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H.B. 181

This document includes House Floor Amendments incorporated into the bill on Thu, Feb 18, 2010 at 4:23 PM by jeyring. -->              1     

CONDOMINIUM ASSOCIATION COMMON

             2     
EXPENSES

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Carol Spackman Moss

             6     
Senate Sponsor: Ross I. Romero

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies a provision of the Condominium Ownership Act relating to common
             11      expenses.
             12      Highlighted Provisions:
             13          This bill:
             14          .    includes rules adopted by the condominium association H. [ board of directors ]
             14a      management committee .H among
             15      the documents that may authorize the management committee to terminate certain
             16      services of an owner who has failed to pay an assessment.
             17      Monies Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          57-8-20, as last amended by Laws of Utah 2003, Chapter 265
             24     
             25      Be it enacted by the Legislature of the state of Utah:
             26          Section 1. Section 57-8-20 is amended to read:
             27           57-8-20. Lien for nonpayment of common expenses.


             28          (1) Every unit owner shall pay his proportionate share of the common expenses.
             29      Payment shall be in the amounts and at the times determined by the management committee in
             30      accordance with the terms of the declaration or the bylaws.
             31          (2) (a) An assessment levied against each unit is a debt of the owner at the time the
             32      assessment is made and is collectible as such.
             33          (b) The association is entitled to recover all expenses incurred by the association in
             34      collecting any unpaid assessment, including reasonable [attorneys'] attorney fees, whether an
             35      action is brought against an owner under Subsection (3), or whether a suit to foreclose the lien
             36      upon the unit is instituted under Subsection (4).
             37          (3) Suit to recover a money judgment for any unpaid assessment is maintainable
             38      without foreclosing or waiving the lien securing it. The prevailing party in the action is entitled
             39      to recover its costs of suit and reasonable [attorneys'] attorney fees.
             40          (4) (a) Subject to Subsection 57-8-37 (6), if any unit owner fails or refuses to pay an
             41      assessment when due, that amount constitutes a lien on the interest of the owner in the
             42      property, and upon the recording of notice of lien by the manager or management committee it
             43      is a lien upon the unit owner's interest in the property prior to all other liens and encumbrances,
             44      recorded or unrecorded, except:
             45          (i) tax and special assessment liens on the unit in favor of any assessing unit or special
             46      improvement district; and
             47          (ii) encumbrances on the interest of the unit owner recorded prior to the date such
             48      notice is recorded which by law would be a lien prior to subsequently recorded encumbrances.
             49          (b) The lien for nonpayment of an assessment may be enforced by sale or foreclosure
             50      of the unit owner's interest by the manager or management committee. The sale or foreclosure
             51      shall be conducted in the same manner as foreclosures in deeds of trust or mortgages or in any
             52      other manner permitted by law.
             53          (c) In any foreclosure or sale, the unit owner shall pay the costs and expenses of such
             54      proceedings and reasonable [attorneys'] attorney fees. If so provided in the declaration or
             55      bylaws, in the case of foreclosure, the owner shall pay a reasonable rental for the unit, and the
             56      plaintiff in the foreclosure action may require the appointment of a receiver to collect the rental
             57      without regard to the value of the mortgage security.
             58          (d) Unless otherwise provided in the declaration, the manager or management


             59      committee may bid in the unit at foreclosure or other sale and hold, lease, mortgage, or convey
             60      the unit.
             61          (5) (a) When authorized in the declaration [or], bylaws, or rules adopted by the H. [ board
             62      of directors
] management committee .H
, if the owner fails or refuses to pay any assessment
             62a      when due, the management
             63      committee may, after giving notice and an opportunity to be heard in accordance with
             64      Subsection (5)(b):
             65          (i) terminate an owner's right to receive utility services paid as a common expense; and
             66          (ii) terminate an owner's right of access and use of recreational facilities.
             67          (b) Before terminating utility services or right of access and use of recreational
             68      facilities under Subsection (5)(a), the manager or management committee shall give written
             69      notice to the unit owner in the manner provided in the declaration, bylaws, or association rules.
             70      The notice shall state:
             71          (i) utility services or right of access and use of recreational facilities will be terminated
             72      if payment of the assessment is not received within the time provided in the declaration,
             73      bylaws, or association rules, which time shall be stated and be at least 48 hours;
             74          (ii) the amount of the assessment due, including any interest or late payment fee; and
             75          (iii) the right to request a hearing under Subsection (5)(c).
             76          (c) A unit owner who is given notice under Subsection (5)(b) may request an informal
             77      hearing to dispute the assessment by submitting a written request to the management
             78      committee within 14 days from the date the notice is received.
             79          (i) The hearing shall be conducted in accordance with the standards provided in the
             80      declaration, bylaws, or association rules.
             81          (ii) If a hearing is requested, utility services or right of access and use or recreational
             82      facilities may not be terminated until after the hearing has been conducted and a final decision
             83      has been entered.
             84          (d) Upon payment of the assessment due, including any interest or late payment fee, the
             85      manager or management committee shall immediately take action to reinstate the terminated
             86      utility services to the unit.
             87          (e) The remedies provided in this Subsection (5) shall only apply to residential
             88      condominium units.
             89          (6) (a) If authorized in the declaration or bylaws, the owner of a unit who is leasing the


