§ 47-245 — Executive board members and officers. Duties. Period of declarant control: Delivery of property and documents by declarant; current financial statement. Prohibitions re elections of executive board members.

Connecticut § 47-245

• Jurisdiction: Connecticut
• Title 47: Land and Land Titles
• Ch. 828: Common Interest Ownership Act

Text

(a) Except as provided in the declaration, the bylaws, subsection (b) of this section, or other provisions of this chapter, the executive board may act in all instances on behalf of the association. In the performance of their duties, officers and members of the executive board appointed by the declarant shall exercise the degree of care and loyalty to the association required of a trustee and officers and members of the executive board not appointed by a declarant shall exercise the degree of care and loyalty to the association required of an officer or director of a corporation organized under chapter 602, and are subject to the conflict of interest rules governing directors and officers under chapter 602. The standards of care and loyalty described in this section apply regardless of the form in which the association is organized. (b) The executive board may not: (1) Amend the declaration, except as provided in section 47-236 ; (2) Terminate the common interest community; (3) Elect members of the executive board, except that the executive board may fill vacancies in its membership for the unexpired portion of any term or, if earlier, until the next regularly scheduled election of executive board members; or (4) Determine the qualifications, powers and duties, or terms of office of executive board members. (c) The executive board shall adopt budgets as provided in section 47-261e . (d) Subject to the provisions of subsection (e) of this section, the declaration may provide for a period of declarant control of the association, during which a declarant, or persons designated by the declarant, may appoint and remove the officers and members of the executive board. A declarant may voluntarily surrender the right to appoint and remove officers and members of the executive board before the period ends. In that event, the declarant may require, during the remainder of the period, that specified actions of the association or executive board, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective. Regardless of the period provided in the declaration, a period of declarant control terminates no later than the earlier of: (1) Sixty days after conveyance of sixty per cent of the units that may be created to unit owners other than a declarant, except that in the case of a master planned community, control terminates no later than sixty days after conveyance to unit owners other than the declarant of sixty per cent of the maximum number of units that may be built, if that number is specified, or, if no such number is specified, after conveyance to unit owners other than the declarant of three hundred units; (2) two years after all declarants have ceased to offer units for sale in the ordinary course of business; (3) two years after any right to add new units was last exercised; or (4) the date the declarant, after giving notice in a record to unit owners, records an instrument voluntarily surrendering all rights to control activities of the association. (e) Not later than sixty days after conveyance of one-third of the units that may be created to unit owners other than a declarant, at least one member and not less than one-third of the members of the executive board shall be elected by unit owners other than the declarant. (f) Except as otherwise provided in subsection (e) of section 47-239 , not later than the termination of any period of declarant control, the unit owners shall elect an executive board of at least three members, at least a majority of whom shall be unit owners. Unless the declaration or bylaws provides for the election of officers by the unit owners, the executive board shall elect the officers. The executive board members and officers shall take office upon election. (g) A declaration may provide for the appointment of specified positions on the executive board by either a governmental subdivision or agency or a nonstock corporation exempt from taxation under 26 USC 501(c)(3) and 26 USC 4940(d)(2), as from time to time amended, during or after the period of declarant control. A declaration may also provide a method for filling vacancies in those specified positions, other than by election by the unit owners, except that, after the period of declarant control, appointed members (1) may not comprise more than one-third of the board, and (2) have no greater authority than any other member of the board. (h) Within thirty days after unit owners other than the declarant elect a majority of the members of the executive board, the declarant shall deliver to the association all property of the unit owners and of the association held by or controlled by the declarant, including without limitation the following items: (1) The original or a certified copy of the recorded declaration as amended; the association articles of incorporation, if the association is incorporated; bylaws; minute books and other books and records of the association; and any rules and regulations which may have been promulgated; (2) an accounting for association funds and financial statements, from the date the association received funds and ending on the date the period of declarant control ends. The financial statements shall be audited by an independent certified public accountant and shall be accompanied by the accountant's letter, expressing either (A) the opinion that the financial statements present fairly the financial position of the association in conformity with generally accepted accounting principles or (B) a disclaimer of the accountant's ability to attest to the fairness of the presentation of the financial information in conformity with generally accepted accounting principles, and the reasons therefor. The expense of the audit shall not be paid for or charged to the association; (3) association funds or control thereof; (4) all of declarant's tangible personal property that has been represented by the declarant to be the property of the association or, unless the declarant has disclosed in the public offering statement that all such personal property used in the common interest community will remain the declarant's property, all of the declarant's tangible personal property that is necessary for, and has been used exclusively in, the operation and enjoyment of the common elements, and inventories of these properties; (5) a copy of any plans and specifications used in the construction of the improvements in the common interest community which were completed within two years before the declaration was recorded; (6) all insurance policies then in force, in which the unit owners, the association or its directors and officers are named as insured persons; (7) copies of any certificates of occupancy that may have been issued with respect to any improvements comprising the common interest community; (8) any other permits issued by governmental bodies applicable to the common interest community and which are currently in force or which were issued within one year prior to the date on which unit owners other than the declarant took control of the association; (9) written warranties of the contractor, subcontractors, suppliers and manufacturers that are still effective; (10) a roster of unit owners and mortgagees and their addresses and telephone numbers, if known, as shown on the declarant's records; (11) employment contracts in which the association is a contracting party; and (12) any service contract in which the association is a contracting party or in which the association or the unit owners have any obligation to pay a fee to the persons performing the services. (i) During the period of declarant control, the declarant shall, at least every six months, provide the unit owners with a current financial statement of the association. The statement shall be on a cash basis and need not be audited by an independent accountant. It shall include, without limitation, (1) all income and expenses for the calendar year to date; (2) all accounts payable and receivable, including the ages of those accounts and showing all sums due to and from the declarant and affiliates of the declarant; (3) the amount of any funded replacement reserves; and (4) the balance of any other funds of the association. (j) No person shall provide or offer to any executive board member or a person seeking election as an executive board member, and no executive board member or person seeking election as an executive board member shall accept, any item of value based on any understanding that the vote, official action or judgment of such member or person seeking election would be or has been influenced thereby. (k) No managing agent of an association or person providing association management services to such association shall campaign for any person seeking election as an executive board member.

