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S.B. 90 Enrolled

             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;
             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
             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).
             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
             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
             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.
             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
             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 or creating aperture between adjoining
             229      units.
             230          (1) Subject to the declaration, a unit owner may, after acquiring an adjoining unit that
             231      shares a common wall with the unit owner's unit:
             232          (a) remove or alter a partition between the unit owner's unit and the acquired unit, even
             233      if the partition is entirely or partly common areas and facilities; or
             234          (b) create an aperture to the adjoining unit or portion of a unit.
             235          (2) A unit owner may not take an action under Subsection (1) if the action would:
             236          (a) impair the structural integrity or mechanical systems of the building or either unit;
             237          (b) reduce the support of any portion of the common areas and facilities or another
             238      unit; or
             239          (c) constitute a violation of Section 10-9a-608 or 17-27a-608 , as applicable, a local
             240      government land use ordinance, or a building code.
             241          (3) The management committee may require a unit owner to submit, at the unit owner's
             242      expense, a registered professional engineer's or registered architect's opinion stating that a
             243      proposed change to the unit owner's unit will not:
             244          (a) impair the structural integrity or mechanical systems of the building or either unit;
             245          (b) reduce the support or integrity of common areas and facilities; or
             246          (c) compromise structural components.
             247          (4) The management committee may require a unit owner to pay all of the legal and
             248      other expenses of the association of unit owners related to a proposed alteration to the unit or
             249      building under this section.
             250          (5) An action under Subsection (1) does not change an assessment or voting right
             251      attributable to the unit owner's unit or the acquired unit, unless the declaration provides
             252      otherwise.
             253          Section 3. Section 57-8-6.7 is enacted to read:


             254          57-8-6.7. Limit on fee for approval of plans.
             255          (1) As used in this section:
             256          (a) "Plan fee" means a fee that an association of unit owners charges for review and
             257      approval of unit plans.
             258          (b) "Unit plans" means plans:
             259          (i) for the construction or improvement of a unit; and
             260          (ii) that are required to be approved by the association of unit owners before the unit
             261      construction or improvement may occur.
             262          (2) An association of unit owners may not charge a plan fee that exceeds the actual cost
             263      of reviewing and approving the unit plans.
             264          Section 4. Section 57-8-7 is amended to read:
             265           57-8-7. Common areas and facilities.
             266          (1) As used in this section:
             267          (a) "Emergency repairs" means any repairs [which] that, if not made in a timely
             268      manner, will likely result in immediate and substantial damage to the common areas and
             269      facilities or to another unit or units[; and].
             270          (b) "Reasonable notice" means:
             271          (i) written notice [which] that is hand delivered to the unit at least 24 hours prior to the
             272      proposed entry[.]; or
             273          (ii) in the case of emergency repairs, notice that is reasonable under the circumstances.
             274          (2) Each unit owner shall be entitled to an undivided interest in the common areas and
             275      facilities in the percentages or fractions expressed in the declaration. The declaration may
             276      allocate to each unit an undivided interest in the common areas and facilities proportionate to
             277      either the size or par value of the unit. Otherwise, the declaration shall allocate to each unit an
             278      equal undivided interest in the common areas and facilities, subject to the following exception:
             279      each convertible space depicted on the condominium plat shall be allocated an undivided
             280      interest in the common areas and facilities proportionate to the size of the space vis-a-vis the
             281      aggregate size of all units so depicted, while the remaining undivided interest in the common


             282      areas and facilities shall be allocated equally among the other units so depicted. The undivided
             283      interest in the common areas and facilities allocated in accordance with this Subsection (2)
             284      shall add up to one if stated as fractions or to 100% if stated as percentages. If an equal
             285      undivided interest in the common areas and facilities is allocated to each unit, the declaration
             286      may simply state that fact and need not express the fraction or percentage so allocated.
             287      Otherwise, the undivided interest allocated to each unit shall be reflected by a table in the
             288      declaration, or by an exhibit or schedule accompanying the declaration and recorded
             289      simultaneously with it, containing columns. The first column shall identify the units, listing
             290      them serially or grouping them together in the case of units to which identical undivided
             291      interests are allocated. Corresponding figures in the second and third columns shall set forth
             292      the respective sizes or par values of those units and the fraction or percentage of undivided
             293      interest in the common areas and facilities allocated thereto.
             294          (3) Except as otherwise expressly provided by this act, the undivided interest of each
             295      unit owner in the common areas and facilities as expressed in the declaration shall have a
             296      permanent character and shall not be altered without the consent of two-thirds of the unit
             297      owners expressed in an amended declaration duly recorded. The undivided interest in the
             298      common areas and facilities shall not be separated from the unit to which it appertains and shall
             299      be considered to be conveyed or encumbered or released from liens with the unit even though
             300      such interest is not expressly mentioned or described in the conveyance or other instrument. A
             301      time period unit may not be further divided into shorter time periods by a conveyance or
             302      disclaimer.
             303          (4) The common areas and facilities shall remain undivided and no unit owner or any
             304      other person shall bring any action for partition or division of any part thereof, unless the
             305      property has been removed from the provisions of this act as provided in Sections 57-8-22 and
             306      57-8-31 . Any covenants to the contrary shall be null and void.
             307          (5) Each unit owner may use the common areas and facilities in accordance with the
             308      purpose for which they were intended without hindering or encroaching upon the lawful rights
             309      of the other unit owners.


             310          (6) The necessary work of maintenance, repair, and replacement of the common areas
             311      and facilities and the making of any additions or improvements thereon shall be carried out
             312      only as provided in this [act] chapter or in the declaration or bylaws.
             313          (7) Except as otherwise provided in the declaration or Section 57-8-43 :
             314          (a) an association of unit owners is responsible for the maintenance, repair, and
             315      replacement of common areas and facilities; and
             316          (b) a unit owner is responsible for the maintenance, repair, and replacement of the unit
             317      owner's unit.
             318          [(7) The] (8) After reasonable notice to the occupant of the unit being entered, the
             319      manager or management committee [shall have the right to have] may access [to each] a unit:
             320          (a) from time to time during reasonable hours [and after reasonable notice to the
             321      occupant of the unit being entered], as may be necessary for the maintenance, repair, or
             322      replacement of any of the common areas and facilities; or
             323          (b) for making emergency repairs [necessary to prevent damage to the common areas
             324      and facilities or to another unit or units, provided that a reasonable effort is made to provide
             325      notice to the occupant of the unit prior to entry].
             326          (9) (a) An association of unit owners is liable to repair damage it causes to the common
             327      areas and facilities or to a unit the association of unit owners uses to access the common areas
             328      and facilities.
             329          (b) An association of unit owners shall repair damage described in Subsection (9)(a)
             330      within a time that is reasonable under the circumstances.
             331          Section 5. Section 57-8-7.5 is amended to read:
             332           57-8-7.5. Reserve analysis -- Reserve fund.
             333          (1) As used in this section[,]:
             334          (a) "Reserve analysis" means an analysis to determine:
             335          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             336      replacing, and restoring common areas and facilities that have a useful life of three years or
             337      more and a remaining useful life of less than 30 years, but excluding any cost that can


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


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


             394      applicable.
             395          (1) An association of unit owners may amend the declaration to make applicable to the
             396      association of unit owners a provision of this chapter that is enacted after the creation of the
             397      association of unit owners, by complying with:
             398          (a) the amendment procedures and requirements specified in the declaration and
             399      applicable provisions of this chapter; or
             400          (b) the amendment procedures and requirements of this chapter, if the declaration
             401      being amended does not contain amendment procedures and requirements.
             402          (2) If an amendment under Subsection (1) adopts a specific section of this chapter:
             403          (a) the amendment grants a right, power, or privilege permitted by that specific section;
             404      and
             405          (b) all correlative obligations, liabilities, and restrictions in that section also apply.
             406          Section 8. Section 57-8-23 is amended to read:
             407           57-8-23. Removal no bar to subsequent resubmission.
             408          The removal provided for in Section 57-8-22 [shall] does not bar the subsequent
             409      resubmission of the property to the provisions of this [act] chapter.
             410          Section 9. Section 57-8-40 is amended to read:
             411           57-8-40. Organization of an association of unit owners under other law --
             412      Reorganization.
             413          (1) As used in this section, "organizational documents" means the documents related to
             414      the formation or operation of a nonprofit corporation or other legal entity formed by the
             415      management committee or the declarant.
             416          (2) If permitted, required, or acknowledged by the declaration, the management
             417      committee may organize an association of unit owners [into] as:
             418          (a) a nonprofit corporation in accordance with Title 16, Chapter 6a, Utah Revised
             419      Nonprofit Corporation Act[,]; or [other]
             420          (b) any other entity organized under other law.
             421          (3) Organizational documents for a nonprofit corporation or other entity formed in


