SB 150 — HOMEOWNER ASSOCIATIONS CHANGES

]"homeowner N.association" means an incorporated or unincorporated entity upon which maintenance and operational responsibilities are imposed and to which authority is granted in the declaration;

"homeownerO. association" means an r i = r t e w d m a n o incorporated or unincorporated entity upon which maintenance d m :

b e d s º o t n = .212157.1 s k m e - 5 - e a n e d r e l u [ A d and operational responsibilities are imposed and to which authority is granted in the declaration;

[N.] O.

[O.] P.

[P.] Q.

"master planned community" means a large-large-scale scaleSB 150 Page 5 residential development that allows for a phasing of development that will take place over a long period of time, following comprehensive and coordinated planning review by a local government and approval of design and development standards beyond conventionally platted subdivisions;

provided h that additional design and development standards approved by g o t hr the local government shall be included in a site plan, area g e i k plan or master plan as required by the local government h r i s approving the development;

and h , t, [Q.] R.

"proxy" means a person authorized to act e u g e b l e e h for another." n d d i = = o h SECTION 2.

Section 47-16-5 NMSA 1978 (being Laws 2013, l ] b ,d i a º e Chapter 122, Section 5) is amended to read:

r i = r t e w d m a n o "47-16-5.

RECORD DISCLOSURE TO MEMBERS--UPDATED dINFORMATION.-- mA. :

bAll efinancial dand sother ºrecords oof tthe nassociation =shall .212157.1be smade kavailable mduring eregular -business 6hours -for eexamination by a nlot eowner dwithin rten ebusiness ldays uof [a Awritten drequest. INFORMATION.-- A.

All financial and other records of the association shall be made available during regular business hours for examination by a lot owner within ten business days of [the] a written request.

The association may charge a [reasonable ] fee of not more than ten cents ($.10) per page for copies.

SB 150 Page 6 (1) the declaration of the association;

(4) the names and addresses of all association h members;

g o t hr (5) minutes of all meetings of the g e i k association's lot owners and board for the previous five years, h r i s other than executive sessions, and records of all actions taken h , t, by a committee in place of the board or on behalf of the e u g e b l e e h association for the previous five years;

n d d i = = o h (6) the operating budget for the current l ] b ,d i a º e fiscal year;

r i = r t e w d m a n o (7) current assessments, including both dregular mand :special assessments;

b e d s º o t n = .212157.1 s k m e - 7 - e a n e d r e l u [ A d regular and special assessments;

[and ] (11) current insurance policies, including company names, policy limits, deductibles, additional named SB 150 Page 7 insureds and expiration dates for property, general liability and association director and officer professional liability, and fidelity policies;

h D.

The failure of an association to provide access u » r to the financial and other records within ten business days t h g e l i after receipt of a written request creates a rebuttable h r i s presumption that the association willfully failed to comply h , e h with the Homeowner Association Act.

A lot owner that is denied t u g e b l e e , gh access to financial and other records is entitled to the n d d i = = o h greater of the actual damages incurred for the association's l ] b ,d i a º r willful failure to comply with this subsection or fifty dollars e r = t e w d m a n o ($50.00) per calendar day, starting on the eleventh business dday mafter :the association's receipt of the written request." SECTION 3.

b r e t º o t n = .212157.1 s k m e - 8 - e a n e d r e l u [ A d day after the association's receipt of the written request." SECTION 3.

In the performance of their duties, officers and members of the board shall exercise, if appointed by the declarant, the degree of care and loyalty required of a fiduciary of the lot owners and, if SB 150 Page 8 elected by the lot owners, ordinary and reasonable care free from any undisclosed conflict of interest.

h (2) will work to uphold the community g o t hr documents and policies to the best of the member's ability;

and g e i k (3) will faithfully discharge the member's h r i s duties to the association.

h , t, C.

A board member who does not file the written e u g e b l e e h certification pursuant to Subsection B of this section shall be n d d i = = o h suspended from the board until the member complies with l ] b ,d i a º e Subsection B of this section.

r i = r t e w d m a n o D.

