HB 477: "An Act relating to common interest communities; and amending Rule 72(k), Alaska Rules of Civil Procedure."
00HOUSE BILL NO. 477 01 "An Act relating to common interest communities; and amending Rule 72(k), 02 Alaska Rules of Civil Procedure." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 34.08.010 is amended to read: 05 Sec. 34.08.010. Applicability generally. Except as provided in AS 34.08.025 06 and 34.08.030 [AS 34.08.030], this chapter applies to all [EACH] common interest 07 communities [COMMUNITY] created within the state after January 1, 1986. The 08 provisions of AS 10.15 and AS 34.07 do not apply to common interest communities 09 created after January 1, 1986. 10 * Sec. 2. AS 34.08 is amended by adding a new section to read: 11 Sec. 34.08.025. Applicability to small cooperatives. If a cooperative contains 12 fewer than 13 units and is not subject to development rights, the cooperative is subject 13 only to AS 34.08.720 - 34.08.740 unless the declaration provides that this entire 14 chapter applies.
01 * Sec. 3. AS 34.08.030 is repealed and reenacted to read: 02 Sec. 34.08.030. Applicability to small and limited expense liability planned 03 communities. Unless the declaration provides that this entire chapter applies, a 04 planned community created after January 1, 1986, is subject only to AS 34.08.720 - 05 34.08.740 if the planned community is not subject to any development rights and 06 contains fewer than 13 units or 07 (1) provides, in its declaration, that the annual average common 08 expense liability of all units restricted to residential purposes, exclusive of optional 09 user fees and any insurance premiums paid by the association, may not exceed $600 10 as adjusted under AS 34.08.820; 11 (2) the declarant reasonably believes in good faith that the maximum 12 stated assessment will be sufficient to pay the expenses of the planned community; and 13 (3) the declaration provides that the assessment may not be increased 14 during the period of declarant control without the consent of all unit owners. 15 * Sec. 4. AS 34.08.060 is repealed and reenacted to read: 16 Sec. 34.08.060. Amendments to governing instruments. (a) The 17 declaration, bylaws, or plats and plans of a common interest community created before 18 January 1, 1986, may be amended to achieve any result permitted by this chapter, 19 regardless of what applicable law provided before January 1, 1986. 20 (b) An amendment to the declaration, bylaws, or plats and plans authorized by 21 this section must be adopted in conformity with the procedures and requirements for 22 amending the instruments specified by those instruments or, if there are none, in 23 conformity with the amendment procedures of this chapter. If an amendment grants 24 to a person rights, powers, or privileges permitted by this chapter, all corresponding 25 obligations, liabilities, and restrictions in this chapter also apply to that person. 26 * Sec. 5. AS 34.08.070(b) is amended to read: 27 (b) This chapter applies to a common interest community containing some 28 units that are restricted exclusively to nonresidential use and other units that are not 29 restricted exclusively to nonresidential use only if the declaration provides that this 30 [THE] chapter applies to the common interest community or if the real estate 31 comprising the units that may be used for residential purposes would be a common
01 interest community subject to this chapter in the absence of the units restricted 02 exclusively to nonresidential use [THAT MAY NOT BE USED FOR RESIDENTIAL 03 PURPOSES]. 04 * Sec. 6. AS 34.08.090 is amended to read: 05 Sec. 34.08.090. Creation of common interest communities. (a) A common 06 interest community may be created under this chapter only by recording a declaration 07 executed in the same manner as a deed and, in a cooperative, by conveying the real 08 estate subject to the declaration to the association. The declaration must be recorded, 09 and a plat or plan that is part of the declaration [FILED AND] recorded, in each 10 recording district in which a portion of the common interest community is located and 11 must be indexed in the grantee's index in the name of the common interest community 12 and the association and in the grantor's index in the name of each person executing 13 the declaration. 14 (b) In a condominium, a declaration or an amendment to a declaration that 15 adds a unit may not be recorded, and a plat or plan that is part of the declaration may 16 not be [FILED OR] recorded, unless the structural components and mechanical systems 17 of each building containing or comprising a unit of the condominium are completed 18 substantially in accordance with the plans, as evidenced by a certificate of completion 19 recorded with the declaration or amendment to the declaration and executed by 20 (1) a [AN INDEPENDENT] registered engineer, architect, or land 21 surveyor; 22 (2) an appraiser with the designation of senior residential appraiser, 23 senior real property appraiser, or senior real estate analyst of the Society of Real Estate 24 Appraisers; 25 (3) a residential member, or member of the appraisal institute, of the 26 American Institute of Real Estate Appraisers; or 27 (4) an individual with a designation established by regulation of the 28 Alaska Housing Finance Corporation for fee appraisers who certify the completion of 29 construction. 30 * Sec. 7. AS 34.08.130 is amended to read: 31 Sec. 34.08.130. Contents of declaration. (a) The declaration must contain
01 (1) the names of the common interest community and the association 02 and a statement that the common interest community is either a condominium, 03 cooperative, or planned community; 04 (2) the name of each recording district in which a part of the common 05 interest community is situated; 06 (3) a legally sufficient description of the real estate included in the 07 common interest community; 08 (4) a statement of the maximum number of units that the declarant 09 reserves the right to create; 10 (5) in a condominium or planned community, a description of the 11 boundaries of each unit created by the declaration, including the identifying number 12 of the unit, or in a cooperative, a description, which may be by plats or plans, of each 13 unit created by the declaration, including the identifying number of the unit, its size 14 or number of rooms, and its location within a building if it is within a building 15 containing more than one unit; 16 (6) a description of any limited common elements, other than those 17 specified in AS 34.08.100(2) and (4) or shown on the plats or plans under 18 AS 34.08.170(b)(10) [34.08.170(b)(10)] and, in a planned community, any real estate 19 that is or must become common elements; 20 (7) a description of any real estate, except real estate subject to 21 development rights, that may be allocated subsequently as limited common elements, 22 other than limited common elements specified in AS 34.08.100(2) and (4), together 23 with a statement that the designated real estate may be allocated; 24 (8) a description of any development rights or other special declarant 25 rights reserved by the declarant, together with a legally sufficient description of the 26 real estate to which each of the rights applies, and a time limit within which each of 27 the rights must be exercised; 28 (9) if a development right may be exercised with respect to different 29 parcels of real estate at different times, a statement to that effect together with 30 (A) either a statement fixing the boundaries of the portions and 31 regulating the order in which the portions may be subjected to the exercise of
01 each development right or a statement that assurances are not made with regard 02 to matters under this paragraph; and 03 (B) a statement as to whether, if a development right is 04 exercised in a portion of the real estate subject to the development right, the 05 development right must be exercised in all or in any other portion of the 06 remainder of that real estate; 07 (10) any other condition or limitation under which the rights described 08 in (8) of this subsection may be exercised or will lapse; 09 (11) an allocation to each unit of the allocated interests in the manner 10 described in AS 34.08.150; 11 (12) any restrictions 12 (A) on [USE, OCCUPANCY, AND] alienation of the units, 13 including restrictions on leasing that exceed the restrictions on leasing 14 units that executive boards may impose under AS 34.08.320(c)(2); and 15 (B) on the amount for which a unit may be sold or on the 16 amount that may be received by a unit owner on sale, condemnation, or 17 casualty loss to the unit or to the common interest community, or on 18 termination of the common interest community; 19 (13) the recording data for recorded easements and licenses appurtenant 20 to or included in the common interest community or to which any portion of the 21 common interest community is or may become subject by virtue of a reservation in the 22 declaration; and 23 (14) each matter required by AS 34.08.140, 34.08.150, 34.08.160, 24 34.08.170, 34.08.230, 34.08.240 , and 34.08.330(d). 25 (b) A declaration may contain other matters the declarant considers 26 appropriate , including restrictions on the uses of a unit or the number or other 27 qualifications of persons who may occupy units . 28 * Sec. 8. AS 34.08.140(b) is amended to read: 29 (b) After the declaration for a leasehold condominium or leasehold planned 30 community is recorded, and a plat or plan that is part of the declaration is [FILED 31 AND] recorded, neither the lessor nor the successor in interest of the lessor may
