Senate Study Bill 3066 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON ZAUN) A BILL FOR An Act relating to the operations and governance of certain 1 common interest communities. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5790XC (2) 87 md/rn

S.F. _____ DIVISION I 1 IOWA COMMON INTEREST OWNERSHIP ACT 2 Section 1. NEW SECTION . 499C.101 Title. 3 This chapter shall be known and cited as the “Iowa Common 4 Interest Ownership Act” . 5 Sec. 2. NEW SECTION . 499C.102 Public policy. 6 The general assembly declares that it is the public policy of 7 the state that the management and affairs of common interest 8 communities be conducted openly, and this chapter shall be 9 construed to provide open access to the management of the 10 common interest community for the unit owners. 11 Sec. 3. NEW SECTION . 499C.103 Definitions. 12 As used in this chapter, unless the context otherwise 13 requires: 14 1. “Assessment” means a sum attributable to each unit and 15 due to the unit owners association as may be provided in a 16 declaration or in the bylaws. 17 2. “Bylaws” means the instruments, however denominated, 18 that contain the procedures for conducting the affairs of the 19 unit owners association or the executive board regardless of 20 the form in which the association is organized, including any 21 amendments to such instruments. 22 3. “Common element” means: 23 a. For a cooperative under chapter 499A or a horizontal 24 property regime under chapter 499B, all portions of the common 25 interest community other than the units. 26 b. For a planned community, any real estate within the 27 planned community which is owned or leased by the unit owners 28 association, other than a unit. 29 c. For all common interest communities, any other interests 30 in real estate identified in the declaration for the benefit 31 of unit owners. 32 4. “Common expenses” means expenditures made by, or 33 financial liabilities of, the unit owners association or the 34 executive board, together with any allocations to reserves. 35 -1- LSB 5790XC (2) 87 md/rn 1/ 20

S.F. _____ 5. a. “Common interest community” means real estate 1 described in a declaration with respect to which a person, 2 by virtue of the person’s ownership of a unit, is obligated 3 to pay for a share of real estate taxes, insurance premiums, 4 maintenance, or improvement of, or services or other expenses 5 related to, common elements, other units, or other real estate 6 described in the declaration. “Common interest community” 7 includes a cooperative under chapter 499A and a horizontal 8 property regime under chapter 499B. 9 b. “Common interest community” does not include: 10 (1) A covenant that requires the owners of separate parcels 11 of real estate to share costs or other obligations related to a 12 wall, driveway, well, or other similar structure, unless all 13 such owners consent in writing to the creation of a common 14 interest community. 15 (2) Real estate described in paragraph “a” if all units are 16 owned by a single owner. 17 6. “Declarant” means a person or group of persons who, 18 as the record title owner of real estate, by a declaration, 19 creates a common interest community. 20 7. “Declaration” means the instrument, however denominated, 21 that creates a common interest community, including any 22 amendments to the instrument. 23 8. “Executive board” means the body, regardless of name, 24 designated in the declaration or bylaws to act on behalf of the 25 unit owners association. 26 9. “Planned community” means a common interest community 27 that is not solely a cooperative under chapter 499A or 28 solely a horizontal property regime under chapter 499B, and 29 includes property owner or homeowner associations. However, a 30 cooperative under chapter 499A or a horizontal property regime 31 under chapter 499B may be part of a planned community. 32 10. “Rule” means a policy, guideline, restriction, 33 procedure, or regulation, however denominated, which is not set 34 forth in the declaration or bylaws. 35 -2- LSB 5790XC (2) 87 md/rn 2/ 20

