Did Connecticut's 1990 condominium management law invalidate existing contracts or wait for regulations?

Plain-English summary

In 1990, Connecticut changed the rules for people managing common interest property, including requirements for management contracts and fidelity bonds. A legislator asked whether existing condominium management contracts became invalid unless amended, whether that result would impair contracts under the U.S. Constitution, and whether the act could operate before the Real Estate Commission issued regulations.

The Attorney General answered the first question no. The act imposed new substantive obligations, and neither its text nor its legislative history indicated retroactive effect. Connecticut's presumption against retroactive application therefore left existing contracts in place even if they lacked the newly required terms. Because the contracts were not nullified, the opinion did not decide the constitutional question.

The opinion also said that the act's already effective sections could be enforced before regulations were adopted. It distinguished requirements written into the act from additional application information and bond provisions the Commission might later add by regulation. Only the statutory bond terms could be enforced until the added regulations were adopted. Different sections of the act had different effective dates, so the opinion did not treat every provision as immediately enforceable.

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

For condominium associations and managers: The opinion said existing management contracts were not nullified merely because they lacked provisions that the 1990 act required for new contracts. It treated those new obligations as prospective.

For the Real Estate Commission: The opinion said effective statutory provisions could operate before regulations were adopted. The Commission's later additions to registration applications or fidelity bonds would become enforceable only when the relevant regulations were adopted.

For legislators and lawyers: The opinion left the Contracts Clause question unanswered because its statutory interpretation did not invalidate existing contracts. Its analysis turned on the presumption against retroactivity and the act's silence on that point.

Common questions

Did Public Act 90-306 cancel existing condominium management contracts?

No. The Attorney General concluded that the act's new substantive requirements applied prospectively. Existing contracts did not become void because they lacked the new terms.

Did the Attorney General find that the act violated the U.S. Constitution's Contracts Clause?

No constitutional issue was decided. The opinion said its negative answer to the contract-nullification question made that second question unnecessary.

Could the act be enforced before the Real Estate Commission adopted regulations?

Yes, for sections that had already taken effect. The opinion said the act itself set different effective dates for different sections; adoption of regulations was not a condition for enforcing provisions already in force.

Were additional fidelity bond terms enforceable before a regulation required them?

No. The opinion distinguished terms stated in the act from any extra bond provisions the Commission might adopt. Only the statutory requirements were enforceable before such a regulation took effect.

Background and statutory framework

The legislator's questions concerned the common interest property portions of 1990 Conn. Pub. Acts, 90-306, rather than its separate real estate disclosure provision. Section 10 addressed management contracts, section 12 addressed fidelity bonds, and section 13 contemplated Real Estate Commission regulations. The opinion described staggered effective dates extending from July 1990 into July 1991.

Conn. Gen. Stat. e 55-3 supplied the starting rule: a new statutory provision imposing an obligation should not be construed retrospectively. The opinion also cited Connecticut decisions distinguishing substantive changes from procedural or clarifying amendments, and found no legislative direction to apply the act backward. For implementation, it noted that the Commission could add terms by regulation but could not enforce those additional terms before the regulation was adopted.

Citations and references

The opinion quotes Conn. Gen. Stat. e 55-3 and discusses Conn. Gen. Stat. e 4-168(b), 1990 Conn. Pub. Acts, 90-306, and its sections 10, 12, 13, and 15. It cites Lavieri v. Ulysses, 149 Conn. 396, 402 (1962), State v. Vilalastra, 207 Conn. 35, 40, 540 A.2d 42, 45 (1988), and Michaud v. Fitzryk, 148 Conn. 447, 449, 171 A.2d 397 (1961), on prospective application. The official HTML renders some section symbols as “e” and some numeral ones as “l”; the original text below preserves that rendering.

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1990-formal-opinions/honorable-robert-g-jaekle-house-minority-leader--1990039-formal-opinion-attorney-general-of-connecti

Original opinion text

Honorable Robert G. Jaekle, House Minority Leader , 1990-039 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

December 2, 1990

Honorable Robert G. Jaekle

House Minority Leader

280 Keating Drive

Stratford, Connecticut 06497

Dear Representative Jaekle:

This will acknowledge receipt of your letter of July 5, l990 wherein you request our opinion regarding 1990 Conn. Pub. Acts, 90-306. The first section of this Act concerns disclosures by real estate brokers and salesmen to prospective purchasers and sellers, while the balance thereof concerns the management of common interest property. Your letter concerns the latter, and asks the following questions:

1. "Does PA 90-306 (10) require that all existing contracts for the management of condominiums be nullified unless provisions are added which include among other things, a provision for a fidelity bond as set forth in subsection (12) of the act?

2. If the answer to the first question is in the affirmative, does this act work to impair any existing contracts in violation of the contract clause of the United States Constitution, and if so, is this act then unenforceable in its entirety or just as to those sections which violate the provisions of the Constitution?

3. Is the act enforceable prior to the Real Estate Commission adopting regulations as set forth in subsection (13) of the act?"