01 terminate the leasehold interest of a unit owner who makes timely payment of a unit 02 owner's share of the rent and otherwise complies with the covenants that, if violated, 03 would entitle the lessor to terminate the lease. The leasehold interest of a unit owner 04 in a condominium or planned community is not affected by the failure of any other 05 person to pay rent or fulfill a covenant. 06 * Sec. 9. AS 34.08.140(d) is amended to read: 07 (d) If the expiration or termination of a lease decreases the number of units 08 in a common interest community, the allocated interests must be reallocated under 09 AS 34.08.740(a) as if the units had been taken by eminent domain. The reallocation 10 must be confirmed by an amendment to the declaration prepared, executed, and 11 recorded by the association of unit owners; a plat or plan that accompanies the 12 amendment must be [FILED AND] recorded with the amendment. 13 * Sec. 10. AS 34.08.160(b) is amended to read: 14 (b) Except as the declaration otherwise provides, a limited common element 15 may be reallocated by an amendment to the declaration executed by the unit owners 16 between or among whose units the reallocation is made. The persons executing the 17 amendment shall provide a copy of the amendment to the association, which shall 18 record the amendment and [FILE AND] record a plat or plan that accompanies the 19 amendment. The amendment must be recorded, and an accompanying plat or plan 20 [FILED AND] recorded, in the names of the parties and the common interest 21 community. 22 * Sec. 11. AS 34.08.160(c) is amended to read: 23 (c) A common element not previously allocated as a limited common element 24 may not be allocated as a limited common element unless the allocation is made 25 [ONLY] under [PROVISIONS IN THE DECLARATION ADOPTED UNDER] 26 AS 34.08.130(a)(7) and not prohibited by the declaration . The allocation must be 27 made by an amendment to the declaration. 28 * Sec. 12. AS 34.08.170(b) is amended to read: 29 (b) Each plat must show 30 (1) the name and a survey or general schematic map of the entire 31 common interest community;
01 (2) the location and dimensions of the real estate not subject to 02 development rights or subject only to the development right to withdraw, and the 03 location and dimensions of each existing improvement within the real estate; 04 (3) a legally sufficient description of the real estate subject to 05 development rights, labeled to identify the rights applicable to each parcel; 06 (4) the extent of each known encroachment by or upon a portion of the 07 common interest community; 08 (5) to the extent feasible, a legally sufficient description of each 09 easement serving or burdening a portion of the common interest community; 10 (6) the approximate location and dimensions of any vertical unit 11 boundaries not shown or projected on plans [FILED AND] recorded under (d) of this 12 section and the identifying number of the unit; 13 (7) the approximate location with reference to an established datum 14 of any horizontal unit boundaries not shown or projected on plans [FILED AND] 15 recorded under (d) of this section and the identifying number of the unit; 16 (8) a legally sufficient description of any real estate in which the unit 17 owners will own only an estate for years, labeled as "leasehold real estate"; 18 (9) the distance between noncontiguous parcels of real estate 19 comprising the common interest community; 20 (10) the approximate location and dimensions of limited common 21 elements, including porches, decks, balconies, and patios, other than parking spaces 22 and the other limited common elements described in AS 34.08.100(2) and (4); 23 (11) in the case of real estate not subject to development rights, all 24 other matters customarily shown on land surveys. 25 * Sec. 13. AS 34.08.170(d) is amended to read: 26 (d) To the extent not shown or projected on the plats, plans of the units must 27 show or project 28 (1) the approximate location and dimensions of the vertical boundaries 29 of each unit [,] and the identifying number of the unit; 30 (2) the approximate location of any horizontal unit boundaries, with 31 reference to an established datum, and the identifying number of the unit; and
01 (3) the approximate location of each unit in which the declarant has 02 reserved the right to create additional units or common elements, identified 03 appropriately. 04 * Sec. 14. AS 34.08.170(f) is amended to read: 05 (f) Upon the exercise of a development right, the declarant shall either [FILE 06 AND] record new plats and plans necessary to conform to the requirements of (a), (b), 07 and (d) of this section, or [FILE AND] record new certifications of plats and plans 08 previously [FILED AND] recorded if the plats and plans otherwise conform to the 09 requirements of (a), (b), and (d) of this section. 10 * Sec. 15. AS 34.08.170(g) is amended to read: 11 (g) A certification of a plat or plan required by this section or AS 34.08.090(b) 12 shall be made by a [AN INDEPENDENT] registered surveyor, architect, or engineer. 13 * Sec. 16. AS 34.08.170(h) is amended to read: 14 (h) The state recorder shall prescribe the style, size, form, and quality of plats 15 and plans [FILED AND] recorded under this chapter. 16 * Sec. 17. AS 34.08.170 is amended by adding a new subsection to read: 17 (i) Notwithstanding the other provisions of this section, plats and plans are not 18 required to show the location and dimensions of the boundaries of the units or their 19 limited common elements if 20 (1) the plats or plans show the location and dimensions of all buildings 21 containing or comprising the units; and 22 (2) the declaration includes other information that shows or contains 23 a narrative description of the general layout of the units in the buildings shown under 24 (1) of this subsection and the limited common elements allocated to the units. 25 * Sec. 18. AS 34.08.180(a) is amended to read: 26 (a) To exercise a development right reserved under AS 34.08.130(a)(8), a 27 declarant shall prepare, execute, and record an amendment to the declaration, [FILE 28 AND] record a plat or plan that accompanies the amendment, and, in a condominium 29 or planned community, comply with AS 34.08.170. [THE DECLARANT IS THE 30 UNIT OWNER OF THE UNITS CREATED UNDER THE AMENDMENT.] The 31 amendment to the declaration must assign an identifying number to each new unit
01 created [,] and, except in the case of subdivision or conversion of units described in 02 (b) of this section, reallocate the allocated interests among all units. The amendment 03 must describe common elements and any limited common elements created under the 04 amendment and, in the case of limited common elements, designate the unit to which 05 each is allocated to the extent required by AS 34.08.160. 06 * Sec. 19. AS 34.08.200(b) is amended to read: 07 (b) The association 08 (1) in a condominium or planned community shall prepare [, FILE,] 09 and record plats or plans necessary to show the altered boundaries between adjoining 10 units [,] and their dimensions and identifying numbers; and 11 (2) in a cooperative shall prepare and record amendments to the 12 declaration, [AND FILE] and record a plat or plan necessary to show or describe the 13 altered boundaries between adjoining units and their dimensions and identifying 14 numbers. 15 * Sec. 20. AS 34.08.200 is amended by adding a new subsection to read: 16 (c) Subject to the provisions of the declaration and other provisions of law, 17 boundaries between units and common elements may be relocated to incorporate 18 common elements within a unit by an amendment to the declaration upon application 19 to the association by the owner of the unit who proposes to relocate a boundary. 20 Unless the declaration provides otherwise, the amendment may not be approved unless 21 persons entitled to cast at least 67 percent of the votes in the association, including 67 22 percent of the votes allocated to units not owned by the declarant, agree to the action. 23 The amendment may describe any fees payable by the owner of the affected unit in 24 connection with the boundary relocation, and the fees are assets of the association. 25 The amendment must be executed by the unit owner of the unit whose boundary is 26 being relocated and by the association, contain words of conveyance between them, 27 and on recordation be indexed in the name of the unit owner and the association as 28 grantor or grantee. 29 * Sec. 21. AS 34.08.250(a) is amended to read: 30 (a) Except for amendments that may be executed by a declarant under 31 AS 34.08.170(b) or 34.08.180, or by the association under AS 34.08.140(d),
01 34.08.160(c), 34.08.200(a), 34.08.210, or 34.08.740, or by certain unit owners under 02 AS 34.08.160(b), 34.08.200(a), 34.08.210(b), or 34.08.260(b), and except as limited 03 by (d) of this section, a declaration, including any required plats and plans, may be 04 amended only by vote or agreement of persons entitled to cast [UNIT OWNERS OF 05 UNITS COMPRISING EITHER] at least 67 percent of the votes [ALLOCATED 06 INTERESTS] in the association or a larger percentage specified in the declaration. A 07 declaration may not specify a smaller number unless all of the units are restricted 08 exclusively to nonresidential use. 09 * Sec. 22. AS 34.08.250(c) is amended to read: 10 (c) Each amendment to the declaration must be recorded, and a plat or plan 11 that accompanies the amendment [FILED AND] recorded, in each recording district 12 in which a portion of the common interest community is located , and the amendment 13 is effective only upon recording. An amendment, except an amendment under 14 AS 34.08.200(a), must be indexed in the name of the common interest community and 15 the association and in the name of the parties executing the amendment. 16 * Sec. 23. AS 34.08.250(d) is amended to read: 17 (d) Except to the extent expressly permitted or required by other provisions of 18 this chapter, an amendment may not create or increase special declarant rights, increase 19 the number of units, or change the boundaries of a unit or [,] the allocated interests 20 of a unit [, OR THE USES TO WHICH A UNIT IS RESTRICTED] in the absence 21 of unanimous consent of the unit owners. 22 * Sec. 24. AS 34.08.250 is amended by adding new subsections to read: 23 (f) By vote or agreement of persons entitled to cast at least 80 percent of the 24 votes in the association, or any larger percentage specified in the declaration, an 25 amendment to the declaration may prohibit or materially restrict the permitted uses of 26 or behavior in a unit or the number or other qualifications of persons who may occupy 27 units. The amendment must provide reasonable protection for a use or occupancy 28 permitted at the time the amendment was adopted. 29 (g) The time limits specified in the declaration under AS 34.08.130(a)(8) 30 within which reserved development rights must be exercised may be extended and 31 additional development rights may be created if persons entitled to cast at least 80