             422      accordance with Subsection (2) shall, to the extent possible, not conflict with the rights and
             423      obligations found in the declaration and any of the association's bylaws recorded at the time of
             424      the formation of a nonprofit corporation or other entity [under Subsection (2)].
             425          (4) Notwithstanding any conflict with the declaration or any recorded bylaws, the
             426      organizational documents of [an] a nonprofit corporation or other entity formed in accordance
             427      with Subsection (2) may include any additional indemnification and liability limitation
             428      provision [for the management committee members and officers of the association that is
             429      permitted by the chapter under which the association is organized] for:
             430          (a) board members, directors, and officers[,]; or
             431          (b) similar persons in a position of control.
             432          (5) In the event of a conflict between this chapter's provisions, a statute under which
             433      the association of unit owners is organized, documents concerning the organization of the
             434      association of unit owners as a nonprofit corporation or other entity, the declaration, the
             435      bylaws, and association rules, the following order prevails:
             436          (a) this chapter controls over a conflicting provision found in any of the sources listed
             437      in Subsections (5)(b) through (f);
             438          (b) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, or any other law
             439      under which an entity is organized controls over a conflicting provision in any of the sources
             440      listed in Subsections (5)(c) through (f);
             441          (c) an organizational document filed in accordance with Title 16, Chapter 6a, Utah
             442      Revised Nonprofit Corporation Act, or any other law under which an entity is organized
             443      controls over a conflicting provision in any of the sources listed in Subsections (5)(d) through
             444      (f);
             445          (d) the declaration controls over a conflicting provision in any of the sources listed in
             446      Subsections (5)(e) or (f);
             447          (e) the bylaws control over a conflicting provision in association rules; and
             448          (f) the association rules yield to a conflicting provision in any of the sources listed in
             449      Subsection (5)(a) through (e).


             450          (6) Immediately upon the legal formation of an entity in compliance with this section,
             451      the association and unit owners are subject to any right, obligation, procedure, and remedy
             452      applicable to that entity.
             453          (7) (a) A form "articles of incorporation" or similar organizational document attached
             454      to a declaration may be modified by the management committee for filing or re-filing if the
             455      modified version is otherwise consistent with this section's provisions.
             456          (b) An organizational document attached to a declaration that is filed and concerns the
             457      organization of an entity may be amended in accordance with its own terms or any applicable
             458      law, notwithstanding the fact that the organizational document might be recorded.
             459          (c) Except for amended bylaws, an initial or amended organizational document
             460      properly filed with the state does not need to be recorded.
             461          (8) This section applies to the reorganization of an association of unit owners
             462      previously organized if the entity's status is terminated or dissolved without the possibility of
             463      reinstatement.
             464          (9) (a) This section applies to all condominium projects, whether established before or
             465      after May 5, 2008.
             466          (b) This section does not validate or invalidate the organization of an association that
             467      occurred before May 5, 2008, whether or not the association was otherwise in compliance with
             468      this section.
             469          Section 10. Section 57-8-43 is amended to read:
             470           57-8-43. Insurance.
             471          (1) As used in this section, "reasonably available" means available using typical
             472      insurance carriers and markets, irrespective of the ability of the association of unit owners to
             473      pay.
             474          (2) (a) This section applies to an insurance policy or combination of insurance policies:
             475          [(a)] (i) issued or renewed on or after July 1, 2011; and
             476          [(b)] (ii) issued to or renewed by:
             477          [(i)] (A) a unit owner; or


             478          [(ii)] (B) an association of unit owners, regardless of when the association of unit
             479      owners is formed.
             480          (b) Unless otherwise provided in the declaration, this section does not apply to a
             481      commercial condominium project insured under a policy or combination of policies issued or
             482      renewed on or after July 1, 2013.
             483          (3) Beginning not later than the day on which the first unit is conveyed to a person
             484      other than a declarant, an association of unit owners shall maintain, to the extent reasonably
             485      available:
             486          (a) subject to Subsection (9), blanket property insurance or guaranteed replacement
             487      cost insurance on the physical structures in the condominium project, including common areas
             488      and facilities, limited common areas and facilities, and units, insuring against all risks of direct
             489      physical loss commonly insured against, including fire and extended coverage perils; and
             490          (b) subject to Subsection (10), liability insurance[, including medical payments
             491      insurance] covering all occurrences commonly insured against for death, bodily injury, and
             492      property damage arising out of or in connection with the use, ownership, or maintenance of the
             493      common areas and facilities.
             494          (4) If an association of unit owners becomes aware that property insurance under
             495      Subsection (3)(a) or liability insurance under Subsection (3)(b) is not reasonably available, the
             496      association of unit owners shall, within seven calendar days after becoming aware, give all unit
             497      owners notice, as provided in Section 57-8-42 , that the insurance is not reasonably available.
             498          (5) (a) The declaration or bylaws may require the association of unit owners to carry
             499      other types of insurance in addition to those described in Subsection (3).
             500          (b) In addition to any type of insurance coverage or limit of coverage provided in the
             501      declaration or bylaws and subject to the requirements of this section, an association of unit
             502      owners may, as the management committee considers appropriate, obtain:
             503          (i) an additional type of insurance than otherwise required; or
             504          (ii) a policy with greater coverage than otherwise required.
             505          (6) Unless a unit owner is acting within the scope of the unit owner's authority on


             506      behalf of an association of unit owners, a unit owner's act or omission may not:
             507          (a) void a property insurance policy under Subsection (3)(a) or a liability insurance
             508      policy under Subsection (3)(b); or
             509          (b) be a condition to recovery under a policy.
             510          (7) An insurer under a property insurance policy or liability insurance policy obtained
             511      by an association of unit owners under this section waives the insurer's right to subrogation
             512      under the policy against [any unit owner or member of the unit owner's household.]:
             513          (a) any person residing with the unit owner, if the unit owner resides in the unit; and
             514          (b) the unit owner.
             515          (8) (a) An insurance policy issued to an association of unit owners may not be
             516      inconsistent with any provision of this section.
             517          (b) A provision of a declaration, bylaw, rule, or other document governing the
             518      association of unit owners that is contrary to a provision of this section has no effect.
             519          (c) [A] Neither the governing documents nor a property insurance or liability insurance
             520      policy issued to an association of unit owners may [not] prevent a unit owner from obtaining
             521      insurance for the unit owner's own benefit.
             522          (9) (a) This Subsection (9) applies to property insurance required under Subsection
             523      (3)(a).
             524          [(b) The property covered by property insurance shall include any property that, under
             525      the declaration, is required to become common areas and facilities.]
             526          [(c)] (b) The total amount of coverage provided by blanket property insurance or
             527      guaranteed replacement cost insurance may not be less than 100% of the full replacement cost
             528      of the insured property at the time the insurance is purchased and at each renewal date,
             529      excluding:
             530          (i) items normally excluded from property insurance policies[.]; and
             531          (ii) unless otherwise provided in the declaration, any commercial condominium unit in
             532      a mixed-use condominium project, including any fixture, improvement, or betterment in a
             533      commercial condominium unit in a mixed-use condominium project.


