New 2026 HOA Laws and What They Mean For Your HOA

May 7, 2026

The Utah general legislative session for 2026 was January – March 2026.  All of the following laws go into effect May 6, 2026.

What a Declaration May Not Contain

Senate Bill 122 (2026) enacts the most significant change.  It contains a new set of restrictions on what a declaration (CC&Rs) may contain. Previously, many of these restrictions applied only to rules adopted by a board. Now, those same restrictions apply to CC&Rs as well, meaning that even if a provision is in the CC&Rs, it cannot be enforced if it violates the statute.

A declaration may not:

  • prohibit a unit owner from displaying in a window of the owner’s unit a for-sale sign, a political sign, or a flag;
  • regulate the content or design criteria of a political sign or flag, except to restrict one that contains obscene, profane, or commercial content;
  • prohibit low water use on lawns during drought conditions;
  • except where reasonably necessary for erosion control, prohibit or restrict the conversion of a grass park strip of less than eight feet wide to water-efficient landscaping;
  • prohibit a unit owner from making modifications, consistent with industry standards and regulations, for radon mitigation;
  • restrict an individual from parking an operable vehicle in a driveway where the vehicle has a legal right to park, unless the vehicle is a commercial vehicle, a motor home, a recreational vehicle trailer, a trailer, an off-highway vehicle, special mobile equipment (as defined in § 41-1a-102), or a motorboat, as each of those vehicles are defined by statute;
  • restrict an individual from operating a vehicle, that is not a commercial vehicle, in accordance with state traffic laws;
  • impose a requirement or restriction on the use of a public street;
  • restrict an individual from installing, displaying, or storing an item that the individual has a legal right to store if the item is not visible to an individual standing outside the unit;
  • restrict an individual from hiring a contractor or worker solely because the contractor or worker is not on the association’s preferred vendor list or does not have a professional or occupational license, unless the license is required by law;
  • restrict a unit owner from displaying a religious or holiday sign, symbol, or decoration on the unit, or on the exterior of the unit, unless the association has an ownership interest in, or maintenance, repair, or replacement obligation for the exterior (which virtually all condo associations do and many noncondos, as well);
  • interfere with reasonable activity of a unit owner within the confines of the unit, to the extent the activity complies with local laws and ordinances, including nuisance laws and ordinances;
  • prohibit the transfer of a unit or require the consent of the association or management committee to transfer a unit;
  • prohibit a unit owner from installing a personal security camera immediately adjacent to the entryway, window, or other outside entry point of the unit;
  • impose a restriction on a unit interior, except as reasonably necessary for the safety of adjacent units and the occupants; or
  • restrict an individual from installing or keeping a properly maintained basketball standard on the individual’s driveway or property if the driveway or property is privately owned and maintained and abutting a public street.

CC&Rs may still: require an individual to park in a garage appurtenant to a unit before parking elsewhere; enforce a reduced speed limit on a private roadway; reasonably regulate the size and time, place, and manner of posting a for-sale sign, political sign, or flag; reasonably regulate the time, place, and manner of religious or holiday displays outside the unit or visible from outside the unit; and restrict a sex offender from accessing a protected area.

These same restrictions apply in the Community Association Act (for non-condo HOAs) through parallel amendments to Utah Code § 57-8a-212.

See Utah Code §§ 57-8-10 or 57-8a-212.

Driveway Parking: Expanded List of Restricted Vehicles

Both the rules statute and the new declaration restrictions expand the list of vehicles that can be restricted from parking in a driveway. Previously, rules could restrict commercial vehicles, motor homes, and recreational vehicle trailers from driveway parking. The bill adds four more categories: trailers (as defined in § 41-1a-102), off-highway vehicles (as defined in § 41-22-2), special mobile equipment (as defined in § 41-1a-102), and motorboats (as defined in § 73-18-2). This expanded list applies to both rules and CC&Rs, in both condos and community associations.

See Utah Code §§ 57-8-8.1 or 57-8a-218.

Additionally, in community associations, a rule can’t prohibit a lot owner from removing vegetation from the owner’s lot if the lot is within a designated wildland-urban interface area, as defined in Utah Code Section 65A-1-1.

