WEST VIRGINIA LEGISLATURE
2022 REGULAR SESSION
Introduced
House Bill 4623
By Delegates Phillips and Doyle
[Introduced February 10, 2022; referred to the Committee on the Judiciary]
A BILL to amend and reenact §36B-1-103 of the Code of West Virginia, 1931, as amended; and to amend and reenact §36B-3-108 and §36B-3-110 of said code, all relating to the Uniform Common Interest Ownership Act; defining “electronic”; establishing requirements for the holding of meetings; and creating procedures for voting and proxy voting.
Be it enacted by the Legislature of West Virginia:
ARTICLE 1. GENERAL PROVISIONS.
§36B-1-103. Definitions.
In the declaration and bylaws (§36B-3-106 of this code), unless specifically provided otherwise or the context otherwise requires, and in this chapter:
(1) “Affiliate of a declarant” means any person who
controls, is controlled by, or is under common control with a declarant. A
person “controls” a declarant if the person: (i) (A) Is a general
partner, officer, director or employer of the declarant; (ii) (B)
Directly or indirectly or acting in concert with one or more other persons, or
through one or more subsidiaries, owns, controls, holds with power to vote, or
holds proxies representing, more than 20 percent of the voting interest in the
declarant; (iii) (C) Controls in any manner the election of a
majority of the directors of the declarant; or (iv) (D) Has contributed
more than 20 percent of the capital of the declarant. A person “is controlled
by” a declarant if the declarant: (i) Is a general partner, officer, director
or employer of the person; (ii) Directly or indirectly or acting in concert
with one or more other persons, or through one or more subsidiaries, owns,
controls, holds with power to vote, or holds proxies representing, more than 20
percent of the voting interest in the person; (iii) Controls in any manner the
election of a majority of the directors of the person; or (iv) Has contributed
more than 20 percent of the capital of the person. Control does not exist if
the powers described in this paragraph are held solely as security for an
obligation and are not exercised.
(2) “Allocated interests” means the following
interests allocated to each unit: (i) (A) In a condominium, the
undivided interest in the common elements, the common expense liability, and
votes in the association; (ii) (B) In a cooperative, the common
expense liability and the ownership interest and votes in the association; and (iii)
(C) In a planned community, the common expense liability and votes in
the association.
(3) “Association” or “unit owners’ association”
means the unit owners’ association organized under §36B-3-101.
(4) “Common elements” means: (i) (A) In
a condominium or cooperative, all portions of the common interest community
other than the units; and (ii) (B) In a planned community, any
real estate within a planned community owned or leased by the association,
other than a unit.
(5) “Common expenses” means expenditures made by,
or financial liabilities of, the association, together with any allocations to
reserves.
(6) “Common expense liability” means the liability
for common expenses allocated to each unit pursuant to §36B-2-107 of this code.
(7) “Common interest community” means real estate
with respect to which a person, by virtue of his or her ownership of a
unit, is obligated to pay for real estate taxes, insurance premiums,
maintenance or improvement of other real estate described in a declaration: Provided,
That any resort owner which, prior to the effective date of this article, began
the development of a resort and imposed fees or assessments upon owners of real
estate in the resort for maintenance and care of the roads, streets, alleys,
sidewalks, parks, common areas and common facilities in and around the resort,
for fire and police protection and for such other services as may be made
available to owners of real estate, may also impose the same fees and
assessments to be used for the same or similar purposes upon persons purchasing
real estate in the resort after the effective date of this article without
creating a common interest community.
“Ownership of a unit” does not include holding a leasehold interest of less than 20 years in a unit, including renewal options.
(8) “Condominium” means a common interest community
in which portions of the real estate are designated for separate ownership and
the remainder of the real estate is designated for common ownership solely by
the owners of those portions. A common interest community is not a condominium
unless the undivided interest in the common elements are vested in the unit
owners.
(9) “Conversion building” means a building that at
any time before creation of the common interest community was occupied wholly
or partially by persons other than purchasers and persons who occupy with the
consent of purchasers.