             534          [(d)] (c) Property insurance shall include coverage for any fixture, improvement, or
             535      betterment installed [by a unit owner to a] at any time to a unit or to a limited common area
             536      associated with a unit, whether installed in the original construction or in any remodel or later
             537      alteration, including a floor covering, cabinet, light fixture, electrical fixture, heating or
             538      plumbing fixture, paint, wall covering, window, and any other item permanently part of or
             539      affixed to a unit or to a limited common element associated with a unit.
             540          [(e)] (d) Notwithstanding anything in this section and unless otherwise provided in the
             541      declaration, an association of unit owners is not required to obtain property insurance for a loss
             542      to a unit that is not physically attached to:
             543          (i) another unit; or
             544          (ii) [an above-ground] a structure that is part of a common area or facility.
             545          [(f)] (e) Each unit owner is an insured person under a property insurance policy.
             546          [(g)] (f) If a loss occurs that is covered by a property insurance policy in the name of an
             547      association of unit owners and another property insurance policy in the name of a unit owner:
             548          (i) the association's policy provides primary insurance coverage; and
             549          (ii) notwithstanding Subsection (9)[(g)](f)(i)[,] and subject to Subsection (9)(g):
             550          (A) the unit owner is responsible for the deductible of the association of unit owners;
             551      and
             552          (B) building property coverage, often referred to as coverage A, of the unit owner's
             553      policy applies to that portion of the loss attributable to the policy deductible of the association
             554      of unit owners.
             555          [(h)] (g) (i) As used in this Subsection (9)[(h)](g) and Subsection (9)(j):
             556          (A) "Covered loss" means a loss, resulting from a single event or occurrence, that is
             557      covered by a property insurance policy of an association of unit owners.
             558          (B) "Unit damage" means damage to a unit or to a limited common area or facility
             559      [applicable] appurtenant to that unit, or both.
             560          (C) "Unit damage percentage" means the percentage of total damage resulting in a
             561      covered loss that is attributable to unit damage.


             562          (ii) A unit owner who owns a unit that has suffered unit damage as part of a covered
             563      loss is responsible for an amount calculated by applying the unit damage percentage for that
             564      unit to the amount of the deductible under the property insurance policy of the association of
             565      unit owners.
             566          (iii) If a unit owner does not pay the amount required under Subsection (9)[(h)](g)(ii)
             567      within 30 days after substantial completion of the repairs to the unit or limited common areas
             568      and facilities appurtenant to that unit, an association of unit owners may levy an assessment
             569      against the unit owner for that amount.
             570          [(i)] (h) An association of unit owners shall set aside an amount equal to the amount of
             571      the association's property insurance policy deductible or, if the policy deductible exceeds
             572      $10,000, [whichever is less] an amount not less than $10,000.
             573          [(j)] (i) (i) An association of unit owners shall provide notice in accordance with
             574      Section 57-8-42 to each unit owner of the unit owner's obligation under Subsection (9)[(h)](g)
             575      for the association's policy deductible and of any change in the amount of the deductible.
             576          (ii) (A) An association of unit owners that fails to provide notice as provided in
             577      Subsection (9)[(j)](i)(i) is responsible for the [amount] portion of the deductible [increase] that
             578      the association of unit owners could have assessed to a unit owner under Subsection
             579      (9)[(h)](g), but only to the extent that the unit owner does not have insurance coverage that
             580      would otherwise apply under this Subsection (9).
             581          (B) Notwithstanding Subsection (9)(i)(ii), an association of unit owners that provides
             582      notice of the association's policy deductible, as required under Subsection (9)(i)(i), but fails to
             583      provide notice of a later increase in the amount of the deductible is responsible only for the
             584      amount of the increase for which notice was not provided.
             585          (iii) The failure of an association of unit owners to provide notice as provided in
             586      Subsection (9)[(j)](i)(i) may not be construed to invalidate any other provision of this section.
             587          [(k)] (j) If, in the exercise of the business judgment rule, the management committee
             588      determines that a [claim] covered loss is likely not to exceed the property insurance policy
             589      deductible of the association of unit owners and until it becomes apparent the covered loss


             590      exceeds the deductible of the property insurance of the association of unit owners and a claim
             591      is submitted to the property insurance insurer of the association of unit owners:
             592          (i) [the] a unit owner's policy is considered the policy for primary coverage [to the
             593      amount of the policy deductible of the association of unit owners] for a loss occurring to the
             594      unit owner's unit or to a limited common area or facility appurtenant to the unit;
             595          (ii) the association of unit owners is responsible for any covered loss to any common
             596      areas and facilities;
             597          [(ii)] (iii) a unit owner who does not have a policy to cover the [property insurance
             598      policy deductible of the association of unit owners is responsible for the loss to the amount of
             599      the policy deductible of the association of unit owners, as provided in Subsection (9)(h)]
             600      damage to that unit owner's unit and appurtenant limited common areas and facilities is
             601      responsible for that damage, and the association of unit owners may, as provided in Subsection
             602      (9)(g)(iii), recover any payments the association of unit owners makes to remediate that unit
             603      and appurtenant limited common areas and facilities; and
             604          [(iii)] (iv) the association of unit owners need not tender the claim to the association's
             605      insurer.
             606          [(l)] (k) (i) An insurer under a property insurance policy issued to an association of unit
             607      owners shall adjust with the association of unit owners a loss covered under the association's
             608      policy.
             609          (ii) Notwithstanding Subsection (9)[(l)](k)(i), the insurance proceeds for a loss under a
             610      property insurance policy of an association of unit owners:
             611          (A) are payable to an insurance trustee that the association of unit owners designates
             612      or, if no trustee is designated, to the association of unit owners; and
             613          (B) may not be payable to a holder of a security interest.
             614          (iii) An insurance trustee or an association of unit owners shall hold any insurance
             615      proceeds in trust for the association of unit owners, unit owners, and lien holders.
             616          (iv) (A) [Insurance] If damaged property is to be repaired or restored, insurance
             617      proceeds shall be disbursed first for the repair or restoration of the damaged property.


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


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


             674      allocated to the unit by the declaration of the consolidating association of unit owners.
             675          (4) A declaration of consolidation under Subsection (2) is not effective until it is
             676      recorded in the office of each applicable county recorder.
             677          (5) Unless otherwise provided in the declaration of consolidation, the consolidated
             678      association of unit owners resulting from a consolidation under this section:
             679          (a) is the legal successor for all purposes of all of the consolidating associations of unit
             680      owners;
             681          (b) the operations and activities of all of the consolidating associations of unit owners
             682      shall be consolidated into the consolidated association of unit owners; and
             683          (c) the consolidated association of unit owners holds all powers, rights, obligations,
             684      assets, and liabilities of all consolidating associations of unit owners.
             685          Section 12. Section 57-8a-102 is amended to read:
             686           57-8a-102. Definitions.
             687          As used in this chapter:
             688          (1) (a) "Assessment" means a charge imposed or levied:
             689          (i) by the association;
             690          (ii) on or against a lot or a lot owner; and
             691          (iii) pursuant to a governing document recorded with the county recorder.
             692          (b) "Assessment" includes:
             693          (i) a common expense; and
             694          (ii) an amount assessed against a lot owner under Subsection 57-8a-405 [(8)](7).
             695          (2) (a) Except as provided in Subsection (2)(b), "association" means a corporation or
             696      other legal entity, [each] any member of which:
             697          (i) is an owner of a residential lot located within the jurisdiction of the association, as
             698      described in the governing documents; and
             699          (ii) by virtue of membership or ownership of a residential lot is obligated to pay:
             700          (A) real property taxes;
             701          (B) insurance premiums;


             702          (C) maintenance costs; or
             703          (D) for improvement of real property not owned by the member.
             704          (b) "Association" or "homeowner association" does not include an association created
             705      under Title 57, Chapter 8, Condominium Ownership Act.
             706          (3) "Board of directors" or "board" means the entity, regardless of name, with primary
             707      authority to manage the affairs of the association.
             708          (4) "Common areas" means property that the association:
             709          (a) owns;
             710          (b) maintains;
             711          (c) repairs; or
             712          (d) administers.
             713          (5) "Common expense" means costs incurred by the association to exercise any of the
             714      powers provided for in the association's governing documents.
             715          (6) "Declarant":
             716          (a) means the person who executes a declaration and submits it for recording in the
             717      office of the recorder of the county in which the property described in the declaration is
             718      located; and
             719          (b) includes the person's successor and assign.
             720          (7) (a) "Governing documents" means a written instrument by which the association
             721      may:
             722          (i) exercise powers; or
             723          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
             724      association.
             725          (b) "Governing documents" includes:
             726          (i) articles of incorporation;
             727          (ii) bylaws;
             728          (iii) a plat;
             729          (iv) a declaration of covenants, conditions, and restrictions; and


