Chapter 756 Oregon Laws 2001

AN ACT

HB 3912

Relating to organized communities; creating new provisions; and amending ORS 94.550, 94.565, 94.570, 94.580, 94.590, 94.595, 94.616, 94.625, 94.630, 94.635, 94.640, 94.647, 94.650, 94.662, 94.667, 94.670, 94.673, 94.704, 94.719, 100.005, 100.020, 100.105, 100.110, 100.115, 100.120, 100.125, 100.135, 100.150, 100.155, 100.175, 100.185, 100.210, 100.250, 100.260, 100.275, 100.405, 100.410, 100.415, 100.417, 100.420, 100.425, 100.445, 100.470, 100.480, 100.490, 100.520, 100.525, 100.530, 100.550, 100.555, 100.600, 100.640, 100.655, 100.740 and 100.785.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Sections 2 to 4 of this 2001 Act are added to and made a part of ORS 94.550 to 94.783.

SECTION 2. (1) Unless the declaration provides otherwise, each lot shall be entitled to one vote.

(2) Unless the declaration or bylaws provide otherwise:

(a) An executor, administrator, guardian or trustee may vote, in person or by proxy, at a meeting of the association with respect to a lot owned or held in a fiduciary capacity if the fiduciary satisfies the secretary of the board of directors that the person is the executor, administrator, guardian or trustee holding the lot.

(b) When a lot is owned by two or more persons jointly, according to the records of the association:

(A) Except as provided in this paragraph, the vote or proxy of the lot may be exercised by a co-owner in the absence of protest by another co-owner. If the co-owners cannot agree upon the vote, the vote of the lot shall be disregarded completely in determining the proportion of votes given with respect to such matter.

(B) A valid court order may establish the right of co-owners’ authority to vote.

SECTION 3. (1)(a) A Class I or Class II planned community created before the effective date of this 2001 Act that is not subject to ORS 94.550 to 94.783 is subject to this section and ORS 94.550, 94.590, 94.630 (1), 94.640, 94.645, 94.647, 94.650, 94.655, 94.660, 94.662, 94.665, 94.670, 94.675, 94.680, 94.690, 94.695, 94.704, 94.709, 94.712, 94.716, 94.719, 94.723, 94.733, 94.770, 94.775, 94.777 and 94.780 and section 4 of this 2001 Act to the extent that those statutes are consistent with any governing documents. If the governing documents do not provide for the formation of an association, the requirements of this subsection are not effective until the formation of an association in accordance with paragraph (b) of this subsection. If a provision of the governing documents is inconsistent with this subsection, the owners may amend the governing documents using the procedures in this subsection:

(A) In accordance with the procedures for the adoption of amendments in the governing documents and subject to any limitations in the governing documents, the owners may amend the inconsistent provisions of the governing documents to conform to the extent feasible with this section and ORS 94.550, 94.590, 94.630 (1), 94.640, 94.645, 94.647, 94.650, 94.655, 94.660, 94.662, 94.665, 94.670, 94.675, 94.680, 94.690, 94.695, 94.704, 94.709, 94.712, 94.716, 94.719, 94.723, 94.733, 94.770, 94.775, 94.777 and 94.780 and section 4 of this 2001 Act. Nothing in this paragraph requires the owners to amend a declaration or bylaws to include the information required by ORS 94.580 or 94.635.

(B) If there are no procedures for amendment in the governing documents:

(i) For an amendment to a recorded governing document other than bylaws, the owners may amend the inconsistent provisions of the document to conform to this section and ORS 94.550, 94.590, 94.630 (1), 94.640, 94.645, 94.647, 94.650, 94.655, 94.660, 94.662, 94.665, 94.670, 94.675, 94.680, 94.690, 94.695, 94.704, 94.709, 94.712, 94.716, 94.719, 94.723, 94.733, 94.770, 94.775, 94.777 and 94.780 and section 4 of this 2001 Act by a vote of at least 75 percent of the owners in the planned community.

(ii) For an amendment to the bylaws, the owners may amend the inconsistent provisions of the bylaws to conform to this section and ORS 94.550, 94.590, 94.630 (1), 94.640, 94.645, 94.647, 94.650, 94.655, 94.660, 94.662, 94.665, 94.670, 94.675, 94.680, 94.690, 94.695, 94.704, 94.709, 94.712, 94.716, 94.719, 94.723, 94.733, 94.770, 94.775, 94.777 and 94.780 and section 4 of this 2001 Act by a vote of at least a majority of the owners in the planned community.

(iii) The amendment may be adopted at a meeting held in accordance with the governing documents or by another procedure permitted by the governing documents following the procedures prescribed in ORS 94.647, 94.650 or 94.660.

(iv) An amendment to a recorded declaration shall be executed, certified and recorded as provided in ORS 94.590 (2) and (3) and shall be subject to ORS 94.590 (5). An amendment to the bylaws and any other governing document shall be executed and certified as provided in ORS 94.590 (3) and shall be recorded in the office of the recording officer of every county in which the planned community is located if the bylaws or other governing document to which the amendment relates were recorded.

(C) An amendment adopted pursuant to this paragraph shall include:

(i) A reference to the recording index numbers and date of recording of the declaration or other governing document, if recorded, to which the amendment relates; and

(ii) A statement that the amendment is adopted pursuant to the applicable subparagraph of this paragraph.

(b)(A) If the governing documents do not provide for the formation of an association of owners, at least 10 percent of the owners in the planned community or any governing entity may initiate the formation of an association as provided in this paragraph. The owners or the governing entity initiating the association formation shall call an organizational meeting for the purpose of voting whether to form an association described in ORS 94.625. The notice of the meeting shall:

(i) Name the initiating owners or governing entity;

(ii) State that the organizational meeting is for the purpose of voting whether to form an association in accordance with the proposed articles of incorporation;

(iii) State that if the owners vote to form an association, the owners may elect the initial board of directors provided for in the articles of incorporation and may adopt the initial bylaws;

(iv) State that to form an association requires an affirmative vote of at least a majority of the owners in the planned community, or, if a larger percentage is specified in the governing documents, the larger percentage;

(v) State that to adopt articles of incorporation, to elect the initial board of directors pursuant to the articles of incorporation or to adopt the initial bylaws requires an affirmative vote of at least a majority of the owners present;

(vi) State that if the initial board of directors is not elected, an interim board of directors shall be elected pursuant to bylaws adopted as provided in subparagraph (C) of this paragraph;

(vii) State that a copy of the proposed articles of incorporation and bylaws will be available at least five business days before the meeting and state the method of requesting a copy; and

(viii) Be delivered in accordance with the declaration and bylaws. If there is no governing document or the document does not include applicable provisions, the owners or governing entity shall follow the procedures prescribed in ORS 94.650 (3).

(B) At least five business days before the organizational meeting, the initiating owners or governing entity shall cause articles of incorporation and bylaws to be drafted. The bylaws shall include, to the extent applicable, the information required by ORS 94.635.

(C) At the organizational meeting:

(i) Representatives of the initiating owners or governing entity shall, to the extent not inconsistent with the governing documents, conduct the meeting according to Robert’s Rules of Order as provided in section 4 of this 2001 Act.

(ii) The initiating owners or governing entity shall make available copies of the proposed articles of incorporation and the proposed bylaws.

(iii) The affirmative vote of at least a majority of the owners of a planned community, or, if a larger percentage is specified in the governing documents, the larger percentage, is required to form an association under this paragraph.

(iv) If the owners vote to form an association, the owners shall adopt articles of incorporation and may elect the initial board of directors as provided in the articles of incorporation, adopt bylaws and conduct any other authorized business by an affirmative vote of at least a majority of the owners present. If the owners do not elect the initial board of directors, owners shall elect an interim board of directors by an affirmative vote of at least a majority of the owners present to serve until the initial board of directors is elected.

(D) Not later than 10 business days after the organizational meeting, the board of directors shall:

(i) Cause the articles of incorporation to be filed with the Secretary of State under ORS chapter 65;

(ii) Cause the notice of planned community described in subsection (4) of this section to be prepared, executed and recorded in accordance with subsection (4) of this section.

(iii) Provide a copy of the notice of planned community to each owner, together with a copy of the adopted articles of incorporation and bylaws, if any, or a statement of the procedure and method for adoption of bylaws described in subparagraph (C) of this paragraph. The copies and any statement shall be delivered to each lot, mailed to the mailing address of each lot or mailed to the mailing addresses designated by the owners in writing; and

(iv) Cause a statement of association information to be prepared, executed and recorded in accordance with ORS 94.667.

(E) If the owners vote to form an association, all costs incurred under this paragraph, including but not limited to the preparation and filing of the articles of incorporation, drafting of bylaws, preparation of notice of meeting and the drafting, delivery and recording of all notices and statements shall be a common expense of the owners and shall be allocated as provided in the appropriate governing document or any amendment thereto.

(2)(a) The owners of lots in a Class I or Class II planned community that are subject to the provisions of ORS chapter 94 specified in subsection (1) of this section may elect to be subject to any other provisions of ORS 94.550 to 94.783 upon compliance with the procedures prescribed in subsection (1) of this section.

(b) If the owners of lots in a Class I or Class II planned community elect to be subject to additional provisions of ORS 94.550 to 94.783, unless the notice of planned community otherwise required or permitted under subsection (4) of this section includes a statement of the election pursuant to this paragraph, the board of directors of the association shall cause the notice of planned community described in subsection (4) of this section to be prepared, executed and recorded in accordance with subsection (4) of this section.

(3)(a) The owners of lots in a Class III planned community created before the effective date of this 2001 Act may elect to be subject to provisions of ORS 94.550 to 94.783 upon compliance with the applicable procedures in subsection (1) of this section.

(b) If the owners of lots in a Class III planned community elect to be subject to provisions of ORS 94.550 to 94.783, the board of directors of the association shall cause the notice of planned community described in subsection (4) of this section to be prepared, executed and recorded in accordance with subsection (4) of this section.

(4) The notice of planned community required or permitted by this section shall be:

(a) Titled “Notice of Planned Community” under this section;

(b) Executed by the president and secretary of the association; and

(c) Recorded in the office of the recording officer of every county in which the property is located.

(5) The notice of planned community shall include:

(a) The name of the planned community and association as identified in the recorded declaration, conditions, covenants and restrictions or other governing document and, if different, the current name of the association;

(b) A list of the properties, described as required for recordation in ORS 93.600, within the jurisdiction of the association;

(c) Information identifying the recorded declaration, conditions, covenants and restrictions or other governing documents and a reference to the recording index numbers and date of recording of the governing documents;

(d) A statement that the property described in accordance with paragraph (b) of this subsection is subject to specific provisions of the Planned Community Act;

(e) A reference to the specific provisions of the Planned Community Act that apply to the subject property and a reference to the subsection of this section under which the application is made; and

(f) If an association is formed under subsection (1)(b)(A) of this section, a statement to that effect.

(6) An amended statement shall include a reference to the recording index numbers and the date of recording of prior statements.

(7) The county clerk may charge a fee for recording a statement under this section according to the provisions of ORS 205.320 (4).

(8) Title to a unit, lot or common property in a Class I or Class II planned community created before the effective date of this 2001 Act may not be rendered unmarketable or otherwise affected by a failure of the planned community to be in compliance with a requirement of this section.

(9) As used in this section:

(a) “Governing document” means an instrument or plat relating to common ownership or common maintenance of a portion of a planned community and that is binding upon lots within the planned community.

(b) “Governing entity” means an incorporated or unincorporated association, committee, person or any other entity that has authority, under a governing document, to maintain commonly maintained property, impose assessments on lots or to act on behalf of lot owners within the planned community on matters of common concern.

(c) “Recorded declaration” means an instrument recorded with the county recording officer of the county in which the planned community is located that contains conditions, covenants and restrictions binding lots in the planned community or imposes servitudes upon the real property.

SECTION 4. Unless other rules of order are required by the declaration or bylaws or by a resolution of the association or its board of directors:

(1) Meetings of the association and the board of directors shall be conducted according to the latest edition of Robert’s Rules of Order published by the Robert’s Rules Association.

(2) A decision of the association or the board of directors may not be challenged because the appropriate rules of order were not used unless a person entitled to be heard was denied the right to be heard and raised an objection at the meeting in which the right to be heard was denied.

(3) A decision of the association and the board of directors is deemed valid without regard to procedural errors related to the rules of order one year after the decision is made unless the error appears on the face of a written instrument memorializing the decision.

SECTION 5. ORS 94.550 is amended to read:

94.550. As used in ORS 94.550 to 94.783:

(1) “Assessment” means any charge imposed or levied by a homeowners association on or against an owner or lot pursuant to the provisions of the declaration or the bylaws of the planned community or provisions of ORS 94.550 to 94.783.

(2) “Blanket encumbrance” means a trust deed or mortgage or any other lien or encumbrance, mechanic’s lien or otherwise, securing or evidencing the payment of money and affecting more than one lot in a planned community, or an agreement affecting more than one lot by which the developer holds such planned community under an option, contract to sell or trust agreement.

(3) “Class I planned community” means a planned community as defined in ORS 94.550 that:

(a) Contains at least 13 lots or in which the declarant has reserved the right to increase the total number of lots beyond 12; and

(b) Has an initial estimated annual assessment, including an amount required for reserves under ORS 94.595, exceeding $10,000 for all lots or $100 per lot, whichever is greater, based on:

(A) For a planned community created on or after the effective date of this 2001 Act, the initial estimated annual assessment, including a constructive assessment based on a subsidy of the association through a contribution of funds, goods or services by the declarant; or

(B) For a planned community created before the effective date of this 2001 Act, a reasonable estimate of the cost of fulfilling existing obligations imposed by the declaration and bylaws.

(4) “Class II planned community” means a planned community as defined in ORS 94.550 that:

(a) Is not a Class I planned community;

(b) Contains at least five lots; and

(c) Has an estimated annual assessment exceeding $1,000 for all lots based on:

(B) For a planned community created before the effective date of this 2001 Act, a reasonable estimate of the cost of fulfilling existing obligations imposed by the declaration and bylaws.

(5) “Class III planned community” means a planned community as defined in ORS 94.550 that is not a Class I or II planned community.

[(3)] (6) “Common expenses” means expenditures made by or financial liabilities incurred by the homeowners association and includes any allocations to the reserve account under ORS 94.595.

[(4)] (7) “Common property” means any real property or interest in real property within a planned community which is owned, held or leased by the homeowners association or owned as tenants in common by the lot owners, or designated in the declaration for transfer to the association. [“Common property” does not include any lot designated on the plat or in the declaration of a planned community for ownership by a person other than the homeowners association.]

[(5)] (8) “Condominium” means property submitted to the provisions of ORS chapter 100.

[(6)] (9) “Declarant” means any person who creates a planned community under ORS 94.550 to 94.785.

[(7)] (10) “Declarant control” means any special declarant right relating to administrative control of a homeowners association, including but not limited to:

(a) The right of the declarant or person designated by the declarant to appoint or remove an officer or a member of the board of directors;

(b) Any weighted vote or special voting right granted to a declarant or to units owned by the declarant so that the declarant will hold a majority of the voting rights in the association by virtue of such weighted vote or special voting right; and

(c) The right of the declarant to exercise powers and responsibilities otherwise assigned by the declaration or bylaws or by the provisions of ORS 94.550 to 94.783 to the association, officers of the association or board of directors of the association.

[(8)] (11) “Declaration” means the instrument described in ORS 94.580 which establishes a planned community, and any amendments to the instrument.

[(9)] (12) “Homeowners association” or “association” means the organization of owners of lots in a planned community, created under ORS 94.625, required by a governing document or formed under section 3 of this 2001 Act.

(13) “Majority” or “majority of votes” or “majority of owners” means more than 50 percent of the votes in the planned community.

[(10)] (14) “Mortgagee” means any person who is:

(a) A mortgagee under a mortgage;

(b) A beneficiary under a trust deed; or

[(11)] (15) “Owner” means the owner of any lot in a planned community, unless otherwise specified, but does not include a person holding only a security interest in a lot.

(16) “Percent of owners” or “percentage of owners” means the owners representing the specified voting rights as determined under section 2 of this 2001 Act.

[(12)] (17) “Planned community” means any subdivision under ORS 92.010 to 92.190 which results in a pattern of ownership of real property and all the buildings, improvements and rights located on or belonging to the real property, in which the owners collectively are responsible for the maintenance, operation, insurance [and property taxes] or other expenses relating to any [common] property [of] within the planned community, including common property, if any, or for the exterior maintenance of any property that is individually owned. “Planned community” does not mean:

(a) A condominium under ORS chapter 100;

(b) A planned community that is exclusively commercial or industrial; or

(c) A timeshare plan under ORS 94.803 to 94.945.

[(13)] (18) “Purchaser” means any person other than a declarant who, by means of a voluntary transfer, acquires a legal or equitable interest in a lot, other than as security for an obligation.

[(14)] (19) “Purchaser for resale” means any person who purchases from the declarant more than two lots for the purpose of resale whether or not the purchaser for resale makes improvements to the lots before reselling them.

[(15)] (20) “Special declarant rights” means any rights, in addition to the rights of the declarant as a lot owner, reserved for the benefit of the declarant under the declaration or ORS 94.550 to 94.783, including but not limited to:

(a) Constructing or completing construction of improvements in the planned community which are described in the declaration;

(b) Expanding the planned community or withdrawing property from the planned community under ORS 94.580 (3) and (4);

(d) Making the planned community subject to a master association under ORS 94.695; or

(e) Exercising any right of declarant control reserved under ORS 94.600.

[(16)] (21) “Successor declarant” means the transferee of any special declarant right.

[(17)] (22) “Turn over” means the act of turning over administrative responsibility pursuant to ORS 94.609 and 94.616.

[(18)] (23) “Unit” means a building or portion of a building located upon a lot in a planned community and designated for separate occupancy or ownership, but does not include any building or portion of a building located on common property.

[(19)] (24) “Votes” means the votes allocated to lots in the declaration under ORS 94.580 (2)[(f)] (h).

SECTION 6. ORS 94.565 is amended to read:

94.565. (1) Except as provided in ORS 94.570, [no] a person [shall] may not create a planned community in this state except as provided in ORS 94.550 to 94.783.

(2) [No] A person [shall] may not convey any lot or unit in a planned community until the planned community is created by the recording of the declaration for the planned community [is recorded] with the county recording officer of each county in which the planned community is located.

SECTION 7. ORS 94.570 is amended to read:

94.570. (1) ORS 94.550 to 94.783 [do not] apply to [any person establishing:] a planned community created before the effective date of this 2001 Act and to a Class I planned community created on or after the effective date of this 2001 Act.

[(a) A planned community that contains 12 or fewer lots, if the declarant has reserved no right to increase the total number of lots in the planned community beyond 12;]

[(b) A condominium under ORS chapter 100;]

[(c) A planned community that is exclusively commercial or industrial, or commercial and industrial;]

[(d) A de minimis planned community described in subsection (2) of this section; or]

[(e) A timeshare plan under ORS 94.803 and 94.807 to 94.945.]

[(2) A de minimis planned community is one for which the estimated annual assessment against all lots in the planned community does not exceed $1,000 total or $100 per lot, whichever is greater.]

(2) ORS 94.550 to 94.783, except for ORS 94.595 and 94.604, apply to a Class II planned community created on or after the effective date of this 2001 Act.

(3) Notwithstanding [subsection (1)(a), (c) or (d) of this section] any other provision of ORS 94.550 to 94.783, ORS 94.550 to 94.783 apply to a Class III planned community or a planned community described in ORS 94.550 (17)(b) created on or after the effective date of this 2001 Act if the [declarant so provides in the] declaration of the planned community so provides.

(4) Nothing in [this section] ORS 94.550 to 94.783 prohibits the establishment of a condominium subject to ORS chapter 100 or a timeshare plan subject to ORS 94.803 to 94.945 within a planned community.

SECTION 8. ORS 94.580 is amended to read:

94.580. (1) A declarant shall record, in accordance with ORS 94.565, the declaration for a planned community in the office of the recording officer of each county in which the planned community is located.

