Establishes the Missouri declaration and bylaws modernization act

SECOND REGULAR SESSION
HOUSE BILL NO. 3176
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE COSTLOW .
6900H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o amend chapter 442, RSMo, by adding thereto ten new sections relating to the declaration
and bylaws modernization act.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Chapter 442, RSMo, is amended by adding thereto ten new sections, to be
2 known as sections 442.900, 442.901, 442.902, 442.903, 442.904, 442.905, 442.906, 442.907,
3 442.908, and 442.909, to read as follows:
442.900. Sections 442.900 to 442.909 shall be known and may be cited as the
2 "Missouri Declaration and Bylaws Modernization Act".
442.901. Sections 442.900 to 442.909 shall apply to all associations; pr ovided,
2 however , that sections 442.900 to 442.909 shall apply with re spect to events and
3 cir cumstances occurring after January 1, 2027, and do not invalidate existing pr ovisions
4 of the declaration, bylaws, articles of incorporation, or plats of an association.
442.902. As used in sections 442.900 to 442.909, the following terms mean:
2 (1) "Association", includes:
3 (a) An association or unit owners' association as defined and pro vided for in
4 subdivision (3) of section 448.1-103;
5 (b) A homeowners' association including, but not limited to, a nonpr ofit
6 corporation or unincorporated association of homeowners cr eated pursuant to a
7 declaration to own and operate portions of a planned community or other res idential
8 subdivision and that has the power under the declaration to assess association members
9 to pay the costs and expenses incurr ed in the performance of the association's
EXPLANA TION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is
intended to be omitted from the law . Matter in bold-face type in the above bill is proposed language.
10 obligations under the declaration, or tenants-in-common with res pect to the ownership
11 of common ar eas or amenities of a planned community or other res idential subdivision;
12 (c) Any cooperative form of ownership of multiunit housing; or
13 (d) An association as used in the context of condominium owners' association
14 under sections 448.005 to 448.210;
15 (2) "Board of dir ectors", the governing body , reg ardless of title or
1 6 denomination, of the association;
17 (3) "Bylaws", the code or codes of rules other than the articles adopted under
18 this chapter or chapter 448 for the r egulation or management of the affairs of the
19 association irres pective of the name or names by which such rules are designated.
20 Bylaws shall not include legally enforceabl e covenants, declarations, indentur es, or
21 r estrictions imposed upon members by validly r ecorded indentur es, declarations,
22 covenants, r estrictions or other record ed instruments, as they apply to r eal prop erty;
23 (4) "Declarant", a person who executes a declaration and submits it for
24 r ecording in the office of the recor der of the county in which the prop erty described in
25 the declaration is located;
26 (5) "Declaration", a rec orded written instrument or instruments in the nature of
27 covenants running with the land that subject the land comprising the community to the
28 jurisdiction and control of an association or associations in which the owners of the
29 par cels, or their association repr esentatives, shall be members;
30 (6) "Person", an individual, corporation, partnership, business enterprise, trust,
31 estate, or other legal entity .
442.903. The interes ts or rights, including any financial interes ts or rights, of a
2 declarant shall cease upon written release pr ovided by the declarant or a relea se of all
3 r eal pr operty held thr ough either a sale, gift, or any other form of disposition of all
4 pr operty to the association.
442.904. 1. The declaration and bylaws of an association may be amended as
2 pr ovided in such instruments; pr ovided, however , that if an amendment to the
3 declaration or bylaws is prop osed by the board of dir ectors and an insufficient number
4 of votes ar e obtained to decide the question within ninety days of distributing the
5 amendment to the members of the association, the instruments shall be adopted if the
6 association prov ides a notice to all members containing a statement that the pro posed
7 amendment would be deemed appr oved by the members unless one-fifth of the voters in
8 the association submit a vote to rej ect the prop osed amendment within sixty days of the
9 date of the notice with a copy of the pro posed amendment.
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10 2. The board of dir ectors is authorized to amend the declaration or bylaws of an
11 association to corr ect drafting, grammatical, and cros s-ref eren ce mistakes, or other
12 technical errors.