             730          (v) rules of the association.
             731          (8) "Judicial foreclosure" means a foreclosure of a lot:
             732          (a) for the nonpayment of an assessment; and
             733          (b) (i) in the manner provided by law for the foreclosure of a mortgage on real
             734      property; and
             735          (ii) as provided in Part 3, Collection of Assessments.
             736          (9) "Lease" or "leasing" means regular, exclusive occupancy of a lot:
             737          (a) by a person or persons other than the owner; and
             738          (b) for which the owner receives a consideration or benefit, including a fee, service,
             739      gratuity, or emolument.
             740          (10) "Limited common areas" means common areas described in the declaration and
             741      allocated for the exclusive use of one or more lot owners.
             742          (11) "Lot" means:
             743          (a) a lot, parcel, plot, or other division of land:
             744          (i) designated for separate ownership or occupancy; and
             745          (ii) (A) shown on a recorded subdivision plat; or
             746          (B) the boundaries of which are described in a recorded governing document; or
             747          (b) (i) a unit in a condominium association if the condominium association is a part of
             748      a development; or
             749          (ii) a unit in a real estate cooperative if the real estate cooperative is part of a
             750      development.
             751          (12) "Mixed-use project" means a project under this chapter that has both residential
             752      and commercial lots in the project.
             753          [(12)] (13) "Nonjudicial foreclosure" means the sale of a lot:
             754          (a) for the nonpayment of an assessment; and
             755          (b) (i) in the same manner as the sale of trust property under Sections 57-1-19 through
             756      57-1-34 ; and
             757          (ii) as provided in Part 3, Collection of Assessments.


             758          [(13)] (14) "Residential lot" means a lot, the use of which is limited by law, covenant,
             759      or otherwise to primarily residential or recreational purposes.
             760          Section 13. Section 57-8a-107 is enacted to read:
             761          57-8a-107. Amending the declaration to make provisions of this chapter
             762      applicable.
             763          (1) An association may amend the declaration to make applicable to the association a
             764      provision of this chapter that is enacted after the creation of the association, by complying with:
             765          (a) the amendment procedures and requirements specified in the declaration and
             766      applicable provisions of this chapter; or
             767          (b) the amendment procedures and requirements of this chapter, if the declaration
             768      being amended does not contain amendment procedures and requirements.
             769          (2) If an amendment under Subsection (1) adopts a specific section of this chapter:
             770          (a) the amendment grants a right, power, or privilege permitted by that specific section;
             771      and
             772          (b) all correlative obligations, liabilities, and restrictions in that section also apply.
             773          Section 14. Section 57-8a-108 is enacted to read:
             774          57-8a-108. Rules against perpetuities and unreasonable restraints -- Insubstantial
             775      failure to comply.
             776          (1) The rule against perpetuities and the rule against unreasonable restraints on
             777      alienation of real estate may not defeat a provision of a governing document.
             778          (2) (a) A declaration that fails to comply with this chapter does not render a title to a lot
             779      and common areas unmarketable or otherwise affect the title if the failure is insubstantial.
             780          (b) This chapter does not affect whether a substantial failure impairs marketability.
             781          Section 15. Section 57-8a-109 is enacted to read:
             782          57-8a-109. Limit on fee for approval of plans.
             783          (1) As used in this section:
             784          (a) "Lot plans" means plans:
             785          (i) for the construction or improvement of a lot; and


             786          (ii) that are required to be approved by the association before the lot construction or
             787      improvement may occur.
             788          (b) "Plan fee" means a fee that an association charges for review and approval of lot
             789      plans.
             790          (2) An association may not charge a plan fee that exceeds the actual cost of reviewing
             791      and approving the lot plans.
             792          Section 16. Section 57-8a-211 is amended to read:
             793     
Part 2. Administrative Provisions

             794           57-8a-211. Reserve analysis -- Reserve fund.
             795          (1) As used in this section[,]:
             796          (a) "Reserve analysis" means an analysis to determine:
             797          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             798      replacing, and restoring common areas that have a useful life of three years or more and a
             799      remaining useful life of less than 30 years, but excluding any cost that can reasonably be
             800      funded from the association's general budget or from other association funds; and
             801          [(b)] (ii) the appropriate amount of any reserve fund.
             802          (b) "Reserve fund line item" means the line item in an association's budget that
             803      identifies the amount to be placed into a reserve fund.
             804          (2) Except as otherwise provided in the governing documents, a board shall:
             805          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no
             806      less frequently than every six years; and
             807          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             808      analysis to be conducted before July 1, 2012; and]
             809          (b) review and, if necessary, update a previously conducted reserve analysis no less
             810      frequently than every three years.
             811          (3) The board may conduct a reserve analysis itself or may engage a reliable person or
             812      organization, as determined by the board, to conduct the reserve analysis.
             813          (4) (a) A board may not use money in a reserve fund:


             814          (i) for daily maintenance expenses, unless a majority of association members vote to
             815      approve the use of reserve fund money for that purpose; or
             816          (ii) for any purpose other than the purpose for which the reserve fund was established.
             817          (b) A board shall maintain [a] reserve [fund] funds separate from other association
             818      funds.
             819          (c) This Subsection (4) may not be construed to limit a board from prudently investing
             820      money in a reserve fund, subject to any investment constraints imposed by the governing
             821      documents.
             822          (5) An association shall:
             823          (a) annually provide lot owners a summary of the most recent reserve analysis or
             824      update; and
             825          (b) provide a copy of the complete reserve analysis or update to a lot owner who
             826      requests a copy.
             827          (6) In formulating its budget each year, an association shall include a reserve fund line
             828      item in:
             829          (a) an amount the board determines, based on the reserve analysis, to be prudent; or
             830          (b) an amount required by the governing documents, if the governing documents
             831      require an amount higher than the amount determined under Subsection (6)(a)(i).
             832          [(5)] (7) Subsections (2)[, (3), (4), and] through (6) do not apply to an association
             833      during the period of administrative control.
             834          [(6) An association shall:]
             835          [(a) annually, at the annual meeting of lot owners or at a special meeting of lot
             836      owners:]
             837          [(i) present the reserve study; and]
             838          [(ii) provide an opportunity for lot owners to discuss reserves and to vote on whether to
             839      fund a reserve fund and, if so, how to fund it and in what amount; and]
             840          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             841      indicate in the minutes any decision relating to funding a reserve fund.]


             842          [(7)] (8) This section applies to each association, regardless of when the association
             843      was created.
             844          Section 17. Section 57-8a-212 is amended to read:
             845           57-8a-212. Content of a declaration.
             846          (1) An initial declaration recorded on or after May 10, 2011 shall contain:
             847          (a) the name of the project;
             848          (b) the name of the association;
             849          (c) a statement that the project is not a cooperative;
             850          (d) a statement indicating any portions of the project that contain condominiums
             851      governed by Chapter 8, Condominium Ownership Act;
             852          (e) if the declarant desires to reserve the option to expand the project, a statement
             853      reserving the option to expand the project;
             854          (f) the name of each county in which any part of the project is located;
             855          (g) a legally sufficient description of the real estate included in the project;
             856          (h) a description of any limited common areas and any real estate that is or is required
             857      to become common areas;
             858          (i) any restriction on the alienation of a lot, including a restriction on leasing; and
             859          (j) (i) an appointment of a trustee who qualifies under Subsection 57-1-21 (1)(a)(i) or
             860      (iv); and
             861          (ii) the following statement: "The declarant hereby conveys and warrants pursuant to
             862      U.C.A. Sections 57-1-20 and [ 57-8a-402 ] 57-8a-302 to (name of trustee), with power of sale,
             863      the lot and all improvements to the lot for the purpose of securing payment of assessments
             864      under the terms of the declaration."
             865          (2) A declaration may contain any other information the declarant considers
             866      appropriate, including any restriction on the use of a lot, the number of persons who may
             867      occupy a lot, or other qualifications of a person who may occupy a lot.
             868          (3) The location of a limited common area or real estate described in Subsection (1)(g)
             869      may be shown on a subdivision plat.


