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[Introduced][Status][Bill Documents][Fiscal Note] [Bills Directory]

H.B. 101 Enrolled

             1     

HOMEOWNERS ASSOCIATION AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Jon E. Stanard

             5     
Senate Sponsor: Stephen H. Urquhart

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill clarifies an association's right to attach and enforce liens following a period of
             10      noncompliance with the registration requirements described in this bill.
             11      Highlighted Provisions:
             12          This bill:
             13          .    specifies how an association ends a period of noncompliance with the registration
             14      requirements described in this bill;
             15          .    clarifies that, under certain circumstances, after an association ends a period of
             16      noncompliance with the registration requirements described in this bill:
             17              .    a lien may arise for the nonpayment of any assessment that occurred during the
             18      period of noncompliance; and
             19              .    the association may enforce any lien that arose before the period of
             20      noncompliance; and
             21          .    makes technical changes.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None
             26      Utah Code Sections Affected:
             27      AMENDS:
             28          57-8-3, as last amended by Laws of Utah 2012, Chapter 166
             29          57-8-13.1, as last amended by Laws of Utah 2012, Chapter 63


             30          57-8-44, as enacted by Laws of Utah 2011, Chapter 355
             31          57-8-45, as enacted by Laws of Utah 2011, Chapter 355
             32          57-8a-102, as last amended by Laws of Utah 2011, Chapter 355
             33          57-8a-105, as last amended by Laws of Utah 2012, Chapter 63
             34          57-8a-301, as enacted by Laws of Utah 2011, Chapter 355
             35          57-8a-302, as enacted by Laws of Utah 2011, Chapter 355
             36     
             37      Be it enacted by the Legislature of the state of Utah:
             38          Section 1. Section 57-8-3 is amended to read:
             39           57-8-3. Definitions.
             40          As used in this chapter:
             41          (1) "Assessment" means any charge imposed by the association, including:
             42          (a) common expenses on or against a unit owner pursuant to the provisions of the
             43      declaration, bylaws, or this chapter; and
             44          (b) an amount that an association of unit owners assesses to a unit owner under
             45      Subsection 57-8-43 (9)(h).
             46          (2) "Association of unit owners" means all of the unit owners:
             47          (a) acting as a group in accordance with the declaration and bylaws; or
             48          (b) organized as a legal entity in accordance with the declaration.
             49          (3) "Building" means a building, containing units, and comprising a part of the
             50      property.
             51          (4) "Common areas and facilities" unless otherwise provided in the declaration or
             52      lawful amendments to the declaration means:
             53          (a) the land included within the condominium project, whether leasehold or in fee
             54      simple;
             55          (b) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
             56      corridors, lobbies, stairs, stairways, fire escapes, entrances, and exits of the building;
             57          (c) the basements, yards, gardens, parking areas, and storage spaces;


             58          (d) the premises for lodging of janitors or persons in charge of the property;
             59          (e) installations of central services such as power, light, gas, hot and cold water,
             60      heating, refrigeration, air conditioning, and incinerating;
             61          (f) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all
             62      apparatus and installations existing for common use;
             63          (g) such community and commercial facilities as may be provided for in the
             64      declaration; and
             65          (h) all other parts of the property necessary or convenient to its existence, maintenance,
             66      and safety, or normally in common use.
             67          (5) "Common expenses" means:
             68          (a) all sums lawfully assessed against the unit owners;
             69          (b) expenses of administration, maintenance, repair, or replacement of the common
             70      areas and facilities;
             71          (c) expenses agreed upon as common expenses by the association of unit owners; and
             72          (d) expenses declared common expenses by this chapter, or by the declaration or the
             73      bylaws.
             74          (6) "Common profits," unless otherwise provided in the declaration or lawful
             75      amendments to the declaration, means the balance of all income, rents, profits, and revenues
             76      from the common areas and facilities remaining after the deduction of the common expenses.
             77          (7) "Condominium" means the ownership of a single unit in a multiunit project
             78      together with an undivided interest in common in the common areas and facilities of the
             79      property.
             80          (8) "Condominium plat" means a plat or plats of survey of land and units prepared in
             81      accordance with Section 57-8-13 .
             82          (9) "Condominium project" means a real estate condominium project; a plan or project
             83      whereby two or more units, whether contained in existing or proposed apartments, commercial
             84      or industrial buildings or structures, or otherwise, are separately offered or proposed to be
             85      offered for sale. Condominium project also means the property when the context so requires.


