Legal Update: Kansas House Bill 2472 and its Impact on Home Owners Associations
The 2010 Legislature of the State of Kansas has enacted House Bill No. 2472, which is entitled the “Kansas Uniform Common Interest Owners Bill of Rights Act (the Act).” The intent of the act is to create uniform operating instructions for all common interest communities (also known as Home Owners Associations) with 12 or more units. The Act is effective as of January 1, 2011. It does not apply retroactively. Some of the important provisions of the act are as follows:
- sets forth the powers and duties of the associations;
- can require disputes between the association and unit owners or between two or more unit owners regarding the common interest community be submitted to nonbinding alternative dispute resolution as a prerequisite to commencement of a judicial proceeding;
- limits the power of associations to suspend rights or privileges of unit owners that fail to pay an assessment;
- establishes a duty of care equivalent to that of a trustee that must be adhered to by officers and members of the board of directors;
- imposes requirements for mandatory annual budgeting;
- imposes requirements for notices of annual meetings, notices for legal proceedings and communication throughout the association;
- requires certain content be included in the by-laws of associations;
- mandates annual meetings be held by the board and its members and that proper notice of said meetings must be distributed per the terms of the Act;
- establishes procedures and protocol for association meetings;
- requires records to be retained for up to 5 years and available for the association’s members to view and copy; and
- sets forth voting requirements and procedures for certain actions of the association.
The passage of this Act will alter and in many cases drastically change the way Home Owners Associations operate as of January 1, 2011. A review of every association’s by-laws should be completed to assure compliance with the Act. In most cases a few amendments to the current by-laws and passage of the same will assure compliance initially. Home Owners Associations will need to review current infrastructure and resources to determine how best to assure compliance with the Act’s requirements on a go forward basis.