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H.B. 335

             1     

CONDOMINIUM OWNER RENTAL AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Earl D. Tanner

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions of the Condominium Ownership Act related to the contents
             10      of a declaration.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides that an association of unit owners for a condominium project that recorded
             14      its initial declaration before May 12, 2009, may not prohibit or restrict a unit
             15      owner's ability to rent to any greater extent than is described in the declaration that
             16      was recorded at the time the unit owner purchased the unit owner's unit, unless the
             17      association of unit owners obtains the unit owner's written consent; and
             18          .    makes technical changes.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          57-8-10, as last amended by Laws of Utah 2011, Chapter 355
             26     
             27      Be it enacted by the Legislature of the state of Utah:


             28          Section 1. Section 57-8-10 is amended to read:
             29           57-8-10. Contents of declaration.
             30          (1) Prior to the conveyance of any unit in a condominium project, a declaration shall be
             31      recorded that contains the covenants, conditions, and restrictions relating to the project that
             32      shall be enforceable equitable servitudes, where reasonable, and which shall run with the land.
             33      Unless otherwise provided, these servitudes may be enforced by any unit owner and his
             34      successors in interest.
             35          (2) (a) For every condominium project:
             36          (i) The declaration shall include a description of the land or interests in real property
             37      included within the project.
             38          (ii) The declaration shall contain a description of any buildings, which states the
             39      number of storeys and basements, the number of units, the principal materials of which the
             40      building is or is to be constructed, and a description of all other significant improvements
             41      contained or to be contained in the project.
             42          (iii) The declaration shall contain the unit number of each unit, the square footage of
             43      each unit, and any other description or information necessary to properly identify each unit.
             44          (iv) The declaration shall describe the common areas and facilities of the project.
             45          (v) The declaration shall describe any limited common areas and facilities and shall
             46      state to which units the use of the common areas and facilities is reserved.
             47          (b) Any shutters, awnings, window boxes, doorsteps, porches, balconies, patios, or
             48      other apparatus intended to serve a single unit, but located outside the boundaries of the unit,
             49      shall constitute a limited common area and facility appertaining to that unit exclusively,
             50      whether or not the declaration makes such a provision.
             51          (c) The condominium plat recorded with the declaration may provide or supplement
             52      the information required under Subsections (2)(a) and (b).
             53          (d) (i) The declaration shall include the percentage or fraction of undivided interest in
             54      the common areas and facilities appurtenant to each unit and its owner for all purposes,
             55      including voting, derived and allocated in accordance with Subsection 57-8-7 (2).
             56          (ii) If any use restrictions are to apply, the declaration shall state the purposes for which
             57      the units are intended and restricted as to use.
             58          (iii) (A) The declaration shall include the name of a person to receive service of


             59      process on behalf of the project, in the cases provided by this chapter, together with the
             60      residence or place of business of that person.
             61          (B) The person described in Subsection (2)(d)(iii)(A) shall be a resident of, or shall
             62      maintain a place of business within, this state.
             63          (iv) The declaration shall describe the method by which it may be amended consistent
             64      with this chapter.
             65          (v) Any further matters in connection with the property may be included in the
             66      declaration, which the person or persons executing the declaration may consider desirable
             67      consistent with this chapter.
             68          (vi) The declaration shall contain a statement of intention that this chapter applies to
             69      the property.
             70          (e) The initial recorded declaration shall include:
             71          (i) an appointment of a trustee who qualifies under Subsection 57-1-21 (1)(a)(i) or (iv);
             72      and
             73          (ii) the following statement: "The declarant hereby conveys and warrants pursuant to
             74      U.C.A. Sections 57-1-20 and 57-8-45 to (name of trustee), with power of sale, the unit and all
             75      improvements to the unit for the purpose of securing payment of assessments under the terms
             76      of the declaration."
             77          (3) (a) If the condominium project contains any convertible land:
             78          (i) The declaration shall contain a legal description by metes and bounds of each area
             79      of convertible land within the condominium project.
             80          (ii) The declaration shall state the maximum number of units that may be created
             81      within each area of convertible land.
             82          (iii) (A) The declaration shall state, with respect to each area of convertible land, the
             83      maximum percentage of the aggregate land and floor area of all units that may be created and
             84      the use of which will not or may not be restricted exclusively to residential purposes.
             85          (B) The statements described in Subsection (3)(a)(iii)(A) need not be supplied if none
             86      of the units on other portions of the land within the project are restricted exclusively to
             87      residential use.
             88          (iv) The declaration shall state the extent to which any structure erected on any
             89      convertible land will be compatible with structures on other portions of the land within the


