The bill increases requirements for disclosure and transparency in the operations of unit owners' associations (HOAs) in common interest communities, including:
- Posting on an internet website the community's governing documents, and any amendments to those documents, in addition to recording them in the county land record, as required by current law ( section 1 of the bill);
- Supplying the same governing documents, as well as a list of the HOA's current fees chargeable upon sale of a home in the community, to the HOA information and resource center for posting on the center's own website ( sections 1 and 11 );
- Posting on an internet website, with the web address communicated annually to all unit owners, the contact information for the HOA and its management company, if any, as well as other information currently required to be disclosed ( section 2 );
- Allowing unit owners to record any portion of an open meeting and to invite a professional election inspector to observe executive board elections ( sections 6 and 7 );
- Prohibiting any action to be taken at an open meeting by written or secret ballot unless at least 20% of the unit owners in attendance so request ( section 7 ); and
- If access to association records required to be provided within 30 calendar days after a request was submitted by certified mail is withheld beyond that period, penalizing the HOA $50 per day for not providing them ( section 9 ).
The bill also requires members of an HOA's executive board to complete a free, online basic training course offered or approved by the HOA information and resource center ( sections 4 and 11 ); requires the board to commission a reserve study at least every 5 years and, at least annually, to adjust the HOA's finances accordingly ( sections 3 and 5 ); eliminates the option to forgo annual audits but allows audits to be informal unless otherwise required by the bylaws or a majority vote (section 5); and requires all new contracts for goods or services over a specific dollar amount to be awarded based on a competitive bid process involving at least 3 bids ( section 8 ).
Under current law, the developer of a subdivision (declarant) is not required to transfer control of the HOA to board members representing the owners of units in the subdivision until specified percentages of the units are sold to initial purchasers. Section 5 places limits on the amount of time that may pass before the declarant must turn over control of the HOA to unit owners, regardless of the percentage of units that remain unsold.
Upon the sale of a unit, current law requires disclosure to the buyer of certain HOA documents. Section 10 requires the seller to certify that the documents are correct and complete, and gives the buyer the right to sue for damages if they are not.
(Note: This summary applies to this bill as introduced.)