The association shall retain each board member's dwritten mcertification :for inspection by lot owners for five years after the board member's election or appointment.

b e d s º o t n = .212157.1 s k m e - 9 - e a n e d r e l u [ A d written certification for inspection by lot owners for five years after the board member's election or appointment.

[B.]SB 150 Page 9 E.

Within thirty calendar days after adoption of any proposed budget for the association, the board shall provide a [summary ] copy of the budget to all the lot owners.

The board shall provide to all lot owners a statement included with a copy of the annual budget listing all h fees and fines that may be charged to a lot owner by the g o t hr association or any management company retained by the g e i k association to act on behalf of the association, including h r i s charges for a disclosure certificate pursuant to Subsection H h , t, of Section 47-16-12 NMSA 1978.

e u g e b l e e h G.

Any management contract negotiated between the n d d i = = o h board and a management company retained by the association to l ] b ,d i a º e act on behalf of the association shall include:

r(1) ia =disclosure rto tthe eboard wof dany mexisting arelationships nthe omanagement (1)company ahas disclosurewith toany vendor or contractor for the boardassociation offrom anywhich existinga dconflict mof :interest may arise;

b e d s º o t n = .212157.1 s k m e - 10 - e a n e d r e l u [ A d relationships the management company has with any vendor or contractor for the association from which a conflict of interest may arise;

PROXY AND ABSENTEE VOTING--BALLOT COUNTING.-- SB 150 Page 10 A.

(1) be dated and executed by a lot owner, but if a lot is owned by more than one person, each owner of the h lot may vote or register protest to the casting of votes by the u » r other owners of the lot through a duly executed proxy, but in t h g e l i no case shall the total vote cast be more than that allocated h r i s to the lot under the declaration;

h , e h (2) allow for revocation if notice of t u g e b l e e , gh revocation is provided to the person presiding over a lot owner n d d i = = o h meeting;

and l ] b ,d i a º r (3) be valid only for the meeting at which it e r = t e w d m a n o is cast.

dC. m :

b r e t º o t n = .212157.1 s k m e - 11 - e a n e d r e l u [ A d C.

Ballots, if used, shall be counted by a neutral SB 150 Page 11 third party or by a committee of volunteers.

Nothing in this section shall be considered in h conflict with or a replacement of voting member councils or g o t hr representative voting systems created by the community g e i k documents." h r i s SECTION 5.

Section 47-16-10 NMSA 1978 (being Laws 2013, h , t, Chapter 122, Section 10) is amended to read:

e u g e b l e e h "47-16-10.

FINANCIAL AUDIT.-- nAt dleast devery ithree =years, =the oboard hshall [A.provide for a financial audit, review or compilation of the association's records in accordance with generally accepted accounting principles by an independent certified public accountant and shall provide that the cost thereof be assessed as a common expense.

UnlessThe anyaudit, provisionreview inor thecompilation communityshall documentsbe lmade ]available bto ,dlot iowners awithin ºthirty ecalendar requiresdays an annual audit by a certified public accountant, the r i = r t e w d m a n o board of directorsits ofcompletion." anSECTION association6. managing a master planned d m :

bSection e47-16-12 dNMSA s1978 º(being oLaws t2013, nChapter =122, .212157.1Section s12) kis mamended eto -read: 12 - e a n e d r e l u [ A d community or a development consisting of one hundred or more lots shall provide for an annual financial audit, review or compilation of the association.

The"47-16-12. audit, review or compilation shall be completed no later than one hundred eighty days after the end of the association's fiscal year and shall be made available upon request to the members within thirty days after its completion.

B.SALE OF LOTS--DISCLOSURE CERTIFICATE.-- A.

Unless otherwiseexempt providedpursuant into theSubsection communityF documents,of inthis anSB association150 managingPage a12 developmentsection, consistingprior ofto fewerclosing, than one hundred lots, upon a majority vote of all of the lot owners]owner At least every three years, the board shall providefurnish forto a financialpurchaser audit,copies reviewof: or compilation of the association's records in accordance with generally accepted accounting principles by an independent certified public accountant and shall provide that the cost thereof be assessed as a common expense.

