S.B. 278 Enrolled

1

HOMEOWNERS' ASSOCIATION AMENDMENTS
2 2010 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Stephen H. Urquhart
5 House Sponsor: Don L. Ipson
6
7 LONG TITLE
8 General Description:
9 This bill enacts provisions relating to condominium and community associations.
10 Highlighted Provisions:
11 This bill:
12 . requires a reserve analysis to be conducted and a review of a reserve analysis on a
13 periodic basis; and
14 . enacts provisions governing reserve funds of condominium associations and
15 community associations.
16 Monies Appropriated in this Bill:
17 None
18 Other Special Clauses:
19 None
20 Utah Code Sections Affected:
21 ENACTS:
22 57-8-7.5, Utah Code Annotated 1953
23 57-8a-211, Utah Code Annotated 1953
24
25 Be it enacted by the Legislature of the state of Utah:
26 Section 1. Section 57-8-7.5 is enacted to read:
27 57-8-7.5. Reserve analysis -- Reserve fund.
28 (1) As used in this section, "reserve analysis" means an analysis to determine:
29 (a) the need for a reserve fund to accumulate money to cover the cost of repairing,

30 replacing, and restoring common areas and facilities that have a useful life of three years or
31 more, but excluding any cost that can reasonably be funded from the general budget or other
32 funds of the association of unit owners; and
33 (b) the appropriate amount of any reserve fund.
34 (2) Except as otherwise provided in the declaration, a management committee shall:
35 (a) (i) subject to Subsection (2)(a)(ii), cause a reserve analysis to be conducted no less
36 frequently than every five years; and
37 (ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
38 analysis to be conducted before July 1, 2012; and
39 (b) review and, if necessary, update a previously conducted reserve analysis no less
40 frequently than every two years.
41 (3) The management committee may conduct a reserve analysis itself or may engage a
42 reliable person or organization, as determined by the management committee, to conduct the
43 reserve analysis.
44 (4) (a) A management committee may not use money in a reserve fund:
45 (i) for daily maintenance expenses, unless a majority of the members of the association
46 of unit owners vote to approve the use of reserve fund money for that purpose; or
47 (ii) for any purpose other than the purpose for which the reserve fund was established.
48 (b) A management committee shall maintain a reserve fund separate from other funds
49 of the association of unit owners.
50 (c) This Subsection (4) may not be construed to limit a management committee from
51 prudently investing money in a reserve fund, subject to any investment constraints imposed by
52 the declaration.
53 (5) Subsections (2), (3), and (4) do not apply to an association of unit owners during
54 the period of declarant management.
55 Section 2. Section 57-8a-211 is enacted to read:
56 57-8a-211. Reserve analysis -- Reserve fund.
57 (1) As used in this section, "reserve analysis" means an analysis to determine:

58 (a) the need for a reserve fund to accumulate money to cover the cost of repairing,
59 replacing, and restoring common areas that have a useful life of three years or more, but
60 excluding any cost that can reasonably be funded from the association's general budget or
61 from other association funds; and
62 (b) the appropriate amount of any reserve fund.
63 (2) Except as otherwise provided in the governing documents, a board shall:
64 (a) (i) subject to Subsection (2)(a)(ii), cause a reserve analysis to be conducted no less
65 frequently than every five years; and
66 (ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
67 analysis to be conducted before July 1, 2012; and
68 (b) review and, if necessary, update a previously conducted reserve analysis no less
69 frequently than every two years.
70 (3) The board may conduct a reserve analysis itself or may engage a reliable person or
71 organization, as determined by the board, to conduct the reserve analysis.
72 (4) (a) A board may not use money in a reserve fund:
73 (i) for daily maintenance expenses, unless a majority of association members vote to
74 approve the use of reserve fund money for that purpose; or
75 (ii) for any purpose other than the purpose for which the reserve fund was established.
76 (b) A board shall maintain a reserve fund separate from other association funds.
77 (c) This Subsection (4) may not be construed to limit a board from prudently investing
78 money in a reserve fund, subject to any investment constraints imposed by the governing
79 documents.
80 (5) Subsections (2), (3), and (4) do not apply to an association during the period of
81 administrative control.