01 percent of the votes in the association, including 80 percent of the votes allocated to 02 units not owned by the declarant, agree to the action. The agreement is effective 30 03 days after an amendment to the declaration reflecting the terms of the agreement is 04 recorded unless all the persons holding the affected special declarant rights, or security 05 interests in those rights, record a written objection within the 30-day period, in which 06 case the amendment is void, or consent in writing at the time the amendment is 07 recorded, in which case the amendment is effective when recorded. 08 * Sec. 25. AS 34.08.260(a) is amended to read: 09 (a) Unless all units are taken by eminent domain, or unless there has been a 10 foreclosure of a security interest that has priority over the declaration against an entire 11 cooperative, a common interest community may be terminated only by agreement of 12 persons entitled to cast [UNIT OWNERS OF UNITS COMPRISING EITHER] at 13 least 80 percent of the votes in the association or any larger percentage specified in 14 the declaration. The declaration may specify a smaller percentage only if all of the 15 units are restricted exclusively to nonresidential uses. 16 * Sec. 26. AS 34.08.260(m) is amended to read: 17 (m) A declaration that specifies a termination date but that does not contain 18 a provision for the extension of the termination date may be extended by amendment 19 to the declaration approved 20 [(1)] by persons entitled to cast [THE APPROVAL OF THE UNIT 21 OWNERS HAVING] more than 50 percent of the votes in the association [; 22 (2) BY THE APPROVAL OF THE UNIT OWNERS HAVING THE 23 PERCENTAGE OF VOTES AS SPECIFIED IN THE DECLARATION FOR AN 24 AMENDMENT TO THE DECLARATION; OR 25 (3) IF THE APPROVAL OF UNIT OWNERS HAVING MORE 26 THAN 50 PERCENT OF THE VOTES IN THE ASSOCIATION IS REQUIRED TO 27 AMEND THE DECLARATION, UNDER AS 34.08.255]. 28 * Sec. 27. AS 34.08.300 is amended to read: 29 Sec. 34.08.300. Addition of unspecified real estate. In a planned community, 30 if the right is originally reserved in the declaration, the declarant, in addition to any 31 other development right, may amend the declaration at any time during as many years
01 as are specified in the declaration for adding additional real estate to the planned 02 community without describing the location of the real estate in the original declaration. 03 The amount of real estate added to the planned community under this section may not 04 exceed 10 percent of the real estate described in AS 34.08.130(a)(3) . The [AND THE] 05 declarant may not [IN ANY EVENT] increase the number of units in the planned 06 community beyond the number stated in the original declaration under 07 AS 34.08.130(a)(4) unless the unit owners unanimously consent to the increase . 08 * Sec. 28. AS 34.08 is amended by adding a new section to article 2 to read: 09 Sec. 34.08.305. Master planned communities. (a) The declaration for a 10 common interest community may state that it is a master planned community if the 11 declarant has reserved the development right to create at least 80 units that may be 12 used for residential purposes, and at the time of the reservation the declarant owns or 13 controls more than 20 acres on which the units may be built. 14 (b) If the requirements of (a) of this section are satisfied, the declaration for 15 the master planned community is not required to state a maximum number of units or 16 to contain the information required by AS 34.08.130(a)(3) - (14) until the declaration 17 is amended under (c) of this section. 18 (c) When a unit in a master planned community is conveyed to a purchaser, 19 the declaration must contain 20 (1) a sufficient legal description of the unit and all portions of the 21 master planned community in which other units have been conveyed to a purchaser; 22 and 23 (2) all the information required by AS 34.08.130(a)(3) - (14) with 24 respect to the real estate of the master planned community. 25 (d) The only master planned community real estate that is subject to this 26 chapter is a unit that has been declared or that is being offered for sale and other real 27 estate described under (c) of this section. Other real estate that is or may become part 28 of the master planned community is not subject to this chapter. 29 (e) If the public offering statement conspicuously identifies the fact that the 30 community is a master planned community, the disclosure requirements contained in 31 AS 34.08.510 - 34.08.700 apply only with respect to units that have been declared or
01 are being offered for sale in connection with the public offering statement and to the 02 real estate described under (c) of this section. 03 (f) Limitations under AS 34.08.300 on the addition of unspecified real estate 04 do not apply to a master planned community. 05 (g) The period of declarant control of the association for a master planned 06 community terminates in accordance with any conditions specified in the declaration 07 or otherwise when the declarant, in a recorded instrument and after giving written 08 notice to all the unit owners, voluntarily surrenders all rights to control the activities 09 of the association. 10 (h) In this section, "master planned community" means a common interest 11 community described in a declaration under (a) of this section. 12 * Sec. 29. AS 34.08.310 is amended to read: 13 Sec. 34.08.310. Organization of unit owners' association. An association 14 of unit owners shall [MUST] be organized no later than the date on which the first 15 unit in the common interest community is conveyed to a purchaser . The membership 16 of the association at all times consists exclusively of all unit owners or, following 17 termination of the common interest community, of all former unit owners entitled to 18 distributions of proceeds under AS 34.08.260 or their heirs, successors, or assigns. 19 The association shall [MUST] be organized as a profit or nonprofit corporation, trust, 20 or partnership. 21 * Sec. 30. AS 34.08.320(a) is amended to read: 22 (a) Except as provided in (b) of this section and subject to the provisions of 23 the declaration, the association may 24 (1) adopt and amend bylaws and rules [AND REGULATIONS]; 25 (2) adopt and amend budgets for revenues, expenditures, and reserves 26 and collect assessments for common expenses from unit owners; 27 (3) hire and discharge managing agents and other employees, agents, 28 and independent contractors; 29 (4) institute, defend, or intervene in litigation or administrative 30 proceedings or seek injunctive relief for violations of its declaration, bylaws, or rules 31 in its own name on behalf of itself or two or more unit owners on matters affecting
01 the common interest community; 02 (5) make contracts and incur liabilities; 03 (6) regulate the use, maintenance, repair, replacement, and modification 04 of common elements; 05 (7) cause additional improvements to be made as a part of the common 06 elements; 07 (8) acquire, hold, encumber, and convey in its own name any right, 08 title, or interest to real estate or personal property, except that 09 (A) common elements in a condominium or planned community 10 may be conveyed or encumbered by [SUBJECTED TO] a security interest 11 only under AS 34.08.430; and 12 (B) part of a cooperative may be conveyed or all or part of a 13 cooperative may be encumbered by [SUBJECTED TO] a security interest only 14 under AS 34.08.430; 15 (9) grant easements, leases, licenses, and concessions through or over 16 the common elements; 17 (10) impose and receive a payment, fee, or charge for the use, rental, 18 or operation of the common elements, other than limited common elements described 19 in AS 34.08.100(2) and (4), and for services provided to unit owners; 20 (11) impose a reasonable charge for late payment of assessments and, 21 after notice and an opportunity to be heard, levy a reasonable fine for a violation of 22 the declaration, bylaws, and rules [, AND REGULATIONS] of the association; 23 (12) impose a reasonable charge for the preparation and recording of 24 an amendment to the declaration, the [FILING AND] recording of a plat or plan that 25 accompanies an amendment, resale certificate required by AS 34.08.590, or a statement 26 of unpaid assessments; 27 (13) provide for the indemnification of its officers and executive board 28 and maintain directors' and officers' liability insurance; 29 (14) assign its right to future income, including the right to receive 30 common expense assessments, but only to the extent the declaration expressly permits 31 the assignment;
01 (15) exercise any other powers conferred by the declaration or bylaws; 02 (16) exercise any other power that may be exercised in the state by a 03 legal entity of the same type as the association; [AND] 04 (17) exercise any other power necessary and proper for the governance 05 and operation of the association ; and 06 (18) require by rule that, before beginning a court action, a dispute 07 between the executive board and unit owners, or between two or more unit 08 owners, regarding the common interest community must be submitted to 09 nonbinding alternative dispute resolution in the manner described in the rules . 10 * Sec. 31. AS 34.08.320 is amended by adding new subsections to read: 11 (c) Unless otherwise provided by the declaration or this chapter, an association 12 may not adopt rules that affect the use of, behavior in, or occupancy of units that may 13 not be used for residential purposes unless the rules 14 (1) prevent a use that violates the declaration; 15 (2) prohibit behavior or occupancy that violates the declaration or that 16 adversely affects the use and enjoyment of other units, or the common elements, by 17 other unit owners; or 18 (3) restrict the leasing of residential units, if and to the extent the rules 19 are reasonably designed to meet underwriting requirements of institutional lenders that 20 lend money secured by first mortgages on units in common interest communities or 21 that purchase those mortgages. 22 (d) If a tenant of a unit owner violates the declaration, bylaws, or rules of the 23 association, in addition to exercising its powers against the unit owner, the association 24 may 25 (1) exercise directly against the tenant the powers described in (a)(11) 26 of this section; 27 (2) after giving notice to the tenant and the unit owner and an 28 opportunity to be heard, levy reasonable fines against the tenant for the violation; and 29 (3) enforce any other right against the tenant for the violation that the 30 unit owner as lessor could lawfully have exercised under the lease or that the 31 association could lawfully have exercised directly against the unit owner.
