Chapter 569 Oregon Laws 2003

AN ACT

HB 3385

Relating to planned unit development; creating new provisions; amending ORS 94.550, 94.570, 94.572, 94.580, 94.590, 94.595, 94.604, 94.625, 94.630, 94.640, 94.647, 94.660, 94.670, 94.704, 94.709, 94.712, 94.770, 94.775, 100.100, 100.105, 100.115, 100.130, 100.135, 100.175, 100.405, 100.407, 100.410, 100.417, 100.420, 100.425, 100.427, 100.450, 100.465, 100.475, 100.480, 100.625, 100.655 and 100.740; and declaring an emergency.

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

NOTE: Sections 1 and 2 were deleted by amendment. Subsequent sections were not renumbered.

SECTION 3. 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 January 1, 2002, 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 January 1, 2002, a reasonable estimate of the cost of fulfilling existing obligations imposed by the declaration and bylaws as of January 1, 2002.

(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

(B) For a planned community created before January 1, 2002, a reasonable estimate of the cost of fulfilling existing obligations imposed by the declaration and bylaws as of January 1, 2002.

(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.

(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.

(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.

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

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

(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.

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

(12) “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.

[(12)] (13) “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 ORS 94.572.

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

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

(a) A mortgagee under a mortgage;

(b) A beneficiary under a trust deed; or

[(15)] (16) “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)] (17) “Percent of owners” or “percentage of owners” means the owners representing the specified voting rights as determined under ORS 94.658.

[(17)] (18)(a) “Planned community” means any subdivision under ORS 92.010 to 92.190 [which] that 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 or other expenses relating to any property within the planned community, including common property, if any, or for the exterior maintenance of any property that is individually owned.

(b) “Planned community” does not mean:

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

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

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

[(18)] (19) “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.

[(19)] (20) “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.

[(20)] (21) “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.

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

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

[(23)] (24) “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.

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

SECTION 4. ORS 94.570 is amended to read:

94.570. (1) ORS 94.550 to 94.783 apply to a planned community created before January 1, 2002, under ORS 94.550 to 94.783 and to a Class I planned community created on or after January 1, 2002.

(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 January 1, 2002.

(3) Notwithstanding 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)] that is exclusively commercial or industrial and that is created on or after January 1, 2002, if the declaration of the planned community so provides.

(4) Nothing in 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 5. ORS 94.572 is amended to read:

94.572. (1)(a) A Class I or Class II planned community created before January 1, 2002, that [is] was not [subject to] created under ORS 94.550 to 94.783 is subject to this section and ORS 94.550, 94.590, 94.595 (4) to (8), 94.625, 94.630 (1), (3) and (4), 94.640, 94.645, 94.647, 94.650, 94.655, 94.657, 94.658,94.660, 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, 94.728, 94.733, 94.770, 94.775, 94.777 and 94.780 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, 94.595 (4) to (8), 94.625, 94.630 (1), (3) and (4), 94.640, 94.645, 94.647, 94.650, 94.655, 94.657, 94.658, 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, 94.728, 94.733, 94.770, 94.775, 94.777 and 94.780. 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, 94.595 (4) to (8), 94.625, 94.630 (1), (3) and (4), 94.640, 94.645, 94.647, 94.650, 94.655, 94.657, 94.658, 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, 94.728, 94.733, 94.770, 94.775, 94.777 and 94.780 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, 94.595 (4) to (8), 94.625, 94.630 (1), (3) and (4), 94.640, 94.645, 94.647, 94.650, 94.655, 94.657, 94.658,94.660, 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, 94.728, 94.733, 94.770, 94.775, 94.777 and 94.780 by a vote of at least a majority of the owners in the planned community.

(iii) [The] An 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.

(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 applicable governing [documents] document, 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.

(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 ORS 94.657.

(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 applicable governing [documents] document, 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.

(v) An owner may vote by proxy, or by written ballot, if approved, in the discretion of a majority of the initiating owners or governing entity.

(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 January 1, 2002, 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 ORS 94.572” [under this section];

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

(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 Oregon Planned Community Act;

(e) A reference to the specific provisions of the Oregon 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) The board of directors of an association not otherwise required to cause a notice of planned community described in subsection (4) of this section to be prepared and recorded under this section may cause a notice of planned community to be prepared, executed and recorded as provided in subsection (4) of this section.

[(8)] (9) Title to a unit, lot or common property in a Class I or Class II planned community created before January 1, 2002, 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)] (10) 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)] (a) “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)] (b) “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 6. 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 the association and the type of entity formed in accordance with ORS 94.625;

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

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

(f) 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;

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

(h) [A provision for allocating votes] A statement of the number of votes allocated to each lot in accordance with ORS 94.658;

(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;

(j) A statement of when the lots, including lots owned by the declarant, become subject to assessment;

[(j)] (k) 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;

[(k)] (L) 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;

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

[(m)] (n) 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;

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

[(o)] (p) 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;

[(p)] (q) 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;

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

[(r)] (s) 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; and

[(s)] (t) 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 7. 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] declaration may be amended only with the approval 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) An amendment under this section may not [create,]:

(A) Limit or diminish any right of a declarant reserved under ORS 94.580 (3) or (4) or any other special declarant [rights, increase the number of lots or units or] right without the consent of the declarant. A declarant may waive the declarant’s right of consent.

(B) Change the boundaries of any lot or any uses to which any lot or unit is restricted as stated in the declaration under ORS 94.580 (2)(L) or change the method of determining liability for common expenses, the method of determining the right to common profits or the method of determining voting rights of any lot or unit unless the owners of the affected lots or units unanimously consent to the amendment.

(c) Any changes to the plat, including required approvals or consents of owners or others, are governed by the applicable provisions of ORS 92.010 to 92.190.

(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] office of the recording officer in each county in which the planned community is located. 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 and certified on behalf of the association by 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.

(6) The board of directors, upon the adoption of a resolution, may cause a restated declaration to be prepared and recorded to codify individual amendments that have been adopted in accordance with this section or ORS 94.585 without the further approval of owners. A declaration restated under this subsection must:

(a) Include all previously adopted amendments in effect and may not include any other changes except to correct scriveners’ errors or to conform format and style;

(b) Include a statement that the board of directors has adopted a resolution in accordance with this subsection and is causing the declaration to be restated and recorded under this subsection;

(c) Include a reference to the recording index numbers and date of recording of the initial declaration and all previously recorded amendments in effect being codified;

(d) Include a certification by the president and secretary of the association that the restated declaration includes all previously adopted amendments in effect and no other changes except, if applicable, to correct scriveners’ errors or to conform format and style; and

(e) Be executed and acknowledged by the president and secretary of the association and recorded in the deed records of each county in which the planned community is located.

SECTION 8. 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 other items required by the declaration or bylaws. The reserve account need not include reserves for those items:

(A) 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] must be funded by assessments against the individual lots for [maintenance of items for] which the reserves are established.

(b) Unless the declaration provides otherwise, the assessments under this subsection begin accruing for all lots from the date the first lot [assessed] is conveyed.

(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.

(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 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) Identification of all items for which reserves are required to be established;

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

(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.

(4)(a) If the declaration or bylaws require a reserve account, the reserve study requirements of subsection (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, 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 shall be completed within one year of adoption of the resolution or submission of the petition to the board of directors.

(5)(a) Except as provided in paragraph (b) of this subsection, the reserve account may be used only for the purposes for which reserves have been established and is to be kept separate from other funds.