(2) The declaration shall include:

(a) The name and classification of the planned community;

[(b) The name of every city and county in which all or a portion of the real property in the planned community is located;]

(b) The name of the association and the type of entity formed in accordance with ORS 94.625;

(c) A statement that the planned community is subject to ORS 94.550 to 94.783;

(d) A statement that the bylaws adopted under ORS 94.625 must be recorded;

[(c)] (e) [The] A legal description, as required under ORS 93.600, of the real property included in the planned community;

[(d)] (f) [The] A legal description, as required under ORS 93.600, of any real property included in the planned community which is or must become a common property;

[(e)] (g) A description of any special declarant rights other than the rights described under subsections (3) and (4) of this section;

[(f)] (h) A provision for allocating votes to each lot in accordance with section 2 of this 2001 Act;

[(g)] (i) A method of determining the liability of each lot for common expenses and the right of each lot to any common profits of the association;

[(h)] (j) If a Class I planned community, provisions for establishing a reserve account and for the preparation, review and update of the reserve study as required by ORS 94.595;

[(i)] (k) Any restrictions on the alienation of lots. Any such restriction created by any document other than the declaration may be incorporated by reference to the official records of the county where the property is located;

[(j)] (L) A statement of the use, residential or otherwise, for which each lot is intended;

[(k)] (m) A statement as to whether or not the association pursuant to ORS 94.665 may sell, convey or subject to a security interest any portion of the common property and any limitation on such authority;

[(L)] (n) A statement of any restriction on the use, maintenance or occupancy of lots or units;

[(m)] (o) The method of amending the declaration and a statement of the percentage of votes required to approve an amendment of the declaration in accordance with ORS 94.590;

[(n)] (p) A description of any contemplated improvements which the declarant agrees to build, or a statement that the declarant does not agree to build any improvement or does not choose to limit declarant’s rights to add improvements not described in the declaration;

[(o)] (q) A statement of any period of declarant control or other special declarant rights reserved by the declarant under ORS 94.600;

[(p)] (r) A statement of the time at which the deed to the common property is to be delivered, whether by date or upon the occurrence of a stipulated event [if the deed is not to be delivered at the turnover meeting under ORS 94.616]; and

[(q)] (s) Any provisions restricting a right of the association with respect to the common property, or an individual lot owner with respect to the lot or improvements on the lot, including but not limited to:

(A) A right to divide the lot or to combine it with other lots;

(B) A right to repair or restore improvements on the lot at the owner’s discretion in the event of damage or destruction;

(C) The requirement for architectural controls, including but not limited to fencing, landscaping or choice of exterior colors and materials of structures to be placed on the common property or on a lot; and

(D) The requirement of review of any plans of any structure to be placed on the common property or a lot.

(3) If the declarant reserves the right to expand the planned community by annexing lots or common property or by creating additional lots or common property by developing existing property in the planned community, the declaration shall contain, in addition to the provisions required under subsections (1) and (2) of this section, a general description of the plan of development[,] including:

(a) The procedure by which the planned community will be expanded;

(b) The maximum number of lots and units to be included in the planned community or a statement that there is no limitation on the number of lots or units which the declarant may create or annex to the planned community;

(c) A general description of the nature and proposed use of any common property which the declarant agrees to create or annex to the planned community or a statement that there is no limitation on the right of the declarant to create or annex common property;

(d) The method of allocation of votes if additional lots are to be created or annexed to the planned community; and

(e) The formula to be used for reallocating the common expenses if additional lots are to be created or annexed to the planned community, and the manner of reapportioning the common expenses if lots are created or annexed during the fiscal year.

(4) If the declarant may withdraw property from the planned community, the declaration shall include in addition to the provisions required under subsections (1), (2) and (3) of this section:

(a) The procedure by which property will be withdrawn;

(b) A general description of the property which may be withdrawn from the planned community;

(d) The formula to be used for reallocating the common expenses if the property to be withdrawn has been assessed for common expenses prior to withdrawal; and

(e) The date after which the right to withdraw property from the planned community shall expire or a statement that such a right shall not expire.

SECTION 9. ORS 94.590 is amended to read:

94.590. (1)(a) The homeowners association may amend the declaration and the plat only by vote or agreement of the owners representing at least 75 percent of the total votes in the planned community or any larger percentage specified in the declaration.

(b) [In no event shall] An amendment under this section may not create, limit or diminish any special declarant rights, increase the number of lots or units or change the boundaries of any lot or any uses to which any lot or unit is restricted unless the owners of the affected lots unanimously consent to the amendment. [The declaration may provide that a percentage less than 75 percent of the votes of the planned community is required to amend the declaration for amendments relating to age restrictions, pet restrictions, limitations on the number of persons who may occupy units or limitations on the rental or leasing of units.]

(2)(a) Unless otherwise provided in the declaration, an amendment to the declaration may be proposed by a majority of the board of directors or by at least 30 percent of the owners in the planned community.

(b) When the association adopts an amendment to the declaration, the association shall record the amendment in the same place as the declaration. An amendment of the declaration is effective only upon recordation.

(3) Notwithstanding a provision in a declaration that requires amendments to be executed and acknowledged by all owners approving the amendment, amendments to a declaration under this section shall be executed[, recorded] and certified on behalf of the association by [any officer of the homeowners association designated for that purpose or, in the absence of designation, by the president of the board of directors of the association] the president and secretary as being adopted in accordance with the declaration and the provisions of this section and acknowledged in the manner provided for acknowledgment of deeds.

(4) An amendment to a declaration or plat shall be conclusively presumed to have been regularly adopted in compliance with all applicable procedures relating to such amendment unless an action is brought within one year after the date such amendment was recorded or the face of the recorded amendment indicates that the amendment received the approval of fewer votes than required for such approval. However, nothing in this subsection shall prevent the further amendment of an amended declaration or plat.

(5) During any period of declarant control, voting on an amendment under subsection (1) of this section shall be without regard to any weighted vote or special voting right reserved by the declarant except as otherwise provided under ORS 94.585. Nothing in this subsection is intended to prohibit a declarant from reserving the right to require the declarant’s consent to an amendment during the period reserved in the declaration for declarant control.

SECTION 10. ORS 94.595 is amended to read:

94.595. (1) The declarant shall:

(a) Conduct a reserve study described in subsection (3) of this section; and

(b) Establish a reserve account for replacement of all items of common property which will normally require replacement, in whole or in part, in more than three and less than 30 years, for exterior painting if the common property includes exterior painted surfaces, for other items, whether or not involving common property, if the association has responsibility to maintain the items[,] and for [such] other items [as may be] required by the declaration or bylaws. The reserve account need not include reserves for those items:

(A) [Those items] That could reasonably be funded from operating assessments; or

(B) For which one or more owners are responsible for maintenance and replacement under the provisions of the declaration or bylaws.

(2)(a) A reserve account established under this section shall be funded by assessments against the individual lots for maintenance of items for which the reserves are established.

(b) The assessments under this subsection begin accruing from the date the first lot assessed is conveyed. [The declarant may defer payment of the accrued assessment for a lot under this subsection until the date the lot is conveyed. The books and records of the homeowners association shall reflect the amount owing from the declarant for all reserve assessments.]

[(3) The amounts assessed shall take into account the estimated remaining life of the items for which the reserve is created and the current replacement cost of those items.]

[(4)] (3)(a) The reserve account shall be established in the name of the homeowners association. The association is responsible for administering the account and for making periodic payments into the account. [it. The association shall adjust the amount of the payments at least annually to reflect changes in current replacement costs over time.]

(b) The reserve portion of the initial assessment determined by the declarant shall be based on:

(A) The reserve study described in paragraph (c) of this subsection; or

(B) Other sources of reliable information.

(c) The board of directors of the association annually shall conduct a reserve study[,] or review and update an existing study[, of the common property components to determine the reserve account requirements. A reserve account shall be established for those items of common property all or part of which will normally require replacement in more than three and less than 30 years, for exterior painting if the common property includes exterior painted surfaces, and for the maintenance, repair or replacement of other items as may be required under the declaration or bylaws or that the board of directors, in its discretion, may deem appropriate. The reserve account need not include items that could reasonably be funded from operating assessments] to determine the reserve account requirements and may:

(A) Adjust the amount of payments as indicated by the study or update; and

(B) Provide for other reserve items that the board of directors, in its discretion, may deem appropriate.

(d) The reserve study shall include:

[(a)] (A) Identification of all items for which reserves are required to be established;

[(b)] (B) The estimated remaining useful life of each item as of the date of the reserve study;

[(c)] (C) The estimated cost of maintenance, repair or replacement of each item at the end of its useful life; and

[(d)] (D) A 30-year plan with regular and adequate contributions, adjusted by estimated inflation and interest earned on reserves, to meet the maintenance, repair and replacement schedule.

[(5)] (4)(a) If the declaration or bylaws require a reserve account, the reserve study requirements of subsection [(4)] (3) of this section first apply to the association of a subdivision that meets the definition of a planned community under ORS 94.550 and is recorded prior to October 23, 1999, [upon receipt of a written request from an owner or mortgagee of a lot that a reserve study be conducted.] when:

(A) The board of directors adopts a resolution in compliance with the bylaws that applies the requirements of subsection (3) of this section to the association; or

(B) A petition signed by a majority of owners is submitted to the board of directors mandating that the requirements of subsection (3) of this section apply to the association.

(b) A reserve study [under this subsection] shall be completed within one year of [the request] adoption of the resolution or submission of the petition to the board of directors.

[(6)] (5)(a) The reserve account may be used only for [maintenance, repair and replacement of common property] the purposes for which reserves have been established and is to be kept separate from other funds. [However,]

(b) After the individual lot owners have assumed responsibility for administration of the planned community under ORS 94.616, the board of directors may borrow funds from the reserve account to meet high seasonal demands on the regular operating funds or to meet [other temporary] unexpected increases in expenses. Funds borrowed [to meet temporary expenses] under this subsection must be repaid later from [special] assessments [or maintenance fees] if the board of directors has adopted a resolution, which may be an annual continuing resolution, authorizing the borrowing of funds. Not later than the adoption of the budget for the following year, the board of directors shall adopt by resolution a written payment plan providing for repayment of the borrowed funds within a reasonable period.

[(7)] (6) Nothing in this section prohibits prudent investment of reserve account funds subject to any constraints imposed by the declaration, bylaws or rules of the association.

[(8)] (7) In addition to the authority of the board of directors under subsection (3)(c) of this section, following the second year after the association has assumed administrative responsibility for the planned community under ORS 94.616[, if owners of lots representing]:

(a) By an affirmative vote of at least 75 percent of the [votes] owners of the planned community [agree to the action, they may vote to increase, reduce or eliminate], the association may elect to reduce or increase future assessments for the reserve account; and

(b) The association may, on an annual basis by a unanimous vote, elect not to fund the reserve account.

[(9)] (8) Assessments paid into the reserve account are the property of the association and are not refundable to sellers or owners of lots.

SECTION 11. ORS 94.616 is amended to read:

94.616. (1) At the meeting called under ORS 94.609, the declarant shall turn over to the homeowners association the responsibility for the administration of the planned community, and the association shall accept the administrative responsibility from the declarant.

(2) The owners shall elect a board of directors in accordance with the bylaws of the association.

(3) At the meeting, called under ORS 94.609, the declarant shall deliver to the association:

(a) The original or a photocopy of the recorded declaration and copies of the bylaws and the articles of incorporation, if any, of the planned community and any supplements and amendments to the articles or bylaws;

(b) A deed to the common property in the planned community, unless otherwise provided in the declaration;

(d) All rules and regulations adopted by the declarant;

(e) Resignations of officers and members of the board of directors who are required to resign because of the expiration of any period of declarant control reserved pursuant to ORS 94.600;

(f) A report on the present financial position of the association, consisting of a balance sheet and an income and expense statement for the 12-month period or a period following the recording of the declaration, whichever period is less;

(g) All funds of the association and control of the funds, including all bank records;

(h) All tangible personal property that is property of the association, and an inventory of the property;

(i) Records of all property tax payments for the common property to be administered by the association;

(j) Copies of any income tax returns filed by the declarant in the name of the association, and supporting records for the returns;

(k) All bank signature cards;

(L) The reserve account established in the name of the association under ORS 94.595;

(m) The reserve study described in ORS 94.595, including all updates and other sources of information that serve as a basis for calculating reserves in accordance with ORS 94.595;

(n) An operating budget for the portion of the planned community turned over to association administration and a budget for replacement and maintenance of the common property;

(o) A copy of the following, if available:

(A) The as-built architectural, structural, engineering, mechanical, electrical and plumbing plans;

(B) The original specifications, indicating all subsequent material changes;

(C) The plans for underground site service, site grading, drainage and landscaping together with cable television drawings;

(D) Any other plans and information relevant to future repair or maintenance of the property; and

(E) A list of the general contractor and the electrical, heating and plumbing subcontractors responsible for construction or installation of common property;

(p) Insurance policies;

(q) Copies of any occupancy permits issued for the planned community;

(r) Any other permits issued by governmental bodies applicable to the planned community in force or issued within one year before the date on which the owners assume administrative responsibility;

(s) A list of any written warranties on the common property that are in effect and the names of the contractor, subcontractor or supplier who made the installation for which the warranty is in effect;

(t) A roster of owners and their addresses and telephone numbers, if known, as shown on the records of the declarant;

(u) Leases of the common property and any other leases to which the association is a party;

(v) Employment or service contracts in which the association is one of the contracting parties or service contracts in which the association or the owners have an obligation or responsibility, directly or indirectly, to pay some or all of the fee or charge of the person performing the service; and

(w) Any other contracts to which the homeowners association is a party.

(4) In order to facilitate an orderly transition, during the three-month period following the turnover meeting, the declarant or an informed representative shall be available to meet with the board of directors on at least three mutually acceptable dates to review the documents delivered under subsection (3) of this section.

(5) If the declarant has complied with this section and unless the declarant has sufficient voting rights as a lot owner to control the association, the declarant is not responsible for the failure of the owners to comply with subsection (1) of this section and the declarant is relieved from further responsibility for the administration of the association, except as a lot owner.

SECTION 12. ORS 94.625 is amended to read:

94.625. (1) Not later than the date on which the first lot in the planned community is conveyed, the declarant shall [form a corporation or unincorporated association and shall]:

(a) Organize the association as a nonprofit corporation under ORS chapter 65;

(b) Adopt, on behalf of the association, the initial bylaws required under ORS 94.635 to govern the administration of the planned community[.]; and

(c) Record the bylaws [may be recorded] in the office of the recording officer in each county in which the planned community is located.

(2) Unless otherwise provided in the bylaws, amendments to the bylaws may be proposed by a majority of the board of directors or by at least 30 percent of the owners of the planned community.

(3) Subject to subsection (4) of this section, an amendment is not effective unless the amendment is:

(a) Approved, unless otherwise provided in the bylaws, by a majority of the votes in a planned community present, in person or by proxy, at a duly constituted meeting or by ballot vote;

(b) Certified by the president and secretary of the association as having been adopted in accordance with the bylaws and this section; and

(c) Recorded in the office of the recording officer if the bylaws to which the amendment relates were recorded.

(4) If a provision required to be in the declaration under ORS 94.580 is included in the bylaws, the voting requirements for amending the declaration shall also govern the amendment of the provision in the bylaws.

(5) Failure to comply with subsection (1) of this section [shall] does not invalidate a conveyance from the declarant to an owner.

SECTION 13. ORS 94.630 is amended to read:

94.630. (1) [Except as provided in] Subject to subsection (2) of this section and except as otherwise provided in its declaration or bylaws, a homeowners association may:

(a) Adopt and amend bylaws, rules and regulations for the planned community;

(b) Adopt and amend budgets for revenues, expenditures and reserves, and collect assessments from owners for common expenses and the reserve account established under ORS 94.595;

(d) Defend against any claims, proceedings or actions brought against it;

(e) Subject to subsection (4) of this section, initiate or intervene in litigation or administrative proceedings in its own name and without joining the individual owners in the following:

(A) Matters relating to the collection of assessments and the enforcement of governing documents;

(B) Matters arising out of contracts to which the association is a party;

(C) Actions seeking equitable or other nonmonetary relief regarding matters that affect the common interests of the owners, including but not limited to the abatement of nuisance;

(D) Matters relating to or affecting common property, including but not limited to actions for damage, destruction, impairment or loss of use of any common property;

(E) Matters relating to or affecting the lots or interests of the owners including but not limited to damage, destruction, impairment or loss of use of a lot or portion thereof, if:

(i) Resulting from a nuisance or a defect in or damage to common property; or

(ii) Required to facilitate repair to any common property; and

(F) Any other matter to which the association has standing under law or pursuant to the declaration or bylaws;

(f) Make contracts and incur liabilities;

(g) Regulate the use, maintenance, repair, replacement and modification of common property;

(h) Cause additional improvements to be made as a part of the common property;

(i) Acquire, hold, encumber and convey in its own name any right, title or interest to real or personal property, except that common property may be conveyed or subjected to a security interest only pursuant to ORS 94.665;

(j) Grant easements, leases, licenses and concessions through or over the common property;

(k) Modify, close, remove, eliminate or discontinue the use of common property, including any improvement or landscaping, regardless of whether the common property is mentioned in the declaration, provided that:

(A) Nothing in this paragraph is intended to limit the authority of the association to seek approval of the modification, closure, removal, elimination or discontinuance by the owners; and

(B) Modification, closure, removal, elimination or discontinuance other than on a temporary basis of any swimming pool, spa or recreation or community building must be approved by at least a majority of owners voting on the matter at a meeting or by written ballot held in accordance with the declaration [or],bylaws or ORS 94.647;

(L) Impose and receive any payments, fees or charges for the use, rental or operation of the common property and services provided to owners;

(m) Adopt rules regarding the termination of utility services paid for out of assessments of the association and access to and use of recreational and service facilities available to owners and, after giving notice and an opportunity to be heard, terminate the rights of any owners to receive such benefits or services until the correction of any violation covered by such rule has occurred;

(n) Impose charges for late payment of assessments and attorney fees related to the collection of assessments and, after giving written notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws, [and] rules and regulations of the association if the charge imposed or the fine levied is based on a schedule contained in the declaration or bylaws, or an amendment to either that is delivered to each lot, mailed to the mailing address of each lot or mailed to the mailing addresses designated in writing by the owners, or based on a resolution of the association or its board of directors that is delivered to each lot, mailed to the mailing address of each lot or mailed to the mailing addresses designated in writing by the owners;

(o) Impose reasonable charges for the preparation and recordation of amendments to the declaration;

(p) Provide for the indemnification of its officers and the board of directors and maintain liability insurance for directors and officers;

(q) Assign its right to future income, including the right to receive common expense assessments; and

(r) Exercise any other powers necessary and proper for the administration and operation of the association.

(2) Notwithstanding subsection (1) of this section, a declaration may not impose any limitation on the ability of the association to deal with a declarant that is more restrictive than the limitations imposed on the ability of the association to deal with any other person, except during the period of declarant control under ORS 94.600.

(3) A permit or authorization, or an amendment, modification, termination or other instrument affecting a permit or authorization, issued by the board of directors that is authorized by law, the declaration or bylaws may be recorded in the deed records of the county in which the planned community is located. A permit or authorization, or an amendment, modification, termination or other instrument affecting a permit or authorization, recorded under this subsection shall:

(a) Be executed by the president and secretary of the association and acknowledged in the manner provided for acknowledgement of instruments by the officers;

(b) Include the name of the planned community and a reference to where the declaration and any applicable supplemental declarations are recorded;

(c) Identify, by the designations stated or referenced in the declaration or applicable supplemental declaration, all affected lots and common property; and

(d) Include other information and signatures if required by law, the declaration, bylaws or the board of directors.

(4)(a) Subject to paragraph (f) of this subsection, before initiating litigation or an administrative proceeding in which the association and an owner have an adversarial relationship, the party that intends to initiate litigation or an administrative proceeding shall offer to use any dispute resolution program available within the county in which the planned community is located that is in substantial compliance with the standards and guidelines adopted under ORS 36.175. The written offer must be hand-delivered or mailed by certified mail, return receipt requested, to the address, contained in the records of the association, for the other party.

(b) If the party receiving the offer does not accept the offer within 10 days after receipt by written notice hand-delivered or mailed by certified mail, return receipt requested, to the address, contained in the records of the association, for the other party, the initiating party may commence the litigation or the administrative proceeding. The notice of acceptance of the offer to participate in the program must contain the name, address and telephone number of the body administering the dispute resolution program.

(c) If a qualified dispute resolution program exists within the county in which the planned community is located and an offer to use the program is not made as required under paragraph (a) of this subsection, litigation or an administrative proceeding may be stayed for 30 days upon a motion of the noninitiating party. If the litigation or administrative action is stayed under this paragraph, both parties shall participate in the dispute resolution process.