             870          Section 18. Section 57-8a-220 is amended to read:
             871           57-8a-220. Creditor approval may be required for lot owner or association action
             872      under declaration -- Creditor approval presumed in certain circumstances -- Notice to
             873      creditor or creditor's successor.
             874          (1) (a) Subject to Subsection (1)(b), a declaration may:
             875          (i) condition the effectiveness of lot owners' actions specified in the declaration on the
             876      approval of a specified number or percentage of lenders holding a security interest in the lots;
             877      or
             878          (ii) condition the effectiveness of association actions specified in the declaration on the
             879      approval of a specified number or percentage of lenders that have extended credit to the
             880      association.
             881          (b) A condition under Subsection (1)(a) may not:
             882          (i) deny or delegate the lot owners' or board's control over the association's general
             883      administrative affairs;
             884          (ii) prevent the association or board from commencing, intervening in, or settling any
             885      litigation or proceeding; or
             886          (iii) prevent an insurance trustee or the association from receiving or distributing
             887      insurance proceeds under Subsection 57-8a-405 [(12)](11).
             888          (c) A condition under Subsection (1)(a) does not violate a prohibition under Subsection
             889      (1)(b) by:
             890          (i) requiring the association to deposit the association's assessments before default with
             891      the lender assigned the income; or
             892          (ii) requiring the association to increase an assessment at the lender's direction by an
             893      amount reasonably necessary to pay the loan in accordance with the loan terms.
             894          (d) This Subsection (1) applies to:
             895          (i) an association formed before, on, or after May 10, 2011; and
             896          (ii) documents created and recorded before, on, or after May 10, 2011.
             897          (2) Subject to this chapter and applicable law, a lender who has extended credit to an


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


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


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


             982      or replacement of any of the common areas; or
             983          (b) for making an emergency repair.
             984          (4) (a) An association is liable to repair damage it causes to the common areas or to a
             985      lot the association uses to access the common areas.
             986          (b) An association shall repair damage described in Subsection (4)(a) within a time that
             987      is reasonable under the circumstances.
             988          (5) Subsections (2), (3), and (4) do not apply during the period of administrative
             989      control as defined in Section 57-8a-104 .
             990          Section 22. Section 57-8a-402 is amended to read:
             991           57-8a-402. Applicability of part.
             992          (1) This part applies to an insurance policy or combination of insurance policies:
             993          (a) issued or renewed on or after July 1, 2011; and
             994          (b) issued to or renewed by:
             995          (i) a lot owner; or
             996          (ii) an association, regardless of when the association is formed.
             997          (2) [This] Unless otherwise provided in the declaration, this part does not apply to a
             998      project if all of the project's lots are restricted to entirely nonresidential use.
             999          (3) Subject to Subsection (4), this part does not apply to a project if:
             1000          (a) the initial declaration for the project is recorded before January 1, 2012;
             1001          (b) the project includes attached dwellings; and
             1002          (c) the declaration requires each lot owner to insure the lot owner's dwelling.
             1003          (4) (a) An association [that is subject to a declaration recorded before January 1, 2012]
             1004      to which this part does not apply under Subsection (3) may amend the declaration, as provided
             1005      in the declaration and applicable law, to subject the association to this part.
             1006          (b) During the period of administrative control, an amendment under Subsection (4)(a)
             1007      requires the consent of the declarant.
             1008          Section 23. Section 57-8a-403 is amended to read:
             1009           57-8a-403. Property and liability insurance required -- Notice if insurance not


             1010      reasonably available.
             1011          (1) Beginning not later than the day on which the first lot is conveyed to a person other
             1012      than a declarant, an association shall maintain, to the extent reasonably available:
             1013          (a) subject to Section 57-8a-405 , blanket property insurance or guaranteed replacement
             1014      cost insurance on the physical structure of all attached dwellings, limited common areas
             1015      appurtenant to a dwelling on a lot, and common areas in the project, insuring against all risks
             1016      of direct physical loss commonly insured against, including fire and extended coverage perils;
             1017      and
             1018          (b) subject to Section 57-8a-406 , liability insurance[, including medical payments
             1019      insurance] covering all occurrences commonly insured against for death, bodily injury, and
             1020      property damage arising out of or in connection with the use, ownership, or maintenance of the
             1021      common areas.
             1022          (2) If an association becomes aware that property insurance under Subsection (1)(a) or
             1023      liability insurance under Subsection (1)(b) is not reasonably available, the association shall,
             1024      within seven calendar days after becoming aware, give all lot owners notice, as provided in
             1025      Section [ 57-8a-215 ] 57-8a-214 , that the insurance is not reasonably available.
             1026          Section 24. Section 57-8a-404 is amended to read:
             1027           57-8a-404. Other and additional insurance -- Limit on effect of lot owner act or
             1028      omission -- Insurer's subrogation waiver -- Inconsistent provisions.
             1029          (1) (a) The declaration or bylaws may require the association to carry other types of
             1030      insurance in addition to those described in Section 57-8a-403 .
             1031          (b) In addition to any type of insurance coverage or limit of coverage provided in the
             1032      declaration or bylaws and subject to the requirements of this part, an association may, as the
             1033      board considers appropriate, obtain:
             1034          (i) an additional type of insurance than otherwise required; or
             1035          (ii) a policy with greater coverage than otherwise required.
             1036          (2) Unless a lot owner is acting within the scope of the lot owner's authority on behalf
             1037      of an association, a lot owner's act or omission may not:


             1038          (a) void a property insurance policy under Subsection 57-8a-403 (1)(a) or a liability
             1039      insurance policy under Subsection 57-8a-403 (1)(b); or
             1040          (b) be a condition to recovery under a policy.
             1041          (3) An insurer under a property insurance policy or liability insurance policy obtained
             1042      by an association under this part waives its right to subrogation under the policy against [any
             1043      lot owner or member of the lot owner's household.]:
             1044          (a) any person residing with a lot owner, if the lot owner resides on the lot; and
             1045          (b) the lot owner.
             1046          (4) (a) An insurance policy issued to an association may not be inconsistent with any
             1047      provision of this part.
             1048          (b) A provision of a governing document that is contrary to a provision of this part has
             1049      no effect.
             1050          (c) [A] Neither the governing documents nor a property insurance or liability insurance
             1051      policy issued to an association may [not] prevent a lot owner from obtaining insurance for the
             1052      lot owner's own benefit.
             1053          Section 25. Section 57-8a-405 is amended to read:
             1054           57-8a-405. Property insurance.
             1055          (1) This section applies to property insurance required under Subsection
             1056      57-8a-403 (1)(a).
             1057          [(2) The property covered by property insurance shall include any property that, under
             1058      the declaration, is required to become common areas.]
             1059          [(3)] (2) The total amount of coverage provided by blanket property insurance or
             1060      guaranteed replacement cost insurance may not be less than 100% of the full replacement cost
             1061      of the insured property at the time the insurance is purchased and at each renewal date,
             1062      excluding:
             1063          (a) items normally excluded from property insurance policies[.]; and
             1064          (b) unless otherwise provided in the declaration, any commercial lot in a mixed-use
             1065      project, including any fixture, improvement, or betterment in a commercial lot in a mixed-use


             1066      project.
             1067          [(4)] (3) Property insurance shall include coverage for any fixture, improvement, or
             1068      betterment installed [by a lot owner] at any time to an attached dwelling or to a limited
             1069      common area appurtenant to a dwelling on a lot, whether installed in the original construction
             1070      or in any remodel or later alteration, including a floor covering, cabinet, light fixture, electrical
             1071      fixture, heating or plumbing fixture, paint, wall covering, window, and any other item
             1072      permanently part of or affixed to an attached dwelling or to a limited common area.
             1073          [(5)] (4) Notwithstanding anything in this part and unless otherwise provided in the
             1074      declaration, an association is not required to obtain property insurance for a loss to a dwelling
             1075      that is not physically attached to another dwelling or to a common area structure.
             1076          [(6)] (5) Each lot owner is an insured person under a property insurance policy.
             1077          [(7)] (6) If a loss occurs that is covered by a property insurance policy in the name of
             1078      an association and another property insurance policy in the name of a lot owner:
             1079          (a) the association's policy provides primary insurance coverage; and
             1080          (b) notwithstanding Subsection [(7)] (6)(a) and subject to Subsection [(8)] (7):
             1081          (i) [a] the lot owner is responsible for the association's policy deductible; and
             1082          (ii) building property coverage, often referred to as coverage A, of the lot owner's
             1083      policy applies to that portion of the loss attributable to the association's policy deductible.
             1084          [(8)] (7) (a) As used in this Subsection [(8)] (7) and Subsection (10):
             1085          (i) "Covered loss" means a loss, resulting from a single event or occurrence, that is
             1086      covered by an association's property insurance policy.
             1087          (ii) "Lot damage" means damage to any combination of a lot, a dwelling on a lot, or a
             1088      limited common area appurtenant to a lot or appurtenant to a dwelling on a lot.
             1089          (iii) "Lot damage percentage" means the percentage of total damage resulting in a
             1090      covered loss that is attributable to lot damage.
             1091          (b) A lot owner who owns a lot that has suffered lot damage as part of a covered loss is
             1092      responsible for an amount calculated by applying the lot damage percentage for that lot to the
             1093      amount of the deductible under the association's property insurance policy.


