72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 1569
 
                         House Bill 2864
 
Sponsored by COMMITTEE ON JUDICIARY
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Directs certain planned unit developments, under specified
circumstances, to cause annual financial statement to be reviewed
by independent certified public accountant.
 
                        A BILL FOR AN ACT
Relating to planned community association records; amending ORS
  94.616, 94.670, 100.210 and 100.480.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 94.616 is amended to read:
  94.616. (1) At the meeting called under ORS 94.609, the
declarant shall turn over to the homeowners association the
responsibility for the administration of the planned community,
and the association shall accept the administrative
responsibility from the declarant.
  (2) The owners shall elect a board of directors in accordance
with the bylaws of the association.
  (3) At the meeting, called under ORS 94.609, the declarant
shall deliver to the association:
  (a) The original or a photocopy of the recorded declaration and
copies of the bylaws and the articles of incorporation, if any,
of the planned community and any supplements and amendments to
the articles or bylaws;
  (b) A deed to the common property in the planned community,
unless otherwise provided in the declaration;
  (c) The minute books, including all minutes, and other books
and records of the association and the board of directors;
  (d) All rules and regulations adopted by the declarant;
  (e) Resignations of officers and members of the board of
directors who are required to resign because of the expiration of
any period of declarant control reserved pursuant to ORS 94.600;
  (f) A   { - report on the present financial position of the
association, - }   { + financial statement + } consisting of a
balance sheet and an income and expense statement for the
 { + preceding + } 12-month period or   { - a - }   { + the + }
period following the recording of the declaration, whichever
period is   { - less - }  { +  shorter. If the annual assessments
of an association exceed $75,000, the association shall engage an
independent certified public accountant licensed in the State of
Oregon to review the financial statement in accordance with the
Statements on Standards for Accounting and Review Services issued
by the American Institute of Certified Public Accountants + };
  (g) All funds of the association and control of the funds,
including all bank records;
  (h) All tangible personal property that is property of the
association, and an inventory of the property;
  (i) Records of all property tax payments for the common
property to be administered by the association;
  (j) Copies of any income tax returns filed by the declarant in
the name of the association, and supporting records for the
returns;
  (k) All bank signature cards;
  (L) The reserve account established in the name of the
association under ORS 94.595;
  (m) The reserve study described in ORS 94.595, including all
updates and other sources of information that serve as a basis
for calculating reserves in accordance with ORS 94.595;
  (n) An operating budget for the portion of the planned
community turned over to association administration and a budget
for replacement and maintenance of the common property;
  (o) A copy of the following, if available:
  (A) The as-built architectural, structural, engineering,
mechanical, electrical and plumbing plans;
  (B) The original specifications, indicating all subsequent
material changes;
  (C) The plans for underground site service, site grading,
drainage and landscaping together with cable television drawings;
  (D) Any other plans and information relevant to future repair
or maintenance of the property; and
  (E) A list of the general contractor and the electrical,
heating and plumbing subcontractors responsible for construction
or installation of common property;
  (p) Insurance policies;
  (q) Copies of any occupancy permits issued for the planned
community;
  (r) Any other permits issued by governmental bodies applicable
to the planned community in force or issued within one year
before the date on which the owners assume administrative
responsibility;
  (s) A list of any written warranties on the common property
that are in effect and the names of the contractor, subcontractor
or supplier who made the installation for which the warranty is
in effect;
  (t) A roster of owners and their addresses and telephone
numbers, if known, as shown on the records of the declarant;
  (u) Leases of the common property and any other leases to which
the association is a party;
  (v) Employment or service contracts in which the association is
one of the contracting parties or service contracts in which the
association or the owners have an obligation or responsibility,
directly or indirectly, to pay some or all of the fee or charge
of the person performing the service; and
  (w) Any other contracts to which the homeowners association is
a party.
  (4) In order to facilitate an orderly transition, during the
three-month period following the turnover meeting, the declarant
or an informed representative shall be available to meet with the
board of directors on at least three mutually acceptable dates to
review the documents delivered under subsection (3) of this
section.
  (5) If the declarant has complied with this section and unless
the declarant has sufficient voting rights as a lot owner to
control the association, the declarant is not responsible for the
failure of the owners to comply with subsection (1) of this
section and the declarant is relieved from further responsibility
for the administration of the association, except as a lot owner.
  SECTION 2. ORS 94.670 is amended to read:
 