(d) Unless a stay has been granted under paragraph (c) of this subsection, if the dispute resolution process is not completed within 30 days after receipt of the initial offer, the initiating party may commence litigation or an administrative proceeding without regard to whether the dispute resolution is completed.

(e) Once made, the decision of the court or administrative body arising from litigation or an administrative proceeding may not be set aside on the grounds that an offer to use a dispute resolution program was not made.

(f) The requirements of this subsection do not apply to circumstances in which irreparable harm to a party will occur due to delay or to litigation or an administrative proceeding initiated to collect assessments, other than assessments attributable to fines.

SECTION 14. ORS 94.635 is amended to read:

94.635. The bylaws of an association adopted under ORS 94.625, or amended or adopted under ORS 94.630, shall provide for the following:

(1) The organization of the association of owners in accordance with ORS 94.625 and 94.630, including when the initial meeting shall be held and the method of calling that meeting.

(2) If a Class I planned community, the formation of a transitional advisory committee in accordance with ORS 94.604.

(3) The turnover meeting required under ORS 94.609, including the time by which the meeting shall be called, the method of calling the meeting, the right of an owner under ORS 94.609 (3) to call the meeting and a statement of the purpose of the meeting.

(4)(a) The method of calling the annual meeting and all other meetings of the owners in accordance with ORS 94.650; and[,]

(b) [In accordance with ORS 94.655,] The percentage of votes that shall constitute a quorum[, if less than 20 percent].

(5)(a) The election of a board of directors from among the unit owners[,] and the number of persons constituting the board[,];

(b) The powers and duties of the board[,];

(c) Any compensation of the directors; and

(d) The method of removing directors from office in accordance with ORS 94.640 [(5)] (6).

(6) The terms of office of directors.

(7) The method of calling meetings of the board of directors in accordance with ORS 94.640 [(7)] (8) and a statement that all meetings of the board of directors shall be open to owners.

(8) The offices of president, secretary and treasurer and any other offices of the association, and the method of selecting and removing officers and filling vacancies in the offices.

(9) The preparation and adoption of a budget in accordance with ORS 94.645.

(10)(a) The program for maintenance, upkeep, [and] repair and replacement of the common property; [and]

(b) The method of payment for the expense of the program [including] and other expenses of the planned community; and

(c) The method of approving payment vouchers.

(11) The employment of personnel necessary for the administration of the planned community and maintenance, upkeep and repair of the common property.

(12) The manner of collecting assessments from the owners [their share of the common expenses].

(13) Insurance coverage in accordance with ORS 94.675 and 94.685.

(14) The preparation and distribution of the annual financial statement required under ORS 94.670.

(15) The method of adopting administrative rules and regulations governing the details for the operation of the planned community and use of the common property.

(16) The method of amending the bylaws [subject to this section] in accordance with ORS 94.630. The bylaws may require no greater than an affirmative majority of votes to amend any provision of the bylaws.

(17) If additional property is proposed to be annexed pursuant to ORS 94.580 (3), the method of apportioning common expenses if new lots are added during [the course of] the fiscal year.

(18) Any other details regarding the planned community that the declarant or the association consider desirable. However, if a provision required to be in the declaration under ORS 94.580 is included in the bylaws, the voting requirements for amending the declaration shall govern the amendment of that provision of the bylaws.

SECTION 15. ORS 94.640 is amended to read:

94.640. (1) The board of directors of an association may act on behalf of the association except as limited by the declaration and the bylaws. In the performance of their duties, officers and members of the board of directors shall exercise the care required of fiduciaries.

(2) Unless otherwise provided in the bylaws, the board of directors may fill vacancies in its membership for the unexpired portion of any term.

(3) At least annually, the board of directors of an association shall review the insurance coverage of the association.

(4) The board of directors of the association annually shall cause to be filed the necessary income tax returns for the association.

(5) The board of directors of the association may record a statement of association information as provided in ORS 94.667.

[(5)] (6) Unless otherwise provided in the declaration or bylaws, the owners may remove any member of the board of directors, other than members appointed by the declarant or persons who are ex officio directors, with or without cause, by a majority vote of all owners present and entitled to vote at any meeting of the owners at which a quorum is present. No removal of a director is effective unless the matter of removal is an item on the agenda and stated in the notice for the meeting required under ORS 94.650.

[(6)] (7)(a) All meetings of the board of directors of the association shall be open to owners, except that at the discretion of the board the following matters may be considered in executive session:

[(a)] (A) Consultation with legal counsel concerning the rights and duties of the association regarding existing or potential litigation, or criminal matters;

[(b)] (B) Personnel matters, including salary negotiations and employee discipline; and

[(c)] (C) The negotiation of contracts with third parties.

(b) Except in the case of an emergency, the board of directors of an association shall vote in an open meeting whether to meet in executive session. If the board of directors votes to meet in executive session, the presiding officer of the board of directors shall state the general nature of the action to be considered and, as precisely as possible, when and under what circumstances the deliberations can be disclosed to owners.

(c) The meeting and notice requirements in this section may not be circumvented by chance or social meetings or by any other means.

[(7)] (8) In a planned community in which the majority of the lots are the principal residences of the occupants, meetings shall be called as follows:

(a) For other than emergency meetings, notice of board of directors’ meetings shall be posted at a place or places on the property at least three days prior to the meeting or notice shall be provided by a method otherwise reasonably calculated to inform lot owners of such meetings;

(b) Emergency meetings may be held without notice, if the reason for the emergency is stated in the minutes of the meeting; and

[(8)] (9) The board of directors, in the name of the association, shall maintain a current mailing address of the association.

SECTION 16. ORS 94.647 is amended to read:

94.647. (1) Unless prohibited or limited by the declaration or bylaws, any action that may be taken at any annual, regular or special meeting of the homeowners association may be taken without a meeting if the association delivers a written ballot to every association member that is entitled to vote on the matter.

(2)(a) A written ballot shall set forth each proposed action and provide an opportunity to vote for or against each proposed action.

(b) The board of directors must provide owners with at least 10 days’ notice before written ballots are mailed or otherwise delivered. If, at least three days before written ballots are scheduled to be mailed or otherwise distributed, at least 10 percent of the owners petition the board of directors requesting secrecy procedures, a written ballot must be accompanied by a secrecy envelope, a return identification envelope to be signed by the owner and instructions for marking and returning the ballot. Notwithstanding the applicable provisions of subsection (3) or (4) of this section, written ballots that are returned in secrecy envelopes may not be examined or counted before the deadline for returning ballots has passed.

(3) Matters that may be voted on by written ballot shall be deemed approved or rejected as follows:

(a) If approval of a proposed action otherwise would require a meeting at which a certain quorum must be present and at which a certain percentage of total votes cast is required to authorize the action, the proposal shall be deemed to be approved when the date for the return of ballots has passed, a quorum of owners has voted and the required percentage of approving votes has been received. Otherwise, the proposal shall be deemed to be rejected; or

(b) If approval of a proposed action otherwise would require a meeting at which a specified percentage of owners must authorize the action, the proposal shall be deemed to be approved when the percentage of total votes cast in favor of the proposal equals or exceeds such required percentage. The proposal shall be deemed to be rejected when the number of votes cast in opposition renders approval impossible or when both the date for return of ballots has passed and such required percentage has not been met. Unless otherwise prohibited by the declaration or bylaws, the votes may be counted from time to time before the final return date to determine whether the proposal has passed or failed by the votes already cast on the date they are counted.

(4) All solicitations for votes by written ballot shall state the following:

(a) If approval of a proposal by written ballot requires that the total number of votes cast equal or exceed a certain quorum requirement, the number of responses needed to meet such quorum requirement; and

(b) If approval of a proposal by written ballot requires that a certain percentage of total votes cast approve the proposal, the required percentage of total votes needed for approval.

(5) All solicitations for votes by written ballot shall specify the period during which the association shall accept written ballots for counting, which period shall end on the earliest of the following dates:

(a) If approval of a proposed action by written ballot requires that a certain percentage of the owners approve the proposal, the date on which the association has received a sufficient number of approving ballots;

(b) If approval of a proposed action by written ballot requires that a certain percentage of the owners approve the proposal, the date on which the association has received a sufficient number of disapproving ballots to render approval impossible; or

(6) Except as otherwise provided in the declaration or bylaws, a written ballot may not be revoked.

SECTION 17. ORS 94.650 is amended to read:

94.650. (1) The homeowners association shall hold at least one meeting of the owners each calendar year.

(2)(a) Special meetings of the association may be called by the president of the board of directors, a majority of the board of directors or a percentage of owners specified in the bylaws of the association. However, the bylaws may not require a percentage greater than 50 percent or less than 10 percent of the votes of the planned community for the purpose of calling a meeting.

(b) If the bylaws do not specify a percentage of owners that may call a special meeting, 30 percent or more of the owners may call a special meeting, notice of which shall be given as specified in this section.

(c) Business transacted at a special meeting shall be confined to the purposes stated in the notice.

(3) Not less than 10 or more than 50 days before any meeting called under this section, the secretary or other officer specified in the bylaws shall cause notice to be hand delivered or mailed to the mailing address of each lot or to the mailing address designated in writing by the owner, and to all mortgagees that have requested such notice. Mortgagees may designate a representative to attend a meeting called under this section.

(4) The notice of a meeting shall state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes or any proposal to remove a director or officer.

SECTION 18. ORS 94.662 is amended to read:

94.662. (1) At least 10 days prior to instituting any litigation or administrative proceeding to recover damages under ORS 94.630 (1)(e)(E), the homeowners association shall provide written notice to each affected owner of the association’s intent to seek damages on behalf of the owner. The notice shall, at a minimum:

(a) Be mailed to the mailing address of each lot or to the mailing address designated in writing to the association by the owner;

[(a)] (b) Inform each owner of the general nature of the litigation or proceeding;

[(b)] (c) Describe the specific nature of the damages to be sought on the owner’s behalf;

[(c)] (d) Set forth the terms under which the association is willing to seek damages on the owner’s behalf, including any mechanism proposed for the determination and distribution of any damages recovered;

[(d)] (e) Inform each owner of the owner’s right not to have the damages sought on the owner’s behalf and specify the procedure for exercising the right; and

[(e)] (f) Inform the owner that exercising the owner’s right not to have damages sought on the owner’s behalf:

(A) Relieves the association of its duty to reimburse or indemnify the owner for the damages;

(B) Does not relieve the owner from the owner’s obligation to pay dues or assessments relating to the litigation or proceeding;

(D) Does not interfere with the association’s right to make repairs to common areas.

(2) Within 10 days of mailing the notice described in this section, any owner may request in writing that the association not seek damages on the owner’s behalf. If an owner makes such a request, the association shall not make or continue any claim or action for damages with regard to the objecting owner’s lot and shall be relieved of any duty to reimburse or indemnify the owner for damages under the litigation or proceeding.

SECTION 19. ORS 94.667 is amended to read:

94.667. (1) As used in this section, “association” means an association formed under ORS 94.625, 94.846 or 100.405, or any other association in which a person holds membership by virtue of owning or possessing a real estate interest subject to assessment and lien authority pursuant to a recorded instrument.

(2) The board of directors or managing agent of an association may record with the county clerk for the county where the subject property is located a statement of association information. Subject to subsection (3) of this section, the statement shall contain at least the following information:

(a) The name of the association as identified in the recorded declaration, conditions, covenants and restrictions or other governing instrument, and the current name of the association, if different;

(b) The name, address and daytime telephone number of a managing agent or treasurer of the association or other person authorized to receive:

(A) Assessments and fees imposed by the association; or

(B) Notice of a transfer of property;

(d) Information identifying the recorded declaration, conditions, covenants and restrictions or other governing instrument, and a reference to where the instruments are recorded; and

(e) If an amended statement is being recorded, information identifying prior recorded statements.

(3) The statement may not include information for a purpose that is not related to the identification of the person specified in subsection (2)(b) of this section.

[(3)] (4) The county clerk may charge a fee for recording a statement under this section according to the provisions of ORS 205.320 (4).

SECTION 20. ORS 94.670 is amended to read:

94.670. (1) A homeowners association shall retain within this state the documents, information and records delivered to the association under ORS 94.616.

(2) All assessments, including declarant subsidies, shall be deposited in a separate bank account, located within this state, in the name of the association. All expenses of the association shall be paid from the association bank account.

(3) The association shall keep financial records sufficiently detailed for proper accounting purposes. Within 90 days after the end of the fiscal year, the board of directors shall distribute to each owner and, upon written request, any mortgagee of a lot, a copy of the annual financial statement consisting of a balance sheet and income and expenses statement for the preceding fiscal year.

(4)(a) The association shall provide, within 10 business days of receipt of a written request from an owner, a written statement that provides:

(A) The amount of assessments due from the owner and unpaid at the time the request was received, including:

(i) Regular and special assessments;

(ii) Fines and other charges;

(iii) Accrued interest; and

(iv) Late payment charges.

(B) The percentage rate at which interest accrues on assessments that are not paid when due.

(C) The percentage rate used to calculate the charges for late payment or the amount of a fixed charge for late payment.

(b) The association is not required to comply with paragraph (a) of this subsection if the association has commenced litigation by filing a complaint against the owner and the litigation is pending when the statement would otherwise be due.

[(4)] (5) The association shall make the documents, information and records described in subsections (1) and (3) of this section and all other records of the association reasonably available for examination by an owner and any mortgagee of a lot. Upon the written request of an owner or mortgagee of a lot, the association shall make available during reasonable hours all such records for duplication. The documents, information and records described in subsections (1) and (3) of this section and all other records of the association shall be located within this state. The association shall maintain a copy, suitable for the purpose of duplication, of the following:

(a) The declaration, bylaws, association rules and regulations and any amendments or supplements to them.

(b) The most recent financial statement prepared pursuant to subsection (3) of this section.

[(5)] (6) Upon written request of a prospective purchaser, the association shall make available for examination and duplication during reasonable hours the documents and information specified in subsection [(4)] (5) of this section.

[(6)] (7) The association may charge a reasonable fee for furnishing copies of any documents, information or records described in this section. The fee may include reasonable personnel costs for furnishing the documents, information or records.

SECTION 21. ORS 94.704 is amended to read:

94.704. (1) Subject to subsection (2) of this section, the declarant of a planned community shall pay all common expenses of the planned community until the individual lots subject to assessment are assessed for common expenses.

(2) The declarant may defer payment of accrued assessments for reserves required under ORS 94.595 for a lot until the date the lot is conveyed. However, the declarant may not defer payment of accrued assessments for reserves:

(a) Beyond the date of the turnover meeting provided for in the bylaws in accordance with ORS 94.635 (3); or

(b) If a turnover meeting is not held, the date the owners assume administrative control of the association.

(3) Failure of the declarant to deposit the balance due within 30 days after the due date constitutes a violation of ORS 94.777.

(4) The books and records of the association shall reflect the amount the declarant owes for all reserve account assessments.

[(2)] (5)(a) Except for assessments under subsections [(3), (4) and (5)] (6), (7) and (8) of this section, the board of directors shall assess all common expenses against all the lots that are subject to assessment according to the allocations stated in the declaration.

(b) Any [common expense] assessment or any installment of the assessment past due shall bear interest at the rate established by resolution of the board of directors.

(c) Nothing in this section prohibits the board from making compromises on overdue assessments if the compromise benefits the association.

[(3)] (6) Any common expense or any part of a common expense benefiting fewer than all of the lots may be assessed exclusively against the lots or units benefited.

[(4)] (7) Assessments to pay a judgment against the association may be made only against the lots existing in the planned community at the time the judgment was entered and only in proportion to their common expense liabilities.

[(5)] (8) If the board of directors determines that any common expense is the fault of any owner, the homeowners association may assess the expense exclusively against the lot of the owner.

[(6)] (9) If the homeowners association reallocates common expense liabilities, any common expense assessment and any installment of the assessment not yet due shall be recalculated according to the reallocated common expense liabilities.

[(7)] (10)(a) A lot owner may not claim exemption from liability for contribution toward the common expenses by waiving the use or enjoyment of any of the common property or by abandoning the owner’s lot.

(b) An owner may not claim to offset an assessment for failure of the association to perform the association’s obligations.

[(8)] (11)(a) During any period of declarant control, any special assessment for capital improvements or additions must be approved by not less than 50 percent of the voting rights, or such greater percentage as may be specified in the declaration, without regard to any weighted right or special voting right in favor of the declarant.

(b) Nothing in this subsection is intended to prohibit a declarant from reserving a special declarant right to approve any such assessment.

NOTE: Section 22 was deleted by amendment. Subsequent sections were not renumbered.

SECTION 23. ORS 94.719 is amended to read:

94.719. Unless otherwise provided in the declaration or bylaws, in any suit or action brought by a homeowners association to foreclose its lien[,] or to collect delinquent assessments or in any suit or action brought by the declarant, the association or any owner or class of owners to enforce compliance with the terms and provisions of ORS 94.550 to 94.783, the declaration or bylaws, including all amendments and supplements thereto or any rules or regulations adopted by the association, the prevailing party shall be entitled to recover reasonable attorney fees therein and in any appeal therefrom.

SECTION 24. ORS 100.005 is amended to read:

100.005. As used in this chapter, unless the context requires otherwise:

(1) “Assessment” means any charge imposed or levied by the association of unit owners on or against a unit owner or unit pursuant to provisions of the declaration or the bylaws of the condominium or provisions of ORS 100.005 to 100.910.

(2) “Association of unit owners” means the association provided for under ORS 100.405.

(3) “Association property” means any real property or interest in real property acquired, held or possessed by the association under ORS 100.405.

(4) “Blanket encumbrance” means a trust deed or mortgage or any other lien or encumbrance, mechanic’s lien or otherwise, securing or evidencing the payment of money and affecting more than one unit in a condominium, or an agreement affecting more than one such unit by which the developer holds such condominium under an option, contract to sell or trust agreement.

(5) “Building” means a multiple-unit building or single-unit buildings, or any combination thereof, comprising a part of the property. “Building” also includes a floating structure described in ORS 100.020 (3)(b)(D).

(6) “Commissioner” means the Real Estate Commissioner.

(7) “Common elements” means the general common elements and the limited common elements.

(8) “Common expenses” means:

(a) Expenses of administration, maintenance, repair or replacement of the common elements;

(b) Expenses agreed upon as common by all the unit owners; and

(c) Expenses declared common by ORS 100.005 to 100.625 or by the declaration or the bylaws of the particular condominium.

(9) “Condominium” means:

(a) With respect to property located within this state:

(A) The land, if any, whether [leasehold or in] fee simple, leasehold, easement or other interest or combination thereof, and whether contiguous or noncontiguous;

(B) Any buildings, improvements and structures on the property; and

(C) Any easements, rights and appurtenances belonging to the property[, which are] submitted to the provisions of ORS 100.005 to 100.625; and

(b) With respect to property located outside this state, the property that has been committed to the condominium form of ownership in accordance with the jurisdiction within which the property is located.

(10) “Conversion condominium” means a condominium in which there is a building, improvement or structure that was occupied prior to any negotiation and that is:

(a) Residential in nature, at least in part; and

(b) Not wholly commercial or industrial, or commercial and industrial, in nature.

(11) “Declarant” means a person who [files] records a declaration under ORS 100.100 or a supplemental declaration under ORS 100.110.

(12) “Declaration” means the instrument described in ORS 100.100 by which the condominium is created and as modified by any amendment recorded in accordance with ORS 100.135 or supplemental declaration recorded in accordance with ORS 100.120.

(13) “Developer” means a declarant or any person who purchases an interest in a condominium from declarant, successor declarant or subsequent developer for the primary purpose of resale.

(14) “Dwelling unit,” “premises,” “rental agreement” and “tenant” mean those terms as defined in ORS 90.100.

(15) “Flexible condominium” means a condominium containing property that may be reclassified or withdrawn from the condominium pursuant to ORS 100.150 (1).

(16) “General common elements,” unless otherwise provided in a declaration, means all portions of the condominium that are not part of a unit or a limited common element, including but not limited to the following:

(a) The land, whether [leased or in] fee simple, [except any portion thereof included in a unit or made a limited common element by the declaration] leasehold, easement, other interest or combination thereof, together with any rights and appurtenances;

(b) The foundations, columns, girders, beams, supports, bearing and shear walls, roofs, halls, corridors, lobbies, stairs, fire escapes, entrances and exits of a building;

(d) Installations of central services such as power, light, gas, hot and cold water, heating, refrigeration, air conditioning, waste disposal and incinerating;

(e) The elevators, tanks, pumps, motors, fans, compressors, ducts and in general all apparatus and installations existing for common use;

(f) The premises for the lodging of janitors or caretakers of the property; and

(g) All other elements of a building and the condominium necessary or convenient to [its] their existence, maintenance and safety, or normally in common use.