(10) “Cooperative” means a common interest
community in which the real estate is owned by an association, each of whose
members is entitled by virtue of his or her ownership interest in the
association to exclusive possession of a unit.
(11) “Dealer” means a person in the business of
selling units for his or her own account.
(12) “Declarant” means any person or group of
persons acting in concert who: (i) (A) As part of a common promotional
plan, offers to dispose of his or her or its interest in a unit not
previously disposed of; or (ii) (B) Reserves or succeeds to any
special declarant right.
(13) “Declaration” means any instruments, however
denominated, that create a common interest community, including any amendments
to those instruments.
(14) “Development rights” means any right or
combination of rights reserved by a declarant in the declaration to: (i)
(A) Add real estate to a common interest community; (ii) (B)
Create units, common elements or limited common elements within a common
interest community; (iii) (C) Subdivide units or convert units
into common elements; or (iv) (D) Withdraw real estate from a
common interest community.
(15) “Dispose” or “disposition” means a voluntary
transfer to a purchaser of any legal or equitable interest in a unit, but the
term does not include the transfer or release of a security interest.
“Electronic” means, relating to technology, having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(16)”Executive board” means the body, regardless of
name, designated in the declaration to act on behalf of the association.
(17) “Identifying number” means a symbol or address
that identifies only one unit in a common interest community.
(18) “Leasehold common interest community” means a
common interest community in which all or a portion of the real estate is
subject to a lease, the expiration or termination of which will terminate the
common interest community or reduce its size.
(19)”Limited common element” means a portion of the
common elements allocated by the declaration or by operation of §36B-2-102(2) or
§36B-2-102(4), of this code for the exclusive use of one or more but fewer than
all of the units.
(20)”Master association” means an organization
described in §36B-2-120 of this code, whether or not it is also an association
described in §36B-3-101 of this coder.
(21)”Offering” means any advertisement, inducement,
solicitation or attempt to encourage any person to acquire any interest in a
unit, other than as security for an obligation. An advertisement in a newspaper
or other periodical of general circulation, or in any broadcast medium to the
general public, of a common interest community not located in this state, is
not an offering if the advertisement states that an offering may be made only
in compliance with the law of the jurisdiction in which the common interest
community is located.
(22) “Person” means an individual, corporation,
business trust, estate, trust, partnership, association, joint venture,
government, governmental subdivision, or agency, or other legal or commercial
entity. In the case of a trust, the corpus of which is real estate, however, “person”
means the beneficiary of the trust rather than the trust or the trustee.
(23)”Planned community” means a common interest
community that is not a condominium or a cooperative. A condominium or
cooperative may be part of a planned community.
(24)”Proprietary lease” means an agreement with the
association pursuant to which a member is entitled to exclusive possession of a
unit in a cooperative.
(25) “Purchaser” means a person, other than a
declarant or a dealer, who by means of a voluntary transfer acquires a legal or
equitable interest in a unit other than: (i) (A) A leasehold
interest (including renewal options) of less than 20 years; or (ii) (B)
As security for an obligation.
(26) “Real estate” means any leasehold or other
estate or interest in, over, or under land, including structures, fixtures and
other improvements and interest that by custom, usage, or law pass with a
conveyance of land though not described in the contract of sale or instrument
of conveyance. “Real estate” includes parcels with or without upper or lower
boundaries, and spaces that may be filled with air or water.
(27)”Residential purposes” means use for dwelling
or recreational purposes, or both.
(28) “Resort” means a destination location which
consists of: (i) (A) One or more persons offering recreational
facilities and services such as skiing, golf, tennis or boating to the general
public and commercial facilities such as retail stores, restaurants and hotels
or other lodging accommodations; and (ii) (B) At least 100
residential units, a majority of which are used as vacation or second homes
rather than primary residences.
(29) “Resort owner” means any person owning or
operating substantially all of the recreational facilities located within a
resort, or the predecessor in title of any such person.
(30)”Security interest” means an interest in real
estate or personal property, created by contract or conveyance, which secures
payment or performance of an obligation. The term includes a lien created by a
mortgage, deed of trust, trust deed, security deed, contract for deed, land
sales contract, lease intended as security, assignment of lease or rents
intended as security, pledge of an ownership interest in an association, and
any other consensual lien or title retention contract intended as security for
an obligation.
