Legislature(2011 - 2012)CAPITOL 120
04/04/2012 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB82 | |
| HB269 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 82 | TELECONFERENCED | |
| + | HB 269 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 269 - COMMON INTEREST COMMUNITIES
2:04:21 PM
VICE CHAIR THOMPSON announced that the final order of business
would be HOUSE BILL NO. 269, "An Act relating to the amendment
of a declaration that creates a common interest community."
REPRESENTATIVE HOLMES, speaking as the sponsor, relayed that
HB 269, in addressing Alaska's version of a uniform law, would
clean up the statutes pertaining to the development of
condominiums.
2:05:08 PM
JAMES R. WALDO, Staff, Representative Lindsey Holmes, Alaska
State Legislature, on behalf of the sponsor, Representative
Holmes, added that HB 269 would address a glitch in state law
that can cause condominium-development projects to stall; this
same glitch existed in the Uniform Common Interest Ownership Act
(UCIOA) upon which Alaska's law was modeled, but has since been
fixed, and HB 269 would similarly fix Alaska's law.
Condominiums are developed in phases, with specific timelines
for the completion of each of those phases having been agreed
upon, and with any necessary adjustments to those timelines also
being agreed upon. However, under current law, before a
declaration - which is the instrument that creates a common
interest community, such as a condominium, and in which the
aforementioned timelines are specified - can be altered,
100 percent of the ["unit owners"] must agree to the proposed
change, and, for a variety of reason, this is often a very
difficult percentage of unit owners to get an affirmative
response from when seeking permission to alter a declaration.
In the UCIOA, the required percentage has been lowered to
80 percent, and the bill would similarly lower the required
percentage stipulated in Alaska law. In conclusion, he urged
the committee to support HB 269.
MR. WALDO, in response to questions, explained that the term,
"declarant" as used in the bill means the developer of a
condominium; and that declarants - regardless that they "own"
the unsold units in a condominium development and are entitled
to cast votes in the unit owners' association - aren't
considered to be "unit owners" for purposes of determining
whether the statutorily-required percentage of affirmative votes
has been obtained.
2:10:48 PM
JAMES H. McCOLLUM, Attorney at Law, in response to comments and
a question, confirmed that under HB 269's proposed new
AS 34.08.250(g), both 80 percent of the votes of all who are
entitled to cast a vote in the association, and 80 percent of
the votes of the unit owners, would be required for any proposed
changes to the timelines and development rights specified in the
declaration; and, in response to further comments and questions,
indicated that under existing law, the votes in an association
may be allocated in a variety of ways.
MR. WALDO added that the specific allocation formula chosen by
the participants in a particular condominium development must be
stipulated in the declaration.
REPRESENTATIVE KELLER expressed concern that under HB 269's
proposed new AS 34.08.250(f), obtaining a mere 80 percent of the
allocated votes would be sufficient to alter a declaration to
prohibit or materially restrict the permitted uses of or
behavior in a unit or the number [or other qualifications] of
persons that may occupy units.
MR. WALDO said proposed new subsection (f) isn't the main thrust
of HB 269.
MR. McCOLLUM indicated that the language of proposed new
subsection (f) reflects additional changes made to the UCIOA by
the National Conference of Commissioners on Uniform State Laws
(NCCUSL), which now considers obtaining an affirmative vote of
80 percent of the allocated votes to be sufficient for those
types of alterations to a declaration, adequately balancing the
interests of the project and those of the individual unit
owners, since even 80 percent of the allocated votes can still
be a difficult percentage of affirmative votes to obtain.
REPRESENTATIVE KELLER relayed that his concern with proposed new
subsection (f) has not yet been alleviated, positing that it
might very well be appropriate for even one negative vote to be
sufficient to preclude alterations [to a declaration that would
prohibit or materially restrict the permitted uses of or
behavior in a unit or the number or other qualifications of
persons that may occupy units].
VICE CHAIR THOMPSON pointed out, however, that that one "no"
vote could come from the person creating the problem that's
meant to be addressed by the proposed alteration to the
declaration.
MR. McCOLLUM concurred, and remarked that obtaining even
80 percent of the allocated votes signifies broad support for a
proposed alteration to a declaration.
REPRESENTATIVE GRUENBERG disclosed that he owns two
condominiums.
REPRESENTATIVE HOLMES, in response to comments and questions,
clarified that language in proposed new AS 34.08.250(g) also
stipulates that "all persons holding special declarant rights" -
the developers - and all persons holding "security interests in
those rights" - the lending institutions - must also all agree
to any proposed alterations to the timelines and development
rights specified in the declaration; that such persons would
have 30 days in which to record written objection to the
proposed alterations; and that baring any such objection, once
the agreed-upon alterations have been recorded, they would
become effective 30 days afterward unless all such persons
consent in writing to having them become effective when
recorded.
MR. McCOLLUM added that that language is intended to preclude a
unit owners' association from making alterations to the
timelines and development rights specified in the declaration
without the consent of the developer and lender.
