Senate Bill No. 533

(By Senator Dugan)

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[Introduced February 19, 1996; referred to the Committee on the Judiciary.]
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A BILL to amend and reenact section one hundred three, article one, chapter thirty-six-b of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to the uniform common interest ownership act; and excluding single family residence subdivision from the definition of a condominium.

Be it enacted by the Legislature of West Virginia:
That section one hundred three, article one, chapter thirty-six-b of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 1. GENERAL PROVISIONS.

§36B-1-103. Definitions.

In the declaration and bylaws (section 3-106), 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) is a general partner, officer, director, or employer of the declarant, (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 declarant, (iii) controls in any manner the election of a majority of the directors of the declarant, or (iv) 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) In a condominium, the undivided interest in the common elements, the common expense liability, and votes in the association; (ii) in a cooperative, the common expense liability and the ownership interest and votes in the association; and (iii) 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 section 3-101 of this chapter.
(4) "Common elements" means (i) in a condominium or cooperative, all portions of the common interest community other than the units; and (ii) 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 section 2-107 of this chapter.
(7) "Common interest community" means real estate with respect to which a person, by virtue of his 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."Ownership of a unit" does not include holding a leasehold interest of less than twenty 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 condominium or common interest community shall not include a single family residence subdivision. 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 ownership interest in the association to exclusive possession of a unit.
(11) "Dealer" means a person in the business of selling units for his own account.
(12) "Declarant" means any person or group of persons acting in concert who (i) as part of a common promotional plan, offers to dispose of his or its interest in a unit not previously disposed of or (ii) 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) add real estate to a common interest community; (ii) create units, common elements, or limited common elements within a common interest community; (iii) subdivide units or convert units into common elements; or (iv) 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.
(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 section 2-102 (2) or (4) for the exclusive use of one or more but fewer than all of the units.
(20) "Master association" means an organization described in section 2-120, whether or not it is also an association described in section 3-101.
(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 leasehold interest (including renewal options) of less than twenty years, or (ii) 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) "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.
(29) "Special declarant rights" means rights reserved for the benefit of a declarant to (i) complete improvements indicated on plats and plans filed with the declaration (section 2-109) or, in a cooperative, to complete improvements described in the public offering statement pursuant to section 4-103(a)(2); (ii) exercise any development right (section 2-110); (iii) maintain sales offices, management offices, signs advertising the common interest community, and models (section 2-115); (iv) 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 (section 2-116); (v) make the common interest community subject to a master association (section 2-120); (vi) merge or consolidate a common interest community with another common interest community of the same form of ownership (section 2-121); 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 (section 3-103(d)).
(30) "Time share" means a right to occupy a unit or any of several units during (5) or more separated time periods over a period of at least (5) years, including renewal options, whether or not coupled with an estate or interest in a common interest community or a specified portion thereof.
(31) "Unit" means a physical portion of the common interest community designated for separate ownership or occupancy, the boundaries of which are described pursuant to section 2- 105(a)(5). 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.
(32) "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 (section 2-107) until that unit has been conveyed to another person.




NOTE: The purpose of this bill is to exclude single family residence subdivision from the definition of condominium or common interest community.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.