In 1999, the Louisiana Homeowners Association Act was adopted by the Louisiana Legislature effective June 16, 1999. Subsequent to its enactment, there have been a few selective amendments over the years, but no major revisions or restatements. The Louisiana Law Institute has worked for the past several years to rewrite The Homeowners Association Act and in the 2024 Regular Legislative Session, Act No. 158 was approved and is called the Planned Community Act (hereinafter “PCA”). The Act will become effective January 1, 2025, and was modeled after the Uniform Common Interest Ownership Act, a basic statute for creating, managing, and terminating condominium, planned community, and real estate cooperatives. The Act revises, restates and adds new provisions to La. R.S. § 9:1141 through § 9:1141.50. The Act is lengthy and should be read thoroughly. 

Planned Community Act: Who’s Affected?

The Act is prospective in nature and applies to newly formed homeowners associations. Provisions of the Louisiana Condominium Act, and the Louisiana Timeshare Act shall supersede any provisions of Act No. 158 in the event of a conflict.

The PCA does not require existing homeowners associations to alter or amend their documents or alter or amend their method of calculating assessments.

The PCA does require newly formed associations to be Louisiana non-profit corporations filed with the Secretary of State. If there are provisions not provided for in the PCA for non-profit corporations, then the general laws on Louisiana non-profit corporations shall apply.

Declarant/Developer Rights

The PCA contains many rules governing the Declarant/Developer rights because, in almost all cases, the Developer imposes unilateral rules and regulations without any input from the lot owners who eventually purchase the lots in the development. There are limitations on the Declarant’s rights provided for in the PCA, such as turnover for the control of the Association to lot owners, time period to add additional property, limitation on withdrawal of property, right to terminate certain Declarant contracts once the lot owners take control of the Association, and many more rules.

The PCA also provides for a limitation on the time period that Declarant can control the Board of Directors and must turn over control to the lot owners.

The PCA provides for rules for the transfer of the Declarant’s rights and in particular what happens if a lender becomes the transferee of Declarant’s rights.

Common Areas

The concept of limited common areas is introduced in the PCA, distinguishing them from the lot and general common areas of the community. The PCA also provides the procedure and limitation on rights of the Association to encumber common areas.

Voting

The PCA changes certain voting requirements requiring approval of a super majority (80% of the voting interest of the Association and not the voting interest of those attending a meeting in which a quorum is present) as opposed to the current law that provides limiting restrictions may be imposed by 75% of the lot owners.

Burdensome restrictions can be imposed by a 66.66% vote as opposed to the current law that is a 75% of the votes of the lot owners.

Management

The PCA provides rules for management of the Association, including the obligation to provide insurance coverage for the common areas, property damage and general liability.

The PCA provides the procedure and limitation on rights of the Association to encumber common areas.

Lot Owners

The PCA requires lot owners to execute leases with non-owner occupants. The lease shall provide that non-owner occupant lessees shall comply with all of the rules and regulations of the Association.

Other

The PCA requires a Public Offering Statement (similar to what is required for condominium conversions by the Louisiana Condominium Act) for communities with 75 or more lots.  The Public Offering Statement must disclose Declarant’s rights, including the right to add additional property and to disclose what community amenities must be built.

Electronic communications consistent with other provisions of Louisiana law are provided for in the PCA.

Upshot

There are many more rules and provisions under Act No. 158. The PCA is lengthy and detailed and should be reviewed carefully by Associations and their advisors.

If you have any questions about the Act, please contact Randy Opotowsky.