Synopsis: Various property issues. Provides that the homeowner
protection unit of the attorney general's office shall enforce violations
of the statute concerning homeowners associations. Makes changes to
the mortgage rescue protection fraud act to make it consistent with the
credit services organization act and the home loan practices act,
including providing that the statute of limitations on filing claims runs
for five years from the occurrence of the violation and not from the
time the home loan is made. Allows for suspension of the license of an
individual licensed under the real estate licensing law for an emergency
period if the licensee has engaged in material and intentional
March 27, 2013
HOUSE BILL No. 1084
DIGEST OF HB 1084
(Updated March 25, 2013 5:35 pm - DI 44)
Citations Affected: IC 4-6; IC 24-5.5; IC 24-9; IC 25-1; IC 32-25.5;
(Continued next page)
Effective: July 1, 2013.
(SENATE SPONSORS _ WALKER, SMITH J)
January 7, 2013, read first time and referred to Committee on Employment, Labor and
January 22, 2013, reported _ Do Pass.
January 28, 2013, read second time, amended, ordered engrossed.
January 29, 2013, engrossed.
January 31, 2013, read third time, passed. Yeas 93, nays 3.
February 25, 2013, read first time and referred to Committee on Commerce, Economic
Development and Technology.
March 26, 2013, amended, reported favorably _ Do Pass.
misrepresentations or omissions. (The law currently allows for
emergency suspension of the licenses of real estate appraisers only.)
With certain exceptions, requires a homeowners association to: (1)
make financial records available for inspection upon written request by
a member of the association; and (2) provide all communications
concerning a dispute with a homeowner to that homeowner. Permits a
homeowners association to charge a search fee for time spent on
records searches in excess of one hour, not to exceed the lesser of the
hourly rate of the person making the search or $35 per hour. Provides
that the homeowners association statute does not abrogate an
agreement by a homeowners association to provide additional
inspection rights. Urges the legislative council to establish a study
committee on the topic of homeowners associations.
March 27, 2013
First Regular Session 118th General Assembly (2013)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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between statutes enacted by the 2012 Regular Session of the General Assembly.
HOUSE BILL No. 1084
A BILL FOR AN ACT to amend the Indiana Code concerning
professions and occupations.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 4-6-12-3; (13)EH1084.1.1. -->
SECTION 1. IC 4-6-12-3, AS AMENDED BY P.L.230-2007,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2013]: Sec. 3. (a) Beginning July 1, 2005, the unit shall do the
(1) Investigate deceptive acts in connection with mortgage
(2) Investigate violations of IC 24-9.
(3) Institute appropriate administrative and civil actions to
(A) deceptive acts in connection with mortgage lending; and
(B) violations of IC 24-5-0.5 and IC 24-9.
(4) Cooperate with federal, state, and local law enforcement
agencies in the investigation of the following:
(A) Deceptive acts in connection with mortgage lending.
(B) Criminal violations involving deceptive acts in connection
with mortgage lending.
(C) Violations of IC 24-5-0.5 and IC 24-9.
(D) Violations of:
(i) the federal Truth in Lending Act (15 U.S.C. 1601 et
(ii) the Real Estate Settlement Procedures Act (12 U.S.C.
2601 et seq.); and
(iii) any other federal laws or regulations concerning
To the extent authorized by federal law, the unit may enforce
compliance with the federal statutes or regulations described
in this clause or refer suspected violations of the statutes or
regulations to the appropriate federal regulatory agencies.
(5) Enforce violations of IC 32-25.5-3 by homeowners
(b) The attorney general shall adopt rules under IC 4-22-2 to the
extent necessary to organize the unit.
SOURCE: IC 24-5.5-5-2; (13)EH1084.1.2. -->
SECTION 2. IC 24-5.5-5-2, AS ADDED BY P.L.209-2007,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2013]: Sec. 2. In addition to any prohibitions that apply under
IC 24-5-15-1 through IC 24-5-15-8, a foreclosure consultant may not:
(1) enter into or attempt to enter into a foreclosure consultant
contract with a homeowner unless the foreclosure consultant first
provides the homeowner written notice of the homeowner's rights
under this article;
(2) demand or receive compensation until after the foreclosure
consultant has fully performed all services the foreclosure
consultant contracted to perform or represented that the
foreclosure consultant would perform, unless the foreclosure
consultant complies with the security requirements under
(3) demand or receive a fee, interest, or any other compensation
that exceeds eight percent (8%) per year of the amount of any
loan that the foreclosure consultant makes to the homeowner;
(4) take a wage assignment, a lien of any type on real or personal
property, or any other security to secure the payment of
(5) receive consideration from a third party in connection with
foreclosure consulting services provided to a homeowner unless
the consideration is first fully disclosed in writing to the
(6) acquire any interest, directly or indirectly, in residential real
property in foreclosure from a homeowner with whom the
foreclosure consultant has contracted;
(7) except to inspect documents as provided by law, take any
power of attorney from a homeowner for any purpose;
(8) execute any contract or agreement with a homeowner or
receive money or other valuable consideration from a
homeowner without providing the homeowner with the
written statement required by IC 24-5-15-6; or
(9) fail to provide a homeowner with a written contract that
includes the notice of cancellation required by IC 24-5-15-7.