             90      condominium project in terms of quality of construction, the principal materials to be used, and
             91      architectural style.
             92          (v) The declaration shall describe all other improvements that may be made on each
             93      area of convertible land within the condominium project.
             94          (vi) The declaration shall state that any units created within each area of convertible
             95      land will be substantially identical to the units on other portions of the land within the project
             96      or it shall describe in detail what other type of units may be created.
             97          (vii) The declaration shall describe the declarant's reserved right, if any, to create
             98      limited common areas and facilities within any convertible land in terms of the types, sizes, and
             99      maximum number of the limited common areas within each convertible land.
             100          (b) The condominium plat recorded with the declaration may provide or supplement
             101      the information required under Subsection (3)(a).
             102          (4) If the condominium is an expandable condominium project:
             103          (a) (i) (A) The declaration shall contain an explicit reservation of an option to expand
             104      the project.
             105          (B) The declaration shall include a statement of any limitations on the option to
             106      expand, including a statement as to whether the consent of any unit owners shall be required
             107      and, a statement as to the method by which consent shall be ascertained, or a statement that
             108      there are no such limitations.
             109          (ii) The declaration shall include a time limit, not exceeding seven years from the date
             110      of the recording of the declaration, upon which the option to expand the condominium project
             111      shall expire, together with a statement of any circumstances which will terminate the option
             112      prior to expiration of the specified time limits.
             113          (iii) The declaration shall contain a legal description by metes and bounds of all land
             114      that may be added to the condominium project, which is known as additional land.
             115          (iv) The declaration shall state:
             116          (A) if any of the additional land is added to the condominium project, whether all of it
             117      or any particular portion of it must be added;
             118          (B) any limitations as to what portions may be added; or
             119          (C) a statement that there are no such limitations.
             120          (v) The declaration shall include a statement as to whether portions of the additional


             121      land may be added to the condominium project at different times, together with any limitations
             122      fixing the boundaries of those portions by legal descriptions setting forth the metes and bounds
             123      of these lands and regulating the order in which they may be added to the condominium
             124      project.
             125          (vi) The declaration shall include a statement of any limitations as to the locations of
             126      any improvements that may be made on any portions of the additional land added to the
             127      condominium project, or a statement that no assurances are made in that regard.
             128          (vii) The declaration shall state the maximum number of units that may be created on
             129      the additional land. If portions of the additional land may be added to the condominium project
             130      and the boundaries of those portions are fixed in accordance with Subsection (4)(a)(v), the
             131      declaration shall also state the maximum number of units that may be created on each portion
             132      added to the condominium project. If portions of the additional land may be added to the
             133      condominium project and the boundaries of those portions are not fixed in accordance with
             134      Subsection (4)(a)(v), then the declaration shall also state the maximum number of units per
             135      acre that may be created on any portion added to the condominium project.
             136          (viii) With respect to the additional land and to any portion of it that may be added to
             137      the condominium project, the declaration shall state the maximum percentage of the aggregate
             138      land and floor area of all units that may be created on it, the use of which will not or may not
             139      be restricted exclusively to residential purposes. However, these statements need not be
             140      supplied if none of the units on the land originally within the project are restricted exclusively
             141      to residential use.
             142          (ix) The declaration shall state the extent to which any structures erected on any
             143      portion of the additional land added to the condominium project will be compatible with
             144      structures on the land originally within the project in terms of quality of construction, the
             145      principal materials to be used, and architectural style. The declaration may also state that no
             146      assurances are made in those regards.
             147          (x) The declaration shall describe all other improvements that will be made on any
             148      portion of the additional land added to the condominium project, or it shall contain a statement
             149      of any limitations as to what other improvements may be made on it. The declaration may also
             150      state that no assurances are made in that regard.
             151          (xi) The declaration shall contain a statement that any units created on any portion of


