2015 Connecticut General Statutes
Title 47 - Land and Land Titles
Chapter 828 - Common Interest Ownership Act
Section 47-237 - Termination of common interest community.

(a) Except in the case of a taking of all the units by eminent domain, foreclosure against an entire cooperative of a security interest that has priority over the declaration, or in the circumstances described in subsection (m) of this section, a common interest community may be terminated only by agreement of unit owners of units to which at least eighty per cent of the votes in the association are allocated, or any larger percentage the declaration specifies, and with any other approvals required by the declaration. The declaration may specify a smaller percentage, but in no event less than a majority of the votes in the association, only if all of the units are restricted exclusively to nonresidential uses.

(b) An agreement to terminate shall be evidenced by the execution of a termination agreement, or ratifications thereof, in the same manner as a deed, by the requisite number of unit owners. The termination agreement shall specify a date after which the agreement will be void unless it is recorded before that date. A termination agreement and all ratifications thereof shall be recorded in every town in which a portion of the common interest community is situated and is effective only on recordation.

(c) In the case of a condominium or planned community containing only units having horizontal boundaries described in the declaration, a termination agreement may provide that all of the common elements and units of the common interest community shall be sold following termination. If, pursuant to the agreement, any real property in the common interest community is to be sold following termination, the termination agreement shall set forth the minimum terms of the sale.

(d) In the case of a condominium or planned community containing any units not having horizontal boundaries described in the declaration, a termination agreement may provide for sale of the common elements, but it may not require that the units be sold following termination, unless the declaration as originally recorded provided otherwise or all unit owners consent to the sale.

(e) The association, on behalf of the unit owners, may contract for the sale of real property in a common interest community, but the contract is not binding on the unit owners until approved pursuant to subsections (a) and (b) of this section. If any real property is to be sold following termination, title to that real property, on termination, vests in the association as trustee for the holders of all interests in the units. Thereafter, the association has all powers necessary and appropriate to effect the sale. Until the sale has been concluded and the proceeds thereof distributed, the association continues in existence with all powers it had before termination. Proceeds of the sale shall be distributed to unit owners and lien holders, as their interests may appear, in accordance with subsections (h), (i) and (j) of this section. Unless otherwise specified in the termination agreement, as long as the association holds title to the real property, each unit owner and the unit owner’s successors in interest have an exclusive right to occupancy of the portion of the real property that formerly constituted the unit. During the period of that occupancy, each unit owner and the unit owner’s successors in interest remain liable for all assessments and other obligations imposed on unit owners by this chapter or the declaration.

(f) In a condominium or planned community, if the real property constituting the common interest community is not to be sold following termination, title to the common elements and, in a common interest community containing only units having horizontal boundaries described in the declaration, title to all the real property in the common interest community, vest in the unit owners on termination as tenants in common in proportion to their respective interests as provided in subsection (j) of this section, and liens on the units shift accordingly. While the tenancy in common exists, each unit owner and the unit owner’s successors in interest have an exclusive right to occupancy of the portion of the real property that formerly constituted the unit.

(g) Following termination of the common interest community, the proceeds of any sale of real property, together with the assets of the association, are held by the association as trustee for unit owners and holders of liens on the units as their interests may appear.

(h) Following termination of a condominium or planned community, creditors of the association holding liens on the units, which were recorded before termination, may enforce those liens in the same manner as any lien holder. All other creditors of the association are to be treated as if they had perfected liens on the units immediately before termination.

