This document includes House Committee Amendments incorporated into the bill on Fri, Jan 30, 2015 at 11:45 AM by lerror.
This document includes House Floor Amendments incorporated into the bill on Wed, Feb 4, 2015 at 12:50 PM by jeyring.
This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Fri, Feb 20, 2015 at 11:56 AM by lpoole.
Representative Gage Froerer proposes the following substitute bill:


1     
ASSOCIATION AMENDMENTS

2     
2015 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Gage Froerer

5     
Senate Sponsor: Stephen H. Urquhart

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions of the Condominium Ownership Act and the Community
10     Association Act.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     addresses the requirements and prohibitions that apply to rules of an association or
15     an association of unit owners;
16          ▸     modifies the method by which an association or an association of unit owners may
17     restrict or prohibit rentals;
18          ▸     modifies the circumstances under which an association or an association of unit
19     owners may assess a fine;
20          ▸     clarifies the procedures by which a lot owner or a unit owner may appeal an
21     assessed fine; and
22          ▸     makes technical and conforming changes.
23     Money Appropriated in this Bill:
24          None
25     Other Special Clauses:
26          None
27     Utah Code Sections Affected:
28     AMENDS:
29          57-8-3, as last amended by Laws of Utah 2013, Chapters 95 and 152
30          57-8-10.1, as enacted by Laws of Utah 2014, Chapter 397
31          57-8-37, as last amended by Laws of Utah 2014, Chapter 116
32          57-8a-102, as last amended by Laws of Utah 2013, Chapters 95 and 152
33          57-8a-208, as last amended by Laws of Utah 2014, Chapter 116
34          57-8a-209, as last amended by Laws of Utah 2014, Chapter 397
35          57-8a-218, as enacted by Laws of Utah 2011, Chapter 355
36     ENACTS:
37          57-8-8.1, Utah Code Annotated 1953
38     

39     Be it enacted by the Legislature of the state of Utah:
40          Section 1. Section 57-8-3 is amended to read:
41          57-8-3. Definitions.
42          As used in this chapter:
43          (1) "Assessment" means any charge imposed by the association, including:
44          (a) common expenses on or against a unit owner pursuant to the provisions of the
45     declaration, bylaws, or this chapter; and
46          (b) an amount that an association of unit owners assesses to a unit owner under
47     Subsection 57-8-43(9)(g).
48          (2) "Association of unit owners" means all of the unit owners:
49          (a) acting as a group in accordance with the declaration and bylaws; or
50          (b) organized as a legal entity in accordance with the declaration.
51          (3) "Building" means a building, containing units, and comprising a part of the
52     property.
53          (4) "Commercial condominium project" means a condominium project that has no
54     residential units within the project.
55          (5) "Common areas and facilities" unless otherwise provided in the declaration or
56     lawful amendments to the declaration means:
57          (a) the land included within the condominium project, whether leasehold or in fee
58     simple;
59          (b) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
60     corridors, lobbies, stairs, stairways, fire escapes, entrances, and exits of the building;
61          (c) the basements, yards, gardens, parking areas, and storage spaces;
62          (d) the premises for lodging of janitors or persons in charge of the property;
63          (e) installations of central services such as power, light, gas, hot and cold water,
64     heating, refrigeration, air conditioning, and incinerating;
65          (f) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all
66     apparatus and installations existing for common use;
67          (g) such community and commercial facilities as may be provided for in the
68     declaration; and
69          (h) all other parts of the property necessary or convenient to its existence, maintenance,
70     and safety, or normally in common use.
71          (6) "Common expenses" means:
72          (a) all sums lawfully assessed against the unit owners;
73          (b) expenses of administration, maintenance, repair, or replacement of the common
74     areas and facilities;
75          (c) expenses agreed upon as common expenses by the association of unit owners; and
76          (d) expenses declared common expenses by this chapter, or by the declaration or the
77     bylaws.
78          (7) "Common profits," unless otherwise provided in the declaration or lawful
79     amendments to the declaration, means the balance of all income, rents, profits, and revenues
80     from the common areas and facilities remaining after the deduction of the common expenses.
81          (8) "Condominium" means the ownership of a single unit in a multiunit project
82     together with an undivided interest in common in the common areas and facilities of the
83     property.
