Senate File 336 - Introduced SENATE FILE 336 BY QUIRMBACH A BILL FOR An Act relating to the meetings and actions of the governing 1 boards of certain nonprofit corporations and horizontal 2 property regimes and including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1452XS (2) 84 md/sc

S.F. 336 Section 1. Section 499B.15, subsection 2, Code 2011, is 1 amended to read as follows: 2 2. a. If the form of administration is a board of 3 administration, board meetings must be open to all apartment 4 owners except for meetings between the board and its attorney 5 with respect to proposed or pending litigation where the 6 contents of the discussion would otherwise be governed by 7 the attorney-client privilege. Notice of each board meeting 8 must be mailed or delivered to each apartment owner and 9 to each member of the board at least seven days before the 10 meeting. Each notice shall contain the date, time, place, 11 and purpose of the meeting. Minutes of meetings of the board 12 of administration must be maintained in written form or in 13 another form that can be converted into written form within 14 a reasonable time. The official records of the board of 15 administration must be open to inspection and available for 16 photocopying at reasonable times and places. Any action taken 17 by a board of administration at a meeting that is in violation 18 of any of the provisions of this subsection is not valid or 19 enforceable. 20 b. An apartment owner may seek judicial enforcement of 21 the requirements of this subsection within six months of the 22 alleged violation. Suits to enforce this subsection shall 23 be brought in the district court for the county in which the 24 declaration under section 499B.3 was filed. In any judicial 25 action, the board shall have the burden of proving that the 26 requirements of this subsection have been met. If a board 27 fails to prove by a preponderance of the evidence that the 28 board complied with the requirements of this subsection, the 29 court shall: 30 (1) Award costs and reasonable attorney fees to the 31 prevailing party. 32 (2) Issue an order declaring any action taken by the 33 board at a meeting that violated this subsection invalid and 34 unenforceable. 35 -1- LSB 1452XS (2) 84 md/sc 1/ 5

S.F. 336 (3) If the court determines that a violation of this 1 subsection is likely or about to occur, enjoin the board from 2 committing the violation. 3 Sec. 2. Section 504.823, Code 2011, is amended to read as 4 follows: 5 504.823 Call and notice of meetings. 6 1. Unless the articles or bylaws of a corporation, or 7 subsection 3 or 5 , provide provides otherwise, regular meetings 8 of the board may be held without notice. 9 2. Unless the articles, bylaws, or subsection 3 or 5 provide 10 provides otherwise, special meetings of the board must be 11 preceded by at least two days’ notice to each director of the 12 date, time, and place, but not the purpose, of the meeting. 13 3. In corporations without members, any board action to 14 remove a director or to approve a matter which would require 15 approval by the members if the corporation had members shall 16 not be valid unless each director is given at least seven 17 days’ written notice that the matter will be voted upon at 18 a directors’ meeting or unless notice is waived pursuant to 19 section 504.824 . 20 4. Unless the articles or bylaws provide otherwise, the 21 presiding officer of the board, the president, or twenty 22 percent of the directors then in office may call and give 23 notice of a meeting of the board. 24 5. a. Notwithstanding any provision of this chapter to 25 the contrary, homeowners’ association board meetings shall be 26 open to all members except for meetings between the board and 27 its attorney with respect to proposed or pending litigation 28 where the contents of the discussion would otherwise be 29 governed by the attorney-client privilege. Notice of each 30 board meeting shall be mailed or delivered to each member and 31 to each director at least seven days before the meeting. Each 32 notice shall contain the date, time, place, and purpose of the 33 meeting. Any action taken by a board at a meeting that is in 34 violation of any of the provisions of this subsection is not 35 -2- LSB 1452XS (2) 84 md/sc 2/ 5

S.F. 336 valid or enforceable. 1 b. A member may seek judicial enforcement of the 2 requirements of this subsection within six months of the 3 alleged violation. Suits to enforce this subsection shall 4 be brought in the district court for the county in which a 5 majority of the area of real estate governed by the homeowners’ 6 association is located. In any judicial action, the 7 homeowners’ association board shall have the burden of proving 8 that the requirements of this subsection have been met. If a 9 homeowners’ association fails to prove by a preponderance of 10 the evidence that the homeowners’ association complied with the 11 requirements of this subsection, the court shall: 12 (1) Award costs and reasonable attorney fees to the 13 prevailing party. 14 (2) Issue an order declaring any action taken by the 15 homeowners’ association board at a meeting that violated this 16 subsection invalid and unenforceable. 17 (3) If the court determines that a violation of this 18 subsection is likely or about to occur, enjoin the homeowners’ 19 association from committing the violation. 20 c. For purposes of this subsection, “homeowners’ 21 association” means a corporation responsible for the 22 administration and operation of an area of real property 23 comprised of land and buildings used primarily for human 24 habitation, whose membership consists of parcel owners or their 25 agents, and, as a condition of parcel ownership, membership in 26 the corporation is mandatory. 27 Sec. 3. APPLICABILITY. This Act applies to homeowners’ 28 association board meetings and horizontal property regime board 29 of administration meetings occurring on or after July 8, 2011. 30 EXPLANATION 31 This bill applies to horizontal property regimes 32 (condominiums) under Code chapter 499B and to homeowners’ 33 associations organized under the revised Iowa nonprofit 34 corporation Act, Code chapter 504. 35 -3- LSB 1452XS (2) 84 md/sc 3/ 5

S.F. 336 The bill amends Code section 504.823 to require homeowners’ 1 association board meetings to be open to all members except 2 for meetings between the board and its attorney with respect 3 to proposed or pending litigation where the contents of the 4 discussion would otherwise be governed by the attorney-client 5 privilege. The bill also requires notice of each board meeting 6 to be mailed or delivered to each member and to each director 7 at least seven days before the meeting. Each notice must 8 contain the date, time, place, and purpose of the meeting. 9 Any action taken by a board at a meeting that is in violation 10 of the bill is not valid or enforceable. The bill defines 11 “homeowners’ association” as a corporation responsible for 12 the administration and operation of an area of real property 13 comprised of land and buildings used primarily for human 14 habitation, whose membership consists of parcel owners or their 15 agents, and as a condition of parcel ownership, membership in 16 the corporation is mandatory. 17 The bill allows an aggrieved member of the homeowners’ 18 association to seek judicial enforcement of the requirements 19 of the bill within six months of the alleged violation. In 20 any judicial action, the homeowners’ association board has 21 the burden of proving that the requirements of the bill have 22 been met. If a homeowners’ association fails to prove by a 23 preponderance of the evidence that the homeowners’ association 24 complied with the requirements of this subsection, the 25 court shall award costs and reasonable attorney fees to the 26 prevailing party, issue an order declaring any action taken by 27 the homeowners’ association board at a meeting that violated 28 this subsection invalid and unenforceable, and if the court 29 determines that a violation of this subsection is likely 30 or about to occur, enjoin the homeowners’ association from 31 committing the violation. 32 The bill also includes similar provisions for the 33 contents of meeting notices, judicial enforcement of meeting 34 requirements, and burden of proof requirements for horizontal 35 -4- LSB 1452XS (2) 84 md/sc 4/ 5

S.F. 336 property regimes under Code chapter 499B. 1 The bill applies to homeowners’ association board meetings 2 and horizontal property regime board of administration meetings 3 occurring on or after July 8, 2011. 4 -5- LSB 1452XS (2) 84 md/sc 5/ 5