01 (e) The rights granted under (d)(3) of this section may not be exercised unless 02 the tenant or unit owner fails to cure the violation within 10 days after the association 03 notifies the tenant and unit owner of the violation. 04 (f) Unless a lease provides otherwise, this section does not 05 (1) affect rights that the unit owner has to enforce the lease or that the 06 association has under other law; or 07 (2) permit the association to enforce a lease to which it is not a party 08 unless there is a violation of the declaration, bylaws, or rules. 09 * Sec. 32. AS 34.08.330(d) is amended to read: 10 (d) Subject to (e) of this section, the declaration may provide for a period of 11 declarant control of the association, during which a declarant or persons designated by 12 the declarant may appoint and remove the officers and members of the executive 13 board. Regardless of the period provided in the declaration, and except as provided 14 in AS 34.08.305, a period of declarant control terminates no later than the earlier of 15 [:] (1) 60 days after conveyance of 75 percent of the units that may be created to unit 16 owners other than a declarant; (2) two years after all declarants have ceased to offer 17 units for sale in the ordinary course of business; or (3) two years after any right to add 18 new units was last exercised. A declarant may voluntarily surrender the right to 19 appoint and remove officers and members of the executive board before termination 20 of the periods established in this subsection, but , in that event , the declarant may 21 require, for the duration of the period of declarant control, that specified actions of the 22 association or executive board, as described in a recorded instrument executed by the 23 declarant, be approved by the declarant before they become effective. 24 * Sec. 33. AS 34.08.330(f) is amended to read: 25 (f) Except as otherwise provided in AS 34.08.280(e), not later than the 26 termination of any period of declarant control, the unit owners shall elect an executive 27 board. The executive board consists of at least three members, except that , if there are 28 fewer than 13 [12] units in the common interest community, the declaration may 29 provide for an executive board with one or two members. At least a majority of the 30 members of the executive board must be unit owners. The executive board shall elect 31 the officers. The executive board members and officers take office upon election.
01 * Sec. 34. AS 34.08.340(c) is amended to read: 02 (c) Before the transfer of control from the declarant to the association, an 03 inspection of the common elements [AREAS] and limited common elements 04 [AREAS] subject to the association's control shall be completed by 05 (1) a [AN INDEPENDENT] registered engineer, architect, or land 06 surveyor; 07 (2) an appraiser with the designation of senior residential appraiser, 08 senior real property appraiser, or senior real estate analyst of the Society of Real Estate 09 Appraisers; 10 (3) a residential member, or member of the appraisal institute, of the 11 American Institute of Real Estate Appraisers; or 12 (4) an individual with a designation established by regulation of the 13 Alaska Housing Finance Corporation for fee appraisers who certify the completion of 14 construction. 15 * Sec. 35. AS 34.08.380(a) is amended to read: 16 (a) Except to the extent provided by the declaration, by (b) of this section, or 17 by AS 34.08.440(h), the association is responsible for the maintenance, repair, and 18 replacement of the common elements, and each unit owner is responsible for the 19 maintenance, repair, and replacement of the unit. Each unit owner shall afford to the 20 association, the other unit owners, and [TO] their agents or employees [,] access 21 through the unit that is reasonably necessary for those purposes [MAINTENANCE 22 AND REPAIR OF THE UNIT]. If damage is inflicted on the common elements or 23 on any unit through which access is taken, the unit owner responsible for the damage, 24 or the association if it is responsible, is liable for the prompt repair of the damage. 25 * Sec. 36. AS 34.08.420 is repealed and reenacted to read: 26 Sec. 34.08.420. Tort and contract liability. (a) A unit owner is not liable, 27 solely by reason of being a unit owner, for an injury or damage arising out of the 28 condition or use of the common elements. The association and a unit owner except 29 the declarant is not liable for the torts of the declarant in connection with a part of the 30 common interest community that the declarant has the responsibility to maintain. 31 (b) An action alleging a wrong done by the association must be brought
01 against the association and not against a unit owner. If the wrong occurred during a 02 period of declarant control and the association gives the declarant reasonable notice 03 of and an opportunity to defend against the action, the declarant who then controlled 04 the association is liable to the association or to a unit owner for 05 (1) tort losses not covered by insurance suffered by the association or 06 the unit owner; and 07 (2) other losses that the association would not have incurred but for a 08 breach of contract by the declarant or other wrongful act or omission of the declarant. 09 (c) Except as provided in AS 34.08.660(d) for warranty claims, a statute of 10 limitation affecting the right of action of the association under this section is tolled 11 until the period of declarant control terminates. A unit owner is not precluded from 12 maintaining an action under this section because the person is a unit owner or a 13 member or officer of the association. A lien resulting from a judgment against the 14 association is governed by AS 34.08.480. 15 * Sec. 37. AS 34.08.430(a) is amended to read: 16 (a) In a condominium or planned community, portions of the common 17 elements may be conveyed or encumbered by [SUBJECTED TO] a security interest 18 by the association if persons entitled to cast at least 80 percent of the votes in the 19 association, including 80 percent of the votes allocated to units not owned by a 20 declarant, or any larger percentage the declaration specifies, agree to the action, but 21 each owner of a unit to which a limited common element is allocated must agree in 22 order to convey the limited common element or encumber it by [SUBJECT IT TO] 23 a security interest. The declaration may specify a smaller percentage only if each of 24 the units is restricted exclusively to nonresidential uses. The proceeds of the sale or 25 encumbrance of a common element [AND PROCEEDS OF A LOAN SECURED BY 26 ENCUMBERING A COMMON AREA] are an asset of the association , but the 27 proceeds of the sale or encumbrance of a limited common element shall be 28 distributed equitably among the owners of units to which the limited common 29 element was allocated . 30 * Sec. 38. AS 34.08.430(b) is amended to read: 31 (b) Part of a cooperative may be conveyed and all or part of a cooperative may
01 be encumbered by [SUBJECTED TO] a security interest by the association if persons 02 entitled to cast at least 80 percent of the votes in the association, including 80 percent 03 of the votes allocated to units not owned by a declarant, or any larger percentage the 04 declaration specifies, agree to the action, but, if fewer than all of the units or limited 05 common elements are to be conveyed or encumbered by [SUBJECTED TO] a 06 security interest, then each unit owner of the units to which the limited common 07 elements are allocated must agree in order to convey the units or limited common 08 elements or encumber [SUBJECT] them by [TO] a security interest. The declaration 09 may specify a smaller percentage only if each of the units is restricted exclusively to 10 nonresidential uses. The proceeds of the sale or encumbrance of a common element 11 [AND PROCEEDS OF A LOAN SECURED BY ENCUMBERING A COMMON 12 AREA] are an asset of the association. A purported conveyance or other voluntary 13 transfer of an entire cooperative, unless made under AS 34.08.260, is void. 14 * Sec. 39. AS 34.08.430(g) is repealed and reenacted to read: 15 (g) Unless the declaration provides otherwise, if the holders of security 16 interests that are first in priority on 80 percent of the units that are encumbered by 17 security interests on the day the unit owners' agreement under (c) of this section is 18 recorded consent in writing, 19 (1) a conveyance of common elements under this section terminates 20 both the undivided interests in those common elements allocated to the units and the 21 security interests in those undivided interests held by all persons holding security 22 interests in the units; and 23 (2) a security interest in common elements under this section has 24 priority over all preexisting encumbrances on the undivided interests in those common 25 elements and held by all persons holding security interests in the units. 26 * Sec. 40. AS 34.08.430 is amended by adding a new subsection to read: 27 (i) The consents by holders of security interests that are first in priority on 28 units under (g) of this section, or a certificate of the secretary of the association 29 affirming that the consents have been received by the association, may be recorded at 30 any time before the date on which the agreement under (c) of this section becomes 31 void. Consents or certificates recorded under this subsection are valid from the date
01 they are recorded for purposes of calculating the percentage of consenting security 02 interest holders, regardless of later sales or encumbrances on those units. Even if the 03 required percentage of security interest holders that are first in priority consent, a 04 conveyance or encumbrance of common elements does not affect interests having 05 priority over the declaration or that are created by the association after the declaration 06 is recorded. 07 * Sec. 41. AS 34.08.440(h) is amended to read: 08 (h) A portion of the common interest community for which insurance is 09 required under this section that is damaged or destroyed must be repaired or replaced 10 promptly by the association unless [:] the common interest community is terminated 11 and AS 34.08.260 applies , [;] repairs or replacement would be illegal under a state 12 statute or municipal ordinance governing health or safety , [;] or 80 percent of the unit 13 owners, including each owner of a unit or assigned limited common element that will 14 not be rebuilt, vote not to rebuild. The cost of repair or replacement in excess of 15 insurance proceeds and reserves is a common expense. If the entire common interest 16 community is not repaired or replaced, (1) the insurance proceeds attributable to the 17 damaged common elements shall [MUST] be used to restore the damaged area to a 18 condition compatible with the remainder of the common interest community, and (2) 19 except to the extent that other persons will be distributees, (A) the insurance proceeds 20 attributable to a unit and limited common elements that are not rebuilt shall [MUST] 21 be distributed to the owner of the unit and the owner of the unit to which the limited 22 common elements were allocated, or to lien holders, as their interests may appear, and 23 (B) the remainder of the proceeds shall [MUST] be distributed to each unit owner or 24 lien holder, as their interests may appear, as follows: (i) in a condominium, in 25 proportion to the common element interest of all the units , and (ii) in a cooperative or 26 planned community, in proportion to the common expense liabilities of all the units. 27 If the unit owners vote not to rebuild a unit, the allocated interests of the unit are 28 reallocated upon the vote as if the unit had been condemned under AS 34.08.740(a), 29 and the association promptly shall prepare, execute, and record an amendment to the 30 declaration reflecting the reallocations [, AND FILE] and record a plat or plan that 31 accompanies the amendment.
