A. If the declaration for a condominium provides that any of the powers described in Section 35 [47-7C-2 NMSA 1978] of the Condominium Act are to be exercised by or may be delegated to a profit or nonprofit corporation or unincorporated association which exercises those or other powers on behalf of one or more condominiums or for the benefit of the unit owners of one or more condominiums, all provisions of that act [47-7A-1 to 47-7D-20 NMSA 1978] applicable to unit owners' associations apply to any such corporation or unincorporated association, except as modified by this section.

B. Unless a master association is acting in the capacity of an association described in Section 34 [47-7C-1 NMSA 1978] of the Condominium Act, it may exercise the powers set forth in Section 35 [47-7C-2 NMSA 1978] of that act only to the extent expressly permitted in the declarations of condominiums which are part of the master association or expressly described in the delegations of power from those condominiums to the master association.

C. If the declaration of any condominium 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 Sections 36, 41, 42, 43 and 45 [47-7C-3, 47-7C-8 to 47-7C-10, 47-7C-12 NMSA 1978] of the Condominium Act apply in the conduct of the affairs of a master association only to those persons who elect the board of a master association, whether or not those persons are otherwise unit owners within the meaning of that act.

E. Notwithstanding the provisions of Section 36 [47-7C-3 NMSA 1978] of the Condominium Act with respect to the election of the executive board of an association by all unit owners after the period of declarant control ends and even if a master association is also an association described in Section 34 [47-7C-1 NMSA 1978] of that act, the certificate of incorporation or other instrument creating the master association and the declaration of each condominium 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 shall be elected after the period of declarant control in any of the following ways:

(1) all unit owners of all condominiums subject to the master association shall elect all members of that executive board;

(2) all members of the executive boards of all condominiums subject to the master association shall elect all members of that executive board;

(3) all unit owners of each condominium subject to the master association shall elect specified members of that executive board; and

(4) all members of the executive board of each condominium subject to the master association shall elect specified members of that executive board.

History: Laws 1982, ch. 27, § 32.

Compiler's notes. — This section is similar to § 2-120 of the Uniform Condominium Act, with the following main exception: the state Condominium Act substitutes "shall" for "may" in Paragraphs (1) to (4) of Subsection E.

COMMISSIONERS' COMMENT

1. It is very common in large or multi-phased condominiums, particularly those developed under existing laws, for the declarant to create a master or umbrella association which provides management services or decision-making function for a series of smaller condominiums. While it is expected that this phenomenon will be less necessary under this act because of the permissible period of time for declarant control over the project, it is nonetheless possible in larger developments that this form of management will continue. Moreover, this section should be of significant benefit to the large number of condominiums created under prior law which have need for the benefits of a provision on master associations.

2. Subsection (a) [Subsection A] states the general rule that the powers of a unit owners' association may only be exercised by, or delegated to, a master association if the declaration for the condominium permits that result. The declaration may have originally provided for a master association; alternatively, the unit owners of several condominiums may amend their declarations in similar fashion to provide for this power. Subsection (a) [Subsection A] makes it clear that, if any of the powers of the unit owners' association may be exercised by, or delegated to, a master association, all other provisions of this act which apply to a unit owners' association apply to that master association except as modified by this section. Accordingly, such provisions on notice, voting, quorums, records, meetings and other matters which apply to the unit owners' association would apply with equal validity to such a master association.

3. Subsection (b) [Subsection B] changes the usual presumption with respect to the powers of the unit owners' association, except in those cases where the master association is actually acting as the only association for one or more condominiums. In those cases where it is not so acting. [,] However, the only powers of the unit owners' association which the master association may exercise are the ones expressly permitted in the declaration or in the delegation of power. This is in significant contrast with the rule of § 3-102 [47-7C-2 NMSA 1978] that all of the powers described in that section may be exercised unless limited by the declaration.

4. Subsection (c) [Subsection C] clarifies the liability of the members of the executive board of a unit owners' association when the condominium for which the unit owners' association acts has delegated some of its powers to a master association. In that instance, subsection (c) [Subsection C] makes it clear that the members of the executive board of the unit owners' association have no liability for acts and omissions of the master association board; under subsection (a) [Subsection A], that liability lies with the members of the master association.

5. Subsection (d) [Subsection D] addresses the question of the rights and responsibilities of the unit owners in their dealings with the master board. A variety of sections enumerated in subsection (d) [Subsection D] provide certain rights and powers to unit owners in their dealings with their association. In the affairs of the master association, however, it would be incongruous for the unit owners to maintain those same rights if those unit owners were not in fact electing the master board. Thus, for example, the question of election of directors, meetings, notice of meetings, quorums and other matters enumerated in those sections would have little meaning if those sections were read literally when applied to a master board which was not elected by all members of the condominiums subject to the master board. For that reason, the rights of notice, voting and other rights enumerated in the act are available only to the persons who actually elect the board.

6. Subsection (e) [Subsection E] recognizes that there may be reasons for a representative form of election of directors of the master association. Alternatively, there may be cases where at-large election is reasonable. For that reason, subsection (e) [Subsection E] provides that, after the period of declarant control has terminated, there may be four ways of electing the master association board. Those four ways are: (1) at-large election of the master board among all the condominiums subject to the master association; (2) at-large election of the master board only among the members of the executive boards of all condominiums subject to the master association; (3) each condominium might have designated positions on the master board, and those spaces could be filled by an at-large election among all the members of each condominium; or (4) the designated positions could be filled by an election only among the members of the executive board of the unit owners' association for each condominium. It would only be in the case of an at-large election of the master board among all condominiums that subsection (d) [Subsection D] would have no relevance.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Condominiums and Cooperative Apartments §§ 13, 14, 16, 17, 28, 29.

Standing to bring action relating to real property of condominium, 74 A.L.R.4th 165.

31 C.J.S. Estates § 153 et seq.