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S.B. 90 Enrolled
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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
17 the 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 . provides a limit on plan fees;
26 . modifies provisions relating to the organization of an association as a nonprofit
27 corporation or other entity;
28 . modifies insurance provisions;
29 . enacts a provision relating to the consolidation of associations;
30 . enacts provisions relating to application of the rule against perpetuities and the rule
31 against unreasonable restraints on alienation;
32 . enacts a provision relating to eminent domain of property that is part of a
33 community association; and
34 . makes technical changes.
35 Money Appropriated in this Bill:
36 None
37 Other Special Clauses:
38 This bill provides effective dates.
39 This bill coordinates with S.B. 64, Homeowner Association Reserve Account
40 Amendments, by providing substantive and technical amendments.
41 Utah Code Sections Affected:
42 AMENDS:
43 57-8-3, as last amended by Laws of Utah 2012, Chapter 166
44 57-8-7, as last amended by Laws of Utah 2003, Chapter 265
45 57-8-7.5, as last amended by Laws of Utah 2012, Chapters 83 and 369
46 57-8-23, as enacted by Laws of Utah 1963, Chapter 111
47 57-8-40, as enacted by Laws of Utah 2008, Chapter 291
48 57-8-43, as enacted by Laws of Utah 2011, Chapter 355
49 57-8a-102, as last amended by Laws of Utah 2011, Chapter 355
50 57-8a-211, as last amended by Laws of Utah 2012, Chapters 83 and 369
51 57-8a-212, as enacted by Laws of Utah 2011, Chapter 355
52 57-8a-220, as enacted by Laws of Utah 2011, Chapter 355
53 57-8a-402, as enacted by Laws of Utah 2011, Chapter 355
54 57-8a-403, as enacted by Laws of Utah 2011, Chapter 355
55 57-8a-404, as enacted by Laws of Utah 2011, Chapter 355
56 57-8a-405, as last amended by Laws of Utah 2012, Chapter 369
57 57-8a-406, as enacted by Laws of Utah 2011, Chapter 355
58 57-8a-407, as enacted by Laws of Utah 2011, Chapter 355
59 76-6-206, as last amended by Laws of Utah 2010, Chapter 334
60 ENACTS:
61 57-8-4.5, Utah Code Annotated 1953
62 57-8-6.7, Utah Code Annotated 1953
63 57-8-10.3, Utah Code Annotated 1953
64 57-8-10.5, Utah Code Annotated 1953
65 57-8-55, Utah Code Annotated 1953
66 57-8a-107, Utah Code Annotated 1953
67 57-8a-108, Utah Code Annotated 1953
68 57-8a-109, Utah Code Annotated 1953
69 57-8a-222, Utah Code Annotated 1953
70 57-8a-223, Utah Code Annotated 1953
71 57-8a-224, Utah Code Annotated 1953
72 57-8a-501, Utah Code Annotated 1953
73 57-8a-502, Utah Code Annotated 1953
74 57-8a-601, Utah Code Annotated 1953
75 Utah Code Sections Affected by Coordination Clause:
76 57-8-7.5, as last amended by Laws of Utah 2012, Chapters 83 and 369
77 57-8a-211, as last amended by Laws of Utah 2012, Chapters 83 and 369
78
79 Be it enacted by the Legislature of the state of Utah:
80 Section 1. Section 57-8-3 is amended to read:
81 57-8-3. Definitions.
82 As used in this chapter:
83 (1) "Assessment" means any charge imposed by the association, including:
84 (a) common expenses on or against a unit owner pursuant to the provisions of the
85 declaration, bylaws, or this chapter; and
86 (b) an amount that an association of unit owners assesses to a unit owner under
87 Subsection 57-8-43 (9)[
88 (2) "Association of unit owners" means all of the unit owners:
89 (a) acting as a group in accordance with the declaration and bylaws; or
90 (b) organized as a legal entity in accordance with the declaration.
91 (3) "Building" means a building, containing units, and comprising a part of the
92 property.
93 (4) "Commercial condominium project" means a condominium project that has no
94 residential units within the project.
95 [
96 lawful amendments to the declaration means:
97 (a) the land included within the condominium project, whether leasehold or in fee
98 simple;
99 (b) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
100 corridors, lobbies, stairs, stairways, fire escapes, entrances, and exits of the building;
101 (c) the basements, yards, gardens, parking areas, and storage spaces;
102 (d) the premises for lodging of janitors or persons in charge of the property;
103 (e) installations of central services such as power, light, gas, hot and cold water,
104 heating, refrigeration, air conditioning, and incinerating;
105 (f) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all
106 apparatus and installations existing for common use;
107 (g) such community and commercial facilities as may be provided for in the
108 declaration; and
109 (h) all other parts of the property necessary or convenient to its existence, maintenance,
110 and safety, or normally in common use.
111 [
112 (a) all sums lawfully assessed against the unit owners;
113 (b) expenses of administration, maintenance, repair, or replacement of the common
114 areas and facilities;
115 (c) expenses agreed upon as common expenses by the association of unit owners; and
116 (d) expenses declared common expenses by this chapter, or by the declaration or the
117 bylaws.
118 [
119 amendments to the declaration, means the balance of all income, rents, profits, and revenues
120 from the common areas and facilities remaining after the deduction of the common expenses.
121 [
122 together with an undivided interest in common in the common areas and facilities of the
123 property.
124 [
125 in accordance with Section 57-8-13 .
126 [
127 project whereby two or more units, whether contained in existing or proposed apartments,
128 commercial or industrial buildings or structures, or otherwise, are separately offered or
129 proposed to be offered for sale. Condominium project also means the property when the
130 context so requires.
131 [
132 the common areas and facilities appertaining to that unit. Any reference in this chapter to a
133 condominium unit includes both a physical unit together with its appurtenant undivided interest
134 in the common areas and facilities and a time period unit together with its appurtenant
135 undivided interest, unless the reference is specifically limited to a time period unit.
136 [
137 or more portions of the land within the project may be withdrawn in accordance with
138 provisions of the declaration and of this chapter. If the withdrawal can occur only by the
139 expiration or termination of one or more leases, then the condominium project is not a
140 contractible condominium within the meaning of this chapter.
141 [
142 areas and facilities, described by metes and bounds, within which additional units or limited
143 common areas and facilities may be created in accordance with this chapter.
144 [
145 condominium project, which portion may be converted into one or more units or common areas
146 and facilities, including limited common areas and facilities in accordance with this chapter.
147 [
148 behalf the declaration is executed. From the time of the recordation of any amendment to the
149 declaration expanding an expandable condominium, all persons who execute that amendment
150 or on whose behalf that amendment is executed shall also come within this definition. Any
151 successors of the persons referred to in this subsection who come to stand in the same relation
152 to the condominium project as their predecessors also come within this definition.
153 [
154 the provisions of this act, as it from time to time may be lawfully amended.
155 [
156 additional land or an interest in it may be added in accordance with the declaration and this
157 chapter.
158 (18) "Governing documents":
159 (a) means a written instrument by which an association of unit owners may:
160 (i) exercise powers; or
161 (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
162 association of unit owners; and
163 (b) includes:
164 (i) articles of incorporation;
165 (ii) bylaws;
166 (iii) a plat;
167 (iv) a declaration of covenants, conditions, and restrictions; and
168 (v) rules of the association of unit owners.
169 [
170 portion of which each unit owner owns an estate for years in his unit, or in the land upon which
171 that unit is situated, or both, with all those leasehold interests to expire naturally at the same
172 time. A condominium project including leased land, or an interest in the land, upon which no
173 units are situated or to be situated is not a leasehold condominium within the meaning of this
174 chapter.
175 [
176 facilities designated in the declaration as reserved for use of a certain unit or units to the
177 exclusion of the other units.
178 [
179 the declaration or lawful amendments to the declaration, means the owners of more than 50%
180 in the aggregate in interest of the undivided ownership of the common areas and facilities.
181 [
182 declaration charged with and having the responsibility and authority to make and to enforce all
183 of the reasonable rules covering the operation and maintenance of the property.
184 (23) "Mixed-use condominium project" means a condominium project that has both
185 residential and commercial units in the condominium project.
186 [
187 declaration. Substantially identical units shall be assigned the same par value, but units located
188 at substantially different heights above the ground, or having substantially different views, or
189 having substantially different amenities or other characteristics that might result in differences
190 in market value, may be considered substantially identical within the meaning of this
191 subsection. If par value is stated in terms of dollars, that statement may not be considered to
192 reflect or control the sales price or fair market value of any unit, and no opinion, appraisal, or
193 fair market transaction at a different figure may affect the par value of any unit, or any
194 undivided interest in the common areas and facilities, voting rights in the unit owners'
195 association, liability for common expenses, or right to common profits, assigned on the basis
196 thereof.
197 [
198 or other legal entity.
199 [
200 if any, all improvements and structures thereon, all easements, rights, and appurtenances
201 belonging thereto, and all articles of personal property intended for use in connection
202 therewith.
203 [
204 in Title 57, Chapter 3, Recording of Documents.
205 [
206 ground or floor space, within each unit as computed by reference to the record of survey map
207 and rounded off to a whole number. Certain spaces within the units including attic, basement,
208 or garage space may be omitted from the calculation or be partially discounted by the use of a
209 ratio, if the same basis of calculation is employed for all units in the condominium project and
210 if that basis is described in the declaration.
211 [
212 specified in the declaration as a period for which a unit is separately owned and includes a
213 timeshare estate as defined in Subsection 57-19-2 (19).
214 [
215 type of independent use, including one or more rooms or spaces located in one or more floors
216 or part or parts of floors in a building or a time period unit, as the context may require. A
217 convertible space shall be treated as a unit in accordance with Subsection 57-8-13.4 (3). A
218 proposed condominium unit under an expandable condominium project, not constructed, is a
219 unit two years after the date the recording requirements of Section 57-8-13.6 are met.