  94.670. (1) A homeowners association shall retain within this
state the documents, information and records delivered to the
association under ORS 94.616.
  (2) All assessments, including declarant subsidies, shall be
deposited in a separate bank account, located within this state,
in the name of the association. All expenses of the association
shall be paid from the association bank account.
  (3) The association shall keep financial records sufficiently
detailed for proper accounting purposes. Within 90 days after the
end of the fiscal year, the board of directors shall  { + prepare
or cause to be prepared an annual financial statement consisting
of a balance sheet and an income and expense statement for the
preceding fiscal year and shall + } distribute to each owner and,
upon written request, any mortgagee of a lot, a copy of the
annual financial statement   { - consisting of a balance sheet
and income and expenses statement for the preceding fiscal
year - } .
   { +  (4) Commencing in the fiscal year following the turnover
meeting held under ORS 94.609, an association of a planned
community established on or after the effective date of this 2003
Act that has annual assessments exceeding $75,000 shall, within
180 days after the end of each fiscal year, cause the financial
statement to be reviewed by an independent certified public
accountant licensed in the State of Oregon in accordance with the
Statements on Standards for Accounting and Review Services issued
by the American Institute of Certified Public Accountants.
  (5) Upon adoption by the board of directors, in accordance with
association bylaws, of a resolution requiring review of the
financial statement or upon submission to the board of a
petition, signed by a majority of the owners, mandating review of
the financial statement, the following associations also are
subject to the provisions of subsection (4) of this section
commencing in the following fiscal year:
  (a) The association of a planned community created under ORS
94.550 to 94.783 prior to, on or after the effective date of this
2003 Act; or
  (b) The association of a planned community described in ORS
94.572.
  (6) An association described in subsection (5) of this section
may:
  (a) By an affirmative vote of at least 60 percent of the
owners, choose to discontinue complying with the requirement to
cause the annual financial statement to be reviewed as provided
in subsection (4) of this section; or
  (b) By an affirmative vote of at least 60 percent of the
owners, not including the vote of a declarant with respect to any
lots owned by the declarant, elect, on an annual basis, not to
comply with the requirement to cause the annual financial
statement to be reviewed as provided in subsection (4) of this
section. + }
    { - (4)(a) - }   { + (7)(a) + } The association shall
provide, within 10 business days of receipt of a written request
from an owner, a written statement that provides:
  (A) The amount of assessments due from the owner and unpaid at
the time the request was received, including:
  (i) Regular and special assessments;
  (ii) Fines and other charges;
  (iii) Accrued interest; and
  (iv) Late payment charges.
  (B) The percentage rate at which interest accrues on
assessments that are not paid when due.
  (C) The percentage rate used to calculate the charges for late
payment or the amount of a fixed charge for late payment.
  (b) The association is not required to comply with paragraph
(a) of this subsection if the association has commenced
 
