Delaware House Bill 112 was signed by Governor Carney on September 20, 2021 and will become effective on October 20, 2021. HB 112 makes modifications to the Delaware Common Interest Ownership Act (the “DUCIOA”) and the Unit Property Act. The Bill makes changes recommended by the Common Interest Community Advisory Council after consultation with representatives of home builders, real estate sales professionals, association managers, and owners in common interest communities. While the Bill modifies fourteen sections of the existing code, some of the more notable changes effecting common interest communities in Delaware include:
- DUCIOA Section 81-119. Amended by adding five sections of DUCIOA that will apply to preexisting communities:
- §81-217 (i): mortgage holder consent for amendments to the declaration
- §81-306: Bylaws
- §81-308A: Executive Board Meetings
- §81-310: Voting; proxies
- §81-314: Surplus funds
- DUCIOA Section 81-119. Change to clarify that a conflict between a preexisting document and DUCIOA in any common interest community is resolved in favor of the preexisting documents, whereas the prior language specified application only to condominium and cooperatives.
- DUCIOA Section 81-217(m). New subsection added which allows Declarants to correct typographical errors.
- DUCIOA Section 81-303(a). Text deleted to clarify that under Delaware corporate law there is no distinction between the duties of a director or officer of a for-profit corporation and those of a director or officer of a non-profit corporation.
- DUCIOA Section 81-303(c). Language added to allow termination of the period of declarant control as permitted in the declaration.
- DUCIOA Section 81-310(a). Expanded the options and methods for owner voting.
- DUCIOA Section 81-316(h). Add language that allows a community to charge a reasonable fee to provide certifications regarding the community and limits the liability of a voluntary association for inadvertent errors.
- DUCIOA Section 81-318(e). Add language that clarifies the right of the association to charge a fee, in advance, to an owner when the owner has requested conversion, inspection, or copying of association’s books and records.
- DUCIOA Section 81-324(a). Add language that clarifies that voting at a budget meeting may be by proxy as well as in person.
- DUCIOA Section 81-408(a). Changes to clarify the date for cancelation of purchase contracts.
- DUCIOA Section 81-409(b). Language added to clarify the liability of the Association or its agent for inaccurate information provided in a resale certificate.
About the author
Chad J. Toms is a Partner with Whiteford Taylor & Preston practicing in the areas of complex business litigation, community associations and business reorganization. He frequently handles litigation matters involving common interest communities, corporate governance, fiduciary duty and bankruptcy issues.
Mr. Toms is licensed to practice law in Delaware, New Jersey and Maryland and is also a Certified Public Accountant, currently inactive. He heads up the firm’s Community Association practice in Delaware and the Eastern Shore and manages the firm’s Bethany Beach, Delaware and Ocean City, Maryland offices.