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

Second Substitute S.B. 90

This document includes House Floor Amendments incorporated into the bill on Thu, Mar 14, 2013 at 7:49 PM by jeyring. -->

Representative Gage Froerer proposes the following substitute bill:


             1     
CONDOMINIUM AND COMMUNITY ASSOCIATION

             2     
AMENDMENTS

             3     
2013 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: J. Stuart Adams

             6     
House Sponsor: Gage Froerer

             7     

             8      LONG TITLE
             9      General Description:
             10          This bill enacts and modifies provisions relating to condominium and community
             11      associations.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies and enacts provisions of the Condominium Ownership Act and the
             15      Community Association Act;
             16          .    enacts provisions relating to making changes to adjoining units or lots acquired by
             17      the same owner;
             18          .    enacts provisions relating to the responsibility for maintenance, repair, and
             19      replacement of common areas and units or lots;
             20          .    modifies reserve fund provisions;
             21          .    enacts a provision allowing management committee members and officers to be
             22      indemnified or to have their liability limited;
             23          .    enacts provisions allowing a preexisting association to make a later-enacted
             24      provision of law applicable to the association;
             25          .    provides a limit on plan fees;



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             26
         .    modifies provisions relating to the organization of an association as a nonprofit
             27      corporation or other entity;
             28          .    modifies insurance provisions;
             29          .    enacts a provision relating to the consolidation of associations;
             30          .    enacts provisions relating to application of the rule against perpetuities and the rule
             31      against unreasonable restraints on alienation;
             32          .    enacts a provision relating to eminent domain of property that is part of a
             33      community association; and
             34          .    makes technical changes.
             35      Money Appropriated in this Bill:
             36          None
             37      Other Special Clauses:
             38          This bill provides effective dates.
             39          This bill coordinates with S.B. 64, Homeowner Association Reserve Account
             40      Amendments, by providing substantive and technical amendments.
             41      Utah Code Sections Affected:
             42      AMENDS:
             43          57-8-3, as last amended by Laws of Utah 2012, Chapter 166
             44          57-8-7, as last amended by Laws of Utah 2003, Chapter 265
             45          57-8-7.5, as last amended by Laws of Utah 2012, Chapters 83 and 369
             46          57-8-23, as enacted by Laws of Utah 1963, Chapter 111
             47          57-8-40, as enacted by Laws of Utah 2008, Chapter 291
             48          57-8-43, as enacted by Laws of Utah 2011, Chapter 355
             49          57-8a-102, as last amended by Laws of Utah 2011, Chapter 355
             50          57-8a-211, as last amended by Laws of Utah 2012, Chapters 83 and 369
             51          57-8a-212, as enacted by Laws of Utah 2011, Chapter 355
             52          57-8a-220, as enacted by Laws of Utah 2011, Chapter 355
             53          57-8a-402, as enacted by Laws of Utah 2011, Chapter 355
             54          57-8a-403, as enacted by Laws of Utah 2011, Chapter 355
             55          57-8a-404, as enacted by Laws of Utah 2011, Chapter 355
             56          57-8a-405, as last amended by Laws of Utah 2012, Chapter 369



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             57
         57-8a-406, as enacted by Laws of Utah 2011, Chapter 355
             58          57-8a-407, as enacted by Laws of Utah 2011, Chapter 355
             59          76-6-206, as last amended by Laws of Utah 2010, Chapter 334
             60      ENACTS:
             61          57-8-4.5, Utah Code Annotated 1953
             62          57-8-6.7, Utah Code Annotated 1953
             63          57-8-10.3, Utah Code Annotated 1953
             64          57-8-10.5, Utah Code Annotated 1953
             65          57-8-55, Utah Code Annotated 1953
             66          57-8a-107, Utah Code Annotated 1953
             67          57-8a-108, Utah Code Annotated 1953
             68          57-8a-109, Utah Code Annotated 1953
             69          57-8a-222, Utah Code Annotated 1953
             70          57-8a-223, Utah Code Annotated 1953
             71          57-8a-224, Utah Code Annotated 1953
             72          57-8a-501, Utah Code Annotated 1953
             73          57-8a-502, Utah Code Annotated 1953
             74          57-8a-601, Utah Code Annotated 1953
             75      Utah Code Sections Affected by Coordination Clause:
             76          57-8-7.5, as last amended by Laws of Utah 2012, Chapters 83 and 369
             77          57-8a-211, as last amended by Laws of Utah 2012, Chapters 83 and 369
             78     

             79      Be it enacted by the Legislature of the state of Utah:
             80          Section 1. Section 57-8-3 is amended to read:
             81           57-8-3. Definitions.
             82          As used in this chapter:
             83          (1) "Assessment" means any charge imposed by the association, including:
             84          (a) common expenses on or against a unit owner pursuant to the provisions of the
             85      declaration, bylaws, or this chapter; and
             86          (b) an amount that an association of unit owners assesses to a unit owner under
             87      Subsection 57-8-43 (9)[(h)](g).



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             88
         (2) "Association of unit owners" means all of the unit owners:
             89          (a) acting as a group in accordance with the declaration and bylaws; or
             90          (b) organized as a legal entity in accordance with the declaration.
             91          (3) "Building" means a building, containing units, and comprising a part of the
             92      property.
             93          (4) "Commercial condominium project" means a condominium project that has no
             94      residential units within the project.
             95          [(4)] (5) "Common areas and facilities" unless otherwise provided in the declaration or
             96      lawful amendments to the declaration means:
             97          (a) the land included within the condominium project, whether leasehold or in fee
             98      simple;
             99          (b) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
             100      corridors, lobbies, stairs, stairways, fire escapes, entrances, and exits of the building;
             101          (c) the basements, yards, gardens, parking areas, and storage spaces;
             102          (d) the premises for lodging of janitors or persons in charge of the property;
             103          (e) installations of central services such as power, light, gas, hot and cold water,
             104      heating, refrigeration, air conditioning, and incinerating;
             105          (f) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all
             106      apparatus and installations existing for common use;
             107          (g) such community and commercial facilities as may be provided for in the
             108      declaration; and
             109          (h) all other parts of the property necessary or convenient to its existence, maintenance,
             110      and safety, or normally in common use.
             111          [(5)] (6) "Common expenses" means:
             112          (a) all sums lawfully assessed against the unit owners;
             113          (b) expenses of administration, maintenance, repair, or replacement of the common
             114      areas and facilities;
             115          (c) expenses agreed upon as common expenses by the association of unit owners; and
             116          (d) expenses declared common expenses by this chapter, or by the declaration or the
             117      bylaws.
             118          [(6)] (7) "Common profits," unless otherwise provided in the declaration or lawful



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             119
     amendments to the declaration, means the balance of all income, rents, profits, and revenues
             120      from the common areas and facilities remaining after the deduction of the common expenses.
             121          [(7)] (8) "Condominium" means the ownership of a single unit in a multiunit project
             122      together with an undivided interest in common in the common areas and facilities of the
             123      property.
             124          [(8)] (9) "Condominium plat" means a plat or plats of survey of land and units prepared
             125      in accordance with Section 57-8-13 .
             126          [(9)] (10) "Condominium project" means a real estate condominium project; a plan or
             127      project whereby two or more units, whether contained in existing or proposed apartments,
             128      commercial or industrial buildings or structures, or otherwise, are separately offered or
             129      proposed to be offered for sale. Condominium project also means the property when the
             130      context so requires.
             131          [(10)] (11) "Condominium unit" means a unit together with the undivided interest in
             132      the common areas and facilities appertaining to that unit. Any reference in this chapter to a
             133      condominium unit includes both a physical unit together with its appurtenant undivided interest
             134      in the common areas and facilities and a time period unit together with its appurtenant
             135      undivided interest, unless the reference is specifically limited to a time period unit.
             136          [(11)] (12) "Contractible condominium" means a condominium project from which one
             137      or more portions of the land within the project may be withdrawn in accordance with
             138      provisions of the declaration and of this chapter. If the withdrawal can occur only by the
             139      expiration or termination of one or more leases, then the condominium project is not a
             140      contractible condominium within the meaning of this chapter.
             141          [(12)] (13) "Convertible land" means a building site which is a portion of the common
             142      areas and facilities, described by metes and bounds, within which additional units or limited
             143      common areas and facilities may be created in accordance with this chapter.
             144          [(13)] (14) "Convertible space" means a portion of the structure within the
             145      condominium project, which portion may be converted into one or more units or common areas
             146      and facilities, including limited common areas and facilities in accordance with this chapter.
             147          [(14)] (15) "Declarant" means all persons who execute the declaration or on whose
             148      behalf the declaration is executed. From the time of the recordation of any amendment to the
             149      declaration expanding an expandable condominium, all persons who execute that amendment



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             150
     or on whose behalf that amendment is executed shall also come within this definition. Any
             151      successors of the persons referred to in this subsection who come to stand in the same relation
             152      to the condominium project as their predecessors also come within this definition.
             153          [(15)] (16) "Declaration" means the instrument by which the property is submitted to
             154      the provisions of this act, as it from time to time may be lawfully amended.
             155          [(16)] (17) "Expandable condominium" means a condominium project to which
             156      additional land or an interest in it may be added in accordance with the declaration and this
             157      chapter.
             158          (18) "Governing documents":
             159          (a) means a written instrument by which an association of unit owners may:
             160          (i) exercise powers; or
             161          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
             162      association of unit owners; and
             163          (b) includes:
             164          (i) articles of incorporation;
             165          (ii) bylaws;
             166          (iii) a plat;
             167          (iv) a declaration of covenants, conditions, and restrictions; and
             168          (v) rules of the association of unit owners.
             169          [(17)] (19) "Leasehold condominium" means a condominium project in all or any
             170      portion of which each unit owner owns an estate for years in his unit, or in the land upon which
             171      that unit is situated, or both, with all those leasehold interests to expire naturally at the same
             172      time. A condominium project including leased land, or an interest in the land, upon which no
             173      units are situated or to be situated is not a leasehold condominium within the meaning of this
             174      chapter.
             175          [(18)] (20) "Limited common areas and facilities" means those common areas and
             176      facilities designated in the declaration as reserved for use of a certain unit or units to the
             177      exclusion of the other units.
             178          [(19)] (21) "Majority" or "majority of the unit owners," unless otherwise provided in
             179      the declaration or lawful amendments to the declaration, means the owners of more than 50%
             180      in the aggregate in interest of the undivided ownership of the common areas and facilities.