13 3. No action to challenge the validity of an amendment to the declaration may be
14 br ought mor e than one year after the amendment to the declaration is r ecorded and no
15 action to challenge the validity of an amendment to the bylaws may be br ought mor e
16 than six months after adoption of the amendment to the bylaws.
17 4. If an association does not have separate adopted bylaws but such pr ovisions
18 ar e contained in a declaration, the amendment pr ocess of the declaration shall govern,
19 and all prov isions of the declaration shall rem ain valid and enforceab le.
20 5. If a declaration or bylaws req uire consent fro m a person other than a member
21 or declarant, a copy of the pr oposed amendment and a ballot shall be provi ded to such
22 person by first-class mail and certified mail to the last known addr ess reas onably
23 available and accessible to the association. If a member has the addr ess information
24 available for the person, the association can r ely solely upon the information pr ovided
25 by the member . If the ballot is not ret urned within the time period and as specified in
26 the ballot, the person r eceiving the ballot is deemed to have consented to the pro posed
27 amendment. Only the person who does not res pond to the ballot shall have standing to
28 assert a claim against the validity of an amendment due to a lack of consent.
442.905. 1. All claims of a member adverse to an association shall be deemed
2 derivative and the pro visions of section 355.221 shall apply unless such claim by the
3 member is consider ed a tort alleging a breach of duty causing injury or loss to the
4 association.
5 2. An association is not r equir ed to be repr esented by an attorney to bring a civil
6 action in the small claims division of the cir cuit court in Missouri against a member of
7 the association for unpaid assessments.
8 3. An association is not subject to the limitation on the number of small claims
9 petitions that may be filed or pro secuted in small claims courts under subdivision (2) of
10 subsection 1 of section 482.330. Any judgment enter ed against a member of the
11 association who was personally served with a summons and petition to appear in small
12 claims court shall be enfor ceable as a judgment enter ed by an associate circui t court
13 under chapter 517, or by a cir cuit court.
14 4. No action to challenge an election or appointment of a member to fill a
15 vacancy on the board of dir ectors shall be br ought mor e than thirty days fr om the date
16 of the board member's election or appointment.
17 5. In the absence of a board of dir ectors, ten perc ent of the members may call a
18 special meeting according to the pr ovisions in chapter 355 to conduct an election, and
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19 any quorum requ irem ent shall be suspended. The newly elected board of dir ectors shall
20 be deemed to be the board of dir ectors of the association unless a suit is filed in a court
21 of competent jurisdiction within sixty days of the election. If a suit is filed, the court
22 shall appoint a r eceiver with experience in management of an association during the
23 pendency of the case.
442.906. 1. Except as expr essly pr ovided in sections 442.900 to 442.906, the
2 effect of these sections shall not be varied by agreements, and rights conferr ed by
3 sections 442.900 to 442.906 shall not be waived.
4 2. If a conflict arises between the pr ovisions relat ing to an association that is
5 incorporated under chapter 355 and sections 442.900 to 442.909, the pr ovisions of
6 sections 442.900 to 442.909 shall control on or after August 28, 2026.
442.907. No association, or any other legal entity under the laws of Missouri,
2 shall r estrict or regu late the transfer of a pr operty interes t based upon a protecte d class
3 even if such res trictions or regula tions ar e not record ed, or such r estrictions or
4 r egulations ar e unwritten but such practices are engaged in, or such interes ts are
5 conveyed as an interes t in a legal entity; provi ded, however , that the for egoing shall
6 apply only to rea l pr operty that is or is capable of being occupied. The attorney general
7 shall have sole authority to commence a civil action in a court of competent jurisdiction
8 to enforce this section.
442.908. 1. An association, regardl ess of whether it is unincorporated or its
2 corporate status has been administratively dissolved, shall have the authority to hir e
3 and terminate a managing agent and other employees, agents, and independent
4 contractors; pro vided, however , no contract with a managing agent or employee shall
5 have a term in excess of thr ee years or automatically renew based upon the occurr ence
6 of an event.