             86          (10) "Condominium unit" means a unit together with the undivided interest in the
             87      common areas and facilities appertaining to that unit. Any reference in this chapter to a
             88      condominium unit includes both a physical unit together with its appurtenant undivided interest
             89      in the common areas and facilities and a time period unit together with its appurtenant
             90      undivided interest, unless the reference is specifically limited to a time period unit.
             91          (11) "Contractible condominium" means a condominium project from which one or
             92      more portions of the land within the project may be withdrawn in accordance with provisions
             93      of the declaration and of this chapter. If the withdrawal can occur only by the expiration or
             94      termination of one or more leases, then the condominium project is not a contractible
             95      condominium within the meaning of this chapter.
             96          (12) "Convertible land" means a building site which is a portion of the common areas
             97      and facilities, described by metes and bounds, within which additional units or limited common
             98      areas and facilities may be created in accordance with this chapter.
             99          (13) "Convertible space" means a portion of the structure within the condominium
             100      project, which portion may be converted into one or more units or common areas and facilities,
             101      including limited common areas and facilities in accordance with this chapter.
             102          (14) "Declarant" means all persons who execute the declaration or on whose behalf the
             103      declaration is executed. From the time of the recordation of any amendment to the declaration
             104      expanding an expandable condominium, all persons who execute that amendment or on whose
             105      behalf that amendment is executed shall also come within this definition. Any successors of
             106      the persons referred to in this subsection who come to stand in the same relation to the
             107      condominium project as their predecessors also come within this definition.
             108          (15) "Declaration" means the instrument by which the property is submitted to the
             109      provisions of this act, as it from time to time may be lawfully amended.
             110          (16) "Expandable condominium" means a condominium project to which additional
             111      land or an interest in it may be added in accordance with the declaration and this chapter.
             112          (17) "Independent third party" means a person that:
             113          (a) is not related to the unit owner;


             114          (b) shares no pecuniary interests with the unit owner; and
             115          (c) purchases the unit in good faith and without the intent to defraud a current or future
             116      lienholder.
             117          [(17)] (18) "Leasehold condominium" means a condominium project in all or any
             118      portion of which each unit owner owns an estate for years in his unit, or in the land upon which
             119      that unit is situated, or both, with all those leasehold interests to expire naturally at the same
             120      time. A condominium project including leased land, or an interest in the land, upon which no
             121      units are situated or to be situated is not a leasehold condominium within the meaning of this
             122      chapter.
             123          [(18)] (19) "Limited common areas and facilities" means those common areas and
             124      facilities designated in the declaration as reserved for use of a certain unit or units to the
             125      exclusion of the other units.
             126          [(19)] (20) "Majority" or "majority of the unit owners," unless otherwise provided in
             127      the declaration or lawful amendments to the declaration, means the owners of more than 50%
             128      in the aggregate in interest of the undivided ownership of the common areas and facilities.
             129          [(20)] (21) "Management committee" means the committee as provided in the
             130      declaration charged with and having the responsibility and authority to make and to enforce all
             131      of the reasonable rules covering the operation and maintenance of the property.
             132          [(21)] (22) "Par value" means a number of dollars or points assigned to each unit by the
             133      declaration. Substantially identical units shall be assigned the same par value, but units located
             134      at substantially different heights above the ground, or having substantially different views, or
             135      having substantially different amenities or other characteristics that might result in differences
             136      in market value, may be considered substantially identical within the meaning of this
             137      subsection. If par value is stated in terms of dollars, that statement may not be considered to
             138      reflect or control the sales price or fair market value of any unit, and no opinion, appraisal, or
             139      fair market transaction at a different figure may affect the par value of any unit, or any
             140      undivided interest in the common areas and facilities, voting rights in the unit owners'
             141      association, liability for common expenses, or right to common profits, assigned on the basis