(b) After the individual lot owners have assumed responsibility for administration of the planned community under ORS 94.616, if the board of directors has adopted a resolution, which may be an annual continuing resolution, authorizing the borrowing of funds:

(A) The board of directors may borrow funds from the reserve account to meet high seasonal demands on the regular operating funds or to meet unexpected increases in expenses. [Funds borrowed under this subsection must be repaid later from assessments if the board of directors has adopted a resolution, which may be an annual continuing resolution, authorizing the borrowing of funds.]

(B) 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.

(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.

(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:

(a) By an affirmative vote of at least 75 percent of the owners of the planned community, 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.

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

SECTION 9. ORS 94.604 is amended to read:

94.604. (1) As provided in this section, the declarant or the owners of a planned community that contains at least 20 lots in either the initial development or with the annexation of additional property shall form a transitional advisory committee to provide for the transition from administrative responsibility by the declarant of the planned community under ORS 94.600 to administrative responsibility by the association. The declarant shall call a meeting of owners for the purpose of selecting a transitional advisory committee not later than the 60th day after [the later of:]

[(a)] the date the declarant conveys 50 percent or more of the lots [in the first or only phase of the planned community to owners other than a successor declarant; or]

[(b) The date the declarant has conveyed 10 lots] then existing in the planned community to owners other than a successor declarant.

(2) The transitional advisory committee shall consist of three or more members. The owners, other than the declarant, shall select two or more members. The declarant may select no more than one member. The committee shall have reasonable access to all information and documents which the declarant is required to turn over to the association under ORS 94.616.

(3) An owner may call a meeting of owners to select the transitional advisory committee if the declarant fails to do so under subsection (1) of this section.

(4) Notwithstanding subsection (1) of this section, if the owners do not select members for the transitional advisory committee under subsection (2) of this section, the declarant shall have no further obligation to form the committee.

(5) The requirement for a transitional advisory committee shall not apply once the turnover meeting called under ORS 94.609 has been held.

SECTION 10. 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:

(a) Organize the homeowners 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 in the office of the recording officer [in] of each county in which the planned community is located.

(2)(a) The board of directors of an association of a planned community created under ORS 94.550 to 94.783 before January 1, 2002, or a planned community described in ORS 94.572 shall cause the bylaws of the association and amendments to the bylaws in effect but not codified in the bylaws to be certified as provided in this subsection and recorded in the office of the recording officer of each county in which the planned community is located within 180 days of receipt of a written request from an owner that the bylaws be recorded.

(b) The president and secretary of the association shall certify and acknowledge, in the manner provided for acknowledgment of deeds, that:

(A) The bylaws are the duly adopted bylaws of the association; and

(B) Each amendment to the bylaws was duly adopted in accordance with the bylaws of the association.

(c) The 180-day period specified in paragraph (a) of this subsection may be extended as necessary if the board of directors is unable to record the bylaws for justifiable reasons.

(d) Failure to record the bylaws or amendments to the bylaws in accordance with this subsection does not render the bylaws or amendments to the bylaws ineffective.

[(2)] (3) 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)] (4) Subject to subsection [(4)] (5) 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], by written ballot in lieu of a meeting under ORS 94.647 or other procedure permitted under the declaration or bylaws;

(b) Certified by the president and secretary of the association as having been adopted in accordance with the bylaws and this section and acknowledged in the manner provided for acknowledgment of deeds if the amendment is required to be recorded under paragraph (c) of this subsection; and

[(4)] (5) 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.

(6) Notwithstanding a provision in the bylaws, including bylaws adopted prior to the effective date of this 2003 Act, that requires an amendment to be executed, or executed and acknowledged, by all owners approving the amendment, amendments to the bylaws under this section become effective after approval by the owners if executed and certified on behalf of the association by the president and secretary in accordance with subsection (4)(b) of this section.

(7) An amendment to the bylaws is conclusively presumed to have been regularly adopted in compliance with all applicable procedures relating to the amendment unless an action is brought within one year after the effective date of the amendment or the face of the amendment indicates that the amendment received the approval of fewer votes than required for approval. Nothing in this subsection prevents the further amendment of an amended bylaw.

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

(9) The board of directors, by resolution and without the further approval of the owners, may cause restated bylaws to be prepared and recorded to codify individual amendments that have been adopted in accordance with subsection (4) of this section. Bylaws restated under this subsection must:

(a) Include all previously adopted amendments that are in effect and may not include any other changes except to correct scriveners’ errors or to conform format and style;

(b) Include a statement that the board of directors has adopted a resolution in accordance with this subsection and is causing the bylaws to be restated and recorded under this subsection;

(c) Include a reference to the recording index numbers and date of recording of the initial bylaws, if recorded, and all previously recorded amendments that are in effect and are being codified;

(d) Include a certification by the president and secretary of the association that the restated bylaws include all previously adopted amendments that are in effect and no other changes except, if applicable, to correct scriveners’ errors or to conform form and style; and

(e) Be executed and acknowledged by the president and secretary of the association and recorded in the deed records of each county in which the planned community is located.

SECTION 11. ORS 94.630 is amended to read:

94.630. (1) 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, 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 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;

(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, rules and regulations of the association [if], provided that the charge imposed or the fine levied by the association is based:

(A) 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]; or

(B) 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 acknowledgment 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 12. 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] are governed by this section and the applicable provisions of ORS 65.357, 65.361, 65.367, 65.369 and 65.377, whether or not the association is incorporated under ORS chapter 65.

(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.

(6) Unless otherwise provided in the declaration or bylaws[,]:

(a) 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]

(b) Removal of a director is not 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.

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

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

(D) Collection of unpaid assessments.

(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. The statement, motion or decision to meet in executive session must be included in the minutes of the meeting.

(c) A contract or an action considered in executive session does not become effective unless the board of directors, following the executive session, reconvenes in open meeting and votes on the contract or an action, which must be reasonably identified in the open meeting and included in the minutes.

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

(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] of the board of directors must comply with the following:

(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

(c) Only emergency meetings of the board of directors may be conducted by telephonic communication or by the use of a means of communication that allows all members of the board of directors participating to hear each other simultaneously or otherwise to be able to communicate during the meeting. A member of the board of directors participating in a meeting by this means is deemed to be present in person at the meeting.

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

(10) The board of directors shall cause the information required to enable the association to comply with ORS 94.670 (7) to be maintained and kept current.

(11) As used in this section, “meeting” means a convening of a quorum of members of the board of directors where matters relating to association business are discussed, except a convening of a quorum of members of the board of directors for the purpose of participating in litigation, mediation or arbitration proceedings.

SECTION 13. 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. Action by written ballot may not substitute for the following meetings:

(a) A turnover meeting required under ORS 94.616.

(b) An annual meeting of an association if more than a majority of the lots are the principal residences of the occupants.

(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) A secrecy envelope[,];

(B) A return identification envelope to be signed by the owner; and

(C) Instructions for marking and returning the ballot.

(c) The notice required under paragraph (b) of this subsection shall state:

(A) The general subject matter of the vote by written ballot;

(B) The right of owners to request secrecy procedures specified in paragraph (b) of this subsection;

(C) The date after which ballots may be distributed;

(D) The date and time by which any petition must be received by the board requesting secrecy procedures; and

(E) The address where any petition must be delivered.

