Download Zipped Introduced WordPerfect HB0101.ZIP
[Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 101

             1     

HOMEOWNERS ASSOCIATION AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Jon E. Stanard

             5     
Senate Sponsor: Stephen H. Urquhart

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill clarifies an association's right to attach and enforce liens following a period of
             10      noncompliance with the registration requirements described in this bill.
             11      Highlighted Provisions:
             12          This bill:
             13          .    specifies how an association ends a period of noncompliance with the registration
             14      requirements described in this bill;
             15          .    clarifies that after an association ends a period of noncompliance with the
             16      registration requirements described in this bill:
             17              .    a lien may arise for the nonpayment of any assessment that occurred during the
             18      period of noncompliance; and
             19              .    the association may enforce any lien that arose before the period of
             20      noncompliance; and
             21          .    makes technical changes.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None
             26      Utah Code Sections Affected:
             27      AMENDS:


             28          57-8-13.1, as last amended by Laws of Utah 2012, Chapter 63
             29          57-8-44, as enacted by Laws of Utah 2011, Chapter 355
             30          57-8-45, as enacted by Laws of Utah 2011, Chapter 355
             31          57-8a-105, as last amended by Laws of Utah 2012, Chapter 63
             32          57-8a-301, as enacted by Laws of Utah 2011, Chapter 355
             33          57-8a-302, as enacted by Laws of Utah 2011, Chapter 355
             34     
             35      Be it enacted by the Legislature of the state of Utah:
             36          Section 1. Section 57-8-13.1 is amended to read:
             37           57-8-13.1. Registration with Department of Commerce.
             38          (1) As used in this section, "department" means the Department of Commerce created
             39      in Section 13-1-2 .
             40          (2) (a) No later than 90 days after the recording of a declaration, an association of unit
             41      owners shall register with the department in the manner established by the department.
             42          (b) An association of unit owners existing under a declaration recorded before May 10,
             43      2011, shall, no later than July 1, 2011, register with the department in the manner established
             44      by the department.
             45          (3) The department shall require an association of unit owners registering as required
             46      in this section to provide with each registration:
             47          (a) the name and address of the association of unit owners;
             48          (b) the name, address, telephone number, and, if applicable, email address of the
             49      president of the association of unit owners;
             50          (c) the name and address of each management committee member;
             51          (d) the name, address, telephone number, and, if the contact person wishes to use email
             52      or facsimile transmission for communicating payoff information, the email address or facsimile
             53      number, as applicable, of a primary contact person who has association payoff information that
             54      a closing agent needs in connection with the closing of a unit owner's financing, refinancing, or
             55      sale of the owner's unit; and
             56          (e) a registration fee not to exceed $37.
             57          (4) An association of unit owners that has registered under Subsection (2) shall submit
             58      to the department an updated registration, in the manner established by the department, within


             59      90 days after a change in any of the information provided under Subsection (3).
             60          (5) (a) During any period of noncompliance with the registration requirement [of]
             61      described in Subsection (2) or the requirement for an updated registration [under] described in
             62      Subsection (4):
             63          (i) a lien [for the nonpayment of common expenses] may not arise under Section
             64      [ 57-8-20 against any condominium unit] 57-8-44 ; and
             65          (ii) an association of unit owners may not enforce [a previous] an existing lien that
             66      arose under Section [ 57-8-20 against any condominium unit] 57-8-44 .
             67          (b) A period of noncompliance with the registration requirement of Subsection (2) or
             68      with the updated registration requirement of Subsection (4) does not begin until after the
             69      expiration of the 90-day period specified in Subsection (2) or (4), respectively.
             70          (c) An association of unit owners that is not in compliance with the registration
             71      requirement described in Subsection (2) may end the period of noncompliance by registering
             72      with the department in the manner established by the department under Subsection (2).
             73          (d) An association of unit owners that is not in compliance with the updated
             74      registration requirement described in Subsection (4) may end the period of noncompliance by
             75      submitting to the department an updated registration in the manner established by the
             76      department under Subsection (4).
             77          (e) Beginning on the date an association of unit owners ends a period of
             78      noncompliance:
             79          (i) a lien may arise under Section 57-8a-44 for any event that:
             80          (A) occurred during the period of noncompliance; and
             81          (B) would have given rise to a lien under Section 57-8-44 had the association of unit
             82      owners been in compliance with the registration requirements described in this section; and
             83          (ii) an association of unit owners may enforce a lien described in Subsection (5)(e) or a
             84      lien that existed before the period of noncompliance.
             85          Section 2. Section 57-8-44 is amended to read:
             86           57-8-44. Lien in favor of association of unit owners for assessments and costs of
             87      collection.
             88          (1) (a) [An] Except as provided in Section 57-8-13.1 , an association of unit owners has
             89      a lien on a unit for:


             90          (i) an assessment;
             91          (ii) except as provided in the declaration, fees, charges, and costs associated with
             92      collecting an unpaid assessment, including:
             93          (A) court costs and reasonable attorney fees;
             94          (B) late charges;
             95          (C) interest; and
             96          (D) any other amount that the association of unit owners is entitled to recover under the
             97      declaration, this chapter, or an administrative or judicial decision; and
             98          (iii) a fine that the association of unit owners imposes against the owner of the unit.
             99          (b) The recording of a declaration constitutes record notice and perfection of a lien
             100      described in Subsection (1)(a).
             101          (2) If an assessment is payable in installments, a lien described in Subsection (1)(a)(i)
             102      is for the full amount of the assessment from the time the first installment is due, unless the
             103      association of unit owners otherwise provides in a notice of assessment.
             104          (3) An unpaid assessment or fine accrues interest at the rate provided:
             105          (a) in Subsection 15-1-1 (2); or
             106          (b) in the governing documents, if the governing documents provide for a different
             107      interest rate.
             108          (4) A lien under this section has priority over each other lien and encumbrance on a
             109      unit except:
             110          (a) a lien or encumbrance recorded before the declaration is recorded;
             111          (b) a first or second security interest on the unit secured by a mortgage or deed of trust
             112      that is recorded before a recorded notice of lien by or on behalf of the association of unit
             113      owners; or
             114          (c) a lien for real estate taxes or other governmental assessments or charges against the
             115      unit.
             116          (5) A lien under this section is not subject to Title 78B, Chapter 5, Part 5, Utah
             117      Exemptions Act.
             118          (6) Unless the declaration provides otherwise, if two or more associations of unit
             119      owners have liens for assessments on the same unit, the liens have equal priority, regardless of
             120      when the liens are created.


             121          Section 3. Section 57-8-45 is amended to read:
             122           57-8-45. Enforcement of a lien.
             123          (1) (a) [To] Except as provided in Section 57-8-13.1 , to enforce a lien established
             124      under Section 57-8-44 , an association of unit owners may:
             125          (i) cause a unit to be sold through nonjudicial foreclosure as though the lien were a
             126      deed of trust, in the manner provided by:
             127          (A) Sections 57-1-24 , 57-1-25 , 57-1-26 , and 57-1-27 ; and
             128          (B) this chapter; or
             129          (ii) foreclose the lien through a judicial foreclosure in the manner provided by:
             130          (A) law for the foreclosure of a mortgage; and
             131          (B) this chapter.
             132          (b) For purposes of a nonjudicial or judicial foreclosure as provided in Subsection
             133      (1)(a):
             134          (i) the association of unit owners is considered to be the beneficiary under a trust deed;
             135      and
             136          (ii) the unit owner is considered to be the trustor under a trust deed.
             137          (2) A unit owner's acceptance of the owner's interest in a unit constitutes a
             138      simultaneous conveyance of the unit in trust, with power of sale, to the trustee designated as
             139      provided in this section for the purpose of securing payment of all amounts due under the
             140      declaration and this chapter.
             141          (3) (a) A power of sale and other powers of a trustee under this part and under Sections
             142      57-1-19 through 57-1-34 may not be exercised unless the association of unit owners appoints a
             143      qualified trustee.
             144          (b) An association of unit owners' execution of a substitution of trustee form
             145      authorized in Section 57-1-22 is sufficient for appointment of a trustee under Subsection (3)(a).
             146          (c) A person may not be a trustee under this part unless the person qualifies as a trustee
             147      under Subsection 57-1-21 (1)(a)(i) or (iv).
             148          (d) A trustee under this part is subject to all duties imposed on a trustee under Sections
             149      57-1-19 through 57-1-34 .
             150          (4) This chapter does not prohibit an association of unit owners from bringing an
             151      action against a unit owner to recover an amount for which a lien is created under Section