84          (9) "Condominium plat" means a plat or plats of survey of land and units prepared in
85     accordance with Section 57-8-13.
86          (10) "Condominium project" means a real estate condominium project; a plan or
87     project whereby two or more units, whether contained in existing or proposed apartments,
88     commercial or industrial buildings or structures, or otherwise, are separately offered or
89     proposed to be offered for sale. Condominium project also means the property when the
90     context so requires.
91          (11) "Condominium unit" means a unit together with the undivided interest in the
92     common areas and facilities appertaining to that unit. Any reference in this chapter to a
93     condominium unit includes both a physical unit together with its appurtenant undivided interest
94     in the common areas and facilities and a time period unit together with its appurtenant
95     undivided interest, unless the reference is specifically limited to a time period unit.
96          (12) "Contractible condominium" means a condominium project from which one or
97     more portions of the land within the project may be withdrawn in accordance with provisions
98     of the declaration and of this chapter. If the withdrawal can occur only by the expiration or
99     termination of one or more leases, then the condominium project is not a contractible
100     condominium within the meaning of this chapter.
101          (13) "Convertible land" means a building site which is a portion of the common areas
102     and facilities, described by metes and bounds, within which additional units or limited common
103     areas and facilities may be created in accordance with this chapter.
104          (14) "Convertible space" means a portion of the structure within the condominium
105     project, which portion may be converted into one or more units or common areas and facilities,
106     including limited common areas and facilities in accordance with this chapter.
107          (15) "Declarant" means all persons who execute the declaration or on whose behalf the
108     declaration is executed. From the time of the recordation of any amendment to the declaration
109     expanding an expandable condominium, all persons who execute that amendment or on whose
110     behalf that amendment is executed shall also come within this definition. Any successors of
111     the persons referred to in this subsection who come to stand in the same relation to the
112     condominium project as their predecessors also come within this definition.
113          (16) "Declaration" means the instrument by which the property is submitted to the
114     provisions of this act, as it from time to time may be lawfully amended.
115          (17) "Expandable condominium" means a condominium project to which additional
116     land or an interest in it may be added in accordance with the declaration and this chapter.
117          (18) "Governing documents":
118          (a) means a written instrument by which an association of unit owners may:
119          (i) exercise powers; or
120          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
121     association of unit owners; and
122          (b) includes:
123          (i) articles of incorporation;
124          (ii) bylaws;
125          (iii) a plat;
126          (iv) a declaration of covenants, conditions, and restrictions; and
127          (v) rules of the association of unit owners.
128          (19) "Independent third party" means a person that:
129          (a) is not related to the unit owner;
130          (b) shares no pecuniary interests with the unit owner; and
131          (c) purchases the unit in good faith and without the intent to defraud a current or future
132     lienholder.
133          (20) "Leasehold condominium" means a condominium project in all or any portion of
134     which each unit owner owns an estate for years in his unit, or in the land upon which that unit
135     is situated, or both, with all those leasehold interests to expire naturally at the same time. A
136     condominium project including leased land, or an interest in the land, upon which no units are
137     situated or to be situated is not a leasehold condominium within the meaning of this chapter.
138          (21) "Limited common areas and facilities" means those common areas and facilities
139     designated in the declaration as reserved for use of a certain unit or units to the exclusion of the
140     other units.
141          (22) "Majority" or "majority of the unit owners," unless otherwise provided in the
142     declaration or lawful amendments to the declaration, means the owners of more than 50% in
143     the aggregate in interest of the undivided ownership of the common areas and facilities.
144          (23) "Management committee" means the committee as provided in the declaration
145     charged with and having the responsibility and authority to make and to enforce all of the
146     reasonable rules covering the operation and maintenance of the property.
147          (24) (a) "Means of electronic communication" means an electronic system that allows
148     individuals to communicate orally in real time.
149          (b) "Means of electronic communication" includes:
150          (i) web conferencing;
151          (ii) video conferencing; and
152          (iii) telephone conferencing.
153          [(24)] (25) "Mixed-use condominium project" means a condominium project that has
154     both residential and commercial units in the condominium project.
