§ 81-103 — Definitions

In this chapter and documents prepared to create a common interest community pursuant to this chapter, unless specifically provided otherwise herein or therein, terms shall have the meaning attributed to them in this section:

(1) “Affiliate of a declarant” means any person who controls, is controlled by, or is under common control with a declarant. A person “controls” a declarant if the person: (i) is a general partner, officer, director, or employer of the declarant, (ii) directly or indirectly or acting in concert with 1 or more other persons, or through 1 or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than 20 percent of the voting interest in the declarant, (iii) controls in any manner the election of a majority of the directors of the declarant, or (iv) has contributed more than 20 percent of the capital of the declarant. A person “is controlled by” a declarant if the declarant: (i) is a general partner, officer, director, or employer of the person, (ii) directly or indirectly or acting in concert with 1 or more other persons, or through 1 or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than 20 percent of the voting interest in the person, (iii) controls in any manner the election of a majority of the directors of the person, or (iv) has contributed more than 20 percent of the capital of the person. Control does not exist if the powers described in this paragraph are held solely as security for an obligation and are not exercised.

(2) “Allocated interests” means the following interests allocated to each unit:

(i) In a condominium, the undivided interest in the common elements, the common expense liability, and votes in the association;

(ii) In a cooperative, the common expense liability and the ownership interest and votes in the association; and

(iii) In a planned community, the common expense liability and votes in the association.

(3) “Approved common interest community” means a proposed common interest community that has received all legally required zoning and/or subdivision approvals from the applicable governmental authorities to permit the construction of such common interest community for which the declarant has (i) entered into 1 or more written contracts with bona-fide third-party purchasers for the construction of 1 or more units in contemplation of the submission of the unit and the proposed common interest community to the provisions of the Unit Property Act (Chapter 22 of this title) and prior to the effective date has provided such third-party purchasers with draft copies of the declaration, code of regulations and other documents pertaining to such common interest community in contemplation of submission to the Unit Property Act [Chapter 22 of this title], and (ii) not yet recorded the declaration plan, declaration, code of regulations and other related documents pertaining to such proposed common interest community in accordance with the Unit Property Act [Chapter 22 of this title] prior to the effective date.

(4) “Assessment” or “common expense assessment” means the sums attributable to each unit and due to the association as a result of the common expense liability allocated to each unit in the manner described in § 81-315 of this title, including all ground lease rents due in a leasehold condominium.

(5) “Association” or “unit owners’ association” means the unit owners’ association organized under § 81-301 of this title.

(6) “Bylaws” mean the recorded document (and any recorded amendments thereto) that contains the procedures for conduct of the affairs of the association of a common interest community in accordance with § 81-306 of this title, regardless of the form of the association’s legal entity or the name by which the document comprising the bylaws is identified.

(7) “Certificate of notice of approved common interest community” means a recorded document by a declarant whereby the declarant certifies and affirms under oath that an approved common interest community shall be developed and units shall be sold under the provisions of the Unit Property Act [Chapter 22 of this title] as a preexisting common interest community, subject to the provisions of § 81-119 of this title regarding applicability to preexisting common interest communities.

(8) “Common elements” means:

(i) In the case of

(A) A condominium or cooperative, all portions of the common interest community other than the units; and

(B) A planned community, any real estate within a planned community which is owned or leased by the association, other than a unit; and

(ii) In all common interest communities, any other interests in real estate for the benefit of unit owners which are subject to the declaration.

(9) “Common expenses” means expenditures made by, or financial liabilities of, the association, together with any allocations to reserves, related to common elements, other units or other real estate described in the declaration.

(10) “Common expense liability” means the liability for common expenses allocated to each unit pursuant to § 81-207 of this title.

(11) “Common interest community” means real estate described in a declaration with respect to which a person, by virtue of that person’s ownership of a unit, is obligated to pay for a share of real estate taxes, insurance premiums, maintenance, or improvement of or services or other expenses related to common elements, other units or other real estate described in that declaration. Common interest community does not include a campground which is subject to Chapter 28 of Title 6 or those arrangements described in § 81-224 of this title. “Ownership of a unit” does not include holding a leasehold interest in a unit of a stated term of less than 20 years in a unit, including renewal options.

(12) “Condominium” means a common interest community in which portions of the real estate are designated for separate ownership and the remainder of the real estate is designated for common ownership solely by the owners of those portions. A common interest community is not a condominium unless the undivided interests in the common elements are vested in the unit owners.

(13) “Conversion building” means a building that at any time before creation of the common interest community was occupied wholly or partially by persons other than purchasers and persons who occupy with the consent of purchasers.

(14) “Cooperative” means a common interest community in which the real estate is owned by an association, each of whose members is entitled by virtue of the member’s ownership interest in the association to exclusive possession of a unit.

(15) “Dealer” means a person in the business of selling units for that person’s own account.

(16) “Declarant” means any person or group of persons acting in concert who: (i) as part of a common promotional plan, offers to dispose of the interest of the person or group of persons in a unit not previously disposed of or (ii) reserves or succeeds to any special declarant right.

(17) “Declaration” means the recorded instruments, however denominated, that create a common interest community, including any amendments to those instruments.

(18) “Declaration plan” means a survey of a condominium or cooperative which contains the verified statement of a registered architect or licensed professional engineer certifying that the declaration plan fully and accurately shows

(i) The location of the condominium or cooperative and the location and layout of the common elements and units, and

(ii) Sets forth the name by which the condominium or cooperative will be known and the unit designation for each unit therein. In addition, the declaration plan may show such other details or information as the declarant may elect or as may be required under § 81-106 of this title. References in this chapter to plats or plans as required by § 81-209 of this title shall mean the declaration plan.

(19) “Development rights” means any right or combination of rights reserved by a declarant in the declaration to:

(i) Add real estate to a common interest community;

(ii) Create units, common elements, or limited common elements within a common interest community including, without limitation, by the conversion of units into common elements or limited common elements and vice versa;

(iii) Subdivide units or convert units into common elements; or

(iv) Withdraw real estate from a common interest community;

(v) Do other things expressly reserved, and identified as such, by declarant in the declaration.

(20) “Dispose” or “disposition” means a voluntary transfer to a purchaser of any legal or equitable interest in a unit, but the term does not include the transfer or release of a security interest.

(21) “Effective date” means September 30, 2009.

(22) “Executive board” means the body, regardless of name, designated in the declaration or bylaws to act on behalf of the association.

(23) “Fully funded,” or any variation thereof with respect to a repair and replacement reserve, means a repair and replacement reserve which contains that balance of funds which

(i) When supplemented by a fixed, budgeted annual addition, will meet fully, without supplementation by borrowed funds or special assessments, the cost of each projected repair and replacement noted in the reserve study no later than the date when each such repair or replacement is projected to be required by the reserve study, and

(ii) With all budgeted contributions and expenditures for repairs and replacements projected out no less than 20 years, will never fall below a positive balance.

(24) “Identifying number” means a symbol or address that identifies only 1 unit in a common interest community.

(25) “Lease” means a lease or other agreement, written or oral, that establishes the terms and conditions for the use and occupancy of a unit by a tenant.

(26) “Leasehold common interest community” means a common interest community in which all or a portion of the real estate is subject to a lease the expiration or termination of which will terminate the common interest community or reduce its size.

(27) “Limited common element” means a portion of the common elements allocated by the declaration or by operation of § 81-202(b) or (d) of this title for the exclusive use of 1 or more but fewer than all of the units.

(28) “Master association” means an organization described in § 81-220 of this title, whether or not it is also an association described in § 81-301 of this title.

(29) “Nonresidential common interest community” means a common interest community in which all units are restricted exclusively to nonresidential purposes.

(30) “Noticed rules” means rules delivered to or otherwise made available to a tenant as provided in § 81-320 of this title.

(31) “Offering” means any advertisement, inducement, solicitation, or attempt to encourage any person to acquire any interest in a unit, other than as security for an obligation. An advertisement in a newspaper or other periodical of general circulation, or in any broadcast medium to the general public, of a common interest community not located in this State, is not an offering if the advertisement states that an offering may be made only in compliance with the law of the jurisdiction in which the common interest community is located.

(32) “Person” means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision, instrumentality or agency, limited liability company, or other legal or commercial entity. In the case of a land trust established pursuant to any statute providing for the creation of a land trust, however, “person” means the beneficiary of the trust rather than the trust or the trustee.

(33) “Planned community” means a common interest community that is not a condominium or a cooperative. A condominium or cooperative may be part of a planned community.

(34) “Proprietary lease” means an agreement with the association pursuant to which a member is entitled to exclusive possession of a unit in a cooperative.

(35) “Purchaser” means a person, other than a declarant or a dealer, who by means of a voluntary transfer acquires a legal or equitable interest in a unit other than:

(i) A leasehold interest (including renewal options) of less than 20 years, or

(ii) As security for an obligation.

(36) “Real estate” means any leasehold or other estate or interest in, over, or under land, including structures, fixtures, and other improvements and interests that by custom, usage, or law pass with a conveyance of land though not described in the contract of sale or instrument of conveyance. “Real estate” includes parcels with or without upper or lower boundaries, and spaces that may be filled with air or water.

(37) “Record”, when used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable format.

(38) “Recorded” means, with respect to the declaration or bylaws of a common interest community and any amendments thereto, to be placed of record at the office for the recorder of deeds in and for each county in which any portion of the common interest community is located.

(39) “Repair and replacement reserve” means a reserve fund maintained by the executive board of a condominium or cooperative solely for the repair and replacement of common elements, and for no other purpose, including operating budget shortfalls or other expenditures appropriately addressed by a contingency reserve.

(40) “Reserve study” means an analysis, by 1 or more independent engineering, architectural, or construction contractors or other qualified persons, performed or updated within the last 5 years, of the remaining useful life and the estimated cost to replace each separate system and component of the common elements, the purpose of which analysis by 1 or more independent engineering, architectural, or construction contractors or other qualified persons, is to inform the executive board and the association of a condominium or cooperative of the amount which should be maintained from year to year in a fully funded repair and replacement reserve to minimize the need for special assessments.

(41) “Residential purposes” means use for dwelling and appurtenant recreational purposes, or both.

(42) “Rule” or “rules” means any rule, procedure or regulation of the association, however denominated, that does not appear in the declaration or bylaws and that governs either the management of the association or the common interest community or the conduct of persons or property within the common interest community and adopted as provided in § 81-320 of this title.

(43) “Security interest” means an interest in real estate or personal property, created by contract or conveyance, which secures payment or performance of an obligation. The term includes a lien created by a mortgage, deed of trust, trust deed, security deed, contract for deed, land sales contract, lease intended as security, assignment of lease or rents intended as security, pledge of an ownership interest in an association, and any other consensual lien or title retention contract intended as security for an obligation.

(44) “Special assessment” means an assessment duly adopted from time to time for an unexpected, nonrecurring or other common expense not included in the annual budget.

(45) “Special declarant rights” means rights reserved for the benefit of a declarant to:

(i) Complete improvements indicated on plats and plans filed with the declaration or, in a cooperative, to complete improvements described in the public offering statement pursuant to § 81-403(a)(2) of this title;

(ii) Exercise any development right maintain sales offices, management offices, signs advertising the common interest community, and models;

(iv) Use easements through the common elements for the purpose of making improvements within the common interest community or within real estate which may be added to the common interest community;

(v) Make the common interest community subject to a master association;

(vi) Merge or consolidate a common interest community with another common interest community of the same form of ownership;

(vii) Appoint or remove any officer of the association or any master association or any executive board member during any period of declarant control;

(viii) Control any construction, design review or aesthetic standards committee or process;

(ix) Attend meetings of the unit owners and, except during an executive session, the executive board;

(x) Have access to the records of the association to the same extent as a unit owner; or

(xi) Other special declarant rights so identified in the declaration.

(46) “Tenant” means a tenant or lessee of a unit, including any subtenant, sublessee, or licensee.

(47) “Time share” means a right to occupy a unit or any of several units during 5 or more separated time periods over a period of at least 5 years, including renewal options, whether or not coupled with an estate or interest in a common interest community or a specified portion thereof.

(48) “Unit” means a physical portion of or 3-dimensional space in the common interest community designated for separate ownership or occupancy, the boundaries of which are described pursuant to § 81-205(a)(5) of this title, and shall include all improvements contained within the space except those excluded in the declaration. A unit may include 2 or more noncontiguous spaces. If a unit in a cooperative is owned by a unit owner or is sold, conveyed, voluntarily or involuntarily encumbered, or otherwise transferred by a unit owner, the interest in that unit which is owned, sold, conveyed, encumbered, or otherwise transferred is the right to possession of that unit under a proprietary lease, coupled with the allocated interests of that unit, and the association’s interest in that unit is not thereby affected.

(49) “Unit owner” means a declarant or other person who owns a unit, or a lessee of a unit in a leasehold common interest community whose lease expires simultaneously with any lease the expiration or termination of which will remove the unit from the common interest community, but does not include a person having an interest in a unit solely as security for an obligation. In a condominium or planned community, the declarant is the unit owner of any unit created by the declaration. In a cooperative, the declarant is treated as the unit owner of any unit to which allocated interests have been allocated until that unit has been conveyed to another person.

(50) “Nonresidential purposes” means use for a purpose other than a residential purpose.

(51) “Customary condominium assessment” shall mean an assessment for periodic payments, payable no less frequently than quarterly, due the association for regular and usual operating and common area expenses pursuant to the association’s annual budget and shall not include amounts for reserves for contingencies, nor shall it include any late charges, penalties, interest or any fees or costs for the collection or enforcement of the assessment or any lien arising from the assessment.

Legislative History

76 Del. Laws, c. 422, § 2 ; 77 Del. Laws, c. 4, §§ 2, 3 ; 77 Del. Laws, c. 91, §§ 1-10, 79, 82