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HomeMy WebLinkAboutZ-686-23/HOA Rental Restriction11/09/2023 Ordinance Z-686-23 1 Sponsor: Councilors Campbell, Aasen and Finkam ORDINANCE Z-686-23 AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA ___________________________________________________ An Ordinance updating owners’ association standards in the Unified Development Ordinance. Synopsis: This ordinance requires that owners’ associations allow changes to governing documents relating to rental restrictions with no more than a simple majority of its owners. WHEREAS, over the last several years, large, out-of-state investment firms have purchased a significant number of owner-occupied, single-family homes across Indiana for the purpose of turning them into rental properties; and WHEREAS, such bulk purchasing of single-family homes by investment firms makes it more difficult for a person to purchase a home and decreases the number of owner-occupied homes in a community; and WHEREAS, pursuant to Indiana Code § 36-7-4-602, the Common Council has the authority to amend the text of the Carmel Unified Development Ordinance (the “UDO”); and WHEREAS, it is in the best interest of the citizens of the City of Carmel to amend the text of the UDO to require that the governing documents of newly formed homeowners associations contain a provision that makes it easier for owners within said associations to restrict rentals if they so desire. NOW, THEREFORE, BE IT ORDAINED by the Common Council of the City of Carmel, Indiana, that, pursuant to IC 36-7-4-600 et seq. and after Docket No. PZ-2023-00166 OA having received a favorable recommendation from the Carmel Advisory Plan Commission on Tuesday, October 17, 2023, it hereby adopts this Ordinance to amend the Carmel Unified Development Ordinance (Ordinance Z -625-17, as amended), to read as follows: Section I: Amend Article 7: Design Standards, Section 7.20: Owners’ Association Standards, as follows: 7.20 Owners’ Association Standards Page 7-29 This Owners’ Association Standards (OA) section applies to the following types of development: CS, RS, TS, CM A. Applicability: Any development with common area, private streets, shared parking, an amenity center, shared or private utilities, retention pond, and the like shall meet the Owners’ Association Standards. B. Establishment of Owners’ Association: 1. Perpetuity: An owners’ association shall be created in perpetuity to make decisions about and to maintain all common property and/or common facilities. 2. Organization: An owners’ association shall be a legally incorporated entity or shall be created by other legal mechanism which provides shared ownership or shared responsibility of common property and/or common facilities. A board of directors or other means for representation in decision-making shall be established. 3. Recording of Legal Mechanism: The legal mechanism binding all property owners or vested parties shall be recorded in the Office of the Hamilton County Recorder. DocuSign Envelope ID: A3F043C1-CAFE-4899-B627-8D79F20BA6CF 11/09/2023 Ordinance Z-686-23 2 4. Declaration of Covenants: The owners’ association shall be responsible for the administration of any elective restrictive covenant utilized to further restrict improvements and uses in the development. The “Declaration of Covenants” shall be recorded in the Office of the Hamilton County Recorder following final plat approval and prior to selling any lots or units. A copy of the recorded document shall be delivered to the Department of Community Services within two (2) weeks of it being recorded. 5. Deed Restrictions: All requirements (See Section 7.20(E): Required Language below) or other restrictions that resulted as a commitment or condition of approval shall be included in an independent legal document (e.g. deed restriction or similar legal mechanism) and recorded for each lot. 6. Association Fee: An association fee or other financial mechanism shall be included in the Declaration of Covenants or other legal mechanism and be equal to the financial needs of the owners’ association to maintain common property and/or common facilities, and to accumulate a reserve account for long-term large expenditures, emergencies, and contingencies. 7. Amendment of Covenants: In accordance with IC 32.25.5-3-9, the governing documents of the owners’ association must contain a provision allowing the owners to amend the governing documents at any time, from time to time and such amendment may not require the consent of more than seventy-five percent (75%) of all owners; provided, however, the governing documents may not require the consent of more than the majority (50%+1) of all owners to create or amend provisions relating to rental restrictions. This paragraph does not apply to Commercial Subdivisions (CM). C. Contractual Obligations: Prior to the transition from the developer to the owners’ association being responsible for common property and/or common facilities, the developer shall not enter into any contractual obligation on behalf of the owners’ association that extends more than one (1) year past the date of transition. Thereafter, the owners’ association shall be responsible for the renewal or termination of such contracts. D. Common Area Inspection: Before the developer transfers control of the owners’ association under the Declaration of Covenants to the property owners, including control of a board of directors or other means of representation, the developer shall arrange for an inspection of all improvements not located on a platted lot or for which the owners’ association has maintenance responsibility (a “Common Area Improvement”), including street trees. For purposes of this section, whenever another person or persons succeeds to the rights and liabilities of the original applicant, the term “developer” includes successors and assigns of the original applicant. 1. Inspection Requirements: Such inspection shall (i) be performed by an independent, licensed professional engineer or land surveyor selected and paid for by the developer, and (ii) determine whether each approved and/or committed Common Area Improvement has been completed and maintained and is currently in compliance with all applicable requirements of the City of Carmel, the Hamilton County Surveyor’s office; and any other applicable governmental authority or utility. 2. Inspection Report: A reasonably detailed report of the inspection shall be provided to the Carmel Department of Community Services. Upon written confirmation by the department that the inspection demonstrates that all Common Area Improvements have been properly completed and maintained, the developer may then turn over control of the owners’ association to the property owners. 