litigation by filing a complaint against the owner and the
litigation is pending when the statement would otherwise be due.
    { - (5) - }  { +  (8) + } The association shall make the
documents, information and records described in subsections (1)
and (3) of this section and all other records of the association
reasonably available for examination by an owner and any
mortgagee of a lot.  Upon the written request of an owner or
mortgagee of a lot, the association shall make available during
reasonable hours all such records for duplication. The documents,
information and records described in subsections (1) and (3) of
this section and all other records of the association shall be
located within this state. The association shall maintain a copy,
suitable for the purpose of duplication, of the following:
  (a) The declaration, bylaws, association rules and regulations
and any amendments or supplements to them.
  (b) The most recent financial statement prepared pursuant to
subsection (3) of this section.
  (c) The current operating budget of the association.
    { - (6) - }  { +  (9) + } 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) - }  { +
(8) + } of this section.
    { - (7) - }  { +  (10) + } The association may charge a
reasonable fee for furnishing copies of any documents,
information or records described in this section. The fee may
include reasonable personnel costs for furnishing the documents,
information or records.
  SECTION 3. ORS 100.210 is amended to read:
  100.210. (1) A turnover meeting shall be called by the
declarant within 90 days of the expiration of any period of
declarant control reserved in the declaration or bylaws under ORS
100.200. If no control has been reserved, the declarant shall
call the turnover meeting within 90 days of the earlier of:
  (a) In a single stage condominium, three years from the date of
conveyance of the first unit to a person other than the declarant
or conveyance of 50 percent of the units.
  (b) In a staged or flexible condominium, seven years from the
date of conveyance of the first unit to a person other than the
declarant or conveyance to persons other than the declarant of 50
percent of the total number of units which the declarant may
submit to the provisions of this chapter under ORS 100.125 or
100.150.
  (2) The declarant shall give notice of the turnover meeting in
accordance with the bylaws of the condominium to each unit owner
at least 10 but not more than 50 days prior to the meeting.  The
notice shall state the purpose of the meeting and the time and
place where it is to be held.
  (3) If the meeting required under subsection (1) of this
section is not called by the declarant within the time specified,
the meeting may be called and notice given by a unit owner or any
first mortgagee of a unit.
  (4) At the turnover meeting:
  (a) The declarant shall relinquish control of the
administration of the association of unit owners and the unit
owners shall assume the control;
  (b) The unit owners shall elect a board of directors in
accordance with the bylaws of the condominium; and
  (c) The declarant shall deliver to the association the items
specified in subsection (5) of this section.
  (5) At the turnover meeting the declarant shall deliver to the
association all property of the unit owners and the association
of unit owners held or controlled by the declarant including, but
not limited to, the following items, if applicable:
 
