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First Substitute S.B. 90


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Senate 2nd & 3rd Reading Amendments 3-11-2013 lp/rhr

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This document includes Senate 2nd and 3rd Reading Floor Amendments incorporated into the bill on Mon, Mar 11, 2013 at 12:55 PM by lpoole. -->
Senator J. Stuart Adams proposes the following substitute bill:


             1     
CONDOMINIUM AND COMMUNITY ASSOCIATION

             2     
AMENDMENTS

             3     
2013 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: J. Stuart Adams

             6     
House Sponsor: Gage Froerer

             7     

             8      LONG TITLE
             9      General Description:
             10          This bill enacts and modifies provisions relating to condominium and community
             11      associations.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies and enacts provisions of the Condominium Ownership Act and the
             15      Community Association Act;
             16          .    enacts provisions relating to making changes to adjoining units or lots acquired by
             16a      S. the .S
             17      same owner;
             18          .    enacts provisions relating to the responsibility for maintenance, repair, and
             19      replacement of common areas and units or lots;
             20          .    modifies reserve fund provisions;
             21          .    enacts a provision allowing management committee members and officers to be
             22      indemnified or to have their liability limited;
             23          .    enacts provisions allowing a preexisting association to make a later-enacted
             24      provision of law applicable to the association;
             25          .    modifies provisions relating to the organization of an association as a nonprofit



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             26
     corporation or other entity;
             27          .    modifies insurance provisions;
             28          .    enacts a provision relating to the consolidation of associations;
             29          .    enacts provisions relating to application of the rule against perpetuities and the rule
             30      against unreasonable restraints on alienation;
             31          .    enacts a provision relating to eminent domain of property that is part of a
             32      community association; and
             33          .    makes technical changes.
             34      Money Appropriated in this Bill:
             35          None
             36      Other Special Clauses:
             37          None
             38      Utah Code Sections Affected:
             39      AMENDS:
             40          57-8-3, as last amended by Laws of Utah 2012, Chapter 166
             41          57-8-7, as last amended by Laws of Utah 2003, Chapter 265
             42          57-8-7.5, as last amended by Laws of Utah 2012, Chapters 83 and 369
             43          57-8-23, as enacted by Laws of Utah 1963, Chapter 111
             44          57-8-40, as enacted by Laws of Utah 2008, Chapter 291
             45          57-8-43, as enacted by Laws of Utah 2011, Chapter 355
             46          57-8a-102, as last amended by Laws of Utah 2011, Chapter 355
             47          57-8a-211, as last amended by Laws of Utah 2012, Chapters 83 and 369
             48          57-8a-212, as enacted by Laws of Utah 2011, Chapter 355
             49          57-8a-220, as enacted by Laws of Utah 2011, Chapter 355
             50          57-8a-402, as enacted by Laws of Utah 2011, Chapter 355
             51          57-8a-403, as enacted by Laws of Utah 2011, Chapter 355
             52          57-8a-404, as enacted by Laws of Utah 2011, Chapter 355
             53          57-8a-405, as last amended by Laws of Utah 2012, Chapter 369
             54          57-8a-406, as enacted by Laws of Utah 2011, Chapter 355
             55          57-8a-407, as enacted by Laws of Utah 2011, Chapter 355
             56          76-6-206, as last amended by Laws of Utah 2010, Chapter 334



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             57      ENACTS:
             58          57-8-4.5, Utah Code Annotated 1953
             58a           S. 57-8-6.7, Utah Code Annotated 1953 .S
             59          57-8-10.3, Utah Code Annotated 1953
             60          57-8-10.5, Utah Code Annotated 1953
             61          57-8-55, Utah Code Annotated 1953
             62          57-8a-107, Utah Code Annotated 1953
             63          57-8a-108, Utah Code Annotated 1953
             63a           S. 57-8a-109, Utah Code Annotated 1953 .S
             64          57-8a-222, Utah Code Annotated 1953
             65          57-8a-223, Utah Code Annotated 1953
             66          57-8a-224, Utah Code Annotated 1953
             67          57-8a-501, Utah Code Annotated 1953
             68          57-8a-502, Utah Code Annotated 1953
             69          57-8a-601, Utah Code Annotated 1953
             70     

             71      Be it enacted by the Legislature of the state of Utah:
             72          Section 1. Section 57-8-3 is amended to read:
             73           57-8-3. Definitions.
             74          As used in this chapter:
             75          (1) "Assessment" means any charge imposed by the association, including:
             76          (a) common expenses on or against a unit owner pursuant to the provisions of the
             77      declaration, bylaws, or this chapter; and
             78          (b) an amount that an association of unit owners assesses to a unit owner under
             79      Subsection 57-8-43 (9)[(h)](g).
             80          (2) "Association of unit owners" means all of the unit owners:
             81          (a) acting as a group in accordance with the declaration and bylaws; or
             82          (b) organized as a legal entity in accordance with the declaration.
             83          (3) "Building" means a building, containing units, and comprising a part of the
             84      property.
             85          (4) "Commercial condominium project" means a condominium project that has no
             86      residential units within the project.
             87          [(4)] (5) "Common areas and facilities" unless otherwise provided in the declaration or



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             88
     lawful amendments to the declaration means:
             89          (a) the land included within the condominium project, whether leasehold or in fee
             90      simple;
             91          (b) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
             92      corridors, lobbies, stairs, stairways, fire escapes, entrances, and exits of the building;
             93          (c) the basements, yards, gardens, parking areas, and storage spaces;
             94          (d) the premises for lodging of janitors or persons in charge of the property;
             95          (e) installations of central services such as power, light, gas, hot and cold water,
             96      heating, refrigeration, air conditioning, and incinerating;
             97          (f) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all
             98      apparatus and installations existing for common use;
             99          (g) such community and commercial facilities as may be provided for in the
             100      declaration; and
             101          (h) all other parts of the property necessary or convenient to its existence, maintenance,
             102      and safety, or normally in common use.
             103          [(5)] (6) "Common expenses" means:
             104          (a) all sums lawfully assessed against the unit owners;
             105          (b) expenses of administration, maintenance, repair, or replacement of the common
             106      areas and facilities;
             107          (c) expenses agreed upon as common expenses by the association of unit owners; and
             108          (d) expenses declared common expenses by this chapter, or by the declaration or the
             109      bylaws.
             110          [(6)] (7) "Common profits," unless otherwise provided in the declaration or lawful
             111      amendments to the declaration, means the balance of all income, rents, profits, and revenues
             112      from the common areas and facilities remaining after the deduction of the common expenses.
             113          [(7)] (8) "Condominium" means the ownership of a single unit in a multiunit project
             114      together with an undivided interest in common in the common areas and facilities of the
             115      property.
             116          [(8)] (9) "Condominium plat" means a plat or plats of survey of land and units prepared
             117      in accordance with Section 57-8-13 .
             118          [(9)] (10) "Condominium project" means a real estate condominium project; a plan or



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             119
     project whereby two or more units, whether contained in existing or proposed apartments,
             120      commercial or industrial buildings or structures, or otherwise, are separately offered or
             121      proposed to be offered for sale. Condominium project also means the property when the
             122      context so requires.
             123          [(10)] (11) "Condominium unit" means a unit together with the undivided interest in
             124      the common areas and facilities appertaining to that unit. Any reference in this chapter to a
             125      condominium unit includes both a physical unit together with its appurtenant undivided interest
             126      in the common areas and facilities and a time period unit together with its appurtenant
             127      undivided interest, unless the reference is specifically limited to a time period unit.
             128          [(11)] (12) "Contractible condominium" means a condominium project from which one
             129      or more portions of the land within the project may be withdrawn in accordance with
             130      provisions of the declaration and of this chapter. If the withdrawal can occur only by the
             131      expiration or termination of one or more leases, then the condominium project is not a
             132      contractible condominium within the meaning of this chapter.
             133          [(12)] (13) "Convertible land" means a building site which is a portion of the common
             134      areas and facilities, described by metes and bounds, within which additional units or limited
             135      common areas and facilities may be created in accordance with this chapter.
             136          [(13)] (14) "Convertible space" means a portion of the structure within the
             137      condominium project, which portion may be converted into one or more units or common areas
             138      and facilities, including limited common areas and facilities in accordance with this chapter.
             139          [(14)] (15) "Declarant" means all persons who execute the declaration or on whose
             140      behalf the declaration is executed. From the time of the recordation of any amendment to the
             141      declaration expanding an expandable condominium, all persons who execute that amendment
             142      or on whose behalf that amendment is executed shall also come within this definition. Any
             143      successors of the persons referred to in this subsection who come to stand in the same relation
             144      to the condominium project as their predecessors also come within this definition.
             145          [(15)] (16) "Declaration" means the instrument by which the property is submitted to
             146      the provisions of this act, as it from time to time may be lawfully amended.
             147          [(16)] (17) "Expandable condominium" means a condominium project to which
             148      additional land or an interest in it may be added in accordance with the declaration and this
             149      chapter.