S.F. _____ 11. “Unit” means a portion of the common interest community 1 designated for separate ownership or occupancy or as otherwise 2 defined in the statute under which the common interest 3 community is organized, including but not limited to an 4 apartment as defined in section 499B.2. 5 12. “Unit owner” means a declarant or other person that owns 6 a unit, but does not include a person having an interest in a 7 unit solely as security for an obligation. In a horizontal 8 property regime under chapter 499B or a planned community, 9 the declarant is the owner of a unit. In a cooperative under 10 chapter 499A, the declarant is the owner of any unit to 11 which an interest has been allocated until that unit has been 12 conveyed to another person. 13 13. “Unit owners association” means an association, 14 regardless of name, organized as a for-profit or nonprofit 15 corporation, trust, limited liability company, partnership, 16 unincorporated association, or any other form of organization 17 authorized by the laws of this state, the membership of 18 which consists solely of unit owners except following 19 termination of the common interest community, at which time the 20 association shall consist of all former unit owners entitled 21 to distributions of proceeds or their heirs, successors, or 22 assigns. 23 Sec. 4. NEW SECTION . 499C.104 Variation by agreement. 24 Except as expressly provided in this chapter, the provisions 25 of this chapter may not be varied by agreement, and rights 26 conferred by it may not be waived. 27 Sec. 5. NEW SECTION . 499C.105 Applicability. 28 Unless otherwise provided by law: 29 1. This chapter applies to common interest communities 30 within this state having eight or more units. 31 2. Any portion of a declaration, bylaws, covenant, or 32 other contractual provision existing prior to July 1, 2018, 33 that violates or is inconsistent with this chapter is not 34 enforceable. However, nothing in this chapter shall be 35 -3- LSB 5790XC (2) 87 md/rn 3/ 20

S.F. _____ construed to invalidate other provisions of the declaration, 1 bylaws, covenant, or contractual provision of those common 2 interest communities established before July 1, 2018. 3 3. The provisions of this chapter shall prevail over any 4 conflicting provision of law under which a common interest 5 community or unit owners association is organized. 6 Sec. 6. NEW SECTION . 499C.201 Unit owners association —— 7 powers and duties. 8 1. Except as otherwise provided in this chapter, a unit 9 owners association shall do all of the following: 10 a. Adopt bylaws and amend such bylaws. 11 b. Adopt budgets, collect assessments for common expenses 12 from unit owners, and invest funds of the association, if 13 applicable. 14 2. Unless otherwise limited by a declaration or bylaws, a 15 unit owners association shall have authority to do any of the 16 following: 17 a. Adopt and amend rules for operation of the unit owners 18 association. 19 b. Hire, employ, and discharge employees, agents, and 20 independent contractors. 21 c. Institute, defend, or intervene in litigation, 22 arbitration, mediation, or governmental administrative 23 proceedings on behalf of the unit owners association or for two 24 or more unit owners on matters affecting the common interest 25 community. 26 d. Make contracts and incur liabilities. 27 e. Regulate the use, maintenance, repair, replacement, and 28 modification of common elements. 29 f. Cause additional improvements to be made to the common 30 elements of the common interest community. 31 g. Acquire, hold, encumber, and convey any right, title, or 32 interest to real estate or personal property. 33 h. Grant easements, leases, licenses, and concessions 34 through or over the common elements of the common interest 35 -4- LSB 5790XC (2) 87 md/rn 4/ 20

S.F. _____ community. 1 i. Impose and receive any payments, fees, or charges for the 2 use, rental, or operation of the common elements, other than 3 limited common elements as defined in section 499B.2, and for 4 services provided to unit owners. 5 j. Impose charges for late payment of assessments and, 6 after notice and an opportunity to be heard, impose reasonable 7 monetary penalties for violations of the declaration, bylaws, 8 and rules of the association. However, such penalties shall 9 not be imposed to accrue each day that the violation is not 10 remedied. Unpaid penalties are subject to collection action 11 or attachment of a lien, but unpaid penalties shall not be 12 collected by means of foreclosure on the unit. 13 k. Impose reasonable charges for the preparation and 14 recording of statements of unpaid assessments. 15 l. Provide for the indemnification of its officers and 16 executive board, including maintenance of liability insurance 17 for directors and officers of the unit owners association. 18 m. Assign its right to future income, including the right 19 to receive assessments. 20 n. Exercise powers conferred by the declaration or bylaws. 21 o. Exercise all other powers that may be exercised in this 22 state by organizations of the same type as the unit owners 23 association. 24 p. Suspend any right or privilege of a unit owner who fails 25 to pay an assessment. The unit owners association shall not, 26 however, deny a unit owner or other occupant access to the 27 owner’s unit, suspend a unit owner’s right to vote, prevent a 28 unit owner from seeking election as a director or officer of 29 the association, or withhold services provided to a unit or a 30 unit owner by the association if the effect of withholding the 31 service would be to endanger the health, safety, or property 32 of any person. 33 q. Exercise any other powers necessary and proper for the 34 governance and operation of the association. 35 -5- LSB 5790XC (2) 87 md/rn 5/ 20