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             181
         [(20)] (22) "Management committee" means the committee as provided in the
             182      declaration charged with and having the responsibility and authority to make and to enforce all
             183      of the reasonable rules covering the operation and maintenance of the property.
             184          (23) "Mixed-use condominium project" means a condominium project that has both
             185      residential and commercial units in the condominium project.
             186          [(21)] (24) "Par value" means a number of dollars or points assigned to each unit by the
             187      declaration. Substantially identical units shall be assigned the same par value, but units located
             188      at substantially different heights above the ground, or having substantially different views, or
             189      having substantially different amenities or other characteristics that might result in differences
             190      in market value, may be considered substantially identical within the meaning of this
             191      subsection. If par value is stated in terms of dollars, that statement may not be considered to
             192      reflect or control the sales price or fair market value of any unit, and no opinion, appraisal, or
             193      fair market transaction at a different figure may affect the par value of any unit, or any
             194      undivided interest in the common areas and facilities, voting rights in the unit owners'
             195      association, liability for common expenses, or right to common profits, assigned on the basis
             196      thereof.
             197          [(22)] (25) "Person" means an individual, corporation, partnership, association, trustee,
             198      or other legal entity.
             199          [(23)] (26) "Property" means the land, whether leasehold or in fee simple, the building,
             200      if any, all improvements and structures thereon, all easements, rights, and appurtenances
             201      belonging thereto, and all articles of personal property intended for use in connection
             202      therewith.
             203          [(24)] (27) "Record," "recording," "recorded," and "recorder" have the meaning stated
             204      in Title 57, Chapter 3, Recording of Documents.
             205          [(25)] (28) "Size" means the number of cubic feet, or the number of square feet of
             206      ground or floor space, within each unit as computed by reference to the record of survey map
             207      and rounded off to a whole number. Certain spaces within the units including attic, basement,
             208      or garage space may be omitted from the calculation or be partially discounted by the use of a
             209      ratio, if the same basis of calculation is employed for all units in the condominium project and
             210      if that basis is described in the declaration.
             211          [(26)] (29) "Time period unit" means an annually recurring part or parts of a year



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             212
     specified in the declaration as a period for which a unit is separately owned and includes a
             213      timeshare estate as defined in Subsection 57-19-2 (19).
             214          [(27)] (30) "Unit" means either a separate physical part of the property intended for any
             215      type of independent use, including one or more rooms or spaces located in one or more floors
             216      or part or parts of floors in a building or a time period unit, as the context may require. A
             217      convertible space shall be treated as a unit in accordance with Subsection 57-8-13.4 (3). A
             218      proposed condominium unit under an expandable condominium project, not constructed, is a
             219      unit two years after the date the recording requirements of Section 57-8-13.6 are met.
             220          [(28)] (31) "Unit number" means the number, letter, or combination of numbers and
             221      letters designating the unit in the declaration and in the record of survey map.
             222          [(29)] (32) "Unit owner" means the person or persons owning a unit in fee simple and
             223      an undivided interest in the fee simple estate of the common areas and facilities in the
             224      percentage specified and established in the declaration or, in the case of a leasehold
             225      condominium project, the person or persons whose leasehold interest or interests in the
             226      condominium unit extend for the entire balance of the unexpired term or terms.
             227          Section 2. Section 57-8-4.5 is enacted to read:
             228          57-8-4.5. Removing or altering partition between adjoining units.
             229          (1) Subject to the declaration, a unit owner may, after acquiring an adjoining unit that
             230      shares a common wall with the unit owner's unit:
             231          (a) remove or alter a partition between the unit owner's unit and the acquired unit, even
             232      if the partition is entirely or partly common areas and facilities; or
             233          (b) create an aperture to the adjoining unit or portion of a unit.
             234          (2) A unit owner may not take an action under Subsection (1) if the action would:
             235          (a) impair the structural integrity or mechanical systems of the building or either unit;
             236          (b) reduce the support of any portion of the common areas and facilities or another
             237      unit; or
             238          (c) constitute a violation of Section 10-9a-608 or 17-27a-608 , as applicable, a local
             239      government land use ordinance, or a building code.
             240          (3) The management committee may require a unit owner to submit, at the unit owner's
             241      expense, a registered professional engineer's or registered architect's opinion stating that a
             242      proposed change to the unit owner's unit will not:



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             243
         (a) impair the structural integrity or mechanical systems of the building or either unit;
             244          (b) reduce the support or integrity of common areas and facilities; or
             245          (c) compromise structural components.
             246          (4) The management committee may require a unit owner to pay all of the legal and
             247      other expenses of the association of unit owners related to a proposed alteration to the unit or
             248      building under this section.
             249          (5) An action under Subsection (1) does not change an assessment or voting right
             250      attributable to the unit owner's unit or the acquired unit, unless the declaration provides
             251      otherwise.
             252          Section 3. Section 57-8-6.7 is enacted to read:
             253          57-8-6.7. Limit on fee for approval of plans.
             254          (1) As used in this section:
             255          (a) "Plan fee" means a fee that an association of unit owners charges for review and
             256      approval of unit plans.
             257          (b) "Unit plans" means plans:
             258          (i) for the construction or improvement of a unit; and
             259          (ii) that are required to be approved by the association of unit owners before the unit
             260      construction or improvement may occur.
             261          (2) An association of unit owners may not charge a plan fee that exceeds the actual cost
             262      of reviewing and approving the unit plans.
             263          Section 4. Section 57-8-7 is amended to read:
             264           57-8-7. Common areas and facilities.
             265          (1) As used in this section:
             266          (a) "Emergency repairs" means any repairs [which] that, if not made in a timely
             267      manner, will likely result in immediate and substantial damage to the common areas and
             268      facilities or to another unit or units[; and].
             269          (b) "Reasonable notice" means:
             270          (i) written notice [which] that is hand delivered to the unit at least 24 hours prior to the
             271      proposed entry[.]; or
             272          (ii) in the case of emergency repairs, notice that is reasonable under the circumstances.
             273          (2) Each unit owner shall be entitled to an undivided interest in the common areas and



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             274
     facilities in the percentages or fractions expressed in the declaration. The declaration may
             275      allocate to each unit an undivided interest in the common areas and facilities proportionate to
             276      either the size or par value of the unit. Otherwise, the declaration shall allocate to each unit an
             277      equal undivided interest in the common areas and facilities, subject to the following exception:
             278      each convertible space depicted on the condominium plat shall be allocated an undivided
             279      interest in the common areas and facilities proportionate to the size of the space vis-a-vis the
             280      aggregate size of all units so depicted, while the remaining undivided interest in the common
             281      areas and facilities shall be allocated equally among the other units so depicted. The undivided
             282      interest in the common areas and facilities allocated in accordance with this Subsection (2)
             283      shall add up to one if stated as fractions or to 100% if stated as percentages. If an equal
             284      undivided interest in the common areas and facilities is allocated to each unit, the declaration
             285      may simply state that fact and need not express the fraction or percentage so allocated.
             286      Otherwise, the undivided interest allocated to each unit shall be reflected by a table in the
             287      declaration, or by an exhibit or schedule accompanying the declaration and recorded
             288      simultaneously with it, containing columns. The first column shall identify the units, listing
             289      them serially or grouping them together in the case of units to which identical undivided
             290      interests are allocated. Corresponding figures in the second and third columns shall set forth
             291      the respective sizes or par values of those units and the fraction or percentage of undivided
             292      interest in the common areas and facilities allocated thereto.
             293          (3) Except as otherwise expressly provided by this act, the undivided interest of each
             294      unit owner in the common areas and facilities as expressed in the declaration shall have a
             295      permanent character and shall not be altered without the consent of two-thirds of the unit
             296      owners expressed in an amended declaration duly recorded. The undivided interest in the
             297      common areas and facilities shall not be separated from the unit to which it appertains and shall
             298      be considered to be conveyed or encumbered or released from liens with the unit even though
             299      such interest is not expressly mentioned or described in the conveyance or other instrument. A
             300      time period unit may not be further divided into shorter time periods by a conveyance or
             301      disclaimer.
             302          (4) The common areas and facilities shall remain undivided and no unit owner or any
             303      other person shall bring any action for partition or division of any part thereof, unless the
             304      property has been removed from the provisions of this act as provided in Sections 57-8-22 and



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             305
     57-8-31 . Any covenants to the contrary shall be null and void.
             306          (5) Each unit owner may use the common areas and facilities in accordance with the
             307      purpose for which they were intended without hindering or encroaching upon the lawful rights
             308      of the other unit owners.
             309          (6) The necessary work of maintenance, repair, and replacement of the common areas
             310      and facilities and the making of any additions or improvements thereon shall be carried out
             311      only as provided in this [act] chapter or in the declaration or bylaws.
             312          (7) Except as otherwise provided in the declaration or Section 57-8-43 :
             313          (a) an association of unit owners is responsible for the maintenance, repair, and
             314      replacement of common areas and facilities; and
             315          (b) a unit owner is responsible for the maintenance, repair, and replacement of the unit
             316      owner's unit.
             317          [(7) The] (8) After reasonable notice to the occupant of the unit being entered, the
             318      manager or management committee [shall have the right to have] may access [to each] a unit:
             319          (a) from time to time during reasonable hours [and after reasonable notice to the
             320      occupant of the unit being entered], as may be necessary for the maintenance, repair, or
             321      replacement of any of the common areas and facilities; or
             322          (b) for making emergency repairs [necessary to prevent damage to the common areas
             323      and facilities or to another unit or units, provided that a reasonable effort is made to provide
             324      notice to the occupant of the unit prior to entry].
             325          (9) (a) An association of unit owners is liable to repair damage it causes to the common
             326      areas and facilities or to a unit the association of unit owners uses to access the common areas
             327      and facilities.
             328          (b) An association of unit owners shall repair damage described in Subsection (9)(a)
             329      within a time that is reasonable under the circumstances.
             330          Section 5. Section 57-8-7.5 is amended to read:
             331           57-8-7.5. Reserve analysis -- Reserve fund.
             332          (1) As used in this section[,]:
             333          (a) "Reserve analysis" means an analysis to determine:
             334          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             335      replacing, and restoring common areas and facilities that have a useful life of three years or



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             336
     more and a remaining useful life of less than 30 years, but excluding any cost that can
             337      reasonably be funded from the general budget or other funds of the association of unit owners;
             338      and
             339          [(b)] (ii) the appropriate amount of any reserve fund.
             340          (b) "Reserve fund line item" means the line item in an association of unit owners'
             341      budget that identifies the amount to be placed into a reserve fund.
             342          (2) Except as otherwise provided in the declaration, a management committee shall:
             343          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no
             344      less frequently than every six years; and
             345          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             346      analysis to be conducted before July 1, 2012; and]
             347          (b) review and, if necessary, update a previously conducted reserve analysis no less
             348      frequently than every three years.
             349          (3) The management committee may conduct a reserve analysis itself or may engage a
             350      reliable person or organization, as determined by the management committee, to conduct the
             351      reserve analysis.
             352          (4) (a) A management committee may not use money in a reserve fund:
             353          (i) for daily maintenance expenses, unless a majority of the members of the association
             354      of unit owners vote to approve the use of reserve fund money for that purpose; or
             355          (ii) for any purpose other than the purpose for which the reserve fund was established.
             356          (b) A management committee shall maintain [a] reserve [fund] funds separate from
             357      other funds of the association of unit owners.
             358          (c) This Subsection (4) may not be construed to limit a management committee from
             359      prudently investing money in a reserve fund, subject to any investment constraints imposed by
             360      the declaration.
             361          (5) An association of unit owners shall:
             362          (a) annually provide unit owners a summary of the most recent reserve analysis or
             363      update; and
             364          (b) provide a copy of the complete reserve analysis or update to a unit owner who
             365      requests a copy.
             366          (6) In formulating its budget each year, an association of unit owners shall include a



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             367
     reserve fund line item in:
             368          (a) an amount the management committee determines, based on the reserve analysis, to
             369      be prudent; or
             370          (b) an amount required by the declaration, if the declaration requires an amount higher
             371      than the amount determined under Subsection (6)(a).
             372          [(5)] (7) Subsections (2)[, (3), (4), and] through (6) do not apply to an association of
             373      unit owners during the period of declarant [management] control described in Subsection
             374      57-8-16.5 (1).
             375          [(6) An association of unit owners shall:]
             376          [(a) annually, at the annual meeting of unit owners or at a special meeting of unit
             377      owners:]
             378          [(i) present the reserve study; and]
             379          [(ii) provide an opportunity for unit owners to discuss reserves and to vote on whether
             380      to fund a reserve fund and, if so, how to fund it and in what amount; and]
             381          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             382      indicate in the minutes any decision relating to funding a reserve fund.]
             383          [(7)] (8) This section applies to each association of unit owners, regardless of when the
             384      association of unit owners was created.
             385          Section 6. Section 57-8-10.3 is enacted to read:
             386          57-8-10.3. Indemnification and limit of liability.
             387          Notwithstanding any conflict with the declaration or recorded bylaws, the
             388      organizational documents of an association of unit owners may indemnify and limit
             389      management committee member and officer liability to the extent permitted by the law under
             390      which the association of unit owners is organized.
             391          Section 7. Section 57-8-10.5 is enacted to read:
             392          57-8-10.5. Amending the declaration to make provisions of this chapter
             393      applicable.
             394          (1) An association of unit owners may amend the declaration to make applicable to the
             395      association of unit owners a provision of this chapter that is enacted after the creation of the
             396      association of unit owners, by complying with:
             397          (a) the amendment procedures and requirements specified in the declaration and