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             150
         (18) "Governing documents":
             151          (a) means a written instrument by which an association of unit owners may:
             152          (i) exercise powers; or
             153          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
             154      association of unit owners; and
             155          (b) includes:
             156          (i) articles of incorporation;
             157          (ii) bylaws;
             158          (iii) a plat;
             159          (iv) a declaration of covenants, conditions, and restrictions; and
             160          (v) rules of the association of unit owners.
             161          [(17)] (19) "Leasehold condominium" means a condominium project in all or any
             162      portion of which each unit owner owns an estate for years in his unit, or in the land upon which
             163      that unit is situated, or both, with all those leasehold interests to expire naturally at the same
             164      time. A condominium project including leased land, or an interest in the land, upon which no
             165      units are situated or to be situated is not a leasehold condominium within the meaning of this
             166      chapter.
             167          [(18)] (20) "Limited common areas and facilities" means those common areas and
             168      facilities designated in the declaration as reserved for use of a certain unit or units to the
             169      exclusion of the other units.
             170          [(19)] (21) "Majority" or "majority of the unit owners," unless otherwise provided in
             171      the declaration or lawful amendments to the declaration, means the owners of more than 50%
             172      in the aggregate in interest of the undivided ownership of the common areas and facilities.
             173          [(20)] (22) "Management committee" means the committee as provided in the
             174      declaration charged with and having the responsibility and authority to make and to enforce all
             175      of the reasonable rules covering the operation and maintenance of the property.
             176          (23) "Mixed-use condominium project" means a condominium project that has both
             177      residential and commercial units in the condominium project.
             178          [(21)] (24) "Par value" means a number of dollars or points assigned to each unit by the
             179      declaration. Substantially identical units shall be assigned the same par value, but units located
             180      at substantially different heights above the ground, or having substantially different views, or



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             181
     having substantially different amenities or other characteristics that might result in differences
             182      in market value, may be considered substantially identical within the meaning of this
             183      subsection. If par value is stated in terms of dollars, that statement may not be considered to
             184      reflect or control the sales price or fair market value of any unit, and no opinion, appraisal, or
             185      fair market transaction at a different figure may affect the par value of any unit, or any
             186      undivided interest in the common areas and facilities, voting rights in the unit owners'
             187      association, liability for common expenses, or right to common profits, assigned on the basis
             188      thereof.
             189          [(22)] (25) "Person" means an individual, corporation, partnership, association, trustee,
             190      or other legal entity.
             191          [(23)] (26) "Property" means the land, whether leasehold or in fee simple, the building,
             192      if any, all improvements and structures thereon, all easements, rights, and appurtenances
             193      belonging thereto, and all articles of personal property intended for use in connection
             194      therewith.
             195          [(24)] (27) "Record," "recording," "recorded," and "recorder" have the meaning stated
             196      in Title 57, Chapter 3, Recording of Documents.
             197          [(25)] (28) "Size" means the number of cubic feet, or the number of square feet of
             198      ground or floor space, within each unit as computed by reference to the record of survey map
             199      and rounded off to a whole number. Certain spaces within the units including attic, basement,
             200      or garage space may be omitted from the calculation or be partially discounted by the use of a
             201      ratio, if the same basis of calculation is employed for all units in the condominium project and
             202      if that basis is described in the declaration.
             203          [(26)] (29) "Time period unit" means an annually recurring part or parts of a year
             204      specified in the declaration as a period for which a unit is separately owned and includes a
             205      timeshare estate as defined in Subsection 57-19-2 (19).
             206          [(27)] (30) "Unit" means either a separate physical part of the property intended for any
             207      type of independent use, including one or more rooms or spaces located in one or more floors
             208      or part or parts of floors in a building or a time period unit, as the context may require. A
             209      convertible space shall be treated as a unit in accordance with Subsection 57-8-13.4 (3). A
             210      proposed condominium unit under an expandable condominium project, not constructed, is a
             211      unit two years after the date the recording requirements of Section 57-8-13.6 are met.



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             212
         [(28)] (31) "Unit number" means the number, letter, or combination of numbers and
             213      letters designating the unit in the declaration and in the record of survey map.
             214          [(29)] (32) "Unit owner" means the person or persons owning a unit in fee simple and
             215      an undivided interest in the fee simple estate of the common areas and facilities in the
             216      percentage specified and established in the declaration or, in the case of a leasehold
             217      condominium project, the person or persons whose leasehold interest or interests in the
             218      condominium unit extend for the entire balance of the unexpired term or terms.
             219          Section 2. Section 57-8-4.5 is enacted to read:
             220          57-8-4.5. Removing or altering partition between adjoining units.
             221          (1) Subject to the declaration, a unit owner may, after acquiring an adjoining unit that
             222      shares a common wall with the unit owner's unit:
             223          (a) remove or alter a partition between the unit owner's unit and the acquired unit, even
             224      if the partition is entirely or partly common areas and facilities; or
             225          (b) create an aperture to the adjoining unit or portion of a unit.
             226          (2) A unit owner may not take an action under Subsection (1) if the action would:
             227          (a) impair the structural integrity or mechanical systems of the building or either unit;
             228          (b) reduce the support of any portion of the common areas and facilities or another
             229      unit; or
             230          (c) constitute a violation of Section 10-9a-608 or 17-27a-608 , as applicable, a local
             231      government land use ordinance, or a building code.
             232          (3) The management committee may require a unit owner to submit, at the unit owner's
             233      expense, a registered professional engineer's or registered architect's opinion stating that a
             234      proposed change to the unit owner's unit will not:
             235          (a) impair the structural integrity or mechanical systems of the building or either unit;
             236          (b) reduce the support or integrity of common areas and facilities; or
             237          (c) compromise structural components.
             238          (4) The management committee may require a unit owner to pay all of the legal and
             239      other expenses of the association of unit owners related to a proposed alteration to the unit or
             240      building under this section.
             241          (5) An action under Subsection (1) does not change an assessment or voting right
             242      attributable to the unit owner's unit or the acquired unit, unless the declaration provides



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             243      otherwise.
             243a           S. Section 3. Section 57-8-6.7 is enacted to read:
             243b          57-8-6.7. Limit on fee for approval of plans.
             243c          (1) As used in this section:
             243d          (a) "Plan fee" means a fee that an association of unit owners charges for review and
             243e      approval of unit plans.
             243f          (b) "Unit plans" means plans:
             243g          (i) for the construction or improvement of a unit; and
             243h          (ii) that are required to be approved by the association of unit owners before the unit
             243i      construction or improvement may occur.
             243j          (2) An association of unit owners may not charge a plan fee that exceeds the actual cost
             243k      of reviewing and approving the unit plans. .S
             244          Section S. [ 3 ] 4 .S . Section 57-8-7 is amended to read:
             245           57-8-7. Common areas and facilities.
             246          (1) As used in this section:
             247          (a) "Emergency repairs" means any repairs [which] that, if not made in a timely
             248      manner, will likely result in immediate and substantial damage to the common areas and
             249      facilities or to another unit or units[; and].
             250          (b) "Reasonable notice" means:
             251          (i) written notice [which] that is hand delivered to the unit at least 24 hours prior to the
             252      proposed entry[.]; or
             253          (ii) in the case of emergency repairs, notice that is reasonable under the circumstances.
             254          (2) Each unit owner shall be entitled to an undivided interest in the common areas and
             255      facilities in the percentages or fractions expressed in the declaration. The declaration may
             256      allocate to each unit an undivided interest in the common areas and facilities proportionate to
             257      either the size or par value of the unit. Otherwise, the declaration shall allocate to each unit an
             258      equal undivided interest in the common areas and facilities, subject to the following exception:
             259      each convertible space depicted on the condominium plat shall be allocated an undivided
             260      interest in the common areas and facilities proportionate to the size of the space vis-a-vis the
             261      aggregate size of all units so depicted, while the remaining undivided interest in the common
             262      areas and facilities shall be allocated equally among the other units so depicted. The undivided
             263      interest in the common areas and facilities allocated in accordance with this Subsection (2)
             264      shall add up to one if stated as fractions or to 100% if stated as percentages. If an equal
             265      undivided interest in the common areas and facilities is allocated to each unit, the declaration


            
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266      may simply state that fact and need not express the fraction or percentage so allocated.
             267      Otherwise, the undivided interest allocated to each unit shall be reflected by a table in the
             268      declaration, or by an exhibit or schedule accompanying the declaration and recorded
             269      simultaneously with it, containing columns. The first column shall identify the units, listing
             270      them serially or grouping them together in the case of units to which identical undivided
             271      interests are allocated. Corresponding figures in the second and third columns shall set forth
             272      the respective sizes or par values of those units and the fraction or percentage of undivided
             273      interest in the common areas and facilities allocated thereto.



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             274
         (3) Except as otherwise expressly provided by this act, the undivided interest of each
             275      unit owner in the common areas and facilities as expressed in the declaration shall have a
             276      permanent character and shall not be altered without the consent of two-thirds of the unit
             277      owners expressed in an amended declaration duly recorded. The undivided interest in the
             278      common areas and facilities shall not be separated from the unit to which it appertains and shall
             279      be considered to be conveyed or encumbered or released from liens with the unit even though
             280      such interest is not expressly mentioned or described in the conveyance or other instrument. A
             281      time period unit may not be further divided into shorter time periods by a conveyance or
             282      disclaimer.
             283          (4) The common areas and facilities shall remain undivided and no unit owner or any
             284      other person shall bring any action for partition or division of any part thereof, unless the
             285      property has been removed from the provisions of this act as provided in Sections 57-8-22 and
             286      57-8-31 . Any covenants to the contrary shall be null and void.
             287          (5) Each unit owner may use the common areas and facilities in accordance with the
             288      purpose for which they were intended without hindering or encroaching upon the lawful rights
             289      of the other unit owners.
             290          (6) The necessary work of maintenance, repair, and replacement of the common areas
             291      and facilities and the making of any additions or improvements thereon shall be carried out
             292      only as provided in this [act] chapter or in the declaration or bylaws.
             293          (7) Except as otherwise provided in the declaration or Section 57-8-43 :
             294          (a) an association of unit owners is responsible for the maintenance, repair, and
             295      replacement of common areas and facilities; and
             296          (b) a unit owner is responsible for the maintenance, repair, and replacement of the unit
             297      owner's unit.
             298          [(7) The] (8) After reasonable notice to the occupant of the unit being entered, the
             299      manager or management committee [shall have the right to have] may access [to each] a unit:
             300          (a) from time to time during reasonable hours [and after reasonable notice to the
             301      occupant of the unit being entered], as may be necessary for the maintenance, repair, or
             302      replacement of any of the common areas and facilities; or
             303          (b) for making emergency repairs [necessary to prevent damage to the common areas
             304      and facilities or to another unit or units, provided that a reasonable effort is made to provide