SOURCE: IC 24-5.5-5-8; (13)EH1084.1.3. -->
SECTION 3. IC 24-5.5-5-8 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2013]: Sec. 8. A foreclosure consultant may not represent to a
homeowner that the foreclosure consultant is endorsed, sponsored,
or affiliated with any governmental or government sponsored
agency or program.
SOURCE: IC 24-5.5-6-1; (13)EH1084.1.4. -->
SECTION 4. IC 24-5.5-6-1, AS AMENDED BY P.L.114-2010,
SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2013]: Sec. 1. A person who knowingly or intentionally
violates this article commits:
(1) a Class A misdemeanor;
(2) a deceptive act that is actionable by the attorney general under
IC 24-5-0.5-4 and is subject to the penalties and remedies
available to the attorney general under IC 24-5-0.5; and
(3) a deceptive act that is actionable by the attorney general
under IC 24-9-8-2 and is subject to the penalties and remedies
available to the attorney general under IC 24-9.
SOURCE: IC 24-9-2-7; (13)EH1084.1.5. -->
SECTION 5. IC 24-9-2-7, AS AMENDED BY P.L.226-2011,
SECTION 16, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2013]: Sec. 7. (a) "Deceptive act" means:
(1) an act or a practice as part of a mortgage transaction (as
defined in IC 24-9-3-7(a)), or of a real estate transaction (as
defined in IC 24-9-3-7(b)), in which a person at the time of the
transaction knowingly or intentionally:
(1) (A) makes a material misrepresentation; or
(2) (B) conceals material information regarding the terms or
conditions of the transaction; or
(2) a violation of IC 24-5.5 concerning mortgage rescue
protection fraud as set forth in IC 24-5.5-6-1.
(b) For purposes of this section, "knowingly" means having actual
knowledge at the time of the transaction.
SOURCE: IC 24-9-8-2; (13)EH1084.1.6. -->
SECTION 6. IC 24-9-8-2 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 2. (a) Beginning July 1, 2005, the
attorney general and the attorney general's homeowner protection unit
established under IC 4-6-12 shall enforce this article.
for any violation
occurring within five (5) years after the making of a home loan. An
action may not be brought under this article more than five (5)
years after the occurrence of the violation.
(b) The attorney general may refer a matter under section 1 of this
chapter to a prosecuting attorney for enforcement.
SOURCE: IC 25-1-11-13; (13)EH1084.1.7. -->
SECTION 7. IC 25-1-11-13, AS AMENDED BY P.L.3-2008,
SECTION 182, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2013]: Sec. 13. (a) The board may summarily
suspend a practitioner's license for ninety (90) days before a final
adjudication or during the appeals process if the board finds that a
practitioner represents a clear and immediate danger to the public's
health, safety, or property if the practitioner is allowed to continue to
practice. The summary suspension may be renewed upon a hearing
before the board, and each renewal may be for not more than ninety
(b) The board may summarily suspend the license of a real estate
appraiser for ninety (90) days before a final adjudication or during the
appeals process if the board finds that the licensed real estate appraiser
has engaged in material and intentional misrepresentations or
omissions in the preparation of at least three (3) written appraisal
reports that were submitted by a person to obtain a loan. The summary
suspension may be renewed after a hearing before the board. Each
renewal of a summary suspension may be for not more than ninety (90)
(c) The board may summarily suspend the license of an
individual licensed under IC 25-34.1 for ninety (90) days before a
final adjudication or during the appeals process if the board finds
that the individual has engaged in material and intentional
misrepresentations or omissions in at least three (3) transactions.
The summary suspension may be renewed after a hearing before
the board. Each renewal of a summary suspension may be for not
more than ninety (90) days.
Before the board may summarily suspend a license under this
section, the consumer protection division of the office of the attorney
general shall make a reasonable attempt to notify a practitioner of:
(1) a hearing by the board to suspend the practitioner's license;
(2) information regarding the allegation against the practitioner.
The consumer protection division of the office of the attorney general
shall also notify the practitioner that the practitioner may provide a
written or an oral statement to the board on the practitioner's behalf
before the board issues an order for summary suspension. A reasonable
attempt to notify the practitioner is made if the consumer protection
division of the office of the attorney general attempts to notify the
practitioner by telephone or facsimile at the last telephone number or
facsimile number of the practitioner on file with the board.
SOURCE: IC 32-25.5-1-1; (13)EH1084.1.8. -->
SECTION 8. IC 32-25.5-1-1, AS AMENDED BY P.L.49-2011,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2013]: Sec. 1. (a) This article applies to the following:
(1) A homeowners association established after June 30, 2009.
(2) A homeowners association established before July 1, 2009:
(A) if a majority of the members of the homeowners
association elect to be governed by this article; or
(B) if the number of members required by the homeowners
association's governing documents elect to be governed by this
article if a different number of members other than the number
established in clause (A) is required by the governing
(b) IC 32-25.5-3-8 applies to all homeowners associations.