(d) 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 14. ORS 94.660 is amended to read:

94.660. (1) Unless the bylaws provide otherwise, the vote or votes of a lot may be cast by absentee ballot or pursuant to a proxy executed by the owner.

(2) An owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association or to the board of directors if a vote is being conducted by written ballot in lieu of a meeting pursuant to ORS 94.647.

(3) A proxy [shall not be] is not valid if it is undated or purports to be revocable without notice. A proxy shall terminate one year after its date unless the proxy specifies a shorter term.

SECTION 15. 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 and all other records of the association for not less than the period specified for the record in ORS 65.771 or any other applicable law except that:

(a) The documents specified in ORS 94.616 (3)(o), if received, must be retained as permanent records of the association.

(b) Proxies and ballots must be retained for one year from the date of determination of the vote.

(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:

(a) Prepare or cause to be prepared an annual financial statement consisting of a balance sheet and income and expenses statement for the preceding fiscal year; and

(b) 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.

(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.

(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 and, upon written request, available for duplication 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] that makes the request in good faith for a proper purpose, except that records kept by or on behalf of the association may be withheld from examination and duplication to the extent the records concern:

(a) Personnel matters relating to a specific identified person or a person’s medical records.

(b) Contracts, leases and other business transactions that are currently under negotiation to purchase or provide goods or services.

(c) Communications with legal counsel that relate to matters specified in paragraphs (a) and (b) of this subsection.

(d) Disclosure of information in violation of law.

(e) Documents, correspondence or management or board reports compiled for or on behalf of the association or the board of directors by its agents or committees for consideration by the board of directors in executive session held in accordance with ORS 94.640 (7).

(f) Documents, correspondence or other matters considered by the board of directors in executive session held in accordance with ORS 94.640 (7).

(g) Files of individual owners, other than those of a requesting owner or requesting mortgagee of an individual owner, including any individual owner’s file kept by or on behalf of the association.

(6) The association shall maintain a copy, suitable for the purpose of duplication, of the following:

(a) The declaration[,] and bylaws, including amendments or supplements in effect, the recorded plat, if feasible, and the association rules and regulations [and any amendments or supplements to them] currently in effect.

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

(d) The reserve study, if any, described in ORS 94.595.

(e) Architectural standards and guidelines, if any.

[(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 (5) of this section.]

(7) The association, within 10 business days after receipt of a written request by an owner, shall furnish the requested information required to be maintained under subsection (6) of this section.

[(7)] (8) The [association may charge] board of directors, by resolution, may adopt reasonable rules governing the frequency, time, location, notice and manner of examination and duplication of association records and the imposition of 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 16. 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 as specified in the declaration pursuant to ORS 94.580 (2).

(2) If the declaration expressly authorizes deferment, the declarant may defer payment of accrued assessments for reserves required under ORS 94.595 for a lot subject to assessment 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.

(5)(a) Except for assessments under subsections (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 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.

(6) Unless otherwise provided in the declaration or bylaws, 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.

(7) Unless otherwise provided in the declaration or bylaws, 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.

(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.

(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.

(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.

(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.

SECTION 17. ORS 94.709 is amended to read:

94.709. (1) Whenever a homeowners association levies any assessment against a lot, the association[, upon complying with subsection (2) of this section,] shall have a lien upon the individual lot for any unpaid assessments [and interest as provided in subsection (2)(b) of this section]. The lien includes interest, late charges, attorney fees, costs or other amounts imposed under the declaration or bylaws or other recorded governing document. The lien [shall be] is prior to a homestead exemption and all other liens or encumbrances upon the lot except:

(a) Tax and assessment liens; and

(b) A first mortgage or trust deed of record.

[(2)(a) An association claiming a lien under subsection (1) of this section shall file in the county in which the lot or some part thereof is located a claim containing:]

(2) Recording of the declaration constitutes record notice and perfection of the lien for assessments. No further recording of a claim of lien for assessments or notice of a claim of lien under this section is required to perfect the association’s lien. The association shall record a notice of claim of lien for assessments under this section in the deed records of the county in which a lot is located before any suit to foreclose may proceed under subsection (4) of this section. The notice shall contain:

[(A)] (a) A true statement of the amount due for the unpaid assessments after deducting all just credits and offsets;

[(B)] (b) The name of the owner of the lot, or reputed owner, if known;

[(C)] (c) The name of the association; [and]

[(D)] (d) The description of the lot as provided in ORS 93.600; and

(e) A statement that if the owner of the lot thereafter fails to pay any assessments when due, as long as the original or any subsequent unpaid assessment remains unpaid, the unpaid amount of assessments automatically continue to accumulate with interest without the necessity of further recording.

[(b) When a claim has been filed and recorded pursuant to this subsection and the owner of the lot subject to the claim thereafter fails to pay any assessment chargeable to such lot, then so long as the original or any subsequent unpaid assessment remains unpaid, such claim shall automatically accumulate the subsequent unpaid assessments and interest thereon without the necessity of further filings under this section.]

(3) The [claim] notice shall be verified by the oath of some person having knowledge of the facts and shall be recorded by the county recording officer. The record shall be indexed as other liens are required by law to be indexed.

(4)(a) The proceedings to foreclose liens created by this section shall conform as nearly as possible to the proceedings to foreclose liens created by ORS 87.010[,] except, [that] notwithstanding ORS 87.055, a lien may be continued in force for a period of time not to exceed six years from the date the [claim is filed and recorded under subsections (2) and (3) of this section] assessment is due. For the purpose of determining the date the [claim is filed] assessment is due in those cases when subsequent unpaid assessments have accumulated under [the claim] a notice recorded as provided in subsection (2)[(b)] of this section, the assessment and claim regarding each unpaid assessment shall be deemed to have been [filed] levied at the time [such] the unpaid assessment became due.

(b) The lien may be enforced by the board of directors acting on behalf of the association.

(c) An action to recover a money judgment for unpaid assessments may be maintained without foreclosing or waiving the lien securing the claim for unpaid assessments.

(5) Unless the declaration or bylaws provide otherwise, fees, late charges, fines and interest imposed pursuant to ORS 94.630 (1)(L), (n) and (o) are enforceable as assessments under this section.

(6) This section does not prohibit an association from pursuing an action to recover sums for which subsection (1) of this section creates a lien or from taking a deed in lieu of foreclosure in satisfaction of the lien.

(7) An action to recover a money judgment for unpaid [common expenses] assessments may be maintained without foreclosing or waiving the lien [securing the claim for common expenses] for unpaid assessments. However, recovery on the action operates to satisfy the lien, or the portion thereof, for which recovery is made.

SECTION 18. ORS 94.712 is amended to read:

94.712. (1) An owner shall be personally liable for all assessments imposed on the owner or assessed against the owner’s lot by the homeowners association.

(2)(a) Subject to paragraph (b) of this subsection, in a voluntary conveyance of a lot, the grantee shall be jointly and severally liable with the grantor for all unpaid assessments against the grantor of the lot to the time of the grant or conveyance, without prejudice to the grantee’s right to recover from the grantor the amounts paid by the grantee therefor.

(b) [However,] Upon request of an owner or owner’s agent, for the benefit of a prospective purchaser, the board of directors shall make and deliver a written statement of the unpaid assessments against the prospective grantor or the lot effective through a date specified in the statement, and the grantee in that case shall not be liable for[, nor shall the lot when conveyed be subject to, a lien filed thereafter for] any unpaid assessments against the grantor [in excess of the amount therein set forth] not included in the written statement.