             152      the additional land added to the condominium project will be substantially identical to the units
             153      on the land originally within the project, or a statement of any limitations as to what types of
             154      units may be created on it. The declaration may also contain a statement that no assurances are
             155      made in that regard.
             156          (xii) The declaration shall describe the declarant's reserved right, if any, to create
             157      limited common areas and facilities within any portion of the additional land added to the
             158      condominium project, in terms of the types, sizes, and maximum number of limited common
             159      areas within each portion. The declaration may also state that no assurances are made in those
             160      regards.
             161          (b) The condominium plat recorded with the declaration may provide or supplement
             162      the information required under Subsections (4)(a)(iii) through (a)(vi) and (a)(ix) through
             163      (a)(xii).
             164          (5) If the condominium project is a contractible condominium:
             165          (a) (i) The declaration shall contain an explicit reservation of an option to contract the
             166      condominium project.
             167          (ii) The declaration shall contain a statement of any limitations on the option to
             168      contract, including a statement as to whether the consent of any unit owners shall be required,
             169      and if so, a statement as to the method by which this consent shall be ascertained. The
             170      declaration may also contain a statement that there are no such limitations.
             171          (iii) The declaration shall state the time limit, not exceeding seven years from the
             172      recording of the declaration, upon which the option to contract the condominium project shall
             173      expire, together with a statement of any circumstances which will terminate this option prior to
             174      expiration of the specified time limit.
             175          (b) (i) The declaration shall include a legal description by metes and bounds of all land
             176      that may be withdrawn from the condominium project, which is known as withdrawable land.
             177          (ii) The declaration shall include a statement as to whether portions of the
             178      withdrawable land may be withdrawn from the condominium project at different times,
             179      together with any limitations fixing the boundaries of those portions by legal descriptions
             180      setting forth the metes and bounds and regulating the order in which they may be withdrawn
             181      from the condominium project.
             182          (iii) The declaration shall include a legal description by metes and bounds of all of the


             183      land within the condominium project to which the option to contract the project does not
             184      extend.
             185          (c) The condominium plat recorded with the declaration may provide or supplement
             186      the information required under Subsection (5)(b).
             187          (6) (a) If the condominium project is a leasehold condominium, then with respect to
             188      any ground lease or other leases the expiration or termination of which will or may terminate or
             189      contract the condominium project:
             190          (i) The declaration shall include recording information enabling the location of each
             191      lease in the official records of the county recorder.
             192          (ii) The declaration shall include the date upon which each lease is due to expire.
             193          (iii) The declaration shall state whether any land or improvements will be owned by the
             194      unit owners in fee simple. If there is to be fee simple ownership, the declaration shall include:
             195          (A) a description of the land or improvements, including without limitation, a legal
             196      description by metes and bounds of the land; or
             197          (B) a statement of any rights the unit owners have to remove these improvements
             198      within a reasonable time after the expiration or termination of the lease or leases involved, or a
             199      statement that they shall have no such rights.
             200          (iv) The declaration shall include a statement of the rights the unit owners have to
             201      extend or renew any of the leases or to redeem or purchase any of the reversions, or a statement
             202      that they have no such rights.
             203          (b) After the recording of the declaration, no lessor who executed the declaration, and
             204      no successor in interest to this lessor, has any right or power to terminate any part of the
             205      leasehold interest of any unit owner who:
             206          (i) makes timely payment of his share of the rent to the persons designated in the
             207      declaration for the receipt of the rent; and
             208          (ii) otherwise complies with all covenants which would entitle the lessor to terminate
             209      the lease if they were violated.
             210          (7) (a) If the condominium project contains time period units, the declaration shall also
             211      contain the location of each condominium unit in the calendar year. This information shall be
             212      set out in a fourth column of the exhibit or schedule referred to in Subsection 57-8-7 (2), if the
             213      exhibit or schedule accompanies the declaration.


