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!