(3) An escrow agent or a title insurance company providing escrow services or issuing title insurance in conjunction with the conveyance:

(a) May rely on a written statement of unpaid assessments delivered pursuant to this section; and

(b) Is not liable for a failure to pay the association at closing any amount in excess of the amount set forth in the written statement.

SECTION 19. ORS 94.770 is amended to read:

94.770. (1) The rule against perpetuities may not be applied to defeat any provision of the declaration, or any bylaws or rules adopted under ORS 94.630.

(2) In the event of a conflict between the declaration and the bylaws of a planned community or between the declaration and the articles of incorporation, the declaration shall prevail except to the extent the declaration is inconsistent with ORS 94.550 to 94.783.

(3) Title to a unit, lot and common property shall not be rendered unmarketable or otherwise affected by reason of a failure of the declarant or the declaration to comply with ORS 94.550 to 94.783.

(4) If the provisions of ORS 94.550 to 94.783 and the provisions of ORS chapter 65 apply to an association and the provisions conflict, the provisions of ORS 94.550 to 94.873 control.

SECTION 20. ORS 94.775 is amended to read:

94.775. [No judicial partition may be allowed of any property in a planned community, nor may any person acquiring any interest in any damaged or destroyed property in the planned community seek a judicial partition unless the declarant or the homeowners association has removed the property from the provisions of the declaration.]

(1) Unless the declaration expressly allows the division of lots in a planned community, judicial partition by division of a lot in a planned community is not allowed under ORS 105.205. The lot may be partitioned by sale and division of the proceeds under ORS 105.245.

(2) The restriction specified in subsection (1) of this section does not apply if the homeowners association has removed the property from the provisions of the declaration.

NOTE: Section 21 was deleted by amendment. Subsequent sections were not renumbered.

SECTION 22. ORS 100.100 is amended to read:

100.100. (1) In order to submit any property to the provisions of this chapter, the declarant shall record a declaration in the office of the recording officer of every county in which such property is located. The declaration shall comply with ORS 100.105 and shall be executed in accordance with subsection (2) of this section and acknowledged in the manner provided for acknowledgment of deeds.

(2) If the declarant is not the fee owner of the property, the fee owner and the vendor under any instrument of sale shall also execute the declaration for the purpose of consenting to the property being submitted to the provisions of this chapter.

(3) If the condominium contains any variable property, the holder of any mortgage or trust deed shall also execute the declaration for the purpose of consenting to the property being submitted to the provisions of ORS 100.005 to 100.625 and the terms and conditions of the declaration and bylaws.

(4) A flexible or staged condominium may be created only as provided in ORS 100.005 to 100.625.

(5) The provisions of and rights conferred by ORS 100.005 to 100.910 shall not be varied or waived except as expressly provided in those statutes. A declarant shall not act under a power of attorney or use any other device to evade the limitations or prohibitions in the declaration, bylaws or ORS 100.005 to 100.910.

(6) If the provisions of this chapter and the provisions of ORS chapter 65 apply to an association and the provisions conflict, the provisions of this chapter control.

SECTION 23. 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).

(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.

(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.

(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).

(e) A description of the general common elements.

(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.

(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

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

(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.

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

(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).

(L) The method of amending the declaration and the percentage of voting rights required to approve an amendment of the declaration in accordance with ORS 100.135.

(m) A statement as to whether or not the association of unit owners 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.

(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.

(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.

(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, 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)] (2) and subsections (9) and (10) of this section:

(a) Not later than two years following the termination dates specified in subsections (2)(b) and (7)(d) of this section, such termination 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), (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) A condominium 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).

(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);

(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, 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.”

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

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

(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 the nonwithdrawable variable property:

(A) A statement that the plat shows the location and dimensions of all nonwithdrawable property that is labeled “NONWITHDRAWABLE VARIABLE PROPERTY.”

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

(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, the property shall automatically be reclassified as of 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.

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

(m) A statement by the local governing body or appropriate department thereof that the withdrawal of any variable property designated as “withdrawable variable property” in the declaration in accordance with paragraph (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)(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)(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 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 24. 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 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 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 of all limited common elements described in the declaration. The plat 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, show the location and dimensions of all variable property identified in the declaration and label 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 tract, each tract shall be labeled in the same manner.

(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 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 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 and the appropriate reference to the stage being annexed or tract of variable property being reclassified. Each supplemental plat for a condominium recorded on or after January 1, 2002, 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, Tract_______.

(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 take measurements and make computations necessary to determine that the plat complies with this section.

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

(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 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.

(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 subsection.

(9) In addition to the provisions of subsection (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 acknowledgment 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.

(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 25. ORS 100.130 is amended to read:

100.130. (1) Subject to any limitations contained in the declaration, the boundaries between adjoining units, including any intervening common elements, may be relocated or eliminated by an amendment to the declaration. The owners of the affected units shall submit to the board of directors of the association a proposed amendment which shall identify the units involved, state any reallocations of common element interest, voting rights, common expense liability and right to common profits and contain words of conveyance. The board of directors shall approve the amendment unless it determines within 45 days that the reallocations are unreasonable or the relocation or elimination will impair the structural integrity or mechanical systems of the condominium or lessen the support of any portion of the condominium.

(2) The board of directors of the association of unit owners may require the owners of the affected units to submit an opinion of a registered architect or registered professional engineer that the proposed relocation or elimination will not impair the structural integrity or mechanical systems of the condominium or lessen the support of any portion of the condominium.

(3) The board of directors of the association or any agent appointed by the board of directors may supervise the work necessary to effect the boundary relocation or elimination.

(4) Any expenses incurred under subsections (2) and (3) of this section shall be charged to the owners of the units requesting the boundary relocation or elimination.

(5) The amendment shall be executed by the owners and mortgagees or trust deed beneficiaries of the affected units, certified by the [chairman] chairperson and secretary of the association and approved and recorded in accordance with ORS 100.135 [(1)(b)] (2)(b).

(6) An amendment to the plat and any floor plans necessary to show the altered boundaries between the adjoining units shall be recorded in accordance with ORS 100.115.

SECTION 26. ORS 100.135 is amended to read:

100.135. (1) Unless otherwise provided in the declaration, an amendment to the declaration may be proposed by a majority of the board of directors of the association of unit owners or by least 30 percent of the unit owners.

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

(a) 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) The amendment, 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 January 1, 2002, that requires amendments to be executed and acknowledged by all owners approving the amendment.

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

[(3)] (4) 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 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)] (5)(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)] (2)(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 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)] (2)(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)] (6) Except as otherwise provided in ORS 100.005 to 100.625, [no] an amendment may not change the allocation of undivided interest in the common elements, the method of determining liability for common expenses, the method of determining the right to common profits or the method of determining voting rights of any unit unless such amendment has been approved by the owners of the affected units.

[(6)] (7) 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)] (8) Nothing in this section shall affect any other approval that may be required by the declaration, bylaws or other instrument.

(9) During a period of declarant control reserved under ORS 100.200, voting on an amendment under this section must be without regard to any weighted vote or other special voting allocation reserved by the declarant unless the declaration provides that the declarant has the right to exercise the voting rights with respect to specifically described amendments. Nothing in this subsection prohibits a declarant from reserving the right that declarant’s consent is required for an amendment during a period of declarant control reserved in the declaration.

