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H.B. 59






Sponsor: Steven R. Mascaro

             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Real Estate Code to enact provisions related to liens for
             10      homeowner association charges.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides definitions;
             14          .    requires that in certain circumstances, a failure to pay homeowner association
             15      charges may result in a lien; and
             16          .    establishes provisions related to the recording and priority of the lien.
             17      Monies Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      ENACTS:
             23          57-24-1, Utah Code Annotated 1953
             24          57-24-2, Utah Code Annotated 1953
             25          57-24-3, Utah Code Annotated 1953
             27      Be it enacted by the Legislature of the state of Utah:

             28          Section 1. Section 57-24-1 is enacted to read:

             30          57-24-1. Title.
             31          This chapter is known as the "Homeowner Associations Act."
             32          Section 2. Section 57-24-2 is enacted to read:
             33          57-24-2. Definitions.
             34          As used in this chapter:
             35          (1) "Homeowner association" means a mandatory membership association of owners
             36      of real property:
             37          (a) created pursuant to a recorded instrument that subjects property within the
             38      homeowner association to certain restrictive covenants;
             39          (b) that represents the mutual interests of the real property owners regarding the
             40      construction, protection, and maintenance of the property and improvements commonly owned
             41      or used by the homeowner association; and
             42          (c) that has the authority under the recorded instrument described in Subsection (1)(a)
             43      to compel members of the homeowner association to pay the expenses incurred in performing
             44      the obligations of the homeowner association.
             45          (2) "Planned unit development" means an area of land developed under unified control
             46      or a unified plan of development.
             47          Section 3. Section 57-24-3 is enacted to read:
             48          57-24-3. Lien for nonpayment of common expenses.
             49          (1) (a) If a homeowner association manages or owns common areas within a planned
             50      unit development, a property owner within the homeowner association shall pay the property
             51      owner's share of the common expenses of the homeowner association.
             52          (b) A payment described in Subsection (1)(a) shall be in the amount and at the time
             53      determined:
             54          (i) by the homeowner association; and
             55          (ii) pursuant to the recorded instrument under which the homeowner association was
             56      created.
             57          (2) (a) Subject to Subsection (3), if a property owner fails or refuses to pay a payment
             58      described in Subsection (1)(a), that amount constitutes a lien on the interest of the property

             59      owner in the property that is subject to the homeowner association.
             60          (b) Subject to Subsection (3), upon the recording of notice of lien by the homeowner
             61      association, a lien described in Subsection (2)(a) is a lien on the interest of the property owner
             62      in the property prior to all other liens and encumbrances, recorded or unrecorded, except:
             63          (i) tax and special assessment liens on the property in favor of any assessing unit or
             64      special improvement district; and
             65          (ii) encumbrances on the interest of the property owner:
             66          (A) recorded prior to the date of the recording of notice of lien described in Subsection
             67      (2)(b); and
             68          (B) that by law would be a lien prior to subsequently recorded encumbrances.
             69          (3) A lien described in Subsection (2) is valid only if:
             70          (a) the homeowner association maintains current records for its officers, directors, and
             71      trustees with the Division of Corporations and Commercial Code; and
             72          (b) the recording of notice of lien contains:
             73          (i) a day time telephone number of the homeowner association; and
             74          (ii) a mailing address of the homeowner association.

Legislative Review Note
    as of 12-23-03 12:49 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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