(31)”Special declarant rights” means rights
reserved for the benefit of a declarant to: (i) (A) Complete
improvements indicated on plans and plans filed with the declaration (§36B-2-109
of this code) or, in a cooperative, to complete improvements described in the
public offering statement pursuant to §36B-4-103(a)(2) of this code; (ii)
(B) Exercise any development right (§36B-2-110
of this code); (iii) (C) Maintain sales offices, management
offices, signs advertising the common interest community, and models (§36B-2-115
of this code); (iv) (D) Use easements through the common elements
for the purpose of making improvements within the common interest community or
within real estate which may be added to the common interest community (§36B-2-116
of this code); (v) (E) Make the common interest community subject
to a master association (§36B-2-120 of this code); (vi) (F) Merge
or consolidate a common interest community with another common interest
community of the same form of ownership (§36B-2-121 of this code); or (vii)
() Appoint or remove any officer of the association or any master
association or any executive board member during any period of declarant
control (§36B-3-103(d) of this code).
(32)”Time share” means a right to occupy a unit or
any of several units during five or more separated time periods over a period
of at least five years, including renewal options, whether or not coupled with
an estate or interest in a common interest community or a specified portion
thereof.
(33) “Unit” means a physical portion of the common
interest community designated for separate ownership or occupancy, the
boundaries of which are described pursuant to §36B-2-105(a)(5) of this code. If
a unit in a cooperative is owned by a unit owner or is sold, conveyed,
voluntarily or involuntarily encumbered, or otherwise transferred by a unit
owner, the interest in that unit which is owned, sold, conveyed, encumbered, or
otherwise transferred is the right to possession of that unit under a
proprietary lease, coupled with the allocated interests of that unit, and the
association’s interest in that unit is not thereby affected.
(34) “Unit owner” means a declarant or other person who owns a unit, or a lessee of a unit in a leasehold common interest community whose lease expires simultaneously with any lease, the expiration or termination of which will remove the unit from the common interest community, but does not include a person having an interest in a unit solely as security for an obligation. In a condominium or planned community, the declarant is the owner of any unit created by the declaration. In a cooperative, the declarant is treated as the owner of any unit to which allocated interests have been allocated (§36B-2-107 of this code) until that unit has been conveyed to another person.
ARTICLE 3. MANAGEMENT OF THE COMMON INTEREST COMMUNITY.
§36B-3-108. Meetings.
(a) A meeting of the association must shall
be held at least once each year. Special meetings of the association may be
called by the president, a majority of the executive board, or by unit owners
having 20 percent, or any lower percentage specified in the bylaws, of the
votes in the association. Not less than 10 nor more than 60 days in advance of
any meeting, the secretary or other officer specified in the bylaws shall cause
notice to be hand-delivered or sent prepaid by United States mail to the
mailing address of each unit or to any other mailing address designated in
writing by the unit owner. The notice of any meeting must state the time and
place of the meeting and the items on the agenda, including the general nature
of any proposed amendment to the declaration or bylaws, any budget changes, and
any proposal to remove an officer or member of the executive board.
(b) A meeting of unit owners is required to be held at a physical location if the meeting is:
(1) Conducted by a means of communication that enables owners in different locations to communicate in real time to the same extent as if they were physically present in the same location; and
(2) Not expressly prohibited by the declaration or bylaws.
(c) In the notice for a meeting held at the physical location, the executive board may notify all unit owners that they may participate remotely in the meeting by a means of communication consistent with subsection (b) (1) of this section.
§36B-3-110. Voting; proxies.
(a) If only one of several owners of a unit is present
at a meeting of the association, that owner is entitled to cast all the votes
allocated to that unit. If more than one of the owners are present, the votes
allocated to that unit may be cast only in accordance with the agreement of a
majority in interest of the owners, unless the declaration expressly provides
otherwise. There is majority agreement if any one of the owners casts the votes
allocated to that unit without protest being made promptly to the person
presiding over the meeting by any of the other owners of the unit.
