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H.B. 402

             1     

RENTAL AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Gage Froerer

             5     
Senate Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions of the Utah Municipal Code, the Condominium
             10      Ownership Act, and the Community Association Act relating to rentals.
             11      Highlighted Provisions:
             12          This bill:
             13          .    clarifies that a municipality may not, without cause and notice, require a landlord to
             14      submit to a building inspection;
             15          .    prohibits, except under certain circumstances, an association or an association of
             16      unit owners from requiring a lot owner or a unit owner to:
             17              .    obtain the association's or the association of unit owners' approval of a
             18      prospective renter; or
             19              .    give the association or the association of unit owners a copy of certain
             20      documents relating to a renter; and
             21          .    makes technical and conforming changes.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None
             26      Utah Code Sections Affected:
             27      AMENDS:


             28           10-1-203.5 , as enacted by Laws of Utah 2012, Chapter 289
             29           57-8-10 , as last amended by Laws of Utah 2011, Chapter 355
             30           57-8-13.8 , as last amended by Laws of Utah 1992, Chapter 12
             31           57-8-13.10 , as last amended by Laws of Utah 2003, Chapter 265
             32           57-8a-209 , as enacted by Laws of Utah 2009, Chapter 178
             33      ENACTS:
             34           57-8-10.1 , Utah Code Annotated 1953
             35     
             36      Be it enacted by the Legislature of the state of Utah:
             37          Section 1. Section 10-1-203.5 is amended to read:
             38           10-1-203.5. Disproportionate rental fee -- Good landlord training program -- Fee
             39      reduction.
             40          (1) As used in this section:
             41          (a) "Business" means the rental of one or more residential units within a municipality.
             42          (b) "Disproportionate rental fee" means a fee adopted by a municipality to recover its
             43      disproportionate costs of providing municipal services to residential rental units compared to
             44      similarly-situated owner-occupied housing.
             45          (c) "Disproportionate rental fee reduction" means a reduction of a disproportionate
             46      rental fee as a condition of complying with the requirements of a good landlord training
             47      program.
             48          (d) "Exempt business" means the rental of a residential unit within a single structure
             49      that contains:
             50          (i) no more than four residential units; and
             51          (ii) one unit occupied by the owner.
             52          (e) "Exempt landlord" means a residential landlord who demonstrates to a
             53      municipality:
             54          (i) completion of any live good landlord training program offered by any other Utah
             55      city that offers a good landlord program;
             56          (ii) that the residential landlord has a current professional designation of "property
             57      manager"; or
             58          (iii) compliance with a requirement described in Subsection (4).


             59          (f) "Good landlord training program" means a program offered by a municipality to
             60      encourage business practices that are designed to reduce the disproportionate cost of municipal
             61      services to residential rental units by offering a disproportionate rental fee reduction for any
             62      landlord who:
             63          (i) (A) completes a landlord training program provided by the municipality; or
             64          (B) is an exempt landlord;
             65          (ii) implements measures to reduce crime in rental housing as specified in a municipal
             66      ordinance or policy; and
             67          (iii) operates and manages rental housing in accordance with an applicable municipal
             68      ordinance.
             69          (g) "Municipal services" means:
             70          (i) public utilities;
             71          (ii) police;
             72          (iii) fire;
             73          (iv) code enforcement;
             74          (v) storm water runoff;
             75          (vi) traffic control;
             76          (vii) parking;
             77          (viii) transportation;
             78          (ix) beautification; or
             79          (x) snow removal.
             80          (h) "Municipal services study" means a study of the cost of all municipal services to
             81      rental housing that:
             82          (i) are reasonably attributable to the rental housing; and
             83          (ii) exceed the municipality's cost to serve similarly-situated, owner-occupied housing.
             84          (2) The legislative body of a municipality may charge and collect a disproportionate
             85      rental fee on a business that causes disproportionate costs to municipal services if the
             86      municipality:
             87          (a) has performed a municipal services study; and
             88          (b) adopts a disproportionate rental fee that does not exceed the amount that is justified
             89      by the municipal services study on a per residential rental unit basis.


