Senate Bill No. 567
(By Senators Snyder and McCabe)
[Introduced February 21, 2011; referred to the Committee on Government Organization; and then to the Committee on the Judiciary.]
A BILL to amend and reenact §8A-6-3 of the Code of West Virginia, 1931, as amended, relating to establishing a planning commission’s rights and obligations when a developer has filed for bankruptcy and the development has not been completed.
Be it enacted by the Legislature of West Virginia:
That §8A-6-3 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:
ARTICLE 6. METHODS OF SECURITY.
§8A-6-3. Enforcement and guarantees.
(a) The planning commission is vested with all the necessary authority to administer and enforce conditions attached to the final plat approved for a development project, including, but not limited to, the authority to:
(1) Order, in writing, the remedy for any noncompliance with the conditions;
(2) Bring legal action to ensure compliance with the conditions, including injunction, abatement, or other appropriate action or proceeding; and
(3) Require a guarantee satisfactory to the planning commission in an amount sufficient for and conditioned upon the construction of any physical improvements required by the conditions, or a contract for the construction of the improvements and the contractor’s guarantee, in like amount and so conditioned, which guarantee shall be reduced or released by the planning commission upon the submission of satisfactory evidence that construction of the improvements has been completed in whole or in part;
(4) Provide for demand or call of a guarantee upon the bankruptcy of the principal however designated on any bond, letter of credit or other form of guarantee required by the governing body;
(5) Provide that upon the declarant’s bankruptcy or other default resulting in a halt in the progress of the subdivision any allocation of common property described in the declaration shall be allocated in any deed convened by the declarant or any successor to the declarant including banks, bankruptcy trustees, assigns, heirs, representatives or agents. In all these cases, the planning commission, or its staff, shall review each subsequent deed of conveyance and shall append its letter of approval to such deed prior to its recordation at the office of the clerk of the county commission; and
(6) Provide that a declarant, upon collection of homeowners’ annual dues, fees and assessments, shall deposit the same in his or her bank, into an account held in trust in the name of the subject subdivision homeowners’ association and payable by signature of the declarant. Copies of all bank statements with regard to this trust account shall be made available by the declarant to each homeowner upon request. Declarant must designate the bank to hold such trust account and must notify the planning commission, in writing, of the designation.
The planning commission shall further provide that upon the declarant’s bankruptcy or abandonment of the subdivision development, evidenced by twelve consecutive months of nonbuilding activity at the site, the planning commission shall, by operation of law, transfer the responsibilities of its homeowners’ association to such duly organized association and homeowners’ association. The order delivered to the declarant’s bank shall be acted upon by the bank within fifteen days. Proof of transfer of such funds to the homeowners’ association shall be submitted to the planning commission by the bank. Such submission of proof shall act as a full release to the bank: Provided, That no such transfer shall be effected if the declarant has transferred his or her special rights as set forth in subsections (c) and (d), section one hundred four, article three, chapter thirty-six-b of this code.
(b) Failure to meet all conditions attached to the final plat approved for a development project shall constitute cause to deny the issuance of any of the required use, occupancy or improvement location permits, as may be appropriate.
NOTE: The purpose of this bill is to establish a planning commission’s rights and obligations when a developer has filed for bankruptcy and has not completed the development.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.