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             398
     applicable provisions of this chapter; or
             399          (b) the amendment procedures and requirements of this chapter, if the declaration
             400      being amended does not contain amendment procedures and requirements.
             401          (2) If an amendment under Subsection (1) adopts a specific section of this chapter:
             402          (a) the amendment grants a right, power, or privilege permitted by that specific section;
             403      and
             404          (b) all correlative obligations, liabilities, and restrictions in that section also apply.
             405          Section 8. Section 57-8-23 is amended to read:
             406           57-8-23. Removal no bar to subsequent resubmission.
             407          The removal provided for in Section 57-8-22 [shall] does not bar the subsequent
             408      resubmission of the property to the provisions of this [act] chapter.
             409          Section 9. Section 57-8-40 is amended to read:
             410           57-8-40. Organization of an association of unit owners under other law --
             411      Reorganization.
             412          (1) As used in this section, "organizational documents" means the documents related to
             413      the formation or operation of a nonprofit corporation or other legal entity formed by the
             414      management committee or the declarant.
             415          (2) If permitted, required, or acknowledged by the declaration, the management
             416      committee may organize an association of unit owners [into] as:
             417          (a) a nonprofit corporation in accordance with Title 16, Chapter 6a, Utah Revised
             418      Nonprofit Corporation Act[,]; or [other]
             419          (b) any other entity organized under other law.
             420          (3) Organizational documents for a nonprofit corporation or other entity formed in
             421      accordance with Subsection (2) shall, to the extent possible, not conflict with the rights and
             422      obligations found in the declaration and any of the association's bylaws recorded at the time of
             423      the formation of a nonprofit corporation or other entity [under Subsection (2)].
             424          (4) Notwithstanding any conflict with the declaration or any recorded bylaws, the
             425      organizational documents of [an] a nonprofit corporation or other entity formed in accordance
             426      with Subsection (2) may include any additional indemnification and liability limitation
             427      provision [for the management committee members and officers of the association that is
             428      permitted by the chapter under which the association is organized] for:



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             429
         (a) board members, directors, and officers[,]; or
             430          (b) similar persons in a position of control.
             431          (5) In the event of a conflict between this chapter's provisions, a statute under which
             432      the association of unit owners is organized, documents concerning the organization of the
             433      association of unit owners as a nonprofit corporation or other entity, the declaration, the
             434      bylaws, and association rules, the following order prevails:
             435          (a) this chapter controls over a conflicting provision found in any of the sources listed
             436      in Subsections (5)(b) through (f);
             437          (b) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, or any other law
             438      under which an entity is organized controls over a conflicting provision in any of the sources
             439      listed in Subsections (5)(c) through (f);
             440          (c) an organizational document filed in accordance with Title 16, Chapter 6a, Utah
             441      Revised Nonprofit Corporation Act, or any other law under which an entity is organized
             442      controls over a conflicting provision in any of the sources listed in Subsections (5)(d) through
             443      (f);
             444          (d) the declaration controls over a conflicting provision in any of the sources listed in
             445      Subsections (5)(e) or (f);
             446          (e) the bylaws control over a conflicting provision in association rules; and
             447          (f) the association rules yield to a conflicting provision in any of the sources listed in
             448      Subsection (5)(a) through (e).
             449          (6) Immediately upon the legal formation of an entity in compliance with this section,
             450      the association and unit owners are subject to any right, obligation, procedure, and remedy
             451      applicable to that entity.
             452          (7) (a) A form "articles of incorporation" or similar organizational document attached
             453      to a declaration may be modified by the management committee for filing or re-filing if the
             454      modified version is otherwise consistent with this section's provisions.
             455          (b) An organizational document attached to a declaration that is filed and concerns the
             456      organization of an entity may be amended in accordance with its own terms or any applicable
             457      law, notwithstanding the fact that the organizational document might be recorded.
             458          (c) Except for amended bylaws, an initial or amended organizational document
             459      properly filed with the state does not need to be recorded.



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             460
         (8) This section applies to the reorganization of an association of unit owners
             461      previously organized if the entity's status is terminated or dissolved without the possibility of
             462      reinstatement.
             463          (9) (a) This section applies to all condominium projects, whether established before or
             464      after May 5, 2008.
             465          (b) This section does not validate or invalidate the organization of an association that
             466      occurred before May 5, 2008, whether or not the association was otherwise in compliance with
             467      this section.
             468          Section 10. Section 57-8-43 is amended to read:
             469           57-8-43. Insurance.
             470          (1) As used in this section, "reasonably available" means available using typical
             471      insurance carriers and markets, irrespective of the ability of the association of unit owners to
             472      pay.
             473          (2) (a) This section applies to an insurance policy or combination of insurance policies:
             474          [(a)] (i) issued or renewed on or after July 1, 2011; and
             475          [(b)] (ii) issued to or renewed by:
             476          [(i)] (A) a unit owner; or
             477          [(ii)] (B) an association of unit owners, regardless of when the association of unit
             478      owners is formed.
             479          (b) Unless otherwise provided in the declaration, this section does not apply to a
             480      commercial condominium project insured under a policy or combination of policies issued or
             481      renewed on or after July 1, 2013.
             482          (3) Beginning not later than the day on which the first unit is conveyed to a person
             483      other than a declarant, an association of unit owners shall maintain, to the extent reasonably
             484      available:
             485          (a) subject to Subsection (9), blanket property insurance or guaranteed replacement
             486      cost insurance on the physical structures in the condominium project, including common areas
             487      and facilities, limited common areas and facilities, and units, insuring against all risks of direct
             488      physical loss commonly insured against, including fire and extended coverage perils; and
             489          (b) subject to Subsection (10), liability insurance[, including medical payments
             490      insurance] covering all occurrences commonly insured against for death, bodily injury, and



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             491
     property damage arising out of or in connection with the use, ownership, or maintenance of the
             492      common areas and facilities.
             493          (4) If an association of unit owners becomes aware that property insurance under
             494      Subsection (3)(a) or liability insurance under Subsection (3)(b) is not reasonably available, the
             495      association of unit owners shall, within seven calendar days after becoming aware, give all unit
             496      owners notice, as provided in Section 57-8-42 , that the insurance is not reasonably available.
             497          (5) (a) The declaration or bylaws may require the association of unit owners to carry
             498      other types of insurance in addition to those described in Subsection (3).
             499          (b) In addition to any type of insurance coverage or limit of coverage provided in the
             500      declaration or bylaws and subject to the requirements of this section, an association of unit
             501      owners may, as the management committee considers appropriate, obtain:
             502          (i) an additional type of insurance than otherwise required; or
             503          (ii) a policy with greater coverage than otherwise required.
             504          (6) Unless a unit owner is acting within the scope of the unit owner's authority on
             505      behalf of an association of unit owners, a unit owner's act or omission may not:
             506          (a) void a property insurance policy under Subsection (3)(a) or a liability insurance
             507      policy under Subsection (3)(b); or
             508          (b) be a condition to recovery under a policy.
             509          (7) An insurer under a property insurance policy or liability insurance policy obtained
             510      by an association of unit owners under this section waives the insurer's right to subrogation
             511      under the policy against [any unit owner or member of the unit owner's household.]:
             512          (a) any person residing with the unit owner, if the unit owner resides in the unit; and
             513          (b) the unit owner.
             514          (8) (a) An insurance policy issued to an association of unit owners may not be
             515      inconsistent with any provision of this section.
             516          (b) A provision of a declaration, bylaw, rule, or other document governing the
             517      association of unit owners that is contrary to a provision of this section has no effect.
             518          (c) [A] Neither the governing documents nor a property insurance or liability insurance
             519      policy issued to an association of unit owners may [not] prevent a unit owner from obtaining
             520      insurance for the unit owner's own benefit.
             521          (9) (a) This Subsection (9) applies to property insurance required under Subsection



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             522
     (3)(a).
             523          [(b) The property covered by property insurance shall include any property that, under
             524      the declaration, is required to become common areas and facilities.]
             525          [(c)] (b) The total amount of coverage provided by blanket property insurance or
             526      guaranteed replacement cost insurance may not be less than 100% of the full replacement cost
             527      of the insured property at the time the insurance is purchased and at each renewal date,
             528      excluding:
             529          (i) items normally excluded from property insurance policies[.]; and
             530          (ii) unless otherwise provided in the declaration, any commercial condominium unit in
             531      a mixed-use condominium project, including any fixture, improvement, or betterment in a
             532      commercial condominium unit in a mixed-use condominium project.
             533          [(d)] (c) Property insurance shall include coverage for any fixture, improvement, or
             534      betterment installed [by a unit owner to a] at any time to a unit or to a limited common area
             535      associated with a unit, whether installed in the original construction or in any remodel or later
             536      alteration, including a floor covering, cabinet, light fixture, electrical fixture, heating or
             537      plumbing fixture, paint, wall covering, window, and any other item permanently part of or
             538      affixed to a unit or to a limited common element associated with a unit.
             539          [(e)] (d) Notwithstanding anything in this section and unless otherwise provided in the
             540      declaration, an association of unit owners is not required to obtain property insurance for a loss
             541      to a unit that is not physically attached to:
             542          (i) another unit; or
             543          (ii) [an above-ground] a structure that is part of a common area or facility.
             544          [(f)] (e) Each unit owner is an insured person under a property insurance policy.
             545          [(g)] (f) If a loss occurs that is covered by a property insurance policy in the name of an
             546      association of unit owners and another property insurance policy in the name of a unit owner:
             547          (i) the association's policy provides primary insurance coverage; and
             548          (ii) notwithstanding Subsection (9)[(g)](f)(i)[,] and subject to Subsection (9)(g):
             549          (A) the unit owner is responsible for the deductible of the association of unit owners;
             550      and
             551          (B) building property coverage, often referred to as coverage A, of the unit owner's
             552      policy applies to that portion of the loss attributable to the policy deductible of the association



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             553
     of unit owners.
             554          [(h)] (g) (i) As used in this Subsection (9)[(h)](g) and Subsection (9)(j):
             555          (A) "Covered loss" means a loss, resulting from a single event or occurrence, that is
             556      covered by a property insurance policy of an association of unit owners.
             557          (B) "Unit damage" means damage to a unit or to a limited common area or facility
             558      [applicable] appurtenant to that unit, or both.
             559          (C) "Unit damage percentage" means the percentage of total damage resulting in a
             560      covered loss that is attributable to unit damage.
             561          (ii) A unit owner who owns a unit that has suffered unit damage as part of a covered
             562      loss is responsible for an amount calculated by applying the unit damage percentage for that
             563      unit to the amount of the deductible under the property insurance policy of the association of
             564      unit owners.
             565          (iii) If a unit owner does not pay the amount required under Subsection (9)[(h)](g)(ii)
             566      within 30 days after substantial completion of the repairs to the unit or limited common areas
             567      and facilities appurtenant to that unit, an association of unit owners may levy an assessment
             568      against the unit owner for that amount.
             569          [(i)] (h) An association of unit owners shall set aside an amount equal to the amount of
             570      the association's property insurance policy deductible or, if the policy deductible exceeds
             571      $10,000, [whichever is less] an amount not less than $10,000.
             572          [(j)] (i) (i) An association of unit owners shall provide notice in accordance with
             573      Section 57-8-42 to each unit owner of the unit owner's obligation under Subsection (9)[(h)](g)
             574      for the association's policy deductible and of any change in the amount of the deductible.
             575          (ii) (A) An association of unit owners that fails to provide notice as provided in
             576      Subsection (9)[(j)](i)(i) is responsible for the [amount] portion of the deductible [increase] that
             577      the association of unit owners could have assessed to a unit owner under Subsection
             578      (9)[(h)](g), but only to the extent that the unit owner does not have insurance coverage that
             579      would otherwise apply under this Subsection (9).
             580          (B) Notwithstanding Subsection (9)(i)(ii), an association of unit owners that provides
             581      notice of the association's policy deductible, as required under Subsection (9)(i)(i), but fails to
             582      provide notice of a later increase in the amount of the deductible is responsible only for the
             583      amount of the increase for which notice was not provided.