             90          (3) A municipality may not:
             91          (a) impose a disproportionate rental fee on an exempt business;
             92          (b) require a landlord to deny tenancy to an individual released from probation or
             93      parole whose conviction date occurred more than four years before the date of tenancy; or
             94          (c) without cause and notice, require a landlord to submit to a [random] building
             95      inspection.
             96          (4) In addition to a requirement or qualification described in Subsection (1)(e), a
             97      municipality may recognize a landlord training described in its ordinance.
             98          (5) (a) If a municipality adopts a good landlord program, the municipality shall provide
             99      an appeal procedure affording due process of law to a landlord who is denied a
             100      disproportionate rental fee reduction.
             101          (b) A municipality may not adopt a new disproportionate rental fee unless the
             102      municipality provides a disproportionate rental fee reduction.
             103          Section 2. Section 57-8-10 is amended to read:
             104           57-8-10. Contents of declaration.
             105          (1) [Prior to] Before the conveyance of any unit in a condominium project, a
             106      declaration shall be recorded that contains the covenants, conditions, and restrictions relating to
             107      the project that shall be enforceable equitable servitudes, where reasonable, and which shall run
             108      with the land. Unless otherwise provided, these servitudes may be enforced by [any] a unit
             109      owner [and his successors] or a unit owner's successor in interest.
             110          (2) (a) For every condominium project, the declaration shall:
             111          (i) [The declaration shall] include a description of the land or interests in real property
             112      included within the project[.];
             113          (ii) [The declaration shall] contain a description of any buildings[, which] that states
             114      the number of storeys and basements, the number of units, the principal materials of which the
             115      building is or is to be constructed, and a description of all other significant improvements
             116      contained or to be contained in the project[.];
             117          (iii) [The declaration shall] contain the unit number of each unit, the square footage of
             118      each unit, and any other description or information necessary to properly identify each unit[.];
             119          (iv) [The declaration shall] describe the common areas and facilities of the project[.];
             120      and


             121          (v) [The declaration shall] describe any limited common areas and facilities and shall
             122      state to which units the use of the common areas and facilities is reserved.
             123          (b) Any shutters, awnings, window boxes, doorsteps, porches, balconies, patios, or
             124      other apparatus intended to serve a single unit, but located outside the boundaries of the unit,
             125      shall constitute a limited common area and facility appertaining to that unit exclusively,
             126      whether or not the declaration makes such a provision.
             127          (c) The condominium plat recorded with the declaration may provide or supplement
             128      the information required under Subsections (2)(a) and (b).
             129          (d) (i) The declaration shall include the percentage or fraction of undivided interest in
             130      the common areas and facilities appurtenant to each unit and [its] the unit owner for all
             131      purposes, including voting, derived and allocated in accordance with Subsection 57-8-7 (2).
             132          (ii) If any use restrictions are to apply, the declaration shall state the purposes for which
             133      the units are intended and [restricted as to] the use restrictions that apply.
             134          (iii) (A) The declaration shall include the name and address of a person to receive
             135      service of process on behalf of the project, in the cases provided by this chapter[, together with
             136      the residence or place of business of that person].
             137          (B) The person described in Subsection (2)(d)(iii)(A) shall be a resident of, or shall
             138      maintain a place of business within, this state.
             139          (iv) The declaration shall describe the method by which [it] the declaration may be
             140      amended consistent with this chapter.
             141          (v) Any further matters in connection with the property may be included in the
             142      declaration, which the person or persons executing the declaration may consider desirable,
             143      consistent with this chapter.
             144          (vi) The declaration shall contain a statement of intention that this chapter applies to
             145      the property.
             146          (e) The initial recorded declaration shall include:
             147          (i) an appointment of a trustee who qualifies under Subsection 57-1-21 (1)(a)(i) or (iv);
             148      and
             149          (ii) the following statement: "The declarant hereby conveys and warrants pursuant to
             150      U.C.A. Sections 57-1-20 and 57-8-45 to (name of trustee), with power of sale, the unit and all
             151      improvements to the unit for the purpose of securing payment of assessments under the terms


             152      of the declaration."
             153          (3) (a) If the condominium project contains any convertible land, the declaration shall:
             154          (i) [The declaration shall] contain a legal description by metes and bounds of each area
             155      of convertible land within the condominium project[.];
             156          (ii) [The declaration shall] state the maximum number of units that may be created
             157      within each area of convertible land[.];
             158          (iii) [(A) The declaration shall] state, with respect to each area of convertible land, the
             159      maximum percentage of the aggregate land and floor area of all units that may be created and
             160      the use of which will not or may not be restricted exclusively to residential purposes[. (B) The
             161      statements described in Subsection (3)(a)(iii)(A) need not be supplied if], unless none of the
             162      units on other portions of the land within the project are restricted exclusively to residential
             163      use[.];
             164          (iv) [The declaration shall] state the extent to which any structure erected on any
             165      convertible land will be compatible with structures on other portions of the land within the
             166      condominium project in terms of quality of construction, the principal materials to be used, and
             167      architectural style[.];
             168          (v) [The declaration shall] describe all other improvements that may be made on each
             169      area of convertible land within the condominium project[.];
             170          (vi) [The declaration shall] state that any units created within each area of convertible
             171      land will be substantially identical to the units on other portions of the land within the project
             172      or [it shall] describe in detail what other type of units may be created[.]; and
             173          (vii) [The declaration shall] describe the declarant's reserved right, if any, to create
             174      limited common areas and facilities within any convertible land in terms of the types, sizes, and
             175      maximum number of the limited common areas within each convertible land.
             176          (b) The condominium plat recorded with the declaration may provide or supplement
             177      the information required under Subsection (3)(a).
             178          (4) If the condominium project is an expandable condominium project, the declaration
             179      shall:
             180          (a) (i) [(A) The declaration shall] contain an explicit reservation of an option to expand
             181      the project[.];
             182          [(B)] (ii) [The declaration shall] include a statement of any limitations on the option to