S.F. _____ 3. If a tenant of a unit owner violates the declaration, 1 bylaws, or rules of the association, in addition to exercising 2 any of its powers against the unit owner, the association may 3 do any of the following: 4 a. After giving notice to the tenant and the unit owner and 5 providing each an opportunity to be heard, exercise the powers 6 described in subsection 2, paragraph “j” , against the offending 7 tenant. 8 b. Take other action against the tenant for the violation in 9 the same manner as the unit owner, acting as landlord, could 10 have exercised under the lease or in the manner that the unit 11 owners association could lawfully have taken action directly 12 against the unit owner, or both. Action under this paragraph 13 may only be taken if the tenant or unit owner fails to remedy 14 the violation within ten days after notification by the unit 15 owners association of the violation. 16 4. Unless a lease of a unit otherwise provides, this section 17 does not do any of the following: 18 a. Affect rights that the unit owner possesses to enforce 19 the lease or that the unit owners association has under other 20 provisions of law. 21 b. In the absence of a violation of the declaration, bylaws, 22 or rules, authorize the unit owners association to enforce a 23 lease to which the unit owners association is not a party. 24 5. An executive board may determine whether to exercise 25 the association’s power to impose sanctions or commence an 26 action for a violation of the declaration, bylaws, or rules, 27 including whether to settle any claim for unpaid assessments or 28 other claim made by or against the unit owners association. An 29 executive board does not have a duty to take enforcement action 30 if the executive board determines, following consideration of 31 the facts and circumstances presented, any of the following: 32 a. The association’s legal position does not justify taking 33 any or further enforcement action. 34 b. The covenant, restriction, or rule being enforced is, or 35 -6- LSB 5790XC (2) 87 md/rn 6/ 20

S.F. _____ is likely to be construed as, inconsistent with law. 1 c. Despite the existence of a violation, the violation is 2 nonmaterial and does not justify expenditure of the unit owners 3 association’s resources. 4 d. It is not in the unit owners association’s best interests 5 to pursue an enforcement action. 6 6. The failure of an executive board to take action pursuant 7 to subsection 5 shall not prevent the executive board from 8 taking enforcement action under a similar set of circumstances 9 or facts. The authority of an executive board to take action 10 under this chapter shall not, however, be exercised in an 11 arbitrary or capricious manner. 12 Sec. 7. NEW SECTION . 499C.202 Executive board. 13 1. A unit owners association shall have an executive 14 board and, except as otherwise provided in the declaration, 15 the bylaws, subsection 2, or provisions of the statute under 16 which the common interest community is organized, an executive 17 board acts on behalf of the unit owners association. In 18 the performance of their duties, officers and members of the 19 executive board appointed by the declarant shall exercise the 20 degree of care and loyalty to the unit owners association 21 required of a trustee. Officers and members of an executive 22 board not appointed by the declarant shall exercise the degree 23 of care and loyalty to the unit owners association required 24 of an officer or director of a corporation organized under 25 chapter 504, and such officers and members are subject to the 26 conflict of interest rules governing directors and officers 27 under chapter 504. 28 2. An executive board shall not act on behalf of the unit 29 owners association to amend the declaration, to terminate the 30 common interest community, to elect members of the executive 31 board, or to determine the qualifications, powers and duties, 32 or terms of office of executive board members. An executive 33 board may fill vacancies in its membership for the unexpired 34 portion of any term. 35 -7- LSB 5790XC (2) 87 md/rn 7/ 20

