After a decade of hard work by CAI members in Alaska, a new state law will establish a streamlined method for community associations to obtain lienholder approval so they may amend their governing documents and take advantage of the protections, flexibility, and guidance of the Uniform Common Interest Ownership Act (UCIOA), as well as the super-priority lien. The law goes into effect on Oct. 6.
“The passage of this bill finally fixes a long-standing error that needed to be corrected and puts every HOA on an even playing field. While the issues at hand might seem like they are technical in nature, they will impact for the better Alaska’s homeowners for decades to come. The entire Alaska chapter and I are very happy that this has passed,” says Jason Henning, CMCA, AMS, president of the CAI Greater Alaska Chapter.
Without a formally established legislative action committee in the state, CAI members were working closely with Alaska legislators for 10 years toward enacting this legislation. In 2022, Sen. Joshua Revak (R-Anchorage) and Rep. David Nelson (R-Anchorage) introduced SB 143 and HB 243, respectively—acts relating to horizontal property regimes and common interest communities and relating to mortgages, deeds of trust, and other property liens.
“We are incredibly excited for the enactment of SB 143, as the amendments provided in the bill will allow associations to make necessary changes to their declarations, even where mortgagee approval in writing is required but where mortgagees are nonresponsive. These statutory amendments also provide older associations (pre-1986) with the same protections of the super-priority lien provided to newer associations, resulting in stronger financial stability. We look forward to assisting these associations in accomplishing their goals under the new statutory amendments,” says Sarah Badten, an attorney with Birch Horton Bittner & Cherot in Anchorage.
Henning and Badten testified during committee hearings in support of the bill during the 2022 legislative session.
This legislation aligns with CAI’s public policies on adoption of the Uniform Common Interest Ownership Act in addition to lien priority for community association assessments. CAI supports an association’s ability to have a streamlined process to amend their documents without antiquated and onerous requirements stated in their declaration that an association must first receive prior approval in writing from mortgagees or other lienholders of the properties within the association.
The legislation also incorporates changes adapted in 2008 from the Connecticut version of UCIOA, which provides that consent of a holder of a security interest in a unit is deemed granted if a refusal to consent is not received by the association within 60 days (UCIOA SECTION 2-117. AMENDMENT OF DECLARATION).
CAI supports legislation that provides community associations with an assessment lien priority equal to the amount of assessments that are due over the term of the lien of a first mortgage or deed of trust. SB 143 and HB 243 clearly provides for pre-existing associations created prior to 1986 to have the benefit of super-priority lien. When community association assessments are not paid, it threatens the viability of the community itself, forcing down property values within and around the community. Associations rely on lien priority as an effective means to recover delinquent assessments to achieve financial stability. It is critical for all associations in Alaska to have this ability to protect the community association housing model.
CAI applauds Alaska legislators for successfully developing public policy that is sensible for the 76,000 residents living in 67,000 homes in nearly 900 community associations in the state.