Condominium Laws & Zoning Changes Understanding the Changes October 18, 2012 Speakers: Steph Horne Agency Title Inc. 6500 Glenridge Park Pl., Ste. 7 Louisville, KY 40222 (502) 339-1145 shorne@agencytitle.com Speakers: Nicholas R. Pregliasco 1000 N. Hurstbourne Pkwy., 2 nd Floor Louisville, KY 40223 (502) 426-0388 x139 nrp@bardlaw.net Speaker: Rocky Pusateri 16218 Shelbyville Road Louisville, KY 40245 (502) 245-6159 rocky@elitebuilthomes.com
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 http://www.lrc.ky.gov/record/11rs/hb433.htm
Kentucky Condominium Act - Limited Application to Condominium Projects Created before January 1, 2011 Some sections of the Kentucky Condominium Act apply retroactively KRS 381.9103(2), including: KRS 381.9167 Powers of the Association, including provisions for Emergency Assessments. KRS 381.9169 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.
Existing regimes can opt-in KRS 381.9103(3) Resale Certificates (KRS 381.9201-9203)
Resale Certificates (KRS 381.9201-9203) 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
Key Definitions KRS 381.9105 Unit now means a physical portion of the condominium designated for separate ownership or occupancy, the boundaries of which are described in KRS 381.9133, including patios, balconies, and other spaces if designated in the declaration Development Rights and Special Declarant Rights
HB 433 makes Resale Certificate provisions retroactive HB 433 2012 Kentucky Condominium Act Amendment Purpose: To address issues with the 2011 Kentucky Condominium Act Most significant provisions: Adoption of Kentucky Condominium Act KRS 381.9103(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 381.9105 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
Resale Certificates - KRS 381.9203 Set limitation on the fee charged for the Certificate to be the lesser of $225 or 80% of the current monthly assessment fee. KRS 381.9167 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
Termination of Condominium Regime under Horizontal Property Law KRS 381.850 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.
Termination of Condominium Regime under New Condominium Act KRS 381.9157 - 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.
KRS 381.9103 - Application and construction of KRS 381.9101 to 381.9207 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 381.9101 to 381.9207 shall apply to a condominium created before the January 1, 2011. 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 381.9101 to 381.9207
Stites & Harbison, PLLC
Questions? Speakers: Steph Horne Agency Title Inc. 6500 Glenridge Park Pl., Ste. 7 Louisville, KY 40222 (502) 339-1145 shorne@agencytitle.com Speakers: Nicholas R. Pregliasco 1000 N. Hurstbourne Pkwy., 2 nd Floor Louisville, KY 40223 (502) 426-0388 x139 nrp@bardlaw.net Speaker: Rocky Pusateri 16218 Shelbyville Road Louisville, KY 40245 (502) 245-6159 rocky@elitebuilthomes.com