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             584
         (iii) The failure of an association of unit owners to provide notice as provided in
             585      Subsection (9)[(j)](i)(i) may not be construed to invalidate any other provision of this section.
             586          [(k)] (j) If, in the exercise of the business judgment rule, the management committee
             587      determines that a [claim] covered loss is likely not to exceed the property insurance policy
             588      deductible of the association of unit owners and until it becomes apparent the covered loss
             589      exceeds the deductible of the property insurance of the association of unit owners and a claim
             590      is submitted to the property insurance insurer of the association of unit owners:
             591          (i) [the] a unit owner's policy is considered the policy for primary coverage [to the
             592      amount of the policy deductible of the association of unit owners] for a loss occurring to the
             593      unit owner's unit or to a limited common area or facility appurtenant to the unit;
             594          (ii) the association of unit owners is responsible for any covered loss to any common
             595      areas and facilities;
             596          [(ii)] (iii) a unit owner who does not have a policy to cover the [property insurance
             597      policy deductible of the association of unit owners is responsible for the loss to the amount of
             598      the policy deductible of the association of unit owners, as provided in Subsection (9)(h)]
             599      damage to that unit owner's unit and appurtenant limited common areas and facilities is
             600      responsible for that damage, and the association of unit owners may, as provided in Subsection
             601      (9)(g)(iii), recover any payments the association of unit owners makes to remediate that unit
             602      and appurtenant limited common areas and facilities; and
             603          [(iii)] (iv) the association of unit owners need not tender the claim to the association's
             604      insurer.
             605          [(l)] (k) (i) An insurer under a property insurance policy issued to an association of unit
             606      owners shall adjust with the association of unit owners a loss covered under the association's
             607      policy.
             608          (ii) Notwithstanding Subsection (9)[(l)](k)(i), the insurance proceeds for a loss under a
             609      property insurance policy of an association of unit owners:
             610          (A) are payable to an insurance trustee that the association of unit owners designates
             611      or, if no trustee is designated, to the association of unit owners; and
             612          (B) may not be payable to a holder of a security interest.
             613          (iii) An insurance trustee or an association of unit owners shall hold any insurance
             614      proceeds in trust for the association of unit owners, unit owners, and lien holders.



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             615
         (iv) (A) [Insurance] If damaged property is to be repaired or restored, insurance
             616      proceeds shall be disbursed first for the repair or restoration of the damaged property.
             617          (B) After the disbursements described in Subsection (9)[(l)](k)(iv)(A) are made and the
             618      damaged property has been completely repaired or restored or the project terminated, any
             619      surplus proceeds are payable to the association of unit owners, unit owners, and lien holders, as
             620      provided in the declaration.
             621          [(m)] (l) An insurer that issues a property insurance policy under this section, or the
             622      insurer's authorized agent, shall issue a certificate or memorandum of insurance to:
             623          (i) the association of unit owners;
             624          (ii) a unit owner, upon the unit owner's written request; and
             625          (iii) a holder of a security interest, upon the holder's written request.
             626          [(n)] (m) A cancellation or nonrenewal of a property insurance policy under this
             627      section is subject to the procedures stated in Section 31A-21-303 .
             628          [(o)] (n) A management committee that acquires from an insurer the property insurance
             629      required in this section is not liable to unit owners if the insurance proceeds are not sufficient
             630      to cover 100% of the full replacement cost of the insured property at the time of the loss.
             631          (o) (i) Unless required in the declaration, property insurance coverage is not required
             632      for fixtures, improvements, or betterments in a commercial unit or limited common areas and
             633      facilities appurtenant to a commercial unit in a mixed-use condominium project.
             634          (ii) Notwithstanding any other provision of this section, an association of unit owners
             635      may obtain property insurance for fixtures, improvements, or betterments in a commercial unit
             636      in a mixed-use condominium project if allowed or required in the declaration.
             637          (p) (i) This Subsection (9) does not prevent a person suffering a loss as a result of
             638      damage to property from asserting a claim, either directly or through subrogation, for the loss
             639      against a person at fault for the loss.
             640          (ii) Subsection (9)(p)(i) does not affect Subsection (7).
             641          (10) (a) This Subsection (10) applies to a liability insurance policy required under
             642      Subsection (3)(b).
             643          (b) A liability insurance policy shall be in an amount determined by the management
             644      committee but not less than an amount specified in the declaration or bylaws.
             645          (c) Each unit owner is an insured person under a liability insurance policy that an



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             646
     association of unit owners obtains [that insures against], but only for liability arising from:
             647          (i) the unit owner's ownership interest in the common areas and facilities [or from];
             648          (ii) maintenance, repair, or replacement of common areas and facilities; and
             649          (iii) the unit owner's membership in the association of unit owners.
             650          Section 11. Section 57-8-55 is enacted to read:
             651          57-8-55. Consolidation of multiple associations of unit owners.
             652          (1) Two or more associations of unit owners may be consolidated into a single
             653      association of unit owners as provided in Title 16, Chapter 6a, Part 11, Merger, and this
             654      section.
             655          (2) Unless the declaration, articles, or bylaws otherwise provide, a declaration of
             656      consolidation between two or more associations of unit owners to consolidate into a single
             657      association of unit owners is not effective unless it is approved by the unit owners of each of
             658      the consolidating associations of unit owners, by the highest percentage of allocated voting
             659      interests of the unit owners required by each association of unit owners to amend its respective
             660      declaration, articles, or bylaws.
             661          (3) A declaration of consolidation under Subsection (2) shall:
             662          (a) be prepared, executed, and certified by the president of the association of each of
             663      the consolidating associations of unit owners; and
             664          (b) provide for the reallocation of the allocated interests in the consolidated association
             665      by stating:
             666          (i) the reallocations of the allocated interests in the consolidated association of unit
             667      owners or the formulas used to reallocate the allocated interests; or
             668          (ii) (A) the percentage of overall allocated interests of the consolidated association of
             669      unit owners that are allocated to all of the units comprising each of the consolidating
             670      associations of unit owners; and
             671          (B) that the portion of the percentages allocated to each unit formerly comprising a part
             672      of a consolidating association of unit owners is equal to the percentages of allocated interests
             673      allocated to the unit by the declaration of the consolidating association of unit owners.
             674          (4) A declaration of consolidation under Subsection (2) is not effective until it is
             675      recorded in the office of each applicable county recorder.
             676          (5) Unless otherwise provided in the declaration of consolidation, the consolidated



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             677
     association of unit owners resulting from a consolidation under this section:
             678          (a) is the legal successor for all purposes of all of the consolidating associations of unit
             679      owners;
             680          (b) the operations and activities of all of the consolidating associations of unit owners
             681      shall be consolidated into the consolidated association of unit owners; and
             682          (c) the consolidated association of unit owners holds all powers, rights, obligations,
             683      assets, and liabilities of all consolidating associations of unit owners.
             684          Section 12. Section 57-8a-102 is amended to read:
             685           57-8a-102. Definitions.
             686          As used in this chapter:
             687          (1) (a) "Assessment" means a charge imposed or levied:
             688          (i) by the association;
             689          (ii) on or against a lot or a lot owner; and
             690          (iii) pursuant to a governing document recorded with the county recorder.
             691          (b) "Assessment" includes:
             692          (i) a common expense; and
             693          (ii) an amount assessed against a lot owner under Subsection 57-8a-405 [(8)](7).
             694          (2) (a) Except as provided in Subsection (2)(b), "association" means a corporation or
             695      other legal entity, [each] any member of which:
             696          (i) is an owner of a residential lot located within the jurisdiction of the association, as
             697      described in the governing documents; and
             698          (ii) by virtue of membership or ownership of a residential lot is obligated to pay:
             699          (A) real property taxes;
             700          (B) insurance premiums;
             701          (C) maintenance costs; or
             702          (D) for improvement of real property not owned by the member.
             703          (b) "Association" or "homeowner association" does not include an association created
             704      under Title 57, Chapter 8, Condominium Ownership Act.
             705          (3) "Board of directors" or "board" means the entity, regardless of name, with primary
             706      authority to manage the affairs of the association.
             707          (4) "Common areas" means property that the association:



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             708
         (a) owns;
             709          (b) maintains;
             710          (c) repairs; or
             711          (d) administers.
             712          (5) "Common expense" means costs incurred by the association to exercise any of the
             713      powers provided for in the association's governing documents.
             714          (6) "Declarant":
             715          (a) means the person who executes a declaration and submits it for recording in the
             716      office of the recorder of the county in which the property described in the declaration is
             717      located; and
             718          (b) includes the person's successor and assign.
             719          (7) (a) "Governing documents" means a written instrument by which the association
             720      may:
             721          (i) exercise powers; or
             722          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
             723      association.
             724          (b) "Governing documents" includes:
             725          (i) articles of incorporation;
             726          (ii) bylaws;
             727          (iii) a plat;
             728          (iv) a declaration of covenants, conditions, and restrictions; and
             729          (v) rules of the association.
             730          (8) "Judicial foreclosure" means a foreclosure of a lot:
             731          (a) for the nonpayment of an assessment; and
             732          (b) (i) in the manner provided by law for the foreclosure of a mortgage on real
             733      property; and
             734          (ii) as provided in Part 3, Collection of Assessments.
             735          (9) "Lease" or "leasing" means regular, exclusive occupancy of a lot:
             736          (a) by a person or persons other than the owner; and
             737          (b) for which the owner receives a consideration or benefit, including a fee, service,
             738      gratuity, or emolument.



