Except as expressly provided in the Condominium Act, the provisions of that act shall not be varied by agreement, and the rights conferred by the Condominium Act shall not be waived. A declarant shall not evade the limitations or prohibitions of that act or the declaration by use of a power of attorney or any other device.

History: Laws 1982, ch. 27, § 3.

Compiler's notes. — This section is similar to § 1-104 of the Uniform Condominium Act, with the following main exception: "shall not" is substituted for "may not" where it appears in the Uniform Condominium Act.

COMMISSIONERS' COMMENT

1. The act is generally designed to provide great flexibility in the creation of condominiums and, to that end, the act permits the parties to vary many of it provisions. In many instances, however, provisions of the act may not be varied, because of the need to protect purchasers, lenders and declarants. Accordingly, this section adopts the approach of prohibiting variation by agreement except in those cases where it is expressly permitted by the terms of the act itself.

2. One of the consumer protections in this act is the requirement for consent by specified percentages of unit owners to particular actions or changes in the declaration. In order to prevent declarants from evading these requirements by obtaining powers of attorney from all unit owners, or in some other fashion controlling the votes of unit owners, this section forbids the use by a declarant of any device to evade the limitations or prohibitions of the act or of the declaration.

3. The following sections permit variation:

Section 1-102 [47-7A-2 NMSA 1978]. [Applicability.] Preexisting condominiums may elect to conform to the act.

Section 1-103 [47-7A-3 NMSA 1978]. [Definitions.] All definitions used in the declaration and bylaws may be varied in the declaration, but not in interpretation of the act.

Section 1-107 [47-7A-7 NMSA 1978]. [Eminent Domain.] The formulas for reallocation upon taking a part of a unit, and for allocation of proceeds attributable to limited common elements, may be varied.

Section 2-102 [47-7B-2 NMSA 1978]. [Unit Boundaries.] The declaration may vary the distinctions as to what constitutes the units and common elements.

Section 2-105 [47-7B-5 NMSA 1978]. [Contents of Declaration.] A declarant may add any information he desires to the required content of the declaration.

Section 2-107 [47-7B-7 NMSA 1978]. [Allocation of Common Element Interests, Votes and Common Expense Liabilities.] A declarant may allocate the interests in any way desired, subject to certain limitations.

Section 2-108 [47-7B-8 NMSA 1978]. [Limited Common Elements.] The act permits reallocation of limited common elements unless prohibited by the declaration.

Section 2-109 [47-7B-9 NMSA 1978]. [Plats and Plans.] There is a presumption regarding horizontal boundaries of units, unless the declaration provides otherwise.

Section 2-111 [47-7B-11 NMSA 1978]. [Alterations Within Units.] Subject to the provisions of the declaration, unit owners may make alterations and improvements to units.

Section 2-112 [47-7B-12 NMSA 1978]. [Relocation of Boundaries Between Adjoining Units.] Subject to the provisions of the declaration, boundaries between adjoining units may be relocated by affected unit owners.

Section 2-113 [47-7B-13 NMSA 1978]. [Subdivision of Units.] If the declaration expressly so permits, a unit may be subdivided into two or more units.

Section 2-115 [47-7B-15 NMSA 1978]. [Use for Sales Purposes.] The declarant may maintain sales offices, management offices and model units only if the declaration so provides. Unless the declaration provides otherwise, the declarant may maintain advertising on the common elements.

Section 2-116 [47-7B-16 NMSA 1978]. [Easement to Facilitate Exercise of Special Declarant Rights.] Subject to the provisions of the declaration, the declarant has an easement for these purposes.

Section 2-117 [47-7B-17 NMSA 1978]. [Amendment of Declaration]. The declaration of a non-residential condominium may specify less than a two-thirds vote to amend the declaration. Any declaration may require a larger majority.

Section 2-118 [47-7B-18 NMSA 1978]. [Termination of Condominium.] The declaration may specify a majority larger than 80 percent to terminate and, in a non-residential condominium, a smaller majority. The declarant may require that the units be sold following termination even though none of them have horizontal boundaries.