S.F. _____ 3. a. Subject to subsection 4, the declaration may 1 provide for a period of declarant control of the unit owners 2 association during which a declarant, or persons designated by 3 the declarant, may appoint and remove the officers and members 4 of the executive board. In no case, however, shall a period of 5 declarant control continue upon the occurrence of any of the 6 following: 7 (1) Sixty days after the conveyance of seventy-five percent 8 of all units in the common interest community to unit owners 9 other than a declarant. 10 (2) Two years after all declarants have ceased to offer 11 units for sale in the ordinary course of business. 12 (3) Two years after the addition of any number of new units 13 to the common interest community. 14 (4) The date the declarant, after giving written notice 15 to all unit owners, records an instrument voluntarily 16 surrendering all rights to control activities of the unit 17 owners association. 18 b. A declarant may voluntarily surrender the right to 19 appoint and remove officers and members of the executive board 20 before termination of the period under paragraph “a” . However, 21 the declarant may retain, for the duration of the period of 22 declarant control, approval authority for specified actions of 23 the unit owners association or executive board, as described in 24 a recorded instrument executed by the declarant. 25 4. a. Not later than sixty days after conveyance of 26 twenty-five percent of the units to unit owners other than a 27 declarant, at least one member, and not less than twenty-five 28 percent of the members of the executive board, must be elected 29 by unit owners other than the declarant. 30 b. Not later than sixty days after conveyance of fifty 31 percent of the units to unit owners other than a declarant, not 32 less than one-third of the members of the executive board must 33 be elected by unit owners other than the declarant. 34 5. Following the termination of any period of declarant 35 -8- LSB 5790XC (2) 87 md/rn 8/ 20

S.F. _____ control under this section, the unit owners shall elect an 1 executive board of at least three members, at least a majority 2 of whom must be unit owners. The executive board members shall 3 elect officers of the executive board. The executive board 4 members and officers shall take office upon election. This 5 subsection shall not apply to a common interest community if 6 all the units of the community are owned by one owner. 7 6. Notwithstanding any provision of the declaration or 8 bylaws to the contrary, the unit owners, by a two-thirds vote 9 of all persons present and entitled to vote at any meeting of 10 the unit owners at which a quorum is present, may remove any 11 member of the executive board with or without cause, other than 12 a member appointed by the declarant. 13 Sec. 8. NEW SECTION . 499C.401 Meetings. 14 1. Meetings of a unit owners association shall comply with 15 all of the following: 16 a. A unit owners association shall hold a meeting of 17 unit owners annually at a time, date, and place stated in or 18 determined in accordance with the declaration or bylaws. 19 b. A unit owners association shall hold a special meeting 20 of unit owners to address any matter affecting the unit owners 21 association if the association’s president, a majority of the 22 executive board, or a number of unit owners comprising at 23 least forty percent of all votes in the association, unless a 24 different percentage is specified in the bylaws, requests that 25 the secretary call the meeting. If the unit owners association 26 does not notify unit owners of a special meeting within thirty 27 days after the required number of unit owners has requested the 28 secretary to call a special meeting, the requesting members may 29 directly notify all unit owners of the meeting. Only matters 30 described in the meeting notice may be considered at a special 31 meeting. 32 c. A unit owners association shall notify each unit owner 33 of the time, date, and place of each annual and special unit 34 owners meeting not less than ten days and not more than sixty 35 -9- LSB 5790XC (2) 87 md/rn 9/ 20

