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