New 2021 Legislation affecting Condominium, Cooperative and Homeowners’ Associations Part II
This year two bills relevant to Community Associations (Senate Bills 630 and 56) became law effective July 1, 2021. Last month we reviewed the provisions of Senate Bill 630. Today we will look at Senate Bill 56. The review is the order presented in the Bill and not in any order of importance.
SB 56: Applies to Condominium, Cooperative and HOA’s concerning collection of assessments by Associations and adds several procedural requirements before an association can recover attorneys’ fees in a collection matter.
Sending Out Invoices: The bill provides that if an association sends out an invoice for assessments or a statement of account, the invoice or statement must be delivered to the owners by first-class United States mail or by electronic transmission to an e-mail address maintained in the association’s official records. If an association decides to change the method of delivery of the invoice or statement, the association must deliver a written notice, by first-class mail to the owner’s last address as reflected in the records or to the property address, of the change to each owner, at least 30 days before the association sends the invoice or statement by the new delivery method. An owner must affirmatively acknowledge, electronically or in writing that the owner understands that the association will change its method of delivery of the invoice or statement before the association may change the method of delivery. The owner’s affirmative acknowledgment becomes a record of the association but is not available to inspection by other owners.
No Attorneys’ Fees in 1st Notice: The bill further provides that an association may not require payment of attorneys’ fees related to a past due assessment without first delivering a written notice to an owner which specifies the amount owed to the association without an assessment of attorneys’ fees. The association must give an owner the opportunity to pay past due amounts, within 30 days of the date of the letter, without imposition of attorneys’ fees.
Use Form and Follow Procedures: The statute provides a form written notice for associations to use. Most associations already provide such a notice, however, it is important to follow the procedural requirements for delivery of the notice. A failure to do so may prevent the association recovering attorneys’ fees in a collection case. For example, the bill provides that the late notice must be sent first-class United States mail to the owner, at the last address of the owner as reflected in the association’s records and, if this address is not the property address, the late notice must also be sent by first-class mail to the property address. A rebuttable presumption that an association mailed a notice in accordance with the bill is established if a board member, officer, agent or property manager attests in a sworn affidavit to such mailing.
45 Day Notice of Intent to File a Lien: In condominium and cooperative associations, the bill provides that a lien may not be filed against a property without giving the owner 45 day notice of the association’s intent to file a lien. The 45-day notice period will now be the same as the existing requirement in homeowner associations.
