills that impacted the condominium industry were introduced during the "long" five month legislative session which ended at Midnight on June 8th. Only two of these bills survived the legislative process to become law. This article is a summary of those bills as well as a snapshot of the bills of importance which "died" this session.

Public Act 11-195 entitled "An Act Concerning Elections of the Executive Boards of Directors of Condominium Unit Owners' Associations and Changes to the Common Interest Ownership Act" made changes to the Common Interest Ownership Act which was most recently modified during the 2009 Legislative Session. The condominium industry worked with various legislators during this session to make changes to the bill which were more amenable to the industry.

Specifically, the bill prohibits an executive board member of a residential common interest community association or master association or an individual seeking election to such board, from accepting any item of value based on the understanding that doing so will influence the member's or candidate's vote, official action, or judgment; and also prohibits someone from providing or offering something of value to these people.

The bill also prohibits a community association manager or person providing association management services from campaigning for any person seeking election to an executive board. It further requires an association to hold a hearing before bringing an action or instituting a proceeding against a unit owner other than a declarant and allows a unit owner, other than a declarant, to request such a hearing to enforce a right or obligation against an association or another unit owner. The bill also exempts certain buildings from the insurance requirements for units divided by horizontal or vertical boundaries.

The bill goes on to prohibit a contract between a common interest community association and an individual providing association management services from including any clause or agreement that indemnifies or holds the association manager harmless against any liability for loss or damage resulting from the manager's negligence or willful misconduct. The act takes effect on October 1, 2011.

The second bill, the omnibus energy reform legislation, contained several sections which pertained specifically to condominiums. Public Act 11-80, "An Act Concerning The Establishment of the Department of Energy and Environmental Protection and Planning for Connecticut's Energy Future" was signed into law by Governor Malloy on July 1, 2011. It established a program to provide grants to residential condominium associations and owners to buy renewable energy sources, including solar energy, geothermal, fuel cell, and other hydrogen-fueled systems. The program will be established within available funds by the Clean Energy Finance and Investment Authority, in consultation with the Department of Energy and Environmental Protection. The program takes effect as of October 1, 2011.

In addition, the bill creates an office of energy efficient businesses within the Department of Energy and Environmental Protection. The office must provide in-state businesses with a single point of contact for any state business interested in energy efficiency, renewable energy, or conservation projects. The office must also make available information on loans and grants for energy efficiency, renewable energy projects, and conservation; audit and assessment services, including outreach to businesses by qualified entities; and any other service the office considers relevant.

Finally, the bill requires the Department of Energy and Environmental Protection to establish a natural gas and heating oil conversion program. This program would allow a gas or heating oil company to finance the conversion to gas or oil heat by potential residential customers who heat their homes with electricity. The Department of Energy and Environmental Protection must adopt regulations to establish procedures and terms for the program. The Department must report on the program's progress to the Energy and Technology and Environment committees by January 1, 2012, and annually thereafter.

Aside from the bills referenced above, there were several other bills introduced this session which the industry opposed. Fortunately, these bills did not make it through the legislative process. Listed below are the bills of significance which "died" this session.

SB 1205, "An Act Concerning Foreclosure Actions Against Unit Owners in Condominiums or Common Interest Communities for Overdue Assessments." This bill would have prohibited a condominium or common interest community association from foreclosing on a unit unless the overdue assessments and fees are at least three months past due. The bill died in the Judiciary Committee.

SB 1208, "An Act Concerning Financial Reporting by Condominium and Common Interest Community Associations." This proposal, which would establish additional financial reporting requirements for executive boards of common interest communities, including those created prior to 1984, received a public hearing and later died in the Judiciary Committee.

HB 6620, "An Act Concerning Condominiums and Common Interest Ownership Communities." This proposal was introduced by the Judiciary Committee and among other things; it established an Office of Condominium Ombudsman to resolve disputes between condominium owners and condominium associations. The industry testified against this aspect of the bill, favoring instead, a system of alternative dispute resolution. The bill died in the House of Representatives. Some of the sections were included in Public Act 11-195 (see above) however, the ombudsman piece did not pass the General Assembly.

In summary, it was a relatively successful legislative session for the condominium industry. The bills that the industry most strenuously opposed, never became law. Of the two bills which survived the session, both were supported in large part by the industry. There were however, provisions of Public Act 11-195, An Act Concerning Elections of the Executive Boards of Directors of Condominium Unit Owners' Associations and Changes to the Common Interest Ownership Act" which were of concern to the industry. Those concerns specifically related to the section regarding contracts between community associations and individuals providing management services. Legislators committed to working with the industry on these issues next legislative session which begins in February.

Prepared by Lori J. Samele-Bates, Law offices of Brown Rudnick on behalf of Imagineers LLC

Thank you for reading the Imagineers Board Newsletter. If you have any question or need any additional information on any articles provided in this newsletter, please contact us at 1-800-560-7268.

Imagineers LLC
Phone: 1-800-560-7268
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