HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR

HOUSE BILL 259

54th legislature - STATE OF NEW MEXICO - second session, 2020

 

 

 

 

 

 

 

AN ACT

RELATING TO HOMEOWNER ASSOCIATIONS; CREATING THE UNFAIR OR DECEPTIVE TRADE PRACTICE OF ABUSIVE HOMEOWNER ASSOCIATION PRACTICES; REQUIRING THAT CERTAIN PROVISIONS OF THE HOMEOWNER ASSOCIATION ACT COMPLY WITH THE UNFAIR PRACTICES ACT.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 47-16-6 NMSA 1978 (being Laws 2013, Chapter 122, Section 6) is amended to read:

     "47-16-6. DUTIES OF A HOMEOWNER ASSOCIATION.--

          A. The association shall exercise any powers conferred to the association in the community documents.

          B. The association shall have a lien on a lot for any assessment levied against that lot or for fines imposed against that lot's owner from the time the assessment or fine becomes due. If an assessment is payable in installments, the full amount of the assessment shall be a lien from the time the first installment becomes due. The association's lien may be foreclosed in like manner as a mortgage on real estate.

          C. Recording the declaration constitutes notice recorded in the office of the county clerk in the county or counties in which any part of the real property is located and perfection of the lien.

          D. Upon written request by a lot owner, the association shall furnish a recordable statement setting forth the amount of unpaid assessments against the lot owner's lot. The statement shall be furnished within ten business days after receipt of the request and is binding on the association and the board.

          E. The provisions of Subsection B of this section shall comply with Section 3 of this 2020 act."

     SECTION 2. Section 47-16-18 NMSA 1978 (being Laws 2019, Chapter 30, Section 10) is amended to read:

     "47-16-18. ENFORCEMENT OF COVENANTS--DISPUTE RESOLUTION.--

          A. Each association and each lot owner and the owner's tenants, guests and invitees shall comply with the [Homeowners] Homeowner Association Act and the association's community documents.

          B. Unless otherwise provided for in the community documents or Section 3 of this 2020 act, the association may, after providing written notice and an opportunity to dispute an alleged violation other than failure to pay assessments:

                (1) levy reasonable fines for violations of or failure to comply with any provision of the community documents; and

                (2) suspend, for a reasonable period of time, the right of a lot owner or the lot owner's tenant, guest or invitee to use common areas and facilities of the association.

          C. Prior to imposition of a fine or suspension, the board shall provide an opportunity to submit a written statement or for a hearing before the board or a committee appointed by the board by providing written notice to the person sought to be fined or suspended fourteen days prior to the hearing. Following the hearing or review of the written statement, if the board or committee, by a majority vote, does not approve a proposed fine or suspension, neither the fine nor the suspension may be imposed. Notice and a hearing are not required for violations that pose an imminent threat to public health or safety.

          D. If a person against whom a violation has been alleged fails to request a hearing or submit a written statement as provided for in Subsection C of this section, the fine or suspension may be imposed, calculated from the date of violation.

          E. A lot owner or the association may use a process other than litigation used to prevent or resolve disputes, including mediation, facilitation, regulatory negotiation, settlement conferences, binding and nonbinding arbitration, fact-finding, conciliation, early neutral evaluation and policy dialogues, for complaints between the lot owner and the association or if such services are required by the community documents.

          F. In addition to the provisions of this section, an association shall comply at a minimum with the provisions of Section 3 of this 2020 act."

     SECTION 3. A new section of the Unfair Practices Act is enacted to read:

     "[NEW MATERIAL] ABUSIVE HOMEOWNER ASSOCIATION PRACTICES-- PROHIBITION.--

          A. Abusive homeowner association practices shall constitute an unfair or deceptive trade practice consisting of:

                (1) failing to provide timely notice of a fee, fine, assessment or penalty; or

                (2) assessing an unconscionable fee, fine, assessment or penalty.

          B. Failing to provide timely notice of a fee, fine, assessment or penalty consists of not providing actual notice of the fee, fine, assessment or penalty within thirty days of its imposition. If a homeowner association fails to provide notice of a fee, fine, assessment or penalty pursuant to this subsection, the homeowner association shall:

                (1) not be able to pursue collection of the fee, fine, assessment or penalty; and

                (2) remove the imposed fee, fine, assessment or penalty from a lot owner's balance.

          C. As used in this section:

                (1) "homeowner association" means an incorporated or unincorporated entity upon which maintenance and operational responsibilities are imposed and to which authority is granted in the declaration; and

                (2) "lot owner" means a person or group of persons holding title to a lot, including a declarant."

- 5 -