Section 2-120 [47-7B-20 NMSA 1978]. [Master Associations.] The declaration may provide for some of the powers of the executive board to be exercised by a master association.

Section 3-102 [47-7C-2 NMSA 1978]. [Powers of the Association.] The declaration may limit the right of the association to exercise any of the listed powers, except in a manner which discriminates in favor of a declarant. The declaration may authorize the association to assign its rights to future income.

Section 3-103 [47-7C-3 NMSA 1978]. [Executive Board Members and Officers.] Except as limited by the declaration or bylaws, the executive board may act for the association.

Section 3-106 [47-7C-6 NMSA 1978]. [Bylaws.] Subject to the provisions of the declaration, the bylaws may contain any matter in addition to that required by the act.

Section 3-107 [47-7C-7 NMSA 1978]. [Upkeep of the Condominium.] Except to the extent otherwise provided by the declaration, maintenance responsibilities are set forth in this section, and income from real estate subject to development rights inures to the declarant.

Section 3-108 [47-7C-8 NMSA 1978]. [Meetings.] The bylaws may provide for special meetings at the call of less than 20 percent of the executive board or the unit owners.

Section 3-109 [47-7C-9 NMSA 1978]. [Quorums.] This section permits statutory quorum requirements to be varied by the bylaws.

Section 3-110 [47-7C-10 NMSA 1978]. [Voting; Proxies.] A majority in interest of the multiple owners of a single unit determine how that unit's vote is to be cast unless the declaration provides otherwise. The declaration may require that lessees vote on specified matters.

Section 3-113 [47-7C-13 NMSA 1978]. [Insurance.] The declaration may vary the provisions of this section in non-residential condominiums, and may require additional insurance in any condominium.

Section 3-114 [47-7C-14 NMSA 1978]. [Surplus Funds.] Unless otherwise provided in the declaration, surplus funds are paid or credited to unit owners in proportion to common expense liability.

Section 3-115 [47-7C-15 NMSA 1978]. [Assessments for Common Expenses.] To the extent otherwise provided in the declaration, common expenses for limited common elements must be assessed against the units to which they are assigned, common expenses benefiting fewer than all the units must be assessed only against the units benefited, insurance costs must be assessed in proportion to risk, and utility costs must be assessed in proportion to usage.

Section 4-101 [47-7D-1 NMSA 1978]. [Applicability;Waiver.] All of Article 4 [Article 7D] is modifiable or waivable by agreement in a condominium restricted to non-residential use.

Section 4-115 [not adopted]. [Warranties.] Implied warranties of quality may be excluded or modified by agreement.

Section 4-116 [not adopted.] [Statute of Limitations on Warranties.] The six-year limitation may be modified by agreement of the parties.

4. The second sentence of the section is an important limitation upon the rights of a declarant. It is the practice in many jurisdictions today, particularly jurisdictions which do not permit expansion of a condominium by statute, for a declarant to secure powers of attorney from all unit purchasers permitting the declarant unilaterally to expand the condominium by "unanimous consent" to include new units and to reallocate common element interests, common expense liability and votes. With such powers of attorney, many declarants have purported to comply with the typical provision of "first generation" condominium statutes requiring unanimous consent for amendments of the declaration concerning such matters.

Section 2-117 [47-7B-17 NMSA 1978] requires unanimous consent to make certain amendments to the declaration and bylaws. If a declarant were permitted to use powers of attorney to accomplish such changes, the substantial protection which § 2-117(d) [47-7B-17D NMSA 1978] provides to unit owners would be illusory. Section 1-104 [this section] prohibits the declarant from using powers of attorney for such purposes.

5. While freedom of contract is a principle of this act, and variation by agreement is accordingly widely available, freedom of contract does not extend so far as to permit parties to disclaim obligations of good faith, see § 1-113 [47-7A-13 NMSA 1978], or to enter into contracts which are unconscionable when viewed as a whole, or which contain unconscionable terms. See § 1-112 [47-7A-12 NMSA 1978]. This section derives from § 1-102(3) of the Uniform Commercial Code [55-1-102 NMSA 1978].

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

31 C.J.S. Estates § 153 et seq.