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             305      notice to the occupant of the unit prior to entry].
             306          (9) (a) An association of unit owners is liable to repair damage it causes to the common
             307      areas and facilities or to a unit the association of unit owners uses to access the common areas
             308      and facilities.
             309          (b) An association of unit owners shall repair damage described in Subsection (9)(a)
             310      within a time that is reasonable under the circumstances.
             311          Section S. [ 4 ] 5 .S . Section 57-8-7.5 is amended to read:
             312           57-8-7.5. Reserve analysis -- Reserve fund.
             313          (1) As used in this section[,]:
             314          (a) "Reserve analysis" means an analysis to determine:
             315          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             316      replacing, and restoring common areas and facilities that have a useful life of three years or
             317      more and a remaining useful life of less than 30 years, but excluding any cost that can
             318      reasonably be funded from the general budget or other funds of the association of unit owners;
             319      and
             320          [(b)] (ii) the appropriate amount of any reserve fund.
             321          (b) "Reserve fund line item" means the line item in an association of unit owners'
             322      budget that identifies the amount to be placed into a reserve fund.
             323          (2) Except as otherwise provided in the declaration, a management committee shall:
             324          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no
             325      less frequently than every six years; and
             326          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             327      analysis to be conducted before July 1, 2012; and]
             328          (b) review and, if necessary, update a previously conducted reserve analysis no less
             329      frequently than every three years.
             330          (3) The management committee may conduct a reserve analysis itself or may engage a
             331      reliable person or organization, as determined by the management committee, to conduct the
             332      reserve analysis.
             333          (4) (a) A management committee may not use money in a reserve fund:
             334          (i) for daily maintenance expenses, unless a majority of the members of the association
             335      of unit owners vote to approve the use of reserve fund money for that purpose; or



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             336          (ii) for any purpose other than the purpose for which the reserve fund was established.
             337          (b) A management committee shall maintain [a] reserve [fund] funds separate from
             338      other funds of the association of unit owners.
             339          (c) This Subsection (4) may not be construed to limit a management committee from
             340      prudently investing money in a reserve fund, subject to any investment constraints imposed by
             341      the declaration.
             342          (5) An association of unit owners shall:
             343          (a) annually provide unit owners a summary of the most recent reserve analysis or
             344      update; and
             345          (b) provide a copy of the complete reserve analysis or update to a unit owner who
             346      requests a copy.
             347          (6) In formulating its budget each year, an association of unit owners shall include a
             348      reserve fund line item in:
             349          (a) an amount the management committee determines, based on the reserve analysis, to
             350      be prudent; or
             351          (b) an amount required by the declaration, if the declaration requires an amount higher
             352      than the amount determined under Subsection (6)(a).
             353          [(5)] (7) Subsections (2)[, (3), (4), and] through (6) do not apply to an association of
             354      unit owners during the period of declarant [management] control described in Subsection
             355      57-8-16.5 (1).
             356          [(6) An association of unit owners shall:]
             357          [(a) annually, at the annual meeting of unit owners or at a special meeting of unit
             358      owners:]
             359          [(i) present the reserve study; and]
             360          [(ii) provide an opportunity for unit owners to discuss reserves and to vote on whether
             361      to fund a reserve fund and, if so, how to fund it and in what amount; and]
             362          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             363      indicate in the minutes any decision relating to funding a reserve fund.]
             364          [(7)] (8) This section applies to each association of unit owners, regardless of when the
             365      association of unit owners was created.
             366          Section S. [ 5 ] 6 .S . Section 57-8-10.3 is enacted to read:



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             367          57-8-10.3. Indemnification and limit of liability.
             368          Notwithstanding any conflict with the declaration or recorded bylaws, the
             369      organizational documents of an association of unit owners may indemnify and limit
             370      management committee member and officer liability to the extent permitted by the law under
             371      which the association of unit owners is organized.
             372          Section S. [ 6 ] 7 .S . Section 57-8-10.5 is enacted to read:
             373          57-8-10.5. Amending the declaration to make provisions of this chapter
             374      applicable.
             375          (1) An association of unit owners may amend the declaration to make applicable to the
             376      association of unit owners a provision of this chapter that is enacted after the creation of the
             377      association of unit owners, by complying with:
             378          (a) the amendment procedures and requirements specified in the declaration and
             379      applicable provisions of this chapter; or
             380          (b) the amendment procedures and requirements of this chapter, if the declaration
             381      being amended does not contain amendment procedures and requirements.
             382          (2) If an amendment under Subsection (1) adopts a specific section of this chapter:
             383          (a) the amendment grants a right, power, or privilege permitted by that specific section;
             384      and
             385          (b) all correlative obligations, liabilities, and restrictions in that section also apply.
             386          Section S. [ 7 ] 8 .S . Section 57-8-23 is amended to read:
             387           57-8-23. Removal no bar to subsequent resubmission.
             388          The removal provided for in Section 57-8-22 [shall] does not bar the subsequent
             389      resubmission of the property to the provisions of this [act] chapter.
             390          Section S. [ 8 ] 9 .S . Section 57-8-40 is amended to read:
             391           57-8-40. Organization of an association of unit owners under other law --
             392      Reorganization.
             393          (1) As used in this section, "organizational documents" means the documents related to
             394      the formation or operation of a nonprofit corporation or other legal entity formed by the
             395      management committee or the declarant.
             396          (2) If permitted, required, or acknowledged by the declaration, the management
             397      committee may organize an association of unit owners [into] as:



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             398          (a) a nonprofit corporation in accordance with Title 16, Chapter 6a, Utah Revised
             399      Nonprofit Corporation Act[,]; or [other]
             400          (b) any other entity organized under other law.
             401          (3) Organizational documents for a nonprofit corporation or other entity formed in
             402      accordance with Subsection (2) shall, to the extent possible, not conflict with the rights and
             403      obligations found in the declaration and any of the association's bylaws recorded at the time of
             404      the formation of a nonprofit corporation or other entity [under Subsection (2)].
             405          (4) Notwithstanding any conflict with the declaration or any recorded bylaws, the
             406      organizational documents of [an] a nonprofit corporation or other entity formed in accordance
             407      with Subsection (2) may include any additional indemnification and liability limitation
             408      provision [for the management committee members and officers of the association that is
             409      permitted by the chapter under which the association is organized for] S. for .S :
             410           S. [ (a) for:
             411          (i)
] (a) .S
board members, directors, and officers[,]; or
             412           S. [ (ii) ] (b) .S similar persons in a position of control S. [ [ ] . [ ] ] [ ; and ] .S
             413          (5) In the event of a conflict between this chapter's provisions, a statute under which
             414      the association of unit owners is organized, documents concerning the organization of the
             415      association of unit owners as a nonprofit corporation or other entity, the declaration, the
             416      bylaws, and association rules, the following order prevails:
             417          (a) this chapter controls over a conflicting provision found in any of the sources listed
             418      in Subsections (5)(b) through (f);
             419          (b) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, or any other law
             420      under which an entity is organized controls over a conflicting provision in any of the sources
             421      listed in Subsections (5)(c) through (f);
             422          (c) an organizational document filed in accordance with Title 16, Chapter 6a, Utah
             423      Revised Nonprofit Corporation Act, or any other law under which an entity is organized
             424      controls over a conflicting provision in any of the sources listed in Subsections (5)(d) through
             425      (f);
             426          (d) the declaration controls over a conflicting provision in any of the sources listed in
             427      Subsections (5)(e) or (f);
             428          (e) the bylaws control over a conflicting provision in association rules; and



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             429          (f) the association rules yield to a conflicting provision in any of the sources listed in
             430      Subsection (5)(a) through (e).
             431          (6) Immediately upon the legal formation of an entity in compliance with this section,
             432      the association and unit owners are subject to any right, obligation, procedure, and remedy
             433      applicable to that entity.
             434          (7) (a) A form "articles of incorporation" or similar organizational document attached
             435      to a declaration may be modified by the management committee for filing or re-filing if the
             436      modified version is otherwise consistent with this section's provisions.
             437          (b) An organizational document attached to a declaration that is filed and concerns the
             438      organization of an entity may be amended in accordance with its own terms or any applicable
             439      law, notwithstanding the fact that the organizational document might be recorded.
             440          (c) Except for amended bylaws, an initial or amended organizational document
             441      properly filed with the state does not need to be recorded.
             442          (8) This section applies to the reorganization of an association of unit owners
             443      previously organized if the entity's status is terminated or dissolved without the possibility of
             444      reinstatement.
             445          (9) (a) This section applies to all condominium projects, whether established before or
             446      after May 5, 2008.
             447          (b) This section does not validate or invalidate the organization of an association that
             448      occurred before May 5, 2008, whether or not the association was otherwise in compliance with
             449      this section.
             450          Section S. [ 9 ] 10 .S . Section 57-8-43 is amended to read:
             451           57-8-43. Insurance.
             452          (1) As used in this section, "reasonably available" means available using typical
             453      insurance carriers and markets, irrespective of the ability of the association of unit owners to
             454      pay.
             455          (2) (a) This section applies to an insurance policy or combination of insurance policies:
             456          [(a)] (i) issued or renewed on or after July 1, 2011; and
             457          [(b)] (ii) issued to or renewed by:
             458          [(i)] (A) a unit owner; or
             459          [(ii)] (B) an association of unit owners, regardless of when the association of unit



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             460
     owners is formed.
             461          (b) Unless otherwise provided in the declaration, this section does not apply to a
             462      commercial condominium project insured under a policy or combination of policies issued or
             463      renewed on or after July 1, 2013.
             464          (3) Beginning not later than the day on which the first unit is conveyed to a person
             465      other than a declarant, an association of unit owners shall maintain, to the extent reasonably
             466      available:
             467          (a) subject to Subsection (9), blanket property insurance or guaranteed replacement
             468      cost insurance on the physical structures in the condominium project, including common areas
             469      and facilities, limited common areas and facilities, and units, insuring against all risks of direct
             470      physical loss commonly insured against, including fire and extended coverage perils; and
             471          (b) subject to Subsection (10), liability insurance[, including medical payments
             472      insurance] covering all occurrences commonly insured against for death, bodily injury, and
             473      property damage arising out of or in connection with the use, ownership, or maintenance of the
             474      common areas and facilities.
             475          (4) If an association of unit owners becomes aware that property insurance under
             476      Subsection (3)(a) or liability insurance under Subsection (3)(b) is not reasonably available, the
             477      association of unit owners shall, within seven calendar days after becoming aware, give all unit
             478      owners notice, as provided in Section 57-8-42 , that the insurance is not reasonably available.
             479          (5) (a) The declaration or bylaws may require the association of unit owners to carry
             480      other types of insurance in addition to those described in Subsection (3).
             481          (b) In addition to any type of insurance coverage or limit of coverage provided in the
             482      declaration or bylaws and subject to the requirements of this section, an association of unit
             483      owners may, as the management committee considers appropriate, obtain:
             484          (i) an additional type of insurance than otherwise required; or
             485          (ii) a policy with greater coverage than otherwise required.
             486          (6) Unless a unit owner is acting within the scope of the unit owner's authority on
             487      behalf of an association of unit owners, a unit owner's act or omission may not:
             488          (a) void a property insurance policy under Subsection (3)(a) or a liability insurance
             489      policy under Subsection (3)(b); or
             490          (b) be a condition to recovery under a policy.