See Utah Code § 57-8a-218

Applicability of the Condo Act and the Community Association Act

SB 122 establishes the conditions under which the Condo Act or the Community Association Act applies to an association, which should resolve confusion about which statute governs a particular community. The Condo Act applies if the association’s declaration states that the Condo Act applies, or, if the declaration doesn’t state which chapter applies, if the plat of the association is designated as a condominium plat. The Community Association Act applies to an association (as “association” is defined in the Act) if the association’s declaration states that the Community Association Act applies, or, if the declaration doesn’t state which chapter applies, the plats are not designated as condominium plats. These provisions apply regardless of when an association is created.

See Utah Code §§ 57-8-2 and 57-8a-103.

Records

SB 122 makes a few small changes to the records statutes.

Response Time. The time for an association to comply with a records request under Sections 57-8-17 or 57-8a-227 is now 10 business days (previously two weeks).

Penalty Timing. The penalty that an association must pay to an owner for each day a records request continues unfulfilled now begins on the 11th business day after the request (previously, the 6th day).

Records Are Property of the Association. The bill now explicitly states that the records an association is required to keep and the funds contained in an association’s account are considered property of the association. If a person other than the association has control over or possession of those records, the person must provide the records to the association upon request, without charge. This is significant for situations where a prior manager or board member has the association’s records and won’t give them back.

See Utah Code §§ 57-8-17 and 57-8a-227.

Budget

Condominiums. SB 122 enacts a new provision for condo associations requiring the management committee to prepare and adopt an annual budget and present it to the members at a meeting. A budget is disapproved if within 45 days after the meeting at which the budget is presented, at least 51% of all the allocated voting interests vote to disapprove the budget at a special meeting called for that purpose. If the budget is disapproved or not adopted, the last adopted budget continues until a new one is adopted. This brings condos in line with community associations, which have had a similar provision for several years.

Community Associations. The bill removes the provision from the budget statute that stated members may not disapprove a budget during the period of declarant control. Now, members may disapprove a budget even while the developer controls the association. Additionally, the bill clarifies that if a budget is not adopted, the last adopted budget continues until a new one is adopted.

See Utah Code §§ 57-8-7.6 and 57-8a-215.

Transfer Fees and Reinvestment Fees

Both SB 122 and House Bill 306 amend the transfer fee statute (Utah Code § 57-1-46).

Administrative Setup Fee (SB 122). SB 122 renames “association transfer fee” to “administrative setup fee.” Substantively, it requires that if a manager collects an administrative setup fee, the manager must provide to the association an annual accounting of each administrative setup fee the manager collects in a calendar year. The accounting is due no later than December 31 each year.

Reinvestment Fee Caps (HB 306). HB 306 introduces a new concept: the “low-amenity association,” defined as a common interest association that is comprised of only detached single-family homes and does not provide capital-intensive infrastructure maintenance services to its members. “Capital-intensive infrastructure maintenance” means maintenance of infrastructure or facilities that the association owns, operates, or maintains and that have a projected useful life exceeding five years, require periodic replacement or major rehabilitation, and reasonably require advance funding through capital reserves. It does not include routine maintenance, landscaping, signage, or perimeter fencing.

Under the prior law, a reinvestment fee covenant could not require a fee exceeding 0.5% of the value of the property, unless the property was part of a large master planned development. Now, for reinvestment fee covenants recorded on or after May 6, 2026, the cap is 0.5% of the value of the burdened property for associations that are not low-amenity associations, and 0.25% of the value of the burdened property for low-amenity associations. As before, large master planned developments are exempt from the cap.

50% to Reserves (HB 306). If the association is not a large master planned development, the association must deposit at least 50% of a reinvestment fee into reserve funds. This is a new requirement added to the conditions for imposing a reinvestment fee.

See Utah Code § 57-1-46.

Registration with the HOA Registry

SB 122 removes the requirement that a board member or president of an association provide a physical address to the Department of Commerce. Now, only the name, telephone number, and email address (if applicable) are required. Contact information for the manager is also required.

Additionally, HB 306 requires that when an association registers (or renews or updates its registration), it must state whether or not the association imposes a reinvestment fee or a transfer fee.

See Utah Code §§ 57-1-46, 57-8-13.1 and 57-8a-105.