(17) “Leasehold” means the interest of a person, firm or corporation who is the lessee under a lease from the owner in fee and who files a declaration creating a condominium under ORS 100.100.

(18) “Limited common elements” means those common elements designated in the declaration, as reserved for the use of a certain unit or number of units, to the exclusion of the other units.

(19) “Majority” or “majority of unit owners” means more than 50 percent of the voting rights allocated to the units by the declaration.

(20) “Negotiation” means any activity preliminary to the execution by either developer or purchaser of a unit sales agreement, including but not limited to advertising, solicitation and promotion of the sale of a unit.

(21) “Nonwithdrawable property” means property which pursuant to ORS 100.150 (1)(b):

(a) Is designated nonwithdrawable in the declaration and on the plat; and

(b) Which may not be withdrawn from the condominium without the consent of all of the unit owners.

(22) [“Percentage” or] “Percent of [unit] owners” or “percentage of owners” means the percent of the voting rights determined under ORS 100.525.

(23) “Purchaser” means an actual or prospective purchaser of a condominium unit pursuant to a sale.

(24) “Recording officer” means the county officer charged with the duty of filing and recording deeds and mortgages or any other instruments or documents affecting the title to real property.

(25) “Reservation agreement” means an agreement relating to the future sale of a unit which is not binding on the purchaser and which grants purchaser the right to cancel the agreement without penalty and obtain a refund of any funds deposited at any time until purchaser executes a unit sales agreement.

(26) “Sale” includes every disposition or transfer of a condominium unit, or an interest or estate therein, by a developer, including the offering of the property as a prize or gift when a monetary charge or consideration for whatever purpose is required by the developer. “Interest or estate” includes a lessee’s interest in a unit for more than three years or less than three years if the interest may be renewed under the terms of the lease for a total period of more than three years. “Interest or estate” does not include any interest held for security purposes or a timeshare regulated or otherwise exempt under ORS 94.803 and 94.807 to 94.945.

(27) “Special declarant right” means any right, in addition to the regular rights of the declarant as a unit owner, reserved for the benefit of or created by the declarant under the declaration, bylaws or the provisions of this chapter.

(28) “Staged condominium” means a condominium which provides for annexation of additional property pursuant to ORS 100.115 and 100.120.

(29) “Successor declarant” means the transferee of any special declarant right.

(30) “Termination date” means that date described in ORS 100.105 (2)(b) or (7)(d).

(31) “Transitional committee” means the committee provided for under ORS 100.205.

(32) “Turnover meeting” means the meeting provided for under ORS 100.210.

(33) “Unit” or “condominium unit” means a part of the property which:

(a) Is described in ORS 100.020 (3);

(b) Is intended for any type of independent ownership; and

(34) “Unit designation” means the number, letter or combination thereof designating a unit in the declaration and on the plat.

(35) “Unit owner” means, except to the extent the declaration or bylaws provide otherwise, the person owning fee simple interest in a unit, the holder of a vendee’s interest in a unit under a recorded installment contract of sale and, in the case of a leasehold condominium, the holder of the leasehold estate in a unit.

(36) “Unit sales agreement” means a written offer or agreement for the sale of a condominium unit which when fully executed will be binding on all parties. “Unit sales agreement” includes but is not limited to an earnest money receipt and agreement to purchase and other such agreements which serve as an agreement of sale for a cash transaction or which are preliminary to the execution of an installment contract of sale, but does not include a reservation agreement.

(37) “Variable property” means property described in ORS 100.150 (2) and designated as variable property in the declaration and on the plat.

(38) “Voting rights” means the portion of the votes allocated to a unit by the declaration in accordance with ORS 100.105 [(1)(h)] (1)(i).

SECTION 25. ORS 100.020 is amended to read:

100.020. (1) Except as otherwise provided in subsections (2) and (3) of this section, ORS 100.100 to 100.625 apply only to property located within this state which a person elects to submit to the condominium form of ownership as provided in ORS 100.005 to 100.625.

(2) Unless the declarant elects otherwise, ORS 100.175, 100.185, 100.200 (2), 100.205, 100.210, 100.300, 100.305, 100.310, 100.315 and 100.320 apply only to condominiums that include units to be used for residential purposes.

(3) [No] Property may not be submitted to the condominium form of ownership under ORS 100.005 to 100.625 unless:

(a) Each unit has legal access to a public street or highway or, if the unit has such access only by virtue of common ownership with other units, the declaration executed under ORS 100.110 prohibits conveyance of the unit unless after conveyance the unit will continue to have legal access to a public street or highway; [and]

(b) Subject to paragraph (c) of this subsection, each unit consists of:

(A) A building or part of a building;

(B) A space used for the parking or storage of automobiles, trucks, boats, campers or other vehicles or equipment;

(D) A floating structure, including a structure formerly used as a ship or other vessel that:

(i) Is permanently moored to structures in a river, lake or other waterway pursuant to a long-term lease with a remaining term at the time the declaration and plat are recorded of not less than 15 years;

(ii) Contains two or more residential units with a combined floor space of not less than 2,000 square feet; and

(iii) Has upland common elements owned in fee or by leasehold having a remaining term of not less than the remaining term of the leasehold on the submerged or submersible land. The units in a condominium described in this subparagraph shall be considered real property for purposes of the Oregon Condominium Act; and

(c) Each unit has an interest in the common elements in accordance with ORS 100.515. However, a unit may not include any portion of the land. A declaration may not provide that there are no common elements.

(4) Except as otherwise provided in subsection (5) of this section, ORS 100.015 and 100.635 to 100.910 apply to condominiums having units to be used for residential purposes which are not offered for sale as a security pursuant to ORS 59.005 to 59.451, 59.660 to 59.830, 59.991 and 59.995.

(5) ORS 100.650, 100.660, 100.670, 100.675, 100.750, 100.770, 100.775, 100.780, 100.900, 100.905 and 100.990 apply to the sale of condominium units to be used for nonresidential purposes.

(6) The units in a condominium described in subsection (3)(b)(C) and (D) of this section shall be considered real property for purposes of this chapter.

SECTION 26. ORS 100.105 is amended to read:

100.105. (1) A declaration shall contain:

(a) A description of the property, including property on which a unit or a limited common element is located, whether held in fee simple, leasehold, easement or other interest or combination thereof, that is being submitted to the condominium form of ownership and that conforms to the description in the surveyor’s certificate provided under ORS 100.115 (2)[, whether leased or in fee simple].

(b) Subject to subsection (11) of this section, a statement of the interest in the property being submitted to the condominium form of ownership, whether fee simple, leasehold, easement or other interest or combination thereof.

[(b)] (c) Subject to subsection (5) of this section, the name by which the property shall be known and a general description of each unit and the building or buildings, including the number of stories and basements of each building, the total number of units and the principal materials of which they are constructed.

[(c)] (d) The unit designation, a statement that the location of each unit is shown on the plat, a description of the boundaries and area in square feet of each unit and any other data necessary for proper identification. The area of a unit shall be the same as shown for that unit on the plat described in ORS 100.115 (2).

[(d)] (e) A description of the general common elements.

[(e)] (f) An allocation to each unit of an undivided interest in the common elements in accordance with ORS 100.515 and the method used to establish the allocation.

[(f)] (g) The designation of any limited common elements including:

(A) A general statement of the nature of the limited common element;

(B) A statement of the unit to which the use of each limited common element is reserved, provided the statement is not a reference to an assignment of use specified on the plat; and

[(g)] (h) The method of determining liability for common expenses and right to common profits in accordance with ORS 100.530.

[(h)] (i) The voting rights allocated to each unit in accordance with ORS 100.525 or in the case of condominium units committed as property in a timeshare plan defined in ORS 94.803, the voting rights allocated in the timeshare instrument.

[(i)] (j) A statement of the use, residential or otherwise, for which the building or buildings and each of the units is intended.

[(j)] (k) A statement that the designated agent to receive service of process in cases provided in ORS 100.550 (1) is named in the Condominium Information Report which will be filed with the Real Estate Agency in accordance with ORS 100.250 (1)(a).

[(k)] (L) The method of amending the declaration and the percentage of voting rights required to approve an amendment of the declaration [if such percentage is greater than 75 percent] in accordance with ORS 100.135.

[(L)] (m) A statement as to whether or not the association pursuant to ORS 100.405 (5) and (8) has authority to grant leases, easements, rights of way, licenses and other similar interests affecting the general and limited common elements of the condominium and consent to vacation of roadways within and adjacent to the condominium.

[(m)] (n) If the condominium contains a floating structure described in ORS 100.020 (3), a statement regarding the authority of the board of directors of the association, subject to ORS 100.410, to temporarily relocate the floating structure without a majority vote of affected unit owners.

[(n)] (o) Any restrictions on alienation of units. Any such restrictions created by documents other than the declaration may be incorporated by reference in the declaration to the official records of the county in which the property is located.

[(o)] (p) Any other details regarding the property that the person executing the declaration considers desirable. However, if a provision required to be in the bylaws under ORS 100.415 is included in the declaration, the voting requirements for amending the bylaws shall also govern the amendment of the provision in the declaration.

(2) In the event the declarant proposes to annex additional property to the condominium under ORS 100.125, the declaration shall also contain a general description of the plan of development, including:

(a) The maximum number of units to be included in the condominium.

(b) The date after which any right to annex additional property will terminate.

(c) A general description of the nature and proposed use of any additional common elements which declarant proposes to annex to the condominium, if such common elements might substantially increase the proportionate amount of the common expenses payable by existing unit owners.

(d) A statement that the method used to establish the allocation of undivided interest in the common elements [of each unit], the method used to determine liability for common expenses and right to common profits and the method used to allocate voting rights for each unit annexed shall be as stated in the declaration in accordance with subsection (1)(f), (h) and (i) of this section.

(e) Such other information as the Real Estate Commissioner shall require in order to carry out the purposes of ORS 100.015, 100.635 to 100.730 and 100.740 to 100.910.

(3) Except where expressly prohibited by the declaration and subject to the requirements of ORS 100.135 (1) and subsections (9) and (10) of this section:

(a) Not later than two years following the termination [date] dates specified in [subsection] subsections (2)(b) and (7)(d) of this section, such termination [date] dates may be extended for a period not exceeding two years; and

(b) The general description under subsection (2)(c) of this section and the information included in the declaration in accordance with subsection (7)(c), (g) and (h) of this section may be changed by an amendment to the declaration.

(4) The information included in the declaration in accordance with subsection (2)(a) and (d) of this section and subsection (7)(a), (b), [(d),] (e), (f) and (k) of this section may not be changed unless all owners agree to the change and record an amendment to the declaration in accordance with this chapter.

(5) The name of the property shall include the word “condominium” or “condominiums” or the words “a condominium.”

(6) [No] A condominium [shall] may not bear a name which is the same as or deceptively similar to the name of any other condominium located in the same county.

(7) If the condominium is a flexible condominium containing variable property, the declaration shall also contain a general description of the plan of development, including:

(a) A statement that the rights provided for under ORS 100.150 (1) are being reserved.

(b) A statement:

(A) Of any limitations on rights reserved under ORS 100.150 (1), including whether the consent of any unit owner shall be required, and if so, a statement of the method by which the consent shall be ascertained; or

(B) That there are no limitations on rights reserved under ORS 100.150 (1).

(c) [A metes and bounds legal description of all] A statement of the total number of tracts of variable property within the condominium[. If there is more than one parcel, a metes and bounds legal description for each parcel and], including:

(A) A designation of each tract as withdrawable or nonwithdrawable variable property;

(B) Identification of each variable tract by a label in accordance with ORS 100.115 (2)(i);

(C) A statement of the method of labeling each [parcel] tract depicted on the plat in accordance with ORS 100.115 (2)(i)[(B)]; and

(D) A statement of the total number of tracts of each type of variable property.

(d) The termination date, which is the date or time period after which any right reserved under ORS 100.150 (1) will terminate, and a statement of the circumstances, if any, that will terminate any right on or before the date or time period specified. The date or time period may not exceed seven years from the recording of the conveyance of the first unit in the condominium to a person other than the declarant. Recording shall be in the county in which the property is located.

(e) The maximum number of units that may be created.

(f) A statement that the method used to establish the allocations of undivided interest in the common elements [of each unit], the method used to determine liability for common expenses and right to common profits and the method used to allocate voting rights as additional units are created shall be the same as stated in the declaration in accordance with subsection (1)(f), (h) and (i) of this section.

(g) A general description of all existing improvements and the nature and proposed use of any improvements that may be made on variable property if the improvements might substantially increase the proportionate amount of the common expenses payable by existing unit owners.

(h) A statement of whether or not the declarant reserves the right to create limited common elements within any variable property, and if so, a general description of the types that may be created.

(i) A statement that the plat shows the location and dimensions of all withdrawable variable property that is labeled “WITHDRAWABLE VARIABLE PROPERTY.”

[(i)] (j) A statement that if by the termination date all or a portion of the withdrawable variable property [not designated as nonwithdrawable variable property] has not been withdrawn or reclassified, [such] the withdrawable property shall automatically be withdrawn from the condominium as of [such] the termination date.

[(j)] (k) A statement of the rights of the association under ORS 100.155 (2).

[(k)] (L) A statement of whether or not all or any portion of the variable property may not be withdrawn from the condominium and, if so, with respect to [such] the nonwithdrawable variable property:

(A) A statement that the plat [shall show] shows the location and dimensions of all [such] nonwithdrawable property [which shall be] that is labeled “NONWITHDRAWABLE VARIABLE PROPERTY.”

[(B) A metes and bounds legal description of each parcel. If there is more than one parcel, a metes and bounds legal description for each parcel and a statement of the method of labeling each parcel depicted on the plat in accordance with ORS 100.115 (2)(i)(B).]

[(C)] (B) A description of all improvements that may be made and a statement of the intended use of each improvement.

[(D)] (C) A statement[,] that, if by the termination date[,] all or a portion of the variable property designated as “nonwithdrawable variable property” has not been reclassified, [such] the property shall automatically be reclassified as of [such] the termination date as a general common element of the condominium and any interest in such property held for security purposes shall be automatically extinguished by such classification.

[(E)] (D) A statement of the rights of the association under ORS 100.155 (3).

[(L)] (m) A statement by the local governing body or appropriate department thereof that the withdrawal of any variable property [not] designated as “[nonwithdrawable] withdrawable variable property” in the declaration in accordance with paragraph [(k)] (L) of this subsection, will not violate any applicable planning or zoning regulation or ordinance. The statement may be attached as an exhibit to the declaration.

(8) The plan of development for any variable property included in the declaration or any supplemental declaration of any stage in accordance with subsection (7) of this section shall be subject to any plan of development included in the declaration in accordance with subsection (2) of this section, except that the time limitation specified in subsection (7)(d) of this section shall govern any right reserved under ORS 100.150 (1) with respect to any variable property.

(9) The information included in the declaration in accordance with subsection (7)[(i), (j) and (L)] (j), (k) and (m) of this section may not be deleted by amendment.

(10) Approval by the unit owners shall not be required to redesignate variable property as “nonwithdrawable variable property” by supplemental declaration or amendment if such redesignation is required by the local governing body or appropriate department thereof to comply with any planning or zoning regulation or ordinance. If as a result of such redesignation the information required to be included in the supplemental declaration or an amendment under subsection [(7)(k)(C)] (7)(L)(B) of this section is inconsistent with the information included in the declaration or supplemental declaration in accordance with subsection (7)(g) of this section, an amendment to the declaration approved by at least 75 percent of [all voting rights] owners shall be required.

(11) The statement of an interest in property other than fee simple submitted to the condominium form of ownership and any easements, rights or appurtenances belonging to property submitted to the condominium form of ownership, whether leasehold or fee simple, shall include:

(a) A reference to the recording index numbers and date of recording of the instrument creating the interest; or

(b) A reference to the law, administrative rule, ordinance or regulation that creates the interest if the interest is created under law, administrative rule, ordinance or regulation and not recorded in the office of the recording officer of the county in which the property is located.

SECTION 27. ORS 100.110 is amended to read:

100.110. (1) Before a declaration, supplemental declaration or an amendment thereto may be recorded, it must be approved as provided in this section by the county assessor and the Real Estate Commissioner. Before a declaration or supplemental declaration may be recorded, it must be approved by the tax collector of the county in which the property is located. [No] A declaration or amendment thereto [shall] may not be approved unless the requirements of subsections (2) to (6) of this section are met. Approval shall be evidenced by execution of the declaration or amendment or by a written approval attached thereto.

(2) The county assessor of the county in which the property is located shall approve a declaration, supplemental declaration or amendment thereto if:

(a) The name complies with ORS 100.105 (5) and (6); and

(b) The plat and floor plans comply with the requirements of ORS 100.115.

(3) The tax collector of the county in which the property is located shall approve the declaration or supplemental declaration, or an amendment that adds property to the condominium or changes the boundary of a unit for which a plat is required under ORS 100.115 [(6)(a)] (9)(a), if:

(a) All ad valorem taxes, special assessments, fees, or other charges required by law to be placed upon the tax roll which have or will become a lien upon the property during the tax year have been paid;

(b) Advance payment of ad valorem taxes, special assessments, fees or other charges which are not on the tax roll and for which payment is required under paragraph (a) of this subsection has been made to the tax collector utilizing the procedures contained in ORS 92.095 and 311.370; and

(c) The additional taxes, penalty, and any interest attributable thereto, required because of disqualification of the property from any special assessment have been paid.

(4) Subject to subsection (5) of this section, the commissioner shall approve the declaration or amendment thereto if:

(a) The declaration or the amendment thereto complies with the requirements of ORS 100.105 and 100.135;

(b) The bylaws adopted under ORS 100.410 comply with the requirements of ORS 100.410 and 100.415; [and]

(d) The declaration is for a conversion condominium and the declarant has submitted:

(A) An affidavit that the notice of conversion was given in accordance with ORS 100.305 and that the notice period has expired;

(B) An affidavit that the notice of conversion was given in accordance with ORS 100.305 and copies of the written consent of any tenants who received the notice of conversion before expiration of the notice; or

(C) Any applicable combination of the requirements of subparagraphs (A) and (B) of this paragraph; and

(e) A paper copy of the plat executed by the declarant and prepared in conformance with ORS 100.115 and a certification of plat execution, on a form prescribed and furnished by the commissioner, have been submitted stating that the paper copy is a true copy of the plat signed by the declarant. The certification may be executed by the declarant, the professional land surveyor who signed the surveyor’s certificate on the plat, the attorney for the declarant, a representative of the title insurance company that issued the information required under ORS 100.640 (5) or 100.660 (2)(d) or another person authorized by the declarant in writing to execute the certification.

(5) Approval by the commissioner shall not be required for an amendment to a declaration transferring the right of use of a limited common element pursuant to ORS 100.515 (5).

(6) Before the commissioner approves the declaration or amendment thereto under this section:

(a) The declarant shall pay to the commissioner a fee determined by the commissioner under ORS 100.670; and

(b) For an amendment, the Condominium Information Report and the Annual Report described in ORS 100.260 shall be designated current by the Real Estate Agency as provided in ORS 100.255 and the fee required under ORS 100.670 shall be paid.

(7) If the declaration or amendment thereto approved by the commissioner under subsection (4) of this section is not recorded in accordance with ORS 100.115 within two years from the date of approval by the commissioner, the approval shall automatically expire and the declaration or amendment thereto must be resubmitted for approval in accordance with this section. The commissioner’s approval shall set forth the date on which the approval will expire.

SECTION 28. ORS 100.115 is amended to read:

100.115. (1) When a declaration or a supplemental declaration under ORS 100.125 is made and approved as required, it shall, upon the payment of the fees provided by law, be recorded by the recording officer. The fact of recording and the date thereof shall be entered thereon. At the time of recording [a] the declaration or supplemental declaration, the person offering it for record shall also file an exact copy, certified by the recording officer to be a true copy thereof, with the county assessor.

