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Except in the case of a taking of all the units by eminent domain pursuant to § 66-27-207, a condominium may be terminated only by agreement of unit owners of units to which at least eighty percent (80%) of the votes in the association are allocated, and eighty percent (80%) of those lenders having first mortgage liens on any unit or units to which eighty percent (80%) of the votes in the association are allocated. The declaration may specify a larger percentage in either instance, and may specify that a lender is deemed to approve the termination if notice is sent to the last address of that lender on file with the association, or if none, as specified in the lender's first mortgage lien of record, and no objection is received within thirty (30) days thereafter. The declaration may specify a smaller percentage only if all of the units in the condominium are restricted exclusively to nonresidential uses.
An agreement to terminate must be evidenced by the execution of a termination agreement, or ratifications of a termination agreement, in the same manner as a deed, by the requisite number of unit owners. The termination agreement may specify a date after which the agreement will be void unless it is recorded before that date. A termination agreement and all ratifications of the termination agreement must be recorded in every county in which a portion of the condominium is situated, and is effective only upon recordation.
In the case of a condominium containing only units having horizontal boundaries described in the declaration, a termination agreement may provide that all the common elements and units of the condominium shall be sold following termination. If, pursuant to the agreement, any real estate in the condominium is to be sold following termination, the termination agreement must set forth the minimum terms of the sale.
In the case of a condominium containing any units that include title to the underlying land as provided in the declaration, a termination agreement may provide for sale of the common elements, but may not require that the units be sold following termination, unless the declaration as originally recorded provided otherwise or unless all owners of units to be sold consent to the sale.
The association, on behalf of the unit owners, may contract for the sale of real estate in the condominium, but the contract is not binding on the unit owners until approved pursuant to subsections (a) and (b). If any real estate in the condominium is to be sold following termination, title to that real estate, upon termination, vests in the association as trustee for the holders of all interests in the units. Thereafter, the association has all powers necessary and appropriate to effect the sale. Until the sale has been concluded and the proceeds thereof distributed, the association continues in existence with all powers it had before termination. Proceeds of the sale must be distributed to unit owners and lienholders as their interests may appear, in proportion to the respective interests of unit owners as provided in subsection (h). Unless otherwise specified in the termination agreement, as long as the association holds title to the real estate, each unit owner and each unit owner's successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted each unit owner’s unit. During the period of that occupancy, each unit owner and each unit owner’s successors in interest remain liable for all assessments and other obligations imposed on unit owners by part 1, this part and parts 4 and 5 of this chapter or the declaration.
If the real estate constituting the condominium is not to be sold following termination, title to the common elements and, in a condominium containing only units not including title to the underlying land as described in the declaration, title to all the real estate in the condominium vests in the unit owners upon termination as tenants in common in proportion to their respective interests as provided in subsection (h), and liens on the units shift accordingly. While the tenancy in common exists, each unit owner and each unit owner's successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted each unit owner’s unit.
Following termination of the condominium, the proceeds of any sale of real estate, together with the assets of the association, are held by the association as trustee for unit owners and holders of liens on the units as their interests may appear. Following termination, creditors of the association holding liens on the units that were recorded before termination may enforce those liens in the same manner as any lienholder. All other creditors of the association are to be treated as if they had perfected liens on the units immediately before termination.
The respective interests of unit owners referred to in subsections (e), (f) and (g) are as follows:
Except as provided in subdivision (h)(2), the respective interests of unit owners are the fair market values of their units, limited common elements, and common element interests immediately before the termination, as determined by one (1) or more independent appraisers selected by the association. The decision of the independent appraisers shall be distributed to the unit owners and becomes final unless disapproved within thirty (30) days after distribution by unit owners of units to which at least twenty-five percent (25%) of the votes in the association are allocated. The proportion of any unit owner's interest to that of all unit owners is determined by dividing the fair market value of that unit owner's unit and common element interest by the total fair market values of all the units and common elements; and
If any unit or any limited common element is destroyed to the extent that an appraisal of the fair market value of the unit or any limited common element before destruction cannot be made, the interests of all unit owners are their respective common element interests immediately before the termination.
If a lien or encumbrance against all or any portion of the real estate comprising the condominium has priority over the declaration, and the lien or encumbrance has been released with respect to any unit, then the lien or encumbrance shall be deemed subordinate to the declaration.
Notwithstanding subdivision (i)(1), foreclosure or enforcement of a lien or encumbrance against withdrawable real estate does not of itself withdraw that real estate from the condominium, but the person taking title to the real estate has the right to require from the association an amendment excluding the real estate from the condominium, upon request and payment of the expense of the amendment.