HOA Ombudsman

SB 122 makes some minor tweaks to the HOA Ombudsman statute that was enacted in 2025.

Nonrefundable Filing Fee. The $150 filing fee is now explicitly stated to be nonrefundable. Additionally, the previous requirement that the party requesting the advisory opinion pay the filing fee unless the office rules in their favor, in which case all parties split the cost, has been repealed. Now, the requesting party simply pays the nonrefundable $150 fee.

No Binding Arbitration Prerequisite. An association may not require that a person engage in binding arbitration before requesting an advisory opinion from the office. A person requesting an advisory opinion is still required to exhaust all existing dispute resolution procedures in the governing documents, but binding arbitration does not count.

Request Requirements. A request for an opinion must now describe the alleged act that is the subject of the opinion and the impact of that alleged act on the person making the request.

Civil Penalty Changed. Previously, if the qualifying conditions were met (the office issues an advisory opinion, the same issue is then litigated in court, and the court rules in favor of the same party), the court could award a civil penalty of $250 for each day beginning 30 days after the advisory opinion was delivered. Now, the court may award a civil penalty of up to $5,000 total. The daily accrual provision has been eliminated.

See Utah Code §§ 13-79-103 and 13-79-104.

Developer (Declarant) Provisions

Condo Declarant Duties. SB 122 codifies declarant duties during the period of administrative control for condominium associations (the same duties were codified for community associations last year). During the period of administrative control, the declarant must: use reasonable care and prudence in managing and maintaining the common areas and facilities; establish a sound fiscal basis for the association by imposing and collecting assessments and establishing reserves; for a service that the association is or will be obligated to provide, disclose to the owners the amount of money the declarant provides for or subsidizes for that service; comply with and enforce the terms of the declaration; and disclose to the owners all material facts and circumstances affecting the condition of the property the association is responsible for maintaining and the financial condition of the association.

See Utah Code §§ 57-8-16.5 and 57-8a-502.

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

  • Review your CC&Rs. If your declaration contains any of the restrictions that are now prohibited (such as prohibiting for-sale signs in windows, restricting driveway parking beyond what’s allowed, restricting contractor hiring, prohibiting basketball standards on private driveways abutting a public street, or imposing restrictions on unit interiors), those provisions are no longer enforceable.
  • If your association charges a reinvestment fee and/or an administrative setup fee,
    • If your manager collects administrative setup fees (formerly called association transfer fees), ensure the manager provides the association an annual accounting of those fees by December 31 each year,
    • Update your HOA Registry information to disclose whether your association imposes a reinvestment fee or a transfer fee.
    • if the association is not a large master planned development, at least 50% of each reinvestment fee must be deposited into reserve funds. Also, if your association is a low-amenity association (detached single-family homes only, no capital-intensive infrastructure maintenance), the reinvestment fee cap is 0.25% of the property value for covenants recorded on or after May 6, 2026, rather than 0.5%.
  • Ensure your condo association has an adopted budget. Condo boards are now required to prepare and adopt an annual budget, if they aren’t doing so already.
  • If you are a community association, ensure you don’t have a rule in place that prohibits a lot owner from removing vegetation from the owner’s lot if it is within a designated wildland-urban interface area.

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Posted by Curtis G. Kimble

New 2025 HOA Laws and What They Mean For Your HOA

May 7, 2025

The Utah general legislative session for 2025 was January – March 2025.  All of the following laws go into effect May 7, 2025.

HOA Registry – Annual Renewal Required

House Bill 217 (2025) requires a homeowner association to renew its registration with the Utah HOA Registry annually, instead of just when there is a change in its information.  So, previously, an association had to register with the HOA Registry and then had to update its information within 90 days every time there was a change, such as when a board member changed.  Now, an association must renew its registration each year and pay an annual fee set by the Department of Commerce (likely around $90), and it must update its information within 90 days every time there is a change.  See Utah Code § 57-8a-105 or 57-8-13.1, as applicable

Rules

A rule is a restriction that governs conduct or property and that is adopted by a board, rather than by a vote of the owners, and does not include restrictions in the CC&Rs (declaration) or bylaws.