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             491
         (7) An insurer under a property insurance policy or liability insurance policy obtained
             492      by an association of unit owners under this section waives the insurer's right to subrogation
             493      under the policy against [any unit owner or member of the unit owner's household.]:
             494          (a) any person residing with the unit owner, if the unit owner resides in the unit; and
             495          (b) the unit owner.
             496          (8) (a) An insurance policy issued to an association of unit owners may not be
             497      inconsistent with any provision of this section.
             498          (b) A provision of a declaration, bylaw, rule, or other document governing the
             499      association of unit owners that is contrary to a provision of this section has no effect.
             500          (c) [A] Neither the governing documents nor a property insurance or liability insurance
             501      policy issued to an association of unit owners may [not] prevent a unit owner from obtaining
             502      insurance for the unit owner's own benefit.
             503          (9) (a) This Subsection (9) applies to property insurance required under Subsection
             504      (3)(a).
             505          [(b) The property covered by property insurance shall include any property that, under
             506      the declaration, is required to become common areas and facilities.]
             507          [(c)] (b) The total amount of coverage provided by blanket property insurance or
             508      guaranteed replacement cost insurance may not be less than 100% of the full replacement cost
             509      of the insured property at the time the insurance is purchased and at each renewal date,
             510      excluding:
             511          (i) items normally excluded from property insurance policies[.]; and
             512          (ii) unless otherwise provided in the declaration, any commercial condominium unit in
             513      a mixed-use condominium project, including any fixture, improvement, or betterment in a
             514      commercial condominium unit in a mixed-use condominium project.
             515          [(d)] (c) Property insurance shall include coverage for any fixture, improvement, or
             516      betterment installed [by a unit owner to a] at any time to a unit or to a limited common area
             517      associated with a unit, whether installed in the original construction or in any remodel or later
             518      alteration, including a floor covering, cabinet, light fixture, electrical fixture, heating or
             519      plumbing fixture, paint, wall covering, window, and any other item permanently part of or
             520      affixed to a unit or to a limited common element associated with a unit.
             521          [(e)] (d) Notwithstanding anything in this section and unless otherwise provided in the



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             522
     declaration, an association of unit owners is not required to obtain property insurance for a loss
             523      to a unit that is not physically attached to:
             524          (i) another unit; or
             525          (ii) [an above-ground] a structure that is part of a common area or facility.
             526          [(f)] (e) Each unit owner is an insured person under a property insurance policy.
             527          [(g)] (f) If a loss occurs that is covered by a property insurance policy in the name of an
             528      association of unit owners and another property insurance policy in the name of a unit owner:
             529          (i) the association's policy provides primary insurance coverage; and
             530          (ii) notwithstanding Subsection (9)[(g)](f)(i)[,] and subject to Subsection (9)(g):
             531          (A) the unit owner is responsible for the deductible of the association of unit owners;
             532      and
             533          (B) building property coverage, often referred to as coverage A, of the unit owner's
             534      policy applies to that portion of the loss attributable to the policy deductible of the association
             535      of unit owners.
             536          [(h)] (g) (i) As used in this Subsection (9)[(h)](g) and Subsection (9)(j):
             537          (A) "Covered loss" means a loss, resulting from a single event or occurrence, that is
             538      covered by a property insurance policy of an association of unit owners.
             539          (B) "Unit damage" means damage to a unit or to a limited common area or facility
             540      [applicable] appurtenant to that unit, or both.
             541          (C) "Unit damage percentage" means the percentage of total damage resulting in a
             542      covered loss that is attributable to unit damage.
             543          (ii) A unit owner who owns a unit that has suffered unit damage as part of a covered
             544      loss is responsible for an amount calculated by applying the unit damage percentage for that
             545      unit to the amount of the deductible under the property insurance policy of the association of
             546      unit owners.
             547          (iii) If a unit owner does not pay the amount required under Subsection (9)[(h)](g)(ii)
             548      within 30 days after substantial completion of the repairs to the unit or limited common areas
             549      and facilities appurtenant to that unit, an association of unit owners may levy an assessment
             550      against the unit owner for that amount.
             551          [(i)] (h) An association of unit owners shall set aside an amount equal to the amount of
             552      the association's property insurance policy deductible or, if the policy deductible exceeds



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             553      $10,000, [whichever is less] an amount not less than $10,000.
             554          [(j)] (i) (i) An association of unit owners shall provide notice in accordance with
             555      Section 57-8-42 to each unit owner of the unit owner's obligation under Subsection (9)[(h)](g)
             556      for the association's policy deductible and of any change in the amount of the deductible.
             557          (ii) (A) An association of unit owners that fails to provide notice as provided in
             558      Subsection (9)[(j)](i)(i) is responsible for the [amount] portion of the deductible [increase] that
             559      the association of unit owners could have assessed to a unit owner under Subsection
             560      (9)[(h)](g), but only to the extent that the unit owner does not have insurance coverage that
             561      would otherwise apply under this Subsection (9).
             562          (B) Notwithstanding Subsection (9)(i) S. [ (i) ] (ii) .S (A), an association of unit owners
             562a      that
             563      provides notice of the association's policy deductible, as required under Subsection (9)(i)(i), but
             564      fails to provide notice of a later increase in the amount of the deductible is responsible only for
             565      the amount of the increase for which notice was not provided.
             566          (iii) The failure of an association of unit owners to provide notice as provided in
             567      Subsection (9)[(j)](i)(i) may not be construed to invalidate any other provision of this section.
             568          [(k)] (j) If, in the exercise of the business judgment rule, the management committee
             569      determines that a [claim] covered loss is likely not to exceed the property insurance policy
             570      deductible of the association of unit owners and until S. [ if ] it .S becomes apparent the covered
             570a      loss
             571      exceeds the deductible of the property insurance of the association of unit owners and a claim
             572      is submitted to the property insurance insurer of the association of unit owners:
             573          (i) [the] a unit owner's policy is considered the policy for primary coverage [to the
             574      amount of the policy deductible of the association of unit owners] for a loss occurring to the
             575      unit owner's unit or to a limited common area or facility appurtenant to the unit;
             576          (ii) the association of unit owners is responsible for any covered loss to any common
             577      areas and facilities;
             578          [(ii)] (iii) a unit owner who does not have a policy to cover the [property insurance
             579      policy deductible of the association of unit owners is responsible for the loss to the amount of
             580      the policy deductible of the association of unit owners, as provided in Subsection (9)(h)]
             581      damage to that unit owner's unit and appurtenant limited common areas and facilities is
             582      responsible for that damage, and the association of unit owners may, as provided in Subsection
             583      (9)(g)(iii), recover any payments the association of unit owners makes to remediate that unit



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             584
     and appurtenant limited common areas and facilities; and
             585          [(iii)] (iv) the association of unit owners need not tender the claim to the association's
             586      insurer.
             587          [(l)] (k) (i) An insurer under a property insurance policy issued to an association of unit
             588      owners shall adjust with the association of unit owners a loss covered under the association's
             589      policy.
             590          (ii) Notwithstanding Subsection (9)[(l)](k)(i), the insurance proceeds for a loss under a
             591      property insurance policy of an association of unit owners:
             592          (A) are payable to an insurance trustee that the association of unit owners designates
             593      or, if no trustee is designated, to the association of unit owners; and
             594          (B) may not be payable to a holder of a security interest.
             595          (iii) An insurance trustee or an association of unit owners shall hold any insurance
             596      proceeds in trust for the association of unit owners, unit owners, and lien holders.
             597          (iv) (A) [Insurance] If damaged property is to be repaired or restored, insurance
             598      proceeds shall be disbursed first for the repair or restoration of the damaged property.
             599          (B) After the disbursements described in Subsection (9)[(l)](k)(iv)(A) are made and the
             600      damaged property has been completely repaired or restored or the project terminated, any
             601      surplus proceeds are payable to the association of unit owners, unit owners, and lien holders, as
             602      provided in the declaration.
             603          [(m)] (l) An insurer that issues a property insurance policy under this section, or the
             604      insurer's authorized agent, shall issue a certificate or memorandum of insurance to:
             605          (i) the association of unit owners;
             606          (ii) a unit owner, upon the unit owner's written request; and
             607          (iii) a holder of a security interest, upon the holder's written request.
             608          [(n)] (m) A cancellation or nonrenewal of a property insurance policy under this
             609      section is subject to the procedures stated in Section 31A-21-303 .
             610          [(o)] (n) A management committee that acquires from an insurer the property insurance
             611      required in this section is not liable to unit owners if the insurance proceeds are not sufficient
             612      to cover 100% of the full replacement cost of the insured property at the time of the loss.
             613          (o) (i) Unless required in the declaration, property insurance coverage is not required
             614      for fixtures, improvements, or betterments in a commercial unit or limited common areas and