             1094          (c) If a lot owner does not pay the amount required under Subsection [(8)] (7)(b) within
             1095      30 days after substantial completion of the repairs to, as applicable, the lot, a dwelling on the
             1096      lot, or the limited common area appurtenant to the lot, an association may levy an assessment
             1097      against a lot owner for that amount.
             1098          [(9)] (8) An association shall set aside an amount equal to the amount of the
             1099      association's property insurance policy deductible or, if the policy deductible exceeds $10,000,
             1100      [whichever is less] an amount not less than $10,000.
             1101          [(10)] (9) (a) An association shall provide notice in accordance with Section 57-8a-214
             1102      to each lot owner of the lot owner's obligation under Subsection [(8)] (7) for the association's
             1103      policy deductible and of any change in the amount of the deductible.
             1104          (b) (i) An association that fails to provide notice as provided in Subsection [(10)] (9)(a)
             1105      is responsible for the [amount] portion of the deductible [increase] that the association could
             1106      have assessed to a lot owner under Subsection [(8)] (7), but only to the extent that the lot owner
             1107      does not have insurance coverage that would otherwise apply under this section.
             1108          (ii) Notwithstanding Subsection (9)(b)(i), an association that provides notice of the
             1109      association's policy deductible, as required under Subsection (9)(a), but fails to provide notice
             1110      of a later increase in the amount of the deductible is responsible only for the amount of the
             1111      increase for which notice was not provided.
             1112          (c) An association's failure to provide notice as provided in Subsection [(10)] (9)(a)
             1113      may not be construed to invalidate any other provision of this part.
             1114          [(11)] (10) If, in the exercise of the business judgment rule, the board determines that a
             1115      [claim] covered loss is likely not to exceed the association's property insurance policy
             1116      deductible, and until it becomes apparent the covered loss exceeds the association's property
             1117      insurance deductible and a claim is submitted to the association's property insurance insurer:
             1118          (a) for a lot to which a loss occurs, the lot owner's policy is considered the policy for
             1119      primary coverage [to the amount of the association's policy deductible] for the damage to that
             1120      lot;
             1121          (b) the association is responsible for any covered loss to any common area;


             1122          [(b)] (c) a lot owner who does not have a policy to cover the [association's property
             1123      insurance policy deductible] damage to that lot owner's lot is responsible for [the loss to the
             1124      amount of the association's policy deductible, as provided in Subsection (8)] that lot damage,
             1125      and the association may, as provided in Subsection (7)(c), recover any payments the association
             1126      makes to remediate that lot; and
             1127          [(c)] (d) the association need not tender the claim to the association's insurer.
             1128          [(12)] (11) (a) An insurer under a property insurance policy issued to an association
             1129      shall adjust with the association a loss covered under the association's policy.
             1130          (b) Notwithstanding Subsection [(12)] (11)(a), the insurance proceeds for a loss under
             1131      an association's property insurance policy:
             1132          (i) are payable to an insurance trustee that the association designates or, if no trustee is
             1133      designated, to the association; and
             1134          (ii) may not be payable to a holder of a security interest.
             1135          (c) An insurance trustee or an association shall hold any insurance proceeds in trust for
             1136      the association, lot owners, and lien holders.
             1137          (d) (i) [Insurance] If damaged property is to be repaired or restored, insurance proceeds
             1138      shall be disbursed first for the repair or restoration of the damaged property.
             1139          (ii) After the disbursements described in Subsection [(12)] (11)(d)(i) are made and the
             1140      damaged property has been completely repaired or restored or the project terminated, any
             1141      surplus proceeds are payable to the association, lot owners, and lien holders, as provided in the
             1142      declaration.
             1143          [(13)] (12) An insurer that issues a property insurance policy under this part, or the
             1144      insurer's authorized agent, shall issue a certificate or memorandum of insurance to:
             1145          (a) the association;
             1146          (b) a lot owner, upon the lot owner's written request; and
             1147          (c) a holder of a security interest, upon the holder's written request.
             1148          [(14)] (13) A cancellation or nonrenewal of a property insurance policy under this
             1149      section is subject to the procedures stated in Section 31A-21-303 .


             1150          [(15)] (14) A board that acquires from an insurer the property insurance required in this
             1151      section is not liable to lot owners if the insurance proceeds are not sufficient to cover 100% of
             1152      the full replacement cost of the insured property at the time of the loss.
             1153          (15) (a) Unless required in the declaration, property insurance coverage is not required
             1154      for fixtures, improvements, or betterments in a commercial lot or limited common areas
             1155      appurtenant to a commercial lot in a mixed-use project.
             1156          (b) Notwithstanding any other provision of this part, an association may obtain
             1157      property insurance for fixtures, improvements, and betterments in a commercial lot in a
             1158      mixed-use project if allowed or required in the declaration.
             1159          (16) (a) This section does not prevent a person suffering a loss as a result of damage to
             1160      property from asserting a claim, either directly or through subrogation, for the loss against a
             1161      person at fault for the loss.
             1162          (b) Subsection (16)(a) does not affect Subsection 57-8a-404 (3).
             1163          Section 26. Section 57-8a-406 is amended to read:
             1164           57-8a-406. Liability insurance.
             1165          (1) This section applies to a liability insurance policy required under Subsection
             1166      57-8a-403 (1)(b).
             1167          (2) A liability insurance policy shall be in an amount determined by the board but not
             1168      less than an amount specified in the declaration or bylaws.
             1169          (3) Each lot owner is an insured person under a liability insurance policy that an
             1170      association obtains [that insures against], but only for liability arising from:
             1171          (a) the lot owner's ownership interest in the common areas [or from];
             1172          (b) maintenance, repair, or replacement of common areas; and
             1173          (c) the lot owner's membership in the association.
             1174          Section 27. Section 57-8a-407 is amended to read:
             1175           57-8a-407. Damage to a portion of project -- Insurance proceeds.
             1176          (1) (a) If a portion of the project for which insurance is required under this part is
             1177      damaged or destroyed, the association shall repair or replace the portion within a reasonable


             1178      amount of time unless:
             1179          (i) the project is terminated;
             1180          (ii) repair or replacement would be illegal under a state statute or local ordinance
             1181      governing health or safety; or
             1182          (iii) (A) at least 75% of the allocated voting interests of the lot owners in the
             1183      association vote not to rebuild; and
             1184          (B) each owner of a dwelling on a lot and the limited common area appurtenant to that
             1185      lot that will not be rebuilt votes not to rebuild.
             1186          (b) If a portion of a project is not repaired or replaced because the project is terminated,
             1187      the termination provisions of applicable law and the governing documents apply.
             1188          (2) (a) The cost of repair or replacement of any lot in excess of insurance proceeds and
             1189      reserves is a common expense[.] to the extent the association is required under this chapter to
             1190      provide insurance coverage for the lot.
             1191          (b) The cost of repair or replacement of any common area in excess of insurance
             1192      proceeds and reserves is a common expense.
             1193          (3) If the entire project is damaged or destroyed and not repaired or replaced:
             1194          (a) the association shall use the insurance proceeds attributable to the damaged
             1195      common areas to restore the damaged area to a condition compatible with the remainder of the
             1196      project;
             1197          (b) the association shall distribute the insurance proceeds attributable to lots and
             1198      common areas that are not rebuilt to:
             1199          (i) the lot owners of the lots that are not rebuilt;
             1200          (ii) the lot owners of the lots to which those common areas that are not rebuilt were
             1201      allocated; or
             1202          (iii) lien holders; and
             1203          (c) the association shall distribute the remainder of the proceeds to all the lot owners or
             1204      lien holders in proportion to the common expense liabilities of all the lots.
             1205          (4) If the lot owners vote not to rebuild a lot:


             1206          (a) the lot's allocated interests are automatically reallocated upon the lot owner's vote
             1207      as if the lot had been condemned; and
             1208          (b) the association shall prepare, execute, and submit for recording an amendment to
             1209      the declaration reflecting the reallocations described in Subsection (4)(a).
             1210          Section 28. Section 57-8a-501 is enacted to read:
             1211     
Part 5. Association Board

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


             1234          (b) Unless the declaration provides for the election of officers by the lot owners, the
             1235      board shall elect officers of the association.
             1236          (c) The board members and officers shall take office upon election or appointment.
             1237          Section 30. Section 57-8a-601 is enacted to read:
             1238     
Part 6. Consolidation of Associations

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


             1262          (a) the consolidated association resulting from a consolidation under this section is the
             1263      legal successor for all purposes of all of the consolidating associations;
             1264          (b) the operations and activities of all of the consolidating associations shall be
             1265      consolidated into the consolidated association; and
             1266          (c) the consolidated association holds all powers, rights, obligations, assets, and
             1267      liabilities of all consolidating associations.
             1268          Section 31. Section 76-6-206 is amended to read:
             1269           76-6-206. Criminal trespass.
             1270          (1) As used in this section, "enter" means intrusion of the entire body.
             1271          (2) A person is guilty of criminal trespass if, under circumstances not amounting to
             1272      burglary as defined in Section 76-6-202 , 76-6-203 , or 76-6-204 or a violation of Section
             1273      76-10-2402 regarding commercial obstruction:
             1274          (a) the person enters or remains unlawfully on property and:
             1275          (i) intends to cause annoyance or injury to any person or damage to any property,
             1276      including the use of graffiti as defined in Section 76-6-107 ;
             1277          (ii) intends to commit any crime, other than theft or a felony; or
             1278          (iii) is reckless as to whether his presence will cause fear for the safety of another;
             1279          (b) knowing the person's entry or presence is unlawful, the person enters or remains on
             1280      property as to which notice against entering is given by:
             1281          (i) personal communication to the actor by the owner or someone with apparent
             1282      authority to act for the owner;
             1283          (ii) fencing or other enclosure obviously designed to exclude intruders; or
             1284          (iii) posting of signs reasonably likely to come to the attention of intruders; or
             1285          (c) the person enters a condominium unit in violation of Subsection 57-8-7 [(7)](8).
             1286          (3) (a) A violation of Subsection (2)(a) or (b) is a class B misdemeanor unless it was
             1287      committed in a dwelling, in which event it is a class A misdemeanor.
             1288          (b) A violation of Subsection (2)(c) is an infraction.
             1289          (4) It is a defense to prosecution under this section that:


             1290          (a) the property was open to the public when the actor entered or remained; and
             1291          (b) the actor's conduct did not substantially interfere with the owner's use of the
             1292      property.
             1293          Section 32. Effective date.
             1294          (1) Except as provided in Subsection (2), this bill takes effect May 14, 2013.
             1295          (2) The actions affecting the following sections take effect July 1, 2014:
             1296          (a) Section 57-8-4.5 ;
             1297          (b) Section 57-8-7 ;
             1298          (c) Section 57-8-7.5 ;
             1299          (d) Section 57-8-10.3 ;
             1300          (e) Section 57-8-10.5 ;
             1301          (f) Section 57-8-23 ;
             1302          (g) Section 57-8-40 ;
             1303          (h) Section 57-8-55 ;
             1304          (i) Section 57-8a-107 ;
             1305          (j) Section 57-8a-108 ;
             1306          (k) Section 57-8a-211 ;
             1307          (l) Section 57-8a-212 ;
             1308          (m) Section 57-8a-220 ;
             1309          (n) Section 57-8a-222 ;
             1310          (o) Section 57-8a-223 ;
             1311          (p) Section 57-8a-224 ;
             1312          (q) Section 57-8a-501 ;
             1313          (r) Section 57-8a-502 ;
             1314          (s) Section 57-8a-601 ; and
             1315          (t) Section 76-6-206 .
             1316          Section 33. Coordinating S.B. 90 with S.B. 64 -- Technical amendment.
             1317          If this S.B. 90 and S.B. 64, Homeowner Association Reserve Account Amendments,


             1318      both pass and become law, it is the intent of the Legislature that the Office of Legislative
             1319      Research and General Counsel, in preparing the Utah Code database for publication:
             1320          (1) modify Section 57-8-7.5 on July 1, 2014, to read:
             1321          " 57-8-7.5. Reserve analysis -- Reserve fund.
             1322          (1) As used in this section[, "reserve]:
             1323          (a) "Reserve analysis" means an analysis to determine:
             1324          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             1325      replacing, [and] or restoring common areas and facilities that have a useful life of three years or
             1326      more[, but excluding any] and a remaining useful life of less than 30 years, if the cost cannot
             1327      cost that can reasonably be funded from the general budget or other funds of the association of
             1328      unit owners; and
             1329          [(b)] (ii) the appropriate amount of any reserve fund.
             1330          (b) "Reserve fund line item" means the line item in an association of unit owners'
             1331      annual budget that identifies the amount to be placed into a reserve fund.
             1332          (2) Except as otherwise provided in the declaration, a management committee shall:
             1333          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no
             1334      less frequently than every six years; and
             1335          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             1336      analysis to be conducted before July 1, 2012; and]
             1337          (b) review and, if necessary, update a previously conducted reserve analysis no less
             1338      frequently than every three years.
             1339          (3) The management committee may conduct a reserve analysis itself or may engage a
             1340      reliable person or organization, as determined by the management committee, to conduct the
             1341      reserve analysis.
             1342          (4) A reserve fund analysis shall include:
             1343          (a) a list of the components identified in the reserve analysis that will reasonably
             1344      require reserve funds;
             1345          (b) a statement of the probable remaining useful life, as of the date of the reserve


             1346      analysis, of each component identified in the reserve analysis;
             1347          (c) an estimate of the cost to repair, replace, or restore each component identified in the
             1348      reserve analysis;
             1349          (d) an estimate of the total annual contribution to a reserve fund necessary to meet the
             1350      cost to repair, replace, or restore each component identified in the reserve analysis during the
             1351      component's useful life and at the end of the component's useful life; and
             1352          (e) a reserve funding plan that recommends how the association of unit owners may
             1353      fund the annual contribution described in Subsection (4)(d).
             1354          (5) An association of unit owners shall:
             1355          (a) annually provide unit owners a summary of the most recent reserve analysis or
             1356      update; and
             1357          (b) provide a copy of the complete reserve analysis or update to a unit owner who
             1358      requests a copy.
             1359          (6) In formulating its budget each year, an association of unit owners shall include a
             1360      reserve fund line item in:
             1361          (a) an amount the management committee determines, based on the reserve analysis, to
             1362      be prudent; or
             1363          (b) an amount required by the declaration, if the declaration requires an amount higher
             1364      than the amount determined under Subsection (6)(a).
             1365          (7) (a) Within 45 days after the day on which an association of unit owners adopts its
             1366      annual budget, the unit owners may veto the reserve fund line item by a 51% vote of the
             1367      allocated voting interests in the association of unit owners at a special meeting called by the
             1368      unit owners for the purpose of voting whether to veto a reserve fund line item.
             1369          (b) If the unit owners veto a reserve fund line item under Subsection (7)(a) and a
             1370      reserve fund line item exists in a previously approved annual budget of the association of unit
             1371      owners that was not vetoed, the association of unit owners shall fund the reserve account in
             1372      accordance with that prior reserve fund line item.
             1373          (8) (a) Subject to Subsection (8)(b), if an association of unit owners does not comply