[(8)] (10) 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.

(11)(a) The board of directors, by resolution and without the further approval of the unit owners, may cause a restated declaration to be prepared and recorded to codify individual amendments that have been adopted in accordance with this section.

(b) A declaration restated under this subsection must:

(A) Include all previously adopted amendments that are in effect and may not include any other changes except to correct scriveners’ errors or to conform format and style;

(B) Include a statement that the board of directors has adopted a resolution in accordance with paragraph (a) of this subsection and is causing the declaration to be restated and recorded under this subsection;

(C) Include a reference to the recording index numbers and date of recording of the initial declaration and all previously recorded amendments that are in effect and are being codified;

(D) Include a certification by the chairperson and secretary of the association that the restated declaration includes all previously adopted amendments that are in effect, that amendments were approved by the county assessor and tax collector if required under ORS 100.110 and that no other changes were made except, if applicable, to correct scriveners’ errors or to conform format and style;

(E) Be executed and acknowledged by the chairperson and secretary of the association and recorded in the deed records of each county in which the condominium is located; and

(F) Be approved by the commissioner, and by the county assessor and the tax collector under ORS 100.110 if the restated declaration includes any amendments required to be approved by the county assessor and the tax collector under ORS 100.110 but not previously approved.

(c) The board of directors shall cause a copy of the recorded restated declaration, including the recording information, to be filed with the commissioner.

SECTION 27. 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) 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 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.

(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.

(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) The board of directors of the association annually shall conduct a reserve study or review and update an existing study to determine the reserve account requirements 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) Identification of all items for which reserves are to be established;

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

(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.

(4)(a) If the declaration or bylaws require a reserve account, the reserve study requirements of subsection (3) of this section first apply to the association of a condominium recorded prior to October 23, 1999:

(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 adoption of the resolution or submission of the petition to the board of directors.

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

(b) After the individual unit owners have assumed administrative responsibility for the association under ORS 100.210, if the board of directors has adopted a resolution, which may be an annual continuing resolution, authorizing the borrowing of funds:

(A) The board of directors may borrow funds from the reserve account to meet high seasonal demands on the regular operating funds or to meet unexpected increases in expenses [which will later be paid from assessments if the board of directors has adopted a resolution, which may be an annual continuing resolution, authorizing the borrowing of funds].

(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.

(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 28. 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] declarations and bylaws;

(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 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], provided that the charge imposed or fine levied by the association is based:

(A) 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]; or

(B) 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)(a)(A) Except as provided in subparagraph (B) of this paragraph, 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 owners.

(B) 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.]

(i) The granting of a lease, easement, right of way, license or other similar interest affecting the general common elements for a term of two years or less shall require the approval of a majority of the board of directors.

(ii) The granting of a lease, easement, right of way, license or other similar interest affecting the general common elements for a term of more than two years to a public body, as defined in ORS 174.109, or to a utility or a communications company for underground installation and maintenance of power, gas, electric, water or other utility and communication lines and services requires the approval of a majority of the board of directors.

(iii) The granting of a lease, easement, license or other similar interest to an owner for the exclusive use of a part of the general common elements to which the owner’s unit provides primary access requires the approval of a majority of the board of directors. If the approval by the board of directors includes the right of the owner to make improvements to the general common elements to which the owner is being granted exclusive use, ORS 100.535 applies to the general common elements to the same extent that ORS 100.535 applies to a unit, including the right of the board under ORS 100.535 to require an owner, at owner’s expense, to submit an opinion of a registered architect or registered professional engineer that the proposed improvement will not impair the structural integrity or mechanical systems of the condominium.

(b) Unless the declaration otherwise provides, the consent to vacation of roadways within and adjacent to the condominium must be approved first by at least a majority of unit owners present voting in person or by proxy at a duly constituted meeting of the association called for the purpose.

(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] the percent of owners required under subsection (6) of this section.

(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 held in accordance with the declaration, 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 29. Unless the declaration of a condominium recorded before the effective date of this 2003 Act expressly limits or prohibits the authority of the association of unit owners 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 pursuant to ORS 100.405 (6) in effect at the time the declaration was recorded, the amendments to ORS 100.405 (6) by section 28 of this 2003 Act apply to a condominium recorded before the effective date of this 2003 Act.

SECTION 29a. Section 29 of this 2003 Act is added to and made a part of ORS chapter 100.

SECTION 30. ORS 100.407 is amended to read:

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

(2)(a) Special meetings of the association may be called by the chairperson of the board of directors, a majority of the board of directors or a percentage of owners specified in the bylaws. However, the bylaws may not require a percentage greater than 50 percent or less than 10 percent of the owners 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.

(3)(a) Not less than 10 nor more than 50 days before any meeting called under this section, the secretary or other officer of the association specified in the bylaws shall cause notice to be hand delivered or mailed to the mailing address of each unit 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.]

(b) The notice 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 of the association.

(c) Mortgagees may designate a representative to attend a meeting called under this section.

SECTION 31. ORS 100.410 is amended to read:

100.410. (1) The declarant shall adopt on behalf of the association of unit owners the initial bylaws [which shall] that govern the administration of the condominium. The bylaws shall be recorded simultaneously with the declaration 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.

(3) Subject to subsections (4) and (5) of this section and ORS 100.415 (20), an amendment of the bylaws is not effective unless the amendment is:

(a) Approved by at least a majority of the unit owners [and until a copy of the amendment,]; and

(b) Certified by the chairperson and secretary of the association of unit owners as being adopted in accordance with the bylaws and the provisions of this section, [is] acknowledged in the manner provided for acknowledgment of instruments and recorded.

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

(a) The bylaws may not provide that greater than a majority of the unit owners 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.

(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.

(6)(a) For five years after the recording of the initial bylaws, before any amended [bylaws or amendment to a] bylaw may be recorded, [it] the amended bylaw 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.

(b) The approval by the commissioner under paragraph (a) of this subsection is not required for bylaws restated under subsection (10) of this section unless the bylaws are restated during the five-year period after the recording of the initial bylaws.

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

(8) Notwithstanding a provision in the bylaws, including bylaws adopted prior to the effective date of this 2003 Act, that requires an amendment to be executed, or executed and acknowledged, by all owners approving the amendment, amendments to the bylaws under this section become effective after approval by the owners if executed and certified on behalf of the association by the chairperson and secretary in accordance with subsection (3)(b) of this section.

(9) An amendment to the bylaws must be conclusively presumed to have been regularly adopted in compliance with all applicable procedures relating to the amendment unless an action is brought within one year after the effective date of the amendment or the face of the amendment indicates that the amendment received the approval of fewer votes than required for the approval. Nothing in this subsection prevents the further amendment of an amended bylaw.

(10)(a) The board of directors, by resolution and without the further approval of unit owners, may cause restated bylaws to be prepared and recorded to codify individual amendments that have been adopted in accordance with this section.

(b) Bylaws restated under this subsection must:

(A) Include all previously adopted amendments that are in effect, state that the amendments were approved by the commissioner as required under this section and state that no other changes were made except, if applicable, to correct scriveners’ errors or to conform format and style;

(B) Include a statement that the board of directors has adopted a resolution in accordance with paragraph (a) of this subsection and is causing the bylaws to be restated and recorded under this subsection;

(C) Include a reference to the recording index numbers and date of recording of the initial bylaws and all previously recorded amendments that are in effect and are being codified;

(D) Include a certification by the chairperson and secretary of the association that the restated bylaws include all previously adopted amendments that are in effect, that amendments were approved by the commissioner if required under this section and that no other changes except, if applicable, to correct scriveners’ errors or to conform format and style;

(E) Be executed and acknowledged by the chairperson and secretary of the association and recorded in the deed records of each county in which the condominium is located; and

(F) If required under subsection (6) of this section, be approved by the commissioner.