S.F. _____ days before the meeting date. Each meeting notice shall state 1 the time, date, and place of the meeting and the items on the 2 agenda in a manner reasonably calculated to apprise the unit 3 owners of that information, including but not limited to: 4 (1) A statement of the general nature of any proposed 5 amendment to the declaration or bylaws. 6 (2) A statement describing any budget changes. 7 (3) Any proposal to remove an officer or member of the 8 executive board. 9 d. The requirements relating to the timing of meeting 10 notices under paragraph “c” may be reduced or waived for a 11 meeting called to address an emergency. A meeting called to 12 address an emergency shall be limited to matters arising out 13 of the emergency. 14 e. Each unit owner shall be given a reasonable opportunity 15 at any meeting to comment on any matter affecting the common 16 interest community or the unit owners association or only on 17 the emergency being addressed, if applicable. 18 f. The declaration or bylaws may allow for meetings of 19 unit owners to be conducted by telephonic, video, or other 20 conferencing methods, if such methods are consistent with 21 subsection 2, paragraph “g” . 22 2. Meetings of the executive board and meetings of 23 committees of the unit owners association, authorized to act 24 for the unit owners association, shall comply with all of the 25 following: 26 a. Meetings shall be open to the unit owners except during 27 executive sessions. The executive board and committees of the 28 unit owners association authorized to act for the association 29 may hold an executive session only during a regular or special 30 meeting of the board or the committee. No final vote or final 31 action may be taken during an executive session. An executive 32 session may only be held for the following reasons: 33 (1) To consult with the unit owners association’s attorney 34 concerning legal matters governed by attorney-client privilege. 35 -10- LSB 5790XC (2) 87 md/rn 10/ 20

S.F. _____ (2) To discuss existing or potential litigation or 1 mediation, arbitration, or governmental administrative 2 proceedings. 3 (3) To discuss matters relating to the job performance, 4 compensation, or health records of an individual employee or 5 specific complaints against an individual employee of the 6 unit owners association or against an independent contractor 7 retained by the unit owners association. 8 (4) To discuss contracts, leases, and other commercial 9 transactions for goods or services that are under negotiation, 10 including the review of bids or proposals, if public disclosure 11 of such matters would place the unit owners association at a 12 disadvantage. 13 (5) To discuss personal, health, or financial information 14 relating to a unit owner, a specific employee of the unit 15 owners association, or a specific employee of an independent 16 contractor retained by the unit owners association, including 17 any records of the unit owners association relating to such 18 information. 19 b. Executive board members shall not use incidental or 20 social gatherings of board members or any other method to 21 evade the meeting and notice requirements of this section. 22 For purposes of this section, a gathering of board members at 23 which the board members do not conduct unit owners association 24 business is not a meeting of the executive board. 25 c. During a period of declarant control, the executive board 26 shall meet at least one time each year. At least one of the 27 meetings shall be held at the common interest community or at 28 a place convenient to the unit owners of the common interest 29 community. After termination of the period of declarant 30 control, all executive board meetings shall be held at the 31 common interest community or at a place convenient to the unit 32 owners of the common interest community unless the unit owners 33 amend the bylaws to vary the location of such meetings. 34 d. Unless the meeting is called to address an emergency, 35 -11- LSB 5790XC (2) 87 md/rn 11/ 20

S.F. _____ at each executive board meeting, the executive board shall 1 provide a reasonable opportunity for unit owners to comment on 2 any matter affecting the common interest community and the unit 3 owners association. 4 e. Unless the meeting is included in a schedule given to the 5 unit owners or the meeting is called to address an emergency, 6 the secretary or other officer specified in the bylaws shall 7 give notice of each executive board meeting to each executive 8 board member and to each unit owner. Such notice shall be 9 given at least ten days before the meeting and shall state the 10 time, date, place, and agenda of the meeting. 11 f. If any materials are distributed to the executive board 12 before a meeting, the executive board, upon receipt of the 13 materials, shall make copies reasonably available to unit 14 owners, except that the executive board is not required to make 15 available copies of unapproved minutes or materials that are to 16 be considered during an executive session. 17 g. Unless otherwise provided in the declaration or bylaws, 18 the executive board may conduct a meeting by telephonic, 19 video, or other conferencing methods if all of the following 20 conditions are met: 21 (1) The meeting notice states the conferencing method to 22 be used and provides information explaining how unit owners 23 may participate in the conference directly or by meeting at a 24 central location or conference connection. 25 (2) The process provides all unit owners the opportunity 26 to hear or perceive the discussion and to comment on matters 27 before the executive board. 28 h. Following termination of the period of declarant control, 29 unit owners may amend the bylaws to vary the procedures for 30 meetings described in paragraph “g” . 31 i. In lieu of a meeting, the executive board may act by 32 unanimous consent if such action is documented in a record 33 authenticated by all executive board members. The secretary 34 shall give prompt notice to all unit owners of any action 35 -12- LSB 5790XC (2) 87 md/rn 12/ 20