             142      thereof.
             143          [(22)] (23) "Person" means an individual, corporation, partnership, association, trustee,
             144      or other legal entity.
             145          [(23)] (24) "Property" means the land, whether leasehold or in fee simple, the building,
             146      if any, all improvements and structures thereon, all easements, rights, and appurtenances
             147      belonging thereto, and all articles of personal property intended for use in connection
             148      therewith.
             149          [(24)] (25) "Record," "recording," "recorded," and "recorder" have the meaning stated
             150      in Title 57, Chapter 3, Recording of Documents.
             151          [(25)] (26) "Size" means the number of cubic feet, or the number of square feet of
             152      ground or floor space, within each unit as computed by reference to the record of survey map
             153      and rounded off to a whole number. Certain spaces within the units including attic, basement,
             154      or garage space may be omitted from the calculation or be partially discounted by the use of a
             155      ratio, if the same basis of calculation is employed for all units in the condominium project and
             156      if that basis is described in the declaration.
             157          [(26)] (27) "Time period unit" means an annually recurring part or parts of a year
             158      specified in the declaration as a period for which a unit is separately owned and includes a
             159      timeshare estate as defined in Subsection 57-19-2 (19).
             160          [(27)] (28) "Unit" means either a separate physical part of the property intended for any
             161      type of independent use, including one or more rooms or spaces located in one or more floors
             162      or part or parts of floors in a building or a time period unit, as the context may require. A
             163      convertible space shall be treated as a unit in accordance with Subsection 57-8-13.4 (3). A
             164      proposed condominium unit under an expandable condominium project, not constructed, is a
             165      unit two years after the date the recording requirements of Section 57-8-13.6 are met.
             166          [(28)] (29) "Unit number" means the number, letter, or combination of numbers and
             167      letters designating the unit in the declaration and in the record of survey map.
             168          [(29)] (30) "Unit owner" means the person or persons owning a unit in fee simple and
             169      an undivided interest in the fee simple estate of the common areas and facilities in the


             170      percentage specified and established in the declaration or, in the case of a leasehold
             171      condominium project, the person or persons whose leasehold interest or interests in the
             172      condominium unit extend for the entire balance of the unexpired term or terms.
             173          Section 2. Section 57-8-13.1 is amended to read:
             174           57-8-13.1. Registration with Department of Commerce.
             175          (1) As used in this section, "department" means the Department of Commerce created
             176      in Section 13-1-2 .
             177          (2) (a) No later than 90 days after the recording of a declaration, an association of unit
             178      owners shall register with the department in the manner established by the department.
             179          (b) An association of unit owners existing under a declaration recorded before May 10,
             180      2011, shall, no later than July 1, 2011, register with the department in the manner established
             181      by the department.
             182          (3) The department shall require an association of unit owners registering as required
             183      in this section to provide with each registration:
             184          (a) the name and address of the association of unit owners;
             185          (b) the name, address, telephone number, and, if applicable, email address of the
             186      president of the association of unit owners;
             187          (c) the name and address of each management committee member;
             188          (d) the name, address, telephone number, and, if the contact person wishes to use email
             189      or facsimile transmission for communicating payoff information, the email address or facsimile
             190      number, as applicable, of a primary contact person who has association payoff information that
             191      a closing agent needs in connection with the closing of a unit owner's financing, refinancing, or
             192      sale of the owner's unit; and
             193          (e) a registration fee not to exceed $37.
             194          (4) An association of unit owners that has registered under Subsection (2) shall submit
             195      to the department an updated registration, in the manner established by the department, within
             196      90 days after a change in any of the information provided under Subsection (3).
             197          (5) (a) During any period of noncompliance with the registration requirement [of]


             198      described in Subsection (2) or the requirement for an updated registration [under] described in
             199      Subsection (4):
             200          (i) a lien [for the nonpayment of common expenses] may not arise under Section
             201      [ 57-8-20 against any condominium unit] 57-8-44 ; and
             202          (ii) an association of unit owners may not enforce [a previous] an existing lien that
             203      arose under Section [ 57-8-20 against any condominium unit] 57-8-44 .
             204          (b) A period of noncompliance with the registration requirement of Subsection (2) or
             205      with the updated registration requirement of Subsection (4) does not begin until after the
             206      expiration of the 90-day period specified in Subsection (2) or (4), respectively.
             207          (c) An association of unit owners that is not in compliance with the registration
             208      requirement described in Subsection (2) may end the period of noncompliance by registering
             209      with the department in the manner established by the department under Subsection (2).
             210          (d) An association of unit owners that is not in compliance with the updated
             211      registration requirement described in Subsection (4) may end the period of noncompliance by
             212      submitting to the department an updated registration in the manner established by the
             213      department under Subsection (4).
             214          (e) Except as described in Subsection (5)(f), beginning on the date an association of
             215      unit owners ends a period of noncompliance:
             216          (i) a lien may arise under Section 57-8-44 for any event that:
             217          (A) occurred during the period of noncompliance; and
             218          (B) would have given rise to a lien under Section 57-8-44 had the association of unit
             219      owners been in compliance with the registration requirements described in this section; and
             220          (ii) an association of unit owners may enforce a lien described in Subsection (5)(e) or a
             221      lien that existed before the period of noncompliance.
             222          (f) If an owner's unit is conveyed to an independent third party during a period of
             223      noncompliance described in this Subsection (5):
             224          (i) a lien that arose under Section 57-8-44 before the conveyance of the unit became
             225      final is extinguished when the conveyance of the unit becomes final; and


