Senate Bill No. 533
(By Senator Dugan)
[Introduced February 19, 1996; referred to the Committee
on the Judiciary.]
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
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
ARTICLE 1. GENERAL PROVISIONS.
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
(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
(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
(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
(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
(16) "Executive board" means the body, regardless of name,
designated in the declaration to act on behalf of the
(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
(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.