220 [
221 letters designating the unit in the declaration and in the record of survey map.
222 [
223 an undivided interest in the fee simple estate of the common areas and facilities in the
224 percentage specified and established in the declaration or, in the case of a leasehold
225 condominium project, the person or persons whose leasehold interest or interests in the
226 condominium unit extend for the entire balance of the unexpired term or terms.
227 Section 2. Section 57-8-4.5 is enacted to read:
228 57-8-4.5. Removing or altering partition or creating aperture between adjoining
229 units.
230 (1) Subject to the declaration, a unit owner may, after acquiring an adjoining unit that
231 shares a common wall with the unit owner's unit:
232 (a) remove or alter a partition between the unit owner's unit and the acquired unit, even
233 if the partition is entirely or partly common areas and facilities; or
234 (b) create an aperture to the adjoining unit or portion of a unit.
235 (2) A unit owner may not take an action under Subsection (1) if the action would:
236 (a) impair the structural integrity or mechanical systems of the building or either unit;
237 (b) reduce the support of any portion of the common areas and facilities or another
238 unit; or
239 (c) constitute a violation of Section 10-9a-608 or 17-27a-608 , as applicable, a local
240 government land use ordinance, or a building code.
241 (3) The management committee may require a unit owner to submit, at the unit owner's
242 expense, a registered professional engineer's or registered architect's opinion stating that a
243 proposed change to the unit owner's unit will not:
244 (a) impair the structural integrity or mechanical systems of the building or either unit;
245 (b) reduce the support or integrity of common areas and facilities; or
246 (c) compromise structural components.
247 (4) The management committee may require a unit owner to pay all of the legal and
248 other expenses of the association of unit owners related to a proposed alteration to the unit or
249 building under this section.
250 (5) An action under Subsection (1) does not change an assessment or voting right
251 attributable to the unit owner's unit or the acquired unit, unless the declaration provides
252 otherwise.
253 Section 3. Section 57-8-6.7 is enacted to read:
254 57-8-6.7. Limit on fee for approval of plans.
255 (1) As used in this section:
256 (a) "Plan fee" means a fee that an association of unit owners charges for review and
257 approval of unit plans.
258 (b) "Unit plans" means plans:
259 (i) for the construction or improvement of a unit; and
260 (ii) that are required to be approved by the association of unit owners before the unit
261 construction or improvement may occur.
262 (2) An association of unit owners may not charge a plan fee that exceeds the actual cost
263 of reviewing and approving the unit plans.
264 Section 4. Section 57-8-7 is amended to read:
265 57-8-7. Common areas and facilities.
266 (1) As used in this section:
267 (a) "Emergency repairs" means any repairs [
268 manner, will likely result in immediate and substantial damage to the common areas and
269 facilities or to another unit or units[
270 (b) "Reasonable notice" means:
271 (i) written notice [
272 proposed entry[
273 (ii) in the case of emergency repairs, notice that is reasonable under the circumstances.
274 (2) Each unit owner shall be entitled to an undivided interest in the common areas and
275 facilities in the percentages or fractions expressed in the declaration. The declaration may
276 allocate to each unit an undivided interest in the common areas and facilities proportionate to
277 either the size or par value of the unit. Otherwise, the declaration shall allocate to each unit an
278 equal undivided interest in the common areas and facilities, subject to the following exception:
279 each convertible space depicted on the condominium plat shall be allocated an undivided
280 interest in the common areas and facilities proportionate to the size of the space vis-a-vis the
281 aggregate size of all units so depicted, while the remaining undivided interest in the common
282 areas and facilities shall be allocated equally among the other units so depicted. The undivided
283 interest in the common areas and facilities allocated in accordance with this Subsection (2)
284 shall add up to one if stated as fractions or to 100% if stated as percentages. If an equal
285 undivided interest in the common areas and facilities is allocated to each unit, the declaration
286 may simply state that fact and need not express the fraction or percentage so allocated.
287 Otherwise, the undivided interest allocated to each unit shall be reflected by a table in the
288 declaration, or by an exhibit or schedule accompanying the declaration and recorded
289 simultaneously with it, containing columns. The first column shall identify the units, listing
290 them serially or grouping them together in the case of units to which identical undivided
291 interests are allocated. Corresponding figures in the second and third columns shall set forth
292 the respective sizes or par values of those units and the fraction or percentage of undivided
293 interest in the common areas and facilities allocated thereto.
294 (3) Except as otherwise expressly provided by this act, the undivided interest of each
295 unit owner in the common areas and facilities as expressed in the declaration shall have a
296 permanent character and shall not be altered without the consent of two-thirds of the unit
297 owners expressed in an amended declaration duly recorded. The undivided interest in the
298 common areas and facilities shall not be separated from the unit to which it appertains and shall
299 be considered to be conveyed or encumbered or released from liens with the unit even though
300 such interest is not expressly mentioned or described in the conveyance or other instrument. A
301 time period unit may not be further divided into shorter time periods by a conveyance or
302 disclaimer.
303 (4) The common areas and facilities shall remain undivided and no unit owner or any
304 other person shall bring any action for partition or division of any part thereof, unless the
305 property has been removed from the provisions of this act as provided in Sections 57-8-22 and
306 57-8-31 . Any covenants to the contrary shall be null and void.
307 (5) Each unit owner may use the common areas and facilities in accordance with the
308 purpose for which they were intended without hindering or encroaching upon the lawful rights
309 of the other unit owners.
310 (6) The necessary work of maintenance, repair, and replacement of the common areas
311 and facilities and the making of any additions or improvements thereon shall be carried out
312 only as provided in this [
313 (7) Except as otherwise provided in the declaration or Section 57-8-43 :
314 (a) an association of unit owners is responsible for the maintenance, repair, and
315 replacement of common areas and facilities; and
316 (b) a unit owner is responsible for the maintenance, repair, and replacement of the unit
317 owner's unit.
318 [
319 manager or management committee [
320 (a) from time to time during reasonable hours [
321
322 replacement of any of the common areas and facilities; or
323 (b) for making emergency repairs [
324
325
326 (9) (a) An association of unit owners is liable to repair damage it causes to the common
327 areas and facilities or to a unit the association of unit owners uses to access the common areas
328 and facilities.
329 (b) An association of unit owners shall repair damage described in Subsection (9)(a)
330 within a time that is reasonable under the circumstances.
331 Section 5. Section 57-8-7.5 is amended to read:
332 57-8-7.5. Reserve analysis -- Reserve fund.
333 (1) As used in this section[
334 (a) "Reserve analysis" means an analysis to determine:
335 [
336 replacing, and restoring common areas and facilities that have a useful life of three years or
337 more and a remaining useful life of less than 30 years, but excluding any cost that can
338 reasonably be funded from the general budget or other funds of the association of unit owners;
339 and
340 [
341 (b) "Reserve fund line item" means the line item in an association of unit owners'
342 budget that identifies the amount to be placed into a reserve fund.
343 (2) Except as otherwise provided in the declaration, a management committee shall:
344 (a) [
345 less frequently than every six years; and
346 [
347
348 (b) review and, if necessary, update a previously conducted reserve analysis no less
349 frequently than every three years.
350 (3) The management committee may conduct a reserve analysis itself or may engage a
351 reliable person or organization, as determined by the management committee, to conduct the
352 reserve analysis.
353 (4) (a) A management committee may not use money in a reserve fund:
354 (i) for daily maintenance expenses, unless a majority of the members of the association
355 of unit owners vote to approve the use of reserve fund money for that purpose; or
356 (ii) for any purpose other than the purpose for which the reserve fund was established.
357 (b) A management committee shall maintain [
358 other funds of the association of unit owners.
359 (c) This Subsection (4) may not be construed to limit a management committee from
360 prudently investing money in a reserve fund, subject to any investment constraints imposed by
361 the declaration.
362 (5) An association of unit owners shall:
363 (a) annually provide unit owners a summary of the most recent reserve analysis or
364 update; and
365 (b) provide a copy of the complete reserve analysis or update to a unit owner who
366 requests a copy.
367 (6) In formulating its budget each year, an association of unit owners shall include a
368 reserve fund line item in:
369 (a) an amount the management committee determines, based on the reserve analysis, to
370 be prudent; or
371 (b) an amount required by the declaration, if the declaration requires an amount higher
372 than the amount determined under Subsection (6)(a).
373 [
374 unit owners during the period of declarant [
375 57-8-16.5 (1).
376 [
377 [
378
379 [
380 [
381
382 [
383
384 [
385 association of unit owners was created.
386 Section 6. Section 57-8-10.3 is enacted to read:
387 57-8-10.3. Indemnification and limit of liability.
388 Notwithstanding any conflict with the declaration or recorded bylaws, the
389 organizational documents of an association of unit owners may indemnify and limit
390 management committee member and officer liability to the extent permitted by the law under
391 which the association of unit owners is organized.
392 Section 7. Section 57-8-10.5 is enacted to read:
393 57-8-10.5. Amending the declaration to make provisions of this chapter
394 applicable.
395 (1) An association of unit owners may amend the declaration to make applicable to the
396 association of unit owners a provision of this chapter that is enacted after the creation of the
397 association of unit owners, by complying with:
398 (a) the amendment procedures and requirements specified in the declaration and
399 applicable provisions of this chapter; or
400 (b) the amendment procedures and requirements of this chapter, if the declaration
401 being amended does not contain amendment procedures and requirements.
402 (2) If an amendment under Subsection (1) adopts a specific section of this chapter:
403 (a) the amendment grants a right, power, or privilege permitted by that specific section;
404 and
405 (b) all correlative obligations, liabilities, and restrictions in that section also apply.
