2015 Delaware Code
Title 25 - Property
CHAPTER 81. DELAWARE UNIFORM COMMON INTEREST OWNERSHIP ACT
Subchapter II Creation, Alteration, and Termination of Common Interest
§ 81-219 Rights of secured lenders.

(a) The declaration may require that all or a specified number or percentage of the lenders who hold security interests encumbering the units or who have extended credit to the association approve specified actions of the unit owners or the association as a condition to the effectiveness of those actions, but no requirement for approval may operate to: (i) deny or delegate control over the general administrative affairs of the association by the unit owners or the executive board, or (ii) prevent the association or the executive board from commencing, intervening in, or settling any litigation or proceeding, or (iii) prevent any insurance trustee or the association from receiving and distributing any insurance proceeds except pursuant to § 81-313 of this title.

(b) A lender who has extended credit to an association secured by an assignment of income or an encumbrance on the common elements may enforce its security agreement in accordance with its terms, subject to the requirements of this chapter and other law. Requirements that the association must deposit its periodic common charges before default with the lender to which the association's income has been assigned, or increase its common charges at the lender's direction by amounts reasonably necessary to amortize the loan in accordance with its terms, do not violate the prohibitions on lender approval contained in subsection (a) of this section.

76 Del. Laws, c. 422, § 2; 77 Del. Laws, c. 91, § 82.;

§ 81-220 Master associations.

(a) If the declaration provides that any of the powers described in § 81-302 of this title are to be exercised by or may be delegated to a profit or nonprofit corporation that exercises those or other powers on behalf of one or more common interest communities or for the benefit of the unit owners of 1 or more common interest communities, all provisions of this chapter applicable to unit owners' associations apply to any such corporation, except as modified by this section.

(b) Unless it is acting in the capacity of an association described in § 81-301 of this title, a master association may exercise the powers set forth in § 81-302(a)(2) of this title only to the extent expressly permitted in the declarations of common interest communities which are part of the master association or expressly described in the delegations of power from those common interest communities to the master association.

(c) If the declaration of any common interest community provides that the executive board may delegate certain powers to a master association, the members of the executive board have no liability for the acts or omissions of the master association with respect to those powers following delegation.

(d) The rights and responsibilities of unit owners with respect to the unit owners' association set forth in §§ 81-303, 81-308, 81-309, 81-310, and 81-312 of this title apply in the conduct of the affairs of a master association only to persons who elect the board of a master association, whether or not those persons are otherwise unit owners within the meaning of this chapter.

(e) Even if a master association is also an association described in § 81-301 of this title, the certificate of incorporation or other instrument creating the master association and the declaration of each common interest community, the powers of which are assigned by the declaration or delegated to the master association, may provide that the executive board of the master association must be elected after the period of declarant control in any of the following ways:

(1) All unit owners of all common interest communities subject to the master association may elect all members of the master association's executive board.

(2) All members of the executive boards of all common interest communities subject to the master association may elect all members of the master association's executive board.

(3) All unit owners of each common interest community subject to the master association may elect specified members of the master association's executive board.

(4) All members of the executive board of each common interest community subject to the master association may elect specified members of the master association's executive board.

76 Del. Laws, c. 422, § 2; 77 Del. Laws, c. 91, § 82.;

§ 81-221 Merger or consolidation of common interest communities.

(a) Any 2 or more common interest communities of the same form of ownership, by agreement of the unit owners as provided in subsection (b) of this section, may be merged or consolidated into a single common interest community. In the event of a merger or consolidation, unless the agreement otherwise provides, the resultant common interest community is the legal successor, for all purposes, of all of the pre-existing common interest communities, and the operations and activities of all associations of the pre-existing common interest communities are merged or consolidated into a single association that holds all powers, rights, obligations, assets, and liabilities of all preexisting associations.

(b) An agreement of 2 or more common interest communities to merge or consolidate pursuant to subsection (a) of this section must be evidenced by an agreement prepared, executed, recorded, and certified by the president of the association of each of the preexisting common interest communities following approval by owners of units to which are allocated the percentage of votes in each common interest community required to terminate that common interest community. The agreement must be recorded in every county in which a portion of the common interest community is located and is not effective until recorded.