             183      expand, including a statement as to whether the consent of any unit owners [shall be] is
             184      required and, a statement as to the method by which consent shall be ascertained, or a
             185      statement that there are no such limitations[.];
             186          [(ii)] (iii) [The declaration shall] include a time limit, not exceeding seven years [from
             187      the date of the recording of] after the day on which the declaration is recorded, upon which the
             188      option to expand the condominium project [shall expire, together with] expires and a statement
             189      of any circumstances [which] that will terminate the option [prior to] before expiration of the
             190      specified time limits[.];
             191          [(iii)] (iv) [The declaration shall] contain a legal description by metes and bounds of all
             192      land that may be added to the condominium project, which is known as additional land[.];
             193          [(iv)] (v) [The declaration shall] state:
             194          (A) if any of the additional land is added to the condominium project, whether all of it
             195      or any particular portion of it must be added;
             196          (B) any limitations as to what portions may be added; or
             197          (C) a statement that there are no such limitations[.];
             198          [(v)] (vi) [The declaration shall] include a statement as to whether portions of the
             199      additional land may be added to the condominium project at different times, [together with]
             200      including any limitations fixing the boundaries of those portions by legal descriptions setting
             201      forth the metes and bounds of these lands and regulating the order in which they may be added
             202      to the condominium project[.];
             203          [(vi)] (vii) [The declaration shall] include a statement of any limitations [as to] on the
             204      locations of any improvements that may be made on any portions of the additional land added
             205      to the condominium project, or a statement that no assurances are made in that regard[.];
             206          [(vii)] (viii) (A) [The declaration shall] state the maximum number of units that may be
             207      created on the additional land[. If];
             208          (B) if portions of the additional land may be added to the condominium project and the
             209      boundaries of those portions are fixed in accordance with Subsection (4)(a)[(v)](vi), the
             210      declaration shall also state the maximum number of units that may be created on each portion
             211      added to the condominium project[. If]; and
             212          (C) if portions of the additional land may be added to the condominium project and the
             213      boundaries of those portions are not fixed in accordance with Subsection (4)(a)[(v)](vi), [then


             214      the declaration shall also] state the maximum number of units per acre that may be created on
             215      any portion added to the condominium project[.];
             216          [(viii) With] (ix) with respect to the additional land and to any portion of [it] the
             217      additional land that may be added to the condominium project, [the declaration shall] state the
             218      maximum percentage of the aggregate land and floor area of all units that may be created on it,
             219      the use of which will not or may not be restricted exclusively to residential purposes[.
             220      However, these statements need not be supplied if], unless none of the units on the land
             221      originally within the project are restricted exclusively to residential use[.];
             222          [(ix)] (x) [The declaration shall] state the extent to which any structures erected on any
             223      portion of the additional land added to the condominium project will be compatible with
             224      structures on the land originally within the project in terms of quality of construction, the
             225      principal materials to be used, and architectural style[. The declaration may also state], or that
             226      no assurances are made in those regards[.];
             227          [(x)] (xi) [The declaration shall] describe all other improvements that will be made on
             228      any portion of the additional land added to the condominium project, [or it shall contain a
             229      statement of] including any limitations [as to] on what other improvements may be made on [it.
             230      The declaration may also] the additional land, or state that no assurances are made in that
             231      regard[.];
             232          [(xi)] (xii) [The declaration shall] contain a statement that any units created on any
             233      portion of the additional land added to the condominium project will be substantially identical
             234      to the units on the land originally within the project, [or] a statement of any limitations [as to]
             235      on what types of units may be created on [it. The declaration may also contain] the additional
             236      land, or a statement that no assurances are made in that regard[.]; and
             237          [(xii)] (xiii) [The declaration shall] describe the declarant's reserved right, if any, to
             238      create limited common areas and facilities within any portion of the additional land added to
             239      the condominium project, in terms of the types, sizes, and maximum number of limited
             240      common areas within each portion[. The declaration may also], or state that no assurances are
             241      made in those regards.
             242          (b) The condominium plat recorded with the declaration may provide or supplement
             243      the information required under Subsections (4)(a)[(iii)](iv) through (a)[(vi)](vii) and
             244      (a)[(ix)](x) through (a)[(xii)](xiii).


