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We are classified as "condominium", however, we are actually…

Customer Question
Good morning; we are...

Good morning; we are classified as "condominium", however, we are actually individual patio homes. Can we change from a COA to an HOA?

Lawyer's Assistant: What steps have you taken so far? Have you prepared or filed any paperwork?

We have not taken any steps, we are still under the umbrella of the builder, and he may be able to turn the association over to the owners by the end of the year. I am trying to determine if we can and what the benefits would be for the owners to change from COA to HOA. I think that the values of the homes would be better. Thanks, ***** *****

Lawyer's Assistant: Where is the condominium located?

We are in Louisville, KY, on land that was originally planned for condominiums, and part of the original structures were build, however, our section (about 34 homes) are not connected. We are part of the Legacy at Lake Forest, however, we have separated from the original section and are now our own Association.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Don't think so, I am trying to see if this is a viable option so that we can start the education process and be prepared to transition (and budget for the costs associated with the change) when the owners take official control of the Association. Thanks, John

Submitted: 2 months ago.Category: Real Estate Law
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Answered in 1 day by:
5/27/2018
Real Estate Lawyer: Josie-Mod,
 replied 2 months ago
Josie-Mod
Category: Real Estate Law
Satisfied Customers: 12
Verified
Hi, I'm Josie, a moderator for this topic.
I've noticed you have not yet received a response to this question.
I wonder whether you're ok with continuing to wait for an answer.
If you are, please let me know. If not, feel free to let me know and I will cancel this question for you.
Thank you!
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Customer reply replied 2 months ago
Josie, I'm back on my email machine, and I do not mind waiting for an answer. I was reading my initial information, and hope it is not too confusing. Essentially, a new builder purchased the remaining land, from the developer (5 or more years after the initial project); the originally planned complex was to have 4 phases. Phases 1-3 were completed and phase 4 was not completed. The new builder changed from attached condominiums to individual patio homes. When the builder turns over control of the HOA to the us (the owners), I wanted to recommend that we change from "condominium" to detached patio homes (or what ever the correct term might be). However, before heading down that road, I wanted to research and see if that is available option.Thanks, John
Real Estate Lawyer: Attyadvisor, Attorney replied 2 months ago
Attyadvisor
Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 8,987
Experience: 30 years of experience in General Practice, Real Estate Law and Estate Law.
Verified

Welcome and thank you for your question. I will be the professional that will be assisting you. Do you have a copy of the governing documents? Since everything is recorded as a condominium, including deed restrictions on your title/deed, all of the governing documents would need to be amended, including but not limited to each owner's deed and mortgage/deed of trust, if any. Will the Developer do this as this is a massive undertaking for anyone other that the developer?

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Customer reply replied 2 months ago
Actually, I was trying to determine if we could transition, and what the appropriate steps are to accomplish the transition, in addition to what the approximate costs would be associated with the transition. Would also like to know the appropriate Kentucky Statutes to reference/review.Thanks, John
Real Estate Lawyer: Attyadvisor, Attorney replied 2 months ago
Will the devioper have new deeds and repaired releasing the deed restrictions?
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Real Estate Lawyer: Attyadvisor, Attorney replied 2 months ago

Your governing documents documebnts would set out the process. Can you attach the governing documents?

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Real Estate Lawyer: Attyadvisor, Attorney replied 2 months ago

Newest law on amending Condominium declarations, bylaws, plats et al. www.lrc.ky.gov/record/10rs/HB391/bill.doc

“381.9155 Amendment of declaration

(1) Except in cases of amendments that may be executed by a declarant under KRS(###) ###-####6) or(###) ###-#### the association under KRS(###) ###-####(###) ###-####4),(###) ###-####3),(###) ###-####1), or(###) ###-#### or certain unit owners under KRS(###) ###-####2),(###) ###-####1), or(###) ###-####2), and except as limited by subsection (4) of this section and KRS(###) ###-####6), the declaration, including the plats and plans, may be amended only by vote or agreement of unit owners of units to which at least sixty-seven percent (67%) of the votes in the association are allocated, or any larger majority specified in the declaration. The declaration may specify a smaller number only if all of the units are restricted exclusively to nonresidential use.

(2) An action to challenge the validity of an amendment adopted by the association pursuant to this section shall not be brought more than one (1) year after the amendment is recorded.

(3) Every amendment to the declaration shall be recorded in every county in which any portion of the condominium is located, and is effective only upon recordation. An amendment shall be indexed in the name of the condominium and the association and in the name of the parties executing the amendment.

(4) Except to the extent expressly permitted or required by other provisions of KRS(###) ###-####to(###) ###-#### an amendment shall not create or increase special declarant rights, increase the number of units, change the boundaries of any unit, the allocated interests of a unit, or the uses to which any unit is restricted, in the absence of unanimous consent of the unit owners.