             152      57-8-44 or from taking a deed in lieu of foreclosure, if the action is brought or deed taken
             153      before the sale or foreclosure of the unit owner's unit under this chapter.
             154          Section 4. Section 57-8a-105 is amended to read:
             155           57-8a-105. Registration with Department of Commerce.
             156          (1) As used in this section, "department" means the Department of Commerce created
             157      in Section 13-1-2 .
             158          (2) (a) No later than 90 days after the recording of a declaration of covenants,
             159      conditions, and restrictions establishing an association, the association shall register with the
             160      department in the manner established by the department.
             161          (b) An association existing under a declaration of covenants, conditions, and
             162      restrictions recorded before May 10, 2011, shall, no later than July 1, 2011, register with the
             163      department in the manner established by the department.
             164          (3) The department shall require an association registering as required in this section to
             165      provide with each registration:
             166          (a) the name and address of the association;
             167          (b) the name, address, telephone number, and, if applicable, email address of the chair
             168      of the association board;
             169          (c) contact information for the manager;
             170          (d) the name, address, telephone number, and, if the contact person wishes to use email
             171      or facsimile transmission for communicating payoff information, the email address or facsimile
             172      number, as applicable, of a primary contact person who has association payoff information that
             173      a closing agent needs in connection with the closing of a lot owner's financing, refinancing, or
             174      sale of the owner's lot; and
             175          (e) a registration fee not to exceed $37.
             176          (4) An association that has registered under Subsection (2) shall submit to the
             177      department an updated registration, in the manner established by the department, within 90
             178      days after a change in any of the information provided under Subsection (3).
             179          (5) (a) During any period of noncompliance with the registration requirement [of]
             180      described in Subsection (2) or the requirement for an updated registration [under] described in
             181      Subsection (4):
             182          (i) a lien [for the nonpayment of an assessment] may not arise under Section


             183      [ 57-8a-203 against any lot] 57-8a-301 ; and
             184          (ii) an association may not enforce [a previous] an existing lien that arose under
             185      Section [ 57-8a-203 against any lot] 57-8a-301 .
             186          (b) A period of noncompliance with the registration requirement of Subsection (2) or
             187      with the updated registration requirement of Subsection (4) does not begin until after the
             188      expiration of the 90-day period specified in Subsection (2) or (4), respectively.
             189          (c) An association that is not in compliance with the registration requirement described
             190      in Subsection (2) may end the period of noncompliance by registering with the department in
             191      the manner established by the department under Subsection (2).
             192          (d) An association that is not in compliance with the updated registration requirement
             193      described in Subsection (4) may end the period of noncompliance by submitting to the
             194      department an updated registration in the manner established by the department under
             195      Subsection (4).
             196          (e) Beginning on the date an association ends a period of noncompliance:
             197          (i) a lien may arise under Section 57-8a-301 for any event that:
             198          (A) occurred during the period of noncompliance; and
             199          (B) would have given rise to a lien under Section 57-8a-301 had the association been in
             200      compliance with the registration requirements described in this section; and
             201          (ii) an association may enforce a lien described in Subsection (5)(e) or a lien that
             202      existed before the period of noncompliance.
             203          Section 5. Section 57-8a-301 is amended to read:
             204           57-8a-301. Lien in favor of association for assessments and costs of collection.
             205          (1) (a) [An] Except as provided in Section 57-8a-105 , an association has a lien on a lot
             206      for:
             207          (i) an assessment;
             208          (ii) except as provided in the declaration, fees, charges, and costs associated with
             209      collecting an unpaid assessment, including:
             210          (A) court costs and reasonable attorney fees;
             211          (B) late charges;
             212          (C) interest; and
             213          (D) any other amount that the association is entitled to recover under the declaration,