             90      unit fails to pay any assessment for a period of more than 60 days after it is due and payable,
             91      the management committee, upon compliance with this Subsection (6)(a), may demand the
             92      tenant to pay to the association all future lease payments due the owner, commencing with the
             93      next monthly or other periodic payment, until the amount due to the association is paid.
             94          (b) The manager or management committee must give the unit owner written notice, in
             95      accordance with the declaration, bylaws, or association rules, of its intent to demand full
             96      payment from the tenant. This notice shall:
             97          (i) provide notice to the tenant that full payment of remaining lease payments will
             98      commence with the next monthly or other periodic payment unless the assessment is received
             99      within the time period provided in the declaration, bylaws, or association rules;
             100          (ii) state the amount of the assessment due, including any interest or late payment fee;
             101          (iii) state that any costs of collection, not to exceed $150, and other assessments that
             102      become due may be added to the total amount due; and
             103          (iv) provide the requirements and rights described in Subsections (6)(b) through (f).
             104          (c) If the unit owner fails to pay the amount of the assessment due by the date specified
             105      in the notice, the manager or management committee may deliver written notice to the tenant,
             106      in accordance with the declaration, bylaws, or association rules, that demands future payments
             107      due to the owner be paid to the association pursuant to Subsection (6)(d). A copy of the notice
             108      must be mailed to the unit owner. The notice provided to the tenant must state:
             109          (i) that due to the owner's failure to pay the assessment within the time period allowed,
             110      the owner has been notified of the management committee's intent to collect all lease payments
             111      due to the association pursuant to Subsection (6)(a);
             112          (ii) that until notification by the association that the assessment due, including any
             113      interest or late payment fee, has been paid, all future lease payments due to the owner are to be
             114      paid to the association; and
             115          (iii) payment by the tenant to the association in compliance with this Subsection (6)
             116      will not constitute a default under the terms of the lease agreement. If payment is in
             117      compliance with this Subsection (6) suit or other action may not be initiated by the owner
             118      against the tenant for failure to pay.
             119          (d) All funds paid to the association pursuant to Subsection (6)(c) shall be deposited in
             120      a separate account and disbursed to the association until the assessment due, together with any


             121      cost of administration which may not exceed $25, is paid in full. Any remaining balance must
             122      be paid to the owner within five business days of payment in full to the association.
             123          (e) Within five business days of payment in full of the assessment, including any
             124      interest or late payment fee, the manager or management committee must notify the tenant in
             125      writing that future lease payments are no longer due to the association. A copy of this
             126      notification must be mailed to the unit owner.
             127          (f) As used in this Subsection (6), "lease" or "leasing" means regular, exclusive
             128      occupancy of a unit by any person or persons, other than the unit owner, for which the unit
             129      owner receives any consideration or benefit, including a fee, service, gratuity, or emolument.
             130          (7) (a) The manager or management committee shall, upon the written request of any
             131      unit owner and upon payment of a reasonable fee not to exceed $10, issue a written statement
             132      indicating any unpaid assessments with respect to the unit covered by the request. This written
             133      statement of unpaid assessments is conclusive upon the remaining unit owners and upon the
             134      manager and management committee in favor of all persons who rely on the written statement
             135      in good faith.
             136          (b) Unless the manager or management committee complies with the request for a
             137      statement of any unpaid assessments within 10 days, all unpaid assessments which became due
             138      prior to the date the request was made are subordinate to the lien held by the person requesting
             139      the statement.
             140          (8) Any encumbrancer holding a lien on a unit may pay any unpaid assessment due
             141      with respect to the unit. Upon payment, the encumbrancer has a lien on the unit for the
             142      amounts paid.
             143          (9) Remedies provided in this section, by law, or in equity are not considered to be
             144      mutually exclusive.




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    as of 1-29-10 4:45 PM


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