A. The disclosure statement of a condominium containing any conversion building shall contain, in addition to the information required by Section 54 [55] [47-7D-3 NMSA 1978] of the Condominium Act:

(1) a statement by the declarant, based on a report prepared by a licensed architect or engineer, describing the present condition of all structural components and mechanical and electrical installations material to the use and enjoyment of the building; and

(2) a list of any outstanding notices of uncured violations of building codes or other municipal regulations, together with the estimated cost of curing those violations.

B. Paragraph (1) of Subsection A of this section applies only to buildings containing more than fifteen units that shall be occupied for residential use.

History: Laws 1982, ch. 27, § 58.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

Compiler's notes. — This section is similar to § 4-106 of the Uniform Condominium Act, with the following main exceptions: "disclosure" is substituted for "public offering" in Subsection A of this section of the state Condominium Act; "licensed" is substituted for "independent (registered)" in Paragraph (1) of Subsection A of this section of the state Condominium Act; paragraph (2) of subsection (a) of § 4-106 of the Uniform Condominium Act, relating to the expected useful life of certain items, is deleted; and Subsection B of this section of the state Condominium Act is substituted for subsection (b) of § 4-106 of the Uniform Condominium Act, which reads "This section applies only to buildings containing units that may be occupied for residential use."

COMMISSIONERS' COMMENT

1. In the case of a condominium containing one or more conversion buildings, the disclosure of additional information relating to the condition of those buildings is required in the public offering statement because of the difficulty inherent in a single purchaser attempting to determine the condition of what is likely to be an older building being renovated for the purpose of condominium sales.

2. Paragraph (a)(1) [Subsection A(1)] requires the person who gives the public offering statement to retain an independent architect or engineer to report on the present condition of all structural components and fixed mechanical and electrical installations in the conversion building. Such information is as useful to declarant as to the purchaser since, under the implied warranty provisions of § 4-114 [not adopted], a declarant impliedly warrants all improvements made by any person to the building "before creation of the condominium" unless such improvements are specifically excluded from the implied warranty of quality pursuant to § 4-115(b) [not adopted].

3. See Comment 6 to § 2-101 [47-7B-1 NMSA 1978] concerning the meaning of "structural components" as used in paragraph (a)(1) [Subsection A(1)]. Any material changes in the "present condition" of these systems must be reported by an amendment to the public offering statement.

4. Under paragraph (a)(3) [Subsection A(2)], the person required to give the public offering statement is required to provide purchasers with a list of all outstanding notices of uncured violations of building codes or other municipal regulations. The literal wording of this provision does not require disclosure of known violations of such building codes or municipal regulations (at least violations having no effect upon the structural components or fixed mechanical and electrical installations of the condominium) unless actual "notices" of such violations have been received. To the extent that outstanding notices of uncured violations do exist, the cost of curing such violations would become a liability of the unit owners or the association following transfer of the unit to a purchaser. For that reason, the estimated cost of curing any outstanding violations must also be disclosed.

5. For the same reasons set forth in the Comment to § 4-101(a) [47-7D-1A NMSA 1978], this section does not apply to units which are restricted exclusively to nonresidential use.

Compiler's notes. — The reference to "Section 54 of the Condominium Act" in Subsection A seems incorrect, as § 54, which appears as 47-7D-2 NMSA 1978, deals with liability for disclosure statement requirements. Section 55 of the Condominium Act, which appears as 47-7D-3 NMSA 1978, deals with the general information required in a disclosure statement.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Condominiums and Cooperative Apartments §§ 14, 16, 22.

31 C.J.S. Estates § 153 et seq.