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).
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Excellent summary, Curtis, as I’ve found it difficult plodding through, and referring back & forth between the Community Assoc. Act and the Non-profit act.
We have a small community of 75 homes. We have someone who is running to be on the HOA board. This person has no ownership in the home. The homeowner is his wife. She has signed a proxy for her husband to be on the board. Wondering if this is legal or if the person running for a position as board member needs to be a homeowner?
I cannot comment on your particular situation because I cannot give legal advice via these comments but there is no law that requires a board member to be a homeowner. Some CC&Rs and bylaws require a board member to be a homeowner, so it will depend on what the association documents say. Incidentally, a “proxy” or similar document would have no effect or validity if the CC&Rs or bylaws require a board member to be a homeowner. Such a requirement is not something that can be overcome with a proxy (or power of attorney or anything else). With such a requirement in the CC&Rs or bylaws, only the homeowner can serve on the board.
Who can I contact for questions about an hoa and specific rules governed by the Utah community association act?
You may ask questions by using the form about halfway down on the About/Contact/Questions page in the top menu or go here: https://utahhoalawblog.com/about/.
Are there any laws that prohibit an HOA from denying a home business that meets state, county and city guidelines? Particularly in single family homes, non-gated community. Our HOA has just shut down a preschool that serves our community. Now parents will be forced to load children in cars, drive them to a school outside our community. This now creates more traffic, adds to our inversion and takes children out of our community. Our state is already at a deficit concerning quality childcare. They closed it because one homeowner complained, there was no chance given to find a solution. The whining of one should not out weight the need of many.
No, the law doesn’t prohibit a group of homeowners from agreeing among themselves, via CC&Rs, to not operate businesses from their homes and the law doesn’t prohibit an HOA run by those homeowners from enforcing such a restriction in the CC&Rs. The CC&Rs are a contract between the homeowners and are recorded against each home so that when a homeowner buys their home, they know what restrictions are in place and can base their purchase on that.
But, if the homeowners change their minds at some point and want to allow businesses to operate from their homes or to allow exceptions, they simply need to amend their agreement (the CC&Rs) by following the process for amending in the CC&Rs.