(c) Every merger or consolidation agreement must provide for the reallocation of the allocated interests in the new association among the units of the resultant common interest community either: (i) by stating the reallocations or the formulas upon which they are based or (ii) by stating the percentage of overall allocated interests of the new common interest community which are allocated to all of the units comprising each of the preexisting common interest communities, and providing that the portion of the percentages allocated to each unit formerly comprising a part of the pre-existing common interest community must be equal to the percentages of allocated interests allocated to that unit by the declaration of the preexisting common interest community.

76 Del. Laws, c. 422, § 2; 77 Del. Laws, c. 91, § 82.;

§ 81-222 Addition of unspecified real estate.

In a planned community, if the right is originally reserved in the declaration, the declarant in addition to any other development right, may amend the declaration at any time during as many years as are specified in the declaration for adding additional real estate to the planned community without describing the location of that real estate in the original declaration; but, the amount of real estate added to the planned community pursuant to this section may not exceed 10 percent of the real estate described in § 81-205(a)(3) of this title and the declarant may not in any event increase the number of units in the planned community beyond the number stated in the original declaration pursuant to § 81-205(a)(5) of this title.

76 Del. Laws, c. 422, § 2; 77 Del. Laws, c. 91, § 82.;

§ 81-223 Master planned communities.

(a) The declaration for a common interest community may state that it is a master planned community if the declarant has reserved the development right to create at least 400 units that may be used for residential purposes, and at the time of the reservation that declarant owns or controls more than 400 acres on which the units may be built.

(b) If the requirements of subsection (a) of this section are satisfied, the declaration for the master planned community need not state a maximum number of units and need not contain any of the information required by § 81-205(a)(3) through (14) of this title until the declaration is amended under subsection (c) of this section.

(c) When each unit in a master planned community is conveyed to a purchaser, the declaration must contain: (i) a sufficient legal description of the unit and all portions of the master planned community in which any other units have been conveyed to a purchaser; and (ii) all the information required by § 81-205(a)(3) through (14) of this title with respect to that real estate.

(d) The only real estate in a master planned community which is subject to this chapter is units that have been declared or which are being offered for sale and any other real estate described pursuant to subsection (c) of this section. Other real estate that is or may become part of the master planned community is only subject to other law and to any other restrictions and limitations that appear of record.

(e) If the public offering statement conspicuously identifies the fact that the community is a master planned community, the disclosure requirements contained in subchapter IV of this chapter apply only with respect to units that have been declared or are being offered for sale in connection with the public offering statement and to the real estate described pursuant to subsection (c) of this section.

(f) Limitations in this chapter on the addition of unspecified real estate do not apply to a master planned community.

(g) The period of declarant control of the association for a master planned community terminates in accordance with any conditions specified in the declaration or otherwise at the time the declarant, in a recorded instrument and after giving written notice to all the unit owners, voluntarily surrenders all rights to control the activities of the association.

76 Del. Laws, c. 422, § 2; 77 Del. Laws, c. 91, § 82.;

§ 81-224 Other exempt real estate arrangements.

(a) An agreement between two or more common interest communities to share the costs of real estate taxes, insurance premiums, services, maintenance or improvements of real estate or other activities specified in their agreement or declarations does not create a separate common interest community unless the cost sharing agreement was intended to evade the limitations of this chapter. If the declarants of those common interest communities are affiliates, the agreement may not unreasonably allocate the costs among those common interest communities.

(b) An agreement between an association for a common interest community and the owner of real estate that is not part of that common interest community to share the costs of real estate taxes, insurance premiums, services, maintenance or improvements of real estate or other activities specified in their agreement does not create a separate common interest community so long as the assessments against the units in the common interest community are included in the periodic budget for the common interest community and are subject to unit owner approval under § 81-324 of this title.

(c) An arrangement between 2 separately owned parcels of real estate for sharing costs associated with a common law party wall, shared driveway or shared well does not create a common interest community.

76 Del. Laws, c. 422, § 2; 77 Del. Laws, c. 91, § 82.;

§ 81-225 Termination following catastrophe.

If substantially all the units in a common interest community have been destroyed or are uninhabitable and the available methods for giving notice for a meeting of unit owners to consider termination under § 81-218 of this title will not likely result in receipt of the notice, the executive board or any other interested person may commence an action in the Court of Chancery of the State of Delaware seeking to terminate the common interest community. During the pendency of the action, the Court may enter 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 and may enter into any other order the court considers to be in the best interest of the unit owners and persons holding an interest in the common interest community.

77 Del. Laws, c. 91, § 37.;