             245          (5) If the condominium project is a contractible condominium, the declaration shall:
             246          (a) (i) [The declaration shall] contain an explicit reservation of an option to contract the
             247      condominium project[.];
             248          (ii) [The declaration shall] contain a statement of any limitations on the option to
             249      contract, including a statement [as to] regarding whether the consent of any unit owners [shall
             250      be] is required, and if so, a statement [as to] regarding the method by which this consent shall
             251      be ascertained[. The declaration may also contain], or a statement that there are no such
             252      limitations[.];
             253          (iii) [The declaration shall] state the time limit, not exceeding seven years [from the
             254      recording of] after the day on which the declaration is recorded, upon which the option to
             255      contract the condominium project [shall expire] expires, together with a statement of any
             256      circumstances [which] that will terminate [this option prior to] the option before expiration of
             257      the specified time limit[.];
             258          [(b) (i)] (iv) [The declaration shall] include a legal description by metes and bounds of
             259      all land that may be withdrawn from the condominium project, which is known as
             260      withdrawable land[.];
             261          [(ii)] (v) [The declaration shall] include a statement as to whether portions of the
             262      withdrawable land may be withdrawn from the condominium project at different times,
             263      together with any limitations fixing the boundaries of those portions by legal descriptions
             264      setting forth the metes and bounds and regulating the order in which they may be withdrawn
             265      from the condominium project[.]; and
             266          [(iii)] (vi) [The declaration shall] include a legal description by metes and bounds of all
             267      of the land within the condominium project to which the option to contract the project does not
             268      extend.
             269          [(c)] (b) The condominium plat recorded with the declaration may provide or
             270      supplement the information required under [Subsection (5)(b)] Subsections (5)(a)(iv) through
             271      (vi).
             272          (6) (a) If the condominium project is a leasehold condominium, [then] the declaration
             273      shall, with respect to any ground lease or other leases the expiration or termination of which
             274      will or may terminate or contract the condominium project:
             275          (i) [The declaration shall] include recording information enabling the location of each


             276      lease in the official records of the county recorder[.];
             277          (ii) [The declaration shall] include the date upon which each lease is due to expire[.];
             278          (iii) [The declaration shall] state whether any land or improvements will be owned by
             279      the unit owners in fee simple[. If];
             280          (iv) if there is to be fee simple ownership of any land or improvement, as described in
             281      Subsection (6)(a)(iii), [the declaration shall] include:
             282          (A) a description of the land or improvements, including [without limitation,] a legal
             283      description by metes and bounds of the land; or
             284          (B) a statement of any rights the unit owners have to remove these improvements
             285      within a reasonable time after the expiration or termination of the lease or leases involved, or a
             286      statement that they shall have no such rights[.]; and
             287          [(iv)] (v) [The declaration shall] include a statement of the rights the unit owners have
             288      to extend or renew any of the leases or to redeem or purchase any of the reversions, or a
             289      statement that they have no such rights.
             290          (b) After the recording of the declaration, [no] a lessor who executed the declaration,
             291      [and no] or the lessor's successor in interest [to this lessor, has any right or power to], may not
             292      terminate any part of the leasehold interest of any unit owner who:
             293          (i) makes timely payment of [his] the unit owner's share of the rent to the persons
             294      designated in the declaration for the receipt of the rent; and
             295          (ii) otherwise complies with all covenants which would entitle the lessor to terminate
             296      the lease if [they] the covenants were violated.
             297          (7) (a) If the condominium project contains time period units, the declaration shall also
             298      contain the location of each condominium unit in the calendar year. This information shall be
             299      set out in a fourth column of the exhibit or schedule referred to in Subsection 57-8-7 (2), if the
             300      exhibit or schedule accompanies the declaration.
             301          (b) The declaration shall also put timeshare owners on notice that tax notices will be
             302      sent to the management committee, not each timeshare owner.
             303          (c) The time period units created with respect to any given physical unit shall be such
             304      that the aggregate of the durations involved constitute a full calendar year.
             305          (8) (a) The declaration, bylaws, and condominium plat shall be duly executed and
             306      acknowledged by all of the owners and any lessees of the land which is made subject to this