7 2. An association shall obtain and maintain fidelity insurance covering the
8 association and any person with access to association funds, including any managing
9 agent. This r equir ement may be waived by a majority vote at an annual meeting of the
10 board of dir ectors.
11 3. If an association uses the services of a managing agent to collect and disburse
12 the association's funds:
13 (1) The managing agent shall obtain and maintain fidelity insurance with the
14 association named as an additional insur ed on the policy; and
15 (2) The record s pr oduced, maintained, obtained, and cr eated in performance of
16 the duties of the managing agent shall be the record s of the association and shall be
17 r eturned to the association should the relat ionship between the association and
18 managing agent terminate within forty days of notice of termination.
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442.909. 1. In addition to the applicable state law requ irem ents governing
2 r etention of r ecords, an association shall maintain and ret ain the re cords as follows:
3 (1) Membership ros ter and rep orts of committees for thr ee years;
4 (2) Personnel and employee reco rds, including any employment contracts, for
5 seven years fro m the last date of employment;
6 (3) Contracts and certificates of insurance for at least seven years fr om the last
7 date of coverage pr ovided under such policies or termination of the contracts;
8 (4) Budget, income and expense statements, and balance sheets pr ovided to the
9 members on an as needed, quarterly , or annual basis for seven years fro m the date such
10 documents were pro vided to the members of the association; and
11 (5) Income tax r eturns, minutes of the board meetings, and minutes of
12 membership meetings, shall be ret ained permanently .
13 2. The association shall maintain a membership ros ter of the owners, excluding
14 telephone numbers and electr onic addr esses, unless the owner has pro vided written
15 consent for the use and disclosur e of the owner's telephone numbers and electr onic
16 addr ess.
17 3. Subject to subsections 4 and 5 of this section, all r ecords reta ined by an
18 association shall be available for examination and copying by an owner or the owner's
19 authorized agent under chapter 355; pr ovided, however , that the association shall not
20 charge a fee for pro viding a curr ent membership ros ter or curr ent and past two years of
21 budget, income and expense statements, and balance sheets, if the association pr ovides
22 electr onic access of such record s to the members.
23 4. Records r etained by an association under this subsection shall not be subject
24 to inspection, copying, or disclosur e, to the extent that the r ecords r elate to:
25 (1) Personnel matters, salary , and medical information concerning identifiable
26 individuals;
27 (2) Contracts, leases, and other commer cial transactions to pur chase or obtain
28 goods or services curr ently being negotiated;
29 (3) Pending or potential litigation or mediation, arbitration, or administrative
30 pr oceedings;
31 (4) Pending or potential matters involving federal, state, or local administrative
32 or other formal pr oceedings before a governmental tribunal for enforcem ent of the
33 declaration, bylaws, or rules;
34 (5) Communications with the association's attorneys that ar e pr otected by the
35 attorney-client privilege, or work-pr oduct doctrine, or other applicable privilege;
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36 (6) Executed ballots, unless the outcome of such election is subject to a timely
37 challenge by suit or the declaration or bylaws of the association expr essly pr ovide such
38 executed ballots as being subject to inspection; or
39 (7) Information, the disclosur e of which would violate any other pr ovision of law .
40 5. An association may charge a reas onable fee for pr oviding copies of any
41 r ecords under this section, including the actual costs associated with staff time and
42 supervisor's time for assisting with the pr oduction of record s. An association may also
43 charge a r easonable fee for staff time associated with supervising an owner's inspection
44 of recor ds and for the pro duction of such records. If prog ramming time is r equir ed
45 beyond the customary and usual level to comply with a request for r ecords or
46 information, the fees may include the actual costs of such pr ogramming time of the
47 technical staff.
48 6. An association is not obligated to compile, format, or synthesize information
49 that is requ ested to be pr ovided in electr onic or paper format.
50 7. Information pr ovided under this section shall not be used by the association or
51 a managing agent for commer cial purposes.
✔
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