406 Section 8. Section 57-8-23 is amended to read:
407 57-8-23. Removal no bar to subsequent resubmission.
408 The removal provided for in Section 57-8-22 [
409 resubmission of the property to the provisions of this [
410 Section 9. Section 57-8-40 is amended to read:
411 57-8-40. Organization of an association of unit owners under other law --
412 Reorganization.
413 (1) As used in this section, "organizational documents" means the documents related to
414 the formation or operation of a nonprofit corporation or other legal entity formed by the
415 management committee or the declarant.
416 (2) If permitted, required, or acknowledged by the declaration, the management
417 committee may organize an association of unit owners [
418 (a) a nonprofit corporation in accordance with Title 16, Chapter 6a, Utah Revised
419 Nonprofit Corporation Act[
420 (b) any other entity organized under other law.
421 (3) Organizational documents for a nonprofit corporation or other entity formed in
422 accordance with Subsection (2) shall, to the extent possible, not conflict with the rights and
423 obligations found in the declaration and any of the association's bylaws recorded at the time of
424 the formation of a nonprofit corporation or other entity [
425 (4) Notwithstanding any conflict with the declaration or any recorded bylaws, the
426 organizational documents of [
427 with Subsection (2) may include any additional indemnification and liability limitation
428 provision [
429
430 (a) board members, directors, and officers[
431 (b) similar persons in a position of control.
432 (5) In the event of a conflict between this chapter's provisions, a statute under which
433 the association of unit owners is organized, documents concerning the organization of the
434 association of unit owners as a nonprofit corporation or other entity, the declaration, the
435 bylaws, and association rules, the following order prevails:
436 (a) this chapter controls over a conflicting provision found in any of the sources listed
437 in Subsections (5)(b) through (f);
438 (b) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, or any other law
439 under which an entity is organized controls over a conflicting provision in any of the sources
440 listed in Subsections (5)(c) through (f);
441 (c) an organizational document filed in accordance with Title 16, Chapter 6a, Utah
442 Revised Nonprofit Corporation Act, or any other law under which an entity is organized
443 controls over a conflicting provision in any of the sources listed in Subsections (5)(d) through
444 (f);
445 (d) the declaration controls over a conflicting provision in any of the sources listed in
446 Subsections (5)(e) or (f);
447 (e) the bylaws control over a conflicting provision in association rules; and
448 (f) the association rules yield to a conflicting provision in any of the sources listed in
449 Subsection (5)(a) through (e).
450 (6) Immediately upon the legal formation of an entity in compliance with this section,
451 the association and unit owners are subject to any right, obligation, procedure, and remedy
452 applicable to that entity.
453 (7) (a) A form "articles of incorporation" or similar organizational document attached
454 to a declaration may be modified by the management committee for filing or re-filing if the
455 modified version is otherwise consistent with this section's provisions.
456 (b) An organizational document attached to a declaration that is filed and concerns the
457 organization of an entity may be amended in accordance with its own terms or any applicable
458 law, notwithstanding the fact that the organizational document might be recorded.
459 (c) Except for amended bylaws, an initial or amended organizational document
460 properly filed with the state does not need to be recorded.
461 (8) This section applies to the reorganization of an association of unit owners
462 previously organized if the entity's status is terminated or dissolved without the possibility of
463 reinstatement.
464 (9) (a) This section applies to all condominium projects, whether established before or
465 after May 5, 2008.
466 (b) This section does not validate or invalidate the organization of an association that
467 occurred before May 5, 2008, whether or not the association was otherwise in compliance with
468 this section.
469 Section 10. Section 57-8-43 is amended to read:
470 57-8-43. Insurance.
471 (1) As used in this section, "reasonably available" means available using typical
472 insurance carriers and markets, irrespective of the ability of the association of unit owners to
473 pay.
474 (2) (a) This section applies to an insurance policy or combination of insurance policies:
475 [
476 [
477 [
478 [
479 owners is formed.
480 (b) Unless otherwise provided in the declaration, this section does not apply to a
481 commercial condominium project insured under a policy or combination of policies issued or
482 renewed on or after July 1, 2013.
483 (3) Beginning not later than the day on which the first unit is conveyed to a person
484 other than a declarant, an association of unit owners shall maintain, to the extent reasonably
485 available:
486 (a) subject to Subsection (9), blanket property insurance or guaranteed replacement
487 cost insurance on the physical structures in the condominium project, including common areas
488 and facilities, limited common areas and facilities, and units, insuring against all risks of direct
489 physical loss commonly insured against, including fire and extended coverage perils; and
490 (b) subject to Subsection (10), liability insurance[
491
492 property damage arising out of or in connection with the use, ownership, or maintenance of the
493 common areas and facilities.
494 (4) If an association of unit owners becomes aware that property insurance under
495 Subsection (3)(a) or liability insurance under Subsection (3)(b) is not reasonably available, the
496 association of unit owners shall, within seven calendar days after becoming aware, give all unit
497 owners notice, as provided in Section 57-8-42 , that the insurance is not reasonably available.
498 (5) (a) The declaration or bylaws may require the association of unit owners to carry
499 other types of insurance in addition to those described in Subsection (3).
500 (b) In addition to any type of insurance coverage or limit of coverage provided in the
501 declaration or bylaws and subject to the requirements of this section, an association of unit
502 owners may, as the management committee considers appropriate, obtain:
503 (i) an additional type of insurance than otherwise required; or
504 (ii) a policy with greater coverage than otherwise required.
505 (6) Unless a unit owner is acting within the scope of the unit owner's authority on
506 behalf of an association of unit owners, a unit owner's act or omission may not:
507 (a) void a property insurance policy under Subsection (3)(a) or a liability insurance
508 policy under Subsection (3)(b); or
509 (b) be a condition to recovery under a policy.
510 (7) An insurer under a property insurance policy or liability insurance policy obtained
511 by an association of unit owners under this section waives the insurer's right to subrogation
512 under the policy against [
513 (a) any person residing with the unit owner, if the unit owner resides in the unit; and
514 (b) the unit owner.
515 (8) (a) An insurance policy issued to an association of unit owners may not be
516 inconsistent with any provision of this section.
517 (b) A provision of a declaration, bylaw, rule, or other document governing the
518 association of unit owners that is contrary to a provision of this section has no effect.
519 (c) [
520 policy issued to an association of unit owners may [
521 insurance for the unit owner's own benefit.
522 (9) (a) This Subsection (9) applies to property insurance required under Subsection
523 (3)(a).
524 [
525
526 [
527 guaranteed replacement cost insurance may not be less than 100% of the full replacement cost
528 of the insured property at the time the insurance is purchased and at each renewal date,
529 excluding:
530 (i) items normally excluded from property insurance policies[
531 (ii) unless otherwise provided in the declaration, any commercial condominium unit in
532 a mixed-use condominium project, including any fixture, improvement, or betterment in a
533 commercial condominium unit in a mixed-use condominium project.
534 [
535 betterment installed [
536 associated with a unit, whether installed in the original construction or in any remodel or later
537 alteration, including a floor covering, cabinet, light fixture, electrical fixture, heating or
538 plumbing fixture, paint, wall covering, window, and any other item permanently part of or
539 affixed to a unit or to a limited common element associated with a unit.
540 [
541 declaration, an association of unit owners is not required to obtain property insurance for a loss
542 to a unit that is not physically attached to:
543 (i) another unit; or
544 (ii) [
545 [
546 [
547 association of unit owners and another property insurance policy in the name of a unit owner:
548 (i) the association's policy provides primary insurance coverage; and
549 (ii) notwithstanding Subsection (9)[
550 (A) the unit owner is responsible for the deductible of the association of unit owners;
551 and
552 (B) building property coverage, often referred to as coverage A, of the unit owner's
553 policy applies to that portion of the loss attributable to the policy deductible of the association
554 of unit owners.
555 [
556 (A) "Covered loss" means a loss, resulting from a single event or occurrence, that is
557 covered by a property insurance policy of an association of unit owners.
558 (B) "Unit damage" means damage to a unit or to a limited common area or facility
559 [
560 (C) "Unit damage percentage" means the percentage of total damage resulting in a
561 covered loss that is attributable to unit damage.
562 (ii) A unit owner who owns a unit that has suffered unit damage as part of a covered
563 loss is responsible for an amount calculated by applying the unit damage percentage for that
564 unit to the amount of the deductible under the property insurance policy of the association of
565 unit owners.
566 (iii) If a unit owner does not pay the amount required under Subsection (9)[
567 within 30 days after substantial completion of the repairs to the unit or limited common areas
568 and facilities appurtenant to that unit, an association of unit owners may levy an assessment
569 against the unit owner for that amount.
570 [
571 the association's property insurance policy deductible or, if the policy deductible exceeds
572 $10,000, [
573 [
574 Section 57-8-42 to each unit owner of the unit owner's obligation under Subsection (9)[
575 for the association's policy deductible and of any change in the amount of the deductible.
576 (ii) (A) An association of unit owners that fails to provide notice as provided in
577 Subsection (9)[
578 the association of unit owners could have assessed to a unit owner under Subsection
579 (9)[
580 would otherwise apply under this Subsection (9).
581 (B) Notwithstanding Subsection (9)(i)(ii), an association of unit owners that provides
582 notice of the association's policy deductible, as required under Subsection (9)(i)(i), but fails to
583 provide notice of a later increase in the amount of the deductible is responsible only for the
584 amount of the increase for which notice was not provided.