             307      chapter.
             308          (b) As used in Subsection (8)(a), "owners and lessees" does not include, in their
             309      respective capacities, any mortgagee, any trustee or beneficiary under a deed of trust, any other
             310      lien holder, any person having an equitable interest under any contract for the sale or lease of a
             311      condominium unit, or any lessee whose leasehold interest does not extend to any portion of the
             312      common areas and facilities.
             313          [(9) (a) As used in this section, "rentals" or "rental unit" means:]
             314          [(i) a unit owned by an individual not described in Subsection (9)(a)(ii) that is occupied
             315      by someone while no unit owner occupies the unit as the unit owner's primary residence; and]
             316          [(ii) a unit owned by an entity or trust, regardless of who occupies the unit.]
             317          [(b) (i) Subject to Subsections (9)(c), (f), and (g), an association of unit owners may:]
             318          [(A) create restrictions on the number and term of rentals in a condominium project;
             319      or]
             320          [(B) prohibit rentals in the condominium project.]
             321          [(ii) An association of unit owners that creates a rental restriction or prohibition in
             322      accordance with Subsection (9)(b)(i) shall create the rental restriction or prohibition in a
             323      declaration or by amending the declaration.]
             324          [(c) If an association of unit owners prohibits or imposes restrictions on the number
             325      and term of rentals, the restrictions shall include:]
             326          [(i) a provision that requires a condominium project to exempt from the rental
             327      restrictions the following unit owner and the unit owner's unit:]
             328          [(A) a unit owner in the military for the period of the unit owner's deployment;]
             329          [(B) a unit occupied by a unit owner's parent, child, or sibling;]
             330          [(C) a unit owner whose employer has relocated the unit owner for no less than two
             331      years; or]
             332          [(D) a unit owned by a trust or other entity created for estate planning purposes if the
             333      trust or other estate planning entity was created for the estate of:]
             334          [(I) a current resident of the unit; or]
             335          [(II) the parent, child, or sibling of the current resident of the unit;]
             336          [(ii) a provision allowing a unit owner who has a rental in the condominium project
             337      before the time the rental restriction described in Subsection (9)(b)(i) is recorded with the


             338      county recorder of the county in which the condominium project is located to continue renting
             339      until:]
             340          [(A) the unit owner occupies the unit; or]
             341          [(B) an officer, owner, member, trustee, beneficiary, director, or person holding a
             342      similar position of ownership or control of an entity or trust that holds an ownership interest in
             343      the unit, occupies the unit; and]
             344          [(iii) a requirement that the association of unit owners create, by rule or resolution,
             345      procedures to:]
             346          [(A) determine and track the number of rentals and units in the condominium project
             347      subject to the provisions described in Subsections (9)(c)(i) and (ii); and]
             348          [(B) ensure consistent administration and enforcement of the rental restrictions.]
             349          [(d) For purposes of Subsection (9)(c)(ii), a transfer occurs when one or more of the
             350      following occur:]
             351          [(i) the conveyance, sale, or other transfer of a unit by deed;]
             352          [(ii) the granting of a life estate in the unit; or]
             353          [(iii) if the unit is owned by a limited liability company, corporation, partnership, or
             354      other business entity, the sale or transfer of more than 75% of the business entity's share, stock,
             355      membership interests, or partnership interests in a 12-month period.]
             356          [(e) This section does not limit or affect residency age requirements for an association
             357      of unit owners that complies with the requirements of the Housing for Older Persons Act, 42
             358      U.S.C. Sec. 3607.]
             359          [(f) A declaration or amendment to a declaration recorded prior to transfer of the first
             360      unit from the initial declarant may prohibit or restrict rentals without providing for the
             361      exceptions, provisions, and procedures required under Subsection (9)(c).]
             362          [(g) This section does not apply to:]
             363          [(i) a condominium project containing a time period unit as defined in Section 57-8-3 ;]
             364          [(ii) any other form of timeshare interest as defined in Section 57-19-2 ; or]
             365          [(iii) a condominium project in which the initial declaration is recorded before May 12,
             366      2009.]
             367          [(h) Notwithstanding this section, an association of unit owners may, upon unanimous
             368      approval by all unit owners, restrict or prohibit rentals without an exception described in


