Developing a condominium building in Iowa comes with its own set of legal requirements and common concerns a person needs to be aware. A condominium project is called a “Horizontal Property Regime” and is governed by Iowa Code chapter 499B. This chapter sets forth the applicable law governing a condominium project, and the most important obligation on the developer is to file the declaration. The declaration must contain a description of the land, a description of the building, all information relating to the different apartments (including apartment number, location, approximate area, number of rooms, common areas it has access to, and any other information needed for identification), description of general common facilities, description of limited common facilities (and which apartments they are for), and the percentage interest which each apartment bears to entire property regime.
After compiling the information to put into the declaration, there are some important requirements when it comes time to file it. First, if the site is an existing building and is located within a city, the declaration must be filed with the city at least 60 days before being recorded with the county. This is to ensure that the building and proposed plans for it satisfy the city’s building code. If the city does not have a building code, then the declaration must be filed with the state building commissioner and meet the state’s building code instead. Second, the declaration must be filed with the county recorder and all recording fees associated must be paid. It is important to check the building code for your city prior to starting the process for a horizontal property regime because having to renovate and update an existing building to meet the standards of the city’s building code can often be a very time-consuming and expensive project.
Along with filing the declaration, Iowa law also requires horizontal property regimes to have bylaws outlining how the regime will be governed. Typically, this results in the creation of a Homeowner’s Association (“HOA”). HOAs are an important piece of a horizontal property regime because they manage shared spaces and handle disputes within the regime among condo owners. Drafting solid, well thought-out bylaws for the HOA will stop problems before they occur, hopefully keeping the value of the individual condos high as a result. The HOA will also be responsible for collecting assessments from condo owners and using those proceeds for the benefit of the entire regime, so well-written bylaws are important for ensuring money is being handled correctly.
In order to file the declaration and start a condo regime, all owners are required to give their consent. This means that the entity wanting to start a condo regime has to get the consent of their lender. While usually not amounting to a problem, it is something to consider because it can slow the process down.
Forming a condo regime requires the entity to go through a number of steps, and knowing how best to navigate those steps and some common concerns is important to making sure this process goes smoothly.
If you have any questions, please feel free to contact your BrownWinick attorney or Katheryn Thorson at thorson@brownwinick.com or 515-242-2484.
* This article was written by BrownWinick's 2018 Summer Law Clerk Billy Daniel