155          [(25)] (26) "Par value" means a number of dollars or points assigned to each unit by the
156     declaration. Substantially identical units shall be assigned the same par value, but units located
157     at substantially different heights above the ground, or having substantially different views, or
158     having substantially different amenities or other characteristics that might result in differences
159     in market value, may be considered substantially identical within the meaning of this
160     subsection. If par value is stated in terms of dollars, that statement may not be considered to
161     reflect or control the sales price or fair market value of any unit, and no opinion, appraisal, or
162     fair market transaction at a different figure may affect the par value of any unit, or any
163     undivided interest in the common areas and facilities, voting rights in the unit owners'
164     association, liability for common expenses, or right to common profits, assigned on the basis
165     thereof.
166          [(26)] (27) "Person" means an individual, corporation, partnership, association, trustee,
167     or other legal entity.
168          [(27)] (28) "Property" means the land, whether leasehold or in fee simple, the building,
169     if any, all improvements and structures thereon, all easements, rights, and appurtenances
170     belonging thereto, and all articles of personal property intended for use in connection
171     therewith.
172          [(28)] (29) "Record," "recording," "recorded," and "recorder" have the meaning stated
173     in Title 57, Chapter 3, Recording of Documents.
174          (30) "Rentals" or "rental unit" means:
175          (a) a unit owned by an individual not described in Subsection (30)(b) that is occupied
176     by someone while no unit owner occupies the unit as the unit owner's primary residence; and
177          (b) a unit owned by an entity or trust, regardless of who occupies the unit.
178          [(29)] (31) "Size" means the number of cubic feet, or the number of square feet of
179     ground or floor space, within each unit as computed by reference to the record of survey map
180     and rounded off to a whole number. Certain spaces within the units including attic, basement,
181     or garage space may be omitted from the calculation or be partially discounted by the use of a
182     ratio, if the same basis of calculation is employed for all units in the condominium project and
183     if that basis is described in the declaration.
184          [(30)] (32) "Time period unit" means an annually recurring part or parts of a year
185     specified in the declaration as a period for which a unit is separately owned and includes a
186     timeshare estate as defined in Subsection 57-19-2(19).
187          [(31)] (33) "Unit" means either a separate physical part of the property intended for any
188     type of independent use, including one or more rooms or spaces located in one or more floors
189     or part or parts of floors in a building or a time period unit, as the context may require. A
190     convertible space shall be treated as a unit in accordance with Subsection 57-8-13.4(3). A
191     proposed condominium unit under an expandable condominium project, not constructed, is a
192     unit two years after the date the recording requirements of Section 57-8-13.6 are met.
193          [(32)] (34) "Unit number" means the number, letter, or combination of numbers and
194     letters designating the unit in the declaration and in the record of survey map.
195          [(33)] (35) "Unit owner" means the person or persons owning a unit in fee simple and
196     an undivided interest in the fee simple estate of the common areas and facilities in the
197     percentage specified and established in the declaration or, in the case of a leasehold
198     condominium project, the person or persons whose leasehold interest or interests in the
199     condominium unit extend for the entire balance of the unexpired term or terms.
200          Section 2. Section 57-8-8.1 is enacted to read:
201          57-8-8.1. Equal treatment by rules required -- Limits on rules.
202          (1) (a) Except as provided in Subsection (1)(b), a rule shall treat similarly situated unit
203     owners similarly.
204          (b) Notwithstanding Subsection (1)(a), a rule may:
205          (i) vary according to the level and type of service that the association of unit owners
206     provides to unit owners; and
207          (ii) differ between residential and nonresidential uses.
208          (2) (a) If a unit owner owns a rental unit and is in compliance with the association of
209     unit owners' governing documents and any rule that the association of unit owners adopts under
210     Subsection (4), a rule may not treat the unit owner differently because the unit owner owns a
211     rental unit.
212          (b) Notwithstanding Subsection (2)(a), a rule may:
213          (i) limit or prohibit a rental unit owner from using the common areas for purposes other
214     than attending an association meeting or managing the rental unit;
215          (ii) if the rental unit owner retains the right to use the association of unit owners'
216     common areas, even occasionally, charge a rental unit owner a fee to use the common areas; or
217          (iii) include a provision in the association of unit owners' governing documents that:
218          (A) requires each tenant of a rental unit to abide by the terms of the governing
219     documents; and
220          (B) holds the tenant and the rental unit owner jointly and severally liable for a violation
221     of a provision of the governing documents.