585 (iii) The failure of an association of unit owners to provide notice as provided in
586 Subsection (9)[
587 [
588 determines that a [
589 deductible of the association of unit owners and until it becomes apparent the covered loss
590 exceeds the deductible of the property insurance of the association of unit owners and a claim
591 is submitted to the property insurance insurer of the association of unit owners:
592 (i) [
593
594 unit owner's unit or to a limited common area or facility appurtenant to the unit;
595 (ii) the association of unit owners is responsible for any covered loss to any common
596 areas and facilities;
597 [
598
599
600 damage to that unit owner's unit and appurtenant limited common areas and facilities is
601 responsible for that damage, and the association of unit owners may, as provided in Subsection
602 (9)(g)(iii), recover any payments the association of unit owners makes to remediate that unit
603 and appurtenant limited common areas and facilities; and
604 [
605 insurer.
606 [
607 owners shall adjust with the association of unit owners a loss covered under the association's
608 policy.
609 (ii) Notwithstanding Subsection (9)[
610 property insurance policy of an association of unit owners:
611 (A) are payable to an insurance trustee that the association of unit owners designates
612 or, if no trustee is designated, to the association of unit owners; and
613 (B) may not be payable to a holder of a security interest.
614 (iii) An insurance trustee or an association of unit owners shall hold any insurance
615 proceeds in trust for the association of unit owners, unit owners, and lien holders.
616 (iv) (A) [
617 proceeds shall be disbursed first for the repair or restoration of the damaged property.
618 (B) After the disbursements described in Subsection (9)[
619 damaged property has been completely repaired or restored or the project terminated, any
620 surplus proceeds are payable to the association of unit owners, unit owners, and lien holders, as
621 provided in the declaration.
622 [
623 insurer's authorized agent, shall issue a certificate or memorandum of insurance to:
624 (i) the association of unit owners;
625 (ii) a unit owner, upon the unit owner's written request; and
626 (iii) a holder of a security interest, upon the holder's written request.
627 [
628 section is subject to the procedures stated in Section 31A-21-303 .
629 [
630 required in this section is not liable to unit owners if the insurance proceeds are not sufficient
631 to cover 100% of the full replacement cost of the insured property at the time of the loss.
632 (o) (i) Unless required in the declaration, property insurance coverage is not required
633 for fixtures, improvements, or betterments in a commercial unit or limited common areas and
634 facilities appurtenant to a commercial unit in a mixed-use condominium project.
635 (ii) Notwithstanding any other provision of this section, an association of unit owners
636 may obtain property insurance for fixtures, improvements, or betterments in a commercial unit
637 in a mixed-use condominium project if allowed or required in the declaration.
638 (p) (i) This Subsection (9) does not prevent a person suffering a loss as a result of
639 damage to property from asserting a claim, either directly or through subrogation, for the loss
640 against a person at fault for the loss.
641 (ii) Subsection (9)(p)(i) does not affect Subsection (7).
642 (10) (a) This Subsection (10) applies to a liability insurance policy required under
643 Subsection (3)(b).
644 (b) A liability insurance policy shall be in an amount determined by the management
645 committee but not less than an amount specified in the declaration or bylaws.
646 (c) Each unit owner is an insured person under a liability insurance policy that an
647 association of unit owners obtains [
648 (i) the unit owner's ownership interest in the common areas and facilities [
649 (ii) maintenance, repair, or replacement of common areas and facilities; and
650 (iii) the unit owner's membership in the association of unit owners.
651 Section 11. Section 57-8-55 is enacted to read:
652 57-8-55. Consolidation of multiple associations of unit owners.
653 (1) Two or more associations of unit owners may be consolidated into a single
654 association of unit owners as provided in Title 16, Chapter 6a, Part 11, Merger, and this
655 section.
656 (2) Unless the declaration, articles, or bylaws otherwise provide, a declaration of
657 consolidation between two or more associations of unit owners to consolidate into a single
658 association of unit owners is not effective unless it is approved by the unit owners of each of
659 the consolidating associations of unit owners, by the highest percentage of allocated voting
660 interests of the unit owners required by each association of unit owners to amend its respective
661 declaration, articles, or bylaws.
662 (3) A declaration of consolidation under Subsection (2) shall:
663 (a) be prepared, executed, and certified by the president of the association of each of
664 the consolidating associations of unit owners; and
665 (b) provide for the reallocation of the allocated interests in the consolidated association
666 by stating:
667 (i) the reallocations of the allocated interests in the consolidated association of unit
668 owners or the formulas used to reallocate the allocated interests; or
669 (ii) (A) the percentage of overall allocated interests of the consolidated association of
670 unit owners that are allocated to all of the units comprising each of the consolidating
671 associations of unit owners; and
672 (B) that the portion of the percentages allocated to each unit formerly comprising a part
673 of a consolidating association of unit owners is equal to the percentages of allocated interests
674 allocated to the unit by the declaration of the consolidating association of unit owners.
675 (4) A declaration of consolidation under Subsection (2) is not effective until it is
676 recorded in the office of each applicable county recorder.
677 (5) Unless otherwise provided in the declaration of consolidation, the consolidated
678 association of unit owners resulting from a consolidation under this section:
679 (a) is the legal successor for all purposes of all of the consolidating associations of unit
680 owners;
681 (b) the operations and activities of all of the consolidating associations of unit owners
682 shall be consolidated into the consolidated association of unit owners; and
683 (c) the consolidated association of unit owners holds all powers, rights, obligations,
684 assets, and liabilities of all consolidating associations of unit owners.
685 Section 12. Section 57-8a-102 is amended to read:
686 57-8a-102. Definitions.
687 As used in this chapter:
688 (1) (a) "Assessment" means a charge imposed or levied:
689 (i) by the association;
690 (ii) on or against a lot or a lot owner; and
691 (iii) pursuant to a governing document recorded with the county recorder.
692 (b) "Assessment" includes:
693 (i) a common expense; and
694 (ii) an amount assessed against a lot owner under Subsection 57-8a-405 [
695 (2) (a) Except as provided in Subsection (2)(b), "association" means a corporation or
696 other legal entity, [
697 (i) is an owner of a residential lot located within the jurisdiction of the association, as
698 described in the governing documents; and
699 (ii) by virtue of membership or ownership of a residential lot is obligated to pay:
700 (A) real property taxes;
701 (B) insurance premiums;
702 (C) maintenance costs; or
703 (D) for improvement of real property not owned by the member.
704 (b) "Association" or "homeowner association" does not include an association created
705 under Title 57, Chapter 8, Condominium Ownership Act.
706 (3) "Board of directors" or "board" means the entity, regardless of name, with primary
707 authority to manage the affairs of the association.
708 (4) "Common areas" means property that the association:
709 (a) owns;
710 (b) maintains;
711 (c) repairs; or
712 (d) administers.
713 (5) "Common expense" means costs incurred by the association to exercise any of the
714 powers provided for in the association's governing documents.
715 (6) "Declarant":
716 (a) means the person who executes a declaration and submits it for recording in the
717 office of the recorder of the county in which the property described in the declaration is
718 located; and
719 (b) includes the person's successor and assign.
720 (7) (a) "Governing documents" means a written instrument by which the association
721 may:
722 (i) exercise powers; or
723 (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
724 association.
725 (b) "Governing documents" includes:
726 (i) articles of incorporation;
727 (ii) bylaws;
728 (iii) a plat;
729 (iv) a declaration of covenants, conditions, and restrictions; and
730 (v) rules of the association.
731 (8) "Judicial foreclosure" means a foreclosure of a lot:
732 (a) for the nonpayment of an assessment; and
733 (b) (i) in the manner provided by law for the foreclosure of a mortgage on real
734 property; and
735 (ii) as provided in Part 3, Collection of Assessments.
736 (9) "Lease" or "leasing" means regular, exclusive occupancy of a lot:
737 (a) by a person or persons other than the owner; and
738 (b) for which the owner receives a consideration or benefit, including a fee, service,
739 gratuity, or emolument.
740 (10) "Limited common areas" means common areas described in the declaration and
741 allocated for the exclusive use of one or more lot owners.
742 (11) "Lot" means:
743 (a) a lot, parcel, plot, or other division of land:
744 (i) designated for separate ownership or occupancy; and
745 (ii) (A) shown on a recorded subdivision plat; or
746 (B) the boundaries of which are described in a recorded governing document; or
747 (b) (i) a unit in a condominium association if the condominium association is a part of
748 a development; or
749 (ii) a unit in a real estate cooperative if the real estate cooperative is part of a
750 development.
751 (12) "Mixed-use project" means a project under this chapter that has both residential
752 and commercial lots in the project.
753 [
754 (a) for the nonpayment of an assessment; and
755 (b) (i) in the same manner as the sale of trust property under Sections 57-1-19 through
756 57-1-34 ; and
757 (ii) as provided in Part 3, Collection of Assessments.
758 [
759 or otherwise to primarily residential or recreational purposes.
760 Section 13. Section 57-8a-107 is enacted to read:
761 57-8a-107. Amending the declaration to make provisions of this chapter
762 applicable.
763 (1) An association may amend the declaration to make applicable to the association a
764 provision of this chapter that is enacted after the creation of the association, by complying with:
765 (a) the amendment procedures and requirements specified in the declaration and
766 applicable provisions of this chapter; or
767 (b) the amendment procedures and requirements of this chapter, if the declaration
768 being amended does not contain amendment procedures and requirements.
769 (2) If an amendment under Subsection (1) adopts a specific section of this chapter:
770 (a) the amendment grants a right, power, or privilege permitted by that specific section;
771 and
772 (b) all correlative obligations, liabilities, and restrictions in that section also apply.
773 Section 14. Section 57-8a-108 is enacted to read:
774 57-8a-108. Rules against perpetuities and unreasonable restraints -- Insubstantial
775 failure to comply.
776 (1) The rule against perpetuities and the rule against unreasonable restraints on
777 alienation of real estate may not defeat a provision of a governing document.
778 (2) (a) A declaration that fails to comply with this chapter does not render a title to a lot
779 and common areas unmarketable or otherwise affect the title if the failure is insubstantial.