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             739
         (10) "Limited common areas" means common areas described in the declaration and
             740      allocated for the exclusive use of one or more lot owners.
             741          (11) "Lot" means:
             742          (a) a lot, parcel, plot, or other division of land:
             743          (i) designated for separate ownership or occupancy; and
             744          (ii) (A) shown on a recorded subdivision plat; or
             745          (B) the boundaries of which are described in a recorded governing document; or
             746          (b) (i) a unit in a condominium association if the condominium association is a part of
             747      a development; or
             748          (ii) a unit in a real estate cooperative if the real estate cooperative is part of a
             749      development.
             750          (12) "Mixed-use project" means a project under this chapter that has both residential
             751      and commercial lots in the project.
             752          [(12)] (13) "Nonjudicial foreclosure" means the sale of a lot:
             753          (a) for the nonpayment of an assessment; and
             754          (b) (i) in the same manner as the sale of trust property under Sections 57-1-19 through
             755      57-1-34 ; and
             756          (ii) as provided in Part 3, Collection of Assessments.
             757          [(13)] (14) "Residential lot" means a lot, the use of which is limited by law, covenant,
             758      or otherwise to primarily residential or recreational purposes.
             759          Section 13. Section 57-8a-107 is enacted to read:
             760          57-8a-107. Amending the declaration to make provisions of this chapter
             761      applicable.
             762          (1) An association may amend the declaration to make applicable to the association a
             763      provision of this chapter that is enacted after the creation of the association, by complying with:
             764          (a) the amendment procedures and requirements specified in the declaration and
             765      applicable provisions of this chapter; or
             766          (b) the amendment procedures and requirements of this chapter, if the declaration
             767      being amended does not contain amendment procedures and requirements.
             768          (2) If an amendment under Subsection (1) adopts a specific section of this chapter:
             769          (a) the amendment grants a right, power, or privilege permitted by that specific section;



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             770
     and
             771          (b) all correlative obligations, liabilities, and restrictions in that section also apply.
             772          Section 14. Section 57-8a-108 is enacted to read:
             773          57-8a-108. Rules against perpetuities and unreasonable restraints -- Insubstantial
             774      failure to comply.
             775          (1) The rule against perpetuities and the rule against unreasonable restraints on
             776      alienation of real estate may not defeat a provision of a governing document.
             777          (2) (a) A declaration that fails to comply with this chapter does not render a title to a lot
             778      and common areas unmarketable or otherwise affect the title if the failure is insubstantial.
             779          (b) This chapter does not affect whether a substantial failure impairs marketability.
             780          Section 15. Section 57-8a-109 is enacted to read:
             781          57-8a-109. Limit on fee for approval of plans.
             782          (1) As used in this section:
             783          (a) "Lot plans" means plans:
             784          (i) for the construction or improvement of a lot; and
             785          (ii) that are required to be approved by the association before the lot construction or
             786      improvement may occur.
             787          (b) "Plan fee" means a fee that an association charges for review and approval of lot
             788      plans.
             789          (2) An association may not charge a plan fee that exceeds the actual cost of reviewing
             790      and approving the lot plans.
             791          Section 16. Section 57-8a-211 is amended to read:
             792     
Part 2. Administrative Provisions

             793           57-8a-211. Reserve analysis -- Reserve fund.
             794          (1) As used in this section[,]:
             795          (a) "Reserve analysis" means an analysis to determine:
             796          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             797      replacing, and restoring common areas that have a useful life of three years or more and a
             798      remaining useful life of less than 30 years, but excluding any cost that can reasonably be
             799      funded from the association's general budget or from other association funds; and
             800          [(b)] (ii) the appropriate amount of any reserve fund.



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             801
         (b) "Reserve fund line item" means the line item in an association's budget that
             802      identifies the amount to be placed into a reserve fund.
             803          (2) Except as otherwise provided in the governing documents, a board shall:
             804          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no
             805      less frequently than every six years; and
             806          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             807      analysis to be conducted before July 1, 2012; and]
             808          (b) review and, if necessary, update a previously conducted reserve analysis no less
             809      frequently than every three years.
             810          (3) The board may conduct a reserve analysis itself or may engage a reliable person or
             811      organization, as determined by the board, to conduct the reserve analysis.
             812          (4) (a) A board may not use money in a reserve fund:
             813          (i) for daily maintenance expenses, unless a majority of association members vote to
             814      approve the use of reserve fund money for that purpose; or
             815          (ii) for any purpose other than the purpose for which the reserve fund was established.
             816          (b) A board shall maintain [a] reserve [fund] funds separate from other association
             817      funds.
             818          (c) This Subsection (4) may not be construed to limit a board from prudently investing
             819      money in a reserve fund, subject to any investment constraints imposed by the governing
             820      documents.
             821          (5) An association shall:
             822          (a) annually provide lot owners a summary of the most recent reserve analysis or
             823      update; and
             824          (b) provide a copy of the complete reserve analysis or update to a lot owner who
             825      requests a copy.
             826          (6) In formulating its budget each year, an association shall include a reserve fund line
             827      item in:
             828          (a) an amount the board determines, based on the reserve analysis, to be prudent; or
             829          (b) an amount required by the governing documents, if the governing documents
             830      require an amount higher than the amount determined under Subsection (6)(a)(i).
             831          [(5)] (7) Subsections (2)[, (3), (4), and] through (6) do not apply to an association



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             832
     during the period of administrative control.
             833          [(6) An association shall:]
             834          [(a) annually, at the annual meeting of lot owners or at a special meeting of lot
             835      owners:]
             836          [(i) present the reserve study; and]
             837          [(ii) provide an opportunity for lot owners to discuss reserves and to vote on whether to
             838      fund a reserve fund and, if so, how to fund it and in what amount; and]
             839          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             840      indicate in the minutes any decision relating to funding a reserve fund.]
             841          [(7)] (8) This section applies to each association, regardless of when the association
             842      was created.
             843          Section 17. Section 57-8a-212 is amended to read:
             844           57-8a-212. Content of a declaration.
             845          (1) An initial declaration recorded on or after May 10, 2011 shall contain:
             846          (a) the name of the project;
             847          (b) the name of the association;
             848          (c) a statement that the project is not a cooperative;
             849          (d) a statement indicating any portions of the project that contain condominiums
             850      governed by Chapter 8, Condominium Ownership Act;
             851          (e) if the declarant desires to reserve the option to expand the project, a statement
             852      reserving the option to expand the project;
             853          (f) the name of each county in which any part of the project is located;
             854          (g) a legally sufficient description of the real estate included in the project;
             855          (h) a description of any limited common areas and any real estate that is or is required
             856      to become common areas;
             857          (i) any restriction on the alienation of a lot, including a restriction on leasing; and
             858          (j) (i) an appointment of a trustee who qualifies under Subsection 57-1-21 (1)(a)(i) or
             859      (iv); and
             860          (ii) the following statement: "The declarant hereby conveys and warrants pursuant to
             861      U.C.A. Sections 57-1-20 and [ 57-8a-402 ] 57-8a-302 to (name of trustee), with power of sale,
             862      the lot and all improvements to the lot for the purpose of securing payment of assessments



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             863
     under the terms of the declaration."
             864          (2) A declaration may contain any other information the declarant considers
             865      appropriate, including any restriction on the use of a lot, the number of persons who may
             866      occupy a lot, or other qualifications of a person who may occupy a lot.
             867          (3) The location of a limited common area or real estate described in Subsection (1)(g)
             868      may be shown on a subdivision plat.
             869          Section 18. Section 57-8a-220 is amended to read:
             870           57-8a-220. Creditor approval may be required for lot owner or association action
             871      under declaration -- Creditor approval presumed in certain circumstances -- Notice to
             872      creditor or creditor's successor.
             873          (1) (a) Subject to Subsection (1)(b), a declaration may:
             874          (i) condition the effectiveness of lot owners' actions specified in the declaration on the
             875      approval of a specified number or percentage of lenders holding a security interest in the lots;
             876      or
             877          (ii) condition the effectiveness of association actions specified in the declaration on the
             878      approval of a specified number or percentage of lenders that have extended credit to the
             879      association.
             880          (b) A condition under Subsection (1)(a) may not:
             881          (i) deny or delegate the lot owners' or board's control over the association's general
             882      administrative affairs;
             883          (ii) prevent the association or board from commencing, intervening in, or settling any
             884      litigation or proceeding; or
             885          (iii) prevent an insurance trustee or the association from receiving or distributing
             886      insurance proceeds under Subsection 57-8a-405 [(12)](11).
             887          (c) A condition under Subsection (1)(a) does not violate a prohibition under Subsection
             888      (1)(b) by:
             889          (i) requiring the association to deposit the association's assessments before default with
             890      the lender assigned the income; or
             891          (ii) requiring the association to increase an assessment at the lender's direction by an
             892      amount reasonably necessary to pay the loan in accordance with the loan terms.
             893          (d) This Subsection (1) applies to:



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             894
         (i) an association formed before, on, or after May 10, 2011; and
             895          (ii) documents created and recorded before, on, or after May 10, 2011.
             896          (2) Subject to this chapter and applicable law, a lender who has extended credit to an
             897      association secured by an assignment of income or an encumbrance of the common areas may
             898      enforce the lender's security agreement as provided in the agreement.
             899          (3) (a) Subject to Subsection (4), a security holder's consent that is required under
             900      Subsection (1) to amend a declaration or bylaw or for another association action is presumed if:
             901          (i) the association sends written notice of the proposed amendment or action by
             902      certified or registered mail to the security holder's address stated in a recorded document
             903      evidencing the security interest; and
             904          (ii) the person designated in a notice under Subsection (3)(a)(i) to receive the security
             905      holder's response does not receive a response within 60 days after the association sends notice
             906      under Subsection (3)(a)(i).
             907          (b) If a security holder's address for receiving notice is not stated in a recorded
             908      document evidencing the security interest, an association:
             909          (i) shall use reasonable efforts to find a mailing address for the security holder; and
             910          (ii) may send the notice to any address obtained under Subsection (3)(b)(i).
             911          (4) If a security holder responds in writing within 60 days after the association sends
             912      notice under Subsection (3)(a)(i) that the security interest has been assigned or conveyed to
             913      another person, the association:
             914          (a) shall:
             915          (i) send a notice under Subsection (3)(a)(i) to the person assigned or conveyed the
             916      security interest at the address provided by the security holder in the security holder's response;
             917      or
             918          (ii) if no address is provided:
             919          (A) use reasonable efforts to find a mailing address for the person assigned or
             920      conveyed the security interest; and
             921          (B) send notice by certified or registered mail to the person at the address that the
             922      association finds under Subsection (4)(a)(ii)(A); and
             923          (b) may not presume the security holder's consent under Subsection (3)(a) unless the
             924      person designated in a notice under Subsection (4)(a) to receive the response from the person



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             925
     assigned or conveyed the security interest does not receive a response within 60 days after the
             926      association sends the notice.
             927          Section 19. Section 57-8a-222 is enacted to read:
             928          57-8a-222. Removing or altering partition between dwelling units on adjoining
             929      lots.
             930          (1) Subject to the declaration, a lot owner may, after acquiring an adjoining lot with a
             931      dwelling unit that shares a common wall with a dwelling unit on the lot owner's lot:
             932          (a) remove or alter a partition between the lot owner's lot and the acquired lot, even if
             933      the partition is entirely or partly common areas; or
             934          (b) create an aperture to the adjoining lot or portion.
             935          (2) A lot owner may not take an action under Subsection (1) if the action would:
             936          (a) impair the structural integrity or mechanical systems of the building or either lot;
             937          (b) reduce the support of any portion of the common areas or another lot; or
             938          (c) constitute a violation of Section 10-9a-608 or 17-27a-608 , as applicable, a local
             939      government land use ordinance, or a building code.
             940          (3) The board may require a lot owner to submit, at the lot owner's expense, a
             941      registered professional engineer's or registered architect's opinion stating that a proposed
             942      change to the lot owner's lot will not:
             943          (a) impair the structural integrity or mechanical systems of the building or either lot;
             944          (b) reduce the support or integrity of common areas; or
             945          (c) compromise structural components.
             946          (4) The board may require a lot owner to pay all of the association's legal and other
             947      expenses related to a proposed alteration to the lot or building under this section.
             948          (5) An action under Subsection (1) does not change an assessment or voting right
             949      attributable to the lot owner's lot or the acquired lot, unless the declaration provides otherwise.
             950          Section 20. Section 57-8a-223 is enacted to read:
             951          57-8a-223. Eminent domain -- Common area.
             952          Unless the declaration provides otherwise:
             953          (1) if part of the common area is taken by eminent domain:
             954          (a) the entity taking part of the common area shall pay to the association the portion of
             955      the compensation awarded for the taking that is attributable to the common area; and



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             956
         (b) the association shall equally divide any portion of the award attributable to the
             957      taking of a limited common area among the owners of the lots to which the limited common
             958      area was allocated at the time of the taking; and
             959          (2) an association shall submit for recording to each applicable county recorder the
             960      court judgment or order in an eminent domain action that results in the taking of some or all of
             961      the common area.
             962          Section 21. Section 57-8a-224 is enacted to read:
             963          57-8a-224. Responsibility for the maintenance, repair, and replacement of
             964      common area and lots.
             965          (1) As used in this section:
             966          (a) "Emergency repair" means a repair that, if not made in a timely manner, will likely
             967      result in immediate and substantial damage to a common area or to another lot.
             968          (b) "Reasonable notice" means:
             969          (i) written notice that is hand delivered to the lot at least 24 hours before the proposed
             970      entry; or
             971          (ii) in the case of an emergency repair, notice that is reasonable under the
             972      circumstances.
             973          (2) Except as otherwise provided in the declaration or Part 4, Insurance:
             974          (a) an association is responsible for the maintenance, repair, and replacement of
             975      common areas; and
             976          (b) a lot owner is responsible for the maintenance, repair, and replacement of the lot
             977      owner's lot.
             978          (3) After reasonable notice to the occupant of the lot being entered, the board may
             979      access a lot:
             980          (a) from time to time during reasonable hours, as necessary for the maintenance, repair,
             981      or replacement of any of the common areas; or
             982          (b) for making an emergency repair.
             983          (4) (a) An association is liable to repair damage it causes to the common areas or to a
             984      lot the association uses to access the common areas.
             985          (b) An association shall repair damage described in Subsection (4)(a) within a time that
             986      is reasonable under the circumstances.