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             615      facilities appurtenant to a commercial unit in a mixed-use condominium project.
             616          (ii) Notwithstanding any other provision of this section, an association of unit owners
             617      may obtain property insurance for fixtures, improvements, or betterments in a commercial unit
             618      in a mixed-use condominium project if allowed or required in the declaration.
             619          (p) (i) This Subsection (9) does not prevent a person suffering a loss as a result of
             620      damage to property from asserting a claim, either directly or through subrogation, for the loss
             621      against a person at fault for the loss.
             622          (ii) Subsection (9)(p)(i) does not affect Subsection (7).
             623          (10) (a) This Subsection (10) applies to a liability insurance policy required under
             624      Subsection (3)(b).
             625          (b) A liability insurance policy shall be in an amount determined by the management
             626      committee but not less than an amount specified in the declaration or bylaws.
             627          (c) Each unit owner is an insured person under a liability insurance policy that an
             628      association of unit owners obtains [that insures against], but only for liability arising from:
             629          (i) the unit owner's ownership interest in the common areas and facilities [or from]
             629a      S. [ : ] ; .S
             630          (ii) maintenance, repair, or replacement of common areas and facilities; and
             631          (iii) the unit owner's membership in the association of unit owners.
             632          Section S. [ 10 ] 11 .S . Section 57-8-55 is enacted to read:
             633          57-8-55. Consolidation of multiple associations of unit owners.
             634          (1) Two or more associations of unit owners may be consolidated into a single
             635      association of unit owners as provided in Title 16, Chapter 6a, Part 11, Merger, and this
             636      section.
             637          (2) Unless the declaration, articles, or bylaws otherwise provide, a declaration of
             638      consolidation between two or more associations of unit owners to consolidate into a single
             639      association of unit owners is not effective unless it is approved by the unit owners of each of
             640      the consolidating associations of unit owners, by the highest percentage of allocated voting
             641      interests of the unit owners required by each association of unit owners to amend its respective
             642      declaration, articles, or bylaws.
             643          (3) A declaration of consolidation under Subsection (2) shall:
             644          (a) be prepared, executed, and certified by the president of the association of each of
             645      the consolidating associations of unit owners; and



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             646          (b) provide for the reallocation of the allocated interests in the consolidated association
             647      by stating:
             648          (i) the reallocations of the allocated interests in the consolidated association of unit
             649      owners or the formulas used to reallocate the allocated interests; or
             650          (ii) (A) the percentage of overall allocated interests of the consolidated association of
             651      unit owners that are allocated to all of the units comprising each of the consolidating
             652      associations of unit owners; and
             653          (B) that the portion of the percentages allocated to each unit formerly comprising a part
             654      of a consolidating association of unit owners is equal to the percentages of allocated interests
             655      allocated to the unit by the declaration of the consolidating association of unit owners.
             656          (4) A declaration of consolidation under Subsection (2) is not effective until it is
             657      recorded in the office of each applicable county recorder.
             658          (5) Unless otherwise provided in the declaration of consolidation, the consolidated
             659      association of unit owners resulting from a consolidation under this section:
             660          (a) is the legal successor for all purposes of all of the consolidating associations of unit
             661      owners;
             662          (b) the operations and activities of all of the consolidating associations of unit owners
             663      shall be consolidated into the consolidated association of unit owners; and
             664          (c) the consolidated association of unit owners holds all powers, rights, obligations,
             665      assets, and liabilities of all consolidating associations of unit owners.
             666          Section S. [ 11 ] 12 .S . Section 57-8a-102 is amended to read:
             667           57-8a-102. Definitions.
             668          As used in this chapter:
             669          (1) (a) "Assessment" means a charge imposed or levied:
             670          (i) by the association;
             671          (ii) on or against a lot or a lot owner; and
             672          (iii) pursuant to a governing document recorded with the county recorder.
             673          (b) "Assessment" includes:
             674          (i) a common expense; and
             675          (ii) an amount assessed against a lot owner under Subsection 57-8a-405 [(8)](7).
             676          (2) (a) Except as provided in Subsection (2)(b), "association" means a corporation or



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     other legal entity, [each] any member of which:
             678          (i) is an owner of a residential lot located within the jurisdiction of the association, as
             679      described in the governing documents; and
             680          (ii) by virtue of membership or ownership of a residential lot is obligated to pay:
             681          (A) real property taxes;
             682          (B) insurance premiums;
             683          (C) maintenance costs; or
             684          (D) for improvement of real property not owned by the member.
             685          (b) "Association" or "homeowner association" does not include an association created
             686      under Title 57, Chapter 8, Condominium Ownership Act.
             687          (3) "Board of directors" or "board" means the entity, regardless of name, with primary
             688      authority to manage the affairs of the association.
             689          (4) "Common areas" means property that the association:
             690          (a) owns;
             691          (b) maintains;
             692          (c) repairs; or
             693          (d) administers.
             694          (5) "Common expense" means costs incurred by the association to exercise any of the
             695      powers provided for in the association's governing documents.
             696          (6) "Declarant":
             697          (a) means the person who executes a declaration and submits it for recording in the
             698      office of the recorder of the county in which the property described in the declaration is
             699      located; and
             700          (b) includes the person's successor and assign.
             701          (7) (a) "Governing documents" means a written instrument by which the association
             702      may:
             703          (i) exercise powers; or
             704          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
             705      association.
             706          (b) "Governing documents" includes:
             707          (i) articles of incorporation;



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             708          (ii) bylaws;
             709          (iii) a plat;
             710          (iv) a declaration of covenants, conditions, and restrictions; and
             711          (v) rules of the association.
             712          (8) "Judicial foreclosure" means a foreclosure of a lot:
             713          (a) for the nonpayment of an assessment; and
             714          (b) (i) in the manner provided by law for the foreclosure of a mortgage on real
             715      property; and
             716          (ii) as provided in Part 3, Collection of Assessments.
             717          (9) "Lease" or "leasing" means regular, exclusive occupancy of a lot:
             718          (a) by a person or persons other than the owner; and
             719          (b) for which the owner receives a consideration or benefit, including a fee, service,
             720      gratuity, or emolument.
             721          (10) "Limited common areas" means common areas described in the declaration and
             722      allocated for the exclusive use of one or more lot owners.
             723          (11) "Lot" means:
             724          (a) a lot, parcel, plot, or other division of land:
             725          (i) designated for separate ownership or occupancy; and
             726          (ii) (A) shown on a recorded subdivision plat; or
             727          (B) the boundaries of which are described in a recorded governing document; or
             728          (b) (i) a unit in a condominium association if the condominium association is a part of
             729      a development; or
             730          (ii) a unit in a real estate cooperative if the real estate cooperative is part of a
             731      development.
             732          (12) "Mixed- S. [ used ] use .S project" means a project under this chapter that has both
             732a      residential
             733      and commercial lots in the project.
             734          [(12)] (13) "Nonjudicial foreclosure" means the sale of a lot:
             735          (a) for the nonpayment of an assessment; and
             736          (b) (i) in the same manner as the sale of trust property under Sections 57-1-19 through
             737      57-1-34 ; and
             738          (ii) as provided in Part 3, Collection of Assessments.



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             739          [(13)] (14) "Residential lot" means a lot, the use of which is limited by law, covenant,
             740      or otherwise to primarily residential or recreational purposes.
             741          Section S. [ 12 ] 13 .S . Section 57-8a-107 is enacted to read:
             742          57-8a-107. Amending the declaration to make provisions of this chapter
             743      applicable.
             744          (1) An association may amend the declaration to make applicable to the association a
             745      provision of this chapter that is enacted after the creation of the association, by complying with:
             746          (a) the amendment procedures and requirements specified in the declaration and
             747      applicable provisions of this chapter; or
             748          (b) the amendment procedures and requirements of this chapter, if the declaration
             749      being amended does not contain amendment procedures and requirements.
             750          (2) If an amendment under Subsection (1) adopts a specific section of this chapter:
             751          (a) the amendment grants a right, power, or privilege permitted by that specific section;
             752      and
             753          (b) all correlative obligations, liabilities, and restrictions in that section also apply.
             754          Section S. [ 13 ] 14 .S . Section 57-8a-108 is enacted to read:
             755          57-8a-108. Rules against perpetuities and unreasonable restraints -- Insubstantial
             756      failure to comply.
             757          (1) The rule against perpetuities and the rule against unreasonable restraints on
             758      alienation of real estate may not defeat a provision of a governing document.
             759          (2) (a) A declaration that fails to comply with this chapter does not render a title to a lot
             760      and common areas unmarketable or otherwise affect the title if the failure is insubstantial.
             761          (b) This chapter does not affect whether a substantial failure impairs marketability.
             761a           S. Section 15 . Section 57-8a-109 is enacted to read:
             761b          57-8a-109. Limit on fee for approval of plans.
             761c          (1) As used in this section:
             761d          (a) "Lot plans" means plans:
             761e          (i) for the construction or improvement of a lot; and
             761f          (ii) that are required to be approved by the association before the lot construction or
             761g      improvement may occur.
             761h          (b)"Plan fee" means a fee that an association charges for review and approval of lot
             761i      plans.    
             761j          (2) An association may not charge a plan fee that exceeds the actual cost of reviewing
             761k      and approving the lot plans. .S


            
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762          Section S. [ 14 ] 16 .S . Section 57-8a-211 is amended to read:
             763     
Part 2. Administrative Provisions

             764           57-8a-211. Reserve analysis -- Reserve fund.
             765          (1) As used in this section[,]:
             766          (a) "Reserve analysis" means an analysis to determine:
             767          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             768      replacing, and restoring common areas that have a useful life of three years or more and a
             769      remaining useful life of less than 30 years, but excluding any cost that can reasonably be



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             770
     funded from the association's general budget or from other association funds; and
             771          [(b)] (ii) the appropriate amount of any reserve fund.
             772          (b) "Reserve fund line item" means the line item in an association's budget that
             773      identifies the amount to be placed into a reserve fund.
             774          (2) Except as otherwise provided in the governing documents, a board shall:
             775          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no
             776      less frequently than every six years; and
             777          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             778      analysis to be conducted before July 1, 2012; and]
             779          (b) review and, if necessary, update a previously conducted reserve analysis no less
             780      frequently than every three years.
             781          (3) The board may conduct a reserve analysis itself or may engage a reliable person or
             782      organization, as determined by the board, to conduct the reserve analysis.
             783          (4) (a) A board may not use money in a reserve fund:
             784          (i) for daily maintenance expenses, unless a majority of association members vote to
             785      approve the use of reserve fund money for that purpose; or
             786          (ii) for any purpose other than the purpose for which the reserve fund was established.
             787          (b) A board shall maintain [a] reserve [fund] funds separate from other association
             788      funds.
             789          (c) This Subsection (4) may not be construed to limit a board from prudently investing
             790      money in a reserve fund, subject to any investment constraints imposed by the governing
             791      documents.
             792          (5) An association shall:
             793          (a) annually provide lot owners a summary of the most recent reserve analysis or
             794      update; and
             795          (b) provide a copy of the complete reserve analysis or update to a lot owner who
             796      requests a copy.
             797          (6) In formulating its budget each year, an association shall include a reserve fund line
             798      item in:
             799          (a) an amount the board determines, based on the reserve analysis, to be prudent; or
             800          (b) an amount required by the governing documents, if the governing documents



