Citations Affected: IC 32-25.5; IC 32-28.
Synopsis: Homeowners associations. Applies the following provisions
to a homeowners association (association) established after June 30,
2009, and allows an association established before July 1, 2009, to
elect to be governed by the provisions: (1) Requires an association to
maintain a current roster of all members of the association (members).
(2) Requires an association to prepare an annual budget that must be
approved by the members. (3) Requires the board of directors of an
association (board) to address an item of business if more than 50% of
the members petition the board to address the item. (4) Prohibits a
board from entering into certain contracts without the approval of the
affected members. (5) Prohibits a homeowners association from
incurring certain amounts of indebtedness or liability on behalf of the
homeowners association unless incurring the indebtedness or liability
is approved by the affirmative vote of a majority of members of the
homeowners association. (6) Provides that the governing documents of
an association must include grievance resolution procedures that
provide for the final and binding resolution of disputes. (7) Provides
that the governing documents of an association must allow for the
termination of the association. (8) Specifies procedures concerning
enforcement of homeowners association liens involving unpaid regular
annual assessments and collection of other unpaid assessments that are
not enforceable through the use of a lien. (9) Prohibits an association
from suspending the voting rights of a member for nonpayment of
annual assessments unless the assessments are delinquent for more
than one year. (10) Provides certain defenses to a member if the
association brings a civil action against the member involving an act in
furtherance of the member's right of petition or free speech.
Effective: July 1, 2009.
January 7, 2009, read first time and referred to Committee on Judiciary.
February 17, 2009, amended, reported _ Do Pass.
February 20, 2009, read second time, amended, ordered engrossed.
A BILL FOR AN ACT to amend the Indiana Code concerning
Sec. 2. "Act in furtherance of a person's right of petition or free speech under the Constitution of the United States or the Constitution of the State of Indiana in connection with a public issue" has the meaning set forth in IC 34-7-7-2.
Sec. 3. "Board" refers to the board of directors of a homeowners association.
Sec. 4. "Governing documents" includes:
(1) the articles of incorporation and bylaws of a homeowners association and all adopted amendments to the articles of incorporation and bylaws; and
(2) any applicable declaration of plat.
Sec. 5. "Homeowners association" means a corporation or another entity that:
(1) is organized and operated exclusively for the benefit of two (2) or more persons who each own a dwelling in fee simple;
(2) acts, in accordance with the articles, bylaws, or other documents governing the corporation or entity, to:
(A) acquire, transfer, manage, repair, maintain, or engage in construction on or in the land and improvements on the land related to the use of the dwellings owned by the members of the corporation or entity;
(B) purchase insurance to cover a casualty or an activity on or in the land and improvements on the land;
(C) engage in an activity incidental to an activity described in clause (A) or (B); or
(D) engage in more than one (1) of the activities described in clauses (A) through (C); and
(3) may be governed by a board that serves the purpose of setting policy and controlling or otherwise overseeing the activities or functional responsibilities of the corporation or entity.
Sec. 6. "Subdivision" means the division of a parcel of land into lots, parcels, tracts, units, or interests in the manner defined and prescribed by a subdivision control ordinance adopted by a legislative body under IC 36-7-4.
Chapter 3. Homeowners Associations
Sec. 1. (a) A homeowners association shall maintain:
(1) a current roster of all members of the association; and
(2) the mailing address and parcel identification for each member of the association.
(b) The homeowners association shall also maintain any
electronic mail addresses or facsimile (fax) numbers of those
members who have consented to receive notice by electronic mail
or facsimile (fax). Electronic mail addresses and facsimile (fax)
numbers provided by a member to receive notice by electronic mail
or facsimile (fax) shall be removed from the association's records
when the member revokes consent to receive notice by electronic
mail or facsimile (fax). However, the association is not liable for an
erroneous disclosure of an electronic mail address or a facsimile
(fax) number for receiving notices.
(c) The mailing addresses and parcel identifications maintained by a homeowners association under subsection (a):
(1) shall be made available to a member of the homeowners association upon request;
(2) may be used by a member of the homeowners association only for a purpose related to the operation of the homeowners association; and
(3) may not be used by a member of the homeowners association for personal reasons.
(d) Except as provided in subsection (c), a homeowners association may not sell, exchange, or otherwise transfer information maintained by the homeowners association under this section to any person.
Sec. 2. If more than fifty percent (50%) of the members of a homeowners association petition the board to address an item of business, including the amendment of any governing documents, the board shall address the petitioned item on an agenda:
(1) at its next regular board meeting or at a special meeting of the board; and
(2) not later than sixty (60) days after the receipt of the petition.
Sec. 3. (a) A homeowners association shall prepare an annual budget.
(b) The annual budget must reflect:
(1) the estimated revenues and expenses for the budget year; and
(2) the estimated surplus or deficit as of the end of the current budget year.
(c) The homeowners association shall provide each member of the homeowners association with:
(1) a copy of the proposed annual budget; or
(2) a written notice that a copy of the proposed annual budget is available upon request at no charge to the member;
regardless of the:
(1) total number of lots, parcels, tracts, units, or interests in land the person owns in the subdivision; or
(2) total number of people who reside on any lot, parcel, tract, unit, or interest in land the person owns in the subdivision.
However, the developer of the subdivision may cast one (1) vote under this section for each lot, parcel, tract, or unit in the subdivision that is owned by the developer.
(c) A vote held under this section must be conducted by paper ballot.
(d) A homeowners association shall distribute paper ballots to persons eligible to vote under this section at least thirty (30) days before the date the votes are to be opened and counted.
(e) Votes cast under this section shall be opened and counted at a public meeting held by the homeowners association.
Sec. 6. (a) The governing documents must include grievance resolution procedures that apply to all members of the homeowners association and the board.
(b) The procedures described in subsection (a) must provide for the final and binding resolution of disputes concerning the administration of the homeowners association and interpretation of the governing documents.
Sec. 7. (a) The governing documents must include provisions that allow the termination of the homeowners association:
(1) if at least ninety percent (90%) of the members of the homeowners association agree to the termination; and
(2) if at least forty percent (40%) of the lots, parcels, tracts, or units in the subdivision are subject to mortgage agreements, if one hundred percent (100%) of the mortgage lenders that hold mortgages on a lot, parcel, tract, or unit in the subdivision agree to the termination.
(b) The approval of a termination under subsection (a) must be evidenced by an agreement:
(1) signed by:
(A) at least ninety percent (90%) of the members of a homeowners association; and
(B) if applicable, one hundred percent (100%) of the mortgage lenders that hold mortgages on a lot, parcel, tract, or unit in the subdivision; and
(2) filed with the clerk of the circuit court that has jurisdiction in the county in which the real property governed by the homeowners association is located.