             226          (ii) an event that occurred before the conveyance of the unit became final, and that
             227      would have given rise to a lien under Section 57-8-44 had the association of unit owners been
             228      in compliance with the registration requirements of this section, may not give rise to a lien
             229      under Section 57-8-44 if the conveyance of the unit becomes final before the association of unit
             230      owners ends the period of noncompliance.
             231          Section 3. Section 57-8-44 is amended to read:
             232           57-8-44. Lien in favor of association of unit owners for assessments and costs of
             233      collection.
             234          (1) (a) [An] Except as provided in Section 57-8-13.1 , an association of unit owners has
             235      a lien on a unit for:
             236          (i) an assessment;
             237          (ii) except as provided in the declaration, fees, charges, and costs associated with
             238      collecting an unpaid assessment, including:
             239          (A) court costs and reasonable attorney fees;
             240          (B) late charges;
             241          (C) interest; and
             242          (D) any other amount that the association of unit owners is entitled to recover under the
             243      declaration, this chapter, or an administrative or judicial decision; and
             244          (iii) a fine that the association of unit owners imposes against the owner of the unit.
             245          (b) The recording of a declaration constitutes record notice and perfection of a lien
             246      described in Subsection (1)(a).
             247          (2) If an assessment is payable in installments, a lien described in Subsection (1)(a)(i)
             248      is for the full amount of the assessment from the time the first installment is due, unless the
             249      association of unit owners otherwise provides in a notice of assessment.
             250          (3) An unpaid assessment or fine accrues interest at the rate provided:
             251          (a) in Subsection 15-1-1 (2); or
             252          (b) in the governing documents, if the governing documents provide for a different
             253      interest rate.


             254          (4) A lien under this section has priority over each other lien and encumbrance on a
             255      unit except:
             256          (a) a lien or encumbrance recorded before the declaration is recorded;
             257          (b) a first or second security interest on the unit secured by a mortgage or deed of trust
             258      that is recorded before a recorded notice of lien by or on behalf of the association of unit
             259      owners; or
             260          (c) a lien for real estate taxes or other governmental assessments or charges against the
             261      unit.
             262          (5) A lien under this section is not subject to Title 78B, Chapter 5, Part 5, Utah
             263      Exemptions Act.
             264          (6) Unless the declaration provides otherwise, if two or more associations of unit
             265      owners have liens for assessments on the same unit, the liens have equal priority, regardless of
             266      when the liens are created.
             267          Section 4. Section 57-8-45 is amended to read:
             268           57-8-45. Enforcement of a lien.
             269          (1) (a) [To] Except as provided in Section 57-8-13.1 , to enforce a lien established
             270      under Section 57-8-44 , an association of unit owners may:
             271          (i) cause a unit to be sold through nonjudicial foreclosure as though the lien were a
             272      deed of trust, in the manner provided by:
             273          (A) Sections 57-1-24 , 57-1-25 , 57-1-26 , and 57-1-27 ; and
             274          (B) this chapter; or
             275          (ii) foreclose the lien through a judicial foreclosure in the manner provided by:
             276          (A) law for the foreclosure of a mortgage; and
             277          (B) this chapter.
             278          (b) For purposes of a nonjudicial or judicial foreclosure as provided in Subsection
             279      (1)(a):
             280          (i) the association of unit owners is considered to be the beneficiary under a trust deed;
             281      and