780 (b) This chapter does not affect whether a substantial failure impairs marketability.
781 Section 15. Section 57-8a-109 is enacted to read:
782 57-8a-109. Limit on fee for approval of plans.
783 (1) As used in this section:
784 (a) "Lot plans" means plans:
785 (i) for the construction or improvement of a lot; and
786 (ii) that are required to be approved by the association before the lot construction or
787 improvement may occur.
788 (b) "Plan fee" means a fee that an association charges for review and approval of lot
789 plans.
790 (2) An association may not charge a plan fee that exceeds the actual cost of reviewing
791 and approving the lot plans.
792 Section 16. Section 57-8a-211 is amended to read:
793
794 57-8a-211. Reserve analysis -- Reserve fund.
795 (1) As used in this section[
796 (a) "Reserve analysis" means an analysis to determine:
797 [
798 replacing, and restoring common areas that have a useful life of three years or more and a
799 remaining useful life of less than 30 years, but excluding any cost that can reasonably be
800 funded from the association's general budget or from other association funds; and
801 [
802 (b) "Reserve fund line item" means the line item in an association's budget that
803 identifies the amount to be placed into a reserve fund.
804 (2) Except as otherwise provided in the governing documents, a board shall:
805 (a) [
806 less frequently than every six years; and
807 [
808
809 (b) review and, if necessary, update a previously conducted reserve analysis no less
810 frequently than every three years.
811 (3) The board may conduct a reserve analysis itself or may engage a reliable person or
812 organization, as determined by the board, to conduct the reserve analysis.
813 (4) (a) A board may not use money in a reserve fund:
814 (i) for daily maintenance expenses, unless a majority of association members vote to
815 approve the use of reserve fund money for that purpose; or
816 (ii) for any purpose other than the purpose for which the reserve fund was established.
817 (b) A board shall maintain [
818 funds.
819 (c) This Subsection (4) may not be construed to limit a board from prudently investing
820 money in a reserve fund, subject to any investment constraints imposed by the governing
821 documents.
822 (5) An association shall:
823 (a) annually provide lot owners a summary of the most recent reserve analysis or
824 update; and
825 (b) provide a copy of the complete reserve analysis or update to a lot owner who
826 requests a copy.
827 (6) In formulating its budget each year, an association shall include a reserve fund line
828 item in:
829 (a) an amount the board determines, based on the reserve analysis, to be prudent; or
830 (b) an amount required by the governing documents, if the governing documents
831 require an amount higher than the amount determined under Subsection (6)(a)(i).
832 [
833 during the period of administrative control.
834 [
835 [
836
837 [
838 [
839
840 [
841
842 [
843 was created.
844 Section 17. Section 57-8a-212 is amended to read:
845 57-8a-212. Content of a declaration.
846 (1) An initial declaration recorded on or after May 10, 2011 shall contain:
847 (a) the name of the project;
848 (b) the name of the association;
849 (c) a statement that the project is not a cooperative;
850 (d) a statement indicating any portions of the project that contain condominiums
851 governed by Chapter 8, Condominium Ownership Act;
852 (e) if the declarant desires to reserve the option to expand the project, a statement
853 reserving the option to expand the project;
854 (f) the name of each county in which any part of the project is located;
855 (g) a legally sufficient description of the real estate included in the project;
856 (h) a description of any limited common areas and any real estate that is or is required
857 to become common areas;
858 (i) any restriction on the alienation of a lot, including a restriction on leasing; and
859 (j) (i) an appointment of a trustee who qualifies under Subsection 57-1-21 (1)(a)(i) or
860 (iv); and
861 (ii) the following statement: "The declarant hereby conveys and warrants pursuant to
862 U.C.A. Sections 57-1-20 and [
863 the lot and all improvements to the lot for the purpose of securing payment of assessments
864 under the terms of the declaration."
865 (2) A declaration may contain any other information the declarant considers
866 appropriate, including any restriction on the use of a lot, the number of persons who may
867 occupy a lot, or other qualifications of a person who may occupy a lot.
868 (3) The location of a limited common area or real estate described in Subsection (1)(g)
869 may be shown on a subdivision plat.
870 Section 18. Section 57-8a-220 is amended to read:
871 57-8a-220. Creditor approval may be required for lot owner or association action
872 under declaration -- Creditor approval presumed in certain circumstances -- Notice to
873 creditor or creditor's successor.
874 (1) (a) Subject to Subsection (1)(b), a declaration may:
875 (i) condition the effectiveness of lot owners' actions specified in the declaration on the
876 approval of a specified number or percentage of lenders holding a security interest in the lots;
877 or
878 (ii) condition the effectiveness of association actions specified in the declaration on the
879 approval of a specified number or percentage of lenders that have extended credit to the
880 association.
881 (b) A condition under Subsection (1)(a) may not:
882 (i) deny or delegate the lot owners' or board's control over the association's general
883 administrative affairs;
884 (ii) prevent the association or board from commencing, intervening in, or settling any
885 litigation or proceeding; or
886 (iii) prevent an insurance trustee or the association from receiving or distributing
887 insurance proceeds under Subsection 57-8a-405 [
888 (c) A condition under Subsection (1)(a) does not violate a prohibition under Subsection
889 (1)(b) by:
890 (i) requiring the association to deposit the association's assessments before default with
891 the lender assigned the income; or
892 (ii) requiring the association to increase an assessment at the lender's direction by an
893 amount reasonably necessary to pay the loan in accordance with the loan terms.
894 (d) This Subsection (1) applies to:
895 (i) an association formed before, on, or after May 10, 2011; and
896 (ii) documents created and recorded before, on, or after May 10, 2011.
897 (2) Subject to this chapter and applicable law, a lender who has extended credit to an
898 association secured by an assignment of income or an encumbrance of the common areas may
899 enforce the lender's security agreement as provided in the agreement.
900 (3) (a) Subject to Subsection (4), a security holder's consent that is required under
901 Subsection (1) to amend a declaration or bylaw or for another association action is presumed if:
902 (i) the association sends written notice of the proposed amendment or action by
903 certified or registered mail to the security holder's address stated in a recorded document
904 evidencing the security interest; and
905 (ii) the person designated in a notice under Subsection (3)(a)(i) to receive the security
906 holder's response does not receive a response within 60 days after the association sends notice
907 under Subsection (3)(a)(i).
908 (b) If a security holder's address for receiving notice is not stated in a recorded
909 document evidencing the security interest, an association:
910 (i) shall use reasonable efforts to find a mailing address for the security holder; and
911 (ii) may send the notice to any address obtained under Subsection (3)(b)(i).
912 (4) If a security holder responds in writing within 60 days after the association sends
913 notice under Subsection (3)(a)(i) that the security interest has been assigned or conveyed to
914 another person, the association:
915 (a) shall:
916 (i) send a notice under Subsection (3)(a)(i) to the person assigned or conveyed the
917 security interest at the address provided by the security holder in the security holder's response;
918 or
919 (ii) if no address is provided:
920 (A) use reasonable efforts to find a mailing address for the person assigned or
921 conveyed the security interest; and
922 (B) send notice by certified or registered mail to the person at the address that the
923 association finds under Subsection (4)(a)(ii)(A); and
924 (b) may not presume the security holder's consent under Subsection (3)(a) unless the
925 person designated in a notice under Subsection (4)(a) to receive the response from the person
926 assigned or conveyed the security interest does not receive a response within 60 days after the
927 association sends the notice.
928 Section 19. Section 57-8a-222 is enacted to read:
929 57-8a-222. Removing or altering partition or creating aperture between dwelling
930 units on adjoining lots.
931 (1) Subject to the declaration, a lot owner may, after acquiring an adjoining lot with a
932 dwelling unit that shares a common wall with a dwelling unit on the lot owner's lot:
933 (a) remove or alter a partition between the lot owner's lot and the acquired lot, even if
934 the partition is entirely or partly common areas; or
935 (b) create an aperture to the adjoining lot or portion.
936 (2) A lot owner may not take an action under Subsection (1) if the action would:
937 (a) impair the structural integrity or mechanical systems of the building or either lot;
938 (b) reduce the support of any portion of the common areas or another lot; or
939 (c) constitute a violation of Section 10-9a-608 or 17-27a-608 , as applicable, a local
940 government land use ordinance, or a building code.
941 (3) The board may require a lot owner to submit, at the lot owner's expense, a
942 registered professional engineer's or registered architect's opinion stating that a proposed
943 change to the lot owner's lot will not:
944 (a) impair the structural integrity or mechanical systems of the building or either lot;
945 (b) reduce the support or integrity of common areas; or
946 (c) compromise structural components.
947 (4) The board may require a lot owner to pay all of the association's legal and other
948 expenses related to a proposed alteration to the lot or building under this section.
949 (5) An action under Subsection (1) does not change an assessment or voting right
950 attributable to the lot owner's lot or the acquired lot, unless the declaration provides otherwise.
951 Section 20. Section 57-8a-223 is enacted to read:
952 57-8a-223. Eminent domain -- Common area.
953 Unless the declaration provides otherwise:
954 (1) if part of the common area is taken by eminent domain:
955 (a) the entity taking part of the common area shall pay to the association the portion of
956 the compensation awarded for the taking that is attributable to the common area; and
957 (b) the association shall equally divide any portion of the award attributable to the
958 taking of a limited common area among the owners of the lots to which the limited common
959 area was allocated at the time of the taking; and
960 (2) an association shall submit for recording to each applicable county recorder the
961 court judgment or order in an eminent domain action that results in the taking of some or all of
962 the common area.
963 Section 21. Section 57-8a-224 is enacted to read:
964 57-8a-224. Responsibility for the maintenance, repair, and replacement of
965 common area and lots.
