For the first time since 2014, the City Council has adopted amendments to the District of Columbia Condominium Act. While the 2014 legislation constituted a sweeping overhaul, the 2017 amendments focus on specific issues, ranging from debtor protections to creation of a condominium advisory council. The amendments were transmitted to Congress for approval in late February and likely become effective April 7, 2017. Here is a summary of the legislation:
Establishment of Advisory Council
The amendments provide for creation of a Condominium Association Advisory Council (CAAC) to serve as an advisory body to the city government on DC condominium matters. The CAAC will be composed of a “community representative” of each of the eight Wards; a community representative appointed by the Council’s Committee that oversees the Department of Housing & Community Development (DHCD); and Mayor-appointed representatives from the community, the mortgage industry and condominium law industry. The “community representatives” must be residents of the District who are members in good standing of condominium associations, with priority for those serving on their board. The CAAC must meet at least four times per year and is similar to bodies in Montgomery County and Virginia, although it is only advisory in nature.
Collection of Assessment Debts
A new section was added with required procedures for collecting past due assessments from owners. Under the law, condominium associations, when advising owners of intent to take legal action, must provide a notice to the owner including a statement of account showing the total amount past due (with breakdowns), information showing who the owner may contact to settle the debt and an enclosure disclosing resources available for housing counseling services at the DHCD and HUD websites. The notice must also state that a failure to pay past due amounts may result in legal action, including foreclosure.
Non-Judicial Foreclosure Procedures
The Act was amended to provide that a non-judicial foreclosure may not be held until at least 31 days following recordation of a Notice of Foreclosure in land records, as well as the already-required delivery of a foreclosure Notice to the owner. The foreclosure Notice must include past due statements, breakdowns showing accrued interest and late fees, as well as instructions on how the owner can request a full account statement. The Notice must also include information regarding the availability of housing counseling services through DHCD or HUD. The law further requires delivery of copies of foreclosure notices to the Mayor, junior lien holders and mortgage holders.
These new requirements may well affect the practical ability of associations to undertake non-judicial foreclosures, given the third parties now required to receive copies of foreclosure Notices. Associations may wish to consult with counsel to determine whether the foreclosure remedy remains viable.
Initial Purchasers - Copies of Documents
The Act was amended to require that developers provide an exact copy of the recorded declaration, bylaws and the “Condominium Association Bill of Rights and Responsibilities” to purchasers within 10 days of recordation.
Association “Bill of Rights & Responsibilities”
Much like a Virginia law enacted in 2015, the Act was amended to provide for a unit owner “Bill of Rights and Responsibilities.” The list contained in this law does nothing but re-state existing rights and includes the:
1. Right to attend and participate in meetings of the association at least once each year, according to §42-1903.03(a).
2. Right to observe all association, committee and board meetings, except for meetings held in lawful executive session, and to examine/copy meeting minutes.
3. Right for opportunity to comment on association matters during each regular/special board meetings, subject to §42-1903.03(c) (allowing board to adopt rules).
4. Right to have meetings of associations and boards be conducted with a quorum present, as provided in the governing documents.
5. Right to cast a vote on any matter requiring a vote by the membership in proportion to the owner’s voting interest.
6. Right to a board that performs duties consistent with the care required of a fiduciary, in accordance with business judgment standard.
7. Right to cure any default in payment of an assessment before a foreclosure sale by tendering payment in full of past due amounts owed.
8. Right to request a statement setting forth the amount of unpaid assessments currently levied against the unit owner.
9. Right of access to books and records kept by or on behalf of the association, subject to the provisions of §42-1903.14 and condominium instruments.
This “Bill of Rights” will be posted on DHCD’s website. When this occurs, we suggest that associations maintain a copy in the management office or the association website.
The Mayor is required to issue rules to implement provisions of the legislation within 180 days of the effective date. It is expected that the amendments will become effective April 7, 2017.