             282          (ii) the unit owner is considered to be the trustor under a trust deed.
             283          (2) A unit owner's acceptance of the owner's interest in a unit constitutes a
             284      simultaneous conveyance of the unit in trust, with power of sale, to the trustee designated as
             285      provided in this section for the purpose of securing payment of all amounts due under the
             286      declaration and this chapter.
             287          (3) (a) A power of sale and other powers of a trustee under this part and under Sections
             288      57-1-19 through 57-1-34 may not be exercised unless the association of unit owners appoints a
             289      qualified trustee.
             290          (b) An association of unit owners' execution of a substitution of trustee form
             291      authorized in Section 57-1-22 is sufficient for appointment of a trustee under Subsection (3)(a).
             292          (c) A person may not be a trustee under this part unless the person qualifies as a trustee
             293      under Subsection 57-1-21 (1)(a)(i) or (iv).
             294          (d) A trustee under this part is subject to all duties imposed on a trustee under Sections
             295      57-1-19 through 57-1-34 .
             296          (4) This chapter does not prohibit an association of unit owners from bringing an
             297      action against a unit owner to recover an amount for which a lien is created under Section
             298      57-8-44 or from taking a deed in lieu of foreclosure, if the action is brought or deed taken
             299      before the sale or foreclosure of the unit owner's unit under this chapter.
             300          Section 5. Section 57-8a-102 is amended to read:
             301           57-8a-102. Definitions.
             302          As used in this chapter:
             303          (1) (a) "Assessment" means a charge imposed or levied:
             304          (i) by the association;
             305          (ii) on or against a lot or a lot owner; and
             306          (iii) pursuant to a governing document recorded with the county recorder.
             307          (b) "Assessment" includes:
             308          (i) a common expense; and
             309          (ii) an amount assessed against a lot owner under Subsection 57-8a-405 (8).


             310          (2) (a) Except as provided in Subsection (2)(b), "association" means a corporation or
             311      other legal entity, each member of which:
             312          (i) is an owner of a residential lot located within the jurisdiction of the association, as
             313      described in the governing documents; and
             314          (ii) by virtue of membership or ownership of a residential lot is obligated to pay:
             315          (A) real property taxes;
             316          (B) insurance premiums;
             317          (C) maintenance costs; or
             318          (D) for improvement of real property not owned by the member.
             319          (b) "Association" or "homeowner association" does not include an association created
             320      under Title 57, Chapter 8, Condominium Ownership Act.
             321          (3) "Board of directors" or "board" means the entity, regardless of name, with primary
             322      authority to manage the affairs of the association.
             323          (4) "Common areas" means property that the association:
             324          (a) owns;
             325          (b) maintains;
             326          (c) repairs; or
             327          (d) administers.
             328          (5) "Common expense" means costs incurred by the association to exercise any of the
             329      powers provided for in the association's governing documents.
             330          (6) "Declarant":
             331          (a) means the person who executes a declaration and submits it for recording in the
             332      office of the recorder of the county in which the property described in the declaration is
             333      located; and
             334          (b) includes the person's successor and assign.
             335          (7) (a) "Governing documents" means a written instrument by which the association
             336      may:
             337          (i) exercise powers; or


             338          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
             339      association.
             340          (b) "Governing documents" includes:
             341          (i) articles of incorporation;
             342          (ii) bylaws;
             343          (iii) a plat;
             344          (iv) a declaration of covenants, conditions, and restrictions; and
             345          (v) rules of the association.
             346          (8) "Independent third party" means a person that:
             347          (a) is not related to the owner of the residential lot;
             348          (b) shares no pecuniary interests with the owner of the residential lot; and
             349          (c) purchases the residential lot in good faith and without the intent to defraud a current
             350      or future lienholder.
             351          [(8)] (9) "Judicial foreclosure" means a foreclosure of a lot:
             352          (a) for the nonpayment of an assessment; and
             353          (b) (i) in the manner provided by law for the foreclosure of a mortgage on real
             354      property; and
             355          (ii) as provided in Part 3, Collection of Assessments.
             356          [(9)] (10) "Lease" or "leasing" means regular, exclusive occupancy of a lot:
             357          (a) by a person or persons other than the owner; and
             358          (b) for which the owner receives a consideration or benefit, including a fee, service,
             359      gratuity, or emolument.
             360          [(10)] (11) "Limited common areas" means common areas described in the declaration
             361      and allocated for the exclusive use of one or more lot owners.
             362          [(11)] (12) "Lot" means:
             363          (a) a lot, parcel, plot, or other division of land:
             364          (i) designated for separate ownership or occupancy; and
             365          (ii) (A) shown on a recorded subdivision plat; or