S.F. _____ taken by unanimous consent. After termination of the period 1 of declarant control, an executive board may act by unanimous 2 consent only to undertake ministerial actions or to implement 3 actions previously taken at a meeting of the executive board. 4 j. Unless otherwise restricted by this chapter or the common 5 interest community’s bylaws, an executive board may determine 6 rules of procedure for the executive board. 7 k. An executive board may remove any person from a meeting 8 of the executive board upon a finding by a majority of the 9 board members that the person is being disruptive to the 10 meeting. An executive board may bar any person from meetings 11 of the executive board or other meetings of the common interest 12 community for a period of up to one year if the person has 13 been twice removed from a meeting within the preceding twelve 14 months. 15 l. An action by an executive board that is not in compliance 16 with this section is valid unless invalidated by a court. A 17 challenge to the validity of an action of the executive board 18 for failure to comply with this section shall not be brought 19 more than sixty days after the minutes of the executive board 20 meeting at which the action was taken are approved or the 21 record of that action is distributed to unit owners, whichever 22 is later. 23 Sec. 9. NEW SECTION . 499C.402 Association records. 24 1. A unit owners association shall retain all of the 25 following: 26 a. Detailed records of receipts and expenditures relating to 27 the operation and administration of the unit owners association 28 and other appropriate accounting records. 29 b. Minutes of all unit owners meetings and executive board 30 meetings, a record of all actions taken by the unit owners or 31 the executive board without a meeting, and a record of all 32 actions taken by a committee in place of the executive board on 33 behalf of the unit owners association. The minutes retained 34 by the unit owners association shall indicate the date, time, 35 -13- LSB 5790XC (2) 87 md/rn 13/ 20

S.F. _____ and place of the meeting, the names of all persons present 1 at the meeting, and each action taken at the meeting. The 2 minutes shall also include the results of each vote taken at 3 the meeting, including information indicating the vote of each 4 executive board member present at the meeting. The vote of 5 each executive board member present shall be made public at the 6 open session. 7 c. The names of all unit owners in a form that permits 8 preparation of a list of the names of all owners and the 9 regular mail and electronic mail addresses at which the unit 10 owners association communicates with them, and the number of 11 votes each unit owner is entitled to cast. 12 d. The unit owners association’s original and amended 13 organizational documents, bylaws including all amendments to 14 the bylaws, and all rules of the common interest community 15 currently in effect. 16 e. All financial statements and tax returns of the unit 17 owners association for the past three years. 18 f. A list of the names and addresses of the current 19 executive board members and officers. 20 g. The unit owners association’s most recent annual report 21 delivered to the secretary of state, if applicable. 22 h. Copies of each contract to which the unit owners 23 association is currently a party. 24 i. Records of executive board or committee actions relating 25 to requests for design or architectural approval from unit 26 owners. 27 j. Ballots, proxies, and other records related to voting by 28 unit owners for one year after the election, action, or vote. 29 2. Except as provided under subsections 3 and 4, all records 30 retained by a unit owners association must be available for 31 examination and copying by a unit owner or the unit owner’s 32 authorized agent during reasonable business hours or at a 33 mutually convenient time and location upon providing a five 34 days’ notice that reasonably identifies the specific records 35 -14- LSB 5790XC (2) 87 md/rn 14/ 20