             214          (b) The declaration shall also put timeshare owners on notice that tax notices will be
             215      sent to the management committee, not each timeshare owner.
             216          (c) The time period units created with respect to any given physical unit shall be such
             217      that the aggregate of the durations involved constitute a full calendar year.
             218          (8) (a) The declaration, bylaws, and condominium plat shall be duly executed and
             219      acknowledged by all of the owners and any lessees of the land which is made subject to this
             220      chapter.
             221          (b) As used in Subsection (8)(a), "owners and lessees" does not include, in their
             222      respective capacities, any mortgagee, any trustee or beneficiary under a deed of trust, any other
             223      lien holder, any person having an equitable interest under any contract for the sale or lease of a
             224      condominium unit, or any lessee whose leasehold interest does not extend to any portion of the
             225      common areas and facilities.
             226          (9) (a) As used in this section, "rentals" or "rental unit" means:
             227          (i) a unit owned by an individual not described in Subsection (9)(a)(ii) that is occupied
             228      by someone while no unit owner occupies the unit as the unit owner's primary residence; and
             229          (ii) a unit owned by an entity or trust, regardless of who occupies the unit.
             230          (b) (i) Subject to Subsections (9)(c), (f), and (g), an association of unit owners may:
             231          (A) create restrictions on the number and term of rentals in a condominium project; or
             232          (B) prohibit rentals in the condominium project.
             233          (ii) An association of unit owners that creates a rental restriction or prohibition in
             234      accordance with Subsection (9)(b)(i) shall create the rental restriction or prohibition in a
             235      declaration or by amending the declaration.
             236          (c) If an association of unit owners prohibits or imposes restrictions on the number and
             237      term of rentals, the restrictions shall include:
             238          (i) a provision that requires a condominium project to exempt from the rental
             239      restrictions the following unit owner and the unit owner's unit:
             240          (A) a unit owner in the military for the period of the unit owner's deployment;
             241          (B) a unit occupied by a unit owner's parent, child, or sibling;
             242          (C) a unit owner whose employer has relocated the unit owner for no less than two
             243      years; or
             244          (D) a unit owned by a trust or other entity created for estate planning purposes if the


             245      trust or other estate planning entity was created for the estate of:
             246          (I) a current resident of the unit; or
             247          (II) the parent, child, or sibling of the current resident of the unit;
             248          (ii) a provision allowing a unit owner who has a rental in the condominium project
             249      before the time the rental restriction described in Subsection (9)(b)(i) is recorded with the
             250      county recorder of the county in which the condominium project is located to continue renting
             251      until:
             252          (A) the unit owner occupies the unit; or
             253          (B) an officer, owner, member, trustee, beneficiary, director, or person holding a
             254      similar position of ownership or control of an entity or trust that holds an ownership interest in
             255      the unit, occupies the unit; and
             256          (iii) a requirement that the association of unit owners create, by rule or resolution,
             257      procedures to:
             258          (A) determine and track the number of rentals and units in the condominium project
             259      subject to the provisions described in Subsections (9)(c)(i) and (ii); and
             260          (B) ensure consistent administration and enforcement of the rental restrictions.
             261          (d) For purposes of Subsection (9)(c)(ii), a transfer occurs when one or more of the
             262      following occur:
             263          (i) the conveyance, sale, or other transfer of a unit by deed;
             264          (ii) the granting of a life estate in the unit; or
             265          (iii) if the unit is owned by a limited liability company, corporation, partnership, or
             266      other business entity, the sale or transfer of more than 75% of the business entity's share, stock,
             267      membership interests, or partnership interests in a 12-month period.
             268          (e) This section does not limit or affect residency age requirements for an association
             269      of unit owners that complies with the requirements of the Housing for Older Persons Act, 42
             270      U.S.C. Sec. 3607.
             271          (f) A declaration or amendment to a declaration recorded prior to transfer of the first
             272      unit from the initial declarant may prohibit or restrict rentals without providing for the
             273      exceptions, provisions, and procedures required under Subsection (9)(c).
             274          (g) This [section] Subsection (9) does not apply to:
             275          (i) a condominium project containing a time period unit as defined in Section 57-8-3 ;


             276          (ii) any other form of timeshare interest as defined in Section 57-19-2 ; or
             277          (iii) a condominium project in which the initial declaration is recorded before May 12,
             278      2009.
             279          (h) Notwithstanding this section, an association of unit owners may, upon unanimous
             280      approval by all unit owners, restrict or prohibit rentals without an exception described in
             281      Subsection (9)(c).
             282          (10) An association of unit owners for a condominium project that recorded its initial
             283      declaration before May 12, 2009, may not prohibit or restrict a unit owner's ability to rent the
             284      unit owner's unit to any greater extent than is described in the declaration that was recorded at
             285      the time the unit owner purchased the unit owner's unit, unless the association of unit owners
             286      obtains the unit owner's written consent.




Legislative Review Note
    as of 2-14-13 1:33 PM


Office of Legislative Research and General Counsel


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