(5) Amendments to the declaration required by KRS(###) ###-####to(###) ###-####to be recorded by the association shall be prepared, executed, recorded, and certified on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association.(###) ###-####/p>

Termination of condominium

(1) Except in the case of a taking of all the units by eminent domain, a condominium may be terminated only by agreement of unit owners of units to which at least eighty percent (80%) of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the units in the condominium are restricted exclusively to nonresidential uses.

(2) An agreement to terminate a condominium shall be evidenced by the execution of a termination agreement, or ratification thereof, in the same manner as a deed, by the requisite number of unit owners. The termination agreement shall specify a date after which the agreement will be void unless it is recorded before that date. A termination agreement and all ratifications thereof shall be recorded in every county in which a portion of the condominium is situated, and is effective only upon recordation.

(3) In the case of a condominium containing only units having horizontal boundaries described in the declaration, a termination agreement may provide that all the common elements and units of the condominium shall be sold following termination. If, pursuant to the agreement, any real estate in the condominium is to be sold following termination, the termination agreement shall set forth the minimum terms of the sale.

(4) In the case of a condominium containing any units not having horizontal boundaries described in the declaration, a termination agreement may provide for sale of the common elements, but shall not require that the units be sold following termination, unless the declaration as originally recorded provided otherwise or unless all the unit owners consent to the sale.

(5) The association, on behalf of the unit owners, may contract for the sale of real estate in the condominium, but the contract is not binding on the unit owners until approved pursuant to subsections (1) and (2) of this section. If any real estate in the condominium is to be sold following termination, title to that real estate, upon termination, vests in the association as trustee for the holders of all interests in the units. Thereafter, the association has all powers necessary and appropriate to effect the sale. Until the sale has been concluded and the proceeds thereof distributed, the association continues in existence with all powers it had before termination. Proceeds of the sale shall be distributed to unit owners and lienholders as their interests may appear, in proportion to the respective interests of unit owners as provided in subsection (8) of this section. Unless otherwise specified in the termination agreement, as long as the association holds title to the real estate, each unit owner and his or her successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted his or her unit. During the period of that occupancy, each unit owner and his or her successors in interest remain liable for all assessments and other obligations imposed on unit owners by KRS(###) ###-####to(###) ###-####or the declaration.

(6) If the real estate constituting the condominium is not to be sold following termination, title to the common elements and, in a condominium containing only units having horizontal boundaries described in the declaration, title to all the real estate in the condominium, vests in the unit owners upon termination as tenants in common in proportion to their respective interests as provided in subsection (8) of this section, and liens on the units shift accordingly. While the tenancy in common exists, each unit owner and his or her successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted his or her unit.

(7) Following termination of the condominium, the proceeds of any sale of real estate, together with the assets of the association, are held by the association as trustee for unit owners and holders of liens on the units as their interests may appear. Following termination, creditors of the association holding liens on the units, which were recorded before termination, may enforce those liens in the same manner as any lienholder. All other creditors of the association are to be treated as if they had perfected liens on the units immediately before termination.

(8) The respective interests of unit owners referred to in subsections (5), (6), and (7) of this section are as follows: (a) Except as provided in paragraph (b) of this subsection, the respective interests of unit owners are the fair market values of their units, limited common elements, and common element interests immediately before the termination, as determined by one (1) or more independent appraisers selected by the association. The decision of the independent appraisers shall be distributed to the unit owners and becomes final unless disapproved within thirty (30) days after distribution by unit owners of units to which twenty-five percent (25%) of the votes in the association are allocated. The proportion of any unit owner's interest to that of all unit owners is determined by dividing the fair market value of that unit owner's unit and common element interest by the total fair market values of all the units and common elements; and (b) If any unit or any limited common element is destroyed to the extent that an appraisal of the fair market value thereof before destruction cannot be made, the interests of all unit owners are their respective common element interests immediately before the termination.

(9) Except as provided in subsection

(10) of this section, foreclosure or enforcement of a lien or encumbrance against the entire condominium does not of itself terminate the condominium, and foreclosure or enforcement of a lien or encumbrance against a portion of the condominium, other than withdrawable real estate, does not withdraw that portion from the condominium. Foreclosure or enforcement of a lien or encumbrance against withdrawable real estate does not of itself withdraw that real estate from the condominium, but the person taking title thereto has the right to require from the association, upon request, an amendment excluding the real estate from the condominium. (10) If a lien or encumbrance against a portion of the real estate comprising the condominium has priority over the declaration, the parties foreclosing the lien or encumbrance may, upon foreclosure, record an instrument excluding the real estate subject to that lien or encumbrance from the condominium. The provisions of this subsection shall not apply to any common elements constituting a portion of the real estate to the extent the common elements as described in and subject to the declaration have been developed.” http://www.ncsl.org/Portals/1/Documents/environ/documents-environ-KY-condo-15.pdf

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Real Estate Lawyer: Attyadvisor, Attorney replied 2 months ago

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