This act [47-7A-1 to 47-7D-20 NMSA 1978] may be cited as the "Condominium Act."

History: Laws 1982, ch. 27, § 1.

Compiler's notes. — Laws 1982, ch. 27, enacted New Mexico's version of the Uniform Condominium Act, as amended in 1980. Those sections of the uniform act not adopted by New Mexico are §§ 1-110 (Uniformity), 4-113 to 4-116 (Warranties) and Article 5, §§ 5-101 to 5-110 (Administration and Registration). Where applicable, the parallel New Mexico sections are designated as "Reserved."

Included following each section of the New Mexico act are the official commissioners' comments to the uniform act. Compiler's notes following each section indicate the similar uniform act provision and its differences, if any, with the New Mexico provision. Where possible, references to the uniform act in the comments have been translated to the parallel New Mexico provisions.

Section 47-7A-1 NMSA 1978 is substantially similar to § 1-101 of the Uniform Condominium Act.

COMMISSIONERS' PREFATORY NOTE

This act contains comprehensive provisions designed to unify and modernize the law of condominiums, which has undergone great change in the last 16 years. As a result of the increasing usefulness and flexibility of the condominium concept, condominiums have become one of the most common forms of community ownership of property in the United States.

All states have statutes which provide for the creation of condominiums and establish some rules concerning their governance. The first statute in the United States was adopted in 1958 in Puerto Rico, and most of the present state statutes are patterned after that 1958 statute, or after the 1962 federal housing administration model condominium statute. As the condominium form of ownership became widespread, however, many states realized that these early statutes were inadequate to deal with the growing condominium industry. In particular, many states perceived a need for additional consumer protection, as well as a need for more flexibility in the creation and use of condominiums. As a result, some states have recently enacted more detailed and comprehensive "second generation" statutes.

The statutes governing condominiums in the various states use varying and sometimes inappropriate terminology, and differ in numerous details, all of which make it difficult for a national lender to assess the appropriateness of condominium documents and of condominium financing arrangements in those states. Moreover, the varying statutes, creating different "bundles of rights" for purchasers of condominiums in the various states, also make it difficult for the increasingly mobile consumer to become educated in this very complex area. Finally, many actual or potential problems involving such matters as termination of condominiums, eminent domain, insurance and the rights and obligations of lenders upon foreclosure of a condominium project, have not been satisfactorily addressed by any existing statute. It is primarily to resolve these various problems that the Uniform Condominium Act was drafted.

Article 1 [this article] of the act contains definitions and general provisions applicable throughout the act. The article deals with such matters as applicability, separate titles and taxation, eminent domain, applicability of other statutes and other general matters.

Article 2 [Article 7B, Chapter 47 NMSA 1978] provides for the creation, alteration and termination of the condominium. The article provides great flexibility to a developer in creating a condominium project designed to meet the needs of a modern real estate market, while imposing reasonable restrictions on developers' practices which have a potential for harm to unit purchasers.

Article 3 [Article 7C, Chapter 47 NMSA 1978] concerns the administration of the unit owners' association, a matter which has received very limited attention in the statutes of the various states. This article provides broad-ranging powers to the association, and covers such matters as insurance, tort and contract liability of the association and other matters often not dealt with in current statutes.

Article 4 [Article 7D, Chapter 47 NMSA 1978] deals with consumer protection for condominium unit purchasers. In addition to treating specific abuses which have developed in the condominium industry in the past, the article requires very substantial disclosure by developers, which must be made available to consumers before conveyance of a unit. To further promote disclosure, the article also requires that all owners of units in residential condominiums provide resale certificates to subsequent purchasers, regardless of when the condominium was created.

Article 5 is an optional article which establishes an administrative agency to supervise a developer's activities. The article is so drafted that it may be included in the act in those states where an agency is thought desirable, and deleted from the act in those states which desire to have the act enforced by private action. In the event that a state determines to delete Article 5 from the act, other provisions of the act, indicated in the text by brackets, should also be deleted. A list of these sections appears in the prefatory note to Article 5.

The Uniform Condominium Act was originally a part of the Uniform Land Transactions Act, but was separated from that act for further consideration at the 1975 annual meeting of the National Conference of Commissioners on Uniform State Laws. This act was approved at the annual meeting of the conference in Vail, Colorado in August 1977.

Since promulgation of the act in 1977, and approval by the American Bar Association in 1978, the act has received widespread legislative attention. The Act was enacted in its uniform version in Minnesota, Pennsylvania, and West Virginia during the 1979-80 legislative year, and was enacted with substantial amendments in Louisiana in 1978-79. By 1980, it had also been introduced in the legislatures of Arizona, Colorado, Connecticut, Idaho, Illinois, Massachusetts, Missouri, Tennessee, Vermont and Wyoming.

During this same period, the national conference appointed a drafting committee to draft a Uniform Planned Community Act (UPCA), and that act was promulgated by the conference at its 1980 annual meeting. UPCA applies to a wide variety of other forms of multiple ownership real estate regimes which are similar in legal structure to condominiums, but do not meet the definition of "condominium" either, under present state law or the Uniform Condominium Act.

As a result of the legislative process in the various states considering the act, and review of the act by the drafting committee on UPCA, a large number of amendments to the 1977 Act were proposed to the conference.

Many of these amendments were adopted at the 1980 annual meeting of the conference, and have been included in this edition of the act. Most of them are of a minor non-substantial nature; they are intended to resolve insignificant technical questions, or to clarify the meaning of provisions susceptible to misinterpretation. A few amendments were adopted which result in more significant changes, either on particular matters of substance, or in the use of terms throughout the act which simplify the structure and readability of the act. A summary of the more significant amendments can be obtained from the headquarters office of the NCCUSL, Suite 510, 645 North Michigan Avenue, Chicago, Illinois 60611.

A second category of changes results from a decision of the conference at its 1978 annual meeting that the Condominium and Planned Community Acts should contain identical provisions wherever possible, in order to facilitate the consolidation of the two acts in those states desiring a single uniform act covering both forms of multiple ownership developments. This required a large number of textual changes with no substantive effect. As a result, however, there are very few differences between the two acts, and consolidation would be a simple and desirable approach in states desiring uniform coverage of both forms of ownership. An analysis of the differences between the acts, and a general description of how the acts might be consolidated, appear in the prefatory note to UPCA. However, at this time, the conference has not prepared a consolidated text, because of its continuing consideration of the co-operative form of ownership, and the possibility that a consolidated act might be applicable to co-operatives as well.

Law reviews. — For annual survey of New Mexico law relating to property, see 13 N.M.L. Rev. 435 (1983).

For comment, "Survey of New Mexico Law: Condominium Law: The New Mexico Condominium Act," see 15 N.M.L. Rev. 203 (1985).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Condominiums and Cooperative Apartments §§ 7, 9, 10.

31 C.J.S. Estates § 153 et seq.