Chapter 677 Oregon Laws 1999

Session Law

AN ACT

SB 1206

Relating to organized communities; creating new provisions; amending ORS 65.369, 94.550, 94.565, 94.570, 94.580, 94.585, 94.590, 94.595, 94.600, 94.604, 94.609, 94.616, 94.621, 94.630, 94.635, 94.640, 94.645, 94.650, 94.655, 94.660, 94.665, 94.670, 94.680, 94.685, 94.690, 94.704, 94.709, 94.723, 94.770, 94.780, 94.783, 94.807, 94.811, 100.005, 100.020, 100.105, 100.110, 100.115, 100.120, 100.135, 100.175, 100.185, 100.210, 100.405, 100.415, 100.420, 100.435, 100.450, 100.480, 100.510, 100.530, 100.550, 100.655, 105.465 and 451.010; and repealing ORS 94.740, 94.745, 94.750, 94.755 and 94.765.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 94.550 is amended to read:

94.550. As used in ORS 94.550 to 94.783:

(1) "Assessment" means any charge imposed or levied by a homeowners association on or against an owner or lot pursuant to the provisions of the declaration or the bylaws of the planned community or provisions of ORS 94.550 to 94.783.

(2) "Blanket encumbrance" means a trust deed or mortgage or any other lien or encumbrance, mechanics' lien or otherwise, securing or evidencing the payment of money and affecting more than one lot in a planned community, or an agreement affecting more than one lot by which the developer holds such planned community under an option, contract to sell or trust agreement.

[(1)] (3) "Common expenses" means expenditures made by or financial liabilities incurred by the homeowners association and includes any allocations to the reserve account under ORS 94.595.

[(2)] (4) "Common property" means any real property or interest in real property within a planned community which is owned or leased by the homeowners association or owned as tenants in common by the lot owners, or designated in the declaration for transfer to the association. "Common property" does not include any lot designated on the plat or in the declaration of a planned community for ownership by a person other than the homeowners association.

[(3)] (5) "Condominium" means property submitted to the provisions of ORS chapter 100.

[(4)] (6) "Declarant" means[:]

[(a)] any person who creates a planned community under ORS 94.550 to 94.785[;]

[(b) Any person who succeeds to any special declarant right and to whom all of the declarant's ownership interest is transferred; or]

[(c) Any person, other than a homeowners association, to whom a declarant has transferred, for the purpose of resale, all of the declarant's ownership interest in the planned community].

(7) "Declarant control" means any special declarant right relating to administrative control of a homeowners association, including but not limited to:

(a) The right of the declarant or person designated by the declarant to appoint or remove an officer or a member of the board of directors;

(b) Any weighted vote or special voting right granted to a declarant or to units owned by the declarant so that the declarant will hold a majority of the voting rights in the association by virtue of such weighted vote or special voting right; and

(c) The right of the declarant to exercise powers and responsibilities otherwise assigned by the declaration or bylaws or by the provisions of ORS 94.550 to 94.783 to the association, officers of the association or board of directors of the association.

[(5)] (8) "Declaration" means the instrument described in ORS 94.580 which establishes a planned community, and any amendments to the instrument.

[(6)] (9) "Homeowners association" or "association" means the organization of owners of lots in a planned community, created under ORS 94.625.

[(7)] (10) "Mortgagee" means any person who is:

(a) A mortgagee under a mortgage;

(b) A beneficiary under a trust deed; or

[(8)] (11) "Owner" means the owner of any lot in a planned community, unless otherwise specified, but does not include a person holding only a security interest in a lot.

[(9)] (12) "Planned community" means any subdivision under ORS 92.010 to 92.190 which results in a pattern of ownership of real property and all the buildings, improvements and rights located on or belonging to the real property, in which[:]

[(a) There is a homeowners association] the owners collectively are responsible for the maintenance, operation, insurance and property taxes relating to any common property of the planned community or for the exterior maintenance of any property that is individually owned[; and]

[(b) Owners of individual lots, by virtue of their ownership, automatically are members of the homeowners association and assume liability for membership fees].

[(10)] (13) "Purchaser" means any person other than a declarant who, by means of a voluntary transfer, acquires a legal or equitable interest in a lot, other than as security for an obligation.

[(11)] (14) "Purchaser for resale" means any person who purchases from the declarant more than two lots for the purpose of resale whether or not the purchaser for resale makes improvements to the lots before reselling them.

[(12)] (15) "Special declarant rights" means any rights, in addition to the rights of the declarant as a lot owner, reserved for the benefit of the declarant under the declaration or ORS 94.550 to 94.783, including but not limited to:

(a) Constructing or completing construction of improvements in the planned community which are described in the declaration;

(b) Expanding the planned community or withdrawing property from the planned community under ORS 94.580 (3) and (4);

(d) Making the planned community subject to a master association under ORS 94.695; or

(e) Exercising any right of declarant control reserved under ORS 94.600.

(16) "Successor declarant" means the transferee of any special declarant right.

[(13)] (17) "Turn over" means the act of turning over administrative responsibility pursuant to ORS 94.609 and 94.616.

[(14)] (18) "Unit" means a building or portion of a building located upon a lot in a planned community and designated for separate occupancy or ownership, but does not include any building or portion of a building located on common property.

[(15)] (19) "Votes" means the votes allocated to lots in the declaration under ORS 94.580 [(2)(g)] (2)(f).

SECTION 2. ORS 94.565 is amended to read:

94.565. (1) Except as provided in ORS 94.570, no person shall create a planned community in this state except as provided in ORS 94.550 to 94.783.

(2) No person shall [sell] convey any lot or unit in a planned community until the declaration for the planned community is recorded with the county recording officer of each county in which the planned community is located.

SECTION 3. ORS 94.570 is amended to read:

94.570. (1) ORS 94.550 to 94.783 do not apply to any person establishing:

(a) A planned community that contains [20] 12 or fewer lots, if the declarant has reserved no right to increase the total number of lots in the planned community beyond [20] 12;

(b) A condominium under ORS chapter 100;

(d) A de minimis planned community described in subsection (2) of this section; or

(e) A timeshare plan under ORS 94.803 and 94.807 to 94.945.

(2) A de minimis planned community is one for which the estimated annual assessment against all lots in the planned community does not exceed $1,000 total or $100 per lot, whichever is greater.[:]

[(a) That is defined or accepted as such by any of the agencies listed in ORS 94.585; or]

[(b) For which the estimated total annual assessment against all lots in the planned community for maintenance and for the reserves required under ORS 94.595 does not exceed the greater of two percent of the estimated value of all lots against which the assessment will be levied or the product of $360 multiplied by the total number of lots in the planned community. For purposes of this paragraph, the estimated value includes the sewers, water systems and streets but not any structures. The assessment estimate under this paragraph:]

[(A) Shall include current costs for any services which the declarant will be providing at less than cost during the period the declarant is marketing the lots and which the association will have to provide at cost after the declarant no longer performs these services. Current costs shall be based on competitive current rates for alternative professional services for such items as landscape and pool maintenance.]

[(B) Shall include maintenance and reserve account estimates based on figures obtained from the department of the city, county or district which would normally perform or contract for services which instead are provided by the planned community.]

[(C) Shall be conclusively presumed to have been made in good faith if one year after the declarant no longer provides any services at less than cost, the total assessment for maintenance and reserves does not exceed three percent of the current assessed value of these lots not including structures on the lots.]

(3) Notwithstanding subsection (1)(a), (c) or (d) of this section, ORS 94.550 to 94.783 apply to a planned community [with 20 or fewer units] if the declarant so provides in the declaration of the planned community.

(4) Nothing in this section prohibits the establishment of a condominium subject to ORS chapter 100 or a timeshare plan subject to ORS 94.803 to 94.945 within a planned community.

SECTION 4. ORS 94.580 is amended to read:

94.580. (1) A declarant shall record the declaration for a planned community in the office of the recording officer of each county in which the planned community is located.

(2) The declaration shall include:

(a) The name of the planned community;

(b) The name of every city and county in which all or a portion of the real property in the planned community is located;

[(d) A statement of the number of lots and units in the planned community;]

[(e)] (d) The legal description of any real property included in the planned community which is or must become a common property;

[(f)] (e) A description of any special declarant rights other than the rights described under subsections (3) and (4) of this section;

[(g)] (f) A provision for allocating votes to each lot;

[(h)] (g) A method of determining the liability of each lot for common expenses and the right of each lot to any common profits of the association;

[(i)] (h) Provisions for establishing a reserve account and for the preparation, review and update of the reserve study as required by ORS 94.595;

[(j)] (i) Any restrictions on the alienation of lots. Any such restriction created by any document other than the declaration may be incorporated by reference to the official records of the county where the property is located;

[(k)] (j) A statement of the use, residential or otherwise, for which each lot is intended;

[(L)] (k) A statement as to whether or not the association pursuant to ORS 94.665 may sell, convey or subject to a security interest any portion of the common property and any limitation on such authority;

[(m)] (L) A statement of any restriction on the use, maintenance or occupancy of lots or units;

[(n)] (m) A statement of the percentage of votes required to approve an amendment of the declaration in accordance with ORS 94.590;

[(o)] (n) A description of any contemplated improvements which the declarant agrees to build, or a statement that the declarant does not agree to build any improvement or does not choose to limit declarant's rights to add improvements not described in the declaration;

[(p)] (o) [A statement of the circumstances under which the individual owners will assume control of the homeowners association as provided under ORS 94.609. These circumstances may be established by a percentage of votes, a stated number of years or the occurrence of a stipulated event] A statement of any period of declarant control or other special declarant rights reserved by the declarant under ORS 94.600;

[(q)] (p) A statement of the time at which the deed to the common property is to be delivered, whether by date or upon the occurrence of a stipulated event if the deed is not to be delivered at the turnover meeting under ORS 94.616; and

[(r)] (q) Any provisions restricting a right of the association with respect to the common property, or an individual lot owner with respect to the lot or improvements on the lot, including but not limited to:

(A) A right to divide the lot or to combine it with other lots;

(B) A right to repair or restore improvements on the lot at the owner's discretion in the event of damage or destruction;

(C) The requirement for architectural controls, including but not limited to fencing, landscaping or choice of exterior colors and materials of structures to be placed on the common property or on a lot; and

(D) The requirement of review of any plans of any structure to be placed on the common property or a lot.

(3) If the declarant reserves the right to expand the planned community by annexing lots or common property or by creating additional lots by developing existing property in the planned community, the declaration shall contain in addition to the provisions required under subsections (1) and (2) of this section, a general description of the plan of development, including:

(a) The procedure by which the planned community will be expanded;

(b) The maximum number of lots and units to be included in the planned community or a statement that there is no limitation on the number of lots or units which the declarant may create or annex to the planned community;

(c) A general description of the nature and proposed use of any common property which the declarant agrees to annex to the planned community or a statement that there is no limitation on the right of the declarant to annex common property;

(d) The method of allocation of votes if additional lots are to be created or annexed to the planned community; and

(e) The formula to be used for reallocating the common expenses if additional lots are to be created or annexed to the planned community, and the manner of reapportioning the common expenses if lots are created or annexed during the fiscal year.

(4) If the declarant may withdraw property from the planned community, the declaration shall include in addition to the provisions required under subsections (1), (2) and (3) of this section:

(a) The procedure by which property will be withdrawn;

(b) A general description of the property which may be withdrawn from the planned community;

(d) The formula to be used for reallocating the common expenses if the property to be withdrawn has been assessed for common expenses prior to withdrawal; and

(e) The date after which the right to withdraw property from the planned community shall expire or a statement that such a right shall not expire.

SECTION 5. ORS 94.590 is amended to read:

94.590. (1) [Except as provided in ORS 94.580,] The homeowners association may amend the declaration and the plat only by vote or agreement of the owners representing 75 percent of the total votes in the planned community or any larger percentage specified in the declaration. In no event shall an amendment under this section create, limit or diminish any special declarant rights, increase the number of lots or units or change the boundaries of any lot or any uses to which any lot or unit is restricted unless the owners of the affected lots unanimously consent to the amendment. The declaration may provide that a percentage less than 75 percent of the votes of the planned community is required to amend the declaration for amendments relating to age restrictions, pet restrictions, limitations on the number of persons who may occupy units or limitations on the rental or leasing of units.

(2) When the association adopts an amendment to the declaration, the association shall record the amendment in the same place as the declaration. An amendment of the declaration is effective only upon recordation.

(3) Amendments to a declaration under this section shall be executed, recorded and certified on behalf of the association by any officer of the homeowners association designated for that purpose or, in the absence of designation, by the president of the board of directors of the association.

[(4) A person may not bring an action to challenge the validity of an amendment adopted pursuant to this section and ORS 94.580 later than one year after the date on which the amendment is recorded. However, nothing in this subsection prevents the association from further amending an amended declaration or plat.]

(4) An amendment to a declaration or plat shall be conclusively presumed to have been regularly adopted in compliance with all applicable procedures relating to such amendment unless an action is brought within one year after the date such amendment was recorded or the face of the recorded amendment indicates that the amendment received the approval of fewer votes than required for such approval. However, nothing in this subsection shall prevent the further amendment of an amended declaration or plat.

(5) During any period of declarant control, voting on an amendment under subsection (1) of this section shall be without regard to any weighted vote or special voting right reserved by the declarant except as otherwise provided under ORS 94.585. Nothing in this subsection is intended to prohibit a declarant from reserving the right to require the declarant's consent to an amendment during the period reserved in the declaration for declarant control.

SECTION 6. ORS 94.585 is amended to read:

94.585. A declarant may amend the declaration or initial bylaws in order to comply with requirements of the Federal Housing Administration, the United States Department of Veterans Affairs, the Farmer's Home Administration of the United States, the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Mortgage Loan Corporation, any department, bureau, board, commission or agency of the United States or the State of Oregon or any corporation [wholly-owned] wholly owned, directly or indirectly, by the United States or the State of Oregon which insures, guarantees or provides financing for a planned community or lots in a planned community. However, if the need to amend the declaration or the initial bylaws occurs after the turnover to the homeowners association has occurred, the amendment must be approved by the association in accordance with the approval provisions of the declaration or bylaws.

SECTION 7. ORS 94.595 is amended to read:

94.595. (1) The declarant shall establish a reserve account for replacement of all items of common property which will normally require replacement, in whole or in part, in more than three and less than 30 years, for exterior painting if the common property includes exterior painted surfaces, and for such other items as may be required by the declaration or bylaws. The reserve account need not include those items that could reasonably be funded from operating assessments. [The items may be identified in the reserve account as those which are insurable by a common carrier of all purpose risk insurance.]

(2) A reserve account established under this section shall be funded by assessments against the individual lots for maintenance of items for which the reserves are established. The assessments under this subsection begin accruing from the date the first lot assessed is conveyed. [These assessments may be shown as a separate item in the sales contract.] The declarant may defer payment of the accrued assessment for a lot under this subsection until the date the lot is conveyed. The books and records of the homeowners association shall reflect the amount owing from the declarant for all reserve assessments.

(3) The amounts assessed shall take into account the estimated remaining life of the items for which the reserve is created and the current replacement cost of those items.

(4) The reserve account shall be established in the name of the homeowners association. The association is responsible for administering the account and for making periodic payments into it. The association shall adjust the amount of the payments at [regular intervals] least annually to reflect changes in current replacement costs over time. The board of directors of the association annually shall conduct a reserve study, or review and update an existing study, of the common property components to determine the reserve account requirements. A reserve account shall be established for those items of common property all or part of which will normally require replacement in more than three and less than 30 years, for exterior painting if the common property includes exterior painted surfaces, and for the maintenance, repair or replacement of other items as may be required under the declaration or bylaws or that the board of directors, in its discretion, may deem appropriate. The reserve account need not include items that could reasonably be funded from operating assessments. The reserve study shall include:

(a) Identification of all items for which reserves are required to be established;

(b) The estimated remaining useful life of each item as of the date of the reserve study;

(c) The estimated cost of maintenance, repair or replacement of each item at the end of its useful life; and

(d) A 30-year plan with regular and adequate contributions, adjusted by estimated inflation and interest earned on reserves, to meet the maintenance, repair and replacement schedule.

(5) If the declaration or bylaws require a reserve account, the reserve study requirements of subsection (4) of this section first apply to the association of a subdivision that meets the definition of a planned community under ORS 94.550 and is recorded prior to the effective date of this 1999 Act, upon receipt of a written request from an owner or mortgagee of a lot that a reserve study be conducted. A reserve study under this subsection shall be completed within one year of the request.

[(5)] (6) The reserve account may be used only for maintenance, repair and replacement of common property for which reserves have been established and is to be kept separate from [assessments for maintenance] other funds. However, after the individual lot owners have assumed responsibility for administration of the planned community, the board of directors may borrow funds from the reserve account to meet high seasonal demands on the regular operating funds or to meet other temporary expenses. Funds borrowed to meet temporary expenses under this subsection must be repaid later from special assessments or maintenance fees.

[(6)] (7) Nothing in this section prohibits prudent investment of reserve account funds subject to any constraints imposed by the declaration, bylaws or rules of the association.

[(7)] (8) Following the second year after the association has assumed administrative responsibility for the planned community under ORS 94.616, if owners of lots representing 75 percent of the votes of the planned community agree to the action, they may vote to increase, reduce or eliminate future assessments for the account.

[(8)] (9) Assessments paid into the reserve account are the property of the association and are not refundable to sellers or owners of lots. [The sellers or owners of lots may treat their outstanding share of the reserve account as a separate item in the sales contract.]

SECTION 8. ORS 94.600 is amended to read:

94.600. [Subject to ORS 94.604 to 94.621, a declaration of a planned community may provide for a period of control of the association by the declarant. Such control may include, but need not be limited to, allowing the declarant to allocate a greater number of votes to lots owned by the declarant, to appoint or remove members of the board of directors of the association or to approve an amendment to the declaration or bylaws after turnover.]

(1) Subject to ORS 94.604 to 94.621, a declaration may reserve special declarant rights including, without limitation, the right to a period of declarant control that may be of limited or unlimited duration. A formal or written proxy or power of attorney is not required from an owner to vest the declarant with such authority.

(2) A declarant may voluntarily relinquish any rights reserved in the declaration under subsection (1) of this section.

(3) Upon the expiration of any period of declarant control reserved in the declaration under subsection (1) of this section, the rights automatically shall pass to the lot owners, including the declarant if the declarant owns a lot in the planned community.

(4) A declarant may not amend a declaration to increase the scope of special declarant rights reserved in the declaration after the sale of the first lot in the planned community unless owners representing 75 percent of the total vote, other than the declarant, agree to the amendment.

SECTION 9. ORS 94.604 is amended to read:

94.604. (1) As provided in this section, the declarant or the owners of a planned community shall form a transitional advisory committee to provide for the transition from administrative responsibility by the declarant of the planned community under ORS 94.600 to administrative responsibility by the association. [Not later than the 60th day after the declarant has conveyed the lots representing 50 percent of the votes in a planned community,] The declarant shall call a meeting of owners for the purpose of selecting a transitional advisory committee not later than the 60th day after the later of:

(a) The date the declarant conveys 50 percent or more of the lots in the first or only phase of the planned community to owners other than a successor declarant; or

(b) The date the declarant has conveyed 10 lots in the planned community to owners other than a successor declarant.

(2) The transitional advisory committee shall consist of three or more members. The owners, other than the declarant, shall select two or more members. The declarant may select no more than one member. The committee shall have reasonable access to all information and documents which the declarant is required to turn over to the association under ORS 94.616.

[(2)] (3) An owner may call a meeting of owners to select the transitional advisory committee if the declarant fails to do so under subsection (1) of this section.

[(3)] (4) Notwithstanding subsection (1) of this section, if the owners do not select members for the transitional advisory committee under subsection [(1)] (2) of this section, the declarant shall have no further obligation to form the committee.

[(4)] (5) The requirement for a transitional advisory committee shall not apply once the turnover meeting called under ORS 94.609 has been held.

SECTION 10. ORS 94.609 is amended to read:

94.609. (1) At the time specified in the declaration, but not later than [120] 90 days after [lots representing 75 percent of the votes have been conveyed] expiration of any period of declarant control reserved under ORS 94.600, or 90 days after conveying 10 lots in the planned community if there is not a period of declarant control, the declarant shall call a meeting for the purpose of turning over administrative responsibility for the planned community to the homeowners association.

(2) The declarant shall give notice of the meeting to each owner as provided in the bylaws.

(3) If the declarant does not call a meeting under this section within the required time, the transitional advisory committee formed under ORS 94.604 or any owner may call a meeting and give notice as required in this section.

SECTION 11. ORS 94.616 is amended to read:

94.616. (1) At the meeting called under ORS 94.609, the declarant shall turn over to the homeowners association the responsibility for the administration of the planned community, and the association shall accept the administrative responsibility from the declarant.

(2) The owners shall elect a board of directors in accordance with the bylaws of the association.

(3) At the meeting, called under ORS 94.609, the declarant shall deliver to the association:

(a) The original or a photocopy of the recorded declaration and copies of the bylaws and the articles of incorporation, if any, of the planned community and any supplements and amendments to the articles or bylaws;

(b) A deed to the common property in the planned community, unless otherwise provided in the declaration;

(d) All rules and regulations adopted by the declarant;

(e) Resignations of officers and members of the board of directors who are required to resign because of the expiration of any period of declarant control reserved pursuant to ORS 94.600;

(f) A report on the present financial position of the association, consisting of a balance sheet and an income and expense statement for the 12-month period or a period following the recording of the declaration, whichever period is less;

(g) All funds of the association and control of the funds, including all bank records;

(h) All tangible personal property that is property of the association, and an inventory of the property;

(i) Records of all property tax payments for the common property to be administered by the association;

(j) Copies of any income tax returns filed by the declarant in the name of the association, and supporting records for the returns;

(k) All bank signature cards;

(L) The reserve account established in the name of the association under ORS 94.595;

(m) The reserve study described in ORS 94.595, including all updates;

[(m)] (n) An operating budget for the portion of the planned community turned over to association administration and a budget for replacement and maintenance of the common property;

[(n)] (o) A copy of the following, if available:

(A) The as-built architectural, structural, engineering, mechanical, electrical and plumbing plans;

(B) The original specifications, indicating all subsequent material changes;

(C) The plans for underground site service, site grading, drainage and landscaping together with cable television drawings;

(D) Any other plans and information relevant to future repair or maintenance of the property; and

(E) A list of the general contractor and the electrical, heating and plumbing subcontractors responsible for construction or installation of common property;

[(o)] (p) Insurance policies;

[(p)] (q) Copies of any occupancy permits issued for the planned community;

[(q)] (r) Any other permits issued by governmental bodies applicable to the planned community in force or issued within one year before the date on which the owners assume administrative responsibility;

[(r)] (s) A list of any written warranties on the common property that are in effect and the names of the contractor, subcontractor or supplier who made the installation for which the warranty is in effect;

[(s)] (t) A roster of owners and their addresses and telephone numbers, if known, as shown on the records of the declarant;

[(t)] (u) Leases of the common property and any other leases to which the association is a party;

[(u)] (v) Employment or service contracts in which the association is one of the contracting parties or service contracts in which the association or the owners have an obligation or responsibility, directly or indirectly, to pay some or all of the fee or charge of the person performing the service; and

[(v)] (w) Any other contracts to which the homeowners association is a party.

(4) In order to facilitate an orderly transition, during the three-month period following the turnover meeting, the declarant or an informed representative shall be available to meet with the board of directors on at least three mutually acceptable dates to review the documents delivered under subsection (3) of this section.

SECTION 12. ORS 94.621 is amended to read:

94.621. If a declarant has not completed development of lots or common property in a planned community at the time of the meeting called under ORS 94.609, the declarant may continue to hold the special declarant rights, other than a right of declarant control, reserved under the declaration. [A declarant may not amend the declaration to increase the scope of the rights of the declarant as originally reserved in the declaration filed before the conveyance of the first lot unless all owners consent to the amendment.]

SECTION 13. ORS 94.630 is amended to read:

94.630. (1) Except as provided in subsection (2) of this section and in its declaration or bylaws, a homeowners association may:

(a) Adopt and amend bylaws, rules and regulations for the planned community;

(b) Adopt and amend budgets for revenues, expenditures and reserves, and collect assessments from owners for common expenses and the reserve account established under ORS 94.595;

[(d) Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more owners on matters affecting the planned community;]

(d) Defend against any claims, proceedings or actions brought against it;

(e) Initiate or intervene in litigation or administrative proceedings in its own name and without joining the individual owners in the following:

(A) Matters relating to the collection of assessments and the enforcement of governing documents;

(B) Matters arising out of contracts to which the association is a party;

(C) Actions seeking equitable or other nonmonetary relief regarding matters that affect the common interests of the owners, including but not limited to the abatement of nuisance;

(D) Matters relating to or affecting common property, including but not limited to actions for damage, destruction, impairment or loss of use of any common property;

(E) Matters relating to or affecting the lots or interests of the owners including but not limited to damage, destruction, impairment or loss of use of a lot or portion thereof, if:

(i) Resulting from a nuisance or a defect in or damage to common property; or

(ii) Required to facilitate repair to any common property; and

(F) Any other matter to which the association has standing under law or pursuant to the declaration or bylaws;

[(e)] (f) Make contracts and incur liabilities;

[(f)] (g) Regulate the use, maintenance, repair, replacement and modification of common property;

[(g)] (h) Cause additional improvements to be made as a part of the common property;

[(h)] (i) Acquire, hold, encumber and convey in its own name any right, title or interest to real or personal property, except that common property may be conveyed or subjected to a security interest only pursuant to ORS 94.665;

[(i)] (j) Grant easements, leases, licenses and concessions through or over the common property;

(k) Modify, close, remove, eliminate or discontinue the use of common property, including any improvement or landscaping, regardless of whether the common property is mentioned in the declaration, provided that:

(A) Nothing in this paragraph is intended to limit the authority of the association to seek approval of the modification, closure, removal, elimination or discontinuance by the owners; and

(B) Modification, closure, removal, elimination or discontinuance other than on a temporary basis of any swimming pool, spa or recreation or community building must be approved by at least a majority of owners voting on the matter at a meeting or ballot held in accordance with the declaration or bylaws;

[(j)] (L) Impose and receive any payments, fees or charges for the use, rental or operation of the common property and services provided to owners;

(m) Adopt rules regarding the termination of utility services paid for out of assessments of the association and access to and use of recreational and service facilities available to owners and, after giving notice and an opportunity to be heard, terminate the rights of any owners to receive such benefits or services until the correction of any violation covered by such rule has occurred;

[(k)] (n) Impose charges for late payment of assessments and attorney fees related to the collection of assessments and, after giving notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws and rules of the association;

[(L)] (o) Impose reasonable charges for the preparation and recordation of amendments to the declaration[, and for preparation of the Statement of Planned Community Information required by ORS 94.750];

[(m)] (p) Provide for the indemnification of its officers and the board of directors and maintain liability insurance for directors and officers;

[(n)] (q) Assign its right to future income, including the right to receive common expense assessments[, but only to the extent the declaration expressly so provides]; and

[(o)] (r) Exercise any other powers necessary and proper for the administration and operation of the association.

(2) Notwithstanding subsection (1) of this section, a declaration may not impose any limitation on the ability of the association to deal with a declarant that is more restrictive than the limitations imposed on the ability of the association to deal with any other person, except during the period of declarant control under ORS 94.600.

SECTION 14. ORS 94.635 is amended to read:

94.635. The bylaws of an association adopted under ORS 94.625, or amended or adopted under ORS 94.630, shall provide for the following:

(1) The organization of the association of owners in accordance with ORS 94.625 and 94.630, including when the initial meeting shall be held and the method of calling that meeting.

(2) The formation of a transitional advisory committee in accordance with ORS 94.604.

(3) The turnover meeting required under ORS 94.609, including the time by which the meeting shall be called, the method of calling the meeting, the right of an owner under ORS 94.609 (3) to call the meeting and a statement of the purpose of the meeting.

(4) The method of calling the annual meeting and all other meetings of the owners and, in accordance with ORS 94.655, the percentage of votes that shall constitute a quorum, if less than 20 percent.

(5) The election of a board of directors from among the unit owners, the number of persons constituting the board, the powers and duties of the board, any compensation of the directors and the method of removing directors from office in accordance with ORS 94.640 (5).

(6) The terms of office of directors.

(7) The method of calling meetings of the board of directors in accordance with ORS 94.640 (7) and a statement that all meetings of the board of directors shall be open to owners.

(8) The offices of president, secretary and treasurer and any other offices of the association, and the method of selecting and removing officers and filling vacancies in the offices.

(9) The preparation and adoption of a budget in accordance with ORS 94.645.

[(9)] (10) The program for maintenance, upkeep and repair of the common property and the method of payment for the expense of the program including the method of approving payment vouchers.

[(10)] (11) The employment of personnel necessary for the maintenance, upkeep and repair of the common property.

[(11)] (12) The manner of collecting from the owners their share of the common expenses.

[(12)] (13) Insurance coverage in accordance with ORS 94.675 and 94.685.

[(13)] (14) The preparation and distribution of the annual financial statement required under ORS 94.670.

[(14)] (15) The method of adopting administrative rules and regulations governing the details for the operation and use of the common property.

[(15)] (16) The method of amending the bylaws subject to this section. The bylaws may require no greater than an affirmative majority of votes to amend any provision of the bylaws.

[(16)] (17) If additional property is proposed to be annexed pursuant to ORS 94.580 (3), the method of apportioning common expenses if new lots are added during the course of the fiscal year.

[(17)] (18) Any other details regarding the planned community that the declarant or the association consider desirable. However, if a provision required to be in the declaration under ORS 94.580 is included in the bylaws, the voting requirements for amending the declaration shall govern the amendment of that provision of the bylaws.

SECTION 15. ORS 94.640 is amended to read:

94.640. (1) The board of directors of an association may act on behalf of the association except as limited by the declaration[,] and the bylaws [and subsection (2) of this section]. In the performance of their duties, officers and members of the board of directors shall exercise the care required of fiduciaries.

(2) [The board of directors may not act on behalf of the association to amend the declaration, terminate the planned community, elect members of the board of directors or determine the qualifications, powers, duties or terms of office of members of the board of directors. However,] Unless otherwise provided in the bylaws, the board of directors may fill vacancies in its membership for the unexpired portion of any term.

(3) At least [once every two years] annually, the board of directors of an association shall review the insurance coverage of the association.

(4) The board of directors of the association annually shall cause to be filed the necessary income tax returns for the association.

(5) [Notwithstanding any contrary provision of] Unless otherwise provided in the declaration or bylaws, the owners may remove any member of the board of directors, other than members appointed by the declarant or persons who are ex officio directors, with or without cause, by a majority vote of all owners present and entitled to vote at any meeting of the owners at which a quorum is present. No removal of a director is effective unless the matter of removal is an item on the agenda and stated in the notice for the meeting required under ORS 94.650.

(6) All meetings of the board of directors of the association shall be open to owners, except that at the discretion of the board the following matters may be considered in executive session:

(a) Consultation with legal counsel concerning the rights and duties of the association regarding existing or potential litigation, or criminal matters;

(b) Personnel matters, including salary negotiations and employee discipline; and

(c) The negotiation of contracts with third parties.

(7) In a planned community in which the majority of the lots are the principal residences of the occupants, meetings shall be called as follows:

(a) For other than emergency meetings, notice of board of directors' meetings shall be posted at a place or places on the property at least three days prior to the meeting or notice shall be provided by a method otherwise reasonably calculated to inform lot owners of such meetings;

(b) Emergency meetings may be held without notice, if the reason for the emergency is stated in the minutes of the meeting; and

(8) The board of directors, in the name of the association, shall maintain a current mailing address of the association.

SECTION 16. ORS 94.645 is amended to read:

94.645. Unless otherwise provided in the bylaws, the board of directors at least annually shall adopt a budget for the planned community [as provided in this section]. Within 30 days after adopting [a proposed] the annual budget for the planned community, the board of directors shall provide a summary of the budget to all owners. [If the board of directors is petitioned by owners representing 20 percent of the votes of the planned community, the board shall call a meeting of the owners to consider rejection of the budget. The date of the meeting shall be not less than 14 or more than 30 days after the summary is provided to the owners. At the meeting, whether or not a quorum is present, the budget shall be adopted unless a majority of the votes of the planned community or any larger vote specified in the bylaws rejects the budget. If the proposed annual budget is rejected, the last annual budget shall continue in effect until the owners approve a subsequent budget.] If the board fails to adopt a budget, the last adopted annual budget shall continue in effect.

SECTION 17. ORS 94.650 is amended to read:

94.650. (1) The homeowners association shall hold at least one meeting of the owners each calendar year.

(2) Special meetings of the association may be called by the president of the board of directors, a majority of the board of directors or a percentage of owners specified in the bylaws of the association. However, the bylaws may not require a percentage greater than 50 percent or less than 10 percent of the votes of the planned community for the purpose of calling a meeting.

[(2)] (3) Not less than 10 or more than 50 days before any meeting called under this section, the secretary or other officer specified in the bylaws shall cause notice to be hand delivered or mailed to the mailing address of each lot or to the mailing address designated in writing by the owner, and to all mortgagees that have requested such notice. Mortgagees may designate a representative to attend a meeting called under this section. The notice shall state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes or any proposal to remove a director or officer.

SECTION 18. ORS 94.655 is amended to read:

94.655. Unless the bylaws of a homeowners association provide otherwise, a quorum for any meeting of the association shall consist of the number of persons who are entitled to cast 20 percent of the votes [which may be cast for election of the board of directors] and who are present in person or by proxy at the beginning of the meeting.

SECTION 19. ORS 94.660 is amended to read:

94.660. Unless the bylaws provide otherwise, the vote or votes of a lot may be cast by absentee ballot or pursuant to a proxy executed by the owner. An owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association. A proxy shall not be valid if it is undated or purports to be revocable without notice. A proxy shall terminate one year after its date unless the proxy specifies a shorter term.

SECTION 20. ORS 94.665 is amended to read:

94.665. (1) Except as otherwise provided in the declaration, a homeowners association may sell, convey or subject to a security interest any portion of the common property if 80 percent or more of the votes in the homeowners association, including 80 percent of the votes of lots not owned by a declarant at the time of the vote, are cast in favor of that action. The association shall treat proceeds of any sale under this section as an asset of the association. [This section does not apply to the granting of easements for public utilities, telecommunications utilities or for other public purposes consistent with the intended use of such common property by the planned community.]

(2) A sale, transfer or encumbrance of the common property or any portion of the common property made pursuant to a right reserved in the declaration under this section may provide that the common property be released from any restriction imposed on the common property by the declaration. However, a sale, transfer or encumbrance may not deprive any lot of its right of access to or support for the lot without the consent of the owner of the lot.

SECTION 21. ORS 94.670 is amended to read:

94.670. (1) A homeowners association shall retain the documents, information and records delivered to the association under ORS 94.616.

(2) All assessments, including declarant subsidies, shall be deposited in a separate bank account in the name of the association. All expenses of the association shall be paid from the association bank account.

[(2)] (3) The association shall keep financial records sufficiently detailed for proper accounting purposes. Within 90 days after the end of the fiscal year, the board of directors shall distribute to each owner and, upon written request, any mortgagee of a lot, a copy of the annual financial statement consisting of a balance sheet and income and expenses statement for the preceding fiscal year.

[(3)] (4) The association shall make the documents, information and records described in subsections (1) and [(2)] (3) of this section and all other records of the association reasonably available for examination by an owner and any mortgagee of a lot. Upon the written request of an owner or mortgagee of a lot, the association shall make available during reasonable hours all such records for duplication. The association shall maintain a copy, suitable for the purpose of duplication, of the following:

(a) The declaration, bylaws, association rules and regulations and any amendments or supplements to them.

(b) The most recent financial statement prepared pursuant to subsection [(1)] (3) of this section.

[(4) The association, within 14 days after receiving a written request from an owner, the declarant or a prospective purchaser, shall furnish a copy of the Statement of Planned Community Information prepared in accordance with ORS 94.750.]

(5) Upon written request of a prospective purchaser, the association shall make available for examination and duplication during reasonable hours the documents and information specified in subsection [(3)(a), (b) and (c)] (4) of this section.

(6) The association may charge a reasonable fee for furnishing copies of any documents, information or records described in this section. The fee may include reasonable personnel costs for furnishing the documents, information or records.

SECTION 22. ORS 94.680 is amended to read:

94.680. (1) If a declaration provides that the homeowners association has the sole authority to decide whether to repair or reconstruct a unit that has suffered damage or whether a unit must be repaired or reconstructed, the board of directors [may] shall obtain blanket all-risk insurance for the full replacement cost of all structures in the planned community. Cost of the coverage shall be a common expense to the association.

(2) If the declaration contains a provision described in subsection (1) of this section, the declaration also shall provide:

(a) Requirements of or limitations on repairing or reconstructing damaged or destroyed property;

(b) The time within which the repair or reconstruction must begin; and

(A) Damage or destruction is not repaired or replaced; or

(B) Insurance proceeds exceed or fall short of the costs of repair or reconstruction.

SECTION 23. ORS 94.685 is amended to read:

94.685. Unless provided in the declaration, the bylaws shall specify:

(1) The insurance an owner must obtain, if any;

(2) The insurance, if any, an individual owner is precluded from obtaining; and

(3) Whether or not the insurance coverage obtained and maintained by the board of directors may be brought into contribution with insurance bought by owners or their mortgagees.

SECTION 24. ORS 94.690 is amended to read:

94.690. The board of directors of a homeowners association shall obtain, if reasonably available, terms in insurance policies under ORS 94.680 which provide[:] a waiver of subrogation by the insurer as to any claims against the board of directors of the association, any owner or any guest of an owner.

[(1) A waiver of subrogation by the insurer as to any claims against the board of directors of the association, any owner or any guest of an owner;]

[(2) A waiver by the insurer of its right to repair and reconstruct instead of paying cash;]

[(3) That no policy may be canceled, invalidated or suspended because of any action of an owner;]

[(4) That no policy may be canceled, invalidated or suspended because of the conduct of any director, officer or employee of the association unless the insurer gives the association a prior written demand that the association correct the defect and allows the association a reasonable time to make the correction; and]

[(5) That any "other insurance" clause in any policy shall exclude from its coverage all owners' policies.]

SECTION 25. ORS 94.704 is amended to read:

94.704. (1) The declarant of a planned community shall pay all common expenses of the planned community until the individual lots subject to assessment are assessed for common expenses.

(2) Except for assessments under subsections (3), (4) and (5) of this section, the board of directors shall assess all common expenses against all the lots that are subject to assessment according to the allocations stated in the declaration. Any common expense assessment or any installment of the assessment past due shall bear interest at the rate established by resolution of the board of directors. Nothing in this section prohibits the board from making compromises on overdue assessments if the compromise benefits the association.

(3) Any common expense or any part of a common expense benefiting fewer than all of the lots may be assessed exclusively against the units benefited.

(4) Assessments to pay a judgment against the association may be made only against the lots existing in the planned community at the time the judgment was entered and only in proportion to their common expense liabilities.

(5) If any common expense is [clearly] the fault of any owner, the homeowners association may assess the expense exclusively against the lot of the owner.

(6) If the homeowners association reallocates common expense liabilities, any common expense assessment and any installment of the assessment not yet due shall be recalculated according to the reallocated common expense liabilities.

(7) A lot owner may not claim exemption from liability for contribution toward the common expenses by waiving the use or enjoyment of any of the common property or by abandoning the owner's lot. An owner may not claim to offset an assessment for failure of the association to perform the association's obligations.

(8) During any period of declarant control, any special assessment for capital improvements or additions must be approved by not less than 50 percent of the voting rights, or such greater percentage as may be specified in the declaration, without regard to any weighted right or special voting right in favor of the declarant. Nothing in this subsection is intended to prohibit a declarant from reserving a special declarant right to approve any such assessment.

SECTION 26. ORS 94.709 is amended to read:

94.709. [(1) As provided in this section, the homeowners association of a planned community has a lien on a lot for any assessment levied against the lot or any fines imposed under the declaration or bylaws against the owner of the lot from the date on which the assessment or fine is due. The provisions regarding the attachment, notice, recordation and duration of liens established on real property under ORS 87.352 to 87.382 and provisions regarding the foreclosure of liens under ORS chapter 88 apply to a lien created under this section. Unless the declaration otherwise provides, the homeowners association may enforce as assessments under this section any fees, charges, late charges or interest charged under ORS 94.630 (1)(j), (k) and (L). If an assessment is payable in installments, the full amount of the assessment is a lien from the date the first installment of the assessment becomes due.]

[(2) A lien created under subsection (1) of this section is prior to a homestead exemption and all other liens and encumbrances on a lot, except:]

[(a) A first mortgage or trust deed of record;]

[(b) A lien for real estate taxes and other governmental assessments or charges; and]

[(c) Liens and encumbrances recorded before the recordation of the declaration.]

[(3) Unless the declaration provides otherwise, if two or more associations have liens for assessments created at any time on the same real estate, the liens have equal priority.]

[(4) A lien created under subsection (1) of this section is extinguished unless proceedings to enforce the lien are instituted within three years after the full amount of the assessments becomes due.]

(1) Whenever a homeowners association levies any assessment against a lot, the association, upon complying with subsection (2) of this section, shall have a lien upon the individual lot for any unpaid assessments and interest as provided in subsection (2)(b) of this section. The lien shall be prior to a homestead exemption and all other liens or encumbrances upon the lot except:

(a) Tax and assessment liens; and

(b) A first mortgage or trust deed of record.

(2)(a) An association claiming a lien under subsection (1) of this section shall file in the county in which the lot or some part thereof is located a claim containing:

(A) A true statement of the amount due for the unpaid assessments after deducting all just credits and offsets;

(B) The name of the owner of the lot, or reputed owner, if known;

(C) The name of the association; and

(D) The description of the lot as provided in ORS 93.600.

(b) When a claim has been filed and recorded pursuant to this subsection and the owner of the lot subject to the claim thereafter fails to pay any assessment chargeable to such lot, then so long as the original or any subsequent unpaid assessment remains unpaid, such claim shall automatically accumulate the subsequent unpaid assessments and interest thereon without the necessity of further filings under this section.

(3) The claim shall be verified by the oath of some person having knowledge of the facts and shall be recorded by the county recording officer. The record shall be indexed as other liens are required by law to be indexed.

(4) The proceedings to foreclose liens created by this section shall conform as nearly as possible to the proceedings to foreclose liens created by ORS 87.010, except that notwithstanding ORS 87.055, a lien may be continued in force for a period of time not to exceed six years from the date the claim is filed and recorded under subsections (2) and (3) of this section. For the purpose of determining the date the claim is filed in those cases when subsequent unpaid assessments have accumulated under the claim as provided in subsection (2)(b) of this section, the claim regarding each unpaid assessment shall be deemed to have been filed at the time such unpaid assessment became due. The lien may be enforced by the board of directors acting on behalf of the association. An action to recover a money judgment for unpaid assessments may be maintained without foreclosing or waiving the lien securing the claim for unpaid assessments.

(5) Unless the declaration or bylaws provide otherwise, fees, late charges, fines and interest imposed pursuant to ORS 94.630 (1)(L), (n) and (o) are enforceable as assessments under this section.

[(5)] (6) This section does not prohibit an association from pursuing an action to recover sums for which subsection (1) of this section creates a lien or from taking a deed in lieu of foreclosure in satisfaction of the lien.

[(6) The homeowners association shall furnish to an owner upon the owner's written request, a recordable statement of the amount of unpaid assessments against the lot. The association shall furnish the statement within 10 business days after receiving the request. The statement is binding on the association, the board of directors and every owner as to the amounts of the unpaid assessments.]

(7) An action to recover a money judgment for unpaid common expenses may be maintained without foreclosing or waiving the lien securing the claim for common expenses. However, recovery on the action operates to satisfy the lien, or the portion thereof, for which recovery is made.

SECTION 27. ORS 94.723 is amended to read:

94.723. If a first mortgagee acquires a lot in a planned community by foreclosure or deed in lieu of foreclosure, the mortgagee and subsequent purchaser shall not be liable for any of the common expenses chargeable to the lot which became due before the mortgagee or purchaser acquired title to the lot. The unpaid expenses shall become a common expense of all lot owners including the mortgagee or purchaser.

SECTION 28. ORS 94.807 is amended to read:

94.807. ORS 94.803, 94.806, 94.811 to 94.863 and 94.869 to 94.945 do not apply to:

(1) Any timeshare plan for which the developer has complied with the requirements of ORS 92.305 to 92.495 or 100.005 to 100.910 before July 28, 1983.

(2) Any timeshare plan for which the developer has complied with all applicable local regulations and has submitted a completed filing under ORS 92.305 to 92.495 or 100.005 to 100.910 before July 28, 1983.

(3) Any subsequent phase or stage of a timeshare plan described in subsection (1) or (2) of this section that has complied with the applicable requirements of ORS chapter 92 and this chapter in effect prior to July 28, 1983. However, the developer of the phase or stage must comply with the cancellation provisions of ORS 94.836 and 94.839.

(4) Subdivided land as defined by ORS 92.305, a planned community as defined by ORS 94.550 [(9)] and a condominium subject to ORS 100.005 to 100.910 that does not involve a timeshare plan.

(5) Subdivided land as defined by ORS 92.305, a planned community as defined by ORS 94.550 [(9)] and a condominium subject to ORS 100.005 to 100.910, that involves a timeshare plan to the extent of the nontimeshare aspects of the development. The developer of such a development must comply with the applicable requirements of ORS chapter 92 and this chapter in addition to ORS 94.803, 94.806 and 94.811 to 94.945.

(6) Any transaction normal and customary in the hotel and motel business involving the acceptance of advance reservations which are not entered into for the purpose of evading the provisions of ORS 92.325, 94.570, 94.803 to 94.945, 100.005, 100.105, 100.200, 100.450 and 696.490.

(7) The offering, sale or transfer of a fractional interest or a timeshare in a timeshare plan comprised of 12 timeshares or less unless the Real Estate Commissioner determines that the developer is attempting by a common scheme or course of development to evade the provisions of ORS 92.325, 94.570, 94.803 to 94.945, 100.005, 100.105, 100.200, 100.450 and 696.490.

(8) The transfer of a timeshare by reason of a foreclosure action, by deed in lieu of foreclosure, by gift or by devise, descent or distribution or transfer to an inter vivos trust that is not made to evade ORS 94.803 and 94.807 to 94.945.

(9) The offering, sale or transfer of a membership or interest in a recreational vehicle park or campground that provides no right to use or occupy a residential dwelling structure in the project overnight.

(10) The offering, sale or transfer of a membership or interest entitling the purchaser to a timeshare in personal property, including but not limited to an airplane, boat or recreational vehicle.

(11) The offering, sale or transfer of a membership or interest entitling the purchaser to use real property and facilities without overnight use for dwelling purposes, including but not limited to commercial office, retail or similar space and golf, tennis or athletic clubs.

SECTION 29. ORS 94.811 is amended to read:

94.811. (1) The unit owners in a condominium subject to the Oregon Condominium Act and the owners in a planned community subject to the Oregon Planned Community Act may amend the declaration for the condominium or planned community to prohibit the creation of a timeshare plan involving any portion of the property of the condominium or planned community. Any amendment to a condominium declaration must comply with ORS 100.135 and any amendment to a planned community declaration must comply with ORS 94.590.

(2) The owners of land in a subdivision may amend the recorded declaration, bylaws or other governing document for the subdivision to prohibit the creation of a timeshare plan involving any portion of the property within the subdivision. The amendment must be approved by not less than 75 percent of the owners or by any larger percentage specified for the amendment in the recorded declaration, bylaws or other governing document for the subdivision. As used in this subsection, "subdivision" means a subdivision as defined by ORS 92.010, that:

(a) Was approved and for which a plat was recorded under ORS 92.120 before July 28, 1983;

(b) At the time of the subdivision's creation, would have met the definition of a planned community under ORS 94.550 [(9)]; and

(3) The declaration for a condominium subject to the Oregon Condominium Act and created after July 28, 1983, and the declaration for a planned community, subject to the Oregon Planned Community Act and created after July 28, 1983, may include a provision prohibiting the creation of a timeshare plan involving any portion of the property of the condominium or planned community.

SECTION 30. Sections 31 to 37 of this 1999 Act are added to and made a part of ORS 94.550 to 94.783.

SECTION 31. (1) Unless prohibited or limited by the declaration or bylaws, any action that may be taken at any annual, regular or special meeting of the homeowners association may be taken without a meeting if the association delivers a written ballot to every association member that is entitled to vote on the matter.

(2) A written ballot shall set forth each proposed action and provide an opportunity to vote for or against each proposed action.

(3) Matters that may be voted on by written ballot shall be deemed approved or rejected as follows:

(a) If approval of a proposed action otherwise would require a meeting at which a certain quorum must be present and at which a certain percentage of total votes cast is required to authorize the action, the proposal shall be deemed to be approved when the date for the return of ballots has passed, a quorum of owners has voted and the required percentage of approving votes has been received. Otherwise, the proposal shall be deemed to be rejected; or

(b) If approval of a proposed action otherwise would require a meeting at which a specified percentage of owners must authorize the action, the proposal shall be deemed to be approved when the percentage of total votes cast in favor of the proposal equals or exceeds such required percentage. The proposal shall be deemed to be rejected when the number of votes cast in opposition renders approval impossible or when both the date for return of ballots has passed and such required percentage has not been met. Unless otherwise prohibited by the declaration or bylaws, the votes may be counted from time to time before the final return date to determine whether the proposal has passed or failed by the votes already cast on the date they are counted.

(4) All solicitations for votes by written ballot shall state the following:

(a) If approval of a proposal by written ballot requires that the total number of votes cast equal or exceed a certain quorum requirement, the number of responses needed to meet such quorum requirement; and

(b) If approval of a proposal by written ballot requires that a certain percentage of total votes cast approve the proposal, the required percentage of total votes needed for approval.

(5) All solicitations for votes by written ballot shall specify the period during which the association shall accept written ballots for counting, which period shall end on the earliest of the following dates:

(a) If approval of a proposed action by written ballot requires that a certain percentage of the owners approve the proposal, the date on which the association has received a sufficient number of approving ballots;

(b) If approval of a proposed action by written ballot requires that a certain percentage of the owners approve the proposal, the date on which the association has received a sufficient number of disapproving ballots to render approval impossible; or

(c) In all cases, the date certain on which all ballots must be returned to be counted.

(6) Except as otherwise provided in the declaration or bylaws, a written ballot may not be revoked.

SECTION 32. (1) An owner shall be personally liable for all assessments imposed on the owner or assessed against the owner's lot by the homeowners association.

(2) In a voluntary conveyance of a lot, the grantee shall be jointly and severally liable with the grantor for all unpaid assessments against the grantor of the lot to the time of the grant or conveyance, without prejudice to the grantee's right to recover from the grantor the amounts paid by the grantee therefor. However, upon request of a prospective purchaser, the board of directors shall make and deliver a statement of the unpaid assessments against the prospective grantor or the lot, and the grantee in that case shall not be liable for, nor shall the lot when conveyed be subject to, a lien filed thereafter for any unpaid assessments against the grantor in excess of the amount therein set forth.

SECTION 33. Unless otherwise provided in the declaration or bylaws, in any suit or action brought by a homeowners association to foreclose its lien, collect delinquent assessments or enforce compliance with the terms and provisions of ORS 94.550 to 94.783, the declaration or bylaws, including all amendments and supplements thereto or any rules or regulations adopted by the association, the prevailing party shall be entitled to recover reasonable attorney fees therein and in any appeal therefrom.

SECTION 34. (1) As used in this section, "affiliate" means any person who controls a transferor or successor declarant, is controlled by a transferor or successor declarant or is under common control with a transferor or successor declarant.

(2) A person controls or is controlled by a transferor or successor declarant if the person:

(a) Is a general partner, officer, director or employee;

(b) Directly or indirectly, or acting in concert with one or more other persons or through one or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing more than 20 percent of the voting interests of the transferor or successor declarant;

(c) Controls in any manner the election of a majority of the members of the board of directors; or

(d) Has contributed more than 20 percent of the capital of the transferor or successor declarant.

(3) Upon the transfer of any special declarant right, the liabilities and obligations of a transferor are as follows:

(a) A transferor is not relieved of any obligation or liability arising before the transfer. Lack of privity does not deprive any owner of standing to bring an action to enforce any obligation of the transferor.

(b) If a transferor retains any special declarant right, or if a successor declarant is an affiliate of the transferor, the transferor is subject to liability for all obligations and liabilities imposed on a declarant by the provisions of ORS 94.550 to 94.783 or by the declaration or bylaws arising after the transfer and is jointly and severally liable with the successor declarant for the liabilities and obligations of the successor declarant which relate to the subject lot.

(c) A transferor who retains no special declarant right has no obligation or liability for any act or omission or any breach of a contractual obligation arising from the exercise of a special declarant right by a successor declarant who is not an affiliate of the transferor.

(4) Upon transfer of any special declarant right, the liabilities and obligations of a successor declarant are as follows:

(a) A successor declarant who is an affiliate of the transferor is subject to all obligations and liabilities imposed on a declarant by the provisions of this chapter or by the declaration or bylaws.

(b) A successor declarant who is not an affiliate of the transferor shall not be liable for any misrepresentations or warranties made or required to be made by the declarant or previous successor declarant or for any breach of fiduciary obligation by such person. Such a successor declarant, however, shall comply with any provisions of the declaration and bylaws which pertain to such successor declarant's ownership of the lot or lots and the exercise of any special declarant right.

SECTION 35. (1) Except as otherwise provided in subsections (2) and (3) of this section, a developer, vendor under a land sale contract, mortgagee of a mortgage or beneficiary of a trust deed affecting the declarant's interest in the property shall acquire all special declarant rights of the transferor upon transfer by the declarant or prior successor declarant of all of such transferor's interest in a lot or lots, unless:

(a) The conveyance evidences an intent not to transfer any special declarant rights;

(b) An instrument executed by the transferor and the transferee evidences an intent not to transfer any special declarant rights and is recorded in the office of the recording officer of every county in which the property is located; or

(c) The transferee executes an instrument disclaiming any right to exercise any special declarant rights and such instrument is recorded in the office of the recording officer of every county in which the property is located.

(2) A transferee under subsection (1) of this section shall acquire less than all special declarant rights if:

(a) The conveyance from the transferor or an instrument executed by the transferor and the transferee evidences an intent to transfer less than all special declarant rights and states the specific rights being transferred, and such instrument is recorded in the office of the recording officer of every county in which the property is located; or

(b) The transferee executes an instrument disclaiming specific special declarant rights and the instrument is recorded in the office of the recording officer of every county in which the property is located.

(3) When a transferee acquires all of the declarant's interest in a lot or lots in which the declarant has reserved the right to expand the planned community under ORS 94.580, the transferee shall not acquire the right to annex property unless the transferee simultaneously acquires from the declarant property adjacent to the lot or lots which are entitled to be annexed to the lot or lots, or unless the conveyance evidences an intent to transfer such right to the transferee.

(4) A declarant or a successor declarant may transfer all or less than all of the transferor's special declarant rights to a transferee, whether or not any interest in real property is conveyed, by an instrument executed by the declarant or successor declarant and the transferee evidencing an intent to transfer all or specific special declarant rights, which instrument shall be recorded in the office of the recording officer of every county in which the property is located. If the transfer is not subject to subsection (1) of this section, it shall also bear the written consent of any holder of a blanket encumbrance on the lot.

(5) An instrument disclaiming or transferring special declarant rights shall be properly acknowledged as provided by law.

SECTION 36. Each owner and the declarant shall comply with the bylaws, and with the administrative rules and regulations adopted pursuant thereto, and with the covenants, conditions and restrictions in the declaration or in the deed to the lot. Failure to comply therewith shall be grounds for an action maintainable by the homeowners association or by an aggrieved owner.

SECTION 37. (1) At least 10 days prior to instituting any litigation or administrative proceeding to recover damages under ORS 94.630 (1)(e)(E), the homeowners association shall provide written notice to each affected owner of the association's intent to seek damages on behalf of the owner. The notice shall, at a minimum:

(a) Inform each owner of the general nature of the litigation or proceeding;

(b) Describe the specific nature of the damages to be sought on the owner's behalf;

(c) Set forth the terms under which the association is willing to seek damages on the owner's behalf, including any mechanism proposed for the determination and distribution of any damages recovered;

(d) Inform each owner of the owner's right not to have the damages sought on the owner's behalf and specify the procedure for exercising the right; and

(e) Inform the owner that exercising the owner's right not to have damages sought on the owner's behalf:

(A) Relieves the association of its duty to reimburse or indemnify the owner for the damages;

(B) Does not relieve the owner from the owner's obligation to pay dues or assessments relating to the litigation or proceeding;

(C) Does not impair any easement owned or possessed by the association; and

(D) Does not interfere with the association's right to make repairs to common areas.

(2) Within 10 days of mailing the notice described in this section, any owner may request in writing that the association not seek damages on the owner's behalf. If an owner makes such a request, the association shall not make or continue any claim or action for damages with regard to the objecting owner's lot and shall be relieved of any duty to reimburse or indemnify the owner for damages under the litigation or proceeding.

SECTION 38. ORS 100.005 is amended to read:

100.005. As used in this chapter, unless the context requires otherwise:

[(1) "Agent" means any person who represents or acts for or on behalf of a developer in selling or offering to sell any unit in a condominium, but such term does not include an attorney-at-law whose representation of another person consists solely of rendering legal services.]

[(2)] (1) "Assessment" means any charge imposed or levied by the association of unit owners on or against a unit owner or unit pursuant to provisions of the declaration or the bylaws of the condominium or provisions of ORS 100.005 to 100.910.

[(3)] (2) "Association of unit owners" means the association provided for under ORS 100.405.

(3) "Association property" means any real property or interest in real property acquired, held or possessed by the association under ORS 100.405.

(4) "Blanket encumbrance" means a trust deed or mortgage or any other lien or encumbrance, mechanics' lien or otherwise, securing or evidencing the payment of money and affecting more than one unit in a condominium, or an agreement affecting more than one such unit by which the developer holds such condominium under an option, contract to sell or trust agreement.

(5) "Building" means a multiple-unit building or single-unit buildings, or any combination thereof, comprising a part of the property. "Building" also includes a floating structure described in ORS 100.020 (3)(b)(D).

(6) "Commissioner" means the Real Estate Commissioner.

(7) "Common elements" means the general common elements and the limited common elements.

(8) "Common expenses" means:

(a) Expenses of administration, maintenance, repair or replacement of the common elements;

(b) Expenses agreed upon as common by all the unit owners; and

(c) Expenses declared common by ORS 100.005 to 100.625 or by the declaration or the bylaws of the particular condominium.

(9) "Condominium" means:

(a) With respect to property located within this state:

(A) The land, if any, whether leasehold or in fee simple and whether contiguous or noncontiguous;

(B) Any buildings, improvements and structures on the property; and

(C) Any easements, rights and appurtenances belonging to the property, which are submitted to the provisions of ORS 100.005 to 100.625; and

(b) With respect to property located outside this state, the property that has been committed to the condominium form of ownership in accordance with the jurisdiction within which the property is located.

(10) "Conversion condominium" means a condominium in which there is a building, improvement or structure that was occupied prior to any negotiation and that is:

(a) Residential in nature, at least in part; and

(b) Not wholly commercial or industrial, or commercial and industrial, in nature.

(11) "Declarant" means a person who files a declaration under ORS 100.100 or a supplemental declaration under ORS 100.110.

(12) "Declaration" means the instrument described in ORS 100.100 by which the condominium is created and as modified by any amendment recorded in accordance with ORS 100.135 or supplemental declaration recorded in accordance with ORS 100.120.

(13) "Developer" means a declarant or any person who purchases an interest in a condominium from declarant, successor declarant or subsequent developer for the primary purpose of resale.

(14) "Dwelling unit," "premises," "rental agreement" and "tenant" mean those terms as defined in ORS 90.100.

(15) "Flexible condominium" means a condominium containing property that may be reclassified or withdrawn from the condominium pursuant to ORS 100.150 (1).

(16) "General common elements," unless otherwise provided in a declaration, means:

(a) The land, whether leased or in fee simple, except any portion thereof included in a unit or made a limited common element by the declaration;

(b) The foundations, columns, girders, beams, supports, [main] bearing and shear walls, roofs, halls, corridors, lobbies, stairs, fire escapes, entrances and exits of a building;

(d) Installations of central services such as power, light, gas, hot and cold water, heating, refrigeration, air conditioning, waste disposal and incinerating;

(e) The elevators, tanks, pumps, motors, fans, compressors, ducts and in general all apparatus and installations existing for common use;

(f) The premises for the lodging of janitors or caretakers of the property; and

(g) All other elements of a building necessary or convenient to its existence, maintenance and safety, or normally in common use.

(17) "Leasehold" means the interest of a person, firm or corporation who is the lessee under a lease from the owner in fee and who files a declaration creating a condominium under ORS 100.100.

(18) "Limited common elements" means those common elements designated in the declaration, as reserved for the use of a certain unit or number of units, to the exclusion of the other units.

(19) "Majority" or "majority of unit owners" means more than 50 percent of the voting rights allocated to the units by the declaration.

(20) "Negotiation" means any activity preliminary to the execution by either developer or purchaser of a unit sales agreement, including but not limited to advertising, solicitation and promotion of the sale of a unit.

(21) "Nonwithdrawable property" means property which pursuant to ORS 100.150 (1)(b):

(a) Is designated nonwithdrawable in the declaration and on the plat; and

(b) Which may not be withdrawn from the condominium without the consent of all of the unit owners.

(22) "Percentage" or "percent of unit owners" means the percent of the voting rights determined under ORS 100.525.

(23) "Purchaser" means an actual or prospective purchaser of a condominium unit pursuant to a sale.

(24) "Recording officer" means the county officer charged with the duty of filing and recording deeds and mortgages or any other instruments or documents affecting the title to real property.

(25) "Reservation agreement" means an agreement relating to the future sale of a unit which is not binding on the purchaser and which grants purchaser the right to cancel the agreement without penalty and obtain a refund of any funds deposited at any time until purchaser executes a unit sales agreement.

(26) "Sale" includes every disposition or transfer of a condominium unit, or an interest or estate therein, by a developer, including the offering of the property as a prize or gift when a monetary charge or consideration for whatever purpose is required by the developer. "Interest or estate" includes a lessee's interest in a unit for more than three years or less than three years if the interest may be renewed under the terms of the lease for a total period of more than three years. "Interest or estate" does not include any interest held for security purposes or a timeshare regulated or otherwise exempt under ORS 94.803 and 94.807 to 94.945.

(27) "Special declarant right" means any right, in addition to the regular rights of the declarant as a unit owner, reserved for the benefit of or created by the declarant under the declaration, bylaws or the provisions of this chapter.

(28) "Staged condominium" means a condominium which provides for annexation of additional property pursuant to ORS 100.115 and 100.120.

(29) "Successor declarant" means the transferee of any special declarant right.

(30) "Termination date" means that date described in ORS 100.105 [(2)(c) or in ORS 100.105] (2)(b) or (7)(d).

(31) "Transitional committee" means the committee provided for under ORS 100.205.

(32) "Turnover meeting" means the meeting provided for under ORS 100.210.

(33) "Unit" or "condominium unit" means a part of the property which:

(a) Is described in ORS 100.020 (3);

(b) Is intended for any type of independent ownership; and

(34) "Unit designation" means the number, letter or combination thereof designating a unit in the declaration.

(35) "Unit owner" means, except to the extent the declaration or bylaws provide otherwise, the person owning fee simple interest in a unit, the holder of a vendee's interest in a unit under a recorded installment contract of sale and, in the case of a leasehold condominium, the holder of the leasehold estate in a unit.

(36) "Unit sales agreement" means a written offer or agreement for the sale of a condominium unit which when fully executed will be binding on all parties. "Unit sales agreement" includes but is not limited to an earnest money receipt and agreement to purchase and other such agreements which serve as an agreement of sale for a cash transaction or which are preliminary to the execution of an installment contract of sale, but does not include a reservation agreement.

(37) "Variable property" means property described in ORS 100.150 (2) and designated as variable property in the declaration and on the plat.

(38) "Voting rights" means the portion of the votes allocated to a unit by the declaration in accordance with ORS 100.105 (1)(h).

SECTION 39. ORS 100.020 is amended to read:

100.020. (1) Except as otherwise provided in subsections (2) and (3) of this section, ORS 100.100 to 100.625 apply only to property located within this state which a person elects to submit to the condominium form of ownership as provided in ORS 100.005 to 100.625.

(2) Unless the declarant elects otherwise, ORS 100.175, 100.185, 100.200 (2), 100.205, 100.210, 100.300, 100.305, 100.310, 100.315 and 100.320 apply only to condominiums that include units to be used for residential purposes.

(3) No property may be submitted to the condominium form of ownership under ORS 100.005 to 100.625 unless:

(a) Each unit has legal access to a public street or highway or, if the unit has such access only by virtue of common ownership with other units, the declaration executed under ORS 100.110 prohibits conveyance of the unit unless after conveyance the unit will continue to have legal access to a public street or highway; and

(b) Each unit consists of:

(A) A building or part of a building;

(B) A space used for the [temporary] parking or storage of automobiles, trucks, boats, campers or other [recreational] vehicles or equipment [when such space is auxiliary to a condominium in which the remaining units are within or part of a building];

(D) A floating structure, including a structure formerly used as a ship or other vessel that:

(i) Is permanently moored to structures in a river, lake or other waterway pursuant to a long-term lease with a remaining term at the time the declaration and plat are recorded of not less than 15 years;

(ii) Contains two or more residential units with a combined floor space of not less than 2,000 square feet; and

(iii) Has upland common elements owned in fee or by leasehold having a remaining term of not less than the remaining term of the leasehold on the submerged or submersible land. The units in a condominium described in this subparagraph shall be considered real property for purposes of the Oregon Condominium Act.

(4) Except as otherwise provided in subsection (5) of this section, ORS 100.015 and 100.635 to 100.910 apply to condominiums having units to be used for residential purposes which are not offered for sale as a security pursuant to ORS 59.005 to 59.451, 59.660 to 59.830, 59.991 and 59.995.

(5) ORS 100.650, 100.660, 100.670, 100.675, 100.750, 100.770, 100.775, 100.780, 100.900, 100.905 and 100.990 apply to the sale of condominium units to be used for nonresidential purposes.

(6) The units in a condominium described in subsection (3)(b)(C) and (D) of this section shall be considered real property for purposes of this chapter.

SECTION 40. ORS 100.105 is amended to read:

100.105. (1) A declaration shall contain:

(a) A description of the property [then being submitted to unit ownership] that conforms to the description in the surveyor's certificate provided under ORS 100.115 (2), whether leased or in fee simple.

(b) Subject to subsection (5) of this section, the name by which the property shall be known and a general description of each unit and the building or buildings, including the number of stories and basements of each building, the number of units and the principal materials of which they are constructed.

(c) The unit designation, location, a description of the boundaries and [approximate] area in square feet of each unit and any other data necessary for proper identification. The area of a unit shall be the same as shown for that unit on the plat described in ORS 100.115 (2).

(d) A description of the general common elements.

(e) An allocation to each unit of an undivided interest in the common elements in accordance with ORS 100.515 and the method used to establish the allocation.

(f) The designation of any limited common elements including:

(A) A general statement of the nature of the limited common element;

[(B) The method of designation that, for any limited common element not contiguous to a unit, shall be a method different from the method used for unit designation;]

[(C)] (B) A statement of the unit to which the use of each limited common element is reserved, provided the statement is not a reference to an assignment of use specified on the plat; and

[(D)] (C) The allocation of use of any limited common element appertaining to more than one unit.

(g) The method of determining liability for common expenses and right to common profits in accordance with ORS 100.530.

(h) The voting rights allocated to each unit in accordance with ORS 100.525 or in the case of condominium units committed as property in a timeshare plan defined in ORS 94.803, the voting rights allocated in the timeshare instrument.

(i) A statement of the use, residential or otherwise, for which the building or buildings and each of the units is intended.

(j) A statement that the designated agent to receive service of process in cases provided in ORS 100.550 (1) is named in the Condominium Information Report which will be filed with the Real Estate Agency in accordance with ORS 100.250 (1)(a).

(k) The percentage of voting rights required to approve an amendment of the declaration if such percentage is greater than 75 percent.

(L) A statement as to whether or not the association pursuant to ORS 100.405 (5) and (8) has authority to grant leases, easements, rights of way, licenses and other similar interests affecting the general and limited common elements of the condominium and consent to vacation of roadways within and adjacent to the condominium.

(m) If the condominium contains a floating structure described in ORS 100.020 (3), a statement regarding the authority of the board of directors of the association, subject to ORS 100.410, to temporarily relocate the floating structure without a majority vote of affected unit owners.

(n) Any restrictions on alienation of units. Any such restrictions created by documents other than the declaration may be incorporated by reference in the declaration to the official records of the county in which the property is located.

(o) Any other details regarding the property that the person executing the declaration considers desirable. However, if a provision required to be in the bylaws under ORS 100.415 is included in the declaration, the voting requirements for amending the bylaws shall also govern the amendment of the provision in the declaration.

(2) In the event the declarant proposes to annex additional property to the condominium under ORS 100.125, the declaration shall also contain a general description of the plan of development, including:

(a) The maximum number of units to be included in the condominium.

[(b) The maximum number of stages in the condominium.]

[(c)] (b) The date after which any right to annex additional property will terminate.

[(d)] (c) A general description of the nature and proposed use of any additional common elements which declarant proposes to annex to the condominium, if such common elements might substantially increase the proportionate amount of the common expenses payable by existing unit owners.

[(e) The minimum allocation of undivided interest in the common elements of each original unit upon completion of development if declarant elected to proceed with all stages of development.]

[(f)] (d) The method used to establish the allocation of undivided interest in the common elements of each unit [at each stage of development].

[(g)] (e) Such other information as the Real Estate Commissioner shall require in order to carry out the purposes of ORS 100.015, 100.635 to 100.730 and 100.740 to 100.910.

(3) Except where expressly prohibited by the declaration and subject to the requirements of ORS 100.135 (1) and subsections (9) and (10) of this section:

(a) Not later than two years following the termination date specified in subsection [(2)(c)] (2)(b) of this section, such termination date may be extended for a period not exceeding two years; and

(b) [The staging specified in the declaration under subsection (2)(b) of this section and] The general description under subsection [(2)(d)] (2)(c) of this section and the information included in the declaration in accordance with subsection (7)(c), [(h) and (i)] (g) and (h) of this section may be changed by an amendment to the declaration.

(4) The information included in the declaration in accordance with subsection (2)(a)[, (e) and (f)] and (d) of this section and subsection (7)(a), (b), (d), (e), (f)[, (g) and (L)] and (k) of this section may not be changed unless all owners agree to the change and record an amendment to the declaration in accordance with this chapter.

(5) The name of the property shall include the word "condominium" or "condominiums" or the words "a condominium."

(6) No condominium shall bear a name which is the same as or deceptively similar to the name of any other condominium located in the same county.

(7) If the condominium is a flexible condominium containing variable property, the declaration shall also contain a general description of the plan of development, including:

(a) A statement that the rights provided for under ORS 100.150 (1) are being reserved.

(b) A statement:

(A) Of any limitations on rights reserved under ORS 100.150 (1), including whether the consent of any unit owner shall be required, and if so, a statement of the method by which the consent shall be ascertained; or

(B) That there are no limitations on rights reserved under ORS 100.150 (1).

(c) A metes and bounds legal description of all variable property within the condominium. If there is more than one parcel, a metes and bounds legal description for each parcel and a statement of the method of labeling each parcel depicted on the plat in accordance with ORS 100.115 (2)(i)(B).

(d) The termination date, which is the date or time period after which any right reserved under ORS 100.150 (1) will terminate, and a statement of the circumstances, if any, that will terminate any right on or before the date or time period specified. The date or time period may not exceed seven years from the recording of the conveyance of the first unit in the condominium to a person other than the declarant. Recording shall be in the county in which the property is located.

(e) The maximum number of units that may be created.

[(f) The minimum allocation of undivided interest in the common elements of each unit upon completion of development if all units are created.]

[(g)] (f) The method used to establish the allocations of undivided interest in the common elements of each unit as additional units are created.

[(h)] (g) A general description of all existing improvements and the nature and proposed use of any improvements that may be made on variable property if the improvements might substantially increase the proportionate amount of the common expenses payable by existing unit owners.

[(i)] (h) A statement of whether or not the declarant reserves the right to create limited common elements within any variable property, and if so, a general description of the types that may be created.

[(j)] (i) A statement that if by the termination date all or a portion of the variable property not designated as nonwithdrawable variable property has not been withdrawn or reclassified, such property shall automatically be withdrawn from the condominium as of such date.

[(k)] (j) A statement of the rights of the association under ORS 100.155 (2).

[(L)] (k) A statement of whether or not all or any portion of the variable property may not be withdrawn from the condominium and, if so, with respect to such nonwithdrawable variable property:

(A) A statement that the plat shall show the location and dimensions of all such property which shall be labeled "NONWITHDRAWABLE VARIABLE PROPERTY."

(B) A metes and bounds legal description of each parcel. If there is more than one parcel, a metes and bounds legal description for each parcel and a statement of the method of labeling each parcel depicted on the plat in accordance with ORS 100.115 (2)(i)(B).

(D) A statement, that if by the termination date, all or a portion of the variable property designated as "nonwithdrawable variable property" has not been reclassified, such property shall automatically be reclassified as of such date as a general common element of the condominium and any interest in such property held for security purposes shall be automatically extinguished by such classification.

(E) A statement of the rights of the association under ORS 100.155 (3).

[(m)] (L) A statement by the local governing body or appropriate department thereof that the withdrawal of any variable property not designated as "nonwithdrawable variable property" in the declaration in accordance with paragraph [(L)] (k) of this subsection, will not violate any applicable planning or zoning regulation or ordinance. The statement may be attached as an exhibit to the declaration.

(8) The plan of development for any variable property included in the declaration in accordance with subsection (7) of this section shall be subject to any plan of development included in the declaration in accordance with subsection (2) of this section.

(9) The information included in the declaration in accordance with subsection [(7)(j), (k) and (m)] (7)(i), (j) and (L) of this section may not be deleted by amendment.

(10) Approval by the unit owners shall not be required to redesignate variable property as "nonwithdrawable variable property" by supplemental declaration or amendment if such redesignation is required by the local governing body or appropriate department thereof to comply with any planning or zoning regulation or ordinance. If as a result of such redesignation the information required to be included in the supplemental declaration or an amendment under subsection [(7)(L)(C)] (7)(k)(C) of this section is inconsistent with the information included in the declaration or supplemental declaration in accordance with subsection [(7)(h)] (7)(g) of this section, an amendment to the declaration approved by at least 75 percent of all voting rights shall be required.

SECTION 41. ORS 100.110 is amended to read:

100.110. (1) Before a declaration, supplemental declaration or an amendment thereto may be recorded, it must be approved as provided in this section by the county assessor and the Real Estate Commissioner. Before a declaration or supplemental declaration may be recorded, it must be approved by the tax collector of the county in which the property is located. No declaration or amendment thereto shall be approved unless the requirements of subsections (2) to (6) of this section are met. Approval shall be evidenced by execution of the declaration or amendment or by a written approval attached thereto.

(2) The county assessor of the county in which the property is located shall approve a declaration, supplemental declaration or amendment thereto if:

(a) The name complies with ORS 100.105 (5) and (6); and

(b) The plat and floor plans comply with the requirements of ORS 100.115.

(3) The tax collector of the county in which the property is located shall approve the declaration or supplemental declaration, or an amendment that adds property to the condominium or changes the boundary of a unit for which a plat is required under ORS 100.115 (6)(a), if:

(a) All ad valorem taxes, special assessments, fees, or other charges required by law to be placed upon the tax roll which have or will become a lien upon the property during the tax year have been paid;

(b) Advance payment of ad valorem taxes, special assessments, fees or other charges which are not on the tax roll and for which payment is required under paragraph (a) of this subsection has been made to the tax collector utilizing the procedures contained in ORS 92.095 and 311.370; and

(c) The additional taxes, penalty, and any interest attributable thereto, required because of disqualification of the property from any special assessment have been paid.

(4) Subject to subsection (5) of this section, the commissioner shall approve the declaration or amendment thereto if:

(a) The declaration or the amendment thereto complies with the requirements of ORS 100.105 and 100.135;

(b) The bylaws adopted under ORS 100.410 comply with the requirements of ORS 100.410 and 100.415; and

(5) Approval by the commissioner shall not be required for an amendment to a declaration transferring the right of use of a limited common element pursuant to ORS 100.515 (5).

(6) Before the commissioner approves the declaration or amendment thereto under this section:

(a) The declarant shall pay to the commissioner a fee determined by the commissioner under ORS 100.670; and

(b) For an amendment, the Condominium Information Report and the Annual Report described in ORS 100.260 shall be designated current by the Real Estate Agency as provided in ORS 100.255 and the fee required under ORS 100.670 shall be paid.

(7) If the declaration or amendment thereto approved by the commissioner under subsection (4) of this section is not recorded in accordance with ORS 100.115 within two years from the date of approval by the commissioner, the approval shall automatically expire and the declaration or amendment thereto must be resubmitted for approval in accordance with this section. The commissioner's approval shall set forth the date on which the approval will expire.

SECTION 42. ORS 100.115 is amended to read:

100.115. (1) When a declaration is made and approved as required, it shall, upon the payment of the fees provided by law, be recorded by the recording officer. The fact of recording and the date thereof shall be entered thereon. At the time of recording a declaration, the person offering it for record shall also file an exact copy, certified by the recording officer to be a true copy thereof, with the county assessor.

(2) A plat of the land described in the declaration, complying with ORS 92.050, 92.060 (1) and (2), 92.080 and 92.120, shall be recorded simultaneously with the declaration. Upon request, the person offering the plat for recording shall also file an exact copy, certified by the surveyor who made the plat to be an exact copy of the plat, with the county assessor and the county surveyor. The exact copy shall be made in archival quality black ink or silver halide permanent photocopy upon a suitable drafting material having the characteristics of strength, stability and transparency required by the county surveyor. The plat shall:

(a) Show the location of:

(A) All buildings[,] and public roads [and other permanent structural improvements]. The location shall be referenced to a point on the boundary of the property; and

(B) For a condominium containing units described in ORS 100.020 (3)(b)(C) or (D), the moorage space or floating structure. The location shall be referenced to a point on the boundary of the upland property regardless of a change in the location resulting from a fluctuation in the water level or flow.

(b) Show the designation, location, [and] dimensions and area in square feet of each unit including:

(A) For units in a building described in ORS 100.020 (3)(b)(A), the horizontal and vertical boundaries of each unit and the common elements to which each unit has access. The vertical boundaries shall be referenced to a known benchmark elevation or other reference point as approved by the city or county surveyor;

(B) For a space described in ORS 100.020 (3)(b)(B), the horizontal boundaries of each unit and the common elements to which each unit has access. If the space is located within a structure, the vertical boundaries also shall be shown and referenced to a known benchmark elevation or other reference point as approved by the city or county surveyor;

(C) For a moorage space described in ORS 100.020 (3)(b)(C), the horizontal boundaries of each unit and the common elements to which each unit has access; and

(D) For a floating structure described in ORS 100.020 (3)(b)(D), the horizontal and vertical boundaries of each unit and the common elements to which each unit has access. The vertical boundaries shall be referenced to an assumed elevation of an identified point on the floating structure even though the assumed elevation may change with the fluctuation of the water level where the floating structure is moored.

(c) Identify and show, to the extent feasible, the location, [and] dimensions and area in square feet of all limited common elements described in the declaration. The plat shall not include any statement indicating to which unit the use of any noncontiguous limited common element is reserved.

(d) Include a statement, including signature and official seal, of a registered architect, registered professional land surveyor or registered professional engineer certifying that the plat fully and accurately depicts the boundaries of the units of the building and that construction of the units and buildings as depicted on the plat has been completed, except that the professional land surveyor who prepared the plat need not affix a seal to the statement.

(e) Include a surveyor's certificate, complying with ORS 92.070.

(f) Include a statement by the declarant that the property and improvements described and depicted on the plat are subject to the provisions of ORS 100.005 to 100.625.

(g) Include such signatures of approval as may be required by local ordinance or regulation.

(h) Include any other information or data not inconsistent with the declaration that the declarant desires to include.

(i) If the condominium is a flexible condominium, also:

(A) Show the location and dimensions of all variable property described in the declaration and label all such property as "VARIABLE PROPERTY." If there is more than one parcel, label each parcel with letters or numbers different from those designating any unit, building or other parcel of variable property.

(B) If any of the variable property is nonwithdrawable, also show the location and dimensions of all nonwithdrawable variable property and label all such property as "NONWITHDRAWABLE PROPERTY." If there is more than one parcel, label each parcel with letters or numbers different from those designating any unit, building, parcel or variable property or other parcel of "nonwithdrawable variable property."

(3) The supplemental plat required under ORS 100.150 (1) shall be recorded simultaneously with the supplemental declaration. Upon request, the person offering the supplemental plat for recording shall also file an exact copy, certified by the surveyor who made the plat to be an exact copy of the plat, with the county assessor and the county surveyor. The exact copy shall be made in archival quality black ink or silver halide permanent photocopy upon a suitable drafting material having the characteristics of strength, stability and transparency required by the county surveyor. The supplemental plat shall:

(a) Comply with ORS 92.050, 92.060 (1), (2) and (4), 92.080, 92.120 and subsection (4) of this section.

(b) If any property is withdrawn:

(A) Show the resulting perimeter boundaries of the condominium after the withdrawal; and

(B) Show the information required under subsection (2)(i) of this section as it relates to any remaining variable property.

(d) Include a "Declarant's Statement" that the property described on the supplemental plat is reclassified or withdrawn from the condominium and that the condominium exists as described and depicted on the plat.

(e) Include a surveyor's affidavit complying with ORS 92.070.

(4) Before a plat or a supplemental plat may be recorded, it must be approved by the city or county surveyor as provided in ORS 92.100. Before approving the plat as required by this section, the city or county surveyor shall check the boundaries of the plat and units and shall take such measurements and make such computations as are necessary to determine that the plat complies with this section. For performing that service, the city surveyor or county surveyor shall collect from the person offering the plat for approval a fee of $150 plus $25 per building. The governing body of a city or county may establish a higher fee by resolution or order.

(5)(a) Whenever variable property is reclassified or withdrawn as provided in ORS 100.155 (1) or (2) or property is removed as provided in ORS 100.600 (2), the county surveyor shall, upon all previously recorded plats relating to the variable property or property being removed and upon any copy thereof certified by the county clerk, trace, shade or make other appropriate marks or notations, including the date and the surveyor's name or initials, with archival quality black ink in such manner as to denote the reclassification, withdrawal or removal. The recording index numbers and date of recording of the supplemental declaration and plat or amendment and amended plat shall also be referenced on each plat.

(b) For performing the activities described in this subsection, the county clerk shall collect a fee set by the county governing body. The county clerk shall also collect a fee set by the county governing body to be paid to the county surveyor for services provided under this section.

(6) In addition to the provisions of subsection (7) of this section, a plat, including any floor plans that are a part of the plat, may be amended as provided in this subsection.

(a)(A) Except as otherwise provided in ORS 100.600, a change to the boundary of the property, a unit or a limited common element or a change to the configuration of other information required to be graphically depicted on the plat shall be made by a plat entitled "Plat Amendment" that shall reference in the title of the amendment the recording information of the original plat and any previous plat amendments.

(B) The plat amendment shall comply with ORS 92.050, 92.060 (1), (2) and (4), 92.080 and 92.120 and shall include:

(i) A graphic depiction of the change.

(ii) For a change to the boundary of the property, a surveyor's certificate, complying with ORS 92.070.

(iii) For a change to a boundary of a unit or a limited common element or a change to other information required to be graphically depicted, the statement of a registered architect, registered professional land surveyor or registered professional engineer described in subsection (2)(d) of this section.

(iv) A declaration by the chairperson and secretary on behalf of the association of unit owners that the plat is being amended pursuant to this subsection. Such declaration shall be executed and acknowledged in the manner provided for acknowledgement of deeds.

(C) The plat amendment shall be accompanied by an amendment to the declaration authorizing such plat amendment. The declaration amendment shall be executed, approved and recorded in accordance with ORS 100.110 and 100.135.

(D) Before a plat amendment may be recorded, it must be approved by the city or county surveyor as provided in ORS 92.100. The surveyor shall approve the plat amendment if it complies with the requirements of this subsection.

(E) Upon request, the person offering the plat amendment for recording shall also file an exact copy, certified by the surveyor who made the plat to be an exact copy of the plat amendment, with the county assessor and the county surveyor. The copy shall be in archival quality black ink or silver halide permanent photocopy upon suitable drafting material having the strength, stability and transparency required by the county surveyor.

(b)(A) A change to a restriction or other information not required to be graphically depicted on the plat may be made by amendment of the declaration without a plat amendment described in paragraph (a) of this subsection. An amendment under this paragraph shall include:

(i) A reference to recording index numbers and date of recording of the declaration, plat and any applicable supplemental declarations, amendments, supplemental plats or plat amendments.

(ii) A description of the change to the plat.

(iii) A statement that the amendment was approved in accordance with the declaration and ORS 110.135.

(B) The amendment shall be executed, approved and recorded in accordance with ORS 100.110 and 100.135.

(C) Before the amendment may be recorded, it must be approved by the city or county surveyor as provided in ORS 92.100. The surveyor shall approve the amendment if it complies with this subsection. Such approval shall be evidenced by execution of the amendment or by written approval attached thereto.

(c)(A) Floor plans of a condominium for which a plat was not required at the time of creation may be amended by an amendment to the declaration. An amendment under this paragraph shall include:

(i) A reference to recording index numbers and date of recording of the declaration and any applicable supplemental declarations or amendments.

(ii) A description of the change to the floor plans.

(iii) A graphic depiction of any change to the boundaries of a unit or common element and a statement by a registered architect, registered professional land surveyor or registered professional engineer certifying that such graphic depiction fully and accurately depicts the boundaries of the unit or common element as it currently exists.

(B) The amendment shall be approved and recorded in accordance with ORS 100.110 and 100.135 except that any change to the floor plans need only comply with the requirements of the unit ownership laws in effect at the time the floor plans were initially recorded.

(d) After recording of any declaration amendment or plat amendment pursuant to this subsection, the county surveyor shall, upon all previously recorded plats relating to the condominium and any copies filed under ORS 92.120 (3), make such appropriate marks or notations, including the date and the surveyor's name or initials, with archival quality black ink in such manner as to denote the changes. The recording index numbers and date of recording of the declaration amendment and any plat amendment shall also be referenced on each plat. For performing the services described in this subsection, the county surveyor shall collect from the person offering the plat amendment or declaration amendment for approval a fee established by the county governing body.

(7) The following may be amended by an affidavit of correction in accordance with ORS 92.170:

(a) A plat, whenever recorded.

(b) Floor plans recorded prior to October 15, 1983.

SECTION 43. ORS 100.120 is amended to read:

100.120. (1) To annex additional property to the condominium or to reclassify variable property under ORS 100.125 or 100.150, a supplemental declaration and plat shall be executed, approved and recorded by declarant at the time of each annexation or reclassification. Such supplemental declarations and plats shall:

(a) Be consistent with the provisions of the original declaration prepared pursuant to ORS 100.105.

(b) Contain the information required by ORS 100.105 (1) insofar as that information relates to the property being annexed or reclassified.

[(c) List the new units to be created or annexed and include the information described in ORS 100.105 (2)(e) in relation to such units.]

[(d)] (c) State the allocation of undivided interest in the common elements of each unit previously submitted to the provisions of this chapter upon the creation or annexation of the additional property.

[(e)] (d) If the stage being annexed contains any variable property, include the information required under ORS 100.105 (7) insofar as that information relates to the property being annexed. The termination date may not exceed seven years from the recording of the conveyance of the first unit in the condominium to a person other than the declarant. Recording shall be in the county in which the property is located.

(2) If the Condominium Information Report and the Annual Report described in ORS 100.250 are designated current as provided in ORS 100.255, all such supplemental declarations and plats shall be approved, executed and recorded as provided in ORS 100.100, 100.110 and 100.115. No unit being annexed or created by a supplemental declaration shall be conveyed until after such recording.

(3) To withdraw all or a portion of variable property from a flexible condominium pursuant to ORS 100.150 (1)(b), a supplemental declaration and plat shall be recorded in accordance with subsection (2) of this section. The supplemental plat shall comply with ORS 100.115 (3) and the supplemental declaration shall:

(a) Be consistent with the provisions of the declaration or supplemental declaration drawn pursuant to ORS 100.105 (7).

(b) Include a metes and bounds legal description of the variable property being withdrawn.

(d) State whether or not any variable property remains which may be reclassified or withdrawn from the condominium and, if property may be withdrawn, include the statement required under ORS 100.105 [(7)(m)] (7)(L).

(e) If any variable property is being redesignated as "nonwithdrawable variable property," include the information required under ORS 100.105 [(7)(L)] (7)(k).

(4) Except as provided in subsection (5) of this section, as to property submitted to unit ownership after October 4, 1977, additional units may not be added within land previously submitted to unit ownership unless all unit owners consent to an amendment to the declaration, plat and any floor plans recorded pursuant to ORS 100.115 in order to provide for such additional units.

(5) As to property submitted to unit ownership before September 27, 1987, if the declaration provides that additional property may be annexed to the condominium, any subsequent stage may contain variable property. The termination date may not be later than the earlier of:

(a) The date specified in the declaration under ORS 100.105 [(2)(c)] (2)(b); or

(b) Seven years from the recording of the conveyance of the first unit in the condominium to a person other than the declarant. Recording shall be in the county in which the property is located.

SECTION 44. ORS 100.175 is amended to read:

100.175. (1) The declarant shall establish a reserve account for replacement of those common elements all or part of which will normally require replacement in more than three and less than 30 years, for exterior painting if the common elements include exterior painted surfaces, and for such other items as may be required by the declaration or bylaws. The reserve account need not include those items that could reasonably be funded from operating assessments. [The items may be identified as those which are insurable by a common carrier of all purpose risk insurance.]

(2) The reserve account must be funded by assessments against the individual unit assessed for maintenance of items for which the reserve account is being established. The assessment under this subsection will accrue from the time of the conveyance of the first individual unit assessed [and may be shown as a separate item in the reservation agreement or unit sales agreement]. The declarant may elect to defer payment of the accrued assessment for a unit under this subsection until the time of conveyance of the unit. However, election by the declarant to defer payment of accrued assessment shall be limited to a period of three years from the date the declaration is recorded. The books and records of the association of unit owners shall reflect the amount owing from the declarant for all reserve assessments.

(3) The amount assessed shall take into account the estimated remaining life of the items for which the reserve is created and the current replacement cost of those items.

(4) The reserve account shall be established in the name of the association of unit owners that will be responsible for administering the account and for making periodic payments into it. The amount of the payments shall be adjusted at [regular intervals] least annually to recognize changes in current replacement costs over time. The board of directors of the association annually shall conduct a reserve study, or review and update an existing study, of the common elements to determine the reserve account requirements. A reserve account shall be established for those items of the common elements all or part of which will normally require replacement in more than three and less than 30 years, for exterior painting if the common elements include exterior painted surfaces, and for the maintenance, repair or replacement of other items as may be required under the declaration or bylaws or that the board of directors, in its discretion, may deem appropriate. The reserve account need not include items that could reasonably be funded from operating assessments. The reserve study shall include:

(a) Identification of all items for which reserves are to be established;

(b) The estimated remaining useful life of each item as of the date of the reserve study;

(c) An estimated cost of maintenance, repair or replacement of each item at the end of its useful life; and

(d) A 30-year plan with regular and adequate contributions, adjusted by estimated inflation and interest earned on reserves, to meet the maintenance, repair and replacement schedule.

(5) If the declaration or bylaws require a reserve account, the reserve study requirements of subsection (4) of this section first apply to the association of a condominium recorded prior to the effective date of this 1999 Act upon receipt by the board of directors of a written request from at least one owner or mortgagee of a unit that a reserve study be conducted. The reserve study shall be completed within one year of the date of the request.

[(5)] (6) The reserve account is to be used only for maintenance, repair and replacement of common elements for which reserves have been established and is to be kept separate from [assessments for maintenance] other funds. However, after the individual unit owners have assumed administrative responsibility for the association under ORS 100.210, the board of directors may borrow funds from the reserve account to meet high seasonal demands on the regular operating funds or to meet other temporary expenses which will later be paid from special assessments or maintenance fees.

[(6)] (7) Restrictions on the use of the reserve account do not prohibit its prudent investment subject to any constraints on investment of association funds imposed by the declaration, bylaws or rules of the association of unit owners.

[(7)] (8) Assessments paid into the reserve account are the property of the association of unit owners and are not refundable to sellers of units. [Sellers of units may treat their outstanding share of the reserve account as a separate item in a unit sales agreement.] Following turnover, the association may, on an annual basis, elect not to fund the reserve account described in subsection (1) of this section by unanimous vote of the owners.

SECTION 45. ORS 100.185 is amended to read:

100.185. (1) The declarant shall expressly warrant against defects in the plumbing, electrical, mechanical, structural, and all other components of the newly constructed units and common elements. Such warranty:

(a) Shall exist on a unit and the related limited common elements for not less than one year from the date of delivery of possession of that unit by the declarant to the first unit owner other than the declarant;

(b) Shall exist on the general common elements for not less than one year from the initial conveyance of title to a unit by the declarant to a unit owner other than the declarant, or, in the case of property developed in stages, for not less than one year from such initial conveyance of title or completion of the construction of the specific general common element, whichever is later;

(d) Shall be separate from, and in addition to, any warranties provided by any other person; [and]

(e) Shall be in lieu of any implied warranties by the declarant against defects in the plumbing, electrical, mechanical, structural or other components of any newly constructed unit or common elements; and

(f) Shall name the association of unit owners as an express beneficiary with regard to general common elements.

(2) A written claim reasonably specifying a breach of the warranty on the unit and the related limited common elements must be delivered to the declarant before the expiration of such warranty. A written claim reasonably specifying a breach of the warranty on the general common elements must be delivered to the declarant within two years of expiration of such warranty, but the claim must be for a defect existing prior to the expiration of such warranty under this section. An action to enforce such warranty shall not be commenced later than four years after expiration of such warranty.

(3) For the purposes of this section, "newly constructed units and common elements" means:

(a) Units and related limited common elements:

(A) That have been substantially completed for less than three years; and

(B) That have been occupied for less than 12 months.

(b) General common elements:

(A) That have been substantially completed for less than three years; and

(B) That were constructed contemporaneously with units that have been occupied for less than 12 months.

(4) The warranty required under subsection (1) of this section is not required for consumer products as defined in 15 United States Code 2301 (1).

SECTION 46. ORS 100.210 is amended to read:

100.210. (1) A turnover meeting shall be called by the declarant within 90 days of the expiration of any period of declarant control reserved in the declaration or bylaws under ORS 100.200. If no control has been reserved, the declarant shall call the turnover meeting within 90 days of the earlier of:

(a) In a single stage condominium, three years from the date of conveyance of the first unit to a person other than the declarant or conveyance of 50 percent of the units.

(b) In a staged or flexible condominium, seven years from the date of conveyance of the first unit to a person other than the declarant or conveyance to persons other than the declarant of 50 percent of the total number of units which the declarant may submit to the provisions of this chapter under ORS 100.125 or 100.150.

(2) The declarant shall give notice of the turnover meeting in accordance with the bylaws of the condominium to each unit owner at least seven but not more than 50 days prior to the meeting. The notice shall state the purpose of the meeting and the time and place where it is to be held.

(3) If the meeting required under subsection (1) of this section is not called by the declarant within the time specified, the meeting may be called and notice given by a unit owner or any first mortgagee of a unit.

(4) At the turnover meeting:

(a) The declarant shall relinquish control of the administration of the association of unit owners and the unit owners shall assume the control;

(b) The unit owners shall elect a board of directors in accordance with the bylaws of the condominium; and

(5) At the turnover meeting the declarant shall deliver to the association all property of the unit owners and the association of unit owners held or controlled by the declarant including, but not limited to, the following items, if applicable:

(a) The original or a photocopy of the recorded declaration and bylaws of the condominium and any supplements and amendments thereto.

(b) A copy of the articles of incorporation.

(d) The reserve study and all updates described in ORS 100.175.

[(d)] (e) Any rules and regulations which have been promulgated.

[(e)] (f) Resignations of officers and members of the board of directors who are required to resign because of the expiration of any period of declarant control reserved under ORS 100.200.

[(f)] (g) A report of the present financial condition of the association of unit owners. The report shall consist of a balance sheet and an income and expense statement for the preceding 12-month period or the period following the recording of the declaration, whichever period is less.

[(g)] (h) Association funds or control thereof, including, but not limited to, any bank signature cards.

[(h)] (i) All tangible personal property that is property of the association and an inventory of such property.

[(i)] (j) A copy of the following, if available:

(A) The as-built architectural, structural, engineering, mechanical, electrical and plumbing plans.

(B) The original specifications indicating thereon all material changes.

(C) The plans for underground site service, site grading, drainage and landscaping together with cable television drawings.

(D) Any other plans and information relevant to future repair or maintenance of the property.

[(j)] (k) Insurance policies.

[(k)] (L) Copies of any occupancy permits which have been issued for the condominium.

[(L)] (m) Any other permits issued by governmental bodies applicable to the condominium in force or issued within one year prior to the date the unit owners assume control of the administration of the association of unit owners.

[(m)] (n) A list of the general contractor and the subcontractors responsible for construction or installation of the major plumbing, electrical, mechanical and structural components of the common elements.

[(n)] (o) A roster of unit owners and their addresses and telephone numbers, if known, as shown on the records of the declarant.

[(o)] (p) Leases of the common elements and any other leases to which the association is a party.

[(p)] (q) Employment or service contracts in which the association is one of the contracting parties or service contracts in which the association or the unit owners have an obligation or responsibility, directly or indirectly, to pay some or all of the fee or charge of the person performing the service.

[(q)] (r) Any other contracts to which the association of unit owners is a party.

(6) In order to facilitate an orderly transition, during the three-month period following the turnover meeting, the declarant or an informed representative shall be available to meet with the board of directors on at least three mutually acceptable dates to review the documents delivered under subsection (5) of this section.

(7) If the declarant has complied with this section, unless the declarant otherwise has sufficient voting rights as a unit owner to control the association, the declarant shall not be responsible for the failure of the unit owners to comply with subsection (4) of this section and the declarant shall be relieved of any further responsibility for the administration of the association except as a unit owner of any unsold unit.

SECTION 47. ORS 100.405 is amended to read:

100.405. (1)(a) An association of unit owners shall be organized to serve as a means through which the unit owners may take action with regard to the administration, management and operation of the condominium. The association shall be organized as a corporation for profit or nonprofit corporation or as an unincorporated association. If the association is incorporated, the name of the association shall include the complete name of the condominium.

(b) Unless otherwise provided in the declaration or bylaws, an unincorporated association may be incorporated if such action is approved by a majority of unit owners in person, by written ballot or by proxy at a meeting at which a quorum is present.

(2) Membership in the association of unit owners shall be limited to unit owners.

(3) The affairs of the association shall be governed by a board of directors as provided for in the bylaws adopted under ORS 100.410.

(4) Subject to the provisions of the condominium's declaration and bylaws, and whether or not the association is unincorporated, the association may:

(a) Adopt and amend bylaws and rules and regulations;

(b) Adopt and amend budgets for revenues, expenditures and reserves and levy and collect assessments for common expenses from unit owners;

[(d) Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or on behalf of two or more unit owners on matters affecting the condominium;]

(d) Defend against any claims, proceedings or actions brought against it;

(e) Initiate or intervene in litigation or administrative proceedings in its own name, and without joining the individual unit owners, in the following:

(A) Matters relating to the collection of assessments and the enforcement of governing documents;

(B) Matters arising out of contracts to which the association is a party;

(C) Actions seeking equitable or other nonmonetary relief regarding matters that affect the common interests of the unit owners, including but not limited to the abatement of nuisance;

(D) Matters relating to or affecting common elements, including but not limited to actions for damage, destruction, impairment or loss of use of any common element;

(E) Matters relating to or affecting the units or interests of unit owners including but not limited to damage, destruction, impairment or loss of use of a unit or portion thereof, if:

(i) Resulting from a nuisance or a defect in or damage to a common element; or

(ii) Required to facilitate repair to any common element; and

(F) Any other matter to which the association has standing under law or pursuant to the declaration, bylaws or any articles of incorporation;

[(e)] (f) Make contracts and incur liabilities;

[(f)] (g) Regulate the use, maintenance, repair, replacement and modification of common elements;

[(g)] (h) Cause additional improvement to be made as a part of the common elements;

[(h)] (i) Acquire by purchase, lease, devise, gift or voluntary grant real or personal property or any interest therein and take, hold, possess and dispose of real or personal property or any interest therein;

[(i)] (j) Impose and receive any payments, fees or charges for the use, rental or operation of the common elements;

[(j)] (k) Impose charges for late payments of assessments, attorney fees for collection of assessments and, after giving notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws and rules and regulations of the association;

[(k)] (L) Adopt rules regarding the termination of utility services paid for out of assessments of the association and access to and use of recreational and service facilities available to unit owners and, after giving notice and an opportunity to be heard, terminate the rights of any owners to receive such benefits or services until the correction of any violation covered by such rule has occurred;

[(L)] (m) Impose reasonable charges for the preparation and recordation of amendments to the declaration or statements of [unpaid] assessments;

(n) Assign its right to future income, including the right to receive common expense assessments;

[(m)] (o) Provide for the indemnification of its officers and executive board, as may be limited by ORS 61.218 (3)(d) (1987 Replacement Part), and maintain directors' and officers' liability insurance;

[(n)] (p) Exercise any other powers conferred by the declaration or bylaws;

[(o)] (q) Exercise all other powers that may be exercised in this state by any such association; and

[(p)] (r) Exercise any other powers determined by the association to be necessary and proper for the governance and operation of the association.

(5) Subject to subsection (6) of this section, unless expressly limited or prohibited by the declaration, the association has the authority to grant, execute, acknowledge, deliver and record on behalf of the unit owners leases, easements, rights of way, licenses and other similar interests affecting the general common elements and consent to vacation of roadways within and adjacent to the condominium.

(6) The granting of a lease, easement, right of way, license or other similar interest in excess of two years [or any other interest] or consent pursuant to subsection (5) of this section shall be first approved by at least 75 percent of the unit owners. Unless the declaration otherwise provides, a [lease of] grant of any such interest affecting the general common elements for a term of two years or less shall not be considered the granting of an interest for which approval by the unit owners is required under this subsection.

(7) The instrument granting an interest or consent pursuant to subsection (5) of this section shall be executed by the [chairman] chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of such instruments by such officers and shall state that such grant or consent was approved, if appropriate, by at least 75 percent of the unit owners.

(8) Unless expressly prohibited by the declaration, any action [of the general association] permitted under subsections (5) and (6) of this section regarding a general common element may be taken with respect to any limited common element, provided that the owner of the unit to which the use of the limited common element is reserved and the holder of any mortgage or trust deed affecting the unit consent to the action and also execute an instrument as provided under subsection (7) of this section.

(9) Except as otherwise provided in the association's declaration or bylaws, the board of directors of the association may modify, close, remove, eliminate or discontinue the use of a general common element facility or improvement or portion of the common element landscaping, regardless of whether such facility, improvement or landscaping is mentioned in the declaration or shown on the plat provided that:

(a) Nothing in this subsection shall be construed as limiting the authority of the board of directors, in its discretion, to seek approval of such modification, closure, removal, elimination or discontinuance by the unit owners; and

(b) Modification, closure, removal, elimination or discontinuance other than on a temporary basis of any swimming pool, spa or recreation or community building must be approved by at least a majority of the unit owners voting on such matter at a meeting or ballot meeting held in accordance with the declaration and bylaws.

(10)(a) A permit or authorization issued by the board of directors pursuant to authority granted to the board under law, the declaration or the bylaws, may be recorded in the deed records of the county where the condominium is located. An instrument recorded under this subsection shall:

(A) Include the name of the condominium and a reference to where the declaration and any applicable supplemental declarations are recorded;

(B) Identify, by the designations stated in the declaration or applicable supplemental declaration, all affected units and common elements;

(C) Include such other information and signatures as may be required by law, under the declaration or bylaws or as the board of directors may desire; and

(D) Be executed by the chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of such instruments by the officers.

(b) The board of directors may record an amendment, modification, termination or other instrument relating to the permit or authorization described in this subsection. Any such instrument shall include a reference to the location of the recorded instrument and be executed by the chairperson and secretary of the association and acknowledged in the manner provided for acknowledgment of such instruments.

SECTION 48. ORS 100.415 is amended to read:

100.415. The bylaws shall provide for:

(1) The organization of the association of unit owners in accordance with ORS 100.405, when the initial meeting shall be held and the method of calling that meeting.

(2) If required under ORS 100.205, the formation of a transitional committee in accordance with such section.

(3) The turnover meeting required under ORS 100.210, including when the meeting shall be called, the method of calling the meeting, the right of a unit owner under ORS 100.210 (3) to call the meeting and a statement of the purpose of the meeting.

(4) The method of calling the annual meeting and all other meetings of the unit owners in accordance with section 59 of this 1999 Act, and the percentage that shall constitute a quorum.

(5) The election from among the unit owners of a board of directors and the number of persons constituting the board; the powers and duties of the board; the compensation, if any, of the directors; and the method of removal from office of directors.

(6) The method of calling meetings of the board of directors in accordance with ORS 100.420 and a statement that all meetings of the board of directors of the association of unit owners shall be open to unit owners.

(7) The election of a [chairman] chairperson, a secretary and a treasurer.

(8) The preparation and adoption of a budget in accordance with section 58 of this 1999 Act.

[(8)] (9) The maintenance, upkeep and repair of the common elements and association property and payment for the expense thereof including the method of approving payment vouchers.

[(9)] (10) The employment of personnel necessary for the maintenance, upkeep and repair of the common elements.

[(10)] (11) The manner of collecting from the unit owners their share of the common expenses.

[(11)] (12) Insurance coverage in accordance with ORS 100.435.

[(12)] (13) The preparation and distribution of the annual financial statement in accordance with ORS 100.480.

(14) The reserve account and the preparation, review and update of the reserve study required under ORS 100.175.

[(13)] (15) The filing of an Annual Report and any amendment with the Real Estate Agency in accordance with ORS 100.250.

[(14)] (16) The method of adopting and of amending administrative rules and regulations governing the details of the operation and use of the common elements.

[(15)] (17) Such restrictions on and requirements respecting the enjoyment and maintenance of the units and the common elements as are designed to prevent unreasonable interference with the use of their respective units and of the common elements by the several unit owners.

[(16)] (18) Any restrictions on use or occupancy of units. Any such restrictions created by documents other than the bylaws may be incorporated by reference in the bylaws to the official records of the county in which the property is located.

[(17)] (19) The method of amending the bylaws subject to ORS 100.410.

[(18)] (20) Any other details regarding the property that the declarant considers desirable. However, if a provision required to be in the declaration under ORS 100.105 is included in the bylaws, the voting requirements for amending the declaration shall also govern the amendment of the provision in the bylaws.

[(19)] (21) In the event additional units are proposed to be annexed or created pursuant to ORS 100.125 or 100.150, the method of apportioning common expenses in the event new units are added during the course of the fiscal year.

SECTION 49. ORS 100.420 is amended to read:

100.420. (1) All meetings of the board of directors of the association of unit owners shall be open to unit owners except that, in the discretion of the board, the following matters may be considered in executive session:

(a) Consultation with legal counsel concerning the rights and duties of the association regarding existing or potential litigation, or criminal matters;

(b) Personnel matters, including salary negotiations and employee discipline; and

(c) The negotiation of contracts with third parties.

(2) Except as provided in subsection (3) of this section, board of directors' meetings may be conducted by telephonic communication.

(3) In condominiums where the majority of the units are the principal residences of the occupants:

(b) Only emergency meetings of the board of directors may be conducted by telephonic communication.

(4) Subsection (3)(a) of this section first applies to property submitted to the provisions of this chapter prior to October 3, 1979, upon receipt by the board of directors of the association of unit owners of a written request from at least one unit owner that notice of board of directors meetings be given in accordance with subsection (3)(a) of this section.

SECTION 50. ORS 100.435 is amended to read:

100.435. (1) If the bylaws provide that the association of unit owners has the sole authority to decide whether to repair or reconstruct a unit that has suffered damage or that a unit must be repaired or reconstructed, the board of directors shall obtain and maintain at all times and shall pay for out of the common expense funds, the following insurance covering both the common elements and individual units:

(a) Property insurance including, but not limited to, fire, extended coverage, vandalism and malicious mischief; and

(b) Insurance covering the legal liability of the association of unit owners, the unit owners individually and the manager including, but not limited to, the board of directors, the public and the unit owners and their invitees or tenants, incident to ownership, supervision, control or use of the property. There may be excluded from the policy required under this paragraph, coverage of a unit owner, other than coverage as a member of the association of unit owners or board of directors, for liability arising out of acts or omissions of that unit owner and liability incident to the ownership or use of the part of the property as to which that unit owner has the exclusive use or occupancy. Liability insurance required under this paragraph shall be issued on a comprehensive liability basis and shall provide a cross liability indorsement providing that the rights of a named insured under the policy shall not prejudice any action against another named insured.

(2) If the bylaws require the individual unit owners to obtain insurance for their units, the bylaws also shall contain a provision requiring the board of directors to obtain the following insurance covering the common elements:

(a) Property insurance including, but not limited to, fire, extended coverage, vandalism and malicious mischief; and

(b) Insurance covering the legal liability of the association of unit owners and the manager including, but not limited to, the board of directors, to the public or the unit owners and their invitees or tenants, incident to supervision, control or use of the property.

(3) The board of directors shall obtain, if reasonably available, terms in insurance policies under this section that provide a waiver of subrogation by the insurer as to any claims against the board of directors of the association, any owner or any guest of an owner.

SECTION 51. ORS 100.480 is amended to read:

100.480. (1) The association of unit owners shall retain the documents, information and records delivered to the association under ORS 100.210.

(2) The association of unit owners shall keep financial records sufficient for proper accounting purposes. All assessments shall be deposited in a separate bank account in the name of the association. All expenses of the association shall be paid from the association bank account.

(3) Within 90 days after the end of the fiscal year, the board of directors shall distribute to each unit owner a copy of the annual financial statement consisting of a balance sheet and income and expense statement for the preceding fiscal year.

(4) The documents, information and records described in subsections (1) to (3) of this section and all other records of the association of unit owners shall be reasonably available for examination by a unit owner and any mortgagee of a unit. Upon the written request of an owner or mortgagee of a unit, the association shall make the documents, information and records described in subsections (1) to (3) of this section and other records available for duplication during reasonable hours. The association of unit owners shall maintain a copy, suitable for the purpose of duplication, of the following:

(a) The declaration, bylaws, association rules and regulations and any amendments or supplements thereto;

(b) The most recent annual financial statement prepared in accordance with subsection (3) of this section; and

(5) Upon the written request of a prospective purchaser, the association of unit owners shall make available for examination and duplication during reasonable hours the documents and information specified in subsection (4) of this section.

(6) The association of unit owners may charge a reasonable fee for furnishing copies of any documents, information or records described in this section. The fee may include reasonable personnel costs incurred to furnish the information.

(7) Subsection (3) of this section first applies to property submitted to the provisions of this chapter before January 1, 1982, when the board of directors of the association of unit owners receives a written request from at least one unit owner that a copy of the annual financial statement be distributed in accordance with subsection (3) of this section.

SECTION 52. ORS 100.510 is amended to read:

100.510. Unless otherwise provided in the declaration, if the declaration designates walls, floors or ceilings as boundaries of a unit:

(1) All lath, furring, wallboard, plasterboard, plaster, paneling, tiles, wallpaper, paint, finished flooring and any other materials constituting any part of the finished surfaces thereof shall be a part of the unit except those portions of the walls, floors or ceilings that materially contribute to the structural or shear capacity of the condominium. [and] All other portions of the walls, floors or ceilings shall be a part of the common elements.

(2) The following shall be a part of the unit:

(a) All spaces, nonbearing interior partitions, windows, window frames, exterior doors, door frames and all other fixtures and improvements within the boundaries of the unit; and

(b) All outlets of utility service lines, including but not limited to power, light, gas, hot and cold water, heating, refrigeration, air conditioning and waste disposal within the boundaries of the unit.

SECTION 53. ORS 100.530 is amended to read:

100.530. (1) Unless otherwise provided in the declaration, the common profits of the property shall be distributed among, and the common expenses shall be charged to, the unit owners according to the allocation of undivided interest of each unit in the common elements.

(2) No unit owner by the owner's own action may claim exemption from liability for contribution towards the common expenses by waiver by the owner of the use or enjoyment of any of the common elements or by abandonment by the owner of the owner's unit. An owner may not claim an offset against an assessment for failure of the association to perform its obligations.

(3) Subject to subsection (4) of this section, from the date of conveyance of the first unit [that the declaration is recorded], the declarant shall:

(a) Pay assessments due for operating expenses on all unsold units; and

(b) Pay assessments due for reserves on all unsold units, or, at the declarant's option, pay or require the unit owner to pay all accrued reserve assessments against the unit at the time of the initial sale to the unit owner.

(4)(a) The association shall not assess units owned by the declarant for additional capital improvements without the written consent of the declarant as long as:

(A) In a single stage condominium, the declarant owns more than two units or five percent of the units, whichever is greater.

(B) In a staged or flexible condominium, the declarant owns more than two units or five percent of the units submitted to the provisions of this chapter, whichever is greater, or the termination date has not expired.

(b) The declarant may waive the declarant's right of consent provided in paragraph (a) of this subsection.

(5) Except with respect to reserves required by ORS 100.175, a declaration or bylaws may provide that the declarant may elect to defer commencement of all or part of common expense assessments as to all units in a condominium or as to all units in a stage of a condominium and if a declarant so elects to defer commencement of all or part of common expense assessments, declarant shall pay as they accrue and be responsible for all or part of the common expenses attributable to the condominium or attributable to the stage of the condominium for which assessments have been deferred, until assessments commence for all common expenses. The declarant shall give not less than 10 days' written notice to all affected unit owners prior to the commencement of common expense assessments if such a deferral occurs.

SECTION 54. ORS 100.550 is amended to read:

100.550. (1) [Actions may be brought on behalf of two or more of the unit owners, as their respective interests may appear, by the association with respect to any cause of action relating to the condominium or more than one unit.] Service of process in any action relating to the [common elements, more than one unit or the association,] condominium may be made on:

(a) If the condominium was submitted to the provisions of this chapter before October 3, 1989, the person designated in the declaration to receive service of process;

(b) The person named as designated agent in the Condominium Information Report filed with the Real Estate Agency under ORS 100.250;

(c) If the association is organized as a corporation under Oregon law, the registered agent in accordance with ORS 60.111 or 61.086 (1987 Replacement Part); or

(d) The [chairman] chairperson or secretary of the association.

(2) Except as provided in subsection (4) of this section, if the association of unit owners of property submitted to the provisions of this chapter before October 15, 1983, wishes to designate a person other than the one named in the declaration to receive service of process in the cases provided in subsection (1) of this section, it shall record an amendment to the declaration. The amendment shall be certified by the chairperson and the secretary of the association of unit owners, and shall state the name of the successor with the successor's residence or place of business as required by ORS 100.105 (1)(j), and that the person named in the amendment was designated by resolution duly adopted by the association of unit owners.

(3) Unless prohibited by the declaration or bylaws, the board of directors of the association of unit owners of property submitted to the provisions of this chapter after October 15, 1983, may elect to designate a person other than the one named in the declaration to receive service of the process in the cases provided in subsection (1) of this section. After the adoption of a resolution by the board of directors in accordance with the bylaws, the board of directors, without the need for further action by the association or approval under ORS 100.110 and 100.135, shall record an amendment to the declaration. The amendment shall be certified by the chairperson and the secretary of the association of unit owners, and shall state the name of the successor with the successor's residence or place of business as required by ORS 100.105 (1)(j), that the person named in the amendment has consented to the designation and that the resolution was duly adopted by the association of unit owners.

(4) Subsection (3) of this section applies to property submitted to the provisions of this chapter before October 15, 1983, if:

(a) The board of directors of the association of unit owners receives a written request from at least one unit owner that subsection (3) of this section applies; or

(b) The board of directors of the association of unit owners adopts a resolution in accordance with the bylaws of the association that subsection (3) of this section applies.

SECTION 55. ORS 100.655 is amended to read:

100.655. (1) The disclosure statement submitted to the Real Estate Commissioner as part of a filing under ORS 100.635 shall contain the following information:

(a) The name and address of the condominium, and the name, address and telephone number of the developer [and agent of the developer, if any];

(b) A general narrative description of the condominium stating the total number of units, a description of the types of units, the total number of units that may be included in the condominium pursuant to ORS 100.105 (2), and a precise statement of the nature of the interest which is being offered;

(A) The construction of the project is not completed, general disclosure of the status of construction and the actual or scheduled dates of completion of buildings, recreational facilities and other common elements, including a statement describing any recreational facilities or improvements to the common elements that the developer reserves the right to develop or promises to develop, or a statement that there are no such facilities or improvements; or

(B) The construction of the project is completed, the actual dates of completion of buildings, recreational facilities and other common elements if known by the developer;

(d) The nature and significant terms of any financing offered by the developer to purchasers of the condominium units;

(e) Copies of any warranties for structural elements and mechanical and other systems or a brief description of such warranties;

(f) A current or projected budget of the association of unit owners for the operation and maintenance and any other common expenses of the condominium, a brief statement of the method of determining liability for common expenses and the right to common profits and the following notice in at least 8-point type:

___________________________________________________________________

NOTICE TO PROSPECTIVE PURCHASERS

THE PROJECTION OF THE BUDGET OF THE ASSOCIATION OF UNIT OWNERS FOR THE OPERATION AND MAINTENANCE AND OTHER COMMON EXPENSES OF THE CONDOMINIUM IS ONLY AN ESTIMATE, PREPARED WITH DUE CARE.

___________________________________________________________________

(g) A description of any provisions made in the budget of the condominium for reserves for capital expenditures for repair or replacement of common elements, including provisions required by ORS 100.175, and an explanation of the basis for such reserves;

(h) In the case of a conversion condominium, a statement of:

(A) The present condition of all structural components and major mechanical and utility installations in the condominium, including the approximate date of construction and a reasonable estimate of the remaining useful life of, at a minimum, the roof, siding, plumbing, electrical, HVAC system, asphalt, sidewalks and decks;

(B) Whether or not the assessment of conditions under subparagraph (A) of this paragraph, which shall be in 8-point or larger type, was prepared by a licensed engineer, architect or home inspector; and

(i) A cross-reference to the portions of the declaration, any supplemental declaration and bylaws containing the general power and authority of the board of directors, the method of apportionment of voting rights among the members of the association of unit owners and a statement of the nature and extent of control of the board of directors retained by the developer by voting rights or otherwise;

(j) A list of the documents by which purchasers may be bound, including the declaration, bylaws, ground leases, management agreement, easements, covenants, restrictions and conditions;

(k) A statement of whether there are any restrictions on alienation of units or any use or occupancy restrictions, such as limitations on residential or commercial use, pets, age of occupants or number of occupants, and a cross-reference to those portions of the declaration, any supplemental declaration, bylaws or any other document containing the principal provisions relating to those restrictions; and

(L) If the condominium is a staged condominium:

(A) Whether the declarant reserves the right to annex additional property to the condominium pursuant to ORS 100.125 and, if so:

(i) The maximum number of units;

[(ii) The maximum number of stages;]

[(iii)] (ii) The date after which annexation right terminates;

[(iv)] (iii) The description of additional common elements declarant reserves right to annex to the property and whether such common elements might substantially increase the proportionate amount of common expenses by current unit owners; and

[(v)] (iv) The effect of annexation of additional units on allocation of interest in the common elements and voting rights.

(B) If the condominium or any stage being filed under ORS 100.635 contains or may contain any variable property, a statement of the rights reserved by the declarant under ORS 100.150 (1) and the results specified in ORS 100.155 if such rights are not exercised.

(2) In lieu of the disclosure statement required under subsection (1) of this section, the commissioner may accept a disclosure report issued or approved by another state or governmental agency.

(3) No disclosure statement is required for condominiums described in ORS 100.660.

SECTION 56. Sections 57 to 63 of this 1999 Act are added to and made a part of ORS chapter 100.

SECTION 57. (1) At least 10 days prior to instituting any litigation or administrative proceeding to recover damages under ORS 100.405 (4)(e)(E), the association of unit owners shall provide written notice to each affected owner of the association's intent to seek damages on behalf of the owner. The notice shall, at a minimum:

(a) Inform each owner of the general nature of the litigation or proceeding;

(b) Describe the specific nature of the damages to be sought on the owner's behalf;

(d) Inform each owner of the owner's right not to have the damages sought on the owner's behalf and specify the procedure for exercising the right; and

(e) Inform the owner that exercising the owner's right not to have damages sought on the owner's behalf:

(A) Relieves the association of its duty to reimburse or indemnify the owner for the damages;

(B) Does not relieve the owner from the owner's obligation to pay dues or assessments relating to the litigation or proceeding;

(C) Does not impair any easement owned or possessed by the association; and

(D) Does not interfere with the association's right to make repairs to common elements.

(2) Within 10 days of mailing the notice described in this section, any owner may request in writing that the association not seek damages on the owner's behalf. If an owner makes such a request, the association shall not make or continue any claim or action for damages with regard to the objecting owner's unit or interest and shall be relieved of any duty to reimburse or indemnify the owner for damages under the litigation or proceeding.

SECTION 58. Unless otherwise provided in the bylaws, the board of directors at least annually shall adopt a budget for the association of unit owners. Within 30 days after adopting the annual budget for the association, the board of directors shall provide a summary of the budget to all owners. If the board of directors fails to adopt an annual budget, the last adopted budget shall continue in effect.

SECTION 59. (1) The association of unit owners shall hold at least one meeting of the owners each calendar year.

(2) Special meetings of the association may be called by the chairperson of the board of directors, a majority of the board of directors or a percentage of owners specified in the bylaws. However, the bylaws may not require a percentage greater than 50 percent or less than 10 percent of the owners for the purpose of calling a meeting.

(3) Not less than 10 nor more than 50 days before any meeting called under this section, the secretary or other officer of the association specified in the bylaws shall cause notice to be hand delivered or mailed to the mailing address of each unit or to the mailing address designated in writing by the owner, and to all mortgagees that have requested such notice. Mortgagees may designate a representative to attend a meeting called under this section. The notice shall state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes or any proposal to remove a director or officer of the association.

SECTION 60. Unless the bylaws provide otherwise, a quorum for any meeting of the association of unit owners shall consist of the number of persons who are entitled to cast 20 percent of the votes and who are present in person or by proxy at the beginning of the meeting.

SECTION 61. Unless the bylaws provide otherwise, the vote or votes of a unit owner may be cast by absentee ballot or pursuant to a proxy executed by the owner. An owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association of unit owners. A proxy shall not be valid if it is undated or purports to be revocable without notice. A proxy shall terminate one year after its date unless the proxy specifies a shorter term.

SECTION 62. In the event of a conflict between the declaration and the bylaws or between the declaration and any articles of incorporation, the declaration shall prevail except to the extent the declaration is inconsistent with ORS 100.005 to 100.910.

SECTION 63. (1) The board of directors of an association of unit owners may act on behalf of the association except as limited by the declaration or bylaws. In the performance of their duties, officers and members of the board of directors shall exercise the care required of fiduciaries.

(2) Unless otherwise provided in the bylaws, the board of directors of an association may fill vacancies in its membership for the unexpired portion of any term.

(3) At least annually, the board of directors of an association shall review the insurance coverage of the association.

(4) The board of directors of the association annually shall cause to be filed the necessary income tax returns for the association.

(5) Unless otherwise provided in the declaration or bylaws, the unit owners may remove any member of the board of directors of the association, other than members appointed by the declarant or persons who are ex officio directors, with or without cause, by a majority vote of all owners present and entitled to vote at any meeting of the owners at which a quorum is present. No removal of a member of the board of directors is effective unless the matter of removal is an item on the agenda and stated in the notice for the meeting required under section 59 of this 1999 Act.

SECTION 64. ORS 65.369 is amended to read:

65.369. (1) The civil liability of a qualified director for the performance or nonperformance of the director's duties shall be limited to gross negligence or intentional misconduct.

(2) This section does not affect the civil liability of the entity which a qualified director serves.

(3) For the purposes of this section, "qualified director" means a person who serves without compensation for personal services as:

(a) A member of a board or commission of the state or a governmental subdivision for the purpose of setting policy and controlling or otherwise overseeing the activities or functional responsibilities of the board or commission but, notwithstanding ORS 30.265 (2), the entity is not thereby rendered immune from liability;

(b) An officer, director or member of an executive board for the purpose of setting policy and controlling or otherwise overseeing the activities or functional responsibilities of a nonprofit corporation, unincorporated association or nonprofit cooperative corporation that has as its primary purpose:

(A) Religion;

(B) Charity;

(D) Providing goods or services at no charge to the general public;

(E) Education;

(F) Scientific activity;

(G) Medical or hospital services at reduced costs; or

(H) Engaging in activities of the nature specified in section 501 of the Internal Revenue Code of 1986, as amended;

(c) A director for the purpose of setting policy and controlling or otherwise overseeing the activities or functional responsibilities of an organization which acts as an advocate for its members and which has as its members individuals or organizations that are:

(A) Members of a particular trade or industry; or

(B) Members of the business community of a particular municipality or area of the state; or

(d) An officer, director or member of an executive board for the purpose of setting policy and controlling or otherwise overseeing the activities or functional responsibilities of a nonprofit corporation, unincorporated association or nonprofit cooperative corporation composed of owners or lessees of units or interests in any condominium submitted to the provisions of ORS 100.005 to 100.625, any planned community as defined in ORS 94.550 [(9)], any timeshare property as defined in ORS 94.803 [(26)], any residential cooperative community or any other residential or commercial common interest real estate community.

(4) An otherwise qualified director shall not be considered to be compensated for personal services if the director receives payment only for actual expenses incurred in attending meetings or performing a director's duties or receives a stipend which is paid only to compensate the director for average expenses incurred over the course of a year.

SECTION 65. ORS 105.465 is amended to read:

105.465. (1) The provisions of ORS 105.465 to 105.490, 696.301 and 696.870:

(a) Apply to the real property described in subparagraphs (A) to (D) of this paragraph unless the buyer indicates to the seller, which indication shall be conclusive, that the buyer will use the real property for purposes other than a residence for the buyer or the buyer's spouse, parent or child:

(A) Real property consisting of or improved by one to four dwelling units [other than a lot in a planned community as defined in ORS 94.550 and for which a Statement of Planned Community Information is not required under ORS 94.670 (4)];

(B) A condominium unit as defined in ORS 100.005 and not subject to disclosure under ORS 100.705;

(D) A manufactured dwelling, as defined in ORS 446.003, that is owned by the same person who owns the land upon which the manufactured dwelling is situated.

(b) Do not apply to a leasehold in real property.

(2) A seller shall deliver one of the following to each buyer who makes a written offer to purchase real property in this state:

(a) A written disclaimer that the seller makes no representations or warranties as to the condition of the real property or any improvement thereon and that the buyer will be purchasing the property "as is," that is, with all defects, if any; or

(b) A seller's property disclosure statement in substantially the following form:

___________________________________________________________________

SELLER'S PROPERTY DISCLOSURE

STATEMENT

(NOT A WARRANTY)

(105.465)

INSTRUCTIONS TO THE SELLER

Please complete the following form. Do not leave any spaces blank unless the question clearly does not apply to the property. Please refer to the line number(s) of the question(s) when you provide your explanation(s). For your protection you must date and sign each page of this disclosure statement and each attachment.

NOTICE TO THE BUYER

THE FOLLOWING REPRESENTATIONS ARE MADE BY THE SELLER(S), CONCERNING THE CONDITION OF THE PROPERTY LOCATED AT _________ ("THE PROPERTY").

DISCLOSURES CONTAINED IN THIS FORM ARE PROVIDED BY THE SELLER ON THE BASIS OF SELLER'S ACTUAL KNOWLEDGE OF THE PROPERTY AT THE TIME OF DISCLOSURE. YOU HAVE FIVE BUSINESS DAYS FROM THE SELLER'S DELIVERY OF THIS SELLER'S DISCLOSURE STATEMENT TO REVOKE YOUR OFFER BY DELIVERING YOUR SEPARATE SIGNED WRITTEN STATEMENT OF REVOCATION TO THE SELLER, UNLESS YOU WAIVE THIS RIGHT AT OR PRIOR TO ENTERING INTO A SALE AGREEMENT.

FOR A MORE COMPREHENSIVE EXAMINATION OF THE SPECIFIC CONDITION OF THIS PROPERTY YOU ARE ADVISED TO OBTAIN AND PAY FOR THE SERVICES OF A QUALIFIED SPECIALIST TO INSPECT THE PROPERTY ON YOUR BEHALF, FOR EXAMPLE, ARCHITECTS, ENGINEERS, PLUMBERS, ELECTRICIANS, ROOFERS, BUILDING INSPECTORS, OR PEST AND DRY ROT INSPECTORS.

Seller____ is/____ is not occupying the property.

I. SELLER'S REPRESENTATIONS:

The following are representations

made by the seller and are not the

representations of any financial

institution that may have made or

may make a loan pertaining to

the property, or that may have or

take a security interest in the

property.

1. TITLE

[ ]Yes[ ]No A. Do you have legal

authority to sell the

property?

[ ]Yes[ ]No * B. To your knowledge, is

title to the property

subject to any of the

following:

(1) First right of refusal

(2) Option

(3) Lease or rental

agreement

(4) Other listing

(5) Life estate?

[ ]Yes[ ]No * C. Are you aware of any

encroachments, bound-

ary agreements, bound-

ary disputes or recent

boundary changes?

[ ]Yes[ ]No * D. Are you aware of any

rights of way, ease-

ments or licenses

(access limitations)

that may affect your

interest in the

property?

[ ]Yes[ ]No * E. Are you aware of any

written agreements for

joint maintenance of

an easement or right

of way?

[ ]Yes[ ]No F. Are you aware of any

governmental study,

survey or notices that

would affect the

property?

[ ]Yes[ ]No G. Are you aware of any

pending or existing

assessments against the

property?

[ ]Yes[ ]No H. Are you aware of any

zoning violations or

nonconforming uses?

[ ]Yes[ ]No * I. Are you aware of a

boundary survey for the

property?

[ ]Yes[ ]No * J. Are you aware of any

covenants, conditions

or restrictions which

affect the property?

2. WATER

A. Household Water

(1) The source of the

water is:

[ ]Public[ ]Community

[ ]Private[ ]Shared

(2) Water source infor-

mation:

[ ]Yes[ ]No * a. Are you aware

of any written

agreements for

shared water

source?

[ ]Yes[ ]No * b. To your knowl-

edge, is there

an easement

(recorded or

unrecorded)

for access to

and/or main-

tenance of the

water source?

[ ]Yes[ ]No c. Are any known

problems or

repairs needed?

[ ]Yes[ ]No (3) Are you aware of

any water treat-

ment systems for

the property?

[ ]Leased[ ]Owned

B. Irrigation

[ ]Yes[ ]No (1) Are you aware of

any water rights

for the property?

[ ]Yes[ ]No * (2) If there exist any,

to your knowledge,

have the water

water rights been

used during the last

five-year period?

[ ]Yes[ ]No * (3) If so, is the certi-

ficate available?

C. Outdoor Sprinkler system

[ ]Yes[ ]No (1) To your knowledge,

is there an outdoor

sprinkler system for

the property?

[ ]Yes[ ]No (2) To your knowledge,

has a back flow

valve been

installed?

[ ]Yes[ ]No (3) To your knowledge,

is the outdoor

sprinkler system

operable?

3. SEWAGE

[ ]Yes[ ]No A. To your knowledge, is

the property connected

to a sanitary sewer?

[ ]Yes[ ]No B. Are you aware of any

sanitary sewer

proposed for the

property?

[ ]Yes[ ]No C. To your knowledge, is

the property connected

to a septic system or

cesspool?

[ ]Yes[ ]No D. Are you aware of any

problems or repairs

needed?

[ ]Yes[ ]No E. To your knowledge,

does your sewage

system require on-site

pumping to another

level?

4. INSULATION

A. To your knowledge, is

there insulation in the:

[ ]Yes[ ]No (1) Ceiling?

[ ]Yes[ ]No (2) Exterior walls?

[ ]Yes[ ]No (3) Floors?

[ ]Yes[ ]No B. To your knowledge,

are there any

defective insulated

windows?

5. STRUCTURAL

[ ]Yes[ ]No * A. To your knowledge,

has the roof leaked?

[ ]Yes[ ]No If yes, has it been

repaired?

[ ]Yes[ ]No B. Additions/conversions/

remodeling?

[ ]Yes[ ]No * If yes, are you aware

of whether a building

permit was obtained?

[ ]Yes[ ]No Was final inspection

obtained?

[ ]Yes[ ]No C. To your knowledge,

are there smoke

detectors?

[ ]Yes[ ]No If there are, which are

electrical (hard-wired)?

___________

[ ]Yes[ ]No D. To your knowledge, is

there a woodstove?

Make_______

[ ]Yes[ ]No Was it installed with a

permit?

[ ]Yes[ ]No * E. Are you aware of

whether a pest or

dry rot, structural

or "whole house"

inspection has

been done?

[ ]Yes[ ]No * F. Are you aware of any

moisture problems in the

structure (especially

in the basement)? If

yes, explain frequency

and extent of prob-

lem on attached sheet

[ ]Yes[ ]No G. Are you aware of a

sump pump on the

property?

6. SYSTEMS AND FIXTURES

If the following systems or

fixtures are included in the

purchase price, are they, to

your knowledge, in good

working order on the date

this form is signed?

[ ]Yes[ ]No A. Electrical system,

including wiring,

switches, outlets

and service

[ ]Yes[ ]No B. Plumbing system,

including pipes,

faucets, fixtures

and toilets

[ ]Yes[ ]No C. Hot water tank

[ ]Yes[ ]No D. Garbage disposal

[ ]Yes[ ]No E. Built-in range and oven

[ ]Yes[ ]No F. Built-in dishwasher

[ ]Yes[ ]No G. Sump pump

[ ]Yes[ ]No H. Heating and cooling

systems

[ ]Yes[ ]No I. Security system

[ ]Owned[ ]Leased

7. COMMON INTEREST

[ ]Yes[ ]No A. Home Owners'

Association?

Name of Association

_________

Contact Person

_________

Address

_________

Phone Number

_________

[ ]Yes[ ]No B. Regular periodic

assessments: $____

per[ ] Month [ ] Year

[ ] Other______

[ ]Yes[ ]No C. Are you aware of any

pending special

assessments?

[ ]Yes[ ]No D. Are you aware of any

shared "common

areas" or any joint

maintenance agree-

ments (facilities such

as walls, fences, pools,

tennis courts, walk-

ways or other areas

co-owned in undivided

interest with others)?

8. GENERAL

[ ]Yes[ ]No A. Are you aware of any

settling, soil, standing

water or drainage

problems on the

property or in the

immediate area?

[ ]Yes[ ]No B. To your knowledge,

does the property

contain fill?

[ ]Yes[ ]No C. Are you aware of any

material damage to the

property or any of the

structure from fire,

wind, floods, beach

movements, earthquake,

expansive soils

or landslides?

[ ]Yes[ ]No D. To your knowledge, is

the property in a

designated flood plain?

[ ]Yes[ ]No E. To your knowledge, is

the property in a

designated slide zone?

[ ]Yes[ ]No F. Are you aware of any

substances, materials

or products that may

be an environmental

hazard such as, but

not limited to,

asbestos, formaldehyde,

radon gas, lead based

paint, fuel or

chemical storage

tanks, and contaminated

soil or water on the

subject property?

[ ]Yes[ ]No G. Are you aware of any

tanks or underground

storage tanks (e.g.,

septic, chemical, fuel,

etc.) on the property?

[ ]Yes[ ]No H. To your knowledge,

has the property ever

been used as an

illegal drug manu-

facturing site?

9. FULL DISCLOSURE BY

SELLERS

A. Other conditions or

defects

[ ]Yes[ ]No Are you aware of any

other material defects

affecting this prop-

erty or its value that

a prospective buyer

should know about?

B. Verification

The foregoing answers

and attached explan-

ations (if any) are

complete and correct

to the best of my/our

knowledge and I/we

have received a copy

hereof. I/we authorize

all of my/our agents

to deliver a copy of

this disclosure state-

ment to other real

estate licensees and

all prospective buyers

of the property.

DATE ____ SELLER _________

SELLER _______________

II. BUYER'S

ACKNOWLEDGMENT

A. As buyer(s), I/we

acknowledge the duty

to pay diligent

attention to any

material defects which

are known to me/us or

can be known by me/us

by utilizing diligent

attention and observation.

B. Each buyer acknowledges

and understands that the

disclosures set forth in

this statement and in any

amendments to this

statement are made only

by the seller and are not

the representations of any

financial institution that

may have made or may

make a loan pertaining to

the property, or that may

have or take a security

interest in the property

and no such financial

institution shall be

bound by or have any

liability with respect to

any representation, mis-

representation, omission,

error or inaccuracy

contained in another

party's disclosure state-

ment required by this

section or any amendment

to the disclosure

statement.

C. Buyer (which term includes

all persons signing the

"buyer's acceptance"

portion of this disclosure

statement below) hereby

acknowledges receipt of

a copy of this disclosure

statement (including

attachments, if any)

bearing seller's signature.

DISCLOSURES CONTAINED IN THIS FORM ARE PROVIDED BY THE SELLER ON THE BASIS OF SELLER'S ACTUAL KNOWLEDGE OF THE PROPERTY AT THE TIME OF DISCLOSURE. YOU, THE BUYER, HAVE FIVE BUSINESS DAYS FROM THE SELLER'S DELIVERY OF THIS SELLER'S DISCLOSURE STATEMENT TO REVOKE YOUR OFFER BY DELIVERING YOUR SEPARATE SIGNED WRITTEN STATEMENT OF REVOCATION TO THE SELLER UNLESS YOU WAIVE THIS RIGHT AT OR PRIOR TO ENTERING INTO A SALE AGREEMENT.

BUYER HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THIS SELLER'S DISCLOSURE STATEMENT.

DATE _____

BUYER ___________

Agent to sign and date:

_________________ Real Estate Licensee

_________________ Real Estate Organization

*If yes, attach a copy or explain on attached sheet

___________________________________________________________________

SECTION 66. ORS 451.010 is amended to read:

451.010. (1) Master plans and service districts may be established as provided by this chapter regarding:

(a) Sewage works, including all facilities necessary for collecting, pumping, treating and disposing of sanitary or storm sewage.

(b) Drainage works, including all facilities necessary for collecting, pumping and disposing of storm and surface water.

(d) Public parks and recreation facilities, including land, structures, equipment, supplies, and personnel necessary to acquire, develop, and maintain such public park and recreation facilities and to administer a program of supervised recreation services.

(e) Diking and flood control works, including all facilities necessary for diking and control of watercourses.

(f) Water supply works and service, including all facilities necessary for tapping natural sources of domestic and industrial water, treating and protecting the quality of the water and transmitting it to the point of sale to any person, city, domestic water supply corporation or other public or private agency for domestic, municipal and industrial water supply service.

(g) Solid waste disposal. This paragraph does not apply in Clackamas, Multnomah and Washington Counties.

(h) Public transportation, including public depots, public parking and the motor vehicles and other equipment necessary for the transportation of persons together with their personal property.

(i) Agricultural educational extension services.

(j) Emergency medical services, including ambulance services.

(k) Library services.

(L) Roads.

(m) Emergency communications services, including a 9-1-1 emergency reporting system established under ORS 401.720.

(n) Law enforcement services.

(2) Within the geographical jurisdiction of any local government boundary commission established by or pursuant to ORS 199.410 to 199.519, master plans and service districts may be established as provided by this chapter regarding:

(a) Fire prevention and protection.

(b) Hospital and ambulance services.

(d) Cemetery maintenance.

(e) Weather modification.

(3) Within the boundaries of any subdivision, service districts may be established as provided by this chapter regarding:

(a) Fire prevention and protection.

(b) Security services provided by contract with an association of homeowners whose property is located entirely within the boundaries of the service district, which services may include the enforcement of the rules or regulations of the association dealing with public access to or the use of the property of the association, routine patrolling and inspection of private areas located within the jurisdiction of the association and matters of traffic and safety within such areas.

(d) Hospital and ambulance services.

(e) Vector control.

(f) Activities set forth in subsection (1)(a), (f), (g), (j) and (m) of this section.

(4) As used in this section, "subdivision" means a subdivision as defined by ORS 92.010 or any contiguous group of such subdivisions that:

(a) Is a planned community within the meaning of ORS 94.550 [(9)] without regard to whether such subdivision or group of subdivisions is subject to the Oregon Planned Community Act;

(b) Is located entirely within an unincorporated area and is everywhere separated by a distance of five miles or more from an urban growth boundary described in an acknowledged comprehensive plan of a city or the urban growth boundary adopted by a metropolitan service district under ORS 268.390 (3); and

(c) Prior to the establishment of a service district under subsection (3) of this section, is designated a subdivision for purposes of this subsection by the governing body of the county in which the subdivision or group of subdivisions is located.

SECTION 67. ORS 94.780 is amended to read:

94.780. (1) [Intentional and deliberate] Failure of the declarant, association, any association member or any other person subject to ORS 94.550 to 94.783 to comply with applicable sections of ORS 94.550 to 94.785 shall be cause for suit or action to remedy the violation or to recover actual damages. The prevailing party is entitled to reasonable attorney fees and court costs.

(2) Failure of an association to accept administrative responsibility under ORS 94.616 shall be a defense for the declarant against an action brought under this section.

[(3) A receipt signed by the purchaser for documents required to be delivered by the seller in ORS 94.740 shall be a defense for the seller in an action against the seller for nondelivery of the documents.]

[(4)] (3) A suit or action arising under this section must be commenced within one year after the discovery or identification of the alleged violation.

SECTION 68. ORS 94.783 is amended to read:

94.783. If a subdivision received preliminary plat approval before July 1, 1982, but the subdivision plat or the plat of the first phase is not filed under ORS 92.120 before January 1, 1984, the provisions of ORS 94.595, 94.604, 94.609, 94.616, 94.700, [94.745, 94.750, 94.755,] 94.760 and 94.780 shall apply to the planned community.

SECTION 69. ORS 94.770 is amended to read:

94.770. (1) The rule against perpetuities may not be applied to defeat any provision of the declaration, or any bylaws or rules adopted under ORS 94.630.

(2) In the event of a conflict between the declaration and the bylaws of a planned community or between the declaration and the articles of incorporation, the declaration shall prevail except to the extent the declaration is inconsistent with ORS 94.550 to 94.783.

(3) Title to a unit, lot and common property shall not be rendered unmarketable or otherwise affected by reason of [an insubstantial] a failure of the declarant or the declaration to comply with ORS 94.550 to 94.783.

SECTION 70. ORS 100.135 is amended to read:

100.135. (1) Except as otherwise provided in ORS 100.005 to 100.625, an amendment of the declaration shall not be effective unless:

(a) Such amendment is approved by the unit owners as provided in this section and the Real Estate Commissioner and county assessor according to ORS 100.110; and

(b) A copy of the declaration as amended or the amendment thereto, certified by the chairperson and secretary of the association of unit owners as being adopted in accordance with the declaration and the provisions of this section and acknowledged in the manner provided for acknowledgment of deeds, is recorded.

(2) Except as otherwise provided in ORS 100.105 or this section, the declaration may be amended only with the approval of at least 75 percent of the unit owners, or such greater percentage as may be required by the declaration.

(3) Unless the declaration requires a greater percentage:

(a) The declaration and plat may be amended to change a general common element to a limited common element or change the boundary of a limited common element with the approval of at least 75 percent of the unit owners and approval of the owners of all units to which the limited common element appertains.

(b) The declaration may be amended to change a limited common element, or portion thereof, to a general common element with the approval of the owners of all units to which the limited common element appertains and the board of directors.

(4)(a) Except as otherwise provided in ORS 100.120, 100.130, 100.515, 100.600, 100.605 and 100.625 and paragraph (b) of this subsection or other provisions of the Oregon Condominium Act, an amendment that changes the boundary of the property or a unit shall be approved by all unit owners. Such amendment shall constitute a conveyance and shall include words of conveyance. In addition to the certification required under subsection (1)(b) of this section, an amendment to the boundary of a unit shall also be executed by the owners of all affected units.

(b) An amendment that adds property owned by the association to the condominium as a common element shall constitute a conveyance and shall:

(A) Be approved by at least 75 percent of the unit owners;

(B) Contain words of conveyance;

(C) Be executed by the chairperson and secretary of the association on behalf of the unit owners and be certified in accordance with subsection (1)(b) of this section; and

(D) Be accompanied by a plat amendment in accordance with ORS 100.115.

(c) Nothing in paragraph (b) of this subsection is intended to require property acquired or held by the association pursuant to ORS 100.405 [(4)(h)] (4)(i) to be added to the condominium.

(5) Except as otherwise provided in ORS 100.005 to 100.625, no amendment may change the allocation of undivided interest in the common elements, method of determining liability for common expenses, right to common profits or voting rights of any unit unless such amendment has been approved by the owners of the affected units.

(6) The declaration may not be amended to limit or diminish any right of a declarant reserved under ORS 100.105 (2) or (7) or any other special declarant right without the consent of the declarant. However, the declarant may waive the declarant's right of consent.

(7) Nothing in this section shall affect any other approval that may be required by the declaration, bylaws or other instrument.

(8) An amendment to a declaration or a supplemental declaration shall be conclusively presumed to have been regularly adopted in compliance with all applicable procedures relating to such amendment unless an action is brought within one year after the date such amendment was recorded or the face of the recorded amendment indicates that the amendment received the approval of fewer votes than are required for such approval. However, nothing in this subsection shall prevent the further amendment of an amended declaration or plat in accordance with ORS 100.005 to 100.625.

SECTION 71. ORS 100.450 is amended to read:

100.450. (1) Whenever an association of unit owners levies any assessment against a unit, the association of unit owners, upon complying with subsection (2) of this section, shall have a lien upon the individual unit and the undivided interest in the common elements appertaining to such unit for any unpaid assessments and interest as provided in subsection (2)(b) of this section. The lien shall be prior to a homestead exemption and all other liens or encumbrances upon the unit except:

(a) Tax and assessment liens; and

(b) A prior mortgage or trust deed of record unless:

(A) The condominium consists of less than seven units, all of which are to be used for nonresidential purposes;

(B) The declaration provides that the lien of any mortgage or trust deed of record affecting the property shall be subordinate to the lien of the association provided under subsection (1) of this section; and

(C) The holder of any mortgage or trust deed of record affecting the property when the declaration is recorded executes a separate subordination of the holder's interest to the declaration which is attached as an exhibit and which states that the holder understands that the declaration subordinates the holder's lien to the assessment lien of the association provided under subsection (1) of this section.

(2)(a) An association of unit owners claiming the benefits of subsection (1) of this section shall record in the county in which the unit or some part thereof is located a claim containing a true statement of the amount due for the unpaid assessments after deducting all just credits and offsets; the name of the owner of the unit, or reputed owner, if known; the name of the condominium and the designation of the unit[, sufficient for identification] as stated in the declaration or applicable supplemental declaration.

(b) Where a claim has been filed and recorded pursuant to this section and the owner of the unit subject to the claim thereafter fails to pay any assessment chargeable to such unit, then so long as the original or any subsequent unpaid assessment remains unpaid such claim shall automatically accumulate the subsequent unpaid assessments and interest thereon without the necessity of further filings under this section.

(3) The claim shall be verified by the oath of some person having knowledge of the facts and [shall be filed with and recorded by the recording officer in the book kept for the purpose of recording liens filed under ORS 87.035. The record shall be indexed as deeds and other conveyances] shall be recorded by the county recording officer. The record shall be indexed as other liens are required by law to be indexed.

(4) The proceedings to foreclose liens created by this section shall conform as nearly as possible to the proceedings to foreclose liens created by ORS 87.010, except that notwithstanding ORS 87.055, a lien may be continued in force for a period of time not to exceed six years from the date the claim is filed under subsection (3) of this section. For the purpose of determining the date the claim is filed in those cases where subsequent unpaid assessments have accumulated under the claim as provided in subsection (2)(b) of this section, the claim regarding each unpaid assessment shall be deemed to have been filed at the time such unpaid assessment became due. The lien may be enforced by the board of directors acting on behalf of the association of unit owners. An action to recover a money judgment for unpaid assessments may be maintained without foreclosing or waiving the lien securing the claim for unpaid assessments. No action to foreclose a lien under this section or recover a money judgment for unpaid assessments may be maintained unless the Condominium Information Report and the Annual Report described in ORS 100.250 are designated current as provided in ORS 100.255.

(5) Unless the declaration or bylaws provides otherwise, fees, late charges, fines and interest imposed pursuant to ORS 100.405 [(4)(i), (j), (k) and (L)] (4)(j), (k), (L) and (m) are enforceable as assessments under this section.

(6) With respect to condominium units also constituting timeshare property as defined by ORS 94.803, liens created by this section shall be assessed to the timeshare owners in the timeshare property according to the method for determining each owner's liability for common expenses under the timeshare instrument and shall be enforced individually against each timeshare owner in the condominium unit.

(7) Notwithstanding the priority established for a lien for unpaid assessments and interest under subsection (1) of this section, the lien shall also be prior to the lien of any prior mortgage or trust deed of record for the unit and the undivided interest in the common elements, if:

(a) The association of unit owners for the condominium in which the unit is located has given the lender under the mortgage or trust deed 90 days prior written notice that the owner of the unit is in default in payment of an assessment. The notice shall contain:

(A) Name of borrower;

(B) Recording date of trust deed or mortgage;

(D) Name of condominium, unit owner and unit [identification] designation stated in the declaration or applicable supplemental declaration; and

(E) Amount of unpaid assessment.

(b) The notice under paragraph (a) of this subsection shall set forth the following in 10-point type:

___________________________________________________________________

NOTICE: The lien of the association may become prior to that of the lender pursuant to ORS 100.450.

___________________________________________________________________

(c) The lender has not initiated judicial action to foreclose the mortgage or requested issuance of a trustee's notice of sale under the trust deed or accepted a deed in lieu of foreclosure in the circumstances described in ORS 100.465 prior to the expiration of 90 days following the notice by the unit owners' association.

(d) The unit owners' association has provided the lender, upon request, with copies of any liens filed on the unit, a statement of the assessments and interest remaining unpaid on the unit and other documents which the lender may reasonably request.

(e) The borrower is in default under the terms of the mortgage or trust deed as to principal and interest.

[(f) A copy of the notice described in paragraph (a) of this subsection has been verified, filed and recorded in the manner prescribed in subsection (3) of this section.]

(f) A copy of the notice described in paragraph (a) of this subsection, together with an affidavit of notice by a person having knowledge of the facts, has been recorded in the manner prescribed in subsection (3) of this section. The affidavit shall recite the date and the person to whom the notice was given.

SECTION 72. ORS 94.740, 94.745, 94.750, 94.755 and 94.765 are repealed.

Approved by the Governor July 14, 1999

Filed in the office of Secretary of State July 14, 1999

Effective date October 23, 1999

__________