HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON LOCAL GOVERNMENT BILL BY CHAIRPERSON WAGNER)

A BILL FOR

An Act relating to the meetings and activities of the governing boards of certain nonprofit corporations and horizontal property regimes and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 499B.15, subsection 2, Code 2011, is amended to read as follows:
   2.
  a.  If the form of administration is a board of administration, board meetings must be open to all apartment owners except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege. Notice of each board meeting must be mailed or delivered to each apartment owner and to each member of the board at least seven days before the meeting. Each notice shall contain the date, time, place, and purpose of the meeting. Minutes of meetings of the board of administration must be maintained in written form or in another form that can be converted into written form within a reasonable time. The official records of the board of administration must be open to inspection and available for photocopying at reasonable times and places. Any action taken by a board of administration at a meeting that is in violation of any of the provisions of this subsection is not valid or enforceable.
   b.  An apartment owner may seek judicial enforcement of the requirements of this subsection within six months of the alleged violation. Suits to enforce this subsection shall be brought in the district court for the county in which the declaration under section 499B.3 was filed. In any judicial action, the board shall have the burden of proving that the requirements of this subsection have been met. If a board fails to prove by a preponderance of the evidence that the board complied with the requirements of this subsection, the court shall:
   (1)  Award costs and reasonable attorney fees to the prevailing party.
   (2)  Issue an order declaring any action taken by the board at a meeting that violated this subsection invalid and unenforceable.
   (3)  If the court determines that a violation of this subsection is likely or about to occur, enjoin the board from committing the violation.
   Sec. 2.  Section 504.823, Code 2011, is amended to read as follows:
   504.823  Call and notice of meetings.
   1.  Unless the articles or bylaws of a corporation, or subsection 3 or 5, provide provides otherwise, regular meetings of the board may be held without notice.
   2.  Unless the articles, bylaws, or subsection 3 or 5provide provides otherwise, special meetings of the board must be preceded by at least two days’ notice to each director of the date, time, and place, but not the purpose, of the meeting.
   3.  In corporations without members, any board action to remove a director or to approve a matter which would require approval by the members if the corporation had members shall not be valid unless each director is given at least seven days’ written notice that the matter will be voted upon at a directors’ meeting or unless notice is waived pursuant to section 504.824.
   4.  Unless the articles or bylaws provide otherwise, the presiding officer of the board, the president, or twenty percent of the directors then in office may call and give notice of a meeting of the board.
   5.
  a.  Notwithstanding any provision of this chapter to the contrary, homeowners’ association board meetings shall be open to all members except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege. Notice of each board meeting shall be mailed or delivered to each member and to each director at least seven days before the meeting. Each notice shall contain the date, time, place, and purpose of the meeting. Any action taken by a board at a meeting that is in violation of any of the provisions of this subsection is not valid or enforceable.
   b.  A member may seek judicial enforcement of the requirements of this subsection within six months of the alleged violation. Suits to enforce this subsection shall be brought in the district court for the county in which a majority of the area of real estate governed by the homeowners’ association is located. In any judicial action, the homeowners’ association board shall have the burden of proving that the requirements of this subsection have been met. If a homeowners’ association fails to prove by a preponderance of the evidence that the homeowners’ association complied with the requirements of this subsection, the court shall:
   (1)  Award costs and reasonable attorney fees to the prevailing party.
   (2)  Issue an order declaring any action taken by the homeowners’ association board at a meeting that violated this subsection invalid and unenforceable.
   (3)  If the court determines that a violation of this subsection is likely or about to occur, enjoin the homeowners’ association from committing the violation.
   c.  For purposes of this subsection,“homeowners’ association” means a corporation responsible for the administration and operation of an area of real property comprised of land and buildings used primarily for human habitation, whose membership consists of parcel owners or their agents, and, as a condition of parcel ownership, membership in the corporation is mandatory.
   Sec. 3.  APPLICABILITY.  This Act applies to homeowners’ association board meetings and horizontal property regime board of administration meetings occurring on or after July 8, 2011.
EXPLANATION
   This bill applies to horizontal property regimes (condominiums) under Code chapter 499B and to homeowners’ associations organized under the revised Iowa nonprofit corporation Act, Code chapter 504. 
   The bill amends Code section 504.823 to require homeowners’ association board meetings to be open to all members except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege. The bill also requires notice of each board meeting to be mailed or delivered to each member and to each director at least seven days before the meeting. Each notice must contain the date, time, place, and purpose of the meeting. Any action taken by a board at a meeting that is in violation of the bill is not valid or enforceable. The bill defines “homeowners’ association” as a corporation responsible for the administration and operation of an area of real property comprised of land and buildings used primarily for human habitation, whose membership consists of parcel owners or their agents, and as a condition of parcel ownership, membership in the corporation is mandatory.
   The bill allows an aggrieved member of the homeowners’ association to seek judicial enforcement of the requirements of the bill within six months of the alleged violation. In any judicial action, the homeowners’ association board has the burden of proving that the requirements of the bill have been met. If a homeowners’ association fails to prove by a preponderance of the evidence that the homeowners’ association complied with the requirements of this subsection, the court shall award costs and reasonable attorney fees to the prevailing party, issue an order declaring any action taken by the homeowners’ association board at a meeting that violated this subsection invalid and unenforceable, and if the court determines that a violation of this subsection is likely or about to occur, enjoin the homeowners’ association from committing the violation.
   The bill also includes similar provisions for the contents of meeting notices, judicial enforcement of meeting requirements, and burden of proof requirements for horizontal property regimes under Code chapter 499B.
   The bill applies to homeowners’ association board meetings and horizontal property regime board of administration meetings occurring on or after July 8, 2011.