Verbatim from the public record. The law itself is a government work — always confirm the current version on the official source before you rely on it.
(a) Portions of the common elements may be conveyed or subject to a security interest
by the association, if persons entitled to cast at least 80 percent of the votes in
the association, including 80 percent of the votes allocated to units not owned by
a declarant, or any larger percentage specified in the declaration, agree to that
action; but all owners of units to which any limited common element is allocated must
agree in order to convey that limited common element or be subjected to a security
interest. The declaration may specify a smaller percentage only if all the units are
restricted exclusively to nonresidential uses. Proceeds of the sale are an asset of
the association; but the proceeds of the sale of limited common elements shall be
distributed equitably among the owners of units to which the limited common elements
were allocated.
(b) An agreement to convey common elements or subject them to a security interest shall
be evidenced by an agreement executed or ratified in the same manner as a deed by
the requisite number of unit owners. The agreement shall specify a date after which
the agreement will be void unless recorded. The agreement and all ratifications shall
be recorded in every town in which a portion of the common interest community is situated
and is effective only upon recordation.
(c) The association, on behalf of the unit owners, may contract to convey an interest
in a common interest community pursuant to subsection (a) of this section, but the
contract is not enforceable against the association until approved pursuant to subsections
(a) and (b) of this section. Thereafter, the association has all powers necessary
and appropriate to effect the conveyance or encumbrance, including the power to execute
deeds or other instruments.
(d) Unless made pursuant to this section, any purported conveyance or encumbrance, judicial
sale or other voluntary transfer of common elements is void.
(e) Unless the declaration otherwise provides, if the holders of first security interests
on 80 percent of the units that are subject to security interests on the day the unit
owners’ agreement under subsection (c) of this section is recorded consent in writing:
(1) a conveyance of common elements pursuant to this section terminates both the undivided
interests in those common elements allocated to the units and the security interests
in those undivided interests held by all persons holding security interests in the
units; and
(2) an encumbrance of common elements pursuant to this section has priority over all preexisting
encumbrances on the undivided interests in those common elements held by all persons
holding security interests in the units.
(f) The consents by holders of first security interests on units described in subsection
(e) of this section, or a certificate of the secretary affirming that those consents
have been received by the association, may be recorded at any time before the date
on which the agreement under subsection (c) of this title becomes void. Consents or
certificates so recorded are valid from the date they are recorded for purposes of
calculating the percentage of consenting first security interest holders, regardless
of later sales or encumbrances on those units. Even if the required percentage of
first security interest holders so consents, a conveyance or encumbrance of common
elements does not affect interests having priority over the declaration, or created
by the association after the declaration was recorded. (Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.)