01 * Sec. 42. AS 34.08.450 is amended to read: 02 Sec. 34.08.450. Surplus funds. Unless otherwise provided in the declaration, 03 any surplus funds of the association remaining after payment of or provision for 04 common expenses and any prepayment of reserves must be paid to the unit owners in 05 proportion to their common expense liabilities or credited to them to reduce their 06 future common expense assessments. 07 * Sec. 43. AS 34.08.470(a) is amended to read: 08 (a) The association has a statutory lien on a unit for an assessment levied 09 against the unit or a fine [FINES] imposed against the [ITS UNIT] owner of the unit 10 [FROM THE TIME THE ASSESSMENT OR FINE BECOMES DUE]. Unless the 11 declaration otherwise provides, fees, charges, late charges, fines, and interest charged 12 under AS 34.08.320(a)(10) - (12) are enforceable as assessments under this section. 13 If an assessment is payable in installments, the full amount of the assessment is a lien 14 from the time the first installment becomes due. 15 * Sec. 44. AS 34.08.470(b) is amended to read: 16 (b) A lien under this section is prior to all other liens and encumbrances on 17 a unit except (1) a lien and encumbrance recorded before the recordation of the 18 declaration and, in a cooperative, a lien and encumbrance that [WHICH] the 19 association creates, assumes, or takes subject to; (2) a [FIRST] security interest that 20 is first in priority on the unit and recorded before the date on which the assessment 21 sought to be enforced became delinquent, or, in a cooperative, the [FIRST] security 22 interest that is first in priority, encumbering only the interest of the unit owner , and 23 perfected before the date on which the assessment sought to be enforced became 24 delinquent; and (3) a lien for real estate taxes and other governmental assessments or 25 charges against the unit or cooperative. A lien under this section is also prior to all 26 security interests described in (2) of this subsection if the common expense 27 assessments based on the periodic budget adopted by the association under 28 AS 34.08.460(a) would have become due in the absence of acceleration during the six 29 months immediately preceding institution of an action to enforce the lien. This 30 subsection does not affect the priority of a mechanic's or materialman's lien [,] or the 31 priority of a lien for other assessments made by the association. A lien under this
01 section is not subject to the provisions of AS 09.38.010. 02 * Sec. 45. AS 34.08.470 is amended by adding a new subsection to read: 03 (l) In an action by an association to collect assessments or to foreclose a lien 04 for unpaid assessments, the court may appoint a receiver under AS 09.40.240 to collect 05 all sums alleged to be due and owing to a unit owner before the commencement or 06 during pendency of the action. The receivership is governed by AS 09.40.240 and 07 09.40.250. The court may order the receiver to pay any sums held by the receiver to 08 the association during the pendency of the action to the extent of the association's 09 common expense assessments based on a periodic budget adopted by the association 10 under AS 34.08.460. 11 * Sec. 46. AS 34.08.510 is amended to read: 12 Sec. 34.08.510. Applicability. (a) The provisions of AS 34.08.510 - 13 34.08.700 apply to all units subject to this chapter, except as provided in (b) of this 14 section or in AS 34.08.305(e) or as modified or waived by agreement of purchasers 15 of units in a common interest community in which each unit is restricted to 16 nonresidential use. 17 (b) A public offering statement and a resale certificate are not required to be 18 prepared or delivered on 19 (1) a gratuitous disposition of a unit; 20 (2) a disposition under a court order; 21 (3) a disposition by a governmental agency; 22 (4) a disposition by foreclosure or deed in lieu of foreclosure; 23 (5) a disposition to a dealer; 24 (6) a disposition that may be canceled at any time and for any reason 25 by the purchaser without penalty; 26 (7) a disposition of a unit restricted to nonresidential purposes [IN 27 A PLANNED COMMUNITY IN WHICH THE DECLARATION LIMITS THE 28 MAXIMUM ANNUAL ASSESSMENT OF A UNIT TO NOT MORE THAN $300, 29 AS ADJUSTED UNDER AS 34.08.820, IF 30 (A) THE DECLARANT HAS A REASONABLE AND GOOD 31 FAITH BELIEF THAT THE MAXIMUM STATED ASSESSMENT WILL BE
01 SUFFICIENT TO PAY THE EXPENSES OF THE PLANNED COMMUNITY; 02 (B) THE DECLARATION CANNOT BE AMENDED TO 03 INCREASE THE ASSESSMENT DURING THE PERIOD OF DECLARANT 04 CONTROL WITHOUT THE CONSENT OF ALL UNIT OWNERS; AND 05 (C) THE PLANNED COMMUNITY IS NOT SUBJECT TO 06 DEVELOPMENT RIGHTS]; or 07 (8) a disposition of property by a nonprofit development corporation 08 if that corporation is eligible for assistance from the Neighborhood Reinvestment 09 Corporation organized under 42 U.S.C. 8101 - 42 U.S.C. 8107 (Neighborhood 10 Reinvestment Corporation Act) for neighborhood housing services, neighborhood 11 revitalization, and economic development projects in a community. 12 * Sec. 47. AS 34.08.520(c) is amended to read: 13 (c) A declarant or dealer who offers a unit to a purchaser shall deliver a public 14 offering statement in the manner required by AS 34.08.580(a). The declarant or 15 dealer [PERSON] who prepared all or a part of the public offering statement is liable 16 under AS 34.08.580 and 34.08.670 for any false or misleading statement set out in the 17 statement or for any omission of a material fact from the statement with respect to the 18 portion of the public offering statement that the declarant or dealer [PERSON] 19 prepared. If a declarant did not prepare any part of a public offering statement , the 20 declarant is not liable for a false or misleading statement set out in the statement or 21 for an omission of a material fact from the statement unless the declarant had actual 22 knowledge of the statement or omission or, in the exercise of reasonable care, should 23 have known of the statement or omission. 24 * Sec. 48. AS 34.08.520 is amended by adding a new subsection to read: 25 (e) The real estate commission established under AS 08.88.011 may establish 26 the form of the disclosures required by AS 34.08.530 - 34.08.560. 27 * Sec. 49. AS 34.08.530(a) is amended to read: 28 (a) A [EXCEPT AS PROVIDED IN (b) OF THIS SECTION, A] public 29 offering statement must fully and accurately contain or disclose 30 (1) the name and principal address of the declarant and of the common 31 interest community and indicate whether the common interest community is a
01 condominium, cooperative, or planned community; 02 (2) a general description of the common interest community, including, 03 in a building constructed for residential purposes with horizontal boundaries, the area 04 of the interior surface of floors available for residential purposes and, to the extent 05 possible, the types, number, and declarant's schedule for the commencement and 06 completion of construction of buildings and amenities that the declarant anticipates 07 including in the common interest community; 08 (3) the number of units in the common interest community; 09 (4) copies and a brief narrative description of the significant features 10 of the declaration, other than plats and plans, and 11 (A) any recorded covenants, conditions, restrictions, and 12 reservations affecting the common interest community; 13 (B) the bylaws and [ANY] rules [OR REGULATIONS] of the 14 association; 15 (C) copies of any contracts and leases to be signed by 16 purchasers at closing; and 17 (D) a brief narrative description of any contracts or leases that 18 will or may be subject to cancellation by the association under AS 34.08.360; 19 (5) any current balance sheet and a projected budget for the association, 20 either within or as an exhibit to the public offering statement, for one year after the 21 date of the first conveyance to a purchaser, and the current budget of the association, 22 the name of the person who prepared the budget, and a statement of the budget's 23 assumptions concerning occupancy, assumptions concerning the calculation of the 24 amount of reserves [CERTIFIED BY A CERTIFIED ARCHITECT OR ENGINEER], 25 and inflation factors, including, without limitation, 26 (A) a statement of the amount included in the budget as a 27 reserve for repairs and replacement , including the estimated cost of repair or 28 replacement cost and the estimated useful life of the asset to be repaired or 29 replaced; 30 (B) a statement of any other reserves; 31 (C) the projected common expense assessment by category of