(i) In a cooperative, the declaration may provide that all creditors of the association have priority over any interests of unit owners and creditors of unit owners. In that event, following termination, creditors of the association holding liens on the cooperative which were recorded before termination may enforce their liens in the same manner as any lien holder, and any other creditor of the association is to be treated as if he had perfected a lien against the cooperative immediately before termination. Unless the declaration provides that all creditors of the association have that priority:

(1) The lien of each creditor of the association which was perfected against the association before termination becomes, on termination, a lien against each unit owner’s interest in the unit as of the date the lien was perfected;

(2) Any other creditor of the association is to be treated on termination as if the creditor had perfected a lien against each unit owner’s interest immediately before termination;

(3) The amount of the lien of an association’s creditor described in subdivisions (1) and (2) of this subsection against each of the unit owners’ interest shall be proportionate to the ratio which each unit’s common expense liability bears to the common expense liability of all of the units;

(4) The lien of each creditor of each unit owner which was perfected before termination continues as a lien against that unit owner’s unit as of the date the lien was perfected; and

(5) The assets of the association shall be distributed to all unit owners and all lien holders as their interests may appear in the order described above. Creditors of the association are not entitled to payment from any unit owner in excess of the amount of the creditor’s lien against that unit owner’s interest.

(j) The respective interests of unit owners referred to in subsections (e), (f), (g), (h) and (i) of this section are as follows:

(1) Except as provided in subdivision (2) of this subsection, the respective interests of unit owners are the fair market values of their units, allocated interests and any limited common elements immediately before the termination, as determined by one or more independent appraisers selected by the association. The decision of the independent appraisers shall be distributed to the unit owners and becomes final unless disapproved within thirty days after distribution by unit owners of units to which twenty-five per cent of the votes in the association are allocated. The proportion of any unit owner’s interest to that of all unit owners is determined by dividing the fair market value of that unit owner’s unit and its allocated interests by the total fair market values of all the units and their allocated interests.

(2) If any unit or any limited common element is destroyed to the extent that an appraisal of the fair market value thereof before destruction cannot be made, the interests of all unit owners are their respective common expense liabilities immediately before the termination.

(k) In a condominium or planned community, except as provided in subsection (l) of this section, foreclosure or enforcement of a lien or encumbrance against the entire common interest community does not terminate, of itself, the common interest community, and foreclosure or enforcement of a lien or encumbrance against a portion of the common interest community, other than withdrawable real property, does not withdraw that portion from the common interest community. Foreclosure or enforcement of a lien or encumbrance against withdrawable real property, or against common elements that have been subjected to a security interest by the association under section 47-254, does not withdraw, of itself, that real property from the common interest community, but the person taking title thereto may require from the association, on request, an amendment excluding the real property from the common interest community.

(l) In a condominium or planned community, if a lien or encumbrance against a portion of the real property comprising the common interest community has priority over the declaration and the lien or encumbrance has not been partially released, the parties foreclosing the lien or encumbrance, on foreclosure, may record an instrument excluding the real property subject to that lien or encumbrance from the common interest community.

(m) If substantially all the units in a common interest community have been destroyed or abandoned or are uninhabitable and the available methods for giving notice under section 47-261c of a meeting of unit owners to consider termination under this section will not likely result in receipt of the notice, the executive board or any other interested person may commence an action in the Superior Court seeking to terminate the common interest community. During the pendency of the action, the court may issue whatever orders it considers appropriate, including appointment of a receiver. After a hearing, the court may terminate the common interest community or reduce its size pursuant to this section, notwithstanding that eighty per cent of the unit owners did not vote or agree to that action, and may issue any other order the court considers to be in the best interest of the unit owners and persons holding a property interest in the common interest community.

(P.A. 83-474, S. 38, 96; P.A. 95-187, S. 13; P.A. 05-288, S. 166; P.A. 09-225, S. 17; P.A. 10-186, S. 4, 5.)

History: P.A. 95-187 amended Subsec. (k) to provide that foreclosure or enforcement of a lien or encumbrance “against common elements that have been subjected to a security interest by the association under section 47-254” does not withdraw, of itself, that real property from the community; P.A. 05-288 made technical changes in Subsec. (e), effective July 13, 2005; P.A. 09-225 amended Subsec. (a) to reference circumstances described in Subsec. (m), other approvals required by declaration and “in no event less than a majority” re votes in association, and added Subsec. (m) re action in Superior Court to terminate common interest community, effective July 1, 2010; P.A. 10-186 made a technical change in Subsec. (d) and replaced reference to Sec. 47-261b with reference to Sec. 47-261c in Subsec. (m), effective July 1, 2010.