(c) The board of directors shall cause a copy of the recorded restated bylaws, including the recording information, to be filed with the commissioner.

SECTION 32. 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] shall be governed by this section and the applicable provisions of ORS 65.357, 65.361, 65.367, 65.369 and 65.377 whether or not the association is incorporated under ORS chapter 65.

(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.

(6) The board of directors, in the name of the association, shall maintain a current mailing address.

(7) The board of directors shall cause to be maintained and kept current the information required to enable the association to comply with ORS 100.480 (7).

[(6)] (8) Unless otherwise provided in the declaration or bylaws[,]:

(a) 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.

(b) [No] Removal of a member of the board of directors is not 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 33. 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) Consultation with legal counsel concerning the rights and duties of the association regarding existing or potential litigation, or criminal matters;

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

(D) Collection of unpaid assessments.

(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. The statement, motion or decision to meet in executive session must be included in the minutes of the meeting.

(c) A contract or an action considered in executive session does not become effective unless the board of directors, following the executive session, reconvenes in open meeting and votes on the contract or action, which must be reasonably identified in the open meeting and included in the minutes.

[(c)] (d) 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 or by the use of a means of communication that allows all members of the board of directors participating to hear each other simultaneously or otherwise to be able to communicate during the meeting. A member of the board of directors participating in a meeting by this means is deemed to be present in person at the meeting.

(3) In condominiums where the majority of the units are the principal residences of the occupants, meetings of the board of directors shall comply with the following:

(b) Only emergency meetings of the board of directors may be conducted by telephonic communication or in a manner described in subsection (2) of this section.

(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.

(5) As used in this section, “meeting” means a convening of a quorum of members of the board of directors where matters relating to association business are discussed, except a convening of a quorum of members of the board of directors for the purpose of participating in litigation, mediation or arbitration proceedings.

SECTION 34. 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. Action by written ballot may not substitute for the following meetings:

(a) The turnover meeting required under ORS 100.210.

(b) The annual meeting of an association if more than a majority of the units are the principal residences of the occupants.

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

(A) A secrecy envelope[,];

(B) A return identification envelope to be signed by the owner; and

(C) Instructions for marking and returning the ballot.

(c) The notice required under paragraph (b) of this subsection shall state:

(A) The general subject matter of the vote by written ballot;

(B) The right of owners to request secrecy procedures specified in paragraph (b) of this subsection;

(C) The date after which ballots may be distributed;

(D) The date and time by which any petition must be received by the board requesting secrecy procedures; and

(E) The address where any petition must be delivered.

(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 35. ORS 100.427 is amended to read:

100.427. (1) Unless the bylaws provide otherwise, the vote or votes of a unit owner may be cast by absentee ballot or pursuant to a proxy executed by the owner.

(2) An owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association of unit owners or to the board of directors if a vote is being conducted by written ballot in lieu of a meeting pursuant to ORS 100.425.

SECTION 36. ORS 100.450 is amended to read:

100.450. (1) Whenever an association of unit owners levies any assessment against a unit, the association of unit owners[, upon complying with subsection (2) of this section,] shall have a lien upon the individual unit and the undivided interest in the common elements appertaining to such unit for any unpaid assessments [and interest as provided in subsection (2)(b) of this section]. The lien includes interest, late charges, attorney fees, costs or other amounts levied under the declaration or bylaws. The lien [shall be] is prior to a homestead exemption and all other liens or encumbrances upon the unit except:

(a) Tax and assessment liens; and

(b) A [prior] first mortgage or trust deed of record unless:

(A) The condominium consists of fewer than seven units, all of which are to be used for nonresidential purposes;

(B) The declaration provides that the lien of any mortgage or trust deed of record affecting the property shall be subordinate to the lien of the association provided under subsection (1) of this section; and

(C) The holder of any mortgage or trust deed of record affecting the property when the declaration is recorded executes a separate subordination of the holder’s interest to the declaration which is attached as an exhibit and which states that the holder understands that the declaration subordinates the holder’s lien to the assessment lien of the association provided under subsection (1) of this section.

(2)[(a) An association of unit owners claiming the benefits of subsection (1) of this section shall record in the county in which the unit or some part thereof is located a claim containing] Recording of the declaration constitutes record notice and perfection of the lien for assessments. No further recording of a claim of lien for assessments or notice of a claim of lien under this section is required to perfect the association’s lien. The association shall record a notice of claim of lien for assessments under this section in the deed records of the county in which the unit is located before any suit to foreclose may proceed under subsection (4) of this section. The notice shall contain:

(a) A true statement of the amount due for the unpaid assessments after deducting all just credits and offsets;

(b) The name of the owner of the unit, or reputed owner, if known;

(c) The name of the condominium and the designation of the unit as stated in the declaration or applicable supplemental declaration; and

(d) A statement that if the owner of the unit thereafter fails to pay any assessments when due, as long as the original or any subsequent unpaid assessment remains unpaid, the unpaid amount of assessments automatically continue to accumulate with interest without the necessity of further recording.

[(b) When a claim has been filed and recorded pursuant to this section and the owner of the unit subject to the claim thereafter fails to pay any assessment chargeable to such unit, then so long as the original or any subsequent unpaid assessment remains unpaid such claim shall automatically accumulate the subsequent unpaid assessments and interest thereon without the necessity of further filings under this section.]

(4)(a) The proceedings to foreclose liens created by this section shall conform as nearly as possible to the proceedings to foreclose liens created by ORS 87.010[,] except, [that] notwithstanding ORS 87.055, a lien may be continued in force for a period of time not to exceed six years from the date the [claim is filed under subsection (3) of this section] assessment is due. For the purpose of determining the date the [claim is filed] assessment is due in those cases [where] when subsequent unpaid assessments have accumulated under [the claim] a notice recorded as provided in subsection (2)[(b)] of this section, the assessment and claim regarding each unpaid assessment shall be deemed to have been [filed] levied at the time [such] the unpaid assessment became due.

(b) The lien may be enforced by the board of directors acting on behalf of the association of unit owners.

(c) An action to recover a money judgment for unpaid assessments may be maintained without foreclosing or waiving the lien securing the claim for unpaid assessments.

(d) [No] An action to foreclose a lien under this section or recover a money judgment for unpaid assessments may not be maintained unless the Condominium Information Report and the Annual Report described in ORS 100.250 are designated current as provided in ORS 100.255.

(5) Unless the declaration or bylaws provides otherwise, fees, late charges, fines and interest imposed pursuant to ORS 100.405 (4)(j), (k), (L) and (m) are enforceable as assessments under this section.

(6) With respect to condominium units also constituting timeshare property as defined by ORS 94.803, liens created by this section shall be assessed to the timeshare owners in the timeshare property according to the method for determining each owner’s liability for common expenses under the timeshare instrument and shall be enforced individually against each timeshare owner in the condominium unit.