             369      Subsection (9)(c).]
             370          Section 3. Section 57-8-10.1 is enacted to read:
             371          57-8-10.1. Rental restrictions.
             372          (1) As used in this section, "rentals" or "rental unit" means:
             373          (a) a unit owned by an individual not described in Subsection (1)(b) that is occupied by
             374      someone while no unit owner occupies the unit as the unit owner's primary residence; and
             375          (b) a unit owned by an entity or trust, regardless of who occupies the unit.
             376          (2) (a) Subject to Subsections (2)(b), (6), and (7), an association of unit owners may:
             377          (i) create restrictions on the number and term of rentals in a condominium project; or
             378          (ii) prohibit rentals in the condominium project.
             379          (b) An association of unit owners that creates a rental restriction or prohibition in
             380      accordance with Subsection (2)(a)(i) shall create the rental restriction or prohibition in a
             381      declaration or by amending the declaration.
             382          (3) If an association of unit owners prohibits or imposes restrictions on the number and
             383      term of rentals, the restrictions shall include:
             384          (a) a provision that requires a condominium project to exempt from the rental
             385      restrictions the following unit owner and the unit owner's unit:
             386          (i) a unit owner in the military for the period of the unit owner's deployment;
             387          (ii) a unit occupied by a unit owner's parent, child, or sibling;
             388          (iii) a unit owner whose employer has relocated the unit owner for no less than two
             389      years; or
             390          (iv) a unit owned by a trust or other entity created for estate planning purposes if the
             391      trust or other estate planning entity was created for the estate of:
             392          (A) a current resident of the unit; or
             393          (B) the parent, child, or sibling of the current resident of the unit;
             394          (b) a provision that allows a unit owner who has a rental in the condominium project
             395      before the time the rental restriction described in Subsection (2)(a) is recorded with the county
             396      recorder of the county in which the condominium project is located to continue renting until:
             397          (i) the unit owner occupies the unit; or
             398          (ii) an officer, owner, member, trustee, beneficiary, director, or person holding a
             399      similar position of ownership or control of an entity or trust that holds an ownership interest in


             400      the unit, occupies the unit; and
             401          (c) a requirement that the association of unit owners create, by rule or resolution,
             402      procedures to:
             403          (i) determine and track the number of rentals and units in the condominium project
             404      subject to the provisions described in Subsections (3)(a) and (b); and
             405          (ii) ensure consistent administration and enforcement of the rental restrictions.
             406          (4) For purposes of Subsection (3)(b), a transfer occurs when one or more of the
             407      following occur:
             408          (a) the conveyance, sale, or other transfer of a unit by deed;
             409          (b) the granting of a life estate in the unit; or
             410          (c) if the unit is owned by a limited liability company, corporation, partnership, or
             411      other business entity, the sale or transfer of more than 75% of the business entity's share, stock,
             412      membership interests, or partnership interests in a 12-month period.
             413          (5) This section does not limit or affect residency age requirements for an association
             414      of unit owners that complies with the requirements of the Housing for Older Persons Act, 42
             415      U.S.C. Sec. 3607.
             416          (6) A declaration or amendment to a declaration recorded before transfer of the first
             417      unit from the initial declarant may prohibit or restrict rentals without providing for the
             418      exceptions, provisions, and procedures required under Subsection (3)(a).
             419          (7) Subsections (2) through (6) do not apply to:
             420          (a) a condominium project that contains a time period unit as defined in Section
             421      57-8-3 ;
             422          (b) any other form of timeshare interest as defined in Section 57-19-2 ; or
             423          (c) a condominium project in which the initial declaration is recorded before May 12,
             424      2009.
             425          (8) Notwithstanding this section, an association of unit owners may, upon unanimous
             426      approval by all unit owners, restrict or prohibit rentals without an exception described in
             427      Subsection (3).
             428          (9) Except as provided in Subsection (10), an association of unit owners may not
             429      require a unit owner who owns a rental unit to:
             430          (a) obtain the association of unit owners' approval of a prospective renter; or