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             987
         (5) Subsections (2), (3), and (4) do not apply during the period of administrative
             988      control as defined in Section 57-8a-104 .
             989          Section 22. Section 57-8a-402 is amended to read:
             990           57-8a-402. Applicability of part.
             991          (1) This part applies to an insurance policy or combination of insurance policies:
             992          (a) issued or renewed on or after July 1, 2011; and
             993          (b) issued to or renewed by:
             994          (i) a lot owner; or
             995          (ii) an association, regardless of when the association is formed.
             996          (2) [This] Unless otherwise provided in the declaration, this part does not apply to a
             997      project if all of the project's lots are restricted to entirely nonresidential use.
             998          (3) Subject to Subsection (4), this part does not apply to a project if:
             999          (a) the initial declaration for the project is recorded before January 1, 2012;
             1000          (b) the project includes attached dwellings; and
             1001          (c) the declaration requires each lot owner to insure the lot owner's dwelling.
             1002          (4) (a) An association [that is subject to a declaration recorded before January 1, 2012]
             1003      to which this part does not apply under Subsection (3) may amend the declaration, as provided
             1004      in the declaration and applicable law, to subject the association to this part.
             1005          (b) During the period of administrative control, an amendment under Subsection (4)(a)
             1006      requires the consent of the declarant.
             1007          Section 23. Section 57-8a-403 is amended to read:
             1008           57-8a-403. Property and liability insurance required -- Notice if insurance not
             1009      reasonably available.
             1010          (1) Beginning not later than the day on which the first lot is conveyed to a person other
             1011      than a declarant, an association shall maintain, to the extent reasonably available:
             1012          (a) subject to Section 57-8a-405 , blanket property insurance or guaranteed replacement
             1013      cost insurance on the physical structure of all attached dwellings, limited common areas
             1014      appurtenant to a dwelling on a lot, and common areas in the project, insuring against all risks
             1015      of direct physical loss commonly insured against, including fire and extended coverage perils;
             1016      and
             1017          (b) subject to Section 57-8a-406 , liability insurance[, including medical payments



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             1018
     insurance] covering all occurrences commonly insured against for death, bodily injury, and
             1019      property damage arising out of or in connection with the use, ownership, or maintenance of the
             1020      common areas.
             1021          (2) If an association becomes aware that property insurance under Subsection (1)(a) or
             1022      liability insurance under Subsection (1)(b) is not reasonably available, the association shall,
             1023      within seven calendar days after becoming aware, give all lot owners notice, as provided in
             1024      Section [ 57-8a-215 ] 57-8a-214 , that the insurance is not reasonably available.
             1025          Section 24. Section 57-8a-404 is amended to read:
             1026           57-8a-404. Other and additional insurance -- Limit on effect of lot owner act or
             1027      omission -- Insurer's subrogation waiver -- Inconsistent provisions.
             1028          (1) (a) The declaration or bylaws may require the association to carry other types of
             1029      insurance in addition to those described in Section 57-8a-403 .
             1030          (b) In addition to any type of insurance coverage or limit of coverage provided in the
             1031      declaration or bylaws and subject to the requirements of this part, an association may, as the
             1032      board considers appropriate, obtain:
             1033          (i) an additional type of insurance than otherwise required; or
             1034          (ii) a policy with greater coverage than otherwise required.
             1035          (2) Unless a lot owner is acting within the scope of the lot owner's authority on behalf
             1036      of an association, a lot owner's act or omission may not:
             1037          (a) void a property insurance policy under Subsection 57-8a-403 (1)(a) or a liability
             1038      insurance policy under Subsection 57-8a-403 (1)(b); or
             1039          (b) be a condition to recovery under a policy.
             1040          (3) An insurer under a property insurance policy or liability insurance policy obtained
             1041      by an association under this part waives its right to subrogation under the policy against [any
             1042      lot owner or member of the lot owner's household.]:
             1043          (a) any person residing with a lot owner, if the lot owner resides on the lot; and
             1044          (b) the lot owner.
             1045          (4) (a) An insurance policy issued to an association may not be inconsistent with any
             1046      provision of this part.
             1047          (b) A provision of a governing document that is contrary to a provision of this part has
             1048      no effect.



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             1049
         (c) [A] Neither the governing documents nor a property insurance or liability insurance
             1050      policy issued to an association may [not] prevent a lot owner from obtaining insurance for the
             1051      lot owner's own benefit.
             1052          Section 25. Section 57-8a-405 is amended to read:
             1053           57-8a-405. Property insurance.
             1054          (1) This section applies to property insurance required under Subsection
             1055      57-8a-403 (1)(a).
             1056          [(2) The property covered by property insurance shall include any property that, under
             1057      the declaration, is required to become common areas.]
             1058          [(3)] (2) The total amount of coverage provided by blanket property insurance or
             1059      guaranteed replacement cost insurance may not be less than 100% of the full replacement cost
             1060      of the insured property at the time the insurance is purchased and at each renewal date,
             1061      excluding:
             1062          (a) items normally excluded from property insurance policies[.]; and
             1063          (b) unless otherwise provided in the declaration, any commercial lot in a mixed-use
             1064      project, including any fixture, improvement, or betterment in a commercial lot in a mixed-use
             1065      project.
             1066          [(4)] (3) Property insurance shall include coverage for any fixture, improvement, or
             1067      betterment installed [by a lot owner] at any time to an attached dwelling or to a limited
             1068      common area appurtenant to a dwelling on a lot, whether installed in the original construction
             1069      or in any remodel or later alteration, including a floor covering, cabinet, light fixture, electrical
             1070      fixture, heating or plumbing fixture, paint, wall covering, window, and any other item
             1071      permanently part of or affixed to an attached dwelling or to a limited common area.
             1072          [(5)] (4) Notwithstanding anything in this part and unless otherwise provided in the
             1073      declaration, an association is not required to obtain property insurance for a loss to a dwelling
             1074      that is not physically attached to another dwelling or to a common area structure.
             1075          [(6)] (5) Each lot owner is an insured person under a property insurance policy.
             1076          [(7)] (6) If a loss occurs that is covered by a property insurance policy in the name of
             1077      an association and another property insurance policy in the name of a lot owner:
             1078          (a) the association's policy provides primary insurance coverage; and
             1079          (b) notwithstanding Subsection [(7)] (6)(a) and subject to Subsection [(8)] (7):



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             1080
         (i) [a] the lot owner is responsible for the association's policy deductible; and
             1081          (ii) building property coverage, often referred to as coverage A, of the lot owner's
             1082      policy applies to that portion of the loss attributable to the association's policy deductible.
             1083          [(8)] (7) (a) As used in this Subsection [(8)] (7) and Subsection (10):
             1084          (i) "Covered loss" means a loss, resulting from a single event or occurrence, that is
             1085      covered by an association's property insurance policy.
             1086          (ii) "Lot damage" means damage to any combination of a lot, a dwelling on a lot, or a
             1087      limited common area appurtenant to a lot or appurtenant to a dwelling on a lot.
             1088          (iii) "Lot damage percentage" means the percentage of total damage resulting in a
             1089      covered loss that is attributable to lot damage.
             1090          (b) A lot owner who owns a lot that has suffered lot damage as part of a covered loss is
             1091      responsible for an amount calculated by applying the lot damage percentage for that lot to the
             1092      amount of the deductible under the association's property insurance policy.
             1093          (c) If a lot owner does not pay the amount required under Subsection [(8)] (7)(b) within
             1094      30 days after substantial completion of the repairs to, as applicable, the lot, a dwelling on the
             1095      lot, or the limited common area appurtenant to the lot, an association may levy an assessment
             1096      against a lot owner for that amount.
             1097          [(9)] (8) An association shall set aside an amount equal to the amount of the
             1098      association's property insurance policy deductible or, if the policy deductible exceeds $10,000,
             1099      [whichever is less] an amount not less than $10,000.
             1100          [(10)] (9) (a) An association shall provide notice in accordance with Section 57-8a-214
             1101      to each lot owner of the lot owner's obligation under Subsection [(8)] (7) for the association's
             1102      policy deductible and of any change in the amount of the deductible.
             1103          (b) (i) An association that fails to provide notice as provided in Subsection [(10)] (9)(a)
             1104      is responsible for the [amount] portion of the deductible [increase] that the association could
             1105      have assessed to a lot owner under Subsection [(8)] (7), but only to the extent that the lot owner
             1106      does not have insurance coverage that would otherwise apply under this section.
             1107          (ii) Notwithstanding Subsection (9)(b)(i), an association that provides notice of the
             1108      association's policy deductible, as required under Subsection (9)(a), but fails to provide notice
             1109      of a later increase in the amount of the deductible is responsible only for the amount of the
             1110      increase for which notice was not provided.



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             1111
         (c) An association's failure to provide notice as provided in Subsection [(10)] (9)(a)
             1112      may not be construed to invalidate any other provision of this part.
             1113          [(11)] (10) If, in the exercise of the business judgment rule, the board determines that a
             1114      [claim] covered loss is likely not to exceed the association's property insurance policy
             1115      deductible, and until it becomes apparent the covered loss exceeds the association's property
             1116      insurance deductible and a claim is submitted to the association's property insurance insurer:
             1117          (a) for a lot to which a loss occurs, the lot owner's policy is considered the policy for
             1118      primary coverage [to the amount of the association's policy deductible] for the damage to that
             1119      lot;
             1120          (b) the association is responsible for any covered loss to any common area;
             1121          [(b)] (c) a lot owner who does not have a policy to cover the [association's property
             1122      insurance policy deductible] damage to that lot owner's lot is responsible for [the loss to the
             1123      amount of the association's policy deductible, as provided in Subsection (8)] that lot damage,
             1124      and the association may, as provided in Subsection (7)(c), recover any payments the association
             1125      makes to remediate that lot; and
             1126          [(c)] (d) the association need not tender the claim to the association's insurer.
             1127          [(12)] (11) (a) An insurer under a property insurance policy issued to an association
             1128      shall adjust with the association a loss covered under the association's policy.
             1129          (b) Notwithstanding Subsection [(12)] (11)(a), the insurance proceeds for a loss under
             1130      an association's property insurance policy:
             1131          (i) are payable to an insurance trustee that the association designates or, if no trustee is
             1132      designated, to the association; and
             1133          (ii) may not be payable to a holder of a security interest.
             1134          (c) An insurance trustee or an association shall hold any insurance proceeds in trust for
             1135      the association, lot owners, and lien holders.
             1136          (d) (i) [Insurance] If damaged property is to be repaired or restored, insurance proceeds
             1137      shall be disbursed first for the repair or restoration of the damaged property.
             1138          (ii) After the disbursements described in Subsection [(12)] (11)(d)(i) are made and the
             1139      damaged property has been completely repaired or restored or the project terminated, any
             1140      surplus proceeds are payable to the association, lot owners, and lien holders, as provided in the
             1141      declaration.