             366          (B) the boundaries of which are described in a recorded governing document; or
             367          (b) (i) a unit in a condominium association if the condominium association is a part of
             368      a development; or
             369          (ii) a unit in a real estate cooperative if the real estate cooperative is part of a
             370      development.
             371          [(12)] (13) "Nonjudicial foreclosure" means the sale of a lot:
             372          (a) for the nonpayment of an assessment; and
             373          (b) (i) in the same manner as the sale of trust property under Sections 57-1-19 through
             374      57-1-34 ; and
             375          (ii) as provided in Part 3, Collection of Assessments.
             376          [(13)] (14) "Residential lot" means a lot, the use of which is limited by law, covenant,
             377      or otherwise to primarily residential or recreational purposes.
             378          Section 6. Section 57-8a-105 is amended to read:
             379           57-8a-105. Registration with Department of Commerce.
             380          (1) As used in this section, "department" means the Department of Commerce created
             381      in Section 13-1-2 .
             382          (2) (a) No later than 90 days after the recording of a declaration of covenants,
             383      conditions, and restrictions establishing an association, the association shall register with the
             384      department in the manner established by the department.
             385          (b) An association existing under a declaration of covenants, conditions, and
             386      restrictions recorded before May 10, 2011, shall, no later than July 1, 2011, register with the
             387      department in the manner established by the department.
             388          (3) The department shall require an association registering as required in this section to
             389      provide with each registration:
             390          (a) the name and address of the association;
             391          (b) the name, address, telephone number, and, if applicable, email address of the chair
             392      of the association board;
             393          (c) contact information for the manager;


             394          (d) the name, address, telephone number, and, if the contact person wishes to use email
             395      or facsimile transmission for communicating payoff information, the email address or facsimile
             396      number, as applicable, of a primary contact person who has association payoff information that
             397      a closing agent needs in connection with the closing of a lot owner's financing, refinancing, or
             398      sale of the owner's lot; and
             399          (e) a registration fee not to exceed $37.
             400          (4) An association that has registered under Subsection (2) shall submit to the
             401      department an updated registration, in the manner established by the department, within 90
             402      days after a change in any of the information provided under Subsection (3).
             403          (5) (a) During any period of noncompliance with the registration requirement [of]
             404      described in Subsection (2) or the requirement for an updated registration [under] described in
             405      Subsection (4):
             406          (i) a lien [for the nonpayment of an assessment] may not arise under Section
             407      [ 57-8a-203 against any lot] 57-8a-301 ; and
             408          (ii) an association may not enforce [a previous] an existing lien that arose under
             409      Section [ 57-8a-203 against any lot] 57-8a-301 .
             410          (b) A period of noncompliance with the registration requirement of Subsection (2) or
             411      with the updated registration requirement of Subsection (4) does not begin until after the
             412      expiration of the 90-day period specified in Subsection (2) or (4), respectively.
             413          (c) An association that is not in compliance with the registration requirement described
             414      in Subsection (2) may end the period of noncompliance by registering with the department in
             415      the manner established by the department under Subsection (2).
             416          (d) An association that is not in compliance with the updated registration requirement
             417      described in Subsection (4) may end the period of noncompliance by submitting to the
             418      department an updated registration in the manner established by the department under
             419      Subsection (4).
             420          (e) Except as described in Subsection (5)(f), beginning on the date an association ends
             421      a period of noncompliance:


             422          (i) a lien may arise under Section 57-8a-301 for any event that:
             423          (A) occurred during the period of noncompliance; and
             424          (B) would have given rise to a lien under Section 57-8a-301 had the association been in
             425      compliance with the registration requirements described in this section; and
             426          (ii) an association may enforce a lien described in Subsection (5)(e) or a lien that
             427      existed before the period of noncompliance.
             428          (f) If an owner's residential lot is conveyed to an independent third party during a
             429      period of noncompliance described in this Subsection (5):
             430          (i) a lien that arose under Section 57-8a-301 before the conveyance of the residential
             431      lot became final is extinguished when the conveyance of the residential lot becomes final; and
             432          (ii) an event that occurred before the conveyance of the residential lot became final,
             433      and that would have given rise to a lien under Section 57-8a-301 had the association been in
             434      compliance with the registration requirements of this section, may not give rise to a lien under
             435      Section 57-8a-301 if the conveyance of the residential lot becomes final before the association
             436      ends the period of noncompliance.
             437          Section 7. Section 57-8a-301 is amended to read:
             438           57-8a-301. Lien in favor of association for assessments and costs of collection.
             439          (1) (a) [An] Except as provided in Section 57-8a-105 , an association has a lien on a lot
             440      for:
             441          (i) an assessment;
             442          (ii) except as provided in the declaration, fees, charges, and costs associated with
             443      collecting an unpaid assessment, including:
             444          (A) court costs and reasonable attorney fees;
             445          (B) late charges;
             446          (C) interest; and
             447          (D) any other amount that the association is entitled to recover under the declaration,
             448      this chapter, or an administrative or judicial decision; and
             449          (iii) a fine that the association imposes against the owner of the lot.


             450          (b) The recording of a declaration constitutes record notice and perfection of a lien
             451      described in Subsection (1)(a).
             452          (2) If an assessment is payable in installments, a lien described in Subsection (1)(a)(i)
             453      is for the full amount of the assessment from the time the first installment is due, unless the
             454      association otherwise provides in a notice of assessment.
             455          (3) An unpaid assessment or fine accrues interest at the rate provided:
             456          (a) in Subsection 15-1-1 (2); or
             457          (b) in the declaration, if the declaration provides for a different interest rate.
             458          (4) A lien under this section has priority over each other lien and encumbrance on a lot
             459      except:
             460          (a) a lien or encumbrance recorded before the declaration is recorded;
             461          (b) a first or second security interest on the lot secured by a mortgage or trust deed that
             462      is recorded before a recorded notice of lien by or on behalf of the association; or
             463          (c) a lien for real estate taxes or other governmental assessments or charges against the
             464      lot.
             465          (5) A lien under this section is not subject to Title 78B, Chapter 5, Part 5, Utah
             466      Exemptions Act.
             467          (6) Unless the declaration provides otherwise, if two or more associations have liens
             468      for assessments on the same lot, the liens have equal priority, regardless of when the liens are
             469      created.
             470          Section 8. Section 57-8a-302 is amended to read:
             471           57-8a-302. Enforcement of a lien.
             472          (1) (a) [To] Except as provided in Section 57-8a-105 , to enforce a lien established
             473      under Section 57-8a-301 , an association may:
             474          (i) cause a lot to be sold through nonjudicial foreclosure as though the lien were a deed
             475      of trust, in the manner provided by:
             476          (A) Sections 57-1-24 , 57-1-25 , 57-1-26 , and 57-1-27 ; and
             477          (B) this part; or


             478          (ii) foreclose the lien through a judicial foreclosure in the manner provided by:
             479          (A) law for the foreclosure of a mortgage; and
             480          (B) this part.
             481          (b) For purposes of a nonjudicial or judicial foreclosure as provided in Subsection
             482      (1)(a):
             483          (i) the association is considered to be the beneficiary under a trust deed; and
             484          (ii) the lot owner is considered to be the trustor under a trust deed.
             485          (2) A lot owner's acceptance of the owner's interest in a lot constitutes a simultaneous
             486      conveyance of the lot in trust, with power of sale, to the trustee designated as provided in this
             487      section for the purpose of securing payment of all amounts due under the declaration and this
             488      chapter.
             489          (3) (a) A power of sale and other powers of a trustee under this part and under Sections
             490      57-1-19 through 57-1-34 may not be exercised unless the association appoints a qualified
             491      trustee.
             492          (b) An association's execution of a substitution of trustee form authorized in Section
             493      57-1-22 is sufficient for appointment of a trustee under Subsection (3)(a).
             494          (c) A person may not be a trustee under this part unless the person qualifies as a trustee
             495      under Subsection 57-1-21 (1)(a)(i) or (iv).
             496          (d) A trustee under this part is subject to all duties imposed on a trustee under Sections
             497      57-1-19 through 57-1-34 .
             498          (4) This part does not prohibit an association from bringing an action against a lot
             499      owner to recover an amount for which a lien is created under Section 57-8a-301 or from taking
             500      a deed in lieu of foreclosure, if the action is brought or deed taken before the sale or foreclosure
             501      of the lot owner's lot under this part.


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