(2) A plat of the land described in the declaration or a supplemental plat described in a supplemental declaration, complying with ORS 92.050, 92.060 (1) and (2), 92.080 and 92.120, shall be recorded simultaneously with the declaration or supplemental declaration. Upon request, the person offering the plat or supplemental plat for recording shall also file an exact copy, certified by the surveyor who made the plat to be an exact copy of the plat, with the county assessor and the county surveyor. The exact copy shall be made on a suitable drafting material having the characteristics of strength, stability and transparency required by the county surveyor. The plat or supplemental plat, titled in accordance with subsection (4) of this section, shall:

(a) Show the location of:

(A) All buildings and public roads. The location shall be referenced to a point on the boundary of the property; and

(B) For a condominium containing units described in ORS 100.020 (3)(b)(C) or (D), the moorage space or floating structure. The location shall be referenced to a point on the boundary of the upland property regardless of a change in the location resulting from a fluctuation in the water level or flow.

(b) Show the designation, location, dimensions and area in square feet of each unit including:

(A) For units in a building described in ORS 100.020 (3)(b)(A), the horizontal and vertical boundaries of each unit and the common elements to which each unit has access. The vertical boundaries shall be referenced to a known benchmark elevation or other reference point as approved by the city or county surveyor;

(B) For a space described in ORS 100.020 (3)(b)(B), the horizontal boundaries of each unit and the common elements to which each unit has access. If the space is located within a structure, the vertical boundaries also shall be shown and referenced to a known benchmark elevation or other reference point as approved by the city or county surveyor;

(C) For a moorage space described in ORS 100.020 (3)(b)(C), the horizontal boundaries of each unit and the common elements to which each unit has access; and

(D) For a floating structure described in ORS 100.020 (3)(b)(D), the horizontal and vertical boundaries of each unit and the common elements to which each unit has access. The vertical boundaries shall be referenced to an assumed elevation of an identified point on the floating structure even though the assumed elevation may change with the fluctuation of the water level where the floating structure is moored.

(c) Identify and show, to the extent feasible, the location[,] and dimensions [and area in square feet] of all limited common elements described in the declaration. The plat [shall] may not include any statement indicating to which unit the use of any noncontiguous limited common element is reserved.

(d) Include a statement, including signature and official seal, of a registered architect, registered professional land surveyor or registered professional engineer certifying that the plat fully and accurately depicts the boundaries of the units of the building and that construction of the units and buildings as depicted on the plat has been completed, except that the professional land surveyor who prepared the plat need not affix a seal to the statement.

(e) Include a surveyor’s certificate, complying with ORS 92.070, that includes information in the declaration in accordance with ORS 100.105 (1)(a) and a metes and bounds description or other description approved by the city or county surveyor.

(f) Include a statement by the declarant that the property and improvements described and depicted on the plat are subject to the provisions of ORS 100.005 to 100.625.

(g) Include such signatures of approval as may be required by local ordinance or regulation.

(h) Include any other information or data not inconsistent with the declaration that the declarant desires to include.

(i) If the condominium is a flexible condominium, [also:]

[(A)] show the location and dimensions of all variable property [described] identified in the declaration and label [all such] the variable property as “WITHDRAWABLE VARIABLE PROPERTY[.]” or “NONWITHDRAWABLE VARIABLE PROPERTY,” with a letter different from those designating a unit, building or other tract of variable property. If there is more than one [parcel] tract, [label] each [parcel] tract shall be labeled in the same manner. [with letters or numbers different from those designating any unit, building or other parcel of variable property.]

[(B) If any of the variable property is nonwithdrawable, also show the location and dimensions of all nonwithdrawable variable property and label all such property as “NONWITHDRAWABLE PROPERTY.” If there is more than one parcel, label each parcel with letters or numbers different from those designating any unit, building, parcel or variable property or other parcel of “nonwithdrawable variable property.”]

(3) The supplemental plat required under ORS 100.150 (1) shall be recorded simultaneously with the supplemental declaration. Upon request, the person offering the supplemental plat for recording shall also file an exact copy, certified by the surveyor who made the plat to be an exact copy of the plat, with the county assessor and the county surveyor. The exact copy shall be made on a suitable drafting material having the characteristics of strength, stability and transparency required by the county surveyor. The supplemental plat, titled in accordance with subsection (4) of this section, shall:

(a) Comply with ORS 92.050, 92.060 (1), (2) and (4), 92.080, 92.120 and [subsection] subsections (4) and (5) of this section.

(b) If any property is withdrawn:

(A) Show the resulting perimeter boundaries of the condominium after the withdrawal; and

(B) Show the information required under subsection (2)(i) of this section as it relates to any remaining variable property.

(d) Include a “Declarant’s Statement” that the property described on the supplemental plat is reclassified or withdrawn from the condominium and that the condominium exists as described and depicted on the plat.

(e) Include a surveyor’s affidavit complying with ORS 92.070.

(4) The title of each supplemental plat described in ORS 100.120 shall include the complete name of the condominium, followed by the additional language specified in this subsection. Each supplemental plat for a condominium recorded on or after the effective date of this 2001 Act shall be numbered sequentially and shall:

(a) If property is annexed under ORS 100.125, include the words “Supplemental Plat No.___: Annexation of Stage; or

(b) If property is reclassified under ORS 100.150, include the words “Supplemental Plat No.___: Reclassification of Variable Property.

[(4)] (5) Before a plat or a supplemental plat may be recorded, it must be approved by the city or county surveyor as provided in ORS 92.100. Before approving the plat as required by this section, the city or county surveyor shall:

(a) Check the boundaries of the plat and units and [shall] take [such] measurements and make [such] computations [as are] necessary to determine that the plat complies with this section.

(b) Determine that the name complies with ORS 100.105 (5) and (6).

(c) Determine that the following are consistent:

(A) The designation and area in square feet of each unit shown on the plat and the unit designations and areas contained in the declaration in accordance with ORS 100.105 (1)(d);

(B) Limited common elements identified on the plat and the information contained in the declaration in accordance with ORS 100.105 (1)(g);

(C) The description of the property in the surveyor’s certificate included on the plat and the description contained in the declaration in accordance with ORS 100.105 (1)(a); and

(D) For a flexible condominium, the variable property depicted on the plat and the identification of the property contained in the declaration in accordance with ORS 100.105 (7)(c).

(6) The person offering the plat for approval shall:

(a) Submit a copy of the proposed declaration and bylaws or applicable supplemental declaration at the time the plat is submitted; and

(b) Submit the original or a copy of the executed declaration and bylaws or the applicable supplemental declaration approved by the commissioner if required by law prior to approval.

(7) For performing [that service] the services described in subsection (5)(a) to (c) of this section, the city surveyor or county surveyor shall collect from the person offering the plat for approval a fee of $150 plus $25 per building. The governing body of a city or county may establish a higher fee by resolution or order.

[(5)] (8)(a) Whenever variable property is reclassified or withdrawn as provided in ORS 100.155 (1) or (2) or property is removed as provided in ORS 100.600 (2), the county surveyor shall, upon the surveyor’s copy of all previously recorded plats relating to the variable property or property being removed and upon any copy thereof certified by the county clerk, trace, shade or make other appropriate marks or notations, including the date and the surveyor’s name or initials, with archival quality black ink in such manner as to denote the reclassification, withdrawal or removal. The recording index numbers and date of recording of the supplemental declaration and plat or amendment and amended plat shall also be referenced on the copy of each plat. The original plat may not be changed or corrected after the plat is recorded.

(b) For performing the activities described in this subsection, the county clerk shall collect a fee set by the county governing body. The county clerk shall also collect a fee set by the county governing body to be paid to the county surveyor for services provided under this [section] subsection.

[(6)] (9) In addition to the provisions of subsection [(7)] (10) of this section, a plat, including any floor plans that are a part of the plat, may be amended as provided in this subsection.

(a)(A) Except as otherwise provided in ORS 100.600, a change to the boundary of the property, a unit or a limited common element or a change to the configuration of other information required to be graphically depicted on the plat shall be made by a plat entitled “Plat Amendment” that shall reference in the title of the amendment the recording information of the original plat and any previous plat amendments.

(B) The plat amendment shall comply with ORS 92.050, 92.060 (1), (2) and (4), 92.080 and 92.120 and shall include:

(i) A graphic depiction of the change.

(ii) For a change to the boundary of the property, a surveyor’s certificate, complying with ORS 92.070.

(iii) For a change to a boundary of a unit or a limited common element or a change to other information required to be graphically depicted, the statement of a registered architect, registered professional land surveyor or registered professional engineer described in subsection (2)(d) of this section.

(iv) A declaration by the chairperson and secretary on behalf of the association of unit owners that the plat is being amended pursuant to this subsection. Such declaration shall be executed and acknowledged in the manner provided for acknowledgement of deeds.

(C) The plat amendment shall be accompanied by an amendment to the declaration authorizing such plat amendment. The declaration amendment shall be executed, approved and recorded in accordance with ORS 100.110 and 100.135.

(D) Before a plat amendment may be recorded, it must be approved by the city or county surveyor as provided in ORS 92.100. The surveyor shall approve the plat amendment if it complies with the requirements of this subsection. The person offering the plat amendment shall:

(i) Submit a copy of the proposed amendment to the declaration required under this paragraph when the plat amendment is submitted; and

(ii) Submit the original or a copy of the executed amendment to the declaration approved by the commissioner if required by law prior to approval of the plat amendment.

(E) Upon request, the person offering the plat amendment for recording shall also file an exact copy, certified by the surveyor who made the plat to be an exact copy of the plat amendment, with the county assessor and the county surveyor. The exact copy shall be made on suitable drafting material having the strength, stability and transparency required by the county surveyor.

(b)(A) A change to a restriction or other information not required to be graphically depicted on the plat may be made by amendment of the declaration without a plat amendment described in paragraph (a) of this subsection. An amendment under this paragraph shall include:

(i) A reference to recording index numbers and date of recording of the declaration, plat and any applicable supplemental declarations, amendments, supplemental plats or plat amendments.

(ii) A description of the change to the plat.

(iii) A statement that the amendment was approved in accordance with the declaration and ORS 110.135.

(B) The amendment shall be executed, approved and recorded in accordance with ORS 100.110 and 100.135.

(C) Before the amendment may be recorded, it must be approved by the city or county surveyor as provided in ORS 92.100. The surveyor shall approve the amendment if it complies with this subsection. Such approval shall be evidenced by execution of the amendment or by written approval attached thereto.

(c)(A) Floor plans of a condominium for which a plat was not required at the time of creation may be amended by an amendment to the declaration. An amendment under this paragraph shall include:

(i) A reference to recording index numbers and date of recording of the declaration and any applicable supplemental declarations or amendments.

(ii) A description of the change to the floor plans.

(iii) A graphic depiction of any change to the boundaries of a unit or common element and a statement by a registered architect, registered professional land surveyor or registered professional engineer certifying that such graphic depiction fully and accurately depicts the boundaries of the unit or common element as it currently exists.

(B) The amendment shall be approved and recorded in accordance with ORS 100.110 and 100.135 except that any change to the floor plans need only comply with the requirements of the unit ownership laws in effect at the time the floor plans were initially recorded.

(d) After recording of any declaration amendment or plat amendment pursuant to this subsection, the county surveyor shall, upon the surveyor’s copy of all previously recorded plats relating to the condominium and any copies filed under ORS 92.120 (3), make such appropriate marks or notations, including the date and the surveyor’s name or initials, with archival quality black ink in such manner as to denote the changes. The recording index numbers and date of recording of the declaration amendment and any plat amendment shall also be referenced on the copy of each plat. The original plat may not be changed or corrected after the plat is recorded. For performing the services described in this subsection, the county surveyor shall collect from the person offering the plat amendment or declaration amendment for approval a fee established by the county governing body.

[(7)] (10) The following may be amended by an affidavit of correction in accordance with ORS 92.170:

(a) A plat, whenever recorded.

(b) Floor plans recorded prior to October 15, 1983.

SECTION 29. ORS 100.120 is amended to read:

100.120. (1) To annex additional property to the condominium or to reclassify variable property under ORS 100.125 or 100.150, a supplemental declaration and a supplemental plat shall be executed, approved and recorded by declarant at the time of each annexation or reclassification. The supplemental plat shall comply with ORS 100.115 and [such] the supplemental declarations [and plats] shall:

(a) Include a reference to recording index numbers and date of recording of the initial declaration and bylaws.

[(a)] (b) Be consistent with the provisions of the original declaration prepared pursuant to ORS 100.105 and any prior recorded supplemental declarations.

[(b)] (c) Contain the information required by ORS 100.105 (1) insofar as that information relates to the property being annexed or reclassified.

[(c)] (d) State the allocation of undivided interest in the common elements of each unit previously submitted to the provisions of this chapter upon the creation or annexation of the additional property.

[(d)] (e) If the stage being annexed contains any variable property, include the information required under ORS 100.105 (7) insofar as that information relates to the property being annexed. The termination date shall be consistent with the information included in the declaration in accordance with ORS 100.105 (2)(b) but may not exceed seven years from the recording of the conveyance of the first unit in [the condominium] the stage to a person other than the declarant. Recording shall be in the county in which the property is located.

(2) If the Condominium Information Report and the Annual Report described in ORS 100.250 are designated current as provided in ORS 100.255, all such supplemental declarations and plats shall be approved, executed and recorded as provided in ORS 100.100, 100.110 and 100.115. No unit being annexed or created by a supplemental declaration shall be conveyed until after such recording.

(3) To withdraw all or a portion of variable property from a flexible condominium pursuant to ORS 100.150 (1)(b), a supplemental declaration and plat shall be recorded in accordance with subsection (2) of this section. The supplemental plat shall comply with ORS 100.115 (3) and the supplemental declaration shall:

(a) Be consistent with the provisions of the declaration or supplemental declaration drawn pursuant to ORS 100.105 (7).

(b) Include a metes and bounds legal description of the variable property being withdrawn.

(d) State whether or not any variable property remains which may be reclassified or withdrawn from the condominium and, if property may be withdrawn, include the statement required under ORS 100.105 [(7)(L)] (7)(m).

(e) If any variable property is being redesignated as “nonwithdrawable variable property,” include the information required under ORS 100.105 [(7)(k)] (7)(L).

(4) Except as provided in subsection (5) of this section, as to property submitted to unit ownership after October 4, 1977, additional units may not be added within [land] property previously submitted to unit ownership unless all unit owners consent to an amendment to the declaration, plat and any floor plans recorded pursuant to ORS 100.115 in order to provide for such additional units.

(5) As to property submitted to unit ownership before September 27, 1987, if the declaration provides that additional property may be annexed to the condominium, any subsequent stage may contain variable property. The termination date may not be later than the earlier of:

(a) The date specified in the declaration under ORS 100.105 (2)(b); or

(b) Seven years from the recording of the conveyance of the first unit in the condominium to a person other than the declarant. Recording shall be in the county in which the property is located.

SECTION 30. ORS 100.125 is amended to read:

100.125. Subject to ORS 100.120 (4), if the declaration complies with ORS 100.105 (2), until the termination date, additional property may be annexed to the condominium by the recording of a supplemental declaration and supplemental plat in accordance with ORS 100.115 and 100.120.

SECTION 31. ORS 100.135 is amended to read:

100.135. (1) Except as otherwise provided in ORS 100.005 to 100.625, an amendment of the declaration [shall] is not [be] effective unless:

(a) [Such] The amendment is approved by the unit owners as provided in this section and the Real Estate Commissioner and county assessor according to ORS 100.110; and

(b) [A copy of the declaration as amended or] The amendment [thereto], certified by the chairperson and secretary of the association of unit owners as being adopted in accordance with the declaration and the provisions of this section and acknowledged in the manner provided for acknowledgment of deeds, is recorded notwithstanding a provision in a declaration, including a declaration recorded before the effective date of this 2001 Act, that requires amendments to be executed and acknowledged by all owners approving the amendment.

(2) Except as otherwise provided in ORS 100.105, 100.130 or this section, the declaration may be amended only with the approval of at least 75 percent of [the unit] owners, or such greater percentage as may be required by the declaration.

(3) Unless the declaration requires a greater percentage:

(a) The declaration and plat may be amended to change a general common element to a limited common element or change the boundary of a limited common element with the approval of at least 75 percent of [the unit] owners and approval of the owners of all units to which the limited common element appertains.

(b) The declaration may be amended to change a limited common element, or portion thereof, to a general common element with the approval of the owners of all units to which the limited common element appertains and the board of directors.

(4)(a) Except as otherwise provided in ORS 100.120, 100.130, 100.515, 100.600, 100.605 and 100.625 and paragraph (b) of this subsection or other provisions of the Oregon Condominium Act, an amendment that changes the boundary of the property or a unit shall be approved by all unit owners. Such amendment shall constitute a conveyance and shall include words of conveyance. In addition to the certification required under subsection (1)(b) of this section, an amendment to the boundary of a unit shall also be executed by the owners of all affected units.

(b) An amendment that adds property owned by the association to the condominium as a common element shall constitute a conveyance and shall:

(A) Be approved by at least 75 percent of [the unit] owners;

(B) Contain words of conveyance;

(C) Be executed by the chairperson and secretary of the association on behalf of the unit owners and be certified in accordance with subsection (1)(b) of this section; and

(D) Be accompanied by a plat amendment in accordance with ORS 100.115.

(c) Nothing in paragraph (b) of this subsection is intended to require property acquired or held by the association pursuant to ORS 100.405 (4)(i) to be added to the condominium.

(5) Except as otherwise provided in ORS 100.005 to 100.625, no amendment may change the allocation of undivided interest in the common elements, method of determining liability for common expenses, right to common profits or voting rights of any unit unless such amendment has been approved by the owners of the affected units.

(6) The declaration may not be amended to limit or diminish any right of a declarant reserved under ORS 100.105 (2) or (7) or any other special declarant right without the consent of the declarant. However, the declarant may waive the declarant’s right of consent.

(7) Nothing in this section shall affect any other approval that may be required by the declaration, bylaws or other instrument.

(8) An amendment to a declaration or a supplemental declaration shall be conclusively presumed to have been regularly adopted in compliance with all applicable procedures relating to such amendment unless an action is brought within one year after the date such amendment was recorded or the face of the recorded amendment indicates that the amendment received the approval of fewer votes than are required for such approval. However, nothing in this subsection shall prevent the further amendment of an amended declaration or plat in accordance with ORS 100.005 to 100.625.

SECTION 32. ORS 100.150 is amended to read:

100.150. (1) With regard to a flexible condominium, before the termination date, and by recording a supplemental declaration and a supplemental plat in accordance with ORS 100.115 and 100.120, the declarant may:

(a) Reclassify all or a portion of the property designated as variable in the declaration and on the plat, as one or more general common elements, limited common elements, units or a combination of the elements and units.

(b) Unless designated in the declaration or on the plat as nonwithdrawable property, withdraw all or a portion of the variable property from the condominium.

(2) Until variable property is withdrawn or reclassified as provided in subsection (1) of this section or under ORS 100.155 (1):

(a) The property shall be a distinct classification of property and [shall] may not be a common element or unit of the condominium.

(b) The property shall be considered a parcel of real property[, whether leased or in fee simple,] and shall be subject to separate assessment and taxation by any taxing unit in like manner as other parcels of real property.

(A) The declarant shall be responsible for the payment of all assessments, taxes and other expenses of the variable property. If the declarant fails to pay any expenses of any variable property designated as nonwithdrawable variable property, the board of directors may elect to pay the expenses and assess the unit owners as a common expense. All costs incurred may be charged to the declarant.

(B) Ownership or occupancy of variable property shall not confer any right to use the common elements of the condominium.

(D) Variable property shall not be subject to assessments for expenses of the condominium.

SECTION 33. ORS 100.155 is amended to read:

100.155. (1) If by the termination date specified in the declaration there is any remaining variable property:

(a) Any property designated nonwithdrawable variable property shall become part of the common elements and any interest in such property held for security purposes shall be automatically extinguished by [such] reclassification[; and].

(b) Any property [not] designated [nonwithdrawable] withdrawable variable property shall be automatically withdrawn from the condominium as of [such] the termination date.

(c) Subject to paragraph (d) of this subsection, the association may record in the office of the recording officer in the county in which the condominium is located:

(A) For property reclassified under paragraph (a) of this subsection, a “Statement of Reclassification of Variable Property” stating that the remaining nonwithdrawable variable property has been reclassified to common elements pursuant to paragraph (a) of this subsection.

(B) For property withdrawn under paragraph (b) of this subsection, a “Statement of Withdrawal of Variable Property from Condominium” stating that remaining withdrawable variable property has been withdrawn from the condominium pursuant to paragraph (b) of this subsection.

(d) A statement described in paragraph (c) of this subsection shall:

(A) Include the name of the condominium, a reference to the recording index numbers and date of recording of the declaration, the plat creating the affected variable property and any applicable supplemental declaration.