01 expenditures for the association; and 02 (D) the projected monthly common expense assessment for each 03 type of unit; 04 (6) any services not reflected in the budget that the declarant provides, 05 or expenses that the declarant pays and that the declarant expects may become a 06 common expense of the association at a subsequent time and the projected common 07 expense assessment attributable to each of those services or expenses for the 08 association and for each type of unit; 09 (7) any initial or special fee due from the purchaser at closing, together 10 with a description of the purpose and method of calculating the fee; 11 (8) a description of liens, defects, or encumbrances on or affecting the 12 title to the common interest community; 13 (9) a description of financing offered or arranged by the declarant; 14 (10) the terms and significant limitations of warranties provided by the 15 declarant, including statutory warranties and limitations on the enforcement of the 16 warranties or on damages; 17 (11) a statement that 18 (A) within 15 days after receipt of a public offering statement , 19 a purchaser, before conveyance, may cancel any contract for purchase of a unit 20 from a declarant; 21 (B) if the [A] declarant or dealer required [FAILS] to provide 22 a public offering statement to a purchaser knowingly fails to provide a public 23 offering statement to a purchaser before conveying a unit and the purchaser 24 suffers damages , the purchaser may recover from that person [THE 25 DECLARANT] 10 percent of the sales price of the unit plus 10 percent of the 26 share, proportionate to the common expense liability of the unit, of any 27 indebtedness of the association secured by security interests encumbering the 28 common interest community; and 29 (C) a purchaser who receives the public offering statement more 30 than 15 days before signing a contract may not [CANNOT] cancel the 31 contract;
01 (12) a statement of any unsatisfied judgments or pending suits against 02 the association [,] and the status of any pending suits material to the common interest 03 community of which a declarant has actual knowledge; 04 (13) a statement that a deposit made in connection with the purchase 05 of a unit is required to [WILL BE HELD IN AN ESCROW ACCOUNT UNTIL 06 CLOSING AND WILL] be returned to the purchaser if the purchaser cancels the 07 contract under AS 34.08.580 [, TOGETHER WITH THE NAME AND ADDRESS OF 08 THE ESCROW AGENT]; 09 (14) any restraints on alienation of any portion of the common interest 10 community and any restrictions on 11 (A) [ON] use, occupancy, and alienation of the unit; and 12 (B) [ON] the amount for which a unit may be sold or on the 13 amount that may be received by a unit owner on sale, condemnation, or 14 casualty loss to the unit or to the common interest community, or on 15 termination of the common interest community; 16 (15) a description of the insurance coverage provided for the benefit 17 of unit owners; 18 (16) current or expected fees or charges to be paid by a unit owner for 19 the use of the common elements and other facilities related to the common interest 20 community; 21 (17) the extent to which financial arrangements have been provided for 22 completion of improvements that the declarant is obligated to build under 23 AS 34.08.690; 24 (18) a brief narrative description of zoning and other land use 25 requirements affecting the common interest community; 26 (19) each unusual and material circumstance, feature, or characteristic 27 of the common interest community and the units; and 28 (20) in a cooperative, 29 (A) whether each unit owner will be entitled, for federal, state, 30 and local income tax purposes, to a pass-through of deductions for payments 31 made by the association for real estate taxes and interest paid the holder of a
01 security interest encumbering the cooperative; and 02 (B) a statement as to the effect on each unit owner if the 03 association fails to pay real estate taxes or payments due the holder of a 04 security interest encumbering the cooperative. 05 * Sec. 50. AS 34.08.530(b) is repealed and reenacted to read: 06 (b) After a purchaser receives a public offering statement, the declarant or 07 dealer responsible for providing a purchaser with the public offering statement under 08 AS 34.08.520 is not required to provide the purchaser with amendments to the public 09 offering statement unless the purchaser requests in writing to be informed of any 10 material change in the information required by this section. 11 * Sec. 51. AS 34.08.580(a) is amended to read: 12 (a) A declarant or dealer [PERSON] required to deliver a public offering 13 statement under AS 34.08.520 [AS 34.08.520(c)] shall provide each purchaser with a 14 copy of the public offering statement , and , if required under AS 34.08.530(b), each 15 amendment to the statement before conveyance of the unit [,] and not later than the 16 date of a contract of sale. If a purchaser is not given the public offering statement 17 more than 15 days before execution of a contract for the purchase of a unit, the 18 purchaser, before conveyance, may cancel the contract within 15 days of receipt of the 19 public offering statement. 20 * Sec. 52. AS 34.08.580(c) is repealed and reenacted to read: 21 (c) If the declarant or dealer required to provide a public offering statement 22 to a purchaser under AS 34.08.520 knowingly fails to provide a public offering 23 statement to a purchaser before conveying a unit and the purchaser suffers damages, 24 the purchaser may recover from the declarant or dealer required to provide the 25 statement 10 percent of the sales price of the unit plus 10 percent of the share, 26 proportionate to the common expense liability of the unit for any indebtedness of the 27 association secured by security interests encumbering the common interest community. 28 * Sec. 53. AS 34.08.590(a) is amended to read: 29 (a) Except for a sale in which delivery of a public offering statement is 30 required, or unless the sale is exempt under AS 34.08.510(b), a unit owner shall 31 furnish to a purchaser before execution of a contract for sale of a unit or before
01 conveyance a copy of the declaration, as amended, the bylaws, or the rules [OR 02 REGULATIONS] of the association, and a certificate containing a statement disclosing 03 (1) the effect on the proposed disposition of a right of first refusal or 04 other restraint on the free alienability of the unit; 05 (2) the amount of the monthly common expense assessment and any 06 unpaid common expense or special assessment currently due and payable from the 07 selling unit owner; 08 (3) any other fees [FEE] payable by the owner of the unit being sold 09 [OWNERS]; 10 (4) any capital expenditures in excess of $3,000 approved by the 11 executive board for the current and two next succeeding fiscal years; 12 (5) the amount of reserves for capital expenditures and of any portion 13 [PORTIONS] of the reserves designated by the association for a specified project; 14 (6) the most recent regularly prepared balance sheet and income and 15 expense statement, if any, of the association; 16 (7) the current operating budget of the association; 17 (8) any unsatisfied judgment against the association and the status of 18 any pending suit in which the association is a defendant or plaintiff; 19 (9) any insurance coverage provided for the benefit of unit owners; 20 (10) whether the executive board has given or received written notice 21 that any existing uses, occupancies, alterations, or improvements in or 22 [KNOWLEDGE THAT ANY ALTERATIONS OR IMPROVEMENTS] to the unit or 23 to the limited common elements assigned to the unit violate any provision of the 24 declaration; 25 (11) whether the executive board has received written notice from a 26 governmental agency of a violation of an applicable environmental, health, or 27 building law or ordinance [KNOWLEDGE OF ANY VIOLATION OF A HEALTH 28 OR SAFETY, FIRE, OR BUILDING CODE OR OTHER LAW, ORDINANCE, OR 29 REGULATION] with respect to the unit, the limited common elements assigned to the 30 unit, or any other portion of the common interest community; 31 (12) a statement of the remaining term of a leasehold estate affecting