S.F. _____ that are being requested. 1 3. Records retained by a unit owners association may be 2 withheld from inspection and copying to the extent that they 3 concern: 4 a. Personally identifiable information, salary, and medical 5 records relating to specific individuals. 6 b. Information relating to contracts, leases, and other 7 commercial transactions that are currently under negotiation to 8 purchase or provide goods or services. 9 c. Information relating to existing or potential litigation, 10 mediation, arbitration, or governmental administrative 11 proceedings. 12 d. Information relating to existing or potential matters 13 involving governmental administrative proceedings or other 14 proceedings before a government tribunal for enforcement of the 15 declaration, bylaws, or rules. 16 e. Communications with the unit owners association attorney 17 which are otherwise protected by the attorney-client privilege 18 or the attorney work-product doctrine. 19 f. Information that if disclosed would violate another 20 provision of law. 21 g. Records of an executive session of the executive board. 22 However, upon the completion of a matter that is the subject of 23 an executive session held under section 499C.401, subsection 24 2, paragraph “a” , subparagraphs (1) through (4), such records 25 of the executive session shall be available for inspection as 26 provided in this section. 27 h. Records directly related to the personal, health, or 28 financial information of a unit owner if the person requesting 29 the records is not the unit owner that is the subject of the 30 records. 31 4. A unit owners association may charge a reasonable fee 32 for providing copies of any records under this section and for 33 supervising the inspection of such records. 34 5. The right to inspect records under this section includes 35 -15- LSB 5790XC (2) 87 md/rn 15/ 20

S.F. _____ the right to copy records by photocopying or other means and 1 includes the right to receive copies through an electronic 2 transmission, if available, upon request of the requester. 3 6. A unit owners association is not obligated to compile or 4 synthesize information or records under this section. 5 7. Information or records obtained under this section shall 6 not be used for commercial purposes. 7 Sec. 10. NEW SECTION . 499C.403 Notice to unit owners. 8 1. A unit owners association or an executive board, as 9 applicable, shall deliver each notice required to be given by 10 the association or board under this chapter to the regular mail 11 address or electronic mail address provided by each unit owner. 12 If a regular mail address or electronic mail address is not 13 provided by the unit owner, the notice may be delivered using 14 any of the following methods: 15 a. Hand delivery to the unit owner. 16 b. Mailing by certified mail, as defined in section 618.15, 17 or by regular mail to the address of the unit. 18 c. Any other method reasonably calculated to provide notice 19 to the unit owner. 20 2. The ineffectiveness of a good-faith effort to deliver 21 notice under subsection 1 does not invalidate an action taken 22 at a meeting or an action taken by other means. 23 Sec. 11. NEW SECTION . 499C.501 Cause of action —— attorney 24 fees. 25 A declarant, unit owners association, unit owner, or any 26 other person subject to this chapter may bring an action to 27 enforce a right granted or obligation imposed by this chapter, 28 the declaration, or the bylaws. In any action under this 29 chapter, the court may award reasonable attorney fees to the 30 prevailing party. 31 DIVISION II 32 CORRESPONDING CHANGES 33 Sec. 12. NEW SECTION . 499A.201 Applicability. 34 This chapter shall apply to cooperatives established under 35 -16- LSB 5790XC (2) 87 md/rn 16/ 20

S.F. _____ this chapter unless otherwise provided in chapter 499C. 1 Sec. 13. NEW SECTION . 499B.1A Applicability. 2 This chapter applies to horizontal property regimes 3 established under this chapter unless otherwise provided in 4 chapter 499C. 5 Sec. 14. Section 499B.15, subsection 2, Code 2018, is 6 amended by striking the subsection. 7 Sec. 15. NEW SECTION . 499B.22 Board of administration —— 8 meetings and records. 9 1. For horizontal property regimes with eight or more 10 apartments, if the form of administration is a board of 11 administration, the board of administration shall comply with 12 the requirements of chapter 499C. 13 2. For horizontal property regimes with seven or fewer 14 apartments, if the form of administration is a board of 15 administration, the board of administration shall comply 16 with the requirements of section 499C.401, subsection 2, and 17 sections 499C.402 and 499C.403. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanation’s substance by the members of the general assembly. 21 Division I of this bill creates an Iowa common interest 22 ownership Act, new Code chapter 499C. The bill provides that 23 it is the public policy of the state that the management and 24 affairs of common interest communities be conducted openly and 25 that the new Code chapter is to be construed to provide open 26 access to the management of the common interest community for 27 the unit owners. 28 New Code chapter 499C defines “common interest community” 29 to mean real estate described in a declaration with respect 30 to which a person, by virtue of the person’s ownership of a 31 unit, is obligated to pay for a share of real estate taxes, 32 insurance premiums, maintenance, or improvement of, or services 33 or other expenses related to, common elements, other units, or 34 other real estate described in the declaration. Cooperatives 35 -17- LSB 5790XC (2) 87 md/rn 17/ 20