(B) Include a description of the reclassified or withdrawn variable property complying with ORS 93.600.

(C) Be executed by the chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of deeds.

(e) After recording a statement under paragraph (c) of this subsection, the association shall provide a copy of the recorded statement to the county surveyor. Upon receipt of the copy or other notification, the county surveyor shall, upon the surveyor’s copy of all previously recorded plats relating to the condominium and any copies of the plat filed under ORS 92.120 (3), make appropriate marks and notations, including the date and the surveyor’s name or initials, with archival quality black ink in a manner that denotes the reclassification or withdrawal. The recording index numbers and date of recording of the statement shall also be referenced on the copy of each plat. The original plat may not be changed or corrected after it is recorded with the county clerk.

(2)(a) Unless expressly prohibited by the declaration, any variable property automatically withdrawn from the condominium under subsection (1)(b) of this section or voluntarily withdrawn under ORS 100.150 (1)(b) may be later annexed to the condominium by the recording of a supplemental declaration and plat in accordance with ORS 100.120 (2) if such action is first approved by at least 75 percent of all voting rights in the manner required for an amendment to the declaration.

(b) The supplemental declaration and plat shall be executed by the chairperson and secretary on behalf of the association and acknowledged in the manner provided for acknowledgment of deeds by such officers. Except for the termination date, the supplemental declaration shall comply with ORS 100.120 (1) and shall state that the annexation was approved by at least 75 percent of all voting rights.

(3)(a) Unless expressly prohibited by the declaration and notwithstanding the termination date, the association may, with respect to any variable property automatically reclassified, exercise any rights previously held by the declarant. The exercise of any right shall first be approved by at least a majority of all voting rights. All other actions relating to such reclassified general common elements shall be regulated and governed in like manner as other general common elements of the condominium.

(b) If a supplemental declaration and plat is required for any action, the plat shall be executed by the chairperson and secretary of the association and shall comply with the requirements of this chapter as to a supplemental declaration and the recording of plats.

(4) Title to any additional units created under subsection (3) of this section shall automatically be vested in the association upon the recording of a supplemental declaration and plat. The board of directors acting on behalf of the association shall have the power to hold, convey, lease, encumber or otherwise deal with a unit or any interest therein in like manner as other property owned by the association.

(5) The county clerk may charge a fee for recording a statement under this section according to provisions of ORS 205.320 (4).

SECTION 34. ORS 100.175 is amended to read:

100.175. (1) The declarant shall:

(a) Conduct a reserve study described in subsection (3) of this section; and

(b) Establish a reserve account for replacement of those common elements all or part of which will normally require replacement in more than three and less than 30 years, for exterior painting if the common elements include exterior painted surfaces, and for such other items as may be required by the declaration or bylaws. The reserve account need not include:

(A) [Those] Items that could reasonably be funded from operating assessments; or

(B) A reserve for limited common elements for which maintenance and replacement are the responsibility of one or more unit owners under the provisions of the declaration or bylaws.

(2)(a) The reserve account must be funded by assessments against the individual [unit assessed for maintenance of items] units for the purposes for which the reserve account is being established.

(b) The assessment under this subsection will accrue from the time of the conveyance of the first individual unit assessed as provided in ORS 100.530. [The declarant may elect to defer payment of the accrued assessment for a unit under this subsection until the time of conveyance of the unit. However, election by the declarant to defer payment of accrued assessment shall be limited to a period of three years from the date the declaration is recorded. The books and records of the association of unit owners shall reflect the amount owing from the declarant for all reserve assessments.]

[(3) The amount assessed shall take into account the estimated remaining life of the items for which the reserve is created and the current replacement cost of those items.]

[(4)] (3)(a) The reserve account shall be established in the name of the association of unit owners that will be responsible for administering the account and for making periodic payments into the account. [it. The amount of the payments shall be adjusted at least annually to recognize changes in current replacement costs over time.]

(b) The reserve portion of the initial assessment determined by the declarant shall be based on the following:

(A) The reserve study described in paragraph (c) of this subsection;

(B) In the case of a conversion condominium, the statement described in ORS 100.655 (1)(g); or

(C) Other reliable information.

(c) The board of directors of the association annually shall conduct a reserve study[,] or review and update an existing study[, of the common elements] to determine the reserve account requirements[. A reserve account shall be established for those items of the common elements all or part of which will normally require replacement in more than three and less than 30 years, for exterior painting if the common elements include exterior painted surfaces, and for the maintenance, repair or replacement of other items as may be required under the declaration or bylaws or that the board of directors, in its discretion, may deem appropriate. The reserve account need not include items that could reasonably be funded from operating assessments.] and may:

(A) Adjust the amount of payments in accordance with the study or review; and

(B) Provide for other reserve items that the board of directors, in its discretion, may deem appropriate.

(d) The reserve study shall include:

[(a)] (A) Identification of all items for which reserves are to be established;

[(b)] (B) The estimated remaining useful life of each item as of the date of the reserve study;

[(c)] (C) An estimated cost of maintenance, repair or replacement of each item at the end of its useful life; and

[(d)] (D) A 30-year plan with regular and adequate contributions, adjusted by estimated inflation and interest earned on reserves, to meet the maintenance, repair and replacement schedule.

[(5)] (4)(a) If the declaration or bylaws require a reserve account, the reserve study requirements of subsection [(4)] (3) of this section first apply to the association of a condominium recorded prior to October 23, 1999[, upon receipt by the board of directors of a written request from at least one owner or mortgagee of a unit that a reserve study be conducted.]:

(A) Upon adoption of a resolution by the board of directors in accordance with the bylaws providing that the requirements of subsection (3) of this section apply to the association; or

(B) Upon submission to the board of directors of a petition signed by a majority of unit owners mandating that the requirements of subsection (3) of this section apply to the association.

(b) The reserve study shall be completed within one year of the date of [the request] adoption of the resolution or submission of the petition to the board of directors.

[(6)] (5)(a) Except as provided in paragraph (b) of this subsection, the reserve account is to be used only for [maintenance, repair and replacement of common elements] the purposes for which reserves have been established and is to be kept separate from other funds. [However,]

(b) After the individual unit owners have assumed administrative responsibility for the association under ORS 100.210, the board of directors may borrow funds from the reserve account to meet high seasonal demands on the regular operating funds or to meet [other temporary] unexpected increases in expenses which will later be paid from [special] assessments [or maintenance fees] if the board of directors has adopted a resolution, which may be an annual continuing resolution, authorizing the borrowing of funds. Not later than the adoption of the budget for the following year, the board of directors shall adopt by resolution a written payment plan providing for repayment of the borrowed funds within a reasonable period.

[(7)] (6) Restrictions on the use of the reserve account do not prohibit its prudent investment subject to any constraints on investment of association funds imposed by the declaration, bylaws or rules of the association of unit owners.

[(8)] (7) Assessments paid into the reserve account are the property of the association of unit owners and are not refundable to sellers of units.

(8) In addition to the authority of the board of directors under subsection (3)(c) of this section, following turnover, the association may[,]:

(a) On an annual basis, elect not to fund the reserve account described in subsection (1) of this section by unanimous vote of the owners; or

(b) Elect to reduce or increase future assessments for the reserve account described in subsection (1) of this section by an affirmative vote of at least 75 percent of the owners.

SECTION 35. ORS 100.185 is amended to read:

100.185. (1) The declarant shall expressly warrant against defects in the plumbing, electrical, mechanical, structural, and all other components of the newly constructed units and common elements. Such warranty:

(a) Shall exist on a unit and the related limited common elements for not less than one year from the date of delivery of possession of that unit by the declarant to the first unit owner other than the declarant;

(b) Shall exist on the general common elements for not less than one year from the initial conveyance of title to a unit by the declarant to a unit owner other than the declarant, or, in the case of [property developed in stages] a staged or a flexible condominium, for not less than one year from such initial conveyance of title or completion of the construction of the specific general common element, whichever is later;

(d) Shall be separate from, and in addition to, any warranties provided by any other person;

(e) Shall be in lieu of any implied warranties by the declarant against defects in the plumbing, electrical, mechanical, structural or other components of any newly constructed unit or common elements; and

(f) Shall name the association of unit owners as an express beneficiary with regard to general common elements.

(2) A written claim reasonably specifying a breach of the warranty on the unit and the related limited common elements must be delivered to the declarant before the expiration of such warranty. A written claim reasonably specifying a breach of the warranty on the general common elements must be delivered to the declarant within two years of expiration of such warranty, but the claim must be for a defect existing prior to the expiration of such warranty under this section. An action to enforce such warranty shall not be commenced later than four years after expiration of such warranty.

(3) For the purposes of this section, “newly constructed units and common elements” means:

(a) Units and related limited common elements:

(A) That have been substantially completed for less than three years; and

(B) That have been occupied for less than 12 months.

(b) General common elements:

(A) That have been substantially completed for less than three years; and

(B) That were constructed contemporaneously with units that have been occupied for less than 12 months.

(4) The warranty required under subsection (1) of this section is not required for consumer products as defined in 15 United States Code 2301 (1).

SECTION 36. ORS 100.210 is amended to read:

100.210. (1) A turnover meeting shall be called by the declarant within 90 days of the expiration of any period of declarant control reserved in the declaration or bylaws under ORS 100.200. If no control has been reserved, the declarant shall call the turnover meeting within 90 days of the earlier of:

(a) In a single stage condominium, three years from the date of conveyance of the first unit to a person other than the declarant or conveyance of 50 percent of the units.

(b) In a staged or flexible condominium, seven years from the date of conveyance of the first unit to a person other than the declarant or conveyance to persons other than the declarant of 50 percent of the total number of units which the declarant may submit to the provisions of this chapter under ORS 100.125 or 100.150.

(2) The declarant shall give notice of the turnover meeting in accordance with the bylaws of the condominium to each unit owner at least [seven] 10 but not more than 50 days prior to the meeting. The notice shall state the purpose of the meeting and the time and place where it is to be held.

(3) If the meeting required under subsection (1) of this section is not called by the declarant within the time specified, the meeting may be called and notice given by a unit owner or any first mortgagee of a unit.

(4) At the turnover meeting:

(a) The declarant shall relinquish control of the administration of the association of unit owners and the unit owners shall assume the control;

(b) The unit owners shall elect a board of directors in accordance with the bylaws of the condominium; and

(5) At the turnover meeting the declarant shall deliver to the association all property of the unit owners and the association of unit owners held or controlled by the declarant including, but not limited to, the following items, if applicable:

(a) The original or a photocopy of the recorded declaration and bylaws of the condominium and any supplements and amendments thereto.

(b) A copy of the articles of incorporation.

(d) The reserve study, [and all] updates described in ORS 100.175 and other sources of information that serve as a basis for calculating reserves in accordance with ORS 100.175 (3).

(e) Any rules and regulations which have been promulgated.

(f) Resignations of officers and members of the board of directors who are required to resign because of the expiration of any period of declarant control reserved under ORS 100.200.

(g) A report of the present financial condition of the association of unit owners. The report shall consist of a balance sheet and an income and expense statement for the preceding 12-month period or the period following the recording of the declaration, whichever period is less.

(h) Association funds or control thereof, including, but not limited to, funds for reserve required under ORS 100.530 (3)(b) and any bank signature cards.

(i) All tangible personal property that is property of the association and an inventory of such property.

(j) A copy of the following, if available:

(A) The as-built architectural, structural, engineering, mechanical, electrical and plumbing plans.

(B) The original specifications indicating thereon all material changes.

(C) The plans for underground site service, site grading, drainage and landscaping together with cable television drawings.

(D) Any other plans and information relevant to future repair or maintenance of the property.

(k) Insurance policies.

(L) Copies of any occupancy permits which have been issued for the condominium.

(m) Any other permits issued by governmental bodies applicable to the condominium in force or issued within one year prior to the date the unit owners assume control of the administration of the association of unit owners.

(n) A list of the general contractor and the subcontractors responsible for construction or installation of the major plumbing, electrical, mechanical and structural components of the common elements.

(o) A roster of unit owners and their addresses and telephone numbers, if known, as shown on the records of the declarant.

(p) Leases of the common elements and any other leases to which the association is a party.

(q) Employment or service contracts in which the association is one of the contracting parties or service contracts in which the association or the unit owners have an obligation or responsibility, directly or indirectly, to pay some or all of the fee or charge of the person performing the service.

(r) Any other contracts to which the association of unit owners is a party.

(6) In order to facilitate an orderly transition, during the three-month period following the turnover meeting, the declarant or an informed representative shall be available to meet with the board of directors on at least three mutually acceptable dates to review the documents delivered under subsection (5) of this section.

(7) If the declarant has complied with this section, unless the declarant otherwise has sufficient voting rights as a unit owner to control the association, the declarant shall not be responsible for the failure of the unit owners to comply with subsection (4) of this section and the declarant shall be relieved of any further responsibility for the administration of the association except as a unit owner of any unsold unit.

SECTION 37. ORS 100.250 is amended to read:

100.250. (1) The following shall be delivered to the Real Estate Agency for filing on behalf of the association in accordance with ORS 100.260 (5):

(a) A Condominium Information Report described in ORS 100.260 (1) by the declarant not later than 90 days after the declaration is recorded under ORS 100.100 or by the board of directors if required under ORS 100.275.

(b) The Annual Report described in ORS 100.260 (2) by the declarant until the turnover meeting and the board of directors thereafter every year not later than the report date which shall be the anniversary date of filing the Condominium Information Report.

(c) An amendment to the reports required under this subsection by the declarant until the turnover meeting and the board of directors thereafter, within 30 days after there is a change in the information contained in a report.

(2) The Real Estate Agency shall collect the following fees for the documents delivered for filing:

______________________________________________________________________________

Document Fee

(a) Condominium Information

Report [$ 40] $100

(b) Annual Report [$ 45] $ 25

(d) Application for

Termination Statement [$ 45] $ 75

(e) Statement of Resignation [$ 45] $ 75

______________________________________________________________________________

(3) Any fee paid under subsection (2) of this section or ORS 100.275 may be a common expense of the condominium.

SECTION 38. ORS 100.260 is amended to read:

100.260. (1) The Condominium Information Report required under ORS 100.250 (1)(a) shall set forth:

(a) The name of the association;

(b) The name of the condominium and the county in which the condominium is located;

(d) The date the condominium declaration was recorded and the recording index numbers;

(e) The name and residence or business address, including the street and number, of the person designated as agent to receive service of process in cases provided in ORS 100.550 (1) and any other legal proceeding relating to the condominium or association; and

(f) The number and type of units as follows:

No.________ Living Units

No.________ Commercial/Office Units

No.________ Other (describe) __________

___________________________________

(2) The Annual Report required under ORS 100.250 (1)(b) shall set forth:

(a) The information required under subsection (1)(a), (b), (c) and (e) of this section;

(b) The names and addresses of the chairman and secretary of the association; and

(3) The amendment required under ORS 100.250 (1)(c) shall set forth:

(a) The name of the association as shown on the current records of the Real Estate Agency;

(b) The name of the condominium and county in which the condominium is located;

(d) If the current designated agent is to be changed, the name of the new designated agent and residence or business address, including the street and number, and a statement that the new agent has consented to the appointment.

(4) The filing by the Real Estate Agency of an amendment which changes the designated agent shall terminate the existing designated agent on the effective date of the filing and establish the newly appointed designated agent as that of the association.

(5) The reports and amendment described in this section and an application for termination described in ORS 100.280 shall be made on forms prescribed and furnished by the Real Estate Agency and must be accompanied by [one exact or conformed copy and] the correct filing fee and shall:

(a) Contain information current as of 30 days before delivery for filing;

(b) Be executed by the designated agent and until the turnover meeting by the declarant and thereafter by the chairman or secretary of the association;

(d) Contain any additional identifying information that the Real Estate Agency may require by rule.

SECTION 39. ORS 100.405 is amended to read:

100.405. (1)(a) An association of unit owners shall be organized to serve as a means through which the unit owners may take action with regard to the administration, management and operation of the condominium. The association shall be organized as a corporation for profit or nonprofit corporation or as an unincorporated association. If the association is incorporated, the name of the association shall include the complete name of the condominium.

(b) Unless otherwise provided in the declaration or bylaws, an unincorporated association may be incorporated if such action is approved by a majority of unit owners in person, by written ballot or by proxy at a meeting at which a quorum is present.

(2) Membership in the association of unit owners shall be limited to unit owners.

(3) The affairs of the association shall be governed by a board of directors as provided for in the bylaws adopted under ORS 100.410.

(4) Subject to the provisions of the condominium’s declaration and bylaws, and whether or not the association is unincorporated, the association may:

(a) Adopt and amend bylaws and rules and regulations;

(b) Adopt and amend budgets for revenues, expenditures and reserves and levy and collect assessments for common expenses from unit owners;

(d) Defend against any claims, proceedings or actions brought against it;

(e) Subject to subsection (11) of this section, initiate or intervene in litigation or administrative proceedings in its own name, and without joining the individual unit owners, in the following:

(A) Matters relating to the collection of assessments and the enforcement of governing documents;

(B) Matters arising out of contracts to which the association is a party;

(C) Actions seeking equitable or other nonmonetary relief regarding matters that affect the common interests of the unit owners, including but not limited to the abatement of nuisance;

(D) Matters relating to or affecting common elements, including but not limited to actions for damage, destruction, impairment or loss of use of any common element;

(E) Matters relating to or affecting the units or interests of unit owners including but not limited to damage, destruction, impairment or loss of use of a unit or portion thereof, if:

(i) Resulting from a nuisance or a defect in or damage to a common element; or

(ii) Required to facilitate repair to any common element; and

(F) Any other matter to which the association has standing under law or pursuant to the declaration, bylaws or any articles of incorporation;

(f) Make contracts and incur liabilities;

(g) Regulate the use, maintenance, repair, replacement and modification of common elements;

(h) Cause additional improvement to be made as a part of the common elements;

(i) Acquire by purchase, lease, devise, gift or voluntary grant real or personal property or any interest therein and take, hold, possess and dispose of real or personal property or any interest therein;

(j) Impose and receive any payments, fees or charges for the use, rental or operation of the common elements;

(k) Impose charges for late payments of assessments, attorney fees for collection of assessments and, after giving notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws and rules and regulations of the association if the charge imposed or fine levied is based on a schedule contained in the declaration or bylaws, or an amendment to either that is delivered to each unit, mailed to the mailing address of each unit or mailed to the mailing addresses designated in writing by the owners, or based on a resolution adopted by the board of directors or the association that is delivered to each unit, mailed to the mailing address of each unit or mailed to the mailing addresses designated by the owners in writing;

(L) Adopt rules regarding the termination of utility services paid for out of assessments of the association and access to and use of recreational and service facilities available to unit owners and, after giving written notice and an opportunity to be heard, terminate the rights of any owners to receive such benefits or services until the correction of any violation covered by such rule has occurred;

(m) Impose reasonable charges for the preparation and recordation of amendments to the declaration or statements of assessments;

(n) Assign its right to future income, including the right to receive common expense assessments;

(o) Provide for the indemnification of its officers and executive board, as may be limited by ORS 61.218 (3)(d) (1987 Replacement Part), and maintain directors’ and officers’ liability insurance;

(p) Exercise any other powers conferred by the declaration or bylaws;

(q) Exercise all other powers that may be exercised in this state by any such association; and

(r) Exercise any other powers determined by the association to be necessary and proper for the governance and operation of the association.

(5) Subject to subsection (6) of this section, unless expressly limited or prohibited by the declaration, the association has the authority to grant, execute, acknowledge, deliver and record on behalf of the unit owners leases, easements, rights of way, licenses and other similar interests affecting the general common elements and consent to vacation of roadways within and adjacent to the condominium.

(6) The granting of a lease, easement, right of way, license or other similar interest in excess of two years or consent pursuant to subsection (5) of this section shall be first approved by at least 75 percent of [the unit] owners. Unless the declaration otherwise provides, a grant of any such interest affecting the general common elements for a term of two years or less shall not be considered the granting of an interest for which approval by the unit owners is required under this subsection.

(7) The instrument granting an interest or consent pursuant to subsection (5) of this section shall be executed by the chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of such instruments by such officers and shall state that such grant or consent was approved, if appropriate, by at least 75 percent of [the unit] owners.