Legislative History

(P.A. 83-474, S. 46, 96; P.A. 84-472, S. 12, 23; P.A. 95-187, S. 17; P.A. 96-180, S. 126, 166; 96-256, S. 204, 209; P.A. 05-288, S. 167; P.A. 07-243, S. 6; P.A. 09-225, S. 22; P.A. 10-186, S. 8; P.A. 11-195, S. 1.) History: P.A. 84-472 added Subsec. (h) requiring the declarant to deliver to the association all property of unit owners and of the association held by or controlled by the declarant within 30 days after unit owners other than the declarant elect a majority of the members of the executive board and added Subsec. (i) requiring the declarant to provide the unit owners with a current financial statement of the association at least every six months during the period of declarant control; P.A. 95-187 amended Subsec. (a) to revise and heighten the standard of care required of officers and members of the executive board and amended Subsec. (d) to add exception re a master planned community in Subdiv. (1) and add Subdiv. (4) re the date the declarant records an instrument voluntarily surrendering control; P.A. 96-180 made technical change in Subsec. (a), effective June 3, 1996; P.A. 96-256 amended Subsec. (a) to replace reference to chapter 600 with chapter 602, effective January 1, 1997; P.A. 05-288 made technical changes in Subsec. (d), effective July 13, 2005; P.A. 07-243 amended Subsec. (c) by adding provisions re notwithstanding declaration or bylaws, re hand-delivery of summary, re opportunity for unit owners to express views concerning proposed budget and re copy of budget available at meeting and by making technical changes; P.A. 09-225 amended Subsec. (a) to insert “to the association” re loyalty and reference conflict of interest rules in Ch. 602 and standards of care and loyalty described in section, reorganized and rewrote Subsec. (b), inserted Subdiv. designators (1) to (4) therein, inserted exception re Sec. 47-236 in Subsec. (b)(1) and rewrote provisions re filling vacancies in Subsec. (b)(3), replaced former provisions of Subsec. (c) re ratification of proposed budget with requirement that executive board adopt budget as provided in Sec. 47-261e, reorganized Subsec. (d) and substituted “notice in a record” for “written notice”, amended Subsec. (f) to add provision re declaration or bylaws providing for election of officers by unit owners, deleted former Subsec. (g) re removal of members, added new Subsec. (g) re appointment of specified positions and method for filling vacancies, and made technical changes, effective July 1, 2010; P.A. 10-186 amended Subsec. (g) to substitute “exempt from taxation” for “exempt from taxation as a public charity”, effective July 1, 2010; P.A. 11-195 added new Subsecs. (j) and (k) re prohibition on providing, offering or accepting item of value from, or campaigning by, managing agent of an association or person providing association management services re elections of executive board members. Cited. 208 C. 318. Cited. 38 CA 420. Subsec. (c): Trial court properly found that assessments based on a prior year's budget were proper when no subsequent budget was properly adopted. 62 CA 462. The majority of all unit owners are needed to reject budget proposal, not simply majority of all unit owners present at meeting. 108 CA 426. Subsec. (d): Subsec. permits a declaration to set a specific period of declarant control, which can be shortened only by the declarant voluntarily surrendering control or by the occurrence of any of the four terminating events outlined in Subdivs. (1) through (4). 192 CA 479.