             431          (b) give the association of unit owners:
             432          (i) a copy of a rental application;
             433          (ii) a copy of a renter's or prospective renter's credit information or credit report;
             434          (iii) a copy of a renter's or prospective renter's background check; or
             435          (iv) documentation to verify the renter's age.
             436          (10) (a) A unit owner who owns a rental unit shall give an association of unit owners
             437      the documents described in Subsection (9)(b) if the unit owner is required to provide the
             438      documents by court order or as part of discovery under the Utah Rules of Civil Procedure.
             439          (b) If an association of unit owners' declaration lawfully prohibits or restricts
             440      occupancy of the units by a certain class of individuals, the association of unit owners may
             441      require a unit owner who owns a rental unit to give the association of unit owners the
             442      information described in Subsection (9)(b), if:
             443          (i) the information helps the association of unit owners determine whether the renter's
             444      occupancy of the unit complies with the association of unit owners' declaration; and
             445          (ii) the association of unit owners uses the information to determine whether the
             446      renter's occupancy of the unit complies with the association of unit owners' declaration.
             447          Section 4. Section 57-8-13.8 is amended to read:
             448           57-8-13.8. Contraction of project.
             449          A condominium project may be contracted under the provisions of the declaration and
             450      the provisions of this chapter. Any such contraction shall be considered to have occurred at the
             451      time of the recordation of an amendment to the declaration, executed by the declarant,
             452      containing a legal description by metes and bounds of the land withdrawn from the
             453      condominium project. If portions of the withdrawable land were described pursuant to
             454      Subsection 57-8-10 [(5)(b)(i)](5)(a)(iv), then no described portion may be so withdrawn after
             455      the conveyance of any unit on the portion. If no withdrawable portions were described, then
             456      none of the withdrawable land may be withdrawn after the first conveyance of any unit on the
             457      portion.
             458          Section 5. Section 57-8-13.10 is amended to read:
             459           57-8-13.10. Condominiums containing convertible land -- Expandable
             460      condominiums -- Allocation of interests in common areas and facilities.
             461          (1) If a condominium project contains any convertible land or is an expandable


             462      condominium, then the declaration may not allocate undivided interests in the common areas
             463      and facilities on the basis of par value unless the declaration:
             464          (a) prohibits the creation of any units not substantially identical to the units depicted on
             465      the condominium plat recorded pursuant to Subsection 57-8-13 (1); or
             466          (b) prohibits the creation of any units not described under Subsection
             467      57-8-10 (3)(a)(vii) in the case of convertible land, Subsection 57-8-10 (4)(a)[(xi)](xii) in the
             468      case of additional land, and contains from the outset a statement of the par value that shall be
             469      assigned to every unit that may be created.
             470          (2) (a) Interests in the common areas and facilities may not be allocated to any units to
             471      be created within any convertible land or within any additional land until a condominium plat
             472      depicting the same is recorded pursuant to Subsection 57-8-13 (2).
             473          (b) Simultaneously with the recording of the supplemental condominium plat required
             474      under Subsection (2)(a), the declarant shall execute and record an amendment to the
             475      declaration which reallocates undivided interests in the common areas and facilities so that the
             476      units depicted on the supplemental condominium plat shall be allocated undivided interests in
             477      the common areas and facilities on the same basis as the units depicted on the condominium
             478      plat that was recorded simultaneously with the declaration pursuant to Subsection 57-8-13 (1).
             479          (3) If all of a convertible space is converted into common areas and facilities, including
             480      limited common areas and facilities, then the undivided interest in the common areas and
             481      facilities appertaining to the convertible space shall afterward appertain to the remaining units
             482      and shall be allocated among them in proportion to their undivided interests in the common
             483      areas and facilities. The principal officer of the unit owners' association or of the management
             484      committee, or any other officer specified in the declaration, shall immediately prepare, execute,
             485      and record an amendment to the declaration reflecting the reallocation of undivided interest
             486      produced by the conversion.
             487          (4) (a) If the expiration or termination of any lease of a leasehold condominium causes
             488      a contraction of the condominium project which reduces the number of units, or if the
             489      withdrawal of withdrawable land of a contractible condominium causes a contraction of the
             490      condominium project which reduces the number of units, the undivided interest in the common
             491      areas and facilities appertaining to any units so withdrawn shall afterward appertain to the
             492      remaining units, being allocated among them in proportion to their undivided interests in the