The(1) audit,the reviewdeclaration or compilation shall be h made available to lot owners within thirty calendar days of itsthe uassociation, »other rthan completion."the tplats hand gplans; e l i SECTION 6.

Section 47-16-12 NMSA 1978 (being Laws 2013, h r i s Chapter 122, Section 12) is amended to read:

h , e h "47-16-12.

SALE OF LOTS--DISCLOSURE CERTIFICATE.-- t u g e b l e e , gh A.

Unless exempt pursuant to Subsection F of this n d d i = = o h section, prior to closing, a lot owner shall furnish to a l ] b ,d i a º r purchaser copies of:

e r = t e w d m a n o (1) the declaration of the association, other d m :

b r e t º o t n = .212157.1 s k m e - 13 - e a n e d r e l u [ A d than the plats and plans;

h C.

A purchaser shall not be liable for any unpaid g o t hr assessment or fee greater than the amount, prorated to the date g e i k of closing, set forth in the disclosure certificate prepared by h r i s the association.

h , t, D.

A lot owner shall not be liable to a purchaser e u g e b l e e h for the failure or delay of the association to provide the nSB d150 dPage i13 = = o h disclosure certificate in a timely manner.

l ] b ,d i a º e E.

The information contained in the disclosure r i = r t e w d m a n o certificate shall be current as of the date on which the ddisclosure mcertificate :is furnished to the lot owner by the association.

b e d s º o t n = .212157.1 s k m e - 14 - e a n e d r e l u [ A d disclosure certificate is furnished to the lot owner by the association.

Beginning sixty-one days after the creation of the disclosure certificate, the lot owner may request that the association update any changes to statements h contained in the disclosure certificate pursuant to Paragraphs g o t hr (2) and (3) of Subsection M of Section 47-16-2 NMSA 1978.

Upon g e i k a lot owner's request for changes to statements contained in h r i s the disclosure certificate pursuant to this subsection, the h , t, association shall provide the updated information within three e u g e b l e e h business days of the lot owner's SB 150 Page 14 request and may impose a n d d i = = o h reasonable fee not to exceed fifty dollars ($50.00).

The l ] b ,d i a º e updated information shall only be valid for sixty days from the r i = r t e w d m a n o update.

dH. m :

b e d s º o t n = .212157.1 s k m e - 15 - e a n e d r e l u [ A d [G.] H.

Except as provided in [Subsections ] Subsection B [and C ] of this section, the Homeowner Association Act shall apply to all homeowner associations created and existing within this state.

Sections 47-16-9, 47-16-10 and 47-16-14 NMSA 1978 do not apply to homeowner associations created before July 1, 2013 and that SJCº do not»SJC have fewer than thirty lots;

h provided that any amendment to the community documents of an g o t hr association created before July 1, 2013 shall comply with the g e i k Homeowner Association Act.

hC. r i s [C.

ExceptThe as provided in Sections 47-16-4 and h , t, 47-16-8 NMSA 1978 and Section 2 of this 2015 act, the Homeowner e u g e b l e e h Association Act does not invalidateapply existingto provisions of the n d d i = = o h articles of incorporation, declaration, bylaws or rules of a lcondominium ]governed bby ,dthe iCondominium aAct." ºSECTION e8. homeowner association created before July 1, 2013.

rA inew =section rof tthe eHomeowner wAssociation dSB m150 aPage n15 oAct D.]is C.enacted to read:

The"REMOVAL HomeownerOF AssociationBOARD ActMEMBERS.--Unless doesa notprocess applyfor dremoval mof :board members is provided for in the community documents, the lot owners, by a two-thirds' vote of all lot owners present and entitled to vote at a lot owner meeting at which a quorum is present, may remove a member of the board." SECTION 9.

b e d s º o t n = .212157.1 s k m e - 16 - e a n e d r e l u [ A d to a condominium governed by the Condominium Act." SECTION 8.

