H. B. 2150
(By Delegate Mezzatesta)
[Introduced January 13, 2003; referred to the
Committee on Political Subdivisions then the Judiciary.]
A BILL to amend article one, chapter thirty-one of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, by
adding thereto a new section, designated section one hundred
fifty-nine, relating to home owner associations; requiring
officers and directors to post bond; registration with the
county commission; county commission to appoint agent to hold
association officers and directors to their fiduciary
responsibility; qualifications of agent; appointment of
knowledgeable person to carry out functions of association in
times that disputes are not resolved; dismantling the
association when disputes are not solvable; authorizing the
secretary of state to restructure the association; and
providing that no past officers or directors may serve on
newly restructured association.
Be it enacted by the Legislature of West Virginia:
That article one, chapter thirty-one of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section one
hundred fifty-nine, to read as follows:
ARTICLE 1. BUSINESS AND NONPROFIT CORPORATIONS.
§31-1-159. Home owner and residential subdivision associations.
Notwithstanding any provision of law to the contrary, in the
case of home owner and residential subdivision associations that
incorporate and which are otherwise governed by the provisions of
this article, all officers and directors that serve on these
associations shall be required to post a surety bond in an amount
equal to the value of one fifteenth of the appraised value of the
entirety of the real property subject to the governance of the
association. Upon incorporation, the association shall register
with the county commission on a form provided by the county clerk.
The registration form shall require disclosure of the names and
addresses of all directors and officers of the association and
shall set forth what pecuniary interests they hold in the property
of the association or any other interests in any other property
that would bear on or influence their activity as an officer or
director of the association in the holdings of the association.
The county commission shall appoint its agent to insure that
directors and officers of the association uphold their respective
fiduciary responsibilities to the shareholders of the association. A person appointed as an agent under the provisions of this section
shall be knowledgeable in matters involving real property,
corporations and dispute resolution. In the event of substantial
conflict among shareholders, officers or directors of the
association, which is not amenable to dispute resolution in the
opinion of the appointed agent, the county commission may appoint
a knowledgeable individual in the affairs of real estate and
corporations to carry out the affairs of the association until such
time that the dispute is resolved. The individual shall be
entitled to a reasonable hourly rate which shall be paid out of the
association dues. If, after the appointment of the individual a
period of six months passes without resolution to the particular
dispute, and if in the discretion of the appointed individual the
dispute is not susceptible to resolution, the association shall be
dissolved under the provisions of this article.
If after dissolution under this section a majority of past
shareholders petition the secretary of state for restructuring, the
secretary shall assist in restructuring and reformulation of the
association. The secretary shall insure that no former officer or
director of the association may serve on the newly restructured
NOTE: The purpose of this bill is to provide a mechanism to
regulate the affairs of home owner or subdivision associations.
This section is new; therefore, strike-throughs and
underscoring have been omitted.