House Bill 217 (2025) says a rule:

  • can’t prohibit an owner from displaying a flag in a window of a condominium unit, or on a lot, a dwelling exterior or the front yard of a dwelling, regardless if the association owns the yard.  But, a rule may regulate the size of flags and the time, place and manner a flag is displayed.  The bill does not define “flag.”  A rule can’t regulate the content or design criteria of a flag, but may restrict a flag that contains obscene, profane, or commercial content.  
  • can’t prohibit an owner from parking in the owner’s driveway, if otherwise legal, unless it’s a commercial vehicle as defined in Section 72-9-102, or a motor home as defined in Section 13-20-2, or a travel trailer, camping trailer, or fifth wheel trailer.  Inoperable vehicles can be prohibited from a driveway and parking in a garage may be required before parking elsewhere.
  • can’t regulate parking on a public street or the use of a public street.
  • can’t restrict a resident from installing, displaying or storing an item that is not visible to someone standing outside the unit or lot.
  • can’t restrict an owner from hiring a contractor solely because the contractor is not on a preferred vendor list or doesn’t have a license, unless a license is required by law.
  • can’t impose a late fee of more than the greater of 10% of the assessment amount or $50, or interest of more than 1.5% per month (18% per annum) for late assessment payments.  Current law states that if the governing documents don’t impose interest on an unpaid assessment, interest accrues at 10% per annum.  (See § 57-8a-301 or 57-8-44).  HB 217 says a board can establish a late fee and interest for late payments by rule.  So, if the CC&Rs don’t impose a late fee or interest, and the association would like to charge a higher interest rate than the default 10%, the board can adopt a rule to do so.  If a late fee or interest are imposed by rule (rather than by the CC&Rs or other governing document that is not adopted by the board), the late fee and interest are capped at those amounts, and before imposing the late fee, the board must formally adopt the fee by rule (and follow any required procedures to adopt a rule) and provide a copy to each owner.  Additionally, in condos, if the board relies on the statute (rather than the CC&Rs) for authority to impose a payment, fee or charge for the use, rental, or operation of the common areas or a service provided to an owner, the fee must be formally adopted by rule and provided to each owner.  Utah Code § 57-8a-201 & 57-8-8.1(5).

See Utah Code § 57-8a-218 or 57-8-8.1.

Additionally, in community associations, a rule

  • can’t prohibit a back yard vegetable garden if the association doesn’t own or maintain the back yard, but it can regulate the vegetable garden to some degree that doesn’t significantly increase the cost or significantly decrease the efficiency of the garden.
  • can’t prohibit a basketball standard on individually-owned property that abuts a public street.

See Utah Code § 57-8a-218

Rentals

Senate Bill 201 (2025) modfies Utah Code § 57-8a-209 and 57-8-10.1 to say:

  • A rule may establish a minimum lease term of six months or less.
  • If a rule requires owners to pay a fee to rent their unit:
    • Before charging the fee, (1) a board meeting must be held to discuss and allow owners to comment on the administrative expenses that the association intends to cover with the fee, and the circumstances that require imposing or increasing the fee; (2) at the board meeting, the board must approve the fee by a majority vote; (2) the association must give notice of the board meeting to every owner 15 days before the meeting. 
    • Within 30 days of adopting the fee, the association must give notice to each owner impacted by the fee describing the “new administrative expenses” that the association intends to cover with the fee, and the circumstances that require imposing or increasing the fee.  An owner may contest the fee if the association doesn’t give the notice.
    • The same required exemptions from the rental restrictions apply to the fee.
    • The fee can only be charged once every 12 months.
    • By way of reminder, the existing law says an association can only charge an owner a fee up to $200 to rent a unit if the association incurs additional administrative expenses directly related to the rental and if at least 35% of the units are allowed to be rented.
  • An owner of a rental may designate in writing a primary contact whom the association may communicate with as if they are the owner.  If an owner designates a primary contact, the association must give the owner written notice that confirms the records have been changed to identify the primary contact.

