§ 34-36.1-2.18 - Termination of a condominium.
SECTION 34-36.1-2.18
§ 34-36.1-2.18 Termination of acondominium. – (a) Except in the case of a taking of all the units by eminent domain §34-36.1-1.07, a condominium may be terminated only by agreement of unit ownersof units to which at least eighty percent (80%) of the votes in the associationare allocated, or any larger percentage the declaration specifies. Thedeclaration may specify a smaller percentage only if all of the units in thecondominium are restricted exclusively to nonresidential uses.
(b) An agreement to terminate must be evidenced by theexecution of a termination agreement, or ratifications thereof, in the samemanner as a deed, by the requisite number of unit owners. The terminationagreement must specify a date after which the agreement will be void unless itis recorded before that date. A termination agreement and all ratificationsthereof must be recorded in every municipality in which a portion of thecondominium is situated, and is effective only upon recordation.
(c) In the case of a condominium containing only units havinghorizontal boundaries described in the declaration, a termination agreement mayprovide that all the common elements and units of the condominium shall be soldfollowing termination. If, pursuant to the agreement, any real estate in thecondominium is to be sold following termination, the termination agreement mustset forth the minimum terms of the sale.
(d) In the case of a condominium containing any units nothaving horizontal boundaries described in the declaration, a terminationagreement may provide for sale of the common elements, but may not require thatthe units be sold following termination, unless the declaration as originallyrecorded provided otherwise or unless all the unit owners consent to the sale.
(e) The association, on behalf of the unit owners, maycontract for the sale of real estate in the condominium, but the contract isnot binding on the unit owners until approved pursuant to subsections (a) and(b). If any real estate in the condominium is to be sold following termination,title to that real estate, upon termination, vests in the association astrustee for the holders of all interests in the units. Thereafter, theassociation has all powers necessary and appropriate to effect the sale. Untilthe sale has been concluded and the proceeds thereof distributed, theassociation continues in existence with all powers it had before termination.Proceeds of the sale must be distributed to unit owners and lien holders astheir interests may appear, in proportion to the respective interests of unitowners as provided in subsection (h). Unless otherwise specified in thetermination agreement, as long as the association holds title to the realestate, each unit owner and his or her successors in interest have an exclusiveright to occupancy of the portion of the real estate that formerly constitutedhis or her unit. During the period of that occupancy, each unit owner and hisor her successors in interest remain liable for all assessments and otherobligations imposed on unit owners by this chapter or the declaration.
(f) If the real estate constituting the condominium is not tobe sold following termination, title to the common elements and, in acondominium containing only units having horizontal boundaries described in thedeclaration, title to all the real estate in the condominium, vests in the unitowners upon termination as tenants in common in proportion to their respectiveinterests as provided in subsection (h), and liens on the units shiftaccordingly. While the tenancy in common exists, each unit owner and his or hersuccessors in interest have an exclusive right to occupancy of the portion ofthe real estate that formerly constituted his or her unit.
(g) Following termination of the condominium, the proceeds ofany sale of real estate, together with the assets of the association, are heldby the association as trustee for unit owners and holders of liens on the unitsas their interests may appear. Following termination, creditors of theassociation holding liens on the units, which were recorded prior totermination, may enforce those liens in the same manner as any lien holder. Allother creditors of the association shall be treated as if they had perfectedliens on the units immediately prior to termination.
(h) The respective interests of unit owners referred to insubsections (e), (f), and (g) are as follows:
(1) Except as provided in subdivision (h)(2), the respectiveinterests of unit owners are the fair market values of their units, limitedcommon elements, and common elements interests immediately before thetermination, as determined by one or more independent appraisers selected bythe association. The decision of the independent appraisers shall bedistributed to the unit owners and becomes final unless disapproved withinthirty (30) days after distribution by unit owners of units to which a majorityof the votes in the association are allocated. The proportion of any unitowner's interest to that of all unit owners is determined by dividing the fairmarket value of that unit owner's unit and common element interest by the totalfair market values of all the units and common elements.
(2) If any unit or any limited common element is destroyed tothe extent that an appraisal of the fair market value thereof prior todestruction cannot be made, the interests of all unit owners are theirrespective common element interests immediately before the termination.
(i) Except as provided in subsection (j), foreclosure orenforcement of a lien or encumbrance against the entire condominium does not ofitself terminate the condominium, and foreclosure or enforcement of a lien orencumbrance against a portion of the condominium, other than withdrawable realestate, does not withdraw that portion from the condominium. Foreclosure orenforcement of a lien or encumbrance against withdrawable real estate does notof itself withdraw that real estate from the condominium, but the person takingtitle thereto has the right to require from the association, upon request, anamendment excluding the real estate from the condominium.
(j) If a lien or encumbrance against a portion of the realestate comprising the condominium has priority over the declaration, and thelien or encumbrance has not been partially released, the parties foreclosingthe lien or encumbrance may upon foreclosure, record an instrument excludingthe real estate subject to that lien or encumbrance from the condominium.