If unit owners attend the meeting by a means of communication under §36B-3-108 of this code, the association shall implement reasonable measures to verify the identity of each unit owner attending remotely.
(b) Except as otherwise provided in the declaration or bylaws, unit owners may vote by proxy subject to the following requirements:
(b) (1) Votes allocated to a unit may be
cast pursuant to a proxy duly executed by a unit owner. If a unit is owned
by more than one person, each owner of the unit may vote or register protest to
the casting of votes by the other owners of the unit through a duly executed
proxy. When a unit owner votes by proxy, the association shall be able
to verify the identity of the unit owner and the proxy holder;
(2) A unit owner may revoke a proxy given pursuant
to this section only by actual notice of revocation to the person presiding
over a meeting of the association;
(3) A proxy is void if it is not dated or purports to be revocable without notice;
A proxy terminates one
year after its date unless it specifies a shorter term.
(4) A proxy is valid only for the meeting at which it is cast and any recessed session of the meeting; and
(5) A person may not cast undirected proxies representing more than 15 percent of the votes in the association.
(c) Unless prohibited or limited by the declaration or bylaws, an association may conduct a vote without a meeting. If that occurs, the following requirements apply:
(1) The association shall notify the unit owners that the vote shall be taken by ballot without a meeting; and
(2) With the notice the association shall deliver instructions for casting a ballot:
(A) A paper ballot to every unit owner except a unit owner that has consented in a record to electronic voting; and
(B) If the association allows electronic voting, instructions for electronic voting. A unit owner’s casting of an electronic ballot is consent to the owner’s use of electronic voting.
(3) The ballot shall set forth each proposed action and provide an opportunity to vote for or against the action;
(4) The association shall state in the notice:
(A) The percent of votes necessary to approve each matter other than election of directors;
(B) Specify the time and date by which a ballot shall be delivered to the association to be counted, which time and date may not be fewer than three days after the date the association delivers the ballot; and
(C) Describe the time, date, and manner by which unit owners wishing to deliver information to all unit owners regarding the subject of the vote may do so.
(5) A unit owner may revoke a ballot before the time and date by which the ballot shall be delivered to the association under paragraph (4) of this subsection. Except as otherwise provided in the declaration or bylaws, a ballot is not revoked by death or disability after delivery to the association;
(6) Approval by ballot pursuant to this subsection is valid only if the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action;
(7) The association shall verify that each paper and electronic ballot is cast by the unit owner having a right to do so; and
(8) If the association allows electronic ballots, the association shall create a record of electronic votes that is capable of retention, retrieval, and review.
(c) (d) If the declaration requires that
votes on specified matters affecting the common interest community be cast by
lessees rather than unit owners of leased units:
(i) (1) The provisions of subsections (a)
and (b) apply This section applies to lessees as if they were unit
owners;
(ii) (2) Unit owners who have leased their
units to other persons may not cast votes on those specified matters; and
(iii) (3) Lessees are entitled to notice of
meetings, access to records, and other rights respecting these matters as if
they were unit owners.
(e) Unit owners must shall also
be given notice, in the manner provided in section 3-108, of all
meetings at which lessees are entitled to vote.
(f) No votes Votes allocated to a
unit owned by the association may shall be cast in any vote
of the unit owners in the same proportion as the votes cast on the matter by
unit owners other than the association.
(g) Unless a different number or fraction of the votes in an association is required by this section or the declaration, a majority of the votes cast determines the outcome of any vote taken at a meeting or without a meeting,
(h) When a unit is owned by more than one person:
(1) If only one of those owners casts a vote, that vote shall be counted as casing all votes allocated to that unit by the declaration;
(2) Unless the declaration requires that all votes cast by multiple owners of a unit shall be counted in the manner described in declaration, if more than one of the owners of a unit casts a vote for that unit, no votes from any owner of that unit may be counted.
NOTE: The purpose of this bill is to amend provisions of the Uniform Common Interest Ownership Act; defining “electronic”; establishing requirements for the holding of meetings; and creating procedures for voting and proxy voting.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.