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             801      require an amount higher than the amount determined under Subsection (6)(a) S. [ (i) ] .S .
             802          [(5)] (7) Subsections (2)[, (3), (4), and] through (6) do not apply to an association
             803      during the period of administrative control.
             804          [(6) An association shall:]
             805          [(a) annually, at the annual meeting of lot owners or at a special meeting of lot
             806      owners:]
             807          [(i) present the reserve study; and]
             808          [(ii) provide an opportunity for lot owners to discuss reserves and to vote on whether to
             809      fund a reserve fund and, if so, how to fund it and in what amount; and]
             810          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             811      indicate in the minutes any decision relating to funding a reserve fund.]
             812          [(7)] (8) This section applies to each association, regardless of when the association
             813      was created.
             814          Section S. [ 15 ] 17 .S . Section 57-8a-212 is amended to read:
             815           57-8a-212. Content of a declaration.
             816          (1) An initial declaration recorded on or after May 10, 2011 shall contain:
             817          (a) the name of the project;
             818          (b) the name of the association;
             819          (c) a statement that the project is not a cooperative;
             820          (d) a statement indicating any portions of the project that contain condominiums
             821      governed by Chapter 8, Condominium Ownership Act;
             822          (e) if the declarant desires to reserve the option to expand the project, a statement
             823      reserving the option to expand the project;
             824          (f) the name of each county in which any part of the project is located;
             825          (g) a legally sufficient description of the real estate included in the project;
             826          (h) a description of any limited common areas and any real estate that is or is required
             827      to become common areas;
             828          (i) any restriction on the alienation of a lot, including a restriction on leasing; and
             829          (j) (i) an appointment of a trustee who qualifies under Subsection 57-1-21 (1)(a)(i) or
             830      (iv); and
             831          (ii) the following statement: "The declarant hereby conveys and warrants pursuant to



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             832      U.C.A. Sections 57-1-20 and [ 57-8a-402 ] 57-8a-302 to (name of trustee), with power of sale,
             833      the lot and all improvements to the lot for the purpose of securing payment of assessments
             834      under the terms of the declaration."
             835          (2) A declaration may contain any other information the declarant considers
             836      appropriate, including any restriction on the use of a lot, the number of persons who may
             837      occupy a lot, or other qualifications of a person who may occupy a lot.
             838          (3) The location of a limited common area or real estate described in Subsection (1)(g)
             839      may be shown on a subdivision plat.
             840          Section S. [ 16 ] 18 .S . Section 57-8a-220 is amended to read:
             841           57-8a-220. Creditor approval may be required for lot owner or association action
             842      under declaration -- Creditor approval presumed in certain circumstances -- Notice to
             843      creditor or creditor's successor.
             844          (1) (a) Subject to Subsection (1)(b), a declaration may:
             845          (i) condition the effectiveness of lot owners' actions specified in the declaration on the
             846      approval of a specified number or percentage of lenders holding a security interest in the lots;
             847      or
             848          (ii) condition the effectiveness of association actions specified in the declaration on the
             849      approval of a specified number or percentage of lenders that have extended credit to the
             850      association.
             851          (b) A condition under Subsection (1)(a) may not:
             852          (i) deny or delegate the lot owners' or board's control over the association's general
             853      administrative affairs;
             854          (ii) prevent the association or board from commencing, intervening in, or settling any
             855      litigation or proceeding; or
             856          (iii) prevent an insurance trustee or the association from receiving or distributing
             857      insurance proceeds under Subsection 57-8a-405 [(12)](11).
             858          (c) A condition under Subsection (1)(a) does not violate a prohibition under Subsection
             859      (1)(b) by:
             860          (i) requiring the association to deposit the association's assessments before default with
             861      the lender assigned the income; or
             862          (ii) requiring the association to increase an assessment at the lender's direction by an



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             863
     amount reasonably necessary to pay the loan in accordance with the loan terms.
             864          (d) This Subsection (1) applies to:
             865          (i) an association formed before, on, or after May 10, 2011; and
             866          (ii) documents created and recorded before, on, or after May 10, 2011.
             867          (2) Subject to this chapter and applicable law, a lender who has extended credit to an
             868      association secured by an assignment of income or an encumbrance of the common areas may
             869      enforce the lender's security agreement as provided in the agreement.
             870          (3) (a) Subject to Subsection (4), a security holder's consent that is required under
             871      Subsection (1) to amend a declaration or bylaw or for another association action is presumed if:
             872          (i) the association sends written notice of the proposed amendment or action by
             873      certified or registered mail to the security holder's address stated in a recorded document
             874      evidencing the security interest; and
             875          (ii) the person designated in a notice under Subsection (3)(a)(i) to receive the security
             876      holder's response does not receive a response within 60 days after the association sends notice
             877      under Subsection (3)(a)(i).
             878          (b) If a security holder's address for receiving notice is not stated in a recorded
             879      document evidencing the security interest, an association:
             880          (i) shall use reasonable efforts to find a mailing address for the security holder; and
             881          (ii) may send the notice to any address obtained under Subsection (3)(b)(i).
             882          (4) If a security holder responds in writing within 60 days after the association sends
             883      notice under Subsection (3)(a)(i) that the security interest has been assigned or conveyed to
             884      another person, the association:
             885          (a) shall:
             886          (i) send a notice under Subsection (3)(a)(i) to the person assigned or conveyed the
             887      security interest at the address provided by the security holder in the security holder's response;
             888      or
             889          (ii) if no address is provided:
             890          (A) use reasonable efforts to find a mailing address for the person assigned or
             891      conveyed the security interest; and
             892          (B) send notice by certified or registered mail to the person at the address that the
             893      association finds under Subsection (4)(a)(ii)(A); and



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             894          (b) may not presume the security holder's consent under Subsection (3)(a) unless the
             895      person designated in a notice under Subsection (4)(a) to receive the response from the person
             896      assigned or conveyed the security interest does not receive a response within 60 days after the
             897      association sends the notice.
             898          Section S. [ 17 ] 19 .S . Section 57-8a-222 is enacted to read:
             899          57-8a-222. Removing or altering partition between dwelling units on adjoining
             900      lots.
             901          (1) Subject to the declaration, a lot owner may, after acquiring an adjoining lot with a
             902      dwelling unit that shares a common wall with a dwelling unit on the lot owner's lot:
             903          (a) remove or alter a partition between the lot owner's lot and the acquired lot, even if
             904      the partition is entirely or partly common areas; or
             905          (b) create an aperture to the adjoining lot or portion.
             906          (2) A lot owner may not take an action under Subsection (1) if the action would:
             907          (a) impair the structural integrity or mechanical systems of the building or either lot;
             908          (b) reduce the support of any portion of the common areas or another lot; or
             909          (c) constitute a violation of Section 10-9a-608 or 17-27a-608 , as applicable, a local
             910      government land use ordinance, or a building code.
             911          (3) The board may require a lot owner to submit, at the lot owner's expense, a
             912      registered professional engineer's or registered architect's opinion stating that a proposed
             913      change to the lot owner's lot will not:
             914          (a) impair the structural integrity or mechanical systems of the building or either lot;
             915          (b) reduce the support or integrity of common areas; or
             916          (c) compromise structural components.
             917          (4) The board may require a lot owner to pay all of the association's legal and other
             918      expenses related to a proposed alteration to the lot or building under this section.
             919          (5) An action under Subsection (1) does not change an assessment or voting right
             920      attributable to the lot owner's lot or the acquired lot, unless the declaration provides otherwise.
             921          Section S. [ 18 ] 20 .S . Section 57-8a-223 is enacted to read:
             922          57-8a-223. Eminent domain -- Common area.
             923          Unless the declaration provides otherwise:
             924          (1) if part of the common area is taken by eminent domain:



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             925          (a) the entity taking part of the common area shall pay to the association the portion of
             926      the compensation awarded for the taking that is attributable to the common area; and
             927          (b) the association shall equally divide any portion of the award attributable to the
             928      taking of a limited common area among the owners of the lots to which the limited common
             929      area was allocated at the time of the taking; and
             930          (2) an association shall submit for recording to each applicable county recorder the
             931      court judgment or order in an eminent domain action that results in the taking of some or all of
             932      the common area.
             933          Section S. [ 19 ] 21 .S . Section 57-8a-224 is enacted to read:
             934          57-8a-224. Responsibility for the maintenance, repair, and replacement of
             935      common area and lots.
             936          (1) As used in this section:
             937          (a) "Emergency repair" means a repair that, if not made in a timely manner, will likely
             938      result in immediate and substantial damage to a common area or to another lot.
             939          (b) "Reasonable notice" means:
             940          (i) written notice that is hand delivered to the lot at least 24 hours before the proposed
             941      entry; or
             942          (ii) in the case of an emergency repair, notice that is reasonable under the
             943      circumstances.
             944          (2) Except as otherwise provided in the declaration or Part 4, Insurance:
             945          (a) an association is responsible for the maintenance, repair, and replacement of
             946      common areas; and
             947          (b) a lot owner is responsible for the maintenance, repair, and replacement of the lot
             948      owner's lot.
             949          (3) After reasonable notice to the occupant of the lot being entered, the board may
             950      access a lot:
             951          (a) from time to time during reasonable hours, as necessary for the maintenance, repair,
             952      or replacement of any of the common areas; or
             953          (b) for making an emergency repair.
             954          (4) (a) An association is liable to repair damage it causes to the common areas or to a
             955      lot the association uses to access the common areas.