             493      common areas and facilities.
             494          (b) The principal officer of the unit owners' association or of the management
             495      committee, or any other officer specified in the declaration shall immediately prepare, execute,
             496      and record an amendment to the declaration, reflecting the reallocation of undivided interests
             497      produced by the reduction of units.
             498          Section 6. Section 57-8a-209 is amended to read:
             499           57-8a-209. Rental restrictions.
             500          (1) As used in this section, "rentals" or "rental lot" means:
             501          (a) a lot owned by an individual not described in Subsection (1)(b) that is occupied by
             502      someone while no lot owner occupies the lot as the lot owner's primary residence; and
             503          (b) a lot owned by an entity or trust, regardless of who occupies the lot.
             504          (2) (a) Subject to Subsections (2)(b), (6), and (7), an association may:
             505          (i) create restrictions on the number and term of rentals in an association; or
             506          (ii) prohibit rentals in the association.
             507          (b) An association that creates a rental restriction or prohibition in accordance with
             508      Subsection (1)(a)(i) shall create the rental restriction or prohibition in a recorded declaration of
             509      covenants, conditions, and restrictions, or by amending the recorded declaration of covenants,
             510      conditions, and restrictions.
             511          (3) If an association prohibits or imposes restrictions on the number and term of
             512      rentals, the restrictions shall include:
             513          (a) a provision that requires the association to exempt from the rental restrictions the
             514      following lot owner and the lot owner's lot:
             515          (i) a lot owner in the military for the period of the lot owner's deployment;
             516          (ii) a lot occupied by a lot owner's parent, child, or sibling;
             517          (iii) a lot owner whose employer has relocated the lot owner for no less than two years;
             518      or
             519          (iv) a lot owned by a trust or other entity created for estate planning purposes if the
             520      trust or other estate planning entity was created for:
             521          (A) the estate of a current resident of the lot; or
             522          (B) the parent, child, or sibling of the current resident of the lot;
             523          (b) a provision [allowing] that allows a lot owner who has a rental in the association


             524      before the time the rental restriction described in Subsection (2)(a) is recorded with the county
             525      recorder of the county in which the association is located to continue renting until:
             526          (i) the lot owner occupies the lot; or
             527          (ii) an officer, owner, member, trustee, beneficiary, director, or person holding a
             528      similar position of ownership or control of an entity or trust that holds an ownership interest in
             529      the lot, occupies the lot; and
             530          (c) a requirement that the association create, by rule or resolution, procedures to:
             531          (i) determine and track the number of rentals and lots in the association subject to the
             532      provisions described in Subsections (3)(a) and (b); and
             533          (ii) ensure consistent administration and enforcement of the rental restrictions.
             534          (4) For purposes of Subsection (3)(b), a transfer occurs when one or more of the
             535      following occur:
             536          (a) the conveyance, sale, or other transfer of a lot by deed;
             537          (b) the granting of a life estate in the lot; or
             538          (c) if the lot is owned by a limited liability company, corporation, partnership, or other
             539      business entity, the sale or transfer of more than 75% of the business entity's share, stock,
             540      membership interests, or partnership interests in a 12-month period.
             541          (5) This section does not limit or affect residency age requirements for an association
             542      that complies with the requirements of the Housing for Older Persons Act, 42 U.S.C. Sec.
             543      3607.
             544          (6) The declaration of covenants, conditions, and restrictions or amendments to the
             545      declaration of covenants, conditions, and restrictions recorded [prior to] before the transfer of
             546      the first lot from the initial declarant may prohibit or restrict rentals without providing for the
             547      exceptions, provisions, and procedures required under Subsection (3)(a).
             548          (7) [This section does] Subsections (2) through (6) do not apply to:
             549          (a) an association [containing] that contains a time period unit as defined in Section
             550      57-8-3 ;
             551          (b) any other form of timeshare interest as defined in Section 57-19-2 ; or
             552          (c) an association in which the initial declaration of covenants, conditions, and
             553      restrictions is recorded before May 12, 2009.
             554          (8) Notwithstanding this section, an association may, upon unanimous approval by all


             555      lot owners, restrict or prohibit rentals without an exception described in Subsection (3).
             556          (9) Except as provided in Subsection (10), an association may not require a lot owner
             557      who owns a rental lot to:
             558          (a) obtain the association's approval of a prospective renter; or
             559          (b) give the association:
             560          (i) a copy of a rental application;
             561          (ii) a copy of a renter's or prospective renter's credit information or credit report;
             562          (iii) a copy of a renter's or prospective renter's background check; or
             563          (iv) documentation to verify the renter's age.
             564          (10) (a) A lot owner who owns a rental lot shall give an association the documents
             565      described in Subsection (9)(b) if the lot owner is required to provide the documents by court
             566      order or as part of discovery under the Utah Rules of Civil Procedure.
             567          (b) If an association's declaration of covenants, conditions, and restrictions lawfully
             568      prohibits or restricts occupancy of the lots by a certain class of individuals, the association may
             569      require a lot owner who owns a rental lot to give the association the information described in
             570      Subsection (9)(b), if:
             571          (i) the information helps the association determine whether the renter's occupancy of
             572      the lot complies with the association's declaration of covenants, conditions, and restrictions;
             573      and
             574          (ii) the association uses the information to determine whether the renter's occupancy of
             575      the lot complies with the association's declaration of covenants, conditions, and restrictions.




Legislative Review Note
    as of 2-21-14 3:56 PM


Office of Legislative Research and General Counsel


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