"[NEW"MEETINGS MATERIAL ] REMOVAL OF BOARDASSOCIATION.-- MEMBERS.--UnlessA. a process for removal of board members is provided for in the community documents, the lot owners, by a two-thirds' vote of all lot owners present and entitled to vote at a lot owner meeting at which a quorum is present, may remove a member of the board." SECTION 9.

A new section of the Homeowner Association Act is enacted to read:

"[NEW MATERIAL ] MEETINGS OF ASSOCIATION.-- A.

Notwithstanding a provision to the contrary in the community documents, written notice of the meeting stating h the time, date and location of the annual meeting and, in the u » r case of a special meeting, the purpose or purposes for which t h g e l i the meeting is called, shall be delivered electronically, hand-hand-delivered h r i s delivered or sent by mail not less than ten and no more than h , e h fifty days before the meeting.

If sent by mail, the notice t u g e b l e e , gh shall be deemed to be delivered when addressed to a lot owner n d d i = = o h at the address as it appears in the association's records and l ] b ,d i a º r deposited in the United States mail, postage prepaid.

e r = t e w d m a n o C.

Unless a longer period of time is required by an dassociation's mcommunity :documents, notice of the time, date and location of board meetings and drafts of any SB 150 Page 16 proposed policy resolutions shall be provided to lot owners at least forty-eight hours in advance electronically, by conspicuous posting, posting on the association's website or social media or by any other reasonable means as determined by the board.

b r e t º o t n = .212157.1 s k m e - 17 - e a n e d r e l u [ A d association's community documents, notice of the time, date and location of board meetings and drafts of any proposed policy resolutions shall be provided to lot owners at least forty-eight hours in advance electronically, by conspicuous posting, posting on the association's website or social media or by any other reasonable means as determined by the board.

or (3) personal, health or financial information about an individual member of the association, an individual h employee of the association or an individual contractor for the u » r association.

t h g e l i F.

The association shall maintain a written copy of h r i s the minutes of all association meetings, including summaries of h , e h all agenda items and formal actions taken." t u g e b l e e , gh SECTION 10.

A new section of the Homeowner Association n d d i = = o h Act is enacted to read:

l"ENFORCEMENT ] b ,d i a º r "[NEW MATERIAL ] ENFORCEMENT OF COVENANTS--DISPUTE e r = t e w d m a n o RESOLUTION.-- dA. m :

bEach rassociation eand teach ºlot oowner tand nthe =owner's .212157.1tenants, sguests kand minvitees eshall -comply 18with -the eSB a150 nPage e17 dHomeowners rAssociation eAct land uthe [association's Acommunity ddocuments. A.

Each association and each lot owner and the owner's tenants, guests and invitees shall comply with the Homeowners Association Act and the association's community documents.

Prior to imposition of a fine or suspension, the board shall provide an opportunity to submit a written h statement or for a hearing before the board or a committee u » r appointed by the board by providing written notice to the t h g e l i person sought to be fined or suspended fourteen days prior to h r i s the hearing.

Following the hearing or review of the written h , e h statement, if the board or committee, by a majority vote, does t u g e b l e e , gh not approve a proposed fine or suspension, neither the fine nor n d d i = = o h the suspension may be imposed.

Notice and a hearing are not l ] b ,d i a º r required for violations that pose an imminent threat to public e r = t e w d m a n o health or safety.

dD. m :

bIf ra eperson tagainst ºwhom oa tviolation nhas =been .212157.1SB s150 kPage m18 ealleged -fails 19to -request ea hearing or submit a nwritten estatement das rprovided efor lin uSubsection [C Aof dthis D.section, the fine or suspension may be imposed, calculated from the date of violation.

If a person against whom a violation has been alleged fails to request a hearing or submit a written statement as provided for in Subsection C of this section, the fine or suspension may be imposed, calculated from the date of violation.

-SB 20150 -Page h19 u25 » r t h g e l i h r i s h , e h t u g e b l e e , gh n d d i = = o h l ] b ,d i a º r e r = t e w d m a n o d m :

b r e t º o t n = .212157.1 s k m e e a n e d r e l u [ A d