966 (1) As used in this section:
967 (a) "Emergency repair" means a repair that, if not made in a timely manner, will likely
968 result in immediate and substantial damage to a common area or to another lot.
969 (b) "Reasonable notice" means:
970 (i) written notice that is hand delivered to the lot at least 24 hours before the proposed
971 entry; or
972 (ii) in the case of an emergency repair, notice that is reasonable under the
973 circumstances.
974 (2) Except as otherwise provided in the declaration or Part 4, Insurance:
975 (a) an association is responsible for the maintenance, repair, and replacement of
976 common areas; and
977 (b) a lot owner is responsible for the maintenance, repair, and replacement of the lot
978 owner's lot.
979 (3) After reasonable notice to the occupant of the lot being entered, the board may
980 access a lot:
981 (a) from time to time during reasonable hours, as necessary for the maintenance, repair,
982 or replacement of any of the common areas; or
983 (b) for making an emergency repair.
984 (4) (a) An association is liable to repair damage it causes to the common areas or to a
985 lot the association uses to access the common areas.
986 (b) An association shall repair damage described in Subsection (4)(a) within a time that
987 is reasonable under the circumstances.
988 (5) Subsections (2), (3), and (4) do not apply during the period of administrative
989 control as defined in Section 57-8a-104 .
990 Section 22. Section 57-8a-402 is amended to read:
991 57-8a-402. Applicability of part.
992 (1) This part applies to an insurance policy or combination of insurance policies:
993 (a) issued or renewed on or after July 1, 2011; and
994 (b) issued to or renewed by:
995 (i) a lot owner; or
996 (ii) an association, regardless of when the association is formed.
997 (2) [
998 project if all of the project's lots are restricted to entirely nonresidential use.
999 (3) Subject to Subsection (4), this part does not apply to a project if:
1000 (a) the initial declaration for the project is recorded before January 1, 2012;
1001 (b) the project includes attached dwellings; and
1002 (c) the declaration requires each lot owner to insure the lot owner's dwelling.
1003 (4) (a) An association [
1004 to which this part does not apply under Subsection (3) may amend the declaration, as provided
1005 in the declaration and applicable law, to subject the association to this part.
1006 (b) During the period of administrative control, an amendment under Subsection (4)(a)
1007 requires the consent of the declarant.
1008 Section 23. Section 57-8a-403 is amended to read:
1009 57-8a-403. Property and liability insurance required -- Notice if insurance not
1010 reasonably available.
1011 (1) Beginning not later than the day on which the first lot is conveyed to a person other
1012 than a declarant, an association shall maintain, to the extent reasonably available:
1013 (a) subject to Section 57-8a-405 , blanket property insurance or guaranteed replacement
1014 cost insurance on the physical structure of all attached dwellings, limited common areas
1015 appurtenant to a dwelling on a lot, and common areas in the project, insuring against all risks
1016 of direct physical loss commonly insured against, including fire and extended coverage perils;
1017 and
1018 (b) subject to Section 57-8a-406 , liability insurance[
1019
1020 property damage arising out of or in connection with the use, ownership, or maintenance of the
1021 common areas.
1022 (2) If an association becomes aware that property insurance under Subsection (1)(a) or
1023 liability insurance under Subsection (1)(b) is not reasonably available, the association shall,
1024 within seven calendar days after becoming aware, give all lot owners notice, as provided in
1025 Section [
1026 Section 24. Section 57-8a-404 is amended to read:
1027 57-8a-404. Other and additional insurance -- Limit on effect of lot owner act or
1028 omission -- Insurer's subrogation waiver -- Inconsistent provisions.
1029 (1) (a) The declaration or bylaws may require the association to carry other types of
1030 insurance in addition to those described in Section 57-8a-403 .
1031 (b) In addition to any type of insurance coverage or limit of coverage provided in the
1032 declaration or bylaws and subject to the requirements of this part, an association may, as the
1033 board considers appropriate, obtain:
1034 (i) an additional type of insurance than otherwise required; or
1035 (ii) a policy with greater coverage than otherwise required.
1036 (2) Unless a lot owner is acting within the scope of the lot owner's authority on behalf
1037 of an association, a lot owner's act or omission may not:
1038 (a) void a property insurance policy under Subsection 57-8a-403 (1)(a) or a liability
1039 insurance policy under Subsection 57-8a-403 (1)(b); or
1040 (b) be a condition to recovery under a policy.
1041 (3) An insurer under a property insurance policy or liability insurance policy obtained
1042 by an association under this part waives its right to subrogation under the policy against [
1043
1044 (a) any person residing with a lot owner, if the lot owner resides on the lot; and
1045 (b) the lot owner.
1046 (4) (a) An insurance policy issued to an association may not be inconsistent with any
1047 provision of this part.
1048 (b) A provision of a governing document that is contrary to a provision of this part has
1049 no effect.
1050 (c) [
1051 policy issued to an association may [
1052 lot owner's own benefit.
1053 Section 25. Section 57-8a-405 is amended to read:
1054 57-8a-405. Property insurance.
1055 (1) This section applies to property insurance required under Subsection
1056 57-8a-403 (1)(a).
1057 [
1058
1059 [
1060 guaranteed replacement cost insurance may not be less than 100% of the full replacement cost
1061 of the insured property at the time the insurance is purchased and at each renewal date,
1062 excluding:
1063 (a) items normally excluded from property insurance policies[
1064 (b) unless otherwise provided in the declaration, any commercial lot in a mixed-use
1065 project, including any fixture, improvement, or betterment in a commercial lot in a mixed-use
1066 project.
1067 [
1068 betterment installed [
1069 common area appurtenant to a dwelling on a lot, whether installed in the original construction
1070 or in any remodel or later alteration, including a floor covering, cabinet, light fixture, electrical
1071 fixture, heating or plumbing fixture, paint, wall covering, window, and any other item
1072 permanently part of or affixed to an attached dwelling or to a limited common area.
1073 [
1074 declaration, an association is not required to obtain property insurance for a loss to a dwelling
1075 that is not physically attached to another dwelling or to a common area structure.
1076 [
1077 [
1078 an association and another property insurance policy in the name of a lot owner:
1079 (a) the association's policy provides primary insurance coverage; and
1080 (b) notwithstanding Subsection [
1081 (i) [
1082 (ii) building property coverage, often referred to as coverage A, of the lot owner's
1083 policy applies to that portion of the loss attributable to the association's policy deductible.
1084 [
1085 (i) "Covered loss" means a loss, resulting from a single event or occurrence, that is
1086 covered by an association's property insurance policy.
1087 (ii) "Lot damage" means damage to any combination of a lot, a dwelling on a lot, or a
1088 limited common area appurtenant to a lot or appurtenant to a dwelling on a lot.
1089 (iii) "Lot damage percentage" means the percentage of total damage resulting in a
1090 covered loss that is attributable to lot damage.
1091 (b) A lot owner who owns a lot that has suffered lot damage as part of a covered loss is
1092 responsible for an amount calculated by applying the lot damage percentage for that lot to the
1093 amount of the deductible under the association's property insurance policy.
1094 (c) If a lot owner does not pay the amount required under Subsection [
1095 30 days after substantial completion of the repairs to, as applicable, the lot, a dwelling on the
1096 lot, or the limited common area appurtenant to the lot, an association may levy an assessment
1097 against a lot owner for that amount.
1098 [
1099 association's property insurance policy deductible or, if the policy deductible exceeds $10,000,
1100 [
1101 [
1102 to each lot owner of the lot owner's obligation under Subsection [
1103 policy deductible and of any change in the amount of the deductible.
1104 (b) (i) An association that fails to provide notice as provided in Subsection [
1105 is responsible for the [
1106 have assessed to a lot owner under Subsection [
1107 does not have insurance coverage that would otherwise apply under this section.
1108 (ii) Notwithstanding Subsection (9)(b)(i), an association that provides notice of the
1109 association's policy deductible, as required under Subsection (9)(a), but fails to provide notice
1110 of a later increase in the amount of the deductible is responsible only for the amount of the
1111 increase for which notice was not provided.
1112 (c) An association's failure to provide notice as provided in Subsection [
1113 may not be construed to invalidate any other provision of this part.
1114 [
1115 [
1116 deductible, and until it becomes apparent the covered loss exceeds the association's property
1117 insurance deductible and a claim is submitted to the association's property insurance insurer:
1118 (a) for a lot to which a loss occurs, the lot owner's policy is considered the policy for
1119 primary coverage [
1120 lot;
1121 (b) the association is responsible for any covered loss to any common area;
1122 [
1123
1124
1125 and the association may, as provided in Subsection (7)(c), recover any payments the association
1126 makes to remediate that lot; and
1127 [
1128 [
1129 shall adjust with the association a loss covered under the association's policy.
1130 (b) Notwithstanding Subsection [
1131 an association's property insurance policy:
1132 (i) are payable to an insurance trustee that the association designates or, if no trustee is
1133 designated, to the association; and
1134 (ii) may not be payable to a holder of a security interest.
1135 (c) An insurance trustee or an association shall hold any insurance proceeds in trust for
1136 the association, lot owners, and lien holders.
1137 (d) (i) [
1138 shall be disbursed first for the repair or restoration of the damaged property.
1139 (ii) After the disbursements described in Subsection [
1140 damaged property has been completely repaired or restored or the project terminated, any
1141 surplus proceeds are payable to the association, lot owners, and lien holders, as provided in the
1142 declaration.
1143 [
1144 insurer's authorized agent, shall issue a certificate or memorandum of insurance to:
1145 (a) the association;
1146 (b) a lot owner, upon the lot owner's written request; and
1147 (c) a holder of a security interest, upon the holder's written request.
1148 [
1149 section is subject to the procedures stated in Section 31A-21-303 .