 
  (a) The original or a photocopy of the recorded declaration and
bylaws of the condominium and any supplements and amendments
thereto.
  (b) A copy of the articles of incorporation.
  (c) The minute books, including all minutes, and other books
and records of the association.
  (d) The reserve study, updates described in ORS 100.175 and
other sources of information that serve as a basis for
calculating reserves in accordance with ORS 100.175 (3).
  (e) Any rules and regulations which have been promulgated.
  (f) Resignations of officers and members of the board of
directors who are required to resign because of the expiration of
any period of declarant control reserved under ORS 100.200.
  (g) A   { - report of the present financial condition of the
association of unit owners. The report shall consist - }  { +
financial statement consisting + } of a balance sheet and an
income and expense statement for the preceding 12-month period or
the period following the recording of the declaration, whichever
period is
  { - less - }  { +  shorter. If the annual assessments of an
association of unit owners exceed $75,000, the association shall
engage an independent certified public accountant licensed in the
State of Oregon to review the financial statement in accordance
with the Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public
Accountants + }.
  (h) Association funds or control thereof, including, but not
limited to, funds for reserve required under ORS 100.530 (3)(b)
and any bank signature cards.
  (i) All tangible personal property that is property of the
association and an inventory of such property.
  (j) A copy of the following, if available:
  (A) The as-built architectural, structural, engineering,
mechanical, electrical and plumbing plans.
  (B) The original specifications indicating thereon all material
changes.
  (C) The plans for underground site service, site grading,
drainage and landscaping together with cable television drawings.
  (D) Any other plans and information relevant to future repair
or maintenance of the property.
  (k) Insurance policies.
  (L) Copies of any occupancy permits which have been issued for
the condominium.
  (m) Any other permits issued by governmental bodies applicable
to the condominium in force or issued within one year prior to
the date the unit owners assume control of the administration of
the association of unit owners.
  (n) A list of the general contractor and the subcontractors
responsible for construction or installation of the major
plumbing, electrical, mechanical and structural components of the
common elements.
  (o) A roster of unit owners and their addresses and telephone
numbers, if known, as shown on the records of the declarant.
  (p) Leases of the common elements and any other leases to which
the association is a party.
  (q) Employment or service contracts in which the association is
one of the contracting parties or service contracts in which the
association or the unit owners have an obligation or
responsibility, directly or indirectly, to pay some or all of the
fee or charge of the person performing the service.
  (r) Any other contracts to which the association of unit owners
is a party.
  (6) In order to facilitate an orderly transition, during the
three-month period following the turnover meeting, the declarant
or an informed representative shall be available to meet with the
board of directors on at least three mutually acceptable dates to
review the documents delivered under subsection (5) of this
section.
  (7) If the declarant has complied with this section, unless the
declarant otherwise has sufficient voting rights as a unit owner
to control the association, the declarant shall not be
responsible for the failure of the unit owners to comply with
subsection (4) of this section and the declarant shall be
relieved of any further responsibility for the administration of
the association except as a unit owner of any unsold unit.
  SECTION 4. ORS 100.480 is amended to read:
  100.480. (1) The association of unit owners shall retain within
this state the documents, information and records delivered to
the association under ORS 100.210.
  (2) The association of unit owners shall keep financial records
sufficient for proper accounting purposes. All assessments shall
be deposited in a separate bank account, located within this
state, in the name of the association. All expenses of the
association shall be paid from the association bank account.
  (3) Within 90 days after the end of the fiscal year, the board
of directors shall  { + prepare or cause to be prepared an annual
financial statement consisting of a balance sheet and an income
and expense statement for the preceding fiscal year and shall + }
distribute to each unit owner a copy of the annual financial
statement   { - consisting of a balance sheet and income and
expense statement for the preceding fiscal year - } .
   { +  (4) Commencing in the fiscal year following the turnover
meeting held under ORS 100.210, an association of unit owners of
a condominium established on or after the effective date of this
2003 Act that has annual assessments exceeding $75,000 shall,
within 180 days after the end of each fiscal year, cause the
financial statement to be reviewed by an independent certified
public accountant licensed in the State of Oregon in accordance
with the Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public
Accountants.
  (5) Upon adoption by the board of directors, in accordance with
the bylaws, of a resolution requiring review of the financial
statement or upon submission to the board of a petition, signed
by a majority of the unit owners, mandating review of the
financial statement, any other association of unit owners also is
subject to the provisions of subsection (4) of this section
commencing in the following fiscal year.
  (6) An association of unit owners described in subsection (5)
of this section may:
  (a) By an affirmative vote of at least 60 percent of the
owners, choose to discontinue complying with the requirement to
cause the annual financial statement to be reviewed as provided
in subsection (4) of this section; or
  (b) By an affirmative vote of at least 60 percent of the
owners, not including the vote of a declarant with respect to any
lots owned by the declarant, elect, on an annual basis, not to
comply with the requirement to cause the annual financial
statement to be reviewed as provided in subsection (4) of this
section. + }
    { - (4)(a) - }   { + (7)(a) + } The association shall
provide, within 10 business days of receipt of a written request
from an owner, a written statement that provides:
  (A) The amount of assessments due from the owner and unpaid at
the time the request was received, including:
  (i) Regular and special assessments;
  (ii) Fines and other charges;
  (iii) Accrued interest; and
  (iv) Late payment charges.
  (B) The percentage rate at which interest accrues on
assessments that are not paid when due.
 
  (C) The percentage rate used to calculate the charges for late
payment or the amount of a fixed charge for late payment.
  (b) The association is not required to comply with paragraph
(a) of this subsection if the association has commenced
litigation by filing a complaint against the owner and the
litigation is pending when the statement would otherwise be due.
    { - (5) - }  { +  (8) + } The documents, information and
records described in subsections (1) to (3) of this section and
all other records of the association of unit owners shall be
located within this state and shall be reasonably available for
examination by a unit owner and any mortgagee of a unit. Upon the
written request of an owner or mortgagee of a unit, the
association shall make the documents, information and records
described in subsections (1) to (3) of this section and other
records available for duplication during reasonable hours. The
association of unit owners shall maintain a copy, suitable for
the purpose of duplication, of the following:
  (a) The declaration, bylaws, association rules and regulations
and any amendments or supplements thereto;
  (b) The most recent annual financial statement prepared in
accordance with subsection (3) of this section; and
  (c) The current operating budget of the association.
    { - (6) - }   { + (9) + } 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) - }  { +  (8) + } of this section.
    { - (7) - }  { +  (10) + } The association of unit owners may
charge a reasonable fee for furnishing copies of any documents,
information or records described in this section. The fee may
include reasonable personnel costs incurred to furnish the
information.
    { - (8) - }  { +  (11) + } 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.
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