S.F. _____ under Code chapter 499A and horizontal property regimes under 1 Code chapter 499B are also defined to be common interest 2 communities. The bill specifies that a common interest 3 community does not include a covenant that requires the owners 4 of separate parcels of real estate to share certain costs or 5 other obligations, unless all such owners consent in writing 6 to the creation of a common interest community, and does not 7 include a community where all units are owned by a single 8 owner. 9 The bill does not allow for the provisions of new Code 10 chapter 499C to be varied by agreement, and rights conferred by 11 new Code chapter 499C may not be waived. 12 The bill specifies that unless otherwise provided by law new 13 Code chapter 499C applies to all common interest communities 14 established within this state having eight or more units. 15 However, the bill provides that for horizontal property regimes 16 with seven or fewer apartments, if the form of administration 17 is a board of administration, the board of administration must 18 comply with specified requirements of new Code chapter 499C 19 regarding meetings, records, and notice. 20 The bill establishes requirements and procedures for common 21 interest communities, unit owners associations, and executive 22 boards. 23 The bill provides that the membership of a unit owners 24 association shall at all times consist exclusively of all unit 25 owners except following termination of the common interest 26 community, at which time the unit owners association shall 27 consist of all former unit owners entitled to distributions 28 of proceeds or their heirs, successors, or assigns. The bill 29 requires each unit owners association to have an executive 30 board. A unit owners association must be organized as a 31 for-profit or nonprofit corporation, trust, limited liability 32 company, partnership, unincorporated association, or any 33 other form of organization authorized by the laws of this 34 state. The bill provides that the requirements of new Code 35 -18- LSB 5790XC (2) 87 md/rn 18/ 20

S.F. _____ chapter 499C relating to a unit owners association preempt 1 any conflicting provision of the statute under which the unit 2 owners association is organized. 3 The bill specifies the duties and powers of a unit owners 4 association, including powers of the unit owners association 5 for enforcement of the provisions of declaration, bylaws, or 6 rules. 7 The bill specifies the duties and powers of an executive 8 board. An executive board, except as otherwise provided in the 9 declaration, the bylaws, or other provision of law, acts on 10 behalf of the unit owners association. The bill specifies the 11 duty of care required for members and officers of the executive 12 board. 13 The bill establishes requirements relating to meetings of 14 unit owners associations, executive boards, and committees 15 of such entities including requirements for the contents 16 of meeting notices, allowable actions during meetings, 17 requirements relating to unit owner comments, and the manner 18 in which meetings may be conducted. The bill also specifies 19 the manner and the reasons for which certain meetings may be 20 called. 21 The bill enacts requirements relating to the retention of 22 records by unit owners associations and specifies the records 23 retained by a unit owners association which may be withheld 24 from inspection and copying. 25 The bill requires a unit owners association or executive 26 board, as applicable, to deliver each notice required to be 27 given by the association under new Code chapter 499C to the 28 regular mail address or electronic mail address provided by 29 each unit owner. If a regular mail or electronic mail address 30 is not provided by the unit owner, the unit owners association 31 may deliver the notice by a different method specified in 32 the bill. The bill provides that the ineffectiveness of a 33 good-faith effort to deliver notice does not invalidate an 34 action taken at a meeting or an action taken by other means. 35 -19- LSB 5790XC (2) 87 md/rn 19/ 20