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             956          (b) An association shall repair damage described in Subsection (4)(a) within a time that
             957      is reasonable under the circumstances.
             958          (5) Subsections (2), (3), and (4) do not apply during the period of administrative
             959      control as defined in Section 57-8a-104 .
             960          Section S. [ 20 ] 22 .S . Section 57-8a-402 is amended to read:
             961           57-8a-402. Applicability of part.
             962          (1) This part applies to an insurance policy or combination of insurance policies:
             963          (a) issued or renewed on or after July 1, 2011; and
             964          (b) issued to or renewed by:
             965          (i) a lot owner; or
             966          (ii) an association, regardless of when the association is formed.
             967          (2) [This] Unless otherwise provided in the declaration, this part does not apply to a
             968      project if all of the project's lots are restricted to entirely nonresidential use.
             969          (3) Subject to Subsection (4), this part does not apply to a project if:
             970          (a) the initial declaration for the project is recorded before January 1, 2012;
             971          (b) the project includes attached dwellings; and
             972          (c) the declaration requires each lot owner to insure the lot owner's dwelling.
             973          (4) (a) An association [that is subject to a declaration recorded before January 1, 2012]
             974      to which this part does not apply under Subsection (3) may amend the declaration, as provided
             975      in the declaration and applicable law, to subject the association to this part.
             976          (b) During the period of administrative control, an amendment under Subsection (4)(a)
             977      requires the consent of the declarant.
             978          Section S. [ 21 ] 23 .S . Section 57-8a-403 is amended to read:
             979           57-8a-403. Property and liability insurance required -- Notice if insurance not
             980      reasonably available.
             981          (1) Beginning not later than the day on which the first lot is conveyed to a person other
             982      than a declarant, an association shall maintain, to the extent reasonably available:
             983          (a) subject to Section 57-8a-405 , blanket property insurance or guaranteed replacement
             984      cost insurance on the physical structure of all attached dwellings, limited common areas
             985      appurtenant to a dwelling on a lot, and common areas in the project, insuring against all risks
             986      of direct physical loss commonly insured against, including fire and extended coverage perils;



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             987      and
             988          (b) subject to Section 57-8a-406 , liability insurance[, including medical payments
             989      insurance] covering all occurrences commonly insured against for death, bodily injury, and
             990      property damage arising out of or in connection with the use, ownership, or maintenance of the
             991      common areas.
             992          (2) If an association becomes aware that property insurance under Subsection (1)(a) or
             993      liability insurance under Subsection (1)(b) is not reasonably available, the association shall,
             994      within seven calendar days after becoming aware, give all lot owners notice, as provided in
             995      Section [ 57-8a-215 ] 57-8a-214 , that the insurance is not reasonably available.
             996          Section S. [ 22 ] 24 .S . Section 57-8a-404 is amended to read:
             997           57-8a-404. Other and additional insurance -- Limit on effect of lot owner act or
             998      omission -- Insurer's subrogation waiver -- Inconsistent provisions.
             999          (1) (a) The declaration or bylaws may require the association to carry other types of
             1000      insurance in addition to those described in Section 57-8a-403 .
             1001          (b) In addition to any type of insurance coverage or limit of coverage provided in the
             1002      declaration or bylaws and subject to the requirements of this part, an association may, as the
             1003      board considers appropriate, obtain:
             1004          (i) an additional type of insurance than otherwise required; or
             1005          (ii) a policy with greater coverage than otherwise required.
             1006          (2) Unless a lot owner is acting within the scope of the lot owner's authority on behalf
             1007      of an association, a lot owner's act or omission may not:
             1008          (a) void a property insurance policy under Subsection 57-8a-403 (1)(a) or a liability
             1009      insurance policy under Subsection 57-8a-403 (1)(b); or
             1010          (b) be a condition to recovery under a policy.
             1011          (3) An insurer under a property insurance policy or liability insurance policy obtained
             1012      by an association under this part waives its right to subrogation under the policy against [any
             1013      lot owner or member of the lot owner's household.]:
             1014          (a) any person residing with a lot owner, if the lot owner resides on the lot; and
             1015          (b) the lot owner.
             1016          (4) (a) An insurance policy issued to an association may not be inconsistent with any
             1017      provision of this part.



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             1018          (b) A provision of a governing document that is contrary to a provision of this part has
             1019      no effect.
             1020          (c) [A] Neither the governing documents nor a property insurance or liability insurance
             1021      policy issued to an association may [not] prevent a lot owner from obtaining insurance for the
             1022      lot owner's own benefit.
             1023          Section S. [ 23 ] 25 .S . Section 57-8a-405 is amended to read:
             1024           57-8a-405. Property insurance.
             1025          (1) This section applies to property insurance required under Subsection
             1026      57-8a-403 (1)(a).
             1027          [(2) The property covered by property insurance shall include any property that, under
             1028      the declaration, is required to become common areas.]
             1029          [(3)] (2) The total amount of coverage provided by blanket property insurance or
             1030      guaranteed replacement cost insurance may not be less than 100% of the full replacement cost
             1031      of the insured property at the time the insurance is purchased and at each renewal date,
             1032      excluding:
             1033          (a) items normally excluded from property insurance policies[.]; and
             1034          (b) unless otherwise provided in the declaration, any commercial lot in a mixed-use
             1035      project, including any fixture, improvement, or betterment in a commercial lot in a mixed-use
             1036      project.
             1037          [(4)] (3) Property insurance shall include coverage for any fixture, improvement, or
             1038      betterment installed [by a lot owner] at any time to an attached dwelling or to a limited
             1039      common area appurtenant to a dwelling on a lot, whether installed in the original construction
             1040      or in any remodel or later alteration, including a floor covering, cabinet, light fixture, electrical
             1041      fixture, heating or plumbing fixture, paint, wall covering, window, and any other item
             1042      permanently part of or affixed to an attached dwelling or to a limited common area.
             1043          [(5)] (4) Notwithstanding anything in this part and unless otherwise provided in the
             1044      declaration, an association is not required to obtain property insurance for a loss to a dwelling
             1045      that is not physically attached to another dwelling or to a common area structure.
             1046          [(6)] (5) Each lot owner is an insured person under a property insurance policy.
             1047          [(7)] (6) If a loss occurs that is covered by a property insurance policy in the name of
             1048      an association and another property insurance policy in the name of a lot owner:



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             1049
         (a) the association's policy provides primary insurance coverage; and
             1050          (b) notwithstanding Subsection [(7)] (6)(a) and subject to Subsection [(8)] (7):
             1051          (i) [a] the lot owner is responsible for the association's policy deductible; and
             1052          (ii) building property coverage, often referred to as coverage A, of the lot owner's
             1053      policy applies to that portion of the loss attributable to the association's policy deductible.
             1054          [(8)] (7) (a) As used in this Subsection [(8)] (7) and Subsection (10):
             1055          (i) "Covered loss" means a loss, resulting from a single event or occurrence, that is
             1056      covered by an association's property insurance policy.
             1057          (ii) "Lot damage" means damage to any combination of a lot, a dwelling on a lot, or a
             1058      limited common area appurtenant to a lot or appurtenant to a dwelling on a lot.
             1059          (iii) "Lot damage percentage" means the percentage of total damage resulting in a
             1060      covered loss that is attributable to lot damage.
             1061          (b) A lot owner who owns a lot that has suffered lot damage as part of a covered loss is
             1062      responsible for an amount calculated by applying the lot damage percentage for that lot to the
             1063      amount of the deductible under the association's property insurance policy.
             1064          (c) If a lot owner does not pay the amount required under Subsection [(8)] (7)(b) within
             1065      30 days after substantial completion of the repairs to, as applicable, the lot, a dwelling on the
             1066      lot, or the limited common area appurtenant to the lot, an association may levy an assessment
             1067      against a lot owner for that amount.
             1068          [(9)] (8) An association shall set aside an amount equal to the amount of the
             1069      association's property insurance policy deductible or, if the policy deductible exceeds $10,000,
             1070      [whichever is less] an amount not less than $10,000.
             1071          [(10)] (9) (a) An association shall provide notice in accordance with Section 57-8a-214
             1072      to each lot owner of the lot owner's obligation under Subsection [(8)] (7) for the association's
             1073      policy deductible and of any change in the amount of the deductible.
             1074          (b) (i) An association that fails to provide notice as provided in Subsection [(10)] (9)(a)
             1075      is responsible for the [amount] portion of the deductible [increase] that the association could
             1076      have assessed to a lot owner under Subsection [(8)] (7), but only to the extent that the lot owner
             1077      does not have insurance coverage that would otherwise apply under this section.
             1078          (ii) Notwithstanding Subsection (9)(b)(i), an association that provides notice of the
             1079      association's policy deductible, as required under Subsection (9)(a), but fails to provide notice



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             1080
     of a later increase in the amount of the deductible is responsible only for the amount of the
             1081      increase for which notice was not provided.
             1082          (c) An association's failure to provide notice as provided in Subsection [(10)] (9)(a)
             1083      may not be construed to invalidate any other provision of this part.
             1084          [(11)] (10) If, in the exercise of the business judgment rule, the board determines that a
             1085      [claim] covered loss is likely not to exceed the association's property insurance policy
             1086      deductible, and until it becomes apparent the covered loss exceeds the association's property
             1087      insurance deductible and a claim is submitted to the association's property insurance insurer:
             1088          (a) for a lot to which a loss occurs, the lot owner's policy is considered the policy for
             1089      primary coverage [to the amount of the association's policy deductible] for the damage to that
             1090      lot;
             1091          (b) the association is responsible for any covered loss to any common area;
             1092          [(b)] (c) a lot owner who does not have a policy to cover the [association's property
             1093      insurance policy deductible] damage to that lot owner's lot is responsible for [the loss to the
             1094      amount of the association's policy deductible, as provided in Subsection (8)] that lot damage,
             1095      and the association may, as provided in Subsection (7)(c), recover any payments the association
             1096      makes to remediate that lot; and
             1097          [(c)] (d) the association need not tender the claim to the association's insurer.
             1098          [(12)] (11) (a) An insurer under a property insurance policy issued to an association
             1099      shall adjust with the association a loss covered under the association's policy.
             1100          (b) Notwithstanding Subsection [(12)] (11)(a), the insurance proceeds for a loss under
             1101      an association's property insurance policy:
             1102          (i) are payable to an insurance trustee that the association designates or, if no trustee is
             1103      designated, to the association; and
             1104          (ii) may not be payable to a holder of a security interest.
             1105          (c) An insurance trustee or an association shall hold any insurance proceeds in trust for
             1106      the association, lot owners, and lien holders.
             1107          (d) (i) [Insurance] If damaged property is to be repaired or restored, insurance proceeds
             1108      shall be disbursed first for the repair or restoration of the damaged property.
             1109          (ii) After the disbursements described in Subsection [(12)] (11)(d)(i) are made and the
             1110      damaged property has been completely repaired or restored or the project terminated, any