3. Corrections: If the inspection reveals that any Common Area Improvements have not been properly completed and/or maintained, the developer shall cause, at its cost, all such improper Common Area Improvements to be corrected so as to be in compliance with DocuSign Envelope ID: A3F043C1-CAFE-4899-B627-8D79F20BA6CF 11/09/2023 Ordinance Z-686-23 3 applicable requirements. Upon completion of such correction, the developer shall notify the department in writing of details of the corrections made. The department shall have thirty (30) days from the date of notice of completion of corrections to verify compliance. Thereafter, upon receipt of notice from the department that all the improper Common Area Improvements have been corrected, the developer may turn over control of the owners’ association to the property owners. 4. Failure to Respond: If the department fails to respond to an inspection that shows no improper Common Area Improvements or to a notice from developer of its correction of all improper Common Area Improvements within thirty (30) days of receipt of such inspection or notice, as applicable, then the developer may assume department approval and turn over control of the owners’ association to the property owners. E. Required Language: The following content shall be reflected in the Deed Restriction or other legal mechanism: 1. Street Lighting: When a development installs a street light, then the owners’ association shall be responsible for the maintenance, replacement, and electricity used. In this case, the legal mechanism shall make the owners’ association responsible for all maintenance, replacement, and electricity consumption in perpetuity. The City of Carmel shall not, now or in the future, be obligated to accept the lights as public property. In the event the owners’ association fails to maintain street lighting, the City of Carmel may make the improvements and assess each property for the project cost plus applicable administrative expenses. 2. Detention, Drainage Systems, and Best Management Practices: When a retention pond and/or other drainage systems are required or installed and established as common area, the City of Carmel shall not, now or in the future, be obligated to accept them as public infrastructure or to maintain those facilities. The owners’ association, or lot owner of the lot in which the retention pond or other drainage system is located, shall bear the cost of such maintenance. In the event the owners’ association fails to maintain the retention pond and/or other drainage facilities, the City of Carmel may make the improvements and assess each property in the subdivision equally for the project cost plus administration costs. 3. Private Streets: When private streets are installed, the City of Carmel shall not, now or in the future, be obligated to accept private streets as public property. The City of Carmel shall bear no financial responsibility for snow removal, maintenance or replacement costs associated with private streets. The owners’ association shall bear the cost of snow removal, maintenance and replacement. In the event the owners’ association fails to maintain private streets, the City of Carmel may make the improvements and assess each property for the project cost plus administration costs. 4. Off‑street Trails: When trails are installed outside of a right-of-way, the City of Carmel shall not, now or in the future, be obligated to accept the trail as public property. The City of Carmel shall bear no financial responsibility for maintenance or replacement costs. The owners’ association shall bear the cost of maintenance and replacement. In the event the owners’ association fails to maintain the trail, the City of Carmel may make the improvements and assess each property for the project cost. 5. On‑street Sidewalks: When sidewalks are installed inside of a right-of-way of internal streets, the City of Carmel shall bear no financial responsibility for maintenance or replacement costs. The owners’ association, and particularly abutting property owners shall bear the cost of maintenance and replacement. In the event the owners’ association, or abutting property owners, fails to maintain the sidewalks, the City of Carmel may complete the maintenance work or make the improvements and assess the appropriate property owners for the project cost. 6. Landscaping: When landscaping is required to be or elected to be installed in a right-of- way, common area or easement, the owners’ association shall be responsible for maintaining DocuSign Envelope ID: A3F043C1-CAFE-4899-B627-8D79F20BA6CF 11/09/2023 Ordinance Z-686-23 4 the plant material in healthy condition, removing dead or diseased vegetation, and/or replacing landscaping, as necessary. Required perimeter land- scaping shall be maintained by the owners’ association as approved by the Plan Commission; or in a manner equal to or in excess of what was approved if permitted by the Planning Administrator. See Section 7:06: Common Area Standards for more information. 7. Street Trees: Once a final plat is approved, the right-of-way becomes the property of the City of Carmel. Therefore, the City retains the right to reasonably trim or remove any tree or shrub impeding the street or sidewalk. When performing essential infrastructure work, the City of Carmel may remove trees or shrubs within the right-of-way and shall not be responsible for replacing said trees. The City of Carmel shall approve any new tree or shrub being planted within the right-of-way and can deny such planting for any reason. F. Enforcement: Failure of the owners’ association to maintain an effective legal mechanism or failure of the owners’ association to fulfill its responsibilities within that legal mechanism shall be deemed a violation of the Unified Development Ordinances and subject to Article 10: Enforcement and Penalties. DocuSign Envelope ID: A3F043C1-CAFE-4899-B627-8D79F20BA6CF 11/09/2023 Ordinance Z-686-23 5 PASSED, by the Common Council of the City of Carmel, Indiana, this ____ day of ________, 2023, by a vote of _____ ayes and _____ nays. COMMON COUNCIL FOR THE CITY OF CARMEL ___________________________________ Jeff Worrell, President Laura Campbell, Vice-President ___________________________________ ____________________________________ Kevin Rider Sue Finkam ___________________________________ ____________________________________ Anthony Green Adam Aasen ___________________________________ ___________________________________ Tim Hannon Miles Nelson ___________________________________ Teresa Ayers ATTEST: __________________________________ Sue Wolfgang, Clerk Presented by me to the Mayor of the City of Carmel, Indiana this ____ day of _________________________ 2023, at _______ __.M. ____________________________________ Sue Wolfgang, Clerk Approved by me, Mayor of the City of Carmel, Indiana, this _____ day of ________________________ 2023, at _______ __.M. ____________________________________ James Brainard, Mayor ATTEST: ___________________________________ Sue Wolfgang, Clerk Prepared by: Adrienne Keeling, Planning Administrator, One Civic Square, Carmel, IN 46032 DocuSign Envelope ID: A3F043C1-CAFE-4899-B627-8D79F20BA6CF ANovember 10:40 Not Present November 22nd Not Present 22nd 7 November20th A 10:30 0