222          (3) (a) A rule may not interfere with the freedom of a unit owner to determine the
223     composition of the unit owner's household.
224          (b) Notwithstanding Subsection (3)(a), an association of unit owners may:
225          (i) require that all occupants of a dwelling be members of a single housekeeping unit;
226     or
227          (ii) limit the total number of occupants permitted in each residential dwelling on the
228     basis of the residential dwelling's:
229          (A) size and facilities; and
230          (B) fair use of the common areas.
231          (4) Unless contrary to a declaration, a rule may require a minimum lease term.
232          (5) Unless otherwise provided in the declaration, an association of unit owners may by
233     rule:
234          (a) regulate the use, maintenance, repair, replacement, and modification of common
235     areas;
236          (b) impose and receive any payment, fee, or charge for:
237          (i) the use, rental, or operation of the common areas, except limited common areas; and
238          (ii) a service provided to a Ĥ→ [lot] unit ←Ĥ owner;
239          (c) impose a charge for a late payment of an assessment; or
240          (d) provide for the indemnification of the association of unit owners' officers and board
241     consistent with Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
242          (6) A rule shall be reasonable.
243          (7) A declaration, or an amendment to a declaration, may vary any of the requirements
244     of Subsections (1) through (5), except Subsection (1)(b)(ii).
245          (8) This section applies to an association regardless of when the association is created.
246          Section 3. Section 57-8-10.1 is amended to read:
247          57-8-10.1. Rental restrictions.
248          [(1) As used in this section, "rentals" or "rental unit" means:]
249          [(a) a unit owned by an individual not described in Subsection (1)(b) that is occupied
250     by someone while no unit owner occupies the unit as the unit owner's primary residence; and]
251          [(b) a unit owned by an entity or trust, regardless of who occupies the unit.]
252          [(2)] (1) (a) Subject to Subsections [(2)] (1)(b), [(6)] (5), and [(7)] (6), an association of
253     unit owners may:
254          (i) create restrictions on the number and term of rentals in a condominium project; or
255          (ii) prohibit rentals in the condominium project.
256          (b) An association of unit owners that creates a rental restriction or prohibition in
257     accordance with Subsection [(2)] (1)(a) shall create the rental restriction or prohibition in a
258     declaration or by amending the declaration.
259          [(3)] (2) If an association of unit owners prohibits or imposes restrictions on the
260     number and term of rentals, the restrictions shall include:
261          (a) a provision that requires a condominium project to exempt from the rental
262     restrictions the following unit owner and the unit owner's unit:
263          (i) a unit owner in the military for the period of the unit owner's deployment;
264          (ii) a unit occupied by a unit owner's parent, child, or sibling;
265          (iii) a unit owner whose employer has relocated the unit owner for no less than two
266     years; or
267          (iv) a unit owned by a trust or other entity created for estate planning purposes if the
268     trust or other estate planning entity was created for the estate of:
269          (A) a current resident of the unit; or
270          (B) the parent, child, or sibling of the current resident of the unit;
271          (b) a provision that allows a unit owner who has a rental in the condominium project
272     before the time the rental restriction described in Subsection [(2)] (1)(a) is recorded with the
273     county recorder of the county in which the condominium project is located to continue renting
274     until:
275          (i) the unit owner occupies the unit; or
276          (ii) an officer, owner, member, trustee, beneficiary, director, or person holding a
277     similar position of ownership or control of an entity or trust that holds an ownership interest in
278     the unit, occupies the unit; and
279          (c) a requirement that the association of unit owners create, by rule or resolution,
280     procedures to:
281          (i) determine and track the number of rentals and units in the condominium project
282     subject to the provisions described in Subsections [(3)] (2)(a) and (b); and
283          (ii) ensure consistent administration and enforcement of the rental restrictions.
284          [(4)] (3) For purposes of Subsection [(3)] (2)(b), a transfer occurs when one or more of
285     the following occur:
286          (a) the conveyance, sale, or other transