SECTION 1. Section 34-36.1-1.02 of the General Laws in Chapter 34-36.1 entitled "Condominium Law" is hereby amended to read as follows: 34-36.1-1.02. Applicability. (a)(1) This chapter applies to all condominiums created within this state after July 1, 1982, except that any condominium created within this state prior to July 1, 1982, may voluntarily accept the provisions of this chapter in lieu of the provisions under which it was originally organized. Acceptance shall be evidenced by an agreement in writing executed by and in behalf of the condominium association and by all of the owners of all of the individual condominium units within the condominium, in which agreement it is clearly stated that they all accept the provisions of this chapter in lieu of those in the statute under which the condominium was organized and wish to be governed in the future by the provisions of this chapter. The agreement shall be recorded in the land evidence records of each and every town or city where all or any part of the land in the condominium concerned may be located and shall become effective when first so recorded. The acceptance shall only apply to the governance of the condominium concerned as to all matters which are prospective or executory in nature; and nothing herein shall be deemed to abrogate, amend, limit, effect, or impair the continued effectiveness, legality, or validity of all actions lawfully taken by or in behalf of the condominium prior to the effective date of the acceptance, including, but without limitation, the condominium declaration and all amendments thereto, the by- laws of the condominium and/or of its association, all deeds, mortgages, leases, and any further documents affecting the titles or rights of unit owners, or of the condominium or the prior lawful acts or deeds of any kind, of the condominium association, its officers, directors, or members.
(2) Sections 34-36.1-1.05 (separate titles and taxation), 34-36.1-1.06 (applicability of local ordinances, regulations, and building codes), 34-36.1-1.07 (eminent domain), 34-36.1-2.03 (construction and validity of declaration and bylaws), 34-36.1-2.04 (description of units), 34-36.1- 2.19(b) (mortgage approval), 34-36.1-3.02(a)(1) — (6) and (11) — (17) (powers of unit owners’ association), 34-36.1-3.06(c) — (d) (bylaws), 34-36.1-3.08 (meetings and notice), 34-36.1-3.11 (tort and contract liability), 34-36.1-3.13(d) and (k) (unit owner responsibility for master policy deductibles), 34-36.1-3.16 (lien for assessments), 34-36.1-3.18 (association records), 34-36.1-3.22 (reserve study and reserve account), 34-36.1-4.09 (resale of units), and 34-36.1-4.17 (effect of violation on rights of action; attorney’s fees), § 34-36.1-3.20 (enforcement of declaration, bylaws and rules), and 34-36.1-1.03 (definitions), to the extent necessary in construing any of those sections, apply to all condominiums created in this state before July 1, 1982; but those sections apply only with respect to events and circumstances occurring after July 1, 1982, and do not invalidate existing provisions of the declaration, bylaws, plats, or plans of those condominiums.
(3) A condominium created as an additional phase by amendment of a condominium created prior to July 1, 1982, if the original declaration contemplated the amendment, shall be deemed to be a condominium created prior to July 1, 1982; provided, however, the provisions of subdivision (a)(2) shall apply as defined therein.
(4) Section 34-36.1-3.21 (foreclosure of condominium lien) applies, with respect to all condominiums created in this state prior to June 19, 1991, only with respect to events and circumstances occurring after June 18, 1991, does not invalidate existing provisions of the declarations, bylaws, plats, or plans of those condominiums, and applies in all respects to all condominiums created in this state after June 18, 1991.
(b) The provisions of the Condominium Ownership Act, chapter 36 of this title, do not apply to condominiums created after July 1, 1982, and do not invalidate any amendment to the declaration, bylaws, plats, and plans of any condominium created before July 1, 1982, if the amendment would be permitted by this chapter. The amendment must be adopted in conformity with the procedures and requirements specified by those instruments and by chapter 36 of this title. If the amendment grants to any person any rights, powers, or privileges permitted by this chapter, all correlative obligations, liabilities, and restrictions in this chapter also apply to that person.
(c) This chapter does not apply to condominiums or units located outside this state, but the public offering statement provisions (§§ 34-36.1-4.02 — 34-36.1-4.07) apply to all contracts for the disposition thereof signed in this state by any party unless exempt under § 34-36.1-4.01(b).
SECTION 2. Chapter 34-36.1 of the General Laws entitled "Condominium Law" is hereby amended by adding thereto the following section: 34-36.1-3.22. Reserve study and reserve account.
(a) This subsection applies to all condominiums that have common elements that would cost at least twenty thousand dollars ($20,000) to maintain, repair or replace because of anticipated deterioration due to exposure to the elements or by wear and tear.
(1) A condominium association shall have a reserve study that shall contain an itemization of common elements that require maintenance, repair or replacement by the association in the future because of anticipated deterioration of those common elements.
(2) The reserve study shall identify specific common elements, the anticipated period of time before maintenance, repair or replacement are necessary, and the estimated expenses for such work at estimated times in the future, and shall contain a statement from an engineer or architect licensed in the State of Rhode Island that the reserve study has been reviewed and recommended as reasonable by such engineer or architect.
(3) The reserve study shall reference estimated association fiscal year funds from the annual assessment to be deposited into the association reserve financial account, which shall be established and maintained by the executive board, and not deposited into the separate association operating financial account which shall be established and maintained by the executive board.
(4) The association reserve financial account shall be established and maintained in a financial institution that has a physical branch located in the county where the condominium is located.
(5) The executive board shall act to have a reserve study for its association, which shall be used by an executive board for no more than three (3) years from the date of the reserve study.
(6) Funds in the association reserve account shall be used for no purposes other than those referenced in the reserve study.
(b) This subsection creates additional obligations for declarants and executive board members appointed by declarants pursuant to § 34-36.1-3.03 when a reserve study is required by subsection (a) of this section.
(1) A declarant shall include a reserve study in the public offering statement pursuant to § 34-36.1-4.03(a)(i) and (a)(ii) that references all common elements constructed prior to the declaration of units by the original declaration as well as any subsequent amendments that declare additional units. Information about the reserve study and the association reserve financial account shall be stated in the narrative portion of the public offering statement.
(2) An association reserve financial account shall be established no later than twenty (20) days after the recording of the declaration in the land evidence records of the city or a town where the condominium is located.
(c) Reserve study funding when required by subsection (a) of this section.
(1) During any period of the declarant control of the association as referenced in § 34-36.1- 3.03(d)(1), the executive board shall adopt a proposed budget for the association that must include in the annual assessment no less than one hundred percent (100%) funding of expenses referenced in the reserve study.
(2) For an association that is not subject to declarant control, the executive board shall adopt a proposed budget that shall include in the annual assessment no less than one hundred percent (100%) funding of expenses referenced in the reserve study no later than January 1, 2027.
(3) Any provision in the declaration or bylaws that limits an increase in the total amount of the association annual assessment relative to the prior annual assessment by a percentage amount or otherwise shall be void.
SECTION 3. This act shall take effect upon passage.