(7) Notwithstanding the priority established for a lien for unpaid assessments and interest under subsection (1) of this section, the lien shall also be prior to the lien of [any prior] a first mortgage or trust deed of record for the unit and the undivided interest in the common elements, if:

(a) The association of unit owners for the condominium in which the unit is located has given the lender under the mortgage or trust deed 90 days prior written notice that the owner of the unit is in default in payment of an assessment. The notice shall contain:

(A) Name of borrower;

(B) Recording date of trust deed or mortgage;

(D) Name of condominium, unit owner and unit designation stated in the declaration or applicable supplemental declaration; and

(E) Amount of unpaid assessment.

(b) The notice under paragraph (a) of this subsection shall set forth the following in 10-point type:

______________________________________________________________________________

NOTICE: The lien of the association may become prior to that of the lender pursuant to ORS 100.450.

______________________________________________________________________________

(c) The lender has not initiated judicial action to foreclose the mortgage or requested issuance of a trustee’s notice of sale under the trust deed or accepted a deed in lieu of foreclosure in the circumstances described in ORS 100.465 prior to the expiration of 90 days following the notice by the unit owners’ association.

(d) The unit owners’ association has provided the lender, upon request, with copies of any liens filed on the unit, a statement of the assessments and interest remaining unpaid on the unit and other documents which the lender may reasonably request.

(e) The borrower is in default under the terms of the mortgage or trust deed as to principal and interest.

(f) A copy of the notice described in paragraph (a) of this subsection, together with an affidavit of notice by a person having knowledge of the facts, has been recorded in the manner prescribed in subsection (3) of this section. The affidavit shall recite the date and the person to whom the notice was given.

SECTION 36a. ORS 100.465 is amended to read:

100.465. [(1)] Unless the declarations or bylaws otherwise provide, a deed in lieu of foreclosure accepted by the holder of a first mortgage or the beneficiary of a first deed of trust in respect to a condominium unit shall have the effect of extinguishing a lien of the association [filed to secure] securing unpaid assessments through the date of recording of the deed in lieu of foreclosure in the following circumstances:

[(a)] (1) Written notice has been given to the association, addressed to the individual authorized to accept service of process sent by first class mail, return receipt requested, notifying the association of the mortgagee or beneficiary’s intent to accept a deed in lieu of foreclosure and stating that the lien of the association may be extinguished in the circumstances specified in this section; and

[(b)] (2) The deed in lieu of foreclosure is recorded not later than 30 days after the date the notice is mailed to the association.

[(2) Unless the declarations or bylaws provide otherwise, any assessment lien filed by an association after receipt of the notice described in subsection (1) of this section and less than 30 days before the deed in lieu of foreclosure is recorded, shall also be extinguished without further notice or action.]

SECTION 37. ORS 100.475 is amended to read:

100.475. (1) A unit owner shall be personally liable for all assessments imposed on the unit owner or assessed against the unit by the association of unit owners.

(2) Where the purchaser of a unit obtains title to the unit as a result of foreclosure of the first mortgage or trust deed, such purchaser, the successors and assigns of the purchaser, shall not be liable for any of the assessments against such unit or its owner which became due prior to the acquisition of title to such unit by such purchaser except as specifically provided otherwise in ORS 100.450. Such unpaid assessments shall be a common expense of all the unit owners including such purchaser, the successors and assigns of the purchaser.

(3)(a) Subject to paragraph (b) of this subsection, in a voluntary conveyance of a unit, the grantee shall be jointly and severally liable with the grantor for all unpaid assessments against the grantor of the unit to the time of the grant or conveyance, without prejudice to the grantee’s right to recover from the grantor the amounts paid by the grantee therefor.

(b) [However,] Upon request of an owner or owner’s agent, for the benefit of a prospective purchaser, the board of directors shall make and deliver a written statement of the unpaid assessments against the prospective grantor or the unit effective through a date specified in the statement, and the grantee in that case shall not be liable for[, nor shall the unit when conveyed be subject to, a lien filed thereafter for] any unpaid assessments against the grantor [in excess of the amount therein set forth] not included in the written statement.

(4) An escrow agent or a title insurance company providing escrow services or issuing title insurance in conjunction with the conveyance:

(a) May rely upon a written statement of unpaid assessments delivered pursuant to this section; and

(b) Is not liable for a failure to pay to the association at closing any amount in excess of the amount set forth in the written statement.

SECTION 38. ORS 100.480 is amended to read:

100.480. (1) [The] An association of unit owners shall retain within this state the documents, information and records delivered to the association under ORS 100.210 and all other records of the association for not less than the period specified for the record in ORS 65.771 or any other applicable law, except that:

(a) The documents specified in ORS 100.210 (5)(j), if received, must be retained as permanent records of the association.

(b) Proxies and ballots must be retained for one year from the date of determination of the vote.

(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:

(a) Prepare or cause to be prepared an annual financial statement consisting of a balance sheet and income and expenses statement for the preceding fiscal year; and

(b) 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.

(5)(a) Except as provided in paragraph (b) of this subsection, 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] must be reasonably available for examination and, upon written request, available for duplication by a unit owner and any mortgagee of a unit that makes the request in good faith for a proper purpose. [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.]

(b) Records kept by or on behalf of the association may be withheld from examination and duplication to the extent the records concern:

(A) Personnel matters relating to a specific identified person or a person’s medical records.

(B) Contracts, leases and other business transactions that are currently under negotiation to purchase or provide goods or services.

(C) Communications with legal counsel that relate to matters specified in subparagraphs (A) and (B) of this paragraph.

(D) Disclosure of information in violation of law.

(E) Documents, correspondence or management or board reports compiled for or behalf of the association or the board of directors by its agents or committees for consideration by the board of directors in executive session held in accordance with ORS 100.420 (1).

(F) Documents, correspondence or other matters considered by the board of directors in executive session held in accordance with ORS 100.420 (1).

(G) Files of individual owners, other than those of a requesting owner or requesting mortgagee of an individual owner, including any individual owner’s file kept by or on behalf of the association.

(6) The association of unit owners shall maintain a copy, suitable for the purpose of duplication, of the following:

(b) The most recent annual financial statement prepared in accordance with subsection (3) of this section; [and]

(d) The reserve study, if any, described in ORS 100.175; and

(e) Architectural standards and guidelines, if any.

[(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 (5) of this section.]

[(7)] (8) The [association of unit owners may charge] board of directors, by resolution, may adopt reasonable rules governing the frequency, time, location, notice and manner of examination and duplication of association records and the imposition of 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.

[(8)] (9) 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 39. ORS 100.625 is amended to read:

100.625. (1) Subject to the provisions of the declaration and any applicable law, and upon compliance with this section:

(a) A unit designated in the declaration to be used for commercial, industrial or other nonresidential purpose may be divided by an owner, including the declarant, into two or more units.

(b) A unit owned by the declarant and located in a condominium that consists exclusively of units designated in the declaration to be used for nonresidential purposes, may be divided or converted into two or more units, common elements or a combination of units and common elements.

(2) The owner of a unit to be divided or converted shall submit to the board of directors of the association of unit owners a proposed amendment which shall:

(a) State the purposes of the amendment;

(b) Assign an identifying number to each unit created;

(c) Reallocate the interest in the common elements and the use of any limited common elements, voting rights, common expense liability and the right to common profits in the manner prescribed in the declaration;

(d) Indicate the means of access for each unit to common elements; and

(e) Include any additional provisions necessary to conform any other provisions of the declaration or bylaws.