(c) IC 32-25.5-3-3(g) through IC 32-25.5-3-3(m) apply to all
SOURCE: IC 32-25.5-3-3; (13)EH1084.1.9. -->
SECTION 9. IC 32-25.5-3-3, AS ADDED BY P.L.167-2009,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2013]: Sec. 3. (a) A homeowners association shall prepare an
(b) The annual budget must reflect:
(1) the estimated revenues and expenses for the budget year; and
(2) the estimated surplus or deficit as of the end of the current
(c) The homeowners association shall provide each member of the
homeowners association with:
(A) copy of the proposed annual budget; or
(B) written notice that a copy of the proposed annual budget
is available upon request at no charge to the member; and
(2) a written notice of the amount of any increase or decrease in
a regular annual assessment paid by the members that would
occur if the proposed annual budget is approved;
before the homeowners association meeting held under subsection (d).
(d) Subject to subsection (f), a homeowners association budget must
be approved at a meeting of the homeowners association members by
a majority of the members of the homeowners association in attendance
at a meeting called and conducted in accordance with the requirements
of the homeowners association's governing documents.
(e) For purposes of this section, a member of a homeowners
association is considered to be in attendance at a meeting if the
(1) in person;
(2) by proxy; or
(3) by any other means allowed under:
(A) state law; or
(B) the governing documents of the homeowners association.
(f) If the number of members of the homeowners association in
attendance at a meeting held under subsection (d) does not constitute
a quorum as defined in the governing documents of the homeowners
association, the board may adopt an annual budget for the homeowners
association for the ensuing year in an amount that does not exceed one
hundred percent (100%) of the amount of the last approved
homeowners association annual budget. However, the board may adopt
an annual budget for the homeowners association for the ensuing year
in an amount that does not exceed one hundred ten percent (110%) of
the amount of the last approved homeowners association annual budget
if the governing documents of the homeowners association allow the
board to adopt an annual budget under this subsection for the ensuing
year in an amount that does not exceed one hundred ten percent
(110%) of the amount of the last approved homeowners association
(g) Subject to subsection (k), the financial records, including all
contracts, invoices, bills, receipts, and bank records, of a
homeowners association must be available for inspection by each
member of the homeowners association upon written request. A
written request for inspection must identify with reasonable
particularity the information being requested. A member's ability
to inspect records under this section shall not be unreasonably
denied or conditioned upon provision of an appropriate purpose
for the request.
(h) If there is a dispute between a homeowner and a
homeowners association, the officers of the homeowners
association must make all communications concerning the dispute
available to the homeowner.
(i) A homeowners association must make all communications
and information concerning a lot available to the owner of the lot
or a home on the lot.
(j) Notwithstanding subsections (h) and (i), a homeowners
association is not required to make:
(1) communications between the homeowners association and
the legal counsel of the homeowners association; and
(2) other communications or attorney work product prepared
in anticipation of litigation;
available to the owner of a lot or home.
(k) A homeowners association is not required to make available
to a member for inspection:
(1) unexecuted contracts;
(2) records regarding contract negotiations;
(3) information regarding an individual member's association
account to a person who is not a named party on the account;
(4) any other information that is prohibited from release
under state or federal law; or
(5) any records that were created more than two (2) years
before the request.
(l) Nothing in this chapter:
(1) abrogates or eliminates provisions in homeowners
association agreements that permit or require additional
disclosure or inspection rights not required by this chapter;
(2) prevents a homeowners association from agreeing to make
disclosures or to provide inspection rights not required by this
(m) A homeowners association may not charge a fee for the first
hour required to search for a record in response to a written
request submitted under this chapter. A homeowners association
may charge a search fee for any time in excess of one (1) hour. The
following provisions apply if a homeowners association charges a
(1) The homeowners association shall charge an hourly fee
that does not exceed the lesser of:
(A) the hourly rate of the person making the search; or
(B) thirty-five dollars ($35) per hour.
(2) The homeowners association may charge the fee only for
time that the person making the search actually spends in
searching for the record.
(3) The homeowners association shall prorate the fee to reflect
any search time of less than one (1) hour.
SOURCE: ; (13)EH1084.1.10. -->
SECTION 10. [EFFECTIVE JULY 1, 2013] (a) As used in this
SECTION, "study committee" means either of the following:
(1) A statutory committee established under IC 2-5.
(2) An interim study committee established by the legislative
(b) The legislative council is urged to assign to a study
committee during the 2013 legislative interim the topic of
homeowners associations, including mediation or arbitration of
disputes involving homeowners associations and members of
(c) If the topic described in subsection (b) is assigned to a study
committee, the study committee shall, not later than November 1,
2013, issue a final report to the legislative council in an electronic
format under IC 5-14-6. The final report must contain the study
committee's findings and recommendations (including any
recommended legislation concerning the topic).
(d) This SECTION expires December 31, 2013.