Transfer Fees (inluding reinvestment fees)

House Bill 217 (2025) amends the transfer fee statute that applies to HOAs, but it should not change anything for an HOA that has already properly adopted a transfer fee (a.k.a. a reinvestment fee).  In short, if the fee is used to pay expenses related to the transfer of the property, the fee does not need to be approved by a vote of the owners or contained in the CC&Rs.  If the fee simply goes into the general coffers of the association, the fee must be authorized in the CC&Rs (or similar document approved by a vote of the owners).

The statue separates and defines those two types of fees:

  • An “association transfer fee” is a fee charged by an association upon transfer of a unit or lot relating to the sale of the unit or lot that is used to pay expenses related to the transfer.
  • A “reinvestment fee” is a fee imposed, directly or indirectly, by an association upon a buyer or seller upon transfer of a unit or lot, and that is dedicated to benefiting the common areas (including payment for association expenses).

In order to charge an “association transfer fee,” approval of the owners is not required.  In order to charge a “reinvestment fee” after May 6, 2025, the fee must be authorized in the declaration (CC&Rs) or a separately recorded covenant and must be approved by a majority of the voting interests or a higher percentage if required in the governing documents.  The separately-recorded notice of the fee is still required.  The amount of the fee must be set in accordance with the CC&Rs or covenant.  The owners may disapprove a reinvestment fee by following a procedure specified in the statute. 

See Utah Code § 57-1-46.

HOA Ombudsman

House Bill 217 (2025) establishes the Office of the Homeowners’ Association Ombudsman, which will issue advisory opinions regarding compliance by an association or owner with statutes applicable to associations and owners.  If an owner or an association are involved in a dispute relating to a violation of a state statute, the owner or association may request an advisory opinion on the issue if: (1) a lawsuit has not yet been filed (or binding arbitration begun), (2) no more than one year has passed since the requester knew or should have known about the act or issue that is the subject of the dispute, (3) the requester has exhausted all existing procedures in the governing documents, other than binding arbitration or a lawsuit, and (4) a $150 filing fee is paid.

The Ombudsman’s office will only issue an advisory opinion when there is an active dispute over an issue between two or more parties and only for issues relating to a violation of a state statute.  The office will not review contract disputes or interpret the governing documents of an association.

An advisory opinion issued by the Ombudsman is not binding on any party and is not admissible as evidence in a dispute, except that if the issue that is the subject of the advisory opinion is then litigated in court and the court rules in favor of the same party as the advisory opinion, the court may award the winning party: (1) attorney fees and court costs from the date of the advisory opinion, and (2) if the court finds that the other party knowingly and intentionally violated the law at issue, a penalty of $250 for each day beginning the later of: (i) 30 days after the advisory opinion is given, or (ii) the day the action is filed in court.

See Utah Code Title 13, Ch. 79, Part 1.

Records

House Bill 86 (2025):

  • increased the penalty that an owner may request a court to require an association to pay if the association fails to make documents available to the owner as required by law or its governing documents from $500 to $1000 (or actual damage, whichever is greater);
  • increased the hourly rate an association can charge an owner for an employee’s or agent’s time making copies in response to a records request by the owner from $15 to $20; and
  • changed whether the winning party in a records request lawsuit will be granted the attorney fees and costs they incur (meaning that the losing party in the lawsuit is required to pay the winner’s attorney fees and costs).  Previously, a court was required to award the prevailing party those fees and costs, but now the law says the court may do so. So now it’s up to the court whether to award those fees and costs. So, for instance, if the association wins the suit, the court may require the owner to pay the association’s attorney fees and costs. See Utah Code Sections 57-8a-227(6) or 57-8-17(6). Note, a different subsection of the statute, subsection (5), says an association is required to pay attorney fees and costs incurred by an owner in obtaining the documents if the association fails to comply with the statute when responding to the request. So, if a court finds an association did comply with the statute, the association does not have to pay those attorney fees and costs. But, if a court finds the association didn’t comply with the statute, the association is required to pay those fees and costs under subsections 57-8a-227(5) or 57-8-17(5). So, the bill changed whether a court is required to award attorney fees and costs to the winning party (which could be the association or the owner), but not whether an association that fails to follow the statute when responding to a records request must pay the attorney fees and costs an owner incurs trying to obtain the records.