1150 [
1151 section is not liable to lot owners if the insurance proceeds are not sufficient to cover 100% of
1152 the full replacement cost of the insured property at the time of the loss.
1153 (15) (a) Unless required in the declaration, property insurance coverage is not required
1154 for fixtures, improvements, or betterments in a commercial lot or limited common areas
1155 appurtenant to a commercial lot in a mixed-use project.
1156 (b) Notwithstanding any other provision of this part, an association may obtain
1157 property insurance for fixtures, improvements, and betterments in a commercial lot in a
1158 mixed-use project if allowed or required in the declaration.
1159 (16) (a) This section does not prevent a person suffering a loss as a result of damage to
1160 property from asserting a claim, either directly or through subrogation, for the loss against a
1161 person at fault for the loss.
1162 (b) Subsection (16)(a) does not affect Subsection 57-8a-404 (3).
1163 Section 26. Section 57-8a-406 is amended to read:
1164 57-8a-406. Liability insurance.
1165 (1) This section applies to a liability insurance policy required under Subsection
1166 57-8a-403 (1)(b).
1167 (2) A liability insurance policy shall be in an amount determined by the board but not
1168 less than an amount specified in the declaration or bylaws.
1169 (3) Each lot owner is an insured person under a liability insurance policy that an
1170 association obtains [
1171 (a) the lot owner's ownership interest in the common areas [
1172 (b) maintenance, repair, or replacement of common areas; and
1173 (c) the lot owner's membership in the association.
1174 Section 27. Section 57-8a-407 is amended to read:
1175 57-8a-407. Damage to a portion of project -- Insurance proceeds.
1176 (1) (a) If a portion of the project for which insurance is required under this part is
1177 damaged or destroyed, the association shall repair or replace the portion within a reasonable
1178 amount of time unless:
1179 (i) the project is terminated;
1180 (ii) repair or replacement would be illegal under a state statute or local ordinance
1181 governing health or safety; or
1182 (iii) (A) at least 75% of the allocated voting interests of the lot owners in the
1183 association vote not to rebuild; and
1184 (B) each owner of a dwelling on a lot and the limited common area appurtenant to that
1185 lot that will not be rebuilt votes not to rebuild.
1186 (b) If a portion of a project is not repaired or replaced because the project is terminated,
1187 the termination provisions of applicable law and the governing documents apply.
1188 (2) (a) The cost of repair or replacement of any lot in excess of insurance proceeds and
1189 reserves is a common expense[
1190 provide insurance coverage for the lot.
1191 (b) The cost of repair or replacement of any common area in excess of insurance
1192 proceeds and reserves is a common expense.
1193 (3) If the entire project is damaged or destroyed and not repaired or replaced:
1194 (a) the association shall use the insurance proceeds attributable to the damaged
1195 common areas to restore the damaged area to a condition compatible with the remainder of the
1196 project;
1197 (b) the association shall distribute the insurance proceeds attributable to lots and
1198 common areas that are not rebuilt to:
1199 (i) the lot owners of the lots that are not rebuilt;
1200 (ii) the lot owners of the lots to which those common areas that are not rebuilt were
1201 allocated; or
1202 (iii) lien holders; and
1203 (c) the association shall distribute the remainder of the proceeds to all the lot owners or
1204 lien holders in proportion to the common expense liabilities of all the lots.
1205 (4) If the lot owners vote not to rebuild a lot:
1206 (a) the lot's allocated interests are automatically reallocated upon the lot owner's vote
1207 as if the lot had been condemned; and
1208 (b) the association shall prepare, execute, and submit for recording an amendment to
1209 the declaration reflecting the reallocations described in Subsection (4)(a).
1210 Section 28. Section 57-8a-501 is enacted to read:
1211
1212 57-8a-501. Board acts for association.
1213 Except as limited in a declaration, the association bylaws, or other provisions of this
1214 chapter, a board acts in all instances on behalf of the association.
1215 Section 29. Section 57-8a-502 is enacted to read:
1216 57-8a-502. Period of administrative control.
1217 (1) Unless otherwise provided for in a declaration, a period of administrative control
1218 terminates on the first to occur of the following:
1219 (a) 60 days after 75% of the lots that may be created are conveyed to lot owners other
1220 than a declarant;
1221 (b) seven years after all declarants have ceased to offer lots for sale in the ordinary
1222 course of business; or
1223 (c) the day the declarant, after giving written notice to the lot owners, records an
1224 instrument voluntarily surrendering all rights to control activities of the association.
1225 (2) (a) A declarant may voluntarily surrender the right to appoint and remove a member
1226 of the board before the period of administrative control terminates under Subsection (1).
1227 (b) Subject to Subsection (2)(a), the declarant may require, for the duration of the
1228 period of administrative control, that actions of the association or board, as specified in a
1229 recorded instrument executed by the declarant, be approved by the declarant before they
1230 become effective.
1231 (3) (a) Upon termination of the period of administrative control, the lot owners shall
1232 elect a board consisting of an odd number of at least three members, a majority of whom shall
1233 be lot owners.
1234 (b) Unless the declaration provides for the election of officers by the lot owners, the
1235 board shall elect officers of the association.
1236 (c) The board members and officers shall take office upon election or appointment.
1237 Section 30. Section 57-8a-601 is enacted to read:
1238
1239 57-8a-601. Consolidation of multiple associations.
1240 (1) Two or more associations may be consolidated into a single association as provided
1241 in Title 16, Chapter 6a, Part 11, Merger, and this section.
1242 (2) Unless the declaration, articles, or bylaws otherwise provide, a declaration of
1243 consolidation between two or more associations to consolidate into a single association is not
1244 effective unless it is approved by the lot owners of each of the consolidating associations by the
1245 highest percentage of allocated voting interests of the lot owners required by each association
1246 to amend its respective declaration, articles, or bylaws.
1247 (3) A declaration of consolidation under Subsection (2) shall:
1248 (a) be prepared, executed, and certified by the president of each of the consolidating
1249 associations; and
1250 (b) provide for the reallocation of the allocated interests in the consolidated association
1251 by stating:
1252 (i) the reallocations of the allocated interests in the consolidated association or the
1253 formulas used to reallocate the allocated interests; or
1254 (ii) (A) the percentage of overall allocated interests of the consolidated association that
1255 are allocated to all of the lots comprising each of the consolidating associations; and
1256 (B) that the portion of the percentages allocated to each lot formerly comprising a part
1257 of a consolidating association is equal to the percentages of allocated interests allocated to the
1258 lot by the declaration of the consolidating association.
1259 (4) A declaration of consolidation under Subsection (2) is not effective until it is
1260 recorded in the office of each applicable county recorder.
1261 (5) Unless otherwise provided in the declaration of consolidation:
1262 (a) the consolidated association resulting from a consolidation under this section is the
1263 legal successor for all purposes of all of the consolidating associations;
1264 (b) the operations and activities of all of the consolidating associations shall be
1265 consolidated into the consolidated association; and
1266 (c) the consolidated association holds all powers, rights, obligations, assets, and
1267 liabilities of all consolidating associations.
1268 Section 31. Section 76-6-206 is amended to read:
1269 76-6-206. Criminal trespass.
1270 (1) As used in this section, "enter" means intrusion of the entire body.
1271 (2) A person is guilty of criminal trespass if, under circumstances not amounting to
1272 burglary as defined in Section 76-6-202 , 76-6-203 , or 76-6-204 or a violation of Section
1273 76-10-2402 regarding commercial obstruction:
1274 (a) the person enters or remains unlawfully on property and:
1275 (i) intends to cause annoyance or injury to any person or damage to any property,
1276 including the use of graffiti as defined in Section 76-6-107 ;
1277 (ii) intends to commit any crime, other than theft or a felony; or
1278 (iii) is reckless as to whether his presence will cause fear for the safety of another;
1279 (b) knowing the person's entry or presence is unlawful, the person enters or remains on
1280 property as to which notice against entering is given by:
1281 (i) personal communication to the actor by the owner or someone with apparent
1282 authority to act for the owner;
1283 (ii) fencing or other enclosure obviously designed to exclude intruders; or
1284 (iii) posting of signs reasonably likely to come to the attention of intruders; or
1285 (c) the person enters a condominium unit in violation of Subsection 57-8-7 [
1286 (3) (a) A violation of Subsection (2)(a) or (b) is a class B misdemeanor unless it was
1287 committed in a dwelling, in which event it is a class A misdemeanor.
1288 (b) A violation of Subsection (2)(c) is an infraction.
1289 (4) It is a defense to prosecution under this section that:
1290 (a) the property was open to the public when the actor entered or remained; and
1291 (b) the actor's conduct did not substantially interfere with the owner's use of the
1292 property.
1293 Section 32. Effective date.
1294 (1) Except as provided in Subsection (2), this bill takes effect May 14, 2013.
1295 (2) The actions affecting the following sections take effect July 1, 2014:
1296 (a) Section 57-8-4.5 ;
1297 (b) Section 57-8-7 ;
1298 (c) Section 57-8-7.5 ;
1299 (d) Section 57-8-10.3 ;
1300 (e) Section 57-8-10.5 ;
1301 (f) Section 57-8-23 ;
1302 (g) Section 57-8-40 ;
1303 (h) Section 57-8-55 ;
1304 (i) Section 57-8a-107 ;
1305 (j) Section 57-8a-108 ;
1306 (k) Section 57-8a-211 ;
1307 (l) Section 57-8a-212 ;
1308 (m) Section 57-8a-220 ;
1309 (n) Section 57-8a-222 ;
1310 (o) Section 57-8a-223 ;
1311 (p) Section 57-8a-224 ;
1312 (q) Section 57-8a-501 ;
1313 (r) Section 57-8a-502 ;
1314 (s) Section 57-8a-601 ; and
1315 (t) Section 76-6-206 .