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             1142
         [(13)] (12) An insurer that issues a property insurance policy under this part, or the
             1143      insurer's authorized agent, shall issue a certificate or memorandum of insurance to:
             1144          (a) the association;
             1145          (b) a lot owner, upon the lot owner's written request; and
             1146          (c) a holder of a security interest, upon the holder's written request.
             1147          [(14)] (13) A cancellation or nonrenewal of a property insurance policy under this
             1148      section is subject to the procedures stated in Section 31A-21-303 .
             1149          [(15)] (14) A board that acquires from an insurer the property insurance required in this
             1150      section is not liable to lot owners if the insurance proceeds are not sufficient to cover 100% of
             1151      the full replacement cost of the insured property at the time of the loss.
             1152          (15) (a) Unless required in the declaration, property insurance coverage is not required
             1153      for fixtures, improvements, or betterments in a commercial lot or limited common areas
             1154      appurtenant to a commercial lot in a mixed-use project.
             1155          (b) Notwithstanding any other provision of this part, an association may obtain
             1156      property insurance for fixtures, improvements, and betterments in a commercial lot in a
             1157      mixed-use project if allowed or required in the declaration.
             1158          (16) (a) This section does not prevent a person suffering a loss as a result of damage to
             1159      property from asserting a claim, either directly or through subrogation, for the loss against a
             1160      person at fault for the loss.
             1161          (b) Subsection (16)(a) does not affect Subsection 57-8a-404 (3).
             1162          Section 26. Section 57-8a-406 is amended to read:
             1163           57-8a-406. Liability insurance.
             1164          (1) This section applies to a liability insurance policy required under Subsection
             1165      57-8a-403 (1)(b).
             1166          (2) A liability insurance policy shall be in an amount determined by the board but not
             1167      less than an amount specified in the declaration or bylaws.
             1168          (3) Each lot owner is an insured person under a liability insurance policy that an
             1169      association obtains [that insures against], but only for liability arising from:
             1170          (a) the lot owner's ownership interest in the common areas [or from];
             1171          (b) maintenance, repair, or replacement of common areas; and
             1172          (c) the lot owner's membership in the association.



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             1173
         Section 27. Section 57-8a-407 is amended to read:
             1174           57-8a-407. Damage to a portion of project -- Insurance proceeds.
             1175          (1) (a) If a portion of the project for which insurance is required under this part is
             1176      damaged or destroyed, the association shall repair or replace the portion within a reasonable
             1177      amount of time unless:
             1178          (i) the project is terminated;
             1179          (ii) repair or replacement would be illegal under a state statute or local ordinance
             1180      governing health or safety; or
             1181          (iii) (A) at least 75% of the allocated voting interests of the lot owners in the
             1182      association vote not to rebuild; and
             1183          (B) each owner of a dwelling on a lot and the limited common area appurtenant to that
             1184      lot that will not be rebuilt votes not to rebuild.
             1185          (b) If a portion of a project is not repaired or replaced because the project is terminated,
             1186      the termination provisions of applicable law and the governing documents apply.
             1187          (2) (a) The cost of repair or replacement of any lot in excess of insurance proceeds and
             1188      reserves is a common expense[.] to the extent the association is required under this chapter to
             1189      provide insurance coverage for the lot.
             1190          (b) The cost of repair or replacement of any common area in excess of insurance
             1191      proceeds and reserves is a common expense.
             1192          (3) If the entire project is damaged or destroyed and not repaired or replaced:
             1193          (a) the association shall use the insurance proceeds attributable to the damaged
             1194      common areas to restore the damaged area to a condition compatible with the remainder of the
             1195      project;
             1196          (b) the association shall distribute the insurance proceeds attributable to lots and
             1197      common areas that are not rebuilt to:
             1198          (i) the lot owners of the lots that are not rebuilt;
             1199          (ii) the lot owners of the lots to which those common areas that are not rebuilt were
             1200      allocated; or
             1201          (iii) lien holders; and
             1202          (c) the association shall distribute the remainder of the proceeds to all the lot owners or
             1203      lien holders in proportion to the common expense liabilities of all the lots.



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             1204
         (4) If the lot owners vote not to rebuild a lot:
             1205          (a) the lot's allocated interests are automatically reallocated upon the lot owner's vote
             1206      as if the lot had been condemned; and
             1207          (b) the association shall prepare, execute, and submit for recording an amendment to
             1208      the declaration reflecting the reallocations described in Subsection (4)(a).
             1209          Section 28. Section 57-8a-501 is enacted to read:
             1210     
Part 5. Association Board

             1211          57-8a-501. Board acts for association.
             1212          Except as limited in a declaration, the association bylaws, or other provisions of this
             1213      chapter, a board acts in all instances on behalf of the association.
             1214          Section 29. Section 57-8a-502 is enacted to read:
             1215          57-8a-502. Period of administrative control.
             1216          (1) Unless otherwise provided for in a declaration, a period of administrative control
             1217      terminates on the first to occur of the following:
             1218          (a) 60 days after 75% of the lots that may be created are conveyed to lot owners other
             1219      than a declarant;
             1220          (b) seven years after all declarants have ceased to offer lots for sale in the ordinary
             1221      course of business; or
             1222          (c) the day the declarant, after giving written notice to the lot owners, records an
             1223      instrument voluntarily surrendering all rights to control activities of the association.
             1224          (2) (a) A declarant may voluntarily surrender the right to appoint and remove a member
             1225      of the board before the period of administrative control terminates under Subsection (1).
             1226          (b) Subject to Subsection (2)(a), the declarant may require, for the duration of the
             1227      period of administrative control, that actions of the association or board, as specified in a
             1228      recorded instrument executed by the declarant, be approved by the declarant before they
             1229      become effective.
             1230          (3) (a) Upon termination of the period of administrative control, the lot owners shall
             1231      elect a board consisting of an odd number of at least three members, a majority of whom shall
             1232      be lot owners.
             1233          (b) Unless the declaration provides for the election of officers by the lot owners, the
             1234      board shall elect officers of the association.



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             1235
         (c) The board members and officers shall take office upon election or appointment.
             1236          Section 30. Section 57-8a-601 is enacted to read:
             1237     
Part 6. Consolidation of Associations

             1238          57-8a-601. Consolidation of multiple associations.
             1239          (1) Two or more associations may be consolidated into a single association as provided
             1240      in Title 16, Chapter 6a, Part 11, Merger, and this section.
             1241          (2) Unless the declaration, articles, or bylaws otherwise provide, a declaration of
             1242      consolidation between two or more associations to consolidate into a single association is not
             1243      effective unless it is approved by the lot owners of each of the consolidating associations by the
             1244      highest percentage of allocated voting interests of the lot owners required by each association
             1245      to amend its respective declaration, articles, or bylaws.
             1246          (3) A declaration of consolidation under Subsection (2) shall:
             1247          (a) be prepared, executed, and certified by the president of each of the consolidating
             1248      associations; and
             1249          (b) provide for the reallocation of the allocated interests in the consolidated association
             1250      by stating:
             1251          (i) the reallocations of the allocated interests in the consolidated association or the
             1252      formulas used to reallocate the allocated interests; or
             1253          (ii) (A) the percentage of overall allocated interests of the consolidated association that
             1254      are allocated to all of the lots comprising each of the consolidating associations; and
             1255          (B) that the portion of the percentages allocated to each lot formerly comprising a part
             1256      of a consolidating association is equal to the percentages of allocated interests allocated to the
             1257      lot by the declaration of the consolidating association.
             1258          (4) A declaration of consolidation under Subsection (2) is not effective until it is
             1259      recorded in the office of each applicable county recorder.
             1260          (5) Unless otherwise provided in the declaration of consolidation:
             1261          (a) the consolidated association resulting from a consolidation under this section is the
             1262      legal successor for all purposes of all of the consolidating associations;
             1263          (b) the operations and activities of all of the consolidating associations shall be
             1264      consolidated into the consolidated association; and
             1265          (c) the consolidated association holds all powers, rights, obligations, assets, and



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             1266
     liabilities of all consolidating associations.
             1267          Section 31. Section 76-6-206 is amended to read:
             1268           76-6-206. Criminal trespass.
             1269          (1) As used in this section, "enter" means intrusion of the entire body.
             1270          (2) A person is guilty of criminal trespass if, under circumstances not amounting to
             1271      burglary as defined in Section 76-6-202 , 76-6-203 , or 76-6-204 or a violation of Section
             1272      76-10-2402 regarding commercial obstruction:
             1273          (a) the person enters or remains unlawfully on property and:
             1274          (i) intends to cause annoyance or injury to any person or damage to any property,
             1275      including the use of graffiti as defined in Section 76-6-107 ;
             1276          (ii) intends to commit any crime, other than theft or a felony; or
             1277          (iii) is reckless as to whether his presence will cause fear for the safety of another;
             1278          (b) knowing the person's entry or presence is unlawful, the person enters or remains on
             1279      property as to which notice against entering is given by:
             1280          (i) personal communication to the actor by the owner or someone with apparent
             1281      authority to act for the owner;
             1282          (ii) fencing or other enclosure obviously designed to exclude intruders; or
             1283          (iii) posting of signs reasonably likely to come to the attention of intruders; or
             1284          (c) the person enters a condominium unit in violation of Subsection 57-8-7 [(7)](8).
             1285          (3) (a) A violation of Subsection (2)(a) or (b) is a class B misdemeanor unless it was
             1286      committed in a dwelling, in which event it is a class A misdemeanor.
             1287          (b) A violation of Subsection (2)(c) is an infraction.
             1288          (4) It is a defense to prosecution under this section that:
             1289          (a) the property was open to the public when the actor entered or remained; and
             1290          (b) the actor's conduct did not substantially interfere with the owner's use of the
             1291      property.
             1292          Section 32. Effective date.
             1293          (1) Except as provided in Subsection (2), this bill takes effect May 14, 2013.
             1294          (2) The actions affecting the following sections take effective July 1, 2014:
             1295          (a) Section 57-8-4.5 ;
             1296          (b) Section 57-8-7 ;



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House Floor Amendments 3-14-2013 je/rhr
             1297          (c) Section 57-8-7.5 ;
             1298          (d) Section 57-8-10.3 ;
             1299          (e) Section 57-8-10.5 ;
             1300          (f) Section 57-8-23 ;
             1301          (g) Section 57-8-40 ;
             1302          (h) Section 57-8-55 ;
             1303          (i) Section 57-8a-107 ;
             1304          (j) Section 57-8a-108 ;
             1305          (k) Section 57-8a-211 ;
             1306          (l) Section 57-8a-212 ;
             1307          (m) Section 57-8a-220 ;
             1308          (n) Section 57-8a-222 ;
             1309          (o) Section 57-8a-223 ;
             1310          (p) Section 57-8a-224 ;
             1311          (q) Section 57-8a-501 ;
             1312          (r) Section 57-8a-502 ; H. [ and ] .H
             1313          (s) Section 57-8a-601 H. [ . ] ; and
             1313a          (t) Section 76-6-206. .H
             1314          Section 33. Coordinating S.B. 90 with S.B. 64 -- Technical amendment.
             1315          If this S.B. 90 and S.B. 64, Homeowner Association Reserve Account Amendments,
             1316      both pass and become law, it is the intent of the Legislature that the Office of Legislative
             1317      Research and General Counsel, in preparing the Utah Code database for publication:
             1318          (1) modify Section 57-8-7.5 on July 1, 2014, to read:
             1319          " 57-8-7.5. Reserve analysis -- Reserve fund.
             1320          (1) As used in this section[, "reserve]:
             1321          (a) "Reserve analysis" means an analysis to determine:
             1322          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             1323      replacing, [and] or restoring common areas and facilities that have a useful life of three years or
             1324      more[, but excluding any] and a remaining useful life of less than 30 years, if the cost cannot
             1325      cost that can reasonably be funded from the general budget or other funds of the association of
             1326      unit owners; and
             1327          [(b)] (ii) the appropriate amount of any reserve fund.



