SB 1013 — AN ACT CONCERNING COMMON INTEREST OWNERSHIP COMMUNITIES.

Senate General Assembly FileSubstitute Bill No.

3421013 January Session, 2023 SubstituteAN SenateACT BillCONCERNING No.COMMON INTEREST OWNERSHIP COMMUNITIES.

1013 Senate, March 30, 2023 The Committee on Insurance and Real Estate reported through SEN.

CABRERA of the 17th Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING COMMON INTEREST OWNERSHIP COMMUNITIES.

(a)At least tendaysbefore adopting,amending or repealing any rule, sSB1013the /executive Fileboard No.shall give all unit owners notice of (1) The executive board'sintentionto adopt,amendor repealarule andshall include with such notice the text of the proposed rule or amendment, or the text of therule proposed to berepealed;and(2)thedate onwhichtheexecutive board will act on the proposed rule, amendment or repeal after considering comments from unit owners.

342LCO 1\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-01013-R01 sSB1013of File4 SB.docx Substitute Bill No.

3421013 the(b) executiveFollowing boardadoption, amendment or repeal of a rule, the association shall give all unit owners notice of (1)its Theaction executiveand board'sintentionto adopt,amendor repealarule andshall include with such notice thea textcopy of theany proposednew rule or amendment,amended orrule. the text of therule proposed to berepealed;and(2)thedate onwhichtheexecutive board will act on the proposed rule, amendment or repeal after considering comments from unit owners.

(b) Following adoption, amendment or repeal of a rule, the association shall give all unit owners notice of its action and include with such notice a copy of any new or amended rule.

(2)Regulate any behavior inor occupancy ofa unit whichviolatesthe sSB1013declaration /or Fileadversely No.affects the use and enjoyment of other units or the common elements by other unit owners;

342or (3) Restrict the leasing of residential units to the extent those rules are reasonably designed to meet underwriting requirements of institutional lenders that regularly make loans secured by first mortgages on units in LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-01013-R02- 2 sSB1013of File4 SB.docx } Substitute Bill No.

3421013 declarationcommon interest communities or adverselyregularly affectspurchase thethose usemortgages, andprovided enjoymentno such restriction shall be enforceable unless notice thereof is recorded on the land records of othereach unitstown orin which any part of the common elementsinterest bycommunity otheris unitlocated. owners;

or (3) Restrict the leasing of residential units to the extent those rules are reasonably designed to meet underwriting requirements of institutional lenders that regularly make loans secured by first mortgages on units in common interest communities or regularly purchase those mortgages, provided no such restriction shall be enforceable unless notice thereof is recorded on the land records of each town in which any part of the common interest community is located.

sSB1013Sec. / File No.

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342 Sec.

(13) "Dealer" means a person who owns either six or more units, or [fifty]LCO up{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-01013-R02- to,3 but not exceeding, twenty-five per cent or more of all4 theSB.docx units,} inSubstitute aBill commonNo. interest community.

1013 [fifty] up to, but not exceeding, twenty-five per cent or more of all the units, in a common interest community.

sSB1013APP /Joint FileFavorable No.LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-01013-R02- 4 of 4 SB.docx }

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342 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 24 $ FY 25 $ Department of Housing GF - Cost At least None 50,000 Note:

GF=General Fund Municipal Impact:

None Explanation The bill requires the Department of Housing (DOH) to prepare a report for the Insurance and Real Estate Committee by February 1, 2024, assessing the funding of reserves involving any common interest community (e.g., condominium association).

Due to a lack of staff capacity at DOH, the bill is anticipated to result in a one-time cost in FY of at least $50,000 for DOH to hire a consultant to prepare the required report.

The cost for consultant services will vary based on:

(1) the methods used to identify and contact associations, (2) the number of associations and communities included, and (3) the depth of analysis into each association’s reserve funding adequacy.

To the extent the consultant conducts a thorough analysis of many systematically selected communities, the cost could exceed $500,000.

There are over 5,000 common interest communities in Connecticut.

The bill also makes various changes to the Common Interest 1According totestimonyfromtheConnecticutchapter oftheCommunityAssociations Institute, February 16, 2023.

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342 Ownership Act, which are not anticipated to have a fiscal impact on the state or municipalities.

The Out Years There is no fiscal impact in the out years.

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342 OLR Bill Analysis sSB 1013 AN ACT CONCERNING COMMON INTEREST OWNERSHIP COMMUNITIES.