Published on: December 20, 2010
MEEB attorneys Edmund Allcock, co-chair of the CAI RI Legislation Action Committee, and Janet Oulousian Aronson have followed up last year’s success in passing ground breaking super-lien legislation in Rhode Island by proposing House Bill 5906, which was sponsored by Representative Patricia Serpa (D) of West Warwick, RI. House Bill 5906 would require unincorporated condominium associations to record the names and contact information for members of the board at least annually, and more often if necessary, to reflect changes in membership. The recording requirements currently apply to incorporated associations, but not to unincorporated ones. As a result banks, attorneys and others don’t always know where to send legal notices informing a board of a foreclosure, litigation or other legal or important matters. In this day and age certainty and knowledge of information (even if bad news) is power. The quicker and more efficiently information is received by condominium associations, the quicker and more efficiently they can address the problems facing their community.
House Bill 5906 also would allow RI condominium associations the power to borrow money from banks to fund repair and improvement projects. Currently that authority is only available if it is contained in the condominium documents, which often it is not. Previously lending to condominium associations in Rhode Island was almost unheard of due to the lack of the strength of security, which is the associations receivable and which explains why the power to borrow was often lacking.
The passage of last year’s superlien legislation has strengthened that security/receivable and resulted in a willingness by banks to lend money to condominium associations to fund needed repair and improvement projects. Accordingly, this year’s proposed legislation really is a product of last year’s legislative success. Most importantly, the legislation provides needed economic relief for condominium unit owners, who are struggling to pay their mortgages and condominium fees and who cannot afford special assessments to pay for repair and improvement projects. This legislation allows associations to borrow the money and defray assessments, while at the same time maintaining unit and property values.
On April 30, 2009, House Bill 5906 Passed the RI House of Representatives by an amazing 61-0 vote. The bill is currently pending in the RI Senate and hopefully will be met with equal success.
Ed Allcock can be reached at email@example.com
Janet Oulousian Aronson can be reached at firstname.lastname@example.org