(8) Unless expressly prohibited by the declaration, any action permitted under subsections (5) and (6) of this section regarding a general common element may be taken with respect to any limited common element, provided that the owner of the unit to which the use of the limited common element is reserved and the holder of any mortgage or trust deed affecting the unit consent to the action and also execute an instrument as provided under subsection (7) of this section.

(9) Except as otherwise provided in the association’s declaration or bylaws, the board of directors of the association may modify, close, remove, eliminate or discontinue the use of a general common element facility or improvement or portion of the common element landscaping, regardless of whether such facility, improvement or landscaping is mentioned in the declaration or shown on the plat provided that:

(a) Nothing in this subsection shall be construed as limiting the authority of the board of directors, in its discretion, to seek approval of such modification, closure, removal, elimination or discontinuance by the unit owners; and

(b) Modification, closure, removal, elimination or discontinuance other than on a temporary basis of any swimming pool, spa or recreation or community building must be approved by at least a majority of the unit owners voting on such matter at a meeting or by written ballot [meeting] held in accordance with the declaration, [and] bylaws or ORS 100.425.

(10)(a) A permit or authorization issued by the board of directors pursuant to authority granted to the board under law, the declaration or the bylaws, may be recorded in the deed records of the county where the condominium is located. An instrument recorded under this subsection shall:

(A) Include the name of the condominium and a reference to where the declaration and any applicable supplemental declarations are recorded;

(B) Identify, by the designations stated in the declaration or applicable supplemental declaration, all affected units and common elements;

(C) Include such other information and signatures as may be required by law, under the declaration or bylaws or as the board of directors may desire; and

(D) Be executed by the chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of such instruments by the officers.

(b) The board of directors may record an amendment, modification, termination or other instrument relating to the permit or authorization described in this subsection. Any such instrument shall include a reference to the location of the recorded instrument and be executed by the chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of such instruments.

(11)(a) Subject to paragraph (f) of this subsection, before initiating litigation or an administrative proceeding in which the association and an owner have an adversarial relationship, the party that intends to initiate litigation or an administrative proceeding shall offer to use any dispute resolution program available within the county in which the condominium is located that is in substantial compliance with the standards and guidelines adopted under ORS 36.175. The written offer must be hand-delivered or mailed by certified mail, return receipt requested, to the address, contained in the records of the association, for the other party.

(c) If a qualified dispute resolution program exists within the county in which the condominium is located and an offer to use the program is not made as required under paragraph (a) of this subsection, litigation or an administrative proceeding may be stayed for 30 days upon a motion of the noninitiating party. If the litigation or administrative action is stayed under this paragraph, both parties shall participate in the dispute resolution process.

SECTION 40. ORS 100.410 is amended to read:

100.410. (1) The declarant shall adopt on behalf of the association the initial bylaws which shall govern the administration of the condominium. The bylaws shall be recorded simultaneously with the declaration [of the property to which the bylaws relate] as an exhibit or as a separate instrument.

(2) Unless otherwise provided in the declaration or bylaws, amendments to the bylaws may be proposed by a majority of the board of directors or by at least 30 percent of the owners.

[(2)] (3) Subject to subsections [(3)] (4) and [(4)] (5) of this section and ORS 100.415 (20), an amendment of the bylaws [shall] is not [be] effective unless approved by at least a majority of the unit owners and until a copy of [the bylaws as amended or] the amendment [thereto], certified by the [chairman] chairperson and secretary of the association of unit owners as being adopted in accordance with the bylaws and the provisions of this section, is recorded.

[(3)] (4) In condominiums which are exclusively residential[,]:

(a) The bylaws may not provide that greater than a majority is required to amend the bylaws except for amendments relating to age restrictions, pet restrictions, limitations on the number of persons who may occupy units and limitations on the rental or leasing of units.

(b) An amendment relating to a matter specified in paragraph (a) of this subsection is not effective unless approved by at least 75 percent of the owners or a greater percentage specified in the bylaws.

[(4)] (5) The bylaws may not be amended to limit or diminish any special declarant right without the consent of the declarant. However, the declarant may waive the declarant’s right of consent.

[(5)] (6) For five years after recording the initial bylaws, before any amended bylaws or amendment to a bylaw may be recorded, it must be approved by the Real Estate Commissioner. The commissioner shall approve such amendment if the requirements of ORS 100.415 and this section have been satisfied.

[(6)] (7) Before the commissioner approves amended bylaws or an amendment to a bylaw under this section, the person submitting the amended bylaws or amendment to a bylaw shall pay to the commissioner the fee provided by ORS 100.670.

SECTION 41. ORS 100.415 is amended to read:

100.415. The bylaws shall include a reference to the declaration to which the bylaws relate and shall provide for:

(1) The organization of the association of unit owners in accordance with ORS 100.405, when the initial meeting shall be held and the method of calling that meeting.

(2) If required under ORS 100.205, the formation of a transitional committee in accordance with such section.

(3) The turnover meeting required under ORS 100.210, including when the meeting shall be called, the method of calling the meeting, the right of a unit owner under ORS 100.210 (3) to call the meeting and a statement of the purpose of the meeting.

(4)(a) The method of calling the annual meeting and all other meetings of the unit owners in accordance with ORS 100.407[,]; and

(b) The percentage of owners that [shall constitute] constitutes a quorum.

(5)(a) The election from among the unit owners of a board of directors and the number of persons constituting the board;

(b) The terms of office of directors;

(c) The powers and duties of the board;

(d) The compensation, if any, of the directors; [and]

(e) The method of removal from office of directors; and

(f) The method of filling vacancies on the board.

(6) The method of calling meetings of the board of directors in accordance with ORS 100.420 and a statement that all meetings of the board of directors of the association of unit owners shall be open to unit owners.

(7) The election of a chairperson, a secretary, [and] a treasurer and any other officers of the association.

(8) The preparation and adoption of a budget in accordance with ORS 100.412.

(9)(a) The maintenance, [upkeep and] repair and replacement of the common elements and association property; [and]

(b) Payment for the expense [thereof including] of maintenance, repair and replacement of common elements and association property and other expenses of the condominium in accordance with ORS 100.530; and

(c) The method of approving payment vouchers.

(10) The employment of personnel necessary for the maintenance[, upkeep] and repair of the common elements.

(11) The manner of collecting assessments from the unit owners [their share of the common expenses].

(12) Insurance coverage in accordance with ORS 100.435.

(13) The preparation and distribution of the annual financial statement in accordance with ORS 100.480.

(14) The reserve account and the preparation, review and update of the reserve study required under ORS 100.175.

(15) The filing of an Annual Report and any amendment with the Real Estate Agency in accordance with ORS 100.250.

(16) The method of adopting and of amending administrative rules and regulations governing the details of the operation of the condominium and use of the common elements.

(17) [Such] Restrictions on and requirements respecting the enjoyment and maintenance of the units and the common elements as are designed to prevent unreasonable interference with the use of their respective units and of the common elements by the several unit owners.

(18) Any restrictions on use or occupancy of units. Any such restrictions created by documents other than the bylaws may be incorporated by reference in the bylaws to the official records of the county in which the property is located.

(19) The method of amending the bylaws [subject to] in accordance with ORS 100.410.

(20) Any other details regarding the property that the declarant considers desirable. However, if a provision required to be in the declaration under ORS 100.105 is included in the bylaws, the voting requirements for amending the declaration shall also govern the amendment of the provision in the bylaws.

(21) In the event additional units are proposed to be annexed or created pursuant to ORS 100.125 or 100.150, the method of apportioning common expenses in the event new units are added during the course of the fiscal year.

SECTION 42. ORS 100.417 is amended to read:

100.417. (1) The board of directors of an association of unit owners may act on behalf of the association except as limited by the declaration or bylaws. In the performance of their duties, officers and members of the board of directors shall exercise the care required of fiduciaries.

(2) Unless otherwise provided in the bylaws, the board of directors of an association may fill vacancies in its membership for the unexpired portion of any term.

(3) At least annually, the board of directors of an association shall review the insurance coverage of the association.

(4) The board of directors of the association annually shall cause to be filed the necessary income tax returns for the association.

(5) The board of directors of the association may record a statement of association information as provided in ORS 94.667.

[(5)] (6) Unless otherwise provided in the declaration or bylaws, the unit owners may remove any member of the board of directors of the association, other than members appointed by the declarant or persons who are ex officio directors, with or without cause, by a majority vote of all owners present and entitled to vote at any meeting of the owners at which a quorum is present. No removal of a member of the board of directors is effective unless the matter of removal is an item on the agenda and stated in the notice for the meeting required under ORS 100.407.

SECTION 43. ORS 100.420 is amended to read:

100.420. (1)(a) All meetings of the board of directors of the association of unit owners shall be open to unit owners except that, in the discretion of the board, the following matters may be considered in executive session:

[(a)] (A) Consultation with legal counsel concerning the rights and duties of the association regarding existing or potential litigation, or criminal matters;

[(b)] (B) Personnel matters, including salary negotiations and employee discipline; and

[(c)] (C) The negotiation of contracts with third parties.

(c) The meeting and notice requirements in this section may not be circumvented by chance or social meetings or by any other means.

(2) Except as provided in subsection (3) of this section, board of directors’ meetings may be conducted by telephonic communication.

(3) In condominiums where the majority of the units are the principal residences of the occupants:

(b) Only emergency meetings of the board of directors may be conducted by telephonic communication.

(4) Subsection (3)(a) of this section first applies to property submitted to the provisions of this chapter prior to October 3, 1979, upon receipt by the board of directors of the association of unit owners of a written request from at least one unit owner that notice of board of directors meetings be given in accordance with subsection (3)(a) of this section.

SECTION 44. ORS 100.425 is amended to read:

100.425. (1) Unless prohibited or limited by the declaration, articles of incorporation or bylaws, any action that may be taken at any annual, regular or special meeting of the association of unit owners may be taken without a meeting if the association delivers a written ballot to every association member that is entitled to vote on the matter.

(2)(a) A written ballot shall set forth each proposed action and provide an opportunity to vote for or against each proposed action.

(3) Matters that may be voted on by written ballot shall be deemed approved or rejected as follows:

(a) If approval of a proposed action otherwise would require a meeting at which a certain quorum must be present and at which a certain percentage of total votes cast is required to authorize the action, the proposal shall be deemed to be approved when the date for return of ballots has passed, a quorum of unit owners has voted and the required percentage of approving votes has been received. Otherwise, the proposal shall be deemed to be rejected; and

(b) If approval of a proposed action otherwise would require a meeting at which a specified percentage of unit owners must authorize the action, the proposal shall be deemed to be approved when the percentage of total votes cast in favor of the proposal equals or exceeds such required percentage. The proposal shall be deemed to be rejected when the number of votes cast in opposition renders approval impossible or when both the date for return of ballots has passed and such required percentage has not been met. Unless otherwise prohibited by the declaration, articles of incorporation or bylaws, the votes may be counted from time to time before the final return date to determine whether the proposal has passed or failed by the votes already cast on the date they are counted.

(4) All solicitations for votes by written ballot shall state the following:

(b) If approval of a proposal by written ballot requires that a certain percentage of total votes cast approve the proposal, the required percentage of total votes needed for approval.

(a) If approval of a proposed action by written ballot requires that a certain percentage of the unit owners approve the proposal, the date on which the association has received a sufficient number of approving ballots;

(b) If approval of a proposed action by written ballot requires that a certain percentage of the unit owners approve the proposal, the date on which the association has received a sufficient number of disapproving ballots to render approval impossible; and

(6) Except as otherwise provided in the declaration, articles of incorporation, or bylaws, a written ballot may not be revoked.

SECTION 45. ORS 100.445 is amended to read:

100.445. Where a leasehold interest is submitted to the provisions of this chapter, the master lease shall:

(1) Contain independent default clauses, the effect of which shall be that a unit owner cannot be evicted because the board of directors of the association of unit owners has defaulted so long as the unit owner has paid the pro rata share of the unit owner of the funds necessary to correct the default or because another unit owner has defaulted.

(2) Contain the procedure for the submission of the fee simple interest in the property to the condominium if the lease includes an option for the unit owners to purchase the fee simple interest.

(3) Be recorded in the office of the recording officer before the declaration for the property is recorded in accordance with ORS 100.100.

SECTION 46. ORS 100.470 is amended to read:

100.470. Unless otherwise provided in the declaration or bylaws, in any suit or action brought by an association of unit owners to foreclose its lien[,] or to collect delinquent assessments or in any suit or action brought by declarant, the association or any owner or class of owners to enforce compliance with the terms and provisions of the Oregon Condominium Act, the condominium declaration or bylaws, including all amendments and supplements thereto or any rules or regulations adopted by the association, the prevailing party shall be entitled to recover reasonable attorney fees therein and in any appeal therefrom.

SECTION 47. ORS 100.480 is amended to read:

100.480. (1) The association of unit owners shall retain within this state the documents, information and records delivered to the association under ORS 100.210.

(2) The association of unit owners shall keep financial records sufficient for proper accounting purposes. All assessments shall be deposited in a separate bank account, located within this state, in the name of the association. All expenses of the association shall be paid from the association bank account.

(3) Within 90 days after the end of the fiscal year, the board of directors shall distribute to each unit owner a copy of the annual financial statement consisting of a balance sheet and income and expense statement for the preceding fiscal year.

(4)(a) The association shall provide, within 10 business days of receipt of a written request from an owner, a written statement that provides:

(A) The amount of assessments due from the owner and unpaid at the time the request was received, including:

(i) Regular and special assessments;

(ii) Fines and other charges;

(iii) Accrued interest; and

(iv) Late payment charges.

(B) The percentage rate at which interest accrues on assessments that are not paid when due.

(C) The percentage rate used to calculate the charges for late payment or the amount of a fixed charge for late payment.

[(4)] (5) The documents, information and records described in subsections (1) to (3) of this section and all other records of the association of unit owners shall be located within this state and shall be reasonably available for examination by a unit owner and any mortgagee of a unit. Upon the written request of an owner or mortgagee of a unit, the association shall make the documents, information and records described in subsections (1) to (3) of this section and other records available for duplication during reasonable hours. The association of unit owners shall maintain a copy, suitable for the purpose of duplication, of the following:

(a) The declaration, bylaws, association rules and regulations and any amendments or supplements thereto;

(b) The most recent annual financial statement prepared in accordance with subsection (3) of this section; and

[(5)] (6) Upon the written request of a prospective purchaser, the association of unit owners shall make available for examination and duplication during reasonable hours the documents and information specified in subsection [(4)] (5) of this section.

[(6)] (7) The association of unit owners may charge a reasonable fee for furnishing copies of any documents, information or records described in this section. The fee may include reasonable personnel costs incurred to furnish the information.

[(7)] (8) Subsection (3) of this section first applies to property submitted to the provisions of this chapter before January 1, 1982, when the board of directors of the association of unit owners receives a written request from at least one unit owner that a copy of the annual financial statement be distributed in accordance with subsection (3) of this section.

SECTION 48. ORS 100.490 is amended to read:

100.490. (1) At least 10 days prior to instituting any litigation or administrative proceeding to recover damages under ORS 100.405 (4)(e)(E), the association of unit owners shall provide written notice to each affected owner of the association’s intent to seek damages on behalf of the owner. The notice shall, at a minimum:

(a) Be mailed to the mailing address of each unit or to the mailing addresses designated by the owners in writing to the association;

(b) Inform each owner of the general nature of the litigation or proceeding;

[(b)] (c) Describe the specific nature of the damages to be sought on the owner’s behalf;

[(d)] (e) Inform each owner of the owner’s right not to have the damages sought on the owner’s behalf and specify the procedure for exercising the right; and

[(e)] (f) Inform the owner that exercising the owner’s right not to have damages sought on the owner’s behalf:

(A) Relieves the association of its duty to reimburse or indemnify the owner for the damages;

(B) Does not relieve the owner from the owner’s obligation to pay dues or assessments relating to the litigation or proceeding;

(D) Does not interfere with the association’s right to make repairs to common elements.

(2) Within 10 days of mailing the notice described in this section, any owner may request in writing that the association not seek damages on the owner’s behalf. If an owner makes such a request, the association shall not make or continue any claim or action for damages with regard to the objecting owner’s unit or interest and shall be relieved of any duty to reimburse or indemnify the owner for damages under the litigation or proceeding.

SECTION 49. ORS 100.520 is amended to read:

100.520. (1) Except as otherwise provided in the declaration, each unit shall have an easement through each other unit and through the common elements for utility, wiring, heat, plumbing and other service elements, and for reasonable access required to effectuate and continue proper operation of the condominium.

[(1)] (2) Each unit and all common elements shall have an easement over all adjoining units and common elements for the purpose of accommodating any present or future encroachment as a result of engineering errors, construction, reconstruction, repairs, settlement, shifting, or movement of any portion of the property, or any other similar cause, and any encroachment due to building overhang or projection. There shall be valid easements for the maintenance of the encroaching units and common elements so long as the encroachments shall exist, and except as otherwise provided in subsection [(2)] (3) of this section, the rights and obligations of owners shall not be altered in any way by the encroachment.

[(2)] (3) The easement described under subsection [(1)] (2) of this section does not relieve a unit owner of liability in case of willful misconduct of a unit owner or relieve a declarant or any contractor, subcontractor or materialman of liability for failure to adhere to the plat and any floor plans recorded pursuant to ORS 100.115.

[(3)] (4) The encroachments described in subsection [(1)] (2) of this section shall not be construed to be encumbrances affecting the marketability of title to any unit.

SECTION 50. ORS 100.525 is amended to read:

100.525. (1) Unless otherwise provided in the declaration, each unit shall be entitled to one vote.

(2) Unless otherwise provided in the declaration or bylaws:

(a) An executor, administrator, guardian or trustee may vote, in person or by proxy, at a meeting of the association with respect to a unit owned or held in a fiduciary capacity, whether or not the same has been transferred to the fiduciary, if the person satisfies the secretary that the person is the executor, administrator, guardian or trustee holding the unit in a fiduciary capacity.

(b) Whenever a unit is owned by two or more persons jointly, according to the records of the association:

(A) Except as provided in this subsection, the vote or proxy of the unit may be exercised by any one of the owners present, in the absence of protest by a co-owner. In the event of a disagreement among the co-owners, the vote of the unit shall be disregarded completely in determining the proportion of votes given with respect to the matter.

(B) A valid court order may establish the right of co-owners’ authority to vote.

SECTION 51. ORS 100.530 is amended to read:

100.530. (1) Unless otherwise provided in the declaration, the common profits of the property shall be distributed among, and the common expenses shall be charged to, the unit owners according to the allocation of undivided interest of each unit in the common elements.

(2) No unit owner by the owner’s own action may claim exemption from liability for contribution towards the common expenses by waiver by the owner of the use or enjoyment of any of the common elements or by abandonment by the owner of the owner’s unit. An owner may not claim an offset against an assessment for failure of the association to perform its obligations.

(3) Subject to subsection (4) of this section[, from the date of conveyance of the first unit, the declarant shall]:

(a) The declarant shall pay assessments due for operating expenses on all unsold units:

(A) From the date of conveyance of the first unit in the condominium; and

(B) For a staged or flexible condominium, from the date of recording the applicable supplemental declaration and supplemental plat recorded pursuant to ORS 100.120[; and].

(b) From the date of conveyance of the first unit in the condominium, the declarant shall pay assessments due for reserves on all unsold units[, or, at the declarant’s option, pay or require the unit owner to pay all accrued reserve assessments against the unit at the time of the initial sale to the unit owner].

(c) The declarant may defer payment of accrued assessments for reserves required under ORS 100.175 for a unit until the date the unit is conveyed. However, the declarant may not defer payment of accrued assessments for reserves:

(A) Beyond the date of the turnover meeting provided for in the bylaws in accordance with ORS 100.210; or

(B) If a turnover meeting is not held, the date the owners assume administrative control of the association.

(d) Failure of the declarant to deposit the balance due within 30 days after the due date constitutes a violation under ORS 100.545.

(e) The books and records of the association shall reflect the amount the declarant owes for all reserve account assessments.

(4)(a) The association shall not assess units owned by the declarant for additional capital improvements without the written consent of the declarant as long as:

(A) In a single stage condominium, the declarant owns more than two units or five percent of the units, whichever is greater.

(B) In a staged or flexible condominium, the declarant owns more than two units or five percent of the units submitted to the provisions of this chapter, whichever is greater, or the termination date has not expired.

(b) The declarant may waive the declarant’s right of consent provided in paragraph (a) of this subsection.