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             1328
         (b) "Reserve fund line item" means the line item in an association of unit owners'
             1329      annual budget that identifies the amount to be placed into a reserve fund.
             1330          (2) Except as otherwise provided in the declaration, a management committee shall:
             1331          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no
             1332      less frequently than every six years; and
             1333          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             1334      analysis to be conducted before July 1, 2012; and]
             1335          (b) review and, if necessary, update a previously conducted reserve analysis no less
             1336      frequently than every three years.
             1337          (3) The management committee may conduct a reserve analysis itself or may engage a
             1338      reliable person or organization, as determined by the management committee, to conduct the
             1339      reserve analysis.
             1340          (4) A reserve fund analysis shall include:
             1341          (a) a list of the components identified in the reserve analysis that will reasonably
             1342      require reserve funds;
             1343          (b) a statement of the probable remaining useful life, as of the date of the reserve
             1344      analysis, of each component identified in the reserve analysis;
             1345          (c) an estimate of the cost to repair, replace, or restore each component identified in the
             1346      reserve analysis;
             1347          (d) an estimate of the total annual contribution to a reserve fund necessary to meet the
             1348      cost to repair, replace, or restore each component identified in the reserve analysis during the
             1349      component's useful life and at the end of the component's useful life; and
             1350          (e) a reserve funding plan that recommends how the association of unit owners may
             1351      fund the annual contribution described in Subsection (4)(d).
             1352          (5) An association of unit owners shall:
             1353          (a) annually provide unit owners a summary of the most recent reserve analysis or
             1354      update; and
             1355          (b) provide a copy of the complete reserve analysis or update to a unit owner who
             1356      requests a copy.
             1357          (6) In formulating its budget each year, an association of unit owners shall include a
             1358      reserve fund line item in:



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             1359
         (a) an amount the management committee determines, based on the reserve analysis, to
             1360      be prudent; or
             1361          (b) an amount required by the declaration, if the declaration requires an amount higher
             1362      than the amount determined under Subsection (6)(a).
             1363          (7) (a) Within 45 days after the day on which an association of unit owners adopts its
             1364      annual budget, the unit owners may veto the reserve fund line item by a 51% vote of the
             1365      allocated voting interests in the association of unit owners at a special meeting called by the
             1366      unit owners for the purpose of voting whether to veto a reserve fund line item.
             1367          (b) If the unit owners veto a reserve fund line item under Subsection (7)(a) and a
             1368      reserve fund line item exists in a previously approved annual budget of the association of unit
             1369      owners that was not vetoed, the association of unit owners shall fund the reserve account in
             1370      accordance with that prior reserve fund line item.
             1371          (8) (a) Subject to Subsection (8)(b), if an association of unit owners does not comply
             1372      with the requirements of Subsection (5), (6), or (7) and fails to remedy the noncompliance
             1373      within the time specified in Subsection (8)(c), a unit owner may file an action in state court for:
             1374          (i) injunctive relief requiring the association of unit owners to comply with the
             1375      requirements of Subsection (5), (6), or (7);
             1376          (ii) $500 or actual damages, whichever is greater;
             1377          (iii) any other remedy provided by law; and
             1378          (iv) reasonable costs and attorney fees.
             1379          (b) No fewer than 90 days before the day on which a unit owner files a complaint under
             1380      Subsection (8)(a), the unit owner shall deliver written notice described in Subsection (8)(c) to
             1381      the association of unit owners.
             1382          (c) A notice under Subsection (8)(b) shall state:
             1383          (i) the requirement in Subsection (5), (6), or (7) with which the association of unit
             1384      owners has failed to comply;
             1385          (ii) a demand that the association of unit owners come into compliance with the
             1386      requirements; and
             1387          (iii) a date, no fewer than 90 days after the day on which the unit owner delivers the
             1388      notice, by which the association of unit owners shall remedy its noncompliance.
             1389          (d) In a case filed under Subsection (8)(a), a court may order an association of unit



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             1390
     owners to produce the summary of the reserve analysis or the complete reserve analysis on an
             1391      expedited basis and at the association of unit owners' expense.
             1392          [(4)] (9) (a) A management committee may not use money in a reserve fund:
             1393          (i) for daily maintenance expenses, unless a majority of the members of the association
             1394      of unit owners vote to approve the use of reserve fund money for that purpose; or
             1395          (ii) for any purpose other than the purpose for which the reserve fund was established.
             1396          (b) A management committee shall maintain a reserve fund separate from other funds
             1397      of the association of unit owners.
             1398          (c) This Subsection [(4)] (9) may not be construed to limit a management committee
             1399      from prudently investing money in a reserve fund, subject to any investment constraints
             1400      imposed by the declaration.
             1401          [(5)] (10) Subsections (2)[, (3), (4), and (6)] through (9) do not apply to an association
             1402      of unit owners during the period of declarant [management] control described in Subsection
             1403      57-8-16.5 (1).
             1404          [(6) An association of unit owners shall:]
             1405          [(a) annually, at the annual meeting of unit owners or at a special meeting of unit
             1406      owners:]
             1407          [(i) present the reserve study; and]
             1408          [(ii) provide an opportunity for unit owners to discuss reserves and to vote on whether
             1409      to fund a reserve fund and, if so, how to fund it and in what amount; and]
             1410          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             1411      indicate in the minutes any decision relating to funding a reserve fund.]
             1412          [(7)] (11) This section applies to each association of unit owners, regardless of when
             1413      the association of unit owners was created."; and
             1414          (2) modify Section 57-8a-211 on July 1, 2014, to read:
             1415          " 57-8a-211. Reserve analysis -- Reserve fund.
             1416          (1) As used in this section[, "reserve]:
             1417          (a) "Reserve analysis" means an analysis to determine:
             1418          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             1419      replacing, [and] or restoring common areas that have a useful life of three years or more[, but
             1420      excluding any cost that can] and a remaining useful life of less than 30 years, if the cost cannot



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             1421
     reasonably be funded from the association's general budget or from other association funds;
             1422      and
             1423          [(b)] (ii) the appropriate amount of any reserve fund.
             1424          (b) "Reserve fund line item" means the line item in an association's annual budget that
             1425      identifies the amount to be placed into a reserve fund.
             1426          (2) Except as otherwise provided in the governing documents, a board shall:
             1427          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no
             1428      less frequently than every six years; and
             1429          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             1430      analysis to be conducted before July 1, 2012; and]
             1431          (b) review and, if necessary, update a previously conducted reserve analysis no less
             1432      frequently than every three years.
             1433          (3) The board may conduct a reserve analysis itself or may engage a reliable person or
             1434      organization, as determined by the board, to conduct the reserve analysis.
             1435          (4) A reserve fund analysis shall include:
             1436          (a) a list of the components identified in the reserve analysis that will reasonably
             1437      require reserve funds;
             1438          (b) a statement of the probable remaining useful life, as of the date of the reserve
             1439      analysis, of each component identified in the reserve analysis;
             1440          (c) an estimate of the cost to repair, replace, or restore each component identified in the
             1441      reserve analysis;
             1442          (d) an estimate of the total annual contribution to a reserve fund necessary to meet the
             1443      cost to repair, replace, or restore each component identified in the reserve analysis during the
             1444      component's useful life and at the end of the component's useful life; and
             1445          (e) a reserve funding plan that recommends how the association may fund the annual
             1446      contribution described in Subsection (4)(d).
             1447          (5) An association shall:
             1448          (a) annually provide lot owners a summary of the most recent reserve analysis or
             1449      update; and
             1450          (b) provide a copy of the complete reserve analysis or update to a lot owner who
             1451      requests a copy.



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             1452
         (6) In formulating its budget each year, an association shall include a reserve fund line
             1453      item in:
             1454          (a) an amount the board determines, based on the reserve analysis, to be prudent; or
             1455          (b) an amount required by the governing documents, if the governing documents
             1456      requires an amount higher than the amount determined under Subsection (6)(a).
             1457          (7) (a) Within 45 days after the day on which an association adopts its annual budget,
             1458      the lot owners may veto the reserve fund line item by a 51% vote of the allocated voting
             1459      interests in the association at a special meeting called by the lot owners for the purpose of
             1460      voting whether to veto a reserve fund line item.
             1461          (b) If the lot owners veto a reserve fund line item under Subsection (7)(a) and a reserve
             1462      fund line item exists in a previously approved annual budget of the association that was not
             1463      vetoed, the association shall fund the reserve account in accordance with that prior reserve fund
             1464      line item.
             1465          (8) (a) Subject to Subsection (8)(b), if an association does not comply with the
             1466      requirements described in Subsection (5), (6), or (7) and fails to remedy the noncompliance
             1467      within the time specified in Subsection (8)(c), a lot owner may file an action in state court for:
             1468          (i) injunctive relief requiring the association to comply with the requirements of
             1469      Subsection (5), (6), or (7);
             1470          (ii) $500 or the lot owner's actual damages, whichever is greater;
             1471          (iii) any other remedy provided by law; and
             1472          (iv) reasonable costs and attorney fees.
             1473          (b) No fewer than 90 days before the day on which a lot owner files a complaint under
             1474      Subsection (8)(a), the lot owner shall deliver written notice described in Subsection (8)(c) to
             1475      the association.
             1476          (c) A notice under Subsection (8)(b) shall state:
             1477          (i) the requirement in Subsection (5), (6), or (7) with which the association has failed to
             1478      comply;
             1479          (ii) a demand that the association come into compliance with the requirements; and
             1480          (iii) a date, no fewer than 90 days after the day on which the lot owner delivers the
             1481      notice, by which the association shall remedy its noncompliance.
             1482          (d) In a case filed under Subsection (8)(a), a court may order an association to produce



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             1483
     the summary of the reserve analysis or the complete reserve analysis on an expedited basis and
             1484      at the association's expense.
             1485          [(4)] (9) (a) A board may not use money in a reserve fund:
             1486          (i) for daily maintenance expenses, unless a majority of association members vote to
             1487      approve the use of reserve fund money for that purpose; or
             1488          (ii) for any purpose other than the purpose for which the reserve fund was established.
             1489          (b) A board shall maintain a reserve fund separate from other association funds.
             1490          (c) This Subsection [(4)] (9) may not be construed to limit a board from prudently
             1491      investing money in a reserve fund, subject to any investment constraints imposed by the
             1492      governing documents.
             1493          [(5)] (10) Subsections (2)[, (3), (4), and (6)] through (9) do not apply to an association
             1494      during the period of administrative control.
             1495          [(6) An association shall:]
             1496          [(a) annually, at the annual meeting of lot owners or at a special meeting of lot
             1497      owners:]
             1498          [(i) present the reserve study; and]
             1499          [(ii) provide an opportunity for lot owners to discuss reserves and to vote on whether to
             1500      fund a reserve fund and, if so, how to fund it and in what amount; and]
             1501          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             1502      indicate in the minutes any decision relating to funding a reserve fund.]
             1503          [(7)] (11) This section applies to each association, regardless of when the association
             1504      was created."


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