             214      this chapter, or an administrative or judicial decision; and
             215          (iii) a fine that the association imposes against the owner of the lot.
             216          (b) The recording of a declaration constitutes record notice and perfection of a lien
             217      described in Subsection (1)(a).
             218          (2) If an assessment is payable in installments, a lien described in Subsection (1)(a)(i)
             219      is for the full amount of the assessment from the time the first installment is due, unless the
             220      association otherwise provides in a notice of assessment.
             221          (3) An unpaid assessment or fine accrues interest at the rate provided:
             222          (a) in Subsection 15-1-1 (2); or
             223          (b) in the declaration, if the declaration provides for a different interest rate.
             224          (4) A lien under this section has priority over each other lien and encumbrance on a lot
             225      except:
             226          (a) a lien or encumbrance recorded before the declaration is recorded;
             227          (b) a first or second security interest on the lot secured by a mortgage or trust deed that
             228      is recorded before a recorded notice of lien by or on behalf of the association; or
             229          (c) a lien for real estate taxes or other governmental assessments or charges against the
             230      lot.
             231          (5) A lien under this section is not subject to Title 78B, Chapter 5, Part 5, Utah
             232      Exemptions Act.
             233          (6) Unless the declaration provides otherwise, if two or more associations have liens
             234      for assessments on the same lot, the liens have equal priority, regardless of when the liens are
             235      created.
             236          Section 6. Section 57-8a-302 is amended to read:
             237           57-8a-302. Enforcement of a lien.
             238          (1) (a) [To] Except as provided in Section 57-8a-105 , to enforce a lien established
             239      under Section 57-8a-301 , an association may:
             240          (i) cause a lot to be sold through nonjudicial foreclosure as though the lien were a deed
             241      of trust, in the manner provided by:
             242          (A) Sections 57-1-24 , 57-1-25 , 57-1-26 , and 57-1-27 ; and
             243          (B) this part; or
             244          (ii) foreclose the lien through a judicial foreclosure in the manner provided by:


             245          (A) law for the foreclosure of a mortgage; and
             246          (B) this part.
             247          (b) For purposes of a nonjudicial or judicial foreclosure as provided in Subsection
             248      (1)(a):
             249          (i) the association is considered to be the beneficiary under a trust deed; and
             250          (ii) the lot owner is considered to be the trustor under a trust deed.
             251          (2) A lot owner's acceptance of the owner's interest in a lot constitutes a simultaneous
             252      conveyance of the lot in trust, with power of sale, to the trustee designated as provided in this
             253      section for the purpose of securing payment of all amounts due under the declaration and this
             254      chapter.
             255          (3) (a) A power of sale and other powers of a trustee under this part and under Sections
             256      57-1-19 through 57-1-34 may not be exercised unless the association appoints a qualified
             257      trustee.
             258          (b) An association's execution of a substitution of trustee form authorized in Section
             259      57-1-22 is sufficient for appointment of a trustee under Subsection (3)(a).
             260          (c) A person may not be a trustee under this part unless the person qualifies as a trustee
             261      under Subsection 57-1-21 (1)(a)(i) or (iv).
             262          (d) A trustee under this part is subject to all duties imposed on a trustee under Sections
             263      57-1-19 through 57-1-34 .
             264          (4) This part does not prohibit an association from bringing an action against a lot
             265      owner to recover an amount for which a lien is created under Section 57-8a-301 or from taking
             266      a deed in lieu of foreclosure, if the action is brought or deed taken before the sale or foreclosure
             267      of the lot owner's lot under this part.




Legislative Review Note
    as of 1-24-13 9:15 AM


Office of Legislative Research and General Counsel


[Bill Documents][Bills Directory]