(5)(a) Except with respect to assessments for reserves required by ORS 100.175, a declaration or bylaws may provide that, until the turnover meeting, the declarant may elect to defer commencement of all or part of common expense assessments as to all units in a condominium or as to all units in a stage of a condominium [and] or as to all units created by a supplemental declaration and plat pursuant to ORS 100.150.

(b) If a declarant so elects to defer commencement of all or part of common expense assessments, declarant shall pay as they accrue and be responsible for all or part of the common expenses attributable to the condominium or attributable to the stage of the condominium or the units and common elements created by such supplemental declaration and plat for which assessments have been deferred, until assessments commence for all common expenses.

(c) The declarant shall give not less than 10 days’ written notice to all affected unit owners prior to the commencement of common expense assessments if such a deferral occurs.

SECTION 52. ORS 100.555 is amended to read:

100.555. (1)(a) Each unit with its allocation of undivided interest in the common elements shall be considered a parcel of real property, whether [leased or in] fee simple, leasehold, easement or other interest or combination thereof, subject to separate assessment and taxation by any taxing unit in like manner as other parcels of real property. A unit [based upon] created by a declaration [filed by the owner of a leasehold estate] or supplemental declaration recorded with the recording officer under ORS 100.100 or 100.120 shall be assessed in the name of the unit owner. [and not in the name of the owner of the fee or of the leasehold estate upon which the declaration is based. Neither the building, the property nor any of]

(b) The common elements [shall] may not be considered a separate parcel for purposes of taxation.

(2) In determining the real market value of a unit with its undivided interest in the common elements, the county assessor may use the allocation of undivided interest in the common elements appertaining to a unit as expressed in the declaration. Determination of real market value of a unit based upon a leasehold estate shall be the same as a unit in fee simple. There shall be no diminution of value by reason of the term of said lease.

(3) Exemptions from executions and real property taxes apply to the owner of each unit or to the individual units, as the case may be.

(4) The Department of Revenue shall have the authority to make rules and regulations prescribing methods best calculated to secure uniformity according to law in the appraisal and assessment of units constituting part of a property submitted to the provisions of this chapter.

SECTION 53. ORS 100.640 is amended to read:

100.640. The following documents and information shall be submitted to the Real Estate Commissioner as part of the filing required under ORS 100.635:

(1) A copy of the proposed or recorded declaration or supplemental declaration of condominium ownership drawn in conformance with ORS 100.105 or 100.120, or the law applicable in the state where the condominium was created;

(2) A copy of the proposed or recorded bylaws drawn in conformance with ORS 100.415 or the law applicable in the state where the condominium was created;

(3) A copy of the full size plat prepared in conformance with ORS 100.115 (2) or the law applicable in the state where the condominium was created, or a copy of the site plan;

(4) A statement from the county assessor or county surveyor that the name for the condominium is acceptable under ORS 100.105 (6);

(5) A copy of a preliminary title report, title insurance policy or condominium guarantee that has been issued within the preceding 30 days, including a map showing the location of property described in the report, policy or guarantee or other evidence of title satisfactory to the commissioner;

(6) A copy of all restrictive covenants, reservations or other documents that may create an encumbrance on or limit the use of the property other than those restrictions contained in the declaration or bylaws;

(7) A copy of the reserve study required by ORS 100.175 and other sources of information that serve as a basis for calculating reserves in accordance with ORS 100.175 (3), unless the information is contained in the disclosure statement;

[(7)] (8) The following sample forms:

(a) Unit sales agreement, including the notice to purchaser of cancellation rights in accordance with ORS 100.730 and 100.740, the statement required by ORS 93.040 (1) and any warranty required under ORS 100.185; and

(b) A receipt for documents required under ORS 100.725;

[(8)] (9) If required by ORS 100.680:

(a) A copy of the escrow agreement drawn in conformance with ORS 100.680 and executed by both the declarant and the escrow agent. If individual escrow agreements or instructions are to be executed by the purchaser, other than the standard escrow instruction required by the escrow agent, submit sample form and a letter from the escrow agent, agreeing to the establishment of the escrows and the procedure set forth in the sample form; and

(b) A unit sales agreement drawn in conformance with ORS 100.680;

[(9)] (10) If any of the sales will be by means of an installment contract of sale:

(a) A copy of the escrow agreement or escrow instructions executed by the developer and the escrow agent providing for the establishment of collection escrows and the deposit of documents in accordance with ORS 100.720; and

(b) The proposed installment contract of sale form, if available;

[(10)] (11) Any other documents by which the purchasers will be bound;

[(11)] (12) Any report or disclosure statement issued for the condominium, by the federal government and any other state; and

[(12)] (13) A statement of any additional facts or information which the developer desires to submit to the commissioner.

SECTION 54. ORS 100.655 is amended to read:

100.655. (1) The disclosure statement submitted to the Real Estate Commissioner as part of a filing under ORS 100.635 shall contain the following information:

(a) The name and address of the condominium, and the name, address and telephone number of the developer;

(b) A general narrative description of the condominium stating the total number of units, a description of the types of units, the total number of units that may be included in the condominium pursuant to ORS 100.105 (2), and a precise statement of the nature of the interest which is being offered;

(A) The construction of the project is not completed, general disclosure of the status of construction and the actual or scheduled dates of completion of buildings, recreational facilities and other common elements, including a statement describing any recreational facilities or improvements to the common elements that the developer reserves the right to develop or promises to develop, or a statement that there are no such facilities or improvements; or

(B) The construction of the project is completed, the actual dates of completion of buildings, recreational facilities and other common elements if known by the developer;

(d) The nature and significant terms of any financing offered by the developer to purchasers of the condominium units;

(e) Copies of any warranties for structural elements and mechanical and other systems or a brief description of such warranties;

(f)(A) A current or projected budget of the association of unit owners for the operation and maintenance and any other common expenses of the condominium, including an amount for a subsidy of the association by the declarant, if any, by a contribution of funds, goods or services;

(B) A brief statement of the method of determining liability for common expenses and the right to common profits; and

(C) The following notice in at least [8-point] 14-point type that is either all capitals or boldface:

______________________________________________________________________________

NOTICE TO PROSPECTIVE PURCHASERS

THE PROJECTION OF THE BUDGET OF THE ASSOCIATION OF UNIT OWNERS FOR THE OPERATION AND MAINTENANCE AND OTHER COMMON EXPENSES OF THE CONDOMINIUM IS ONLY AN ESTIMATE, PREPARED WITH DUE CARE.

______________________________________________________________________________

(g) [A description of any provisions made in the budget of the condominium for reserves for capital expenditures for repair or replacement of common elements, including provisions required by ORS 100.175, and an explanation of the basis for such reserves] If a provision for reserves under ORS 100.175 is included in the budget disclosed under paragraph (f) of this subsection:

(A) A statement identifying the information constituting the basis for the reserve assessment under ORS 100.175 (3)(b); and

(B) A statement that the information constituting the basis for the reserve assessment identified under ORS 100.175 (3)(b) is available for review upon written request to the declarant or the designated person, unless included in the disclosure statement;

(h) In the case of a conversion condominium, a statement of:

(A) The present condition of all structural components and major mechanical and utility installations in the condominium, including the approximate date of construction and a reasonable estimate of the remaining useful life of, at a minimum, the roof, siding, plumbing, electrical, HVAC system, asphalt, sidewalks and decks;

(B) Whether or not the assessment of conditions under subparagraph (A) of this paragraph, which shall be in [8-point or larger] at least 14-point type that is all capitals or boldface, was prepared by a licensed engineer, architect or home inspector; and

(i) A cross-reference to the portions of the declaration, any supplemental declaration and bylaws containing the general power and authority of the board of directors, the method of apportionment of voting rights among the members of the association of unit owners and a statement of the nature and extent of control of the board of directors retained by the developer by voting rights or otherwise;

(j) A list of the documents by which purchasers may be bound, including the declaration, bylaws, ground leases, management agreement, easements, covenants, restrictions and conditions;

(k) A statement of whether there are any restrictions on alienation of units or any use or occupancy restrictions, such as limitations on residential or commercial use, pets, age of occupants or number of occupants, and a cross-reference to those portions of the declaration, any supplemental declaration, bylaws or any other document containing the principal provisions relating to those restrictions; and

(L) If the condominium is a staged condominium:

(A) Whether the declarant reserves the right to annex additional property to the condominium pursuant to ORS 100.125 and, if so:

(i) The maximum number of units;

(ii) The date after which annexation right terminates;

(iii) The description of additional common elements declarant reserves right to annex to the property and whether such common elements might substantially increase the proportionate amount of common expenses by current unit owners; and

(iv) The effect of annexation of additional units on allocation of interest in the common elements and voting rights.

(B) If the condominium or any stage being filed under ORS 100.635 contains or may contain any variable property, a statement of the rights reserved by the declarant under ORS 100.150 (1) and the results specified in ORS 100.155 if such rights are not exercised.

(2) In lieu of the disclosure statement required under subsection (1) of this section, the commissioner may accept a disclosure report issued or approved by another state or governmental agency.

(3) No disclosure statement is required for condominiums described in ORS 100.660.

(4) The declarant is not liable to the association or the owners with respect to a statement of condition or estimate of useful life contained in the disclosure statement if:

(a) The declarant did not have actual knowledge of any inaccuracies in the statement at the time of delivery of the disclosure statement to the purchaser; and

(b) The declarant relied upon reports prepared by licensed engineers or architects in making the statement.

SECTION 55. ORS 100.740 is amended to read:

100.740. (1) Subject to ORS 100.730 (8), a unit sales agreement shall contain, either upon the first page or upon a separate sheet attached to such first page, the following notice in at least [8-point] 14-point type that is all capitals or boldface:

______________________________________________________________________________

NOTICE TO PURCHASER

(RIGHT OF CANCELLATION)

BY SIGNING A UNIT SALES AGREEMENT YOU ARE INCURRING A CONTRACTUAL OBLIGATION TO PURCHASE AN INTEREST IN A CONDOMINIUM. HOWEVER, YOU HAVE THE RIGHT TO CANCEL THIS AGREEMENT FOR ANY REASON FOR FIVE BUSINESS DAYS (EXCLUDING SATURDAYS AND HOLIDAYS) AFTER WHICHEVER OF THE FOLLOWING IS LAST TO OCCUR:

(1) SIGNING BY THE PURCHASER OF THE UNIT SALES AGREEMENT;

(2) SIGNING BY THE PURCHASER OF THE RECEIPT FOR THE DISCLOSURE STATEMENT, IF ANY; OR

(3) SIGNING BY THE PURCHASER OF THE RECEIPT FOR A COPY OF THE CONDOMINIUM DECLARATION AND BYLAWS AND ANY AMENDMENTS OR SUPPLEMENTS THERETO AFFECTING THE UNIT.

TO CANCEL THIS AGREEMENT, YOU MUST GIVE WRITTEN NOTICE TO THE DEVELOPER OR THE AGENT OF THE DEVELOPER AT THE FOLLOWING ADDRESS:

____________________________________

(SUGGESTED PROCEDURE)

BEFORE EXECUTING THIS AGREEMENT, OR BEFORE THE CANCELLATION PERIOD ENDS, YOU SHOULD DO THE FOLLOWING:

(1) CAREFULLY EXAMINE THE DISCLOSURE STATEMENT, IF ANY, ISSUED BY THE REAL ESTATE COMMISSIONER ON THE CONDOMINIUM AND ALL ACCOMPANYING INFORMATION DELIVERED BY THE DEVELOPER. OREGON LAW REQUIRES THE DEVELOPER TO DELIVER TO YOU A COPY OF THE DECLARATION AND BYLAWS OF THE CONDOMINIUM AND ANY SUPPLEMENTS AND AMENDMENTS THERETO AFFECTING THE UNIT PRIOR TO THE TIME THE UNIT SALES AGREEMENT IS FULLY EXECUTED BY ALL PARTIES. A COPY OF THE DECLARATION AND BYLAWS, AND ANY SUPPLEMENTS AND AMENDMENTS THERETO, ARE AVAILABLE FROM THE ASSOCIATION FOR EXAMINATION AND DUPLICATION, AT A REASONABLE FEE, UPON YOUR WRITTEN REQUEST.

(2) INQUIRE OF YOUR LENDER WHETHER YOU CAN GET ADEQUATE FINANCING ON AN ACCEPTABLE BASIS.

(3) INQUIRE OF THE DEVELOPER AND THE LENDER WHAT THE AMOUNT OF THE CLOSING COSTS WILL BE.

OREGON LAW REQUIRES THAT YOU IMMEDIATELY BE GIVEN A COPY OF THIS NOTICE AND A COPY OF THE UNIT SALES AGREEMENT WHEN IT HAS BEEN FULLY EXECUTED BY ALL PARTIES.

______________________________________________________________________________

(2) Except as provided in ORS 100.665, a copy of the notice set forth in subsection (1) of this section shall be given to each purchaser at the time of or immediately following the purchaser’s signing of the unit sales agreement, for the use of the purchaser.

SECTION 56. ORS 100.785 is amended to read:

100.785. (1) Subject to the provisions of ORS 100.720, a condominium unit [shall] may not be [sold] conveyed by a developer subject to a blanket encumbrance [unless there exists in such blanket encumbrance or other supplementary agreement a provision which by its terms shall unconditionally provide that the purchaser of the unit can obtain legal title or other interest bargained for, free and clear of such blanket encumbrance, upon compliance with the terms and conditions of the contract by which such purchaser’s interest was acquired].

(2) [In lieu of the requirement of] Notwithstanding subsection (1) of this section, the developer shall conform to [such] an alternative requirement or method which the Real Estate Commissioner may deem acceptable to [carry into effect the intent and provisions] afford a purchaser the protection provided by the prohibition in subsection (1) of this section.

SECTION 57. Section 58 of this 2001 Act is added to and made a part of ORS chapter 100.

SECTION 58. Unless other rules of order are required by the declaration or bylaws or by a resolution of the association or its board of directors:

(1) Meetings of the association and the board of directors shall be conducted according to the latest edition of Robert’s Rules of Order published by the Robert’s Rules Association.

SECTION 59. ORS 94.673 is amended to read:

94.673. (1) The homeowners association of a subdivision that received preliminary plat approval before July 1, 1982, shall comply with the provisions of ORS 94.640 (1), (3), (4), [(6),] (7), (8) and (9) and 94.670 if:

(a) An owner submits a written request to the homeowners association to comply with the provisions;

(b) The subdivision otherwise conforms to the description of a planned community under ORS 94.550; and

(2) A homeowners association board of directors is not subject to ORS 94.780 unless the association fails to comply with subsection (1) of this section after receiving a written request from an owner.

SECTION 60. ORS 100.275 is amended to read:

100.275. (1) Subject to ORS 100.550 (3), ORS 100.250 to 100.280, including the filing of a Condominium Information Report described in ORS 100.260 (1), apply to property submitted to the provisions of this chapter before October 3, 1989, if:

(a) The board of directors of the association receives a written request to comply with such sections from at least one unit owner or holder of a first mortgage or deed of trust on a unit;

(b) The board of directors of the association adopts a resolution to comply with such sections in accordance with the bylaws;

(c) The association is a party to a suit or action, the person designated in the declaration under ORS 100.105 [(1)(j)] (1)(k), the chairman or secretary receives written notice to comply with such sections from any other party to such suit or action. A copy of the notice shall be delivered to the Real Estate Agency. The Real Estate Agency shall provide a copy of the filed report to the requesting party and may charge the association a fee for cost of such action. If the association fails to deliver for filing such report, the provisions of ORS 100.265 (3) shall apply; or

(d) A filing is required to comply with the requirements of ORS 100.120, 100.135 or 100.450.

(2) The Condominium Information Report required under subsection (1) of this section shall be executed by the chairman or secretary of the association and the designated agent.

SECTION 61. ORS 100.550 is amended to read:

100.550. (1) Service of process in any action relating to the condominium may be made on:

(a) If the condominium was submitted to the provisions of this chapter before October 3, 1989, the person designated in the declaration to receive service of process;

(b) The person named as designated agent in the Condominium Information Report filed with the Real Estate Agency under ORS 100.250;

(c) If the association is organized as a corporation under Oregon law, the registered agent in accordance with ORS 60.111 or 61.086 (1987 Replacement Part); or

(d) The chairperson or secretary of the association.

(2) Except as provided in subsection (4) of this section, if the association of unit owners of property submitted to the provisions of this chapter before October 15, 1983, wishes to designate a person other than the one named in the declaration to receive service of process in the cases provided in subsection (1) of this section, it shall record an amendment to the declaration. The amendment shall be certified by the chairperson and the secretary of the association of unit owners, and shall state the name of the successor with the successor’s residence or place of business as required by ORS 100.105 [(1)(j)] (1)(k), and that the person named in the amendment was designated by resolution duly adopted by the association of unit owners.

(3) Unless prohibited by the declaration or bylaws, the board of directors of the association of unit owners of property submitted to the provisions of this chapter after October 15, 1983, may elect to designate a person other than the one named in the declaration to receive service of the process in the cases provided in subsection (1) of this section. After the adoption of a resolution by the board of directors in accordance with the bylaws, the board of directors, without the need for further action by the association or approval under ORS 100.110 and 100.135, shall record an amendment to the declaration. The amendment shall be certified by the chairperson and the secretary of the association of unit owners, and shall state the name of the successor with the successor’s residence or place of business as required by ORS 100.105 [(1)(j)] (1)(k), that the person named in the amendment has consented to the designation and that the resolution was duly adopted by the association of unit owners.

(4) Subsection (3) of this section applies to property submitted to the provisions of this chapter before October 15, 1983, if:

(a) The board of directors of the association of unit owners receives a written request from at least one unit owner that subsection (3) of this section applies; or

(b) The board of directors of the association of unit owners adopts a resolution in accordance with the bylaws of the association that subsection (3) of this section applies.

SECTION 62. ORS 100.600 is amended to read:

100.600. (1)(a) Subject to ORS 100.605, the condominium may be terminated if all of the unit owners remove the property from the provisions of this chapter by executing and recording an instrument to that effect and the holders of all liens affecting the units consent thereto or agree, in either case by instruments duly recorded, that their liens be transferred to the undivided interest of the unit owner in the property after the termination. The instrument shall state the interest of each unit owner and lienholder as determined under ORS 100.610.

(b) The recording of an instrument of termination shall vacate the plat but shall not vacate or terminate any recorded covenants, restrictions, easements or other interests not imposed under the declaration or bylaws or any easement granted by the plat unless the instrument of termination otherwise provides.

(c) Before the instrument of termination may be recorded, it must be signed by the county assessor for the purpose of acknowledging that the county assessor has been notified of the proposed termination.

(d) The person offering the instrument of termination for recording shall cause a copy of the recorded instrument, including the recording information, to be filed with the commissioner. The county clerk shall promptly provide a certified copy of the recorded instrument of termination to the county assessor and the county surveyor. Upon receipt of the instrument of termination, the county surveyor shall make appropriate annotations, including the date and surveyor’s name or initials, with archival quality black ink on the surveyor’s copy of the plat and any copies filed under ORS 92.120. Corrections or changes shall not be allowed on the original plat once it is recorded with the county clerk.

(e) Failure to file the copies as required under paragraph (d) of this subsection shall not invalidate the termination.

(2) A portion of the property may be removed from the provisions of this chapter by recording simultaneously with the recording officer an amendment to the declaration and an amended plat approved as required under ORS 100.110, 100.115 and 100.135. The amendment to the declaration shall:

(a) Include a metes and bounds legal description of the property being removed;

(b) Include a metes and bounds legal description of the resulting boundaries of the condominium after the removal;

(d) State the interest of each unit owner and lienholder in the condominium after the removal;

(e) Be approved and executed by all owners and lienholders and acknowledged in the manner provided for acknowledgment of deeds; and

(f) A statement by the local governing body or appropriate department thereof that the removal will not violate any applicable planning or zoning regulation or ordinance. The statement may be attached as an exhibit to the amendment.

(3) The amended plat required under subsection (2) of this section shall:

(a) Comply with ORS 100.115 [(6)] (9);

(b) Include a “Statement of Removal” that the property described on the amended plat is removed from the condominium and that the condominium exists as described and depicted on the amended plat. Such statement shall be made by the chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of deeds; and

(4) The tax collector for any taxing unit having a lien for taxes or assessments shall have authority to consent to such a transfer of any tax or assessment lien under subsection (1) of this section or the removal of a portion of the property under subsection (2) of this section.

Approved by the Governor July 6, 2001

Filed in the office of Secretary of State July 6, 2001

Effective date January 1, 2002

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