Length of declarant control; period for expanding condominiums; community manager requirements; requiring a written agreement between the declarant and the municipality, declarant warranties, and posting securities; requiring approval by the municipality of condominium instruments; and requiring certification of condominium financial statements

2. The bill adds requirements for condominium declarants (the person who establishes the condominium). A declarant must enter into an agreement with each municipality in which the condominium is to be located that specifies the rights and responsibilities of the declarant and the municipality. The agreement must address zoning approvals, permit issuance, the completion schedule, and remedies in the event of default. The agreement must include fair market value guarantees, utility and water and sewer specifications, and a development plan with such details as buildings and other structures, roadways, open space, and parking facilities. The agreement must authorize the municipality to inspect the condominium development during construction and must authorize the condominium association to enforce the agreement. The bill also explicitly gives an association standing to enforce the agreement between the declarant and the municipality.

3. In addition to the agreement requirement, a declarant must provide a three-year warranty to each unit owner against defects in materials and workmanship in the unit, and a three-year warranty to the association against defects in materials and workmanship in the condominium outside of the units.

Before conveying the first unit to a purchaser, the declarant must post a bond or letter of credit with each municipality with which the declarant has entered into an agreement. The amount of bond or letter of credit must equal 10 percent of the estimated construction or conversion costs and be in favor of the municipality for the benefit of the association and any unit owner damaged by a defect in materials or workmanship.

4. Under current law, a condominium declaration may authorize the association to hire a manager to handle the day-to-day affairs of the condominium.

The bill provides that any person hired by an association as a manager must be certified by the Certified Manager of Community Associations certification program and must post a bond in an amount specified by the association board.

5. Under current law, before the declarant turns over control of the condominium to the owner's association and for one year after that, the association must arrange for an independent audit of the condominium's financial records, at the association's expense, upon the request of three unit owners or the owners of 10 percent of the units, whichever is less. Any request for an audit within three years after a previous audit must be paid for by the requesting unit owners. The bill requires the association to arrange for an independent audit by a certified public accountant annually, at the association's expenses, both during and after the declarant turns over control. Any additional audit must be paid for by the requesting owner or owners.

6. Under current law, the declarant may not have control over the association for more than three years, or for more than ten years if the condominium is expandable, meaning that the declaration allows more units to be added to the original plans by amendment to the declaration. Also, the declaration of a condominium may not allow the condominium to be expanded for a period exceeding ten years. The bill limits the period during which a condominium may expand to no more than three years and limits the maximum period of declarant control over the association of an expandable condominium to three years.