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Uniform Laws Update—Property provides information on uniform and model state laws in development as they apply to real property, trust, and estate matters. The editors of Probate & Property welcome information and suggestions from readers.
Two months into the 2009 legislative sessions, states are considering a wide variety of uniform laws in the areas of real property and trusts and estates. Familiar uniform acts, such as the Uniform Real Property Electronic Recording Act (URPERA), continue to see a steady number of introductions and considerations. The Uniform Prudent Management of Institutional Funds Act (UPMIFA) continues its swift march toward national uniformity with 13 introductions on top of its 27 enactments, and several more bills have been filed and await introduction. The Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act (UAGPPJA), discussed in our last column, has been enacted in four jurisdictions to date and introduced in nine more this year.
New items of interest on the horizon are uniform real property acts. The ULC has several acts currently in drafting, including the Uniform Real Property TOD Act and the Uniform Partition of Inherited Property Act. Of more immediate interest, this spring the ABA House of Delegates has approved an important new revision of the Uniform Common Interest Ownership Act (UCIOA), completed by the Uniform Law Commission at its 2008 Annual Meeting held last summer. The ABA House of Delegates also approved a subset of the 2008 UCIOA developed by the ULC, known as the Uniform Common Interest Owners Bill of Rights Act.
The original 1982 UCIOA consolidated three related older uniform acts: the Uniform Condominium Act, the Uniform Planned Community Act, and the Model Real Estate Cooperative Act. It is a comprehensive act to govern the formation, management, and termination of common interest communities. In 1994, the ULC revisited UCIOA and made minor changes based on experience in the states and analysis and commentary on its provisions.
In 2004, the ULC approved a new drafting committee to consider and propose revisions to the Act. The primary purpose was to address the growing demand from the states for a legislative solution to increased tensions between unit owners and the elected directors of unit owners associations. Like prior versions of the Act, the 2008 UCIOA incorporates a comprehensive review of states' experience with the Act and common interest communities over the last 30 years.
The 2008 UCIOA expands on the Act's treatment of association operations, including rulemaking. It also revisits notice methods, meetings (including "open meeting" requirements for executive board and unit owner meetings and limitations on executive sessions), voting procedures, and the process for adopting budgets and special assessments. Under the revised Act, associations are required to have an executive board, and unit owners associations may organize in any form permitted under state law. The 2008 UCIOA includes revised rules for board elections and recalls and also allows for election of a limited number of independent outside directors.
The 2008 UCIOA clarifies mandatory and discretionary actions by association boards and certain aspects of association investment and borrowing practices. It also confirms an association's right to suspend unit owner privileges (within limitations) and gives flexibility to the executive board to determine whether to enforce the letter of each provision of its governing instruments, to compromise, or to decline to enforce them. Associations are given greater flexibility to seek payment for damages resulting from willful misconduct or gross negligence directly from a unit owner instead of filing a claim with the association's insurer. The Act now clarifies the status of an association's statutory lien for all sums due from unit owners, and the association's right to proceed in foreclosure on a lien against a unit owner is significantly limited.
As part of the drafting of the 2008 UCIOA, the ULC also promulgated a freestanding Uniform Common Interest Owners Bill of Rights Act (UCIOBORA). UCIOBORA borrows existing provisions of the previous UCIOA and many of the 2008 amendments to provide significant rights to unit owners in all common interest communities. The UCIOBORA can be enacted as a stand-alone act when adoption of the broader 2008 UCIOA is not feasible. The ABA House of Delegates also approved the UCIOBORA in conjunction with the 2008 UCIOA.
The full 2008 UCIOA and its smaller version, UCIOBORA, address and clarify association governance and the relationship between association boards and individual unit owners. The end goal of both new Acts is to provide all parties within common interest communities with clarity and guidance through a strong, flexible, and comprehensive governing statute that will serve their needs well into the future. For more information on 2008 UCIOA or UCIOBORA or an update on the Act's status in your state, please visit www.nccusl.org or contact the ULC at (312) 450-6600.Return to Probate & Property Magazine