(3) The board of directors shall approve the proposed amendment unless the board determines within 45 days that the amendment is inconsistent with the declaration or bylaws, or the division or conversion will impair the structural integrity or mechanical systems of the condominium or lessen the support of any portion of the condominium.

(4) The board of directors may require the owner of the unit to be divided or converted to submit an opinion of a registered professional engineer as to whether or not the proposed division or conversion will impair the structural integrity or mechanical systems of the condominium or weaken the support of any portion of the condominium. The board of directors or any agent appointed by the board of directors may supervise the work necessary to effect the division or conversion. Any expenses incurred under this section shall be charged to the owner of the unit requesting the division or conversion.

(5) The amendment shall be executed by the owner and mortgagees or trust deed beneficiaries of the affected unit, certified by the chairperson and secretary of the association and approved and recorded in accordance with ORS 100.135 [(1)(b)] (2)(b).

(6) A plat showing each unit created or the conversion of a unit to common elements or combination thereof shall be recorded in accordance with ORS 100.115.

(7) This section applies only if the declaration expressly permits and contains:

(a) A statement of the maximum number of units into which a unit may be divided under subsection (1) of this section;

(b) A general description of the nature and proposed use of any unit or portion of any unit which the declarant may convert to common elements; and

(c) A statement of the method to be used to reallocate interest in the common elements, the use of any limited common elements, voting rights, common expense liability and right to common profits.

SECTION 40. 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

______________________________________________________________________________

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) 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 at least [14-point] 12-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 or, if the condominium has four or fewer units, reports prepared by licensed engineers, architects or home inspectors.

SECTION 41. 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 [14-point] 12-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 42. Sections 43 and 44 of this 2003 Act are added to and made a part of ORS chapter 100.

SECTION 43. (1) The owner of fee title interest in the real property underlying a leasehold condominium may submit the fee title to the provisions of this chapter by the procedures set forth in this section. Submission has the effect set forth in section 44 of this 2003 Act.

(2) The fee title interest of a leasehold condominium may be submitted to the provisions of this chapter by an amendment to the declaration. The amendment must:

(a) Include a reference to the recording index numbers and date of recording of the initial declaration, supplemental declarations recorded pursuant to ORS 100.120 and the lease;

(b) State that the fee title interest in the real property subject to the leasehold is submitted to the provisions of this chapter pursuant to this section;

(c) State that the submission of the fee title interest in the real property subject to the leasehold to the provisions of this chapter has the effect set forth in section 44 of this 2003 Act;

(d) State that there are no encumbrances against the fee title interest securing payment of moneys except for the assessments of the owners association that are not yet due;

(e) Be approved by at least 75 percent of the unit owners or, if a larger percentage is specified in the declaration to effect amendments to the declaration, the larger percentage;

(f) Be executed by the fee title holder and the chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of instruments;

(g) Be certified by the chairperson and secretary as being adopted in accordance with this section;

(h) Be approved as required by ORS 100.110; and

(i) Be recorded in the office of the recording officer of each county in which the condominium is located.

(3) At the time of submission, the fee title interest being submitted may not be subject to an encumbrance securing payment of money except for the assessments of an association that are not yet due.

(4) Nothing in this section precludes the declarant of a leasehold condominium, all unit owners and the association from agreeing to other procedures for submitting the fee title interest to the provisions of this chapter, provided the procedures are set forth in:

(a) The declaration; or

(b) An amendment to the declaration approved by at least 75 percent of the unit owners or, if a larger percentage is specified in the declaration to effect amendments to the declaration, the larger percentage, and 75 percent of the lenders holding a first-priority security position in any unit in the condominium.

SECTION 44. (1) After an amendment submitting the fee title interest underlying a leasehold condominium has been recorded as provided in section 43 of this 2003 Act:

(a) The leasehold or leaseholds affecting the fee title interest of the land underlying the condominium property must be converted to individual leaseholds of the units;

(b) The former owner of the underlying fee title interest of the condominium property shall become the holder of the fee title interest to all individual units and the lessor of the individual units. The individual unit owners of the leasehold condominium units shall become lessees of the fee title condominium units;

(c) Unless otherwise provided by the lease or agreed by the lessor and lessee of the fee title condominium units, the obligations to pay rent under the former lease must be allocated among all former leasehold units on the basis of the percentage ownership in the common elements of the condominium allocated to each unit;

(d) Liens against leasehold condominium units become liens on the lessee’s interest in the leased unit and have the same priority and rights against the leasehold of the individual unit in the fee title condominium formerly held against the leasehold condominium unit;

(e) The holder of the fee title to the unit in the fee condominium shall have the same priority and rights in the individual leasehold of the fee title condominium unit as was held under the leases prior to submission of the fee title interest; and

(f) The fee title interest is not subject to the liens suffered or incurred by the unit lessee, except for property taxes and condominium association assessment liens.

(2) The assessor shall assign all value of the fee simple interest to the fee title condominium units and allocate any additional value in accordance with the allocation of interest of each unit in the common elements.

(3) All easements, covenants, conditions and restrictions or other interests encumbering the fee title and the leasehold at the time of submission of the fee title to the provisions of this chapter continue and remain in full force, unaffected by the submission.

(4)(a) Options to purchase that were granted to unit owners or to the association prior to submission of the fee title interest to the provisions of this chapter pursuant to section 43 of this 2003 Act continue according to their terms, except that purchaser options must be segregated so that each option pertains to an individual unit only.

(b) Unless the purchase options provide otherwise, the purchase price must be allocated among the individual units on the basis of the percentage ownership interest in the common elements pertaining to individual units.

(c) Except for segregating the former leasehold into individual leaseholds in each of the units and reallocating lease payments among the units as provided in this section, the terms and provisions of the former lease are unaffected by submission of the fee title to the provisions of this chapter.

(d) Except for segregating the purchase options and allocating the purchase price, if not otherwise allocated by the terms of the purchase option, the terms and provisions of the purchase option are unaffected by submission of the fee title to the provisions of this chapter.

SECTION 45. Section 46 of this 2003 Act is added to and made a part of ORS chapter 65.

SECTION 46. For a corporation organized under this chapter and formed pursuant to ORS chapter 100 or subject to regulation under all or part of the provisions of ORS 94.550 to 94.783 or under ORS 94.803 and 94.807 to 94.945:

(1) A provision of this chapter that may be avoided by a corporation by a provision in the corporation’s articles of incorporation, bylaws or otherwise also may be avoided by a provision in the declaration, bylaws or other recorded governing document of a planned community or a condominium.

(2) In the event of a conflict between the provisions of this chapter and:

(a) The declaration and bylaws of a condominium and the provisions of ORS chapter 100, the declaration and bylaws and the provisions of ORS chapter 100 control.

(b) The declaration, bylaws and other recorded governing documents of a planned community and the provisions of ORS 94.550 to 94.783, the declaration, bylaws and other governing documents and the provisions of ORS 94.550 to 94.873 control.

(c) The recorded timeshare instrument of a timeshare plan and the provisions of ORS 94.803 and 94.807 to 94.945, the recorded timeshare instrument and the provisions of ORS 94.803 and 94.807 to 94.945 control.

SECTION 47. This 2003 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2003 Act takes effect on its passage.

Approved by the Governor July 14, 2003

Filed in the office of Secretary of State July 15, 2003

Effective date July 14, 2003

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