2:30:52 PM
ROBERT C. PETERSEN, Director & President, The Petersen Group,
Inc. - after indicating that his company, a building and
development firm, has been the declarant on numerous projects,
and thus he is quite familiar with how unit owners' associations
function under [Alaska's version of] the UCIOA and various types
of declarations - opined that for purposes of altering the
timelines and development rights specified in a declaration,
requiring agreement from 100 percent of the unit owners to
address delays in project development is unreasonable,
particularly given the impact various economic factors can have
on the development of such a project. In conclusion, he
expressed his hope that the committee would pass the bill and
thereby rectify the existing problem with Alaska law.
2:35:29 PM
JOE BEEDLE, President & CEO, Northrim Bank; President, Alaska
Bankers Association (ABA), mentioning that he was speaking in
favor of HB 269, relayed that all members of the ABA have
unanimously agreed to support the bill. Characterizing
condominium developments as both important for the future
because they provide communities with affordable housing, and
difficult to develop, finance, and govern, he offered his
beliefs that current law creates hardships for existing
developments that haven't been finished on schedule, and that
the adoption of the bill's proposed conforming updates to
Alaska's version of the UCIOA is going to provide a solution to
that problem and help with the timely development of
condominiums in Alaska. In conclusion, he relayed that the ABA
recommends approval of HB 269 so that the burden of financing
such projects would be eased.
VICE CHAIR THOMPSON, after ascertaining that no one else wished
to testify, closed public testimony on HB 269.
REPRESENTATIVE KELLER reiterated his concern with proposed new
AS 34.08.250(f), and relayed that he would be amenable to
deleting it from the bill.
REPRESENTATIVE HOLMES, in response to a question, relayed that
according to those who drafted the bill, proposed new
AS 34.08.250(f) would allow a future condominium development to
initially stipulate that only 80 percent of allocated votes
would be required in order to alter its declaration to prohibit
or materially restrict the permitted uses of or behavior in a
unit or the number or other qualifications of persons that may
occupy units. She offered her belief that under proposed new
subsection (f), an existing condominium development wouldn't
automatically have to, or get to, lower the required-vote
percentage, and would instead still have to first obtain
100 percent agreement before it could alter its declaration to
require only 80 percent of the allocated votes. The bill simply
provides condominium developments with the statutory authority
to stipulate an affirmative-vote requirement of as low as
80 percent, but does not mandate that they do so.
MR. WALDO concurred, and pointed out that language in proposed
new AS 34.08.250(f) indicates that a percentage higher than
80 percent could still be stipulated in the declaration itself.
The bill, he remarked in conclusion, would simply provide
condominium developments with greater latitude.
REPRESENTATIVE HOLMES, in response to comments, characterized
the bill's proposed affirmative-vote requirement of 80 percent
as sufficiently high, particularly given that declarations would
not be mandated to require only 80 percent of the allocated
votes.
MR. McCOLLUM, in response to further comments and questions,
added his understanding that when a condominium development does
vote to alter its declaration [to prohibit or materially
restrict the permitted uses of or behavior in a unit or the
number or other qualifications of persons that may occupy
units], what was permitted prior to the alteration often gets
"grandfathered in."
2:52:57 PM
REPRESENTATIVE KELLER made a motion to adopt an amendment to
delete HB 269's proposed new AS 34.08.250(f) [and the references
to it].
REPRESENTATIVE HOLMES objected, and requested that she be given
time to research the issues raised.
REPRESENTATIVE KELLER withdrew the amendment.
VICE CHAIR THOMPSON announced that HB 269 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB0082E.pdf |
HJUD 4/4/2012 1:00:00 PM |
SB 82 |
| SB 82 Sponsor Statement.pdf |
HJUD 4/4/2012 1:00:00 PM |
SB 82 |
| SB82 LS0500M.pdf |
HJUD 4/4/2012 1:00:00 PM |
SB 82 |
| SB 82 Sectional Summary.pdf |
HJUD 4/4/2012 1:00:00 PM |
SB 82 |
| HB269 Sponsor Statement.pdf |
HJUD 4/4/2012 1:00:00 PM HL&C 3/14/2012 3:15:00 PM |
HB 269 |
| HB269 ver A.PDF |
HJUD 4/4/2012 1:00:00 PM HL&C 3/14/2012 3:15:00 PM |
HB 269 |
| SB082CSSS(JUD)-Fiscal Note.pdf |
HJUD 4/4/2012 1:00:00 PM |
SB 82 |
| SB 82 Letters of Support.pdf |
HJUD 4/4/2012 1:00:00 PM |
SB 82 |
| SB 82 Background Information.pdf |
HJUD 4/4/2012 1:00:00 PM |
SB 82 |
| HB269 Supporting Documents-UCIOA Section 2-117.pdf |
HJUD 4/4/2012 1:00:00 PM HL&C 3/14/2012 3:15:00 PM |
HB 269 |
| HB269-DCCED-DCRA-03-14-12.pdf |
HJUD 4/4/2012 1:00:00 PM |
HB 269 |
| HB269 Supporting Documents-Letter First American Title 2-20-12.pdf |
HJUD 4/4/2012 1:00:00 PM HL&C 3/14/2012 3:15:00 PM |
HB 269 |