Condominium Laws & Zoning Changes Understanding the Changes October 18, 2012
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1 Condominium Laws & Zoning Changes Understanding the Changes October 18, 2012 Speakers: Steph Horne Agency Title Inc Glenridge Park Pl., Ste. 7 Louisville, KY (502) shorne@agencytitle.com Speakers: Nicholas R. Pregliasco 1000 N. Hurstbourne Pkwy., 2 nd Floor Louisville, KY (502) x139 nrp@bardlaw.net Speaker: Rocky Pusateri Shelbyville Road Louisville, KY (502) rocky@elitebuilthomes.com
2 Recent Condominium Law Changes The prior Horizontal Property Law was in effect from 1962 to 2011 New Kentucky Condominium Act is based on the Uniform Condominium Act Effective January 1, 2011 Amended by HB 433 effective April 11, 2012 Changes found at
3 Kentucky Condominium Act - Limited Application to Condominium Projects Created before January 1, 2011 Some sections of the Kentucky Condominium Act apply retroactively KRS (2), including: KRS Powers of the Association, including provisions for Emergency Assessments. KRS Executive Board Members and Officers Declarant must turn over control of the Association to the Unit Owners no later than the earlier of: Sixty (60) days after conveyance of seventy-five percent (75%) of the units which may be created to unit owners other than a declarant; Two (2) years after all declarants have ceased to offer units for sale in the ordinary course of business; Two (2) years after any development right to add new units was last exercised; or Seven (7) years after the first unit was conveyed to a unit owner other than a declarant.
4 Existing regimes can opt-in KRS (3) Resale Certificates (KRS )
5 Resale Certificates (KRS ) Required by seller for most conveyances of a unit Association must provide to unit owner within 10 days of a request Includes information related to: the effect on the proposed disposition of any right of first refusal or other restraint on the free alienability of the unit; the amount of the monthly common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner; any other fees payable by unit owners; any capital expenditures anticipated by the association for the current and, if known, next two (2) fiscal years; amount of any reserves for capital expenditures, if any, and of any portions of those reserves designated by the association for any specified projects; the current operating budget of the association and current financial report; any unsatisfied judgments against the association and the status of any pending suits greater than $10,000 in which the association is a defendant; any insurance coverage provided for the benefit of unit owners Cancellation of contract
6 Key Definitions KRS Unit now means a physical portion of the condominium designated for separate ownership or occupancy, the boundaries of which are described in KRS , including patios, balconies, and other spaces if designated in the declaration Development Rights and Special Declarant Rights
7 HB 433 makes Resale Certificate provisions retroactive HB Kentucky Condominium Act Amendment Purpose: To address issues with the 2011 Kentucky Condominium Act Most significant provisions: Adoption of Kentucky Condominium Act KRS (3) Regime existing before January 1, 2011 can adopt the Kentucky Condominium Act with less than 100% vote of owners if declaration provides lesser percentage to terminate regime Definition of Condominium KRS Allows greater flexibility for creation of a condominium by removing the language single units in a single unit or a multiple unit structure or structures and replacing with real estate
8 Resale Certificates - KRS Set limitation on the fee charged for the Certificate to be the lesser of $225 or 80% of the current monthly assessment fee. KRS Set limitation of $50 for Resale Certificate updates Added more specificity to the Certificate provisions Failure to provide required Certificate does not void deed to purchaser
9 Termination of Condominium Regime under Horizontal Property Law KRS Waiver of regime - Effect of encumbrances. All of the co-owners or the sole owner of a building constituted into a horizontal property regime may waive this regime and request the county clerk to regroup or merge the records of the filial estates with the principal property, provided, that the filial estates are unencumbered, or if encumbered, that the creditors in whose behalf the encumbrances are recorded agree to accept as security the undivided portions of the property owned by the debtors.
10 Termination of Condominium Regime under New Condominium Act KRS Termination of condominium. Except in the case of a taking of all the units by eminent domain, a condominium may be terminated only by agreement of unit owners of units to which at least eighty percent (80%) of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the units in the condominium are restricted exclusively to nonresidential uses.
11 KRS Application and construction of KRS to Unit owners of units to which one hundred percent (100%) of the votes in the association are allocated, or such lesser percentage as stated in the declaration as necessary to terminate the condominium, may elect that KRS to shall apply to a condominium created before the January 1, In such event the declaration, bylaws, plats, or plans of the condominium shall be modified or amended to the extent necessary to be consistent with KRS to
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21 Questions? Speakers: Steph Horne Agency Title Inc Glenridge Park Pl., Ste. 7 Louisville, KY (502) shorne@agencytitle.com Speakers: Nicholas R. Pregliasco 1000 N. Hurstbourne Pkwy., 2 nd Floor Louisville, KY (502) x139 nrp@bardlaw.net Speaker: Rocky Pusateri Shelbyville Road Louisville, KY (502) rocky@elitebuilthomes.com
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