March 2025 CT

COMMUNITY WEALTH... from page 24.

ment Corporations” to purchase prop erties at the upset price. This prevents any surplus funds from being generated and, as a result, eliminates what is often the association’s most feasible method of recovery. Since the CWPP went into effect, several associations, as well as lenders who have been

similarly deprived of access to surplus funds, have taken to court to challenge the constitutionality of the CWPP for this reason. As of this writing, this litigation remains unresolved. The second major implication is less immediate, but possibly even more far-reaching. The CWPP requires that, if a property is purchased by a “Nonprofit Community Development Corporation” and then sold or leased, it must be deed-restricted as affordable housing. Affordable housing deed restrictions mean that only purchasers or renters below a certain maximum income can buy or rent the prop erty. Many community associations have a certain number of affordable units; others have none. Regardless, as properties within associations are sold under the CWPP and converted to affordable housing, the number of affordable-housing units will gradually expand. The long-term effects of this development are uncertain, but it has the potential to drastically alter the socioeconomic composition of many community associations across the state. The phenomenon of “Nonprofit Com munity Development Corporations” spawned by the CWPP is only one piece of this paradigm-shifting legisla tion. Its full story is yet to be told, as we await decisions of the courts and pos sible legislative action to amend the law. For now, community associations are left to contend with a foreclosure process that is far removed from what it was little more than a year ago. n “The second major implication is less immediate, but possibly even more far-reaching.”

liens on the property can then apply to obtain those “surplus funds” and be made whole. Recall, however, that the CWPP allows “Nonprofit Community Develop

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MARCH 2025