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             1111      surplus proceeds are payable to the association, lot owners, and lien holders, as provided in the
             1112      declaration.
             1113          [(13)] (12) An insurer that issues a property insurance policy under this part, or the
             1114      insurer's authorized agent, shall issue a certificate or memorandum of insurance to:
             1115          (a) the association;
             1116          (b) a lot owner, upon the lot owner's written request; and
             1117          (c) a holder of a security interest, upon the holder's written request.
             1118          [(14)] (13) A cancellation or nonrenewal of a property insurance policy under this
             1119      section is subject to the procedures stated in Section 31A-21-303 .
             1120          [(15)] (14) A board that acquires from an insurer the property insurance required in this
             1121      section is not liable to lot owners if the insurance proceeds are not sufficient to cover 100% of
             1122      the full replacement cost of the insured property at the time of the loss.
             1123          (15) (a) Unless required in the declaration, property insurance coverage is not required
             1124      for fixtures, improvements, or betterments in a commercial lot or limited common areas
             1125      appurtenant to a commercial lot in a mixed- S. [ used ] use .S project.
             1126          (b) Notwithstanding any other provision of this part, an association may obtain
             1127      property insurance for fixtures, improvements, and betterments in a commercial lot in a
             1128      mixed- S. [ used ] use .S project if allowed or required in the declaration.
             1129          (16) (a) This section does not prevent a person suffering a loss as a result of damage to
             1130      property from asserting a claim, either directly or through subrogation, for the loss against a
             1131      person at fault for the loss.
             1132          (b) Subsection (16)(a) does not affect Subsection 57-8a-404 (3).
             1133          Section S. [ 24 ] 26 .S . Section 57-8a-406 is amended to read:
             1134           57-8a-406. Liability insurance.
             1135          (1) This section applies to a liability insurance policy required under Subsection
             1136      57-8a-403 (1)(b).
             1137          (2) A liability insurance policy shall be in an amount determined by the board but not
             1138      less than an amount specified in the declaration or bylaws.
             1139          (3) Each lot owner is an insured person under a liability insurance policy that an
             1140      association obtains [that insures against], but only for liability arising from:
             1141          (a) the lot owner's ownership interest in the common areas [or from];



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             1142          (b) maintenance, repair, or replacement of common areas; and
             1143          (c) the lot owner's membership in the association.
             1144          Section S. [ 25 ] 27 .S . Section 57-8a-407 is amended to read:
             1145           57-8a-407. Damage to a portion of project -- Insurance proceeds.
             1146          (1) (a) If a portion of the project for which insurance is required under this part is
             1147      damaged or destroyed, the association shall repair or replace the portion within a reasonable
             1148      amount of time unless:
             1149          (i) the project is terminated;
             1150          (ii) repair or replacement would be illegal under a state statute or local ordinance
             1151      governing health or safety; or
             1152          (iii) (A) at least 75% of the allocated voting interests of the lot owners in the
             1153      association vote not to rebuild; and
             1154          (B) each owner of a dwelling on a lot and the limited common area appurtenant to that
             1155      lot that will not be rebuilt votes not to rebuild.
             1156          (b) If a portion of a project is not repaired or replaced because the project is terminated,
             1157      the termination provisions of applicable law and the governing documents apply.
             1158          (2) (a) The cost of repair or replacement of any lot in excess of insurance proceeds and
             1159      reserves is a common expense[.] to the extent the association is required under this chapter to
             1160      provide insurance coverage for the lot.
             1161          (b) The cost of repair or replacement of any common area in excess of insurance
             1162      proceeds and reserves is a common expense.
             1163          (3) If the entire project is damaged or destroyed and not repaired or replaced:
             1164          (a) the association shall use the insurance proceeds attributable to the damaged
             1165      common areas to restore the damaged area to a condition compatible with the remainder of the
             1166      project;
             1167          (b) the association shall distribute the insurance proceeds attributable to lots and
             1168      common areas that are not rebuilt to:
             1169          (i) the lot owners of the lots that are not rebuilt;
             1170          (ii) the lot owners of the lots to which those common areas that are not rebuilt were
             1171      allocated; or
             1172          (iii) lien holders; and



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             1173          (c) the association shall distribute the remainder of the proceeds to all the lot owners or
             1174      lien holders in proportion to the common expense liabilities of all the lots.
             1175          (4) If the lot owners vote not to rebuild a lot:
             1176          (a) the lot's allocated interests are automatically reallocated upon the lot owner's vote
             1177      as if the lot had been condemned; and
             1178          (b) the association shall prepare, execute, and submit for recording an amendment to
             1179      the declaration reflecting the reallocations described in Subsection (4)(a).
             1180          Section S. [ 26 ] 28 .S . Section 57-8a-501 is enacted to read:
             1181     
Part 5. Association Board

             1182          57-8a-501. Board acts for association.
             1183          Except as limited in a declaration, the association bylaws, or other provisions of this
             1184      chapter, a board acts in all instances on behalf of the association.
             1185          Section S. [ 27 ] 29 .S . Section 57-8a-502 is enacted to read:
             1186          57-8a-502. Period of administrative control.
             1187          (1) Unless otherwise provided for in a declaration, a period of administrative control
             1188      terminates on the first to occur of the following:
             1189          (a) 60 days after 75% of the lots that may be created are conveyed to lot owners other
             1190      than a declarant;
             1191          (b) seven years after all declarants have ceased to offer lots for sale in the ordinary
             1192      course of business; or
             1193          (c) the day the declarant, after giving written notice to the lot owners, records an
             1194      instrument voluntarily surrendering all rights to control activities of the association.
             1195          (2) (a) A declarant may voluntarily surrender the right to appoint and remove a member
             1196      of the board before the period of administrative control terminates under Subsection (1).
             1197          (b) Subject to Subsection (2)(a), the declarant may require, for the duration of the
             1198      period of administrative control, that actions of the association or board, as specified in a
             1199      recorded instrument executed by the declarant, be approved by the declarant before they
             1200      become effective.
             1201          (3) (a) Upon termination of the period of administrative control, the lot owners shall
             1202      elect a board consisting of an odd number of at least three members, a majority of whom shall
             1203      be lot owners.



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             1204          (b) Unless the declaration provides for the election of officers by the lot owners, the
             1205      board shall elect officers of the association.
             1206          (c) The board members and officers shall take office upon election or appointment.
             1207          Section S. [ 28 ] 30 .S . Section 57-8a-601 is enacted to read:
             1208     
Part 6. Consolidation of Associations

             1209          57-8a-601. Consolidation of multiple associations.
             1210          (1) Two or more associations may be consolidated into a single association as provided
             1211      in Title 16, Chapter 6a, Part 11, Merger, and this section.
             1212          (2) Unless the declaration, articles, or bylaws otherwise provide, a declaration of
             1213      consolidation between two or more associations to consolidate into a single association is not
             1214      effective unless it is approved by the lot owners of each of the consolidating associations by the
             1215      highest percentage of allocated voting interests of the lot owners required by each association
             1216      to amend its respective declaration, articles, or bylaws.
             1217          (3) A declaration of consolidation under Subsection (2) shall:
             1218          (a) be prepared, executed, and certified by the president of each of the consolidating
             1219      associations; and
             1220          (b) provide for the reallocation of the allocated interests in the consolidated association
             1221      by stating:
             1222          (i) the reallocations of the allocated interests in the consolidated association or the
             1223      formulas used to reallocate the allocated interests; or
             1224          (ii) (A) the percentage of overall allocated interests of the consolidated association that
             1225      are allocated to all of the lots comprising each of the consolidating associations; and
             1226          (B) that the portion of the percentages allocated to each lot formerly comprising a part
             1227      of a consolidating association is equal to the percentages of allocated interests allocated to the
             1228      lot by the declaration of the consolidating association.
             1229          (4) A declaration of consolidation under Subsection (2) is not effective until it is
             1230      recorded in the office of each applicable county recorder.
             1231          (5) Unless otherwise provided in the declaration of consolidation S. [ , ] :
             1231a          (a) .S the consolidated
             1232      association resulting from a consolidation under this section S. [ :
             1233          (a)
] .S
is the legal successor for all purposes of all of the consolidating associations;
             1234          (b) the operations and activities of all of the consolidating associations shall be



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             1235      consolidated into the consolidated association; and
             1236          (c) the consolidated association holds all powers, rights, obligations, assets, and
             1237      liabilities of all consolidating associations.
             1238          Section S. [ 29 ] 31 .S . Section 76-6-206 is amended to read:
             1239           76-6-206. Criminal trespass.
             1240          (1) As used in this section, "enter" means intrusion of the entire body.
             1241          (2) A person is guilty of criminal trespass if, under circumstances not amounting to
             1242      burglary as defined in Section 76-6-202 , 76-6-203 , or 76-6-204 or a violation of Section
             1243      76-10-2402 regarding commercial obstruction:
             1244          (a) the person enters or remains unlawfully on property and:
             1245          (i) intends to cause annoyance or injury to any person or damage to any property,
             1246      including the use of graffiti as defined in Section 76-6-107 ;
             1247          (ii) intends to commit any crime, other than theft or a felony; or
             1248          (iii) is reckless as to whether his presence will cause fear for the safety of another;
             1249          (b) knowing the person's entry or presence is unlawful, the person enters or remains on
             1250      property as to which notice against entering is given by:
             1251          (i) personal communication to the actor by the owner or someone with apparent
             1252      authority to act for the owner;
             1253          (ii) fencing or other enclosure obviously designed to exclude intruders; or
             1254          (iii) posting of signs reasonably likely to come to the attention of intruders; or
             1255          (c) the person enters a condominium unit in violation of Subsection 57-8-7 [(7)](8).
             1256          (3) (a) A violation of Subsection (2)(a) or (b) is a class B misdemeanor unless it was
             1257      committed in a dwelling, in which event it is a class A misdemeanor.
             1258          (b) A violation of Subsection (2)(c) is an infraction.
             1259          (4) It is a defense to prosecution under this section that:
             1260          (a) the property was open to the public when the actor entered or remained; and
             1261          (b) the actor's conduct did not substantially interfere with the owner's use of the
             1262      property.


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