S.B. 262

1

REAL PROPERTY AMENDMENTS
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Mark B. Madsen
5 House Sponsor: Kenneth W. Sumsion
6
7 LONG TITLE
8 General Description:
9 This bill provides restrictions on the use of arbitration in condominium projects and
10 community associations.
11 Highlighted Provisions:
12 This bill:
13 . prohibits arbitration in condominium and community association developments
14 unless the relevant governing documents, bylaws, rules, or separate agreement allow
15 arbitration;
16 . addresses the remedies for a party objecting to a prohibited arbitration; and
17 . makes technical changes.
18 Monies Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 None
22 Utah Code Sections Affected:
23 AMENDS:
24 57-8-38, as last amended by Chapter 90, Laws of Utah 2004
25 ENACTS:
26 57-8a-209, Utah Code Annotated 1953
27

28 Be it enacted by the Legislature of the state of Utah:
29 Section 1. Section 57-8-38 is amended to read:
30 57-8-38. Arbitration.
31 (1) The declaration, bylaws, or association rules may provide that disputes between the
32 parties shall be submitted to arbitration pursuant to Title 78, Chapter 31a, Utah Uniform
33 Arbitration Act.
34 (2) A dispute concerning a condominium may be submitted to arbitration only if
35 allowed by the declaration, bylaws, association rules, or an agreement signed by each party to
36 the arbitration or each party's predecessor-in-interest.
37 (3) If a matter is submitted to arbitration in violation of Subsection (2):
38 (a) any document arising from the arbitration that is recorded and in any way
39 encumbers the property of any person who objects to the arbitration constitutes a wrongful lien
40 for purposes of Title 38, Chapter 9, Wrongful Liens and Wrongful Judgment Liens; or
41 (b) any person who suffers damage and objects to the arbitration has a civil action for
42 actual damages, costs, and attorney fees against the person who institutes the arbitration
43 proceeding.
44 Section 2. Section 57-8a-209 is enacted to read:
45 57-8a-209. Arbitration.
46 (1) The governing documents may provide that disputes between the parties shall be
47 submitted to arbitration pursuant to Title 78, Chapter 31a, Utah Uniform Arbitration Act.
48 (2) A dispute concerning a lot may be submitted to arbitration only if allowed by the
49 governing documents or an agreement signed by each party to the arbitration or each party's
50 predecessor-in-interest.
51 (3) If a matter is submitted to arbitration in violation of Subsection (2):
52 (a) (i) any document arising from the arbitration that is recorded and in any way
53 encumbers the property of any person who objects to the arbitration constitutes a wrongful lien
54 for purposes of Title 38, Chapter 9, Wrongful Liens and Wrongful Judgment Liens; or
55 (ii) any person who suffers damage and objects to the arbitration has a civil action for
56 actual damages, costs, and attorney fees against the person who institutes the arbitration
57 proceeding; and
58 (b) the arbitrator's decision is not valid or binding on the parties.

Legislative Review Note
as of 2-9-07 11:48 AM

Office of Legislative Research and General Counsel