1316 Section 33. Coordinating S.B. 90 with S.B. 64 -- Technical amendment.
1317 If this S.B. 90 and S.B. 64, Homeowner Association Reserve Account Amendments,
1318 both pass and become law, it is the intent of the Legislature that the Office of Legislative
1319 Research and General Counsel, in preparing the Utah Code database for publication:
1320 (1) modify Section 57-8-7.5 on July 1, 2014, to read:
1321 " 57-8-7.5. Reserve analysis -- Reserve fund.
1322 (1) As used in this section[
1323 (a) "Reserve analysis" means an analysis to determine:
1324 [
1325 replacing, [
1326 more[
1327 cost that can reasonably be funded from the general budget or other funds of the association of
1328 unit owners; and
1329 [
1330 (b) "Reserve fund line item" means the line item in an association of unit owners'
1331 annual budget that identifies the amount to be placed into a reserve fund.
1332 (2) Except as otherwise provided in the declaration, a management committee shall:
1333 (a) [
1334 less frequently than every six years; and
1335 [
1336
1337 (b) review and, if necessary, update a previously conducted reserve analysis no less
1338 frequently than every three years.
1339 (3) The management committee may conduct a reserve analysis itself or may engage a
1340 reliable person or organization, as determined by the management committee, to conduct the
1341 reserve analysis.
1342 (4) A reserve fund analysis shall include:
1343 (a) a list of the components identified in the reserve analysis that will reasonably
1344 require reserve funds;
1345 (b) a statement of the probable remaining useful life, as of the date of the reserve
1346 analysis, of each component identified in the reserve analysis;
1347 (c) an estimate of the cost to repair, replace, or restore each component identified in the
1348 reserve analysis;
1349 (d) an estimate of the total annual contribution to a reserve fund necessary to meet the
1350 cost to repair, replace, or restore each component identified in the reserve analysis during the
1351 component's useful life and at the end of the component's useful life; and
1352 (e) a reserve funding plan that recommends how the association of unit owners may
1353 fund the annual contribution described in Subsection (4)(d).
1354 (5) An association of unit owners shall:
1355 (a) annually provide unit owners a summary of the most recent reserve analysis or
1356 update; and
1357 (b) provide a copy of the complete reserve analysis or update to a unit owner who
1358 requests a copy.
1359 (6) In formulating its budget each year, an association of unit owners shall include a
1360 reserve fund line item in:
1361 (a) an amount the management committee determines, based on the reserve analysis, to
1362 be prudent; or
1363 (b) an amount required by the declaration, if the declaration requires an amount higher
1364 than the amount determined under Subsection (6)(a).
1365 (7) (a) Within 45 days after the day on which an association of unit owners adopts its
1366 annual budget, the unit owners may veto the reserve fund line item by a 51% vote of the
1367 allocated voting interests in the association of unit owners at a special meeting called by the
1368 unit owners for the purpose of voting whether to veto a reserve fund line item.
1369 (b) If the unit owners veto a reserve fund line item under Subsection (7)(a) and a
1370 reserve fund line item exists in a previously approved annual budget of the association of unit
1371 owners that was not vetoed, the association of unit owners shall fund the reserve account in
1372 accordance with that prior reserve fund line item.
1373 (8) (a) Subject to Subsection (8)(b), if an association of unit owners does not comply
1374 with the requirements of Subsection (5), (6), or (7) and fails to remedy the noncompliance
1375 within the time specified in Subsection (8)(c), a unit owner may file an action in state court for:
1376 (i) injunctive relief requiring the association of unit owners to comply with the
1377 requirements of Subsection (5), (6), or (7);
1378 (ii) $500 or actual damages, whichever is greater;
1379 (iii) any other remedy provided by law; and
1380 (iv) reasonable costs and attorney fees.
1381 (b) No fewer than 90 days before the day on which a unit owner files a complaint under
1382 Subsection (8)(a), the unit owner shall deliver written notice described in Subsection (8)(c) to
1383 the association of unit owners.
1384 (c) A notice under Subsection (8)(b) shall state:
1385 (i) the requirement in Subsection (5), (6), or (7) with which the association of unit
1386 owners has failed to comply;
1387 (ii) a demand that the association of unit owners come into compliance with the
1388 requirements; and
1389 (iii) a date, no fewer than 90 days after the day on which the unit owner delivers the
1390 notice, by which the association of unit owners shall remedy its noncompliance.
1391 (d) In a case filed under Subsection (8)(a), a court may order an association of unit
1392 owners to produce the summary of the reserve analysis or the complete reserve analysis on an
1393 expedited basis and at the association of unit owners' expense.
1394 [
1395 (i) for daily maintenance expenses, unless a majority of the members of the association
1396 of unit owners vote to approve the use of reserve fund money for that purpose; or
1397 (ii) for any purpose other than the purpose for which the reserve fund was established.
1398 (b) A management committee shall maintain a reserve fund separate from other funds
1399 of the association of unit owners.
1400 (c) This Subsection [
1401 from prudently investing money in a reserve fund, subject to any investment constraints
1402 imposed by the declaration.
1403 [
1404 of unit owners during the period of declarant [
1405 57-8-16.5 (1).
1406 [
1407 [
1408
1409 [
1410 [
1411
1412 [
1413
1414 [
1415 the association of unit owners was created."; and
1416 (2) modify Section 57-8a-211 on July 1, 2014, to read:
1417 " 57-8a-211. Reserve analysis -- Reserve fund.
1418 (1) As used in this section[
1419 (a) "Reserve analysis" means an analysis to determine:
1420 [
1421 replacing, [
1422
1423 reasonably be funded from the association's general budget or from other association funds;
1424 and
1425 [
1426 (b) "Reserve fund line item" means the line item in an association's annual budget that
1427 identifies the amount to be placed into a reserve fund.
1428 (2) Except as otherwise provided in the governing documents, a board shall:
1429 (a) [
1430 less frequently than every six years; and
1431 [
1432
1433 (b) review and, if necessary, update a previously conducted reserve analysis no less
1434 frequently than every three years.
1435 (3) The board may conduct a reserve analysis itself or may engage a reliable person or
1436 organization, as determined by the board, to conduct the reserve analysis.
1437 (4) A reserve fund analysis shall include:
1438 (a) a list of the components identified in the reserve analysis that will reasonably
1439 require reserve funds;
1440 (b) a statement of the probable remaining useful life, as of the date of the reserve
1441 analysis, of each component identified in the reserve analysis;
1442 (c) an estimate of the cost to repair, replace, or restore each component identified in the
1443 reserve analysis;
1444 (d) an estimate of the total annual contribution to a reserve fund necessary to meet the
1445 cost to repair, replace, or restore each component identified in the reserve analysis during the
1446 component's useful life and at the end of the component's useful life; and
1447 (e) a reserve funding plan that recommends how the association may fund the annual
1448 contribution described in Subsection (4)(d).
1449 (5) An association shall:
1450 (a) annually provide lot owners a summary of the most recent reserve analysis or
1451 update; and
1452 (b) provide a copy of the complete reserve analysis or update to a lot owner who
1453 requests a copy.
1454 (6) In formulating its budget each year, an association shall include a reserve fund line
1455 item in:
1456 (a) an amount the board determines, based on the reserve analysis, to be prudent; or
1457 (b) an amount required by the governing documents, if the governing documents
1458 require an amount higher than the amount determined under Subsection (6)(a).
1459 (7) (a) Within 45 days after the day on which an association adopts its annual budget,
1460 the lot owners may veto the reserve fund line item by a 51% vote of the allocated voting
1461 interests in the association at a special meeting called by the lot owners for the purpose of
1462 voting whether to veto a reserve fund line item.
1463 (b) If the lot owners veto a reserve fund line item under Subsection (7)(a) and a reserve
1464 fund line item exists in a previously approved annual budget of the association that was not
1465 vetoed, the association shall fund the reserve account in accordance with that prior reserve fund
1466 line item.
1467 (8) (a) Subject to Subsection (8)(b), if an association does not comply with the
1468 requirements described in Subsection (5), (6), or (7) and fails to remedy the noncompliance
1469 within the time specified in Subsection (8)(c), a lot owner may file an action in state court for:
1470 (i) injunctive relief requiring the association to comply with the requirements of
1471 Subsection (5), (6), or (7);
1472 (ii) $500 or the lot owner's actual damages, whichever is greater;
1473 (iii) any other remedy provided by law; and
1474 (iv) reasonable costs and attorney fees.
1475 (b) No fewer than 90 days before the day on which a lot owner files a complaint under
1476 Subsection (8)(a), the lot owner shall deliver written notice described in Subsection (8)(c) to
1477 the association.
1478 (c) A notice under Subsection (8)(b) shall state:
1479 (i) the requirement in Subsection (5), (6), or (7) with which the association has failed to
1480 comply;
1481 (ii) a demand that the association come into compliance with the requirements; and
1482 (iii) a date, no fewer than 90 days after the day on which the lot owner delivers the
1483 notice, by which the association shall remedy its noncompliance.
1484 (d) In a case filed under Subsection (8)(a), a court may order an association to produce
1485 the summary of the reserve analysis or the complete reserve analysis on an expedited basis and
1486 at the association's expense.
1487 [
1488 (i) for daily maintenance expenses, unless a majority of association members vote to
1489 approve the use of reserve fund money for that purpose; or
1490 (ii) for any purpose other than the purpose for which the reserve fund was established.
1491 (b) A board shall maintain a reserve fund separate from other association funds.
1492 (c) This Subsection [
1493 investing money in a reserve fund, subject to any investment constraints imposed by the
1494 governing documents.
1495 [
1496 during the period of administrative control.
1497 [
1498 [
1499
1500 [
1501 [
1502
1503 [
1504
1505 [
1506 was created."
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