01 the common interest community and the provisions governing an extension or renewal 02 of the lease; 03 (13) a statement of any restriction [RESTRICTIONS] in the 04 declaration affecting the amount that may be received by a unit owner upon sale, 05 condemnation, casualty loss to the unit or the common interest community, or 06 termination of the common interest community; [AND] 07 (14) in a cooperative, an accountant's statement, if any was prepared, 08 as to the deductibility for federal income tax purposes by the unit owner of real estate 09 taxes and interest paid by the association ; 10 (15) any pending sale or encumbrance of common elements; and 11 (16) the effect on the unit to be conveyed of any restrictions on the 12 owner's right to use or occupy the unit or to lease the unit to another person . 13 * Sec. 54. AS 34.08.590(d) is amended to read: 14 (d) A unit owner in a planned community that was created before January 1, 15 1986, is not exempt under AS 34.08.050, [AND] does not collect assessments as a 16 planned community , and has not formed an association , [OR] elected officers , or 17 elected an executive board may comply with (a) and (b) of this section by furnishing 18 the purchaser of the unit an affidavit , in recordable form , that contains 19 (1) a statement [STATING] that assessments are not collected, the last 20 known date assessments were collected, [IF KNOWN,] the amount of the last known 21 assessment, [IF KNOWN,] and the reason assessments ceased; 22 (2) a statement [STATING] that an association has not been formed 23 or that no officers or executive board have been elected [EXISTS]; and 24 (3) attached copies [PROVIDING THE PURCHASER A COPY] of 25 (A) the recorded declaration, if any, and any amendment to the 26 declaration; 27 (B) bylaws and [,] rules [, AND REGULATIONS] of the 28 association, if any; and 29 (C) a brief narrative description of 30 (i) the real estate comprising the planned community; 31 and
01 (ii) obligations to pay for real estate taxes, insurance 02 premiums, maintenance, and improvements of the real estate described 03 in the declaration. 04 * Sec. 55. AS 34.08.600 is amended to read: 05 Sec. 34.08.600. Escrow of deposits. A deposit made in connection with the 06 purchase or reservation of a unit from a person required to deliver a public offering 07 statement under AS 34.08.520(c) must be placed in escrow and held either in this state 08 or in the state where the unit is located in an account designated solely for that 09 purpose by a licensed title insurance company, an attorney, a licensed real estate 10 broker, an independent bonded escrow company, or an institution whose accounts are 11 insured by a governmental agency or instrumentality until 12 (1) delivered to the declarant or dealer at closing; 13 (2) delivered to the declarant or dealer because of the purchaser's 14 default under a contract to purchase the unit; or 15 (3) refunded to the purchaser. 16 * Sec. 56. AS 34.08.640 is repealed and reenacted to read: 17 Sec. 34.08.640. Implied warranties of quality. (a) A declarant impliedly 18 warrants that improvement it constructs in the common interest community will be in 19 at least as good condition at the time of the conveyance or delivery of possession of 20 the improvements, whichever time is earlier, as they were at the time of contracting, 21 reasonable wear and tear excepted. 22 (b) A dealer impliedly warrants that improvements it constructs in the common 23 interest community will be in at least as good condition at the time of the conveyance 24 or delivery of possession of the improvements, whichever time is earlier, as they were 25 at the time of contracting, reasonable wear and tear excepted. 26 (c) A declarant impliedly warrants to a purchaser, other than a dealer, of a unit 27 from the declarant that any improvements on the unit and on the common elements 28 made or contracted for by the declarant or an affiliate of the declarant, or made by any 29 person before the creation of the common interest community, will be free from 30 defective materials and constructed in accordance with applicable law, according to 31 sound engineering and construction standards, and in a skillful manner.
01 (d) A dealer impliedly warrants to a purchaser of a unit from the dealer that 02 the unit is suitable for the ordinary uses of real estate of its type and that any 03 improvements on the unit made or contracted for by the dealer, or made by any person 04 before the creation of the common interest community, will be free from defective 05 materials, and constructed in accordance with applicable law, according to sound 06 engineering and construction standards, and in a skillful manner. 07 (e) A declarant impliedly warrants to a purchaser, other than a dealer, of a 08 residential unit from the declarant that an existing use contemplated by the declarant 09 and the purchaser does not violate applicable law at the time of conveyance or delivery 10 of possession, whichever time is earlier. 11 (f) A dealer impliedly warrants to a purchaser of a residential unit from the 12 dealer that an existing use contemplated by the declarant and the purchaser does not 13 violate applicable law at the time of conveyance or delivery of possession, whichever 14 time is earlier. 15 (g) Warranties under this section may be excluded or modified under 16 AS 34.08.650. 17 (h) For the purposes of this section, improvements made or contracted for by 18 an affiliate of a declarant are made or contracted for by the declarant. 19 (i) A conveyance of a unit transfers to the purchaser all of the declarant's and 20 dealer's implied warranties of quality. 21 * Sec. 57. AS 34.08.660(a) is amended to read: 22 (a) Unless a period of limitation is tolled under AS 34.08.420 or affected 23 by (d) of this section, a [A] judicial proceeding for breach of an obligation arising 24 under AS 34.08.630 or 34.08.640 must be commenced within six years after the cause 25 of action accrues, but the parties may agree to reduce the period of limitation to not 26 less than two years. If the unit may be occupied for residential use, an agreement to 27 reduce the period of limitation must be evidenced by a separate instrument executed 28 by the purchaser. 29 * Sec. 58. AS 34.08.660(b) is repealed and reenacted to read: 30 (b) Subject to (c) of this section, a cause of action for breach of warranty of 31 quality, regardless of the purchaser's lack of knowledge of the breach, accrues as to
01 (1) a unit at the time the purchaser to whom the warranty is first made 02 enters into possession if a possessory interest was conveyed, or at the time of 03 acceptance of the instrument of conveyance if a nonpossessory interest was conveyed; 04 and 05 (2) each common element when the later of the following occurs: 06 (A) the common element is completed; 07 (B) the common element is added to the common interest 08 community; or 09 (C) the first unit in the common interest community is conveyed 10 to a bona fide purchaser. 11 * Sec. 59. AS 34.08.660 is amended by adding a new subsection to read: 12 (d) During the period of declarant control, the association may authorize an 13 independent committee of the executive board to evaluate and enforce by any lawful 14 means warranty claims involving the common elements and to compromise those 15 claims. Only members of the executive board elected by unit owners other than the 16 declarant, and other persons appointed by those independent members, may serve on 17 the committee, and the committee's decision shall be made without any control by the 18 declarant or by a member of the executive board or an officer appointed by the 19 declarant. All costs reasonably incurred by the committee, including attorney fees, are 20 common expenses and must be added to the budget annually adopted by the 21 association under AS 34.08.460(a). If a committee is created under this subsection, 22 the period of limitation for claims for the warranties begins to run from the date of the 23 first meeting of the committee, regardless of when the period of declarant control 24 terminates. 25 * Sec. 60. AS 34.08.670 is amended by adding a new subsection to read: 26 (b) Parties to a dispute arising under this chapter, the declaration, or the 27 bylaws of a common interest community may agree to resolve the dispute by a form 28 of binding or nonbinding alternative dispute resolution, except that a declarant may not 29 agree with the association to submit all of the disputes to binding or nonbinding 30 alternative dispute resolution after the period of declarant control passes unless the 31 agreement is made by the declarant with an independent committee of the executive
