New 2023 HOA Laws and What They Mean For Your HOA

May 25, 2023

The Utah general legislative session for 2023 was January – March 2023, and the general effective date for legislation from the session was May 3, 2023.

Records

Senate Bill 191 (2023) clarifies the Nonprofit Act regarding which records an owner is entitled to see if the owner follows the process specified in Subsection 16-6a-1602(2) (the process that requires the owner to have a “proper purpose” for seeing the records).  The statute now specifies that the records that may be viewed after following that particular process are the “other records” listed in Utah Code Subsections 16-6a-1601(2) through (5), namely: “appropriate” accounting records and a membership list with the names and addresses of all members in alphabetical order and showing the number of votes of each member.  Previously, the subsection referred to “any of the other records of the nonprofit corporation.”  (Since Subsection 16-6a-1602(1) specifies the process to view the records listed in Subsection 16-6a-1601(5), the process specified in Subsection 16-6a-1602(2) only applies to the records listed in 16-6a-1601(2) through (4), which, again are “appropriate” accounting records and the membership list).  

The bill also defines the term “corporate records” in the definitions section of the Utah Revised Nonprofit Corporation Act, to mean the records described in Section 16-6a-1601, and to exclude “correspondence, communications, notes, or other similar information, regardless of format or method of storage, that are not an official decision, published document, or record of the corporation.”  However, the Nonprofit Act never uses the term “corporate records” in any substantive way, so the definition has limited usefulness, if any at all.  See Utah Code Section 16-6a-102(13).

Rental Restrictions

The law prohibits a condo and community association from requiring an owner who rents out their home to pay an additional assessment or fee because the home is a rental.  Senate Bill 191 (2023) amends the statute to provide that an association that permits at least 35% of the units in the association to be rental units may charge an owner who rents their unit an annual fee of up to $200 to defray the association’s additional administrative expenses directly related to that rental unit, as detailed in an accounting provided to the owner.  See Utah Code Sections 57-8a-209(9)(c) and 57-8-10.1(9)(c).

Board Member Qualifications, Sex Offenders

Senate Bill 191 (2023) amends the law to provide that an association may, through governing documents or the board’s internal procedures, disqualify an individual from serving as a director because the individual has either been convicted of a felony or is required to register with the sex offender registry due to a conviction for an offense committed against a person under 18 (a.k.a. a “sex offender”).  See Utah Code Sections 57-8a-501 and 57-8-59.

The bill further provides that an association rule may restrict an adult or juvenile who is required to register with the sex offender registry due to a conviction for an offense committed against a person under 18 (a.k.a. a “sex offender”) from accessing a swimming pool, park or playground that is maintained, operated, or owned by the association (a “protected area”), except an association cannot restrict such access when that person must be in a protected area to perform their parental responsibilities.  See Utah Code Sections 57-8a-218(18) and 57-8-8.1(10).

Definition of “Political Sign”

The law contains restrictions against association rules restricting political signs, except reasonable regulations on the time, place, and manner of posting a political sign.  But, the law never defined what constituted a political sign.  Senate Bill 191 (2023) defines a “political sign” to mean “any sign or document that advocates: (1) the election or defeat of a candidate for public office, or (2) the approval or defeat of a ballot proposition.”  See the new definitions in Utah Code Sections 57-8a-102(21) and 57-8-3(34).  See the restrictions against rules governing political signs in Utah Code Sections 57-8a-218(4) and 57-8-8.1(8).

Community Associations Only

Water-efficient Landscaping

Under Senate Bill 191 (2023), community associations must adopt required rules regarding water efficient landscaping before June 30, 2023.  The requirement for associations to adopt rules supporting water-efficient landscaping, including allowance for low water use on lawns during drought conditions, was made law in 2022.  This new law requires those rules to be adopted by June 30, 2023.  Additionally, the bill explicitly provides that a rule may not prohibit low water use on lawns during drought conditions.  See New 2022 HOA Laws and What They Mean For Your HOA.  See also Utah Code Sections 57-8a-218(16) and 57-8-8.1(9).

House Bill 450 (2023) modifies Utah Code Section 57-8a-231 in the Community Association Act, which was enacted last year and states that an association may not enforce a governing document that prohibits a lot owner of a detached home (aka single family home) from incorporating water wise landscaping on the owner’s lot, except in certain instances.  The bill clarifies that an association may restrict or prohibit the use of specific plant materials other than water wise plant materials (as defined in the statute).  Additionally, the provision in the statute that said an association could adopt a requirement that imposes minimum or maximum vegetative coverage was deleted.  Now the statute says an association may not require an owner to have more than 50% vegetative coverage that is not water wise landscaping on the owner’s lot.

Rules

The law that’s been in place for several years in Utah Code Section 57-8a-217 requires that before a board in a community association adopts or amends a rule, the board must: (1) deliver notice to the owners that the board is considering a change to a rule, (2) provide an open forum at the board meeting giving owners an opportunity to be heard at the board meeting before the board adopts or amends a rule, and (3) deliver a copy of the change in the rules within 15 days after the date of the board meeting.

Senate Bill 152 (2023) amends the law to say that if a board fails to do any of those things, a lawsuit must be brought within 18 months in order to challenge the board action.  See Subsection 57-8a-217(7).

Definition of “Rule”

Both the Condo and Community Association Acts have long had provisions governing “rules” in an association but neither act ever defined what constitutes a rule (other than that a rule is adopted by a board and the provisions of CC&Rs and bylaws are not rules).

Senate Bill 191 (2023) defines “rule” for community associations (but, strangely, not for condos):

“Rule” means a policy, guideline, restriction, procedure, or regulation of an association that:
(1) is not set forth in a contract, easement, article of incorporation, bylaw, or declaration; and
(2) governs the conduct of persons, or the use, quality, type, design, or appearance of real property or personal property.
“Rule” does not include the internal business operating procedures of a board.

See Utah Code Section 57-8a-102(25).

Applicability of the Community Association Act

To avoid any confusion and curtail any argument that the Community Association Act doesn’t apply to a given association just because the association was formed before a certain provision of the act was enacted, Senate Bill 152 (2023) amends the law to provide that the act applies to an association that registers or updates the association’s registration with the Utah HOA Registry.  Of course, registering and updating an association’s registration with the HOA Registry is required by the law.  See Utah Code Section 57-8a-105(7).

How the new laws affect your community and what you need to do to comply with the new laws

Your community association (noncondos) must adopt rules supporting water-efficient landscaping, including allowance for low water use on lawns during drought conditions by June 30, 2023. See CounselOurHOA.com for sample rules (for Prudent-Legal subscribers).

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Posted by Curtis G. Kimble

New 2022 HOA Laws and What They Mean For Your HOA

June 1, 2022

The Utah general legislative session for 2022 was January – March 2022, and the general effective date for legislation from the session was May 4, 2022.

Water-efficient Landscaping

Under Senate Bill 152 (2022), all associations (even condominiums) are required to adopt rules supporting water-efficient landscaping, including allowance for low water use on lawns during drought conditions. See Utah Code Sections 57-8a-218(16) and 57-8-8.1(9).  

Under House Bill 282 (2022), an association may not prohibit an owner of a lot with a detached dwelling (aka single family home) from incorporating water wise landscaping on the owner’s lot.  “Water wise landscaping” means any of the following: (1) installation of plant materials suited to the microclimate and soil conditions that can remain healthy with minimal irrigation once established or be maintained without the use of sprinklers, (2) use of water for outdoor irrigation through proper and efficient irrigation design and water application, or (3) the use of other landscape design features that either minimize the need of the landscape for supplemental water from irrigation or reduce the landscape area dedicated to lawn.

However, an association can require a lot owner to comply with a site plan review process, to maintain plants in a healthy condition, and to follow specific water wise landscaping design requirements adopted by the association, and can restrict the use of mulches considered detrimental to the association’s operations, impose minimum or maximum vegetative coverage, and restrict the use of specific plant materials.

The bill enacts a new section of the Community Association Act, Utah Code Section 57-8a-231.

Finally, an association may not require a lot owner to have lawn in an area that’s less than eight feet wide and may not restrict the conversion of a “grass park strip” to water-efficient landscaping.  See Senate Bill 152 and House Bill 282, now codified in Utah Code Sections 57-8a-218(16), 57-8-8.1(9) and 57-8a-231(3)(b).

Records

Senate Bill 152 (2022) limits the records that owners are entitled to see to just the main records, such as minutes, governing documents, financials, etc.  This is a change from prior law where owners were entitled to view and copy virtually all records of their HOA.  Specifically, an association is required to keep and make available to owners a copy of the governing documents, most recent approved minutes, most recent budget and financial statement, most recent reserve analysis, and certificate of insurance for each insurance policy the association holds, plus the records listed in Utah Code Subsections 16-6a-1601(1) through (5).

Additionally, an association must now have all of its governing documents on its website, including the CC&Rs (declaration), articles of incorporation, bylaws, the plat of the development, and the rules, as well as the most recent approved minutes and most recent budget and financial statement.  Previously, just the declaration and bylaws (and most recent approved minutes and most recent budget and financial statement) were required to be on the website.  If the association doesn’t have a website, then it must make the documents available to lot owners free of charge during regular business hours at the association’s address listed with the Utah HOA Registry.  See Utah Code Section 57-8a-227(2) and Section 57-8-17(2).

Electric Vehicle Charging Systems

Senate Bill 152 (2022) added new statutes to both the Condo Act and Community Association Act that provide:

  • an association may not prohibit an owner from installing or using an electric vehicle charging system in a parking space on the owner’s lot or in a limited common area parking space designated for the owner’s exclusive use;
  • an association may (1) require the owner to obtain approval before installing a charging system; (2) require that an electrical contractor install the charger, or if installed on common area, require the owner to reimburse the association for any increase in the insurance premium caused by the installation of the charger; (3) require the system to comply with the association’s design criteria and other restrictions if they do not significantly increase the cost of or decrease the efficiency or performance of the charging station; and (4) require the owner to pay the costs of installation, metering, and use of the system, including the costs of electricity and damage to common area.

See Utah Code Section 57-8a-801 and 802 and Section 57-8-8.2.

Rules

Senate Bill 152 (2022) amends and enacts provisions in Utah Code Sections 57-8a-218 and 57-8-8.1 “Equal treatment by rules required — Limits on association rules and design criteria.”

Religious and Holiday Displays.  A rule may not abridge the rights of an owner to display a religious or holiday sign, symbol, or decoration inside a dwelling or outside a dwelling on: (1) a lot, (2) the exterior of the dwelling, unless the association owns or maintains the exterior, or (3) the front yard of the dwelling, unless the association owns or maintains the yard.  But, the association may adopt a reasonable time, place, and manner restriction with respect to a display that is outside a dwelling and visible from outside the lot.

Political Signs.  The new law says a rule may not prohibit an owner from displaying a political sign inside a dwelling or outside a dwelling on: (1) a lot, (2) the exterior of the dwelling, regardless of whether the association owns the exterior, or (3) the front yard of the dwelling, regardless of whether the association owns the yard.  A rule may reasonably regulate the time, place, and manner of posting a political sign, but may not regulate the content of a political sign. A “design provision” may not establish design criteria for a political sign.

For-Sale Signs.  Finally, a rule may not prohibit an owner from displaying a for-sale sign inside a dwelling or outside a dwelling on: (1) a lot, (2) the exterior of the dwelling, regardless of whether the association owns the exterior, or (3) the front yard of the dwelling, regardless of whether the association owns the yard.  A rule may reasonably regulate the time, place, and manner of posting a for-sale sign.

Continue reading for how the new laws affect your community and what you need to do to comply with the new laws.

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Posted by Curtis G. Kimble

HOA Immunity from COVID-19 Liability

August 31, 2020

Utah HOAs can breathe a little easier because associations are now protected generally from lawsuits and claims relating to COVID-19.  A new Utah law went into effect August 18, 2020, that provides immunity from civil liability for damages or an injury resulting from exposure of an individual to COVID-19 on the premises owned or operated by an HOA, or during an activity managed by the HOA.

Immunity does not apply if an association purposely does something wrong or is reckless.  Specifically, immunity does not apply “to willful misconduct, reckless infliction of harm, or intentional infliction of harm.”  The new law is found in Utah Code Section 78B-4-517.

The new law provides some welcome relief from the stress of potential liability for associations, especially because claims relating to communicable diseases and viruses are usually excluded from association insurance policies.  However, Utah condominium and community associations with common spaces and amenities should still take precautions regarding the coronavirus, such as social distancing and mask usage as appropriate, signage informing residents that a particular facility is used at their own risk – where appropriate, increased cleaning and disinfecting, and notifying residents when the association learns someone has COVID-19 in the development (but don’t mention specific names, of course).

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Posted by Curtis G. Kimble

New 2020 Utah HOA Laws

May 12, 2020

By Curtis G. Kimble.

Two bills were passed this year in Utah changing parts of the Condominium Ownership Act and the Community Association Act.  The new laws that were passed by the two bills go into effect today, May 12, 2020.

House Bill 155 (2020) requires a seller of a unit or lot, or the association if requested by the seller, to make certain disclosures before closing on a sale, and requires the Department of Commerce to publish certain educational materials on its website.  The bill enact Sections 57-8-6.1 (in the Condo Act (57-8)) and 57-8a-105.1 (in the Community Association Act (57-8a)), and amends Sections 57-8-13.1 and 57-8a-105.  Specifically, before the closing of a sale of a unit or lot, the seller must provide to the buyer (1) a copy of the association’s recorded governing documents, and (2) a link to the Department of Commerce’s educational materials.  The association must, upon request by the seller, provide those two things to the seller.  Additionally, if a condo association has a manager, the association may now opt to include the name and address of the manager rather than that of each board member (community associations are not and were never required to include the name and address of each board member).

The Department of Commerce is required to publish educational materials on its website providing, in simple and easy to understand language, a brief overview of state law governing associations, including: (1) a description of the rights and responsibilities provided in the law to any party under the jurisdiction of an association; and (2) instructions regarding how an association may be organized and dismantled in accordance with the law.

The education materials don’t appear to be published quite yet on the Department’s website.  When I called the Department, they informed me it should be up within a week.  It isn’t clear yet exactly which website will host the information.  It could be at the Department’s primary website at commerce.utah.gov, or at the Homeowner Associations Registry website at secure.utah.gov/hoa, or somewhere else entirely.  I think the Homeowner Associations Registry website would make the most sense.

Senate Bill 183 (2020), “Nonjudicial Foreclosure Amendments,” amends provisions related to nonjudicial foreclosure of a lien on a unit or lot by an association, including establishing limitations on nonjudicial foreclosure.  A nonjudicial foreclosure is a foreclosure without a lawsuit—in the same manner a bank typically forecloses on a home that is in default.

The bill amends Utah Code Sections 57-8-3 and 57-8-46 (in the Condo Act), and 57-8a-303 (in the Community Association Act), by adding definitions of “judicial foreclosure” and “nonjudicial foreclosure” in the Condo Act to mirror the definitions in the Community Association Act, and by changing the notice that must be sent to a unit or lot owner before an HOA starts a nonjudicial foreclosure.  Additionally, the law now prohibits nonjudicial foreclosure of a unit or lot if the lien includes a fine the association imposed in accordance with Section 57-8-37 “Fines” (condo) or 57-8a-208 “Fines” (for noncondos).

Contact Kimble Law if your association needs any assistance with legal issues!

7 Comments | Condo, New Condo Laws, New HOA Laws, New Non-Condo HOA Laws, Non-Condo HOA, Uncategorized | Permalink
Posted by Curtis G. Kimble

2018 Utah Legislative Session

May 8, 2018

Happy Laws Go Into Effect Day! (okay, I’m sure there’s a better name for that).  Today, May 8, the HOA laws that were enacted this year go into effect.  Specifically, those laws:

  • include an amendment to the law regarding HOA records,
  • include an amendment to the law regarding HOA reserve fund money,
  • regulate how HOAs keep association funds,
  • clean up a couple of the required exceptions to certain rental restrictions,
  • codify that a management committee acts for an association, and
  • enacts provisions regarding a management committee that imposes sanctions or pursues legal action.

HOA Records

A change to the law this year requires an HOA to make certain documents available to homeowners free of charge, via the association’s website or at the association’s address, requires a homeowner to include certain information in a written request for records, establishes a penalty for the failure of an association to fulfill a request,  and provides that an association is not liable for erroneous documents identified or produced in good faith.

The law already required associations to keep certain records and make them available to homeowners who request them.  Now, the law also requires all associations to keep and make available to homeowners a copy of the association’s: (1) declaration and bylaws, (2) most recent approved minutes, and (3) most recent budget and financial statement.  Associations are required to make those documents available to owners, free of charge, through the association website, or, if the association does not have an active website, it must make physical copies of the documents available to owners during regular business hours at the association’s address registered with the Department of Commerce’s Utah HOA Registry.

If a homeowner wishes to view or copy other association records, then in a written request to the association, the homeowner must include certain information, including how the owner wishes to inspect or to copy the documents.  The owner may elect: (1) that the association or a third party duplicating service make the copies or electronic scans of the requested documents, or (2) that the owner be allowed to bring any necessary imaging equipment to the place of inspection and make copies or electronic scans of the documents while inspecting the documents, or (3) that the association email the requested documents to an email address provided in the request.

If an association produces the copies or electronic scans, the owner must pay the association the reasonable cost of the copies or electronic scans and for time spent meeting with the owner, which may not exceed the actual cost that the association paid to a recognized third party duplicating service to make the copies or electronic scans, or 10 cents per page and $15 per hour for the association employee’s, manager’s, or other agent’s time.

In addition to the penalties already in place for failure by an association to comply with this law, the new law imposes the additional penalty that an association must pay $25 per day for as long as the owner’s records request continues unfulfilled, beginning on the sixth day after a proper written request was made.

Finally, the new law states that an association is not liable for identifying or providing a document in error, if the association identified or provided the erroneous document in good faith.

See Utah Code Section 57-8-17 (condominiums) and Utah Code Section 57-8a-227 (non-condo HOAs).

Reserve Fund Money

A change goes into effect today to the law that prohibited an association from using money in a reserve fund for a purpose other than the purpose for which the reserve fund was established.  Effective today, an association may use money in a reserve fund for a purpose other than the purpose for which the reserve fund was established if a majority of association members vote to approve the use of reserve fund money for that purpose.

See Utah Code Section 57-8-60 (condominiums) and Utah Code Section 57-8a-211 (non-condo HOAs).

Association Funds

Starting today, associations are required to keep all of the association’s funds in an account in the name of the association, and an association may not commingle the association’s funds with the funds of any other person or entity.

See Utah Code Section 57-8-7.5 (condominiums) and Utah Code Section 57-8a-230 (non-condo HOAs).

Exceptions to Certain Rental Restrictions

Utah law requires certain exceptions when an association prohibits rentals or restricts the number and term of rentals in the association.  See Utah Code Section 57-8-10.1 (condominiums) and Utah Code Section 57-8a-209 (non-condo HOAs).

A couple of those exceptions were clarified this year.  The law use to say an owner “whose employer has relocated the owner for no less than two years” is exempt from the prohibition or restriction on the number and term of rentals.  This made little sense as a hardship-type exception.  A temporary, short-term job relocation is more likely to cause a hardship.  Long-term relocations are less in need of a hardship-exception because it’s less of a hardship to have to sell a home for a long-term relocation than a short-term relocation.  So, the statute now states an owner “whose employer has relocated the lot owner for two years or less” is exempt from the prohibition or restriction on the number and term of rentals.

Additionally, the new law clarifies that the exemption for owners who have a rental before a prohibition or restriction on the number and term of rentals is adopted terminates when the home is sold or otherwise conveyed (and defines what constitutes such a conveyance).

Miscellaneous

A couple of minor changes were passed that simply codify what was basically already true, at common law or otherwise.  Utah Code Section 57-8-59 states that a management committee acts in all instances on behalf of the association (except as otherwise stated in the association’s governing documents).  And Utah Code Section 57-8-10.7, in the Condo Act, was adopted to match a parallel section in the Community Association Act.  It states that a management committee must use its reasonable judgment to determine whether to exercise the association’s powers to impose sanctions or pursue legal action for a violation of the governing documents, and it specifies certain circumstances under which an association may not be required to take enforcement action.  And, finally, Utah Code Section 57-8a-212.5, in the Community Association Act, was adopted to match a parallel section in the Condo Act.  It states that owners must comply with the governing documents and enforcement may be sought by an association or an aggrieved owner through an action to recover money for damages, or injunctive relief, or both.

Contact Kimble Law for assistance with any of the issues addressed in these new laws, or for any association issues.

2 Comments | Enforcement, HOA Finances, New Condo Laws, New HOA Laws, New Non-Condo HOA Laws, Reserves | Tagged: , , | Permalink
Posted by Curtis G. Kimble

2017 Utah Legislative Session – HOA/Developer Issues

March 10, 2017

HOAs have not come out unscathed by the 2017 Utah general legislative session, which ended yesterday, March 9.  A new law was passed that requires an HOA to comply with rather onerous requirements before it may go after the developer for problems created by the developer.

House Bill 157 (HB 157 3rd Substitute) was passed stating that: (1) an HOA must comply with certain requirements before suing a declarant (the developer of the HOA) or a board related to a period of declarant control, and (2) certain provisions regarding open board meetings apply during the period of declarant control.

Requirements Before Association Can Sue Developer

The new laws enacted by HB 157 (Utah Code section 57-8-58 in the Condo Act and 57-8a-229 in the Community Association Act) require that an HOA may not, after the period of declarant control, sue a declarant (or a board of directors, or an employee, an independent contractor, or the agent of the declarant or the previous board of directors related to the period of declarant control), unless:

(1) the lawsuit is approved in advance at a meeting where owners of at least 51% of the allocated voting interests of the owners in the association are represented (i.e., a quorum of 51% of the voting interests);

(2) the lawsuit is approved either by (i) more than 75% of the voting interests of the owners who are represented (in person or by proxy) at the meeting; or by (ii) more than 51% of the total voting interests of the owners in the association; and

(3) the association first notifies the declarant (or person to be sued) and gives them an opportunity to cure the problem.

Additionally, before owners may vote to approve the lawsuit, the association must provide each owner:

(1) a written notice that the association is contemplating legal action; and

(2) after the association consults with an attorney, a written assessment of: (i) the likelihood that the legal action will succeed; (ii) the likely amount in controversy in the legal action; (iii) the likely cost of resolving the legal action to the association’s satisfaction; and (iv) the likely effect the legal action will have on an owner’s or prospective buyer’s ability to obtain financing for a lot or unit while the legal action is pending.

Finally, before the association commences the lawsuit, the association must allocate an amount equal to 10% of the cost estimated to resolve the lawsuit, not including attorney fees, and place it in a trust that the association may only use to pay the costs to resolve the lawsuit.

The statute does not apply to lawsuits where the amount being sued for is less than $75,000.

Open Board Meetings During Declarant Control

HB 157 also modifies Utah Code Section 57-8a-226 “Board meetings – Open meetings” which applies to community associations (inexplicably, the statute that applies to condominiums was not changed).

This statute requires every association except declarant-controlled associations to give 48 hours’ notice of board meetings to each owner who requests it, unless the meeting was provided for in a meeting schedule previously provided to the owner, or unless the meeting is to address an emergency.  The board meeting must be open to each owner, except for specific reasons (such as to discuss ongoing litigation or delinquent assessments).  The board must provide each owner an opportunity to offer comments at the board meeting.

The existing statute does not apply to an association during the period of declarant control, but the new statute requires that, during the period of declarant control, the association must hold at least one such board meeting a year as well as each time the association increases a fee or raises an assessment.  The requirements of Section 57-8a-226, subsections (1) through (3) (summarized above) will apply to such a board meeting.

Other laws were also passed which will be discussed in a different blog post.  Stay tuned.

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Posted by Curtis G. Kimble

New 2015 HOA Laws – Open Meetings

July 1, 2015

By Curtis G. Kimble.

Continuing our summary of the new laws affecting HOAs in 2015, effective July 1, 2015, both the Utah Condominium Ownership Act and the Utah Community Association Act require board meetings to be open to each homeowner (or homeowner’s designated representative).

Open Meetings; Exception.

Utah Code 57-8-57 (for condos) and 57-8a-226 (for non-condo HOAs) require open board meetings, with the exception that executive sessions may be closed to the owners for the following purposes: to consult with an attorney or to discuss ongoing litigation, personnel matters, contract negotiations, delinquencies, and matters involving an individual if privacy is required.

Comment Period at Meetings.

Additionally, at each board meeting, the board must provide each owner a reasonable opportunity to offer comments, but the board may limit the comments to one specific time period during the meeting and may limit the time allotted to each owner to comment.

Notice of Meetings.

If an owner has requested notice of a board meeting, the association must give written notice of a board meeting at least 48 hours before a meeting to the owner who requested it, unless notice of the meeting is included in a meeting schedule that was previously provided to that owner, or the meeting is to address an emergency and each board member receives notice of the meeting less than 48 hours before the meeting.

The notice to the owner must (i) be delivered to the owner by email, to the email address that the owner provides to the board or the association; (ii) state the time and date of the meeting; (iii) state the location of the meeting; and (iv) if a board member may participate by means of electronic communication, provide the information necessary to allow the owner to participate by the available means of electronic communication.

Exactly what constitutes a board meeting?

A board “meeting” means “a gathering of a board, whether in person or by means of electronic communication, at which the board can take binding action.”  (Utah Code 57-8a-102(16), 57-8-3(27)).  “Means of electronic communication” means an electronic system that allows individuals to communicate orally in real time, including web conferencing, video conferencing, and telephone conferencing (Utah Code 57-8a-102(15), 57-8-3(26)).

Action/decisions without a Meeting.

A meeting requires a gathering of the board in a way that they are communicating live and in real time.  It does not include actions or decisions taken without a meeting, as is commonly done by boards (most commonly through email).  However, specific requirements must be followed by a board in taking an action or making a decision without a meeting.  These requirements are spelled out (for associations that are nonprofit corporations) in Utah Code Section 16-6a-813, which, significantly, was also changed this year.

Under the prior law, a board could make decisions or take an action without a meeting if each member of the board either: (1) voted for the action, or (2) waived the right to demand that the decision/action be made or taken at a meeting and either voted against the action or abstained from voting.  Now, unanimous consent of the members of the board is needed for the action or decision being made or taken without a meeting, unless an association’s bylaws specifically provide that an action or decision may be taken without a meeting without the board unanimously consenting to the action or decision being made.

If the bylaws do authorize it, the statute sets out the required procedure for a board to make a decision or take an action without a meeting without the board unanimously consenting to the action or decision being made (regardless of any contrary procedure in your bylaws).  The statute requires notice to be sent to each member of the board containing certain items listed in the statute.   Then each member of the board has to either (1) sign a writing in favor of the action/decision, or (2) sign a writing against the action/decision, abstain in writing from voting, or fail to respond or vote or demand in writing that the action or decision be made at a meeting.  All of these “writings” and communications can be delivered electronically (e.g., as an email), in which case, the date on which such an electronic transmission is transmitted is considered the date on which the vote, abstention, demand, or revocation is signed.

Declarant/developer Controlled Associations.

The open meetings laws do not apply to associations that are still under “declarant” (developer) control (where the declarant appoints the board).

Penalty.

The law stipulates certain penalties and procedures if an association does not comply.  Essentially, an owner can make demand for compliance on the association stating which requirements the association has failed to comply with.  Then, if 90 days elapses without compliance after a proper demand, the owner may file an action in court for a court order requiring the association to comply and to pay a $500 penalty.  The court may also require that the prevailing party be reimbursed its costs and attorney fees by the non-prevailing party.

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Posted by Curtis G. Kimble

Free Movie Tickets to Max this Tuesday Night!

June 25, 2015

As many of you know, Richards, Kimble and Winn has merged with the national law firm Ball Janik LLP, although we are still the same people, same location, same great service!  As a thank you to our clients and potential clients, we are giving away 30 tickets to the showing of the movie Max on Tuesday, June 30, at 6:15 pm at Jordan Commons.

Each ticket includes one free popcorn and soda.  We will also be raffling off a $50 gift card before the movie starts.

See the trailer for Max.

The tickets will be given to the first 30 people who submit a request below.  You do not have to be a client, any HOA homeowner or board member (and guests) may request a ticket.

Request a Free Ticket to Max :

Date: Tues. 6/30/2015

Time: 6:15 pm

Location: Jordan Commons Megaplex, theater #16

Address: 9400 State St, Sandy, UT 84070

Fill in and submit this form.  If requesting more than one ticket fill in and submit the form for each person that will attend (the same email can be used).

(Submission Period Ended)

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Posted by Curtis G. Kimble

2015 Condo and HOA Laws – Fines

June 22, 2015

By Curtis G. Kimble.

This year was another busy year at the Utah legislature for the HOA world.  Many changes and additions were made to the statutes that govern condominiums, community associations and nonprofit corporations.  As always, refer to the UtahHOALaws app on your iOS device or Android device, or on the web at utahhoalaws.com for the current HOA statutes.

The most significant changes that affect HOAs are laws that:

  • Change how fines must be levied and collected,
  • Require board meetings to be open to the association membership,
  • Change what rental restrictions may be adopted by an association after May 12, 2015,
  • Set forth requirements and procedures for record keeping and making records available to members.

Fines.  

Utah Code 57-8a-208 for community associations (non-condo HOAs), and Utah Code 57-8-37 for condos, provides certain requirements for levying fines.  These laws went into effect May 12, 2015.

Before assessing a fine, the board must give the owner a written warning that:

  1. describes the violation;
  2. states the rule or provision of the association’s governing documents that the owner’s conduct violates;
  3. states that the board may assess fines against the owner if a continuing violation is not cured or if the owner commits similar violations within one year; and
  4. if the violation is a continuing violation, states a time that is not less than 48 hours after the day on which the board gives the owner the written warning by which the lot owner must cure the violation.

Then, a board may assess a fine if:

  1. within one year after the board gives written warning, the owner commits another violation of the same rule or provision identified in the written warning; or
  2. for a continuing violation, the owner does not cure the violation within the time period that is stated in the written warning.

Subsequent fines.  If permitted by the association’s governing documents, after the board assesses a fine against an owner, the board may, without further warning, assess an additional fine against the owner each time the owner:

  1. commits a violation of the same rule or provision within one year after the day on which the board assesses a fine for a violation of the same rule or provision; or
  2. allows a violation to continue for 10 days or longer after the day on which the board assesses the fine (thus, there must be a 10-day period between fines for continuous violations).

Note, as indicated for “subsequent fines,” it is important to have a schedule of fines or fining policy in place in the governing documents (if not in the CC&Rs, then in the rules or separate policy) that allows for levying more than one fine for the same violation without having to repeatedly provide notice first.  Contact us for help with that, if needed.

In my next post, I’ll discuss the new laws on open meetings and rentals.

5 Comments | Enforcement, New HOA Laws | Tagged: , , | Permalink
Posted by Curtis G. Kimble

New 2014 Utah HOA Laws

May 16, 2014

By Curtis G. Kimble.

A few new HOA laws went into effect earlier this week on May 13.  They are not too substantial and shouldn’t significantly alter your way of doing business, but they’re important to know about and comply with.

1.    S.B. 147 deals with rental restrictions.

This bill amended Utah Code Section 57-8-10 and enacted 57-8-10.1 in the Condo Act, and amended 57-8a-209 in the Community Association Act.  It prohibits an association from requiring a homeowner to:

A.  obtain the association’s approval of a prospective renter; or

B.  give the association:
(i) a copy of a rental application;
(ii) a copy of a renter’s or prospective renter’s credit information or credit report;
(iii) a copy of a renter’s or prospective renter’s background check; or
(iv) documentation to verify the renter’s age.

There is an exception if the association’s CC&Rs “prohibits or restricts occupancy of the lots by a certain class of individuals, the association may require a lot owner who owns a rental lot to give the association” those items in B above.  So, for instance, a 55 and older community could require a homeowner to give the association documentation to verify that at least one occupant is 55 or older.

2.    H.B. 26 deals with fines.

This bill amended Utah Code Sections 57-8a-208 and 57-8a-301 in the Community Association Act, and made a minor change in 57-8-37 and 57-8-44 in the Condo Act.

Appealing a Fine.  In the Community Association Act, it limits how and when an owner can appeal a fine that’s levied against the owner.  An owner has 30 days to request a hearing after a fine is levied, and then the owner has up to 6 months to appeal the fine by bringing a court action to challenge the fine.

When the Fine Becomes a Lien.  It further requires that a fine does not become a lien against a lot until, basically, seven months after the fine is levied (because the owner has 30 days to request a hearing before the board and then 180 days after that to bring a court action).   If, after that time, the owner has not sued to challenge the fine in court, the fine becomes a lien against the owner’s lot (if the owner has sued within that time, the fine does not become a lien until the court action is over).    Previously, the owner only had 14 days to request a hearing, an unpaid fine became a lien just like assessments (no 6-7 month waiting period), and the owner was not limited in the time they had to file a lawsuit to challenge the fine.

Condos.  There is nothing much new for condos.  The Condo Act already required that a fine does not become a lien against a unit until, basically, seven months after the fine is levied (because the owner has 30 days to request a hearing before the board and then 180 days after that to bring a court action) and limited an owner to a 6 month period to challenge the fine in court, but it’s now clear that if the owner has sued within that time, the fine does not become a lien until the court action is over.

3.    H.B. 350 deals with removal of board members.

This bill amended Utah Code Section 16-6a-808 in the Nonprofit Corporation Act.  This section provides the requirements to remove a board member (director) from office.  The old section was problematic because (a) it didn’t defer to the association’s bylaws if the bylaws provided a different method for removing a director (the Nonprofit Act should let associations decide for themselves how they want certain things handled and should simply be a default when an association’s bylaws are silent on an issue), and (b) it led to a great deal of confusion because it was not clear how many votes were necessary to remove a director when directors were elected by a plurality vote (where the candidates receiving the most votes win).  Most homeowner associations use plurality voting for electing directors.

The new law states that “unless otherwise provided in the bylaws,” a director may be removed by the vote of a majority of the members entitled to vote.  So, the provisions in your bylaws will govern and apply first and foremost, but if your bylaws are silent, more than 50% of the members have to vote to remove a director in order for that director to be removed from office.

The Utah HOA Law App has been updated with all the new laws and will automatically update on your iphone or Android device when you open the app.  iPad app users will have to update the app itself, which should be available in the App Store in the next week or two.

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Posted by Curtis G. Kimble

Construction Defects? Utah’s First Choice for Help

November 9, 2013

Let’s take care of your construction defect issues.

Construction defects can be extremely expensive to fix; can cause your property to deteriorate; decrease your property values; and can subject your community to substantial future special assessments!  Obviously, as a board, you want to do your best to avoid these problems – and fix them when they are discovered.

Kimble Law is pleased to announce the ability to handle your community’s construction defect issues!  Kimble Law has formed a strategic partnership with Ball Janik LLP, which has helped many associations obtain recoveries for construction defects.  While Kimble Law remains your “go to” general HOA law firm, we have teamed up with experienced, successful and knowledgeable attorneys who have a deep understanding of construction issues relating to HOAs of all types.

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Posted by John Richards, Esq

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