| Summary |
Section 1 of the bill authorizes a party in a matter concerning
rights and responsibilities arising under the declaration, bylaws,
covenants, or other governing documents of a unit owners' association
(HOA) to enforce those rights or responsibilities in small claims court if
the amount at issue does not exceed $7,500, exclusive of interest and
costs. The party may also seek declaratory relief in small claims court.
Section 2 specifies that the authority to enforce rights and responsibilities
in small claims court applies to an HOA's collection of fines from a unit
owner if the amount of fines, exclusive of interest and costs, does not
exceed $7,500.
Section 2 also requires an HOA that voluntarily conducts a reserve
study to also conduct a reconciliation of all of its reserve accounts at the
time of conducting the reserve study.
With regard to a unit owner's delinquency in paying HOA
assessments, section 2 also:
•
Requires an HOA to alert the unit owner regarding the
delinquency by, in addition to sending a notice of
delinquency to the unit owner as required by current law,
attempting to contact the unit owner by at least 2 other
methods of communication, including first-class or
certified mail, an e-mail, a telephone call or voice mail
message, or an in-person contact. The HOA must keep
records of its attempts to contact the unit owner regarding
the delinquency.
•
Prohibits an HOA, or a property management company
acting on behalf of an HOA, from referring the delinquent
account to a collection agency or attorney unless a majority
of the HOA's board of directors vote to refer the matter on
the record at a public hearing;
•
Prohibits an HOA from imposing late fees, fines, and
interest on a per-diem basis in an amount that exceeds the
lesser of $50 per day or $500 total;
•
Prohibits an HOA from assessing late fees and fines in an
amount or manner that renders the HOA dependent on the
late fees or fines for the purpose of generating revenue for
the HOA's general expenses;
•
Prohibits an HOA from charging a rate of interest on
unpaid assessments, fees, or fines in an amount greater than
8% per year;
•
Prohibits an HOA from assessing a fee or other charge for
providing the unit owner a statement of the total amount
that the unit owner owes the HOA;
•
Requires an HOA to adopt a policy to provide the unit
owner with contact information for one or more foreclosure
counseling services available in the county in which the
unit owner's common interest community is located; and
•
Before an HOA may initiate a foreclosure action against a
unit owner, requires that the HOA offer the unit owner a
repayment plan to pay the debt in monthly installments, and
the unit owner either declines the offer or, after accepting
the offer, fails to make at least 3 monthly payments.
Section 3 limits the interest rate that an HOA may apply to a unit
owner's past due assessment to an amount not to exceed 8% per year.
Section 4 limits the amount that an HOA is entitled to recover in
any action or suit that the HOA brings against a unit owner to an amount
equal to 3 times the amount of unpaid regular and special assessments
plus interest. Similarly, section 5 limits the maximum amount of
assessments and associated fees, late charges, attorney fees, fines, and
interest that an HOA may recover from the unit owner to 3 times the
amount of all unpaid regular and special assessments plus interest.
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