01 board elected under AS 34.08.660(d). An agreement under this section must be in 02 writing and signed by the parties. 03 * Sec. 61. AS 34.08.680 is amended to read: 04 Sec. 34.08.680. Labeling of promotional material. Promotional material 05 may not be displayed or delivered to a prospective purchaser that describes or portrays 06 an improvement that is not in existence unless the description or portrayal of the 07 improvement in the promotional material is [CONSPICUOUSLY] labeled or identified 08 either as "MUST BE BUILT" or as "NEED NOT BE BUILT." 09 * Sec. 62. AS 34.08.690 is amended to read: 10 Sec. 34.08.690. Declarant's obligation to complete and restore. (a) Except 11 for an improvement labeled "NEED NOT BE BUILT," the declarant shall complete 12 each improvement depicted on a site plan or other graphic representation provided by 13 the declarant to a purchaser , including any plats or plans prepared under 14 AS 34.08.180 [, WHETHER OR NOT THE SITE PLAN OR OTHER GRAPHIC 15 REPRESENTATION IS CONTAINED IN THE PUBLIC OFFERING STATEMENT 16 OR IN PROMOTIONAL MATERIAL DISTRIBUTED BY OR FOR THE 17 DECLARANT]. 18 (b) The declarant is liable for the prompt repair and restoration, to a condition 19 compatible with the remainder of the common interest community, of a portion of the 20 common interest community damaged [AFFECTED] by the exercise of rights reserved 21 under or created by AS 34.08.180, 34.08.190, 34.08.200, 34.08.210, 34.08.230, or 22 34.08.240. 23 * Sec. 63. AS 34.08.700 is amended to read: 24 Sec. 34.08.700. Substantial completion of units. In the sale of a unit for 25 which delivery of a public offering statement is required, a contract of sale may be 26 executed, but an interest in the unit may not be conveyed until the declaration is 27 recorded, a plat or plan that accompanies the declaration is [FILED AND] recorded, 28 and , in the case of a condominium, the unit is substantially completed as evidenced 29 by [ISSUANCE OF] a certificate of occupancy authorized by law or by a 30 [RECORDED] certificate of completion recorded under AS 34.08.090(b) 31 [SUBSTANTIAL COMPLETION EXECUTED BY
01 (1) AN INDEPENDENT REGISTERED ENGINEER, ARCHITECT, 02 OR LAND SURVEYOR; 03 (2) AN APPRAISER WITH THE DESIGNATION OF SENIOR 04 RESIDENTIAL APPRAISER, SENIOR REAL PROPERTY APPRAISER, OR 05 SENIOR REAL ESTATE ANALYST OF THE SOCIETY OF REAL ESTATE 06 APPRAISERS; 07 (3) A RESIDENTIAL MEMBER, OR MEMBER OF THE 08 APPRAISAL INSTITUTE, OF THE AMERICAN INSTITUTE OF REAL ESTATE 09 APPRAISERS; OR 10 (4) AN INDIVIDUAL WITH A DESIGNATION ESTABLISHED BY 11 REGULATION OF THE ALASKA HOUSING FINANCE CORPORATION FOR FEE 12 APPRAISERS WHO CERTIFY THE COMPLETION OF CONSTRUCTION]. 13 * Sec. 64. AS 34.08.740(a) is amended to read: 14 (a) If a unit is acquired by eminent domain or part of a unit is acquired by 15 eminent domain leaving the unit owner with a remnant that may not practically or 16 lawfully be used for any purpose permitted by the declaration, the award must include 17 compensation to the unit owner for that unit and its allocated interests, whether or not 18 any common elements are acquired. Upon acquisition, unless the decree otherwise 19 provides, the allocated interests of the unit are automatically reallocated to the 20 remaining units in proportion to the respective allocated interests of those units before 21 the taking, and the association shall promptly prepare, execute, and record an 22 amendment to the declaration reflecting the reallocations [, AND FILE] and record a 23 plat or plans [PLAN] that accompany [ACCOMPANIES] the amendment. A remnant 24 of a unit remaining after part of a unit is taken under this subsection is a common 25 element from that time. 26 * Sec. 65. AS 34.08.740(e) is repealed and reenacted to read: 27 (e) On a condemnation of a unit or common element, the court shall award to 28 the association reasonable costs for preparation and recording of the amendment, plat, 29 or plans required by (a) of this section. 30 * Sec. 66. AS 34.08.820(a) is amended to read: 31 (a) The dollar amount [AMOUNTS] specified in AS 34.08.030 changes [AND
01 34.08.510(b)(7) CHANGE] under (b) and (c) of this section [,] according to and to the 02 extent of changes in the Consumer Price Index for Urban Wage Earners and Clerical 03 Workers: U.S. City Average, All Items 1967 equal 100, compiled by the Bureau of 04 Labor Statistics, United States Department of Labor, (the "Index"). The Index for 05 December [,] 1979, which was 230, is the Reference Base Index. 06 * Sec. 67. AS 34.08.820(b) is amended to read: 07 (b) The dollar amount [AMOUNTS] specified in AS 34.08.030 and 08 [34.08.510(b)(7) AND] any amount stated in the declaration under that section 09 [PURSUANT TO THOSE SECTIONS] change on July 1 of each year if the 10 percentage of change, calculated to the nearest whole percentage point, between the 11 Index at the end of the preceding year and the Reference Base Index is 10 percent or 12 more, except that 13 (1) the portion of the percentage change in the Index in excess of a 14 multiple of 10 percent shall be disregarded and the dollar amounts shall change only 15 in multiples of 10 percent of the amounts appearing in this chapter on the effective 16 date of this Act [JANUARY 1, 1986]; 17 (2) the dollar amounts may not change if the amounts required by this 18 section are those currently in effect under this chapter as a result of an earlier 19 application of this section; and 20 (3) in no event may the dollar amounts be reduced below the amounts 21 appearing in this chapter on the effective date of this Act [JANUARY 1, 1986]. 22 * Sec. 68. AS 34.08.990(4) is amended to read: 23 (4) "common elements" means 24 (A) in a condominium or cooperative, each portion of the 25 common interest community other than a unit; [AND] 26 (B) in a planned community, the real estate within a planned 27 community owned or leased by the association, other than a unit; and 28 (C) in all common interest communities, any real estate 29 interests, other than units, that are for the benefit of unit owners who are 30 subject to the declaration; 31 * Sec. 69. AS 34.08.990(11) is amended to read:
01 (11) "dealer" means a person who is in the business of selling units 02 for the person's own account [OWNS EITHER SIX OR MORE UNITS IN A 03 COMMON INTEREST COMMUNITY OR 50 PERCENT OR MORE OF THE 04 UNITS IN A COMMON INTEREST COMMUNITY]; 05 * Sec. 70. AS 34.08.990(13) is amended to read: 06 (13) "declaration" 07 (A) means an instrument, however described, that creates a 08 common interest community; and 09 (B) includes any amendment [AMENDMENTS] to an 10 instrument described in (A) of this paragraph [A DECLARATION]; 11 * Sec. 71. AS 34.08.990(30) is amended to read: 12 (30) "special declarant rights" means the right reserved for the benefit 13 of a declarant to 14 (A) complete improvements indicated on plats and plans 15 [FILED AND] recorded with the declaration or, in a cooperative, to complete 16 improvements described in the public offering statement under 17 AS 34.08.530(a)(2); 18 (B) exercise a development right; 19 (C) maintain sales offices, management offices, signs 20 advertising the common interest community, and models; 21 (D) use easements through the common elements for the 22 purpose of making improvements within the common interest community or 23 within real estate that may be added to the common interest community; 24 (E) make the common interest community subject to a master 25 association; 26 (F) merge or consolidate a common interest community with 27 another common interest community of the same form of ownership; or 28 (G) appoint or remove an officer of the association or a master 29 association or an executive board member during a period of declarant control; 30 * Sec. 72. AS 34.08.990(33) is repealed and reenacted to read: 31 (33) "unit owner"
01 (A) means 02 (i) a declarant or other person who owns a unit or a 03 lessee of a unit in a leasehold common interest community if the lease 04 expires simultaneously with another lease whose expiration or 05 termination removes the unit from the common interest community; 06 (ii) the declarant in a condominium or planned 07 community, except for units that have been conveyed to another person; 08 (iii) the declarant in a cooperative as to any unit to 09 which allocated interests have been allocated except for units that have 10 been conveyed to another person; 11 (B) does not include a person who has an interest in a unit 12 solely as security for an obligation. 13 * Sec. 73. AS 34.08.990 is amended by adding a new paragraph to read: 14 (34) "knowingly" has the meaning given in AS 11.81.900. 15 * Sec. 74. AS 34.08.990 is amended by adding a new subsection to read: 16 (b) Unless specifically provided otherwise by the declaration or bylaws, or 17 unless the context requires otherwise, the definitions in (a) of this section apply to the 18 declaration and bylaws of a common interest community. 19 * Sec. 75. AS 34.08.530(c), 34.08.770, 34.08.790, and 34.08.800 are repealed. 20 * Sec. 76. This Act does not affect a right of action or another right that accrues before 21 the effective date of this Act. This Act may not be applied to change or otherwise impair a 22 contract in effect before the effective date of this Act unless all of the persons who are parties 23 to the contract at the time of the change or other impairment agree to the change or other 24 impairment. 25 * Sec. 77. COURT RULE. AS 34.08.740(e), enacted by sec. 65 of this Act, changes Rule 26 72(k), Alaska Rules of Civil Procedure, by requiring the award of certain costs in eminent 27 domain actions, even if the costs are not allowed under Rule 72(k). 28 * Sec. 78. AS 34.08.740(e), enacted by sec. 65 of this Act, takes effect only if sec. 77 of 29 this Act receives the two-thirds majority vote of each house required by art. IV, sec. 15, 30 Constitution of the State of Alaska.