The answer to your first question is "no." Conn. Gen. Stat. e 55-3 provides: "(N)o provision of the general statutes, not previously contained in the statutes of the state, which imposes any new obligation on any person or corporation, shall be construed to have a retrospective effect." The provisions of the Act in question do impose new obligations on licensed real estate brokers and salesmen, as well as on persons who are "community association managers" as defined in section 2 of the Act.

Also, Connecticut cases have generally held that if a new statute affects substantive rights it shall not be retroactively applied. "Legislation which limits or increases statutory liability has generally been held to be substantive in nature." Lavieri v. Ulysses, 149 Conn. 396, 402 (1962). The provisions of this act are certainly substantive.

"Newly enacted statutes are generally given only prospective effect unless there is clear evidence that the legislature intended to give the statute retroactive effect." State v. Vilalastra, 207 Conn. 35, 40, 540 A.2d 42, 45 (1988). "Statutes should be construed retroactively only when the mandate of the legislature is imperative." Michaud v. Fitzryk, 148 Conn. 447, 449, 171 A.2d 397 (1961). Many cases have upheld this construction, such as Neiditz v. Morton S. Fine & Associates, 199 Conn. 683, 508 A.2d 438, 443 (1986), in which the court stated, "As a general rule of construction, statutes which effect 'substantial changes in the law' are not to be given retroactive application unless the legislature has expressly so declared."

The court in Rudewicz v. Gagne, 22 Conn. App. 285, 287-288 (1990) stated that,

Our Supreme Court has consistently held that there is a general presumption that legislation is intended to operate prospectively, and has repeatedly expressed a reluctance to give retroactive application to statutes. Enfield Federal Savings & Loan Assn. v. Bissell, 184 Conn. 569, 571, 440, A.2d 220 (1981); East Village Associates, Inc. v. Monroe, 173 Conn. 328, 331-32, 377 A.2d 1092 (1977). A new provision of the General Statutes, imposing a new obligation on any person or corporation, is construed to have prospective effect; General Statutes e 55-3; unless the legislature clearly and unequivocally intended otherwise. State v. Lizotte, 200 Conn. 734, 741, 517 A.2d 610 (1986); State v. Paradise, 189 Conn. 346, 350-51, 456 A.2d 305 (1983); Hunter v. Hunter, 177 Conn. 327, 331, 416 A.2d 1201 (1979); American Masons' Supply Co. v. F. W. Brown Co., 174 Conn. 219, 222-23, 384 A.2d 378 (1978).

Statutes are applied retroactively in a very narrow category of cases. Retroactive application is the rule for amending statutes that are procedural in their impact. Enfield Federal Savings & Loan Assn v. Bissell, supra. An act that has been passed to clarify an existing statute, that is, one that was passed shortly after controversies arose as to the judicial interpretation of the original act, is also to be applied retroactively. Darak v. Darak, 210 Conn. 462, 473, 556, A.2d 145 (1989). All other statutes are applied prospectively unless the legislature expressly specifies the contrary. State v. Lizotte, supra; Sherry H. v. Probate Court, 177 Conn. 93, 411, A.2d 931 (1979).

Legislative history concerning this Act is silent on retroactivity. Therefore, in view of section 55-3 and the rules of statutory construction mentioned above, this Act does not have retroactive application, and existing contracts are not to be nullified if they do not have the various provisions required by this Act.

Since question one has been answered in the negative, question two need not be answered.

As for your third question, the Act is enforceable prior to the adoption of regulations by the Real Estate Commission as set forth in section 13 of the Act, but only with regard to those sections which have become effective. Section 15 of the Act provides different effective dates for the various sections of the Act: Sections 1, 1 13, and 15 became effective on July 1, 1990, and are enforceable now. Sections 2, 10, 11, and 12 became effective on October 1, 1990, and are also enforceable now. Section 4 will become effective and enforceable on May 1, 1991, while sections 3, 5, 6, 7, 8, 9, and 14 will become effective and enforceable on July 1, 1991.

It should be noted, however, that sections 4 and 12 of the Act allow the Real Estate Commission 2 to include in its regulations provisions whereby additional information may be required on the application for registration as a community association manager and additional provisions in the fidelity bond to be obtained. Pursuant to Conn. Gen. Stat. e 4-168(b), the Commission has 5 months from July 1, l990 to publish its notice of intent to adopt regulations, and another l80 days after such publication to submit the regulations to the legislative regulation review committee. Since section 12 becomes effective only 3 months after July 1, l990, it is probable that this section will become effective before the regulations are adopted. In this situation, all fidelity bonds required by this Act will be required to have only those provisions stated in section 12, and only those provisions can be enforced. Any provisions added by way of regulation cannot be enforced until the regulation requiring same is adopted.

I trust this answers your questions.

Very truly yours,

CLARINE NARDI RIDDLE

ATTORNEY GENERAL

Donald E. Wasik

Assistant Attorney General

CNR/DW/ic/rc

1 Although section one became effective July 1, 1990, pursuant to e 15, its requirements, pursuant to its own provisions, do not become operative until January 1, 1991.

2 We note an obvious typographical error in e 12(b) (7) where reference is made to the "association management" commission. The two words in quotes should be deleted.