             1374      with the requirements of Subsection (5), (6), or (7) and fails to remedy the noncompliance
             1375      within the time specified in Subsection (8)(c), a unit owner may file an action in state court for:
             1376          (i) injunctive relief requiring the association of unit owners to comply with the
             1377      requirements of Subsection (5), (6), or (7);
             1378          (ii) $500 or actual damages, whichever is greater;
             1379          (iii) any other remedy provided by law; and
             1380          (iv) reasonable costs and attorney fees.
             1381          (b) No fewer than 90 days before the day on which a unit owner files a complaint under
             1382      Subsection (8)(a), the unit owner shall deliver written notice described in Subsection (8)(c) to
             1383      the association of unit owners.
             1384          (c) A notice under Subsection (8)(b) shall state:
             1385          (i) the requirement in Subsection (5), (6), or (7) with which the association of unit
             1386      owners has failed to comply;
             1387          (ii) a demand that the association of unit owners come into compliance with the
             1388      requirements; and
             1389          (iii) a date, no fewer than 90 days after the day on which the unit owner delivers the
             1390      notice, by which the association of unit owners shall remedy its noncompliance.
             1391          (d) In a case filed under Subsection (8)(a), a court may order an association of unit
             1392      owners to produce the summary of the reserve analysis or the complete reserve analysis on an
             1393      expedited basis and at the association of unit owners' expense.
             1394          [(4)] (9) (a) A management committee may not use money in a reserve fund:
             1395          (i) for daily maintenance expenses, unless a majority of the members of the association
             1396      of unit owners vote to approve the use of reserve fund money for that purpose; or
             1397          (ii) for any purpose other than the purpose for which the reserve fund was established.
             1398          (b) A management committee shall maintain a reserve fund separate from other funds
             1399      of the association of unit owners.
             1400          (c) This Subsection [(4)] (9) may not be construed to limit a management committee
             1401      from prudently investing money in a reserve fund, subject to any investment constraints


             1402      imposed by the declaration.
             1403          [(5)] (10) Subsections (2)[, (3), (4), and (6)] through (9) do not apply to an association
             1404      of unit owners during the period of declarant [management] control described in Subsection
             1405      57-8-16.5 (1).
             1406          [(6) An association of unit owners shall:]
             1407          [(a) annually, at the annual meeting of unit owners or at a special meeting of unit
             1408      owners:]
             1409          [(i) present the reserve study; and]
             1410          [(ii) provide an opportunity for unit owners to discuss reserves and to vote on whether
             1411      to fund a reserve fund and, if so, how to fund it and in what amount; and]
             1412          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             1413      indicate in the minutes any decision relating to funding a reserve fund.]
             1414          [(7)] (11) This section applies to each association of unit owners, regardless of when
             1415      the association of unit owners was created."; and
             1416          (2) modify Section 57-8a-211 on July 1, 2014, to read:
             1417          " 57-8a-211. Reserve analysis -- Reserve fund.
             1418          (1) As used in this section[, "reserve]:
             1419          (a) "Reserve analysis" means an analysis to determine:
             1420          [(a)] (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
             1421      replacing, [and] or restoring common areas that have a useful life of three years or more[, but
             1422      excluding any cost that can] and a remaining useful life of less than 30 years, if the cost cannot
             1423      reasonably be funded from the association's general budget or from other association funds;
             1424      and
             1425          [(b)] (ii) the appropriate amount of any reserve fund.
             1426          (b) "Reserve fund line item" means the line item in an association's annual budget that
             1427      identifies the amount to be placed into a reserve fund.
             1428          (2) Except as otherwise provided in the governing documents, a board shall:
             1429          (a) [(i) subject to Subsection (2)(a)(ii),] cause a reserve analysis to be conducted no


             1430      less frequently than every six years; and
             1431          [(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve
             1432      analysis to be conducted before July 1, 2012; and]
             1433          (b) review and, if necessary, update a previously conducted reserve analysis no less
             1434      frequently than every three years.
             1435          (3) The board may conduct a reserve analysis itself or may engage a reliable person or
             1436      organization, as determined by the board, to conduct the reserve analysis.
             1437          (4) A reserve fund analysis shall include:
             1438          (a) a list of the components identified in the reserve analysis that will reasonably
             1439      require reserve funds;
             1440          (b) a statement of the probable remaining useful life, as of the date of the reserve
             1441      analysis, of each component identified in the reserve analysis;
             1442          (c) an estimate of the cost to repair, replace, or restore each component identified in the
             1443      reserve analysis;
             1444          (d) an estimate of the total annual contribution to a reserve fund necessary to meet the
             1445      cost to repair, replace, or restore each component identified in the reserve analysis during the
             1446      component's useful life and at the end of the component's useful life; and
             1447          (e) a reserve funding plan that recommends how the association may fund the annual
             1448      contribution described in Subsection (4)(d).
             1449          (5) An association shall:
             1450          (a) annually provide lot owners a summary of the most recent reserve analysis or
             1451      update; and
             1452          (b) provide a copy of the complete reserve analysis or update to a lot owner who
             1453      requests a copy.
             1454          (6) In formulating its budget each year, an association shall include a reserve fund line
             1455      item in:
             1456          (a) an amount the board determines, based on the reserve analysis, to be prudent; or
             1457          (b) an amount required by the governing documents, if the governing documents


             1458      require an amount higher than the amount determined under Subsection (6)(a).
             1459          (7) (a) Within 45 days after the day on which an association adopts its annual budget,
             1460      the lot owners may veto the reserve fund line item by a 51% vote of the allocated voting
             1461      interests in the association at a special meeting called by the lot owners for the purpose of
             1462      voting whether to veto a reserve fund line item.
             1463          (b) If the lot owners veto a reserve fund line item under Subsection (7)(a) and a reserve
             1464      fund line item exists in a previously approved annual budget of the association that was not
             1465      vetoed, the association shall fund the reserve account in accordance with that prior reserve fund
             1466      line item.
             1467          (8) (a) Subject to Subsection (8)(b), if an association does not comply with the
             1468      requirements described in Subsection (5), (6), or (7) and fails to remedy the noncompliance
             1469      within the time specified in Subsection (8)(c), a lot owner may file an action in state court for:
             1470          (i) injunctive relief requiring the association to comply with the requirements of
             1471      Subsection (5), (6), or (7);
             1472          (ii) $500 or the lot owner's actual damages, whichever is greater;
             1473          (iii) any other remedy provided by law; and
             1474          (iv) reasonable costs and attorney fees.
             1475          (b) No fewer than 90 days before the day on which a lot owner files a complaint under
             1476      Subsection (8)(a), the lot owner shall deliver written notice described in Subsection (8)(c) to
             1477      the association.
             1478          (c) A notice under Subsection (8)(b) shall state:
             1479          (i) the requirement in Subsection (5), (6), or (7) with which the association has failed to
             1480      comply;
             1481          (ii) a demand that the association come into compliance with the requirements; and
             1482          (iii) a date, no fewer than 90 days after the day on which the lot owner delivers the
             1483      notice, by which the association shall remedy its noncompliance.
             1484          (d) In a case filed under Subsection (8)(a), a court may order an association to produce
             1485      the summary of the reserve analysis or the complete reserve analysis on an expedited basis and


             1486      at the association's expense.
             1487          [(4)] (9) (a) A board may not use money in a reserve fund:
             1488          (i) for daily maintenance expenses, unless a majority of association members vote to
             1489      approve the use of reserve fund money for that purpose; or
             1490          (ii) for any purpose other than the purpose for which the reserve fund was established.
             1491          (b) A board shall maintain a reserve fund separate from other association funds.
             1492          (c) This Subsection [(4)] (9) may not be construed to limit a board from prudently
             1493      investing money in a reserve fund, subject to any investment constraints imposed by the
             1494      governing documents.
             1495          [(5)] (10) Subsections (2)[, (3), (4), and (6)] through (9) do not apply to an association
             1496      during the period of administrative control.
             1497          [(6) An association shall:]
             1498          [(a) annually, at the annual meeting of lot owners or at a special meeting of lot
             1499      owners:]
             1500          [(i) present the reserve study; and]
             1501          [(ii) provide an opportunity for lot owners to discuss reserves and to vote on whether to
             1502      fund a reserve fund and, if so, how to fund it and in what amount; and]
             1503          [(b) prepare and keep minutes of each meeting held under Subsection (6)(a) and
             1504      indicate in the minutes any decision relating to funding a reserve fund.]
             1505          [(7)] (11) This section applies to each association, regardless of when the association
             1506      was created."


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