First Substitute H.B. 264

Representative Marda Dillree proposes to substitute the following bill:

1 INSURANCE COVERAGE AND COMMON AREA
2 AMENDMENTS FOR CONDOMINIUMS
3 2000 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Marda Dillree
6 AN ACT RELATING TO THE CONDOMINIUM OWNERSHIP ACT; REQUIRING
7 CONDOMINIUM ASSOCIATIONS TO OBTAIN INSURANCE COVERING ALL COMMON
8 AREAS AND BUILDINGS; AMENDING PROVISIONS RELATING TO COMMON AREAS;
9 AND MAKING TECHNICAL CHANGES.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 57-8-7, as last amended by Chapter 173, Laws of Utah 1975
13 57-8-29, as enacted by Chapter 111, Laws of Utah 1963
14 Be it enacted by the Legislature of the state of Utah:
15 Section 1. Section 57-8-7 is amended to read:
16 57-8-7. Common areas and facilities.
17 (1) Each unit owner shall be entitled to an undivided interest in the common areas and
18 facilities in the percentages or fractions expressed in the declaration. The declaration may allocate
19 to each unit an undivided interest in the common areas and facilities proportionate to either the size
20 or par value of such unit. Otherwise, the declaration shall allocate to each unit an equal undivided
21 interest in the common areas and facilities, subject to the following exception: each convertible
22 space depicted on the record of survey map shall be allocated an undivided interest in the common
23 areas and facilities proportionate to the size of such space vis-a-vis the aggregate size of all units
24 so depicted, while the remaining undivided interest in the common areas and facilities shall be
25 allocated equally among the other units so depicted. The undivided interest in the common areas

26 and facilities allocated in accordance with this subsection shall add up to one if stated as fractions
27 or to 100% if stated as percentages. If an equal undivided interest in the common areas and
28 facilities is allocated to each unit, the declaration may simply state that fact and need not express
29 the fraction or percentage so allocated. Otherwise, the undivided interest allocated to each unit
30 shall be reflected by a table in the declaration, or by an exhibit or schedule accompanying the
31 declaration and recorded simultaneously with it, containing columns. The first column shall
32 identify the units, listing them serially or grouping them together in the case of units to which
33 identical undivided interests are allocated. Corresponding figures in the second and third columns
34 shall set forth the respective sizes or par values of those units and the fraction or percentage of
35 undivided interest in the common areas and facilities allocated thereto.
36 (2) Except as otherwise expressly provided by this act, the undivided interest of each unit
37 owner in the common areas and facilities as expressed in the declaration shall have a permanent
38 character and shall not be altered without the consent of [all] S [ 75% ] TWO-THIRDS s of the unit
38a owners expressed
39 in an amended declaration duly recorded. The undivided interest in the common areas and facilities
40 shall not be separated from the unit to which it appertains and shall be deemed to be conveyed or
41 encumbered or released from liens with the unit even though such interest is not expressly
42 mentioned or described in the conveyance or other instrument. A time period unit may not be
43 further divided into shorter time periods by a conveyance or disclaimer.
44 (3) The common areas and facilities shall remain undivided and no unit owner or any other
45 person shall bring any action for partition or division of any part thereof, unless the property has
46 been removed from the provisions of this act as provided in Sections 57-8-22 and 57-8-31 . Any
47 covenants to the contrary shall be null and void.
48 (4) Each unit owner may use the common areas and facilities in accordance with the
49 purpose for which they were intended without hindering or encroaching upon the lawful rights of
50 the other unit owners.
51 (5) The necessary work of maintenance, repair and replacement of the common areas and
52 facilities and the making of any additions or improvements thereon shall be carried out only as
53 provided in this act or in the declaration or bylaws.
54 (6) The manager or management committee shall have the irrevocable right to have access
55 to each unit from time to time during reasonable hours as may be necessary for the maintenance,
56 repair or replacement of any of the common areas and facilities or for making emergency repairs

57 necessary to prevent damage to the common areas and facilities or to another unit or units.
58 Section 2. Section 57-8-29 is amended to read:
59 57-8-29. Insurance.
60 (1) The manager, management committee, or association of unit owners[, if required by
61 the declaration, bylaws or by a majority of the unit owners, or at the request of a mortgagee having
62 a first mortgage of record covering a unit, shall have the authority to, and shall, obtain insurance
63 for the property] shall obtain insurance against loss or damage by fire and [such] other hazards
64 [under such terms and for such amounts as shall be required or requested.] for:
65 (a) all common areas and facilities; and
66 (b) all buildings S THAT CONTAIN MORE THAN ONE CONDOMINIUM UNIT s , including
66a any improvement which is a permanent part of a building.
67 (2) Insurance coverage shall be written on the property in the name of the manager,
68 management committee, or association of unit owners, as trustee for each of the unit owners in the
69 percentages established in the declaration.
70 (3) Premiums on insurance required by this section shall be common expenses.
71 (4) Provision for insurance shall be without prejudice to the right of each unit owner to
72 insure his own unit for his benefit.