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SENATE BILL NO. 25
INTRODUCED BY R. WEBB
A BILL FOR AN ACT ENTITLED: "AN ACT GENERALLY REVISING CONDOMINIUM AND TOWNHOME LAWS; PROVIDING REQUIREMENTS FOR CONVERSION OF A CONDOMINIUM TO A TOWNHOME OR TOWNHOUSE; REQUIRING THAT NOTICE OF THE CONVERSION AND AN OPPORTUNITY TO OBJECT TO THE CONVERSION BE GIVEN TO MORTGAGE HOLDERS OF CONDOMINIUM UNITS TO BE CONVERTED TO TOWNHOMES OR TOWNHOUSES; PROVIDING THAT AN AMENDED DECLARATION MUST BE ACCEPTED FOR RECORDING IF IT MEETS CERTAIN REQUIREMENTS; PROVIDING THAT THE CONVERSION OF A CONDOMINIUM TO A TOWNHOME OR TOWNHOUSE IS EFFECTIVE UPON THE RECORDING OF THE AMENDED DECLARATION; CLARIFYING THE DEFINITION OF "TOWNHOME" OR "TOWNHOUSE"; REQUIRING A CONDOMINIUM DECLARATION TO STATE THE PERCENTAGE OF OWNERS ALLOWED TO AMEND THE DECLARATION IF LESS THAN 100%; AMENDING SECTIONS 70-23-102 AND 70-23-301, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND AN APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Conversion of condominium to townhome. (1) A condominium may be converted to a townhome or townhouse if the percentage of unit owners required for approval of amendments pursuant to the condominium's most recently recorded declaration consent in writing to the conversion and an amended declaration containing a legal description of the land beneath each unit to be converted to a townhome is recorded.
(2) Within 10 days following the date of written consent pursuant to subsection (1), a representative of the unit owners who consented to the conversion shall deliver by certified mail, return receipt requested, to each lender holding a mortgage against a unit subject to the conversion or to the applicable loan servicing company a written notification of the proposed conversion with an opportunity to respond. If a lender or loan servicing company does not, within 45 days after the date of the mailing of the written notification, send by certified mail to the representative who prepared the notification a written notice of objection to the conversion and a written explanation of the lender's or loan servicing company's requirements for acceptance of the conversion, the lender is considered to have consented to the conversion, and the unit owners' representative may record the amended declaration.
(3) The amended declaration must be executed in accordance with 70-23-301.
(4) An amended declaration must be accepted for recording by the clerk and recorder if the amended declaration contains a description of the units pursuant to subsection (1) and meets the requirements of 70-23-301, 70-23-305, and this section.
(5) The conversion of a condominium to a townhome or townhouse is effective upon recording of the amended declaration. The amended declaration must be accompanied by an exhibit containing certification by the unit owners that they have consented in writing to the conversion as provided in subsection (1).
Section 2. Section 70-23-102, MCA, is amended to read:
"70-23-102. Definitions. In this chapter, unless the context requires otherwise, the following definitions apply:
(1) "Association of unit owners" means all the unit owners acting as a group in accordance with the declaration and bylaws.
(2) "Building" means a multiple-unit building or buildings comprising a part of the property.
(3) "Common elements" means the general common elements and the limited common elements.
(4) "Common expenses" means:
(a) expenses of administration, maintenance, repair, or replacement of the common elements;
(b) expenses agreed upon as common by all the unit owners; and
(c) expenses declared common by 70-23-610 and 70-23-612 or by the declaration or the bylaws of the particular condominium.
(5) "Condominium" means the ownership of single units with common elements located on property submitted to the provisions of this chapter. The term does not include a townhome or townhouse.
(6) "Declaration" means the instrument by which the property is submitted to the provisions of this chapter.
(7) "General common elements", unless otherwise provided in a declaration or by consent of all the unit owners, means:
(a) the land on which the building is located, except any portion of the land included in a unit or made a limited common element by the declaration;
(b) the foundations, columns, girders, beams, supports, mainwalls, roofs, halls, corridors, lobbies, stairs, fire escapes, entrances, and exits of the building;
(c) the basements, yards, gardens, parking areas, and outside storage spaces, private pathways, sidewalks, and private roads;
(d) installations of central services such as power, light, gas, hot and cold water, heating, refrigeration, air conditioning, waste disposal, and incinerating;
(e) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all apparatus and installations existing for common use;
(f) the premises for the lodging of janitors or caretakers of the property; and
(g) all other elements of the building necessary or convenient to its existence, maintenance, and safety or normally in common use.
(8) "Limited common elements" means those common elements designated in the declaration or by agreement of all the unit owners as reserved for the use of a certain unit or number of units to the exclusion of the other units.
(9) "Majority" or "majority of the unit owners", unless otherwise provided in the declaration, means the owners of more than 50% in the aggregate of the undivided ownership interests in the general common elements as the percentage of interest in the element appertaining to each unit is expressed in the declaration. Whenever a percentage of the unit owners is specified, percentage means the percentage in the aggregate of undivided ownership.
(10) "Manager" means the manager, board of managers, or other person in charge of the administration of or managing the property.
(11) "Project" means a real estate condominium project whereby a condominium of two or more units located on property submitted to the provisions of this chapter are is offered or proposed to be offered for sale.
(12) "Property" means the land, all buildings, improvements, and structures on the land, and all easements, rights, and appurtenances belonging to the land that are submitted to the provisions of this chapter.
(13) "Recording officer" means the county officer charged with the duty of filing and recording deeds and mortgages or other instruments or documents affecting the title to real property.
(14) "Townhome" or "townhouse" means property that is owned subject to an arrangement under which persons own their own units and hold separate title to the land beneath their units, but under which they may jointly own the common areas and facilities. The land beneath a unit may include the land beneath patios and decks attached to the unit and may include any private yard area within the unit footprint as depicted on any site plan attached to and recorded with the declaration.
(15) "Unit" means a part of the property including one or more rooms occupying one or more floors or a part or parts of the property intended for any type of independent use and with a direct exit to a public street or highway or to a common area or area leading to a public street or highway.
(16) "Unit designation" means the number, letter, or combination of numbers and letters designating a unit in the declaration.
(17) "Unit owner" means the person owning a unit in fee simple absolute individually or as co-owner in any real estate tenancy relationship recognized under the laws of this state. However, for all purposes, including the exercise of voting rights, provided by lease filed with the presiding officer of the association of unit owners, a lessee of a unit must be considered a unit owner."
Section 3. Section 70-23-301, MCA, is amended to read:
"70-23-301. Contents of declaration. A declaration must contain:
(1) a description of the land, whether leased or in fee simple, on which the building is located or is to be located;
(2) the name by which the property will be known and a general description of the building, including the number of stories and basements, the number of units, and the principal materials of which it is constructed;
(3) the unit designation, location, approximate area of each unit, and any other data necessary for proper identification;
(4) a description of the general common elements and the percentage of the interest of each unit owner in the common elements;
(5) a description of the limited common elements, if any, stating to which units their use is reserved and in what percentage;
(6) a statement of the use for which the building and each of the units is intended;
(7) the name of a person to receive service of process in the cases provided in 70-23-901 and the residence or place of business of the person which must be within the county in which the property is located;
(8) an exhibit containing certification from the applicable local government that the condominiums, townhomes, or townhouses are either exempt from review under 76-3-203 or have been approved following review under Title 76, chapter 3, parts 5 and 6; and
(9) if less than 100%, the percentage of unit owners required to amend the declaration, except that the percentage of unit owners may not be less than 75%; and
(9)(10) any other details regarding the property that the person executing the declaration considers desirable."
NEW SECTION. Section 4. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 70, chapter 23, and the provisions of Title 70, chapter 23, apply to [section 1].
NEW SECTION. Section 5. Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].
NEW SECTION. Section 6. Effective date. [This act] is effective on passage and approval.
NEW SECTION. Section 7. Applicability. [Sections 1 and 3] apply to declarations recorded on or after [the effective date of this act].
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