House Bill 217 (2025):

  • added two financial statements to the list of records an association must keep and make available to owners who request them, a profit and loss statement and balance sheet for the previous three fiscal years;
  • specifies that an associaition must comply with a request for records by an owner under 57-8a-227(3) within two weeks after the day the association receives the request.  Previously, there was no specific time period for some records.  The records that are required to be always available haven’t changed; 
  • says an association can’t charge for the cost of electronic transmission of documents requested by an owner;
  • allows an association to comply with a request by posting the documents to the association’s website or online owner portal.

See Utah Code § 57-8a-227 or 57-8-17.

Architectural Review

House Bill 217 (2025) requires that if an association denies architectural plans, the association must give written notice to the owner specifying: 

  • each governing document provision that the association relied on when denying the plan, and
  • the specific aspect of the proposed plan that does not conform to that governing document provision.

Additionally, in community associations, an association may not restrict or deny a plan due to the plan’s inclusion of a fire-resistant material in an area with heightened risk of wildfire.  “Fire-resistant material” means a material designed and tested to resist ignition, slow the spread of fire, or withstand high temperatures, including: (i) Class A roofing; (ii) non-combustible siding; (iii) a fiber cement product; (iv) metal roofing; or (v) fire-rated gypsum board.

See Utah Code § 57-8a-109 or 57-8-6.7

Water

Senate Bill 201 finishes a sentence in the existing Community Association Act that just sort of trailed off and created a rather large ambiguity about whether an association could require grass on a lot.  For some reason, last year the statute was changed from saying, “An association may not require a property owner to install or keep in place lawn or turf in an area with a width less than eight feet,” to deleting the last seven words and simply saying, “An association may not require a lot owner to install or keep in place lawn or turf in an area.”  SB 201 adds those words “less than eight feet wide” back in.  So, now it reads, “Except where reasonably necessary for erosion control, an association may not require a lot owner to install or keep in place lawn or turf in an area less than eight feet wide.”

See Utah Code § 57-8a-231 or 57-8-8.1.

Amendment of Declaration

House Bill 217 (2025) imposes a minimum number of owners that must approve an amendment to the CC&Rs (declaration), as well as a minimum quorum requirement, but it doesn’t apply if your documents require a higher number of owners.  The law only applies after the period of administrative control by the developer.

The bill establishes that the minimum number of owners that must participate in a vote to amend the declaration (the quorum requirement) is 51%, or a higher percentage if required in the CC&Rs.  So, in the rare instance that an association’s CC&Rs say the CC&Rs can be amended where a quorum of less than 51% of the owners participate, this statute overrides that requirement and makes it inapplicable.  If the CC&Rs say the CC&Rs can be amended with a quorum that is more than 51% of the owners, this statute has no effect.  For instance, if the CC&Rs require a quorum of 55% of the owners, then the 55% quorum is still required. 

Then, as to the vote itself, the bill establishes that the minimum number of votes that can approve an amendment to the declaration is a majority vote of the voters where at least 51% of the owners participate. “Voters” means owners that actually cast a vote. 

For instance, if the CC&Rs require approval of a majority of voters that vote in a proceeding where at least 30% of the owners participate, the association has 150 owners, 45 owners are present and cast a vote, and 23 vote in favor of amending, that would be sufficient under the CC&Rs to amend before this law.  Now, at least 77 owners must be present (51% of 150) and if 70 of those cast a vote, 35 must vote in favor (a majority of 70).

If the CC&Rs require a higher threshold than this statute, the statute has no effect.  For instance, if the CC&Rs require approval of 60% of the owners and the association has 150 owners, at least 90 affirmative votes (60% of 150) are needed for the amendment to pass (and it doesn’t otherwise matter how many owners vote).

Finally, the bill makes clear that a board alone cannot amend CC&Rs.

Key Point:  If your CC&Rs require approval of an amendment to the CC&Rs by a majority vote of the voters or more, and that a quorum of at least 51% of the voting interests must participate, this statute has no effect for your community.

See Utah Code § 57-8a-104 or 57-8-39.

Solar

House Bill 119 (2025) lowers the percentage of owners required to approve a change to CC&Rs that prohibit solar installations on a lot with a detached dwelling from “greater than 67%” to “at least 51%.”  Also, an association may not prohibit solar installations unless at least 67% of the owners approve the prohibition in an amendment to the CC&Rs (this was changed from “greater than 67%” to “at least 67%”).

Developer

Developer Duties

In 2009, the Utah Supreme Court ruled that a developer owes certain fiduciary duties to an association until the developer relinquishes control of the association.  Those fiduciary duties have now been codified into Utah Code § 57-8a-502 by House Bill 217 (2025) for community associations.

During the period of administrative control of an association, the developer must:

  • use reasonable care and prudence in managing and maintaining the common areas;
  • establish a sound fiscal basis for the association by imposing and collecting assessments and establishing reserves for the maintenance and replacement of common areas;
  • for a service that the association is or will be obligated to provide, disclose to the owners the amount of money the declarant provides for or subsidizes for that service;
  • maintain records and account for the financial affairs of the association from the association’s inception;
  • comply with and enforce the terms of the declaration, including design controls, land-use restrictions, and the payment of assessments; and
  • disclose to the owners all material facts and circumstances affecting:
    (1) the condition of the property that the association is responsible for maintaining, and
    (2) the financial condition of the association, including the interest of the developer and the developer’s affiliates in any contract, lease, or other agreement entered into by the association.

Developer Control Period

Additionally, in community associations, the default for when the period of administrative control terminates is changed to 60 days after the day on which 80% of the lots that may be created in the association are conveyed to owners (unless otherwise stated in the CC&Rs).  Regardless of what the CC&Rs say, the period of administrative control ends on the earlier of: (a) when the developer no longer owns any lot and no longer possesses any development right, or (b) seven years after the day on which the developer has stopped offering lots, including lots that may be created, for sale in the ordinary course of business.

While the developer is still in control of the association, the developer can’t use money paid by homeowners to fight a lawsuit that homeowners have filed against them.

Finally, a developer may not sell any of the common areas during the period of administrative control, except in the same way an association may as provided in Section 10-9a-606 or 17-27a-606, or as allowed by the Condo Act.

See Utah Code §§ 57-8a-502, 57-8a-229, 57-8-58, 57-8a-232 and 57-8-32.

Finally, Senate Bill 201 requires that, in order to sue a developer for defective construction, a condo unit owner must first provide notice to the developer describing the defective construction and requesting repairs and then allow nine months for the repairs to be made.  See Utah Code § 78B-4-513.

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

  • Make sure the association always has a profit and loss statement and balance sheet for the previous three fiscal years.
  • Review your rules and revise as necessary if the rules:
    • prohibit flags,
    • prohibit an owner from parking in the owner’s driveway,
    • regulate parking on a public street or the use of a public street,
    • restrict items that are not visible to someone standing outside a unit or lot,
    • require using a contractor from a preferred vendor list or that has a license, unless a license is required by law,
    • restrict vegetable gardens in the backyard of property the association doesn’t own or maintain,
    • prohibit a basketball standard on individuallly-owned property that abuts a public street.
  • If a late fee and interest aren’t authorized in the CC&Rs and the board imposes a late fee and interest, ensure they don’t exceed the cap and ensure the late fee is formally adopted in a rule with a copy provided to each owner.  Additionally, for condos, any fee charged for the use, rental, or operation of the common areas and any fee charged for a service provided to a unit owner must be included in a rule provided to each owner.
  • Ensure your association renews its registration with the HOA Registry annually now, instead of just after changes.
  • If the association charges a fee to owners of rental units, make sure to follow the process outlined above.
  • If the association charges a transfer fee (a.k.a. reinvestment fee) that benefits the association generally (e.g., goes into the general fund or reserve fund), rather than paying expenses associated with transferring title to a lot or unit, ensure the fee is authorized in a recorded covenant (such as the CC&Rs) approved by at least a majority of the voting interests of the owners.
  • Don’t reject an architectural review plan submitted by an owner without notifying the owner of the specific governing document provisions relied on when denying the plan and the specific aspect of the proposed plan that does not conform to those governing document provisions.
  • If you are a community association, don’t refuse to allow fire-resistant materials that are proposed in an architectural plan.

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Posted by Curtis G. Kimble

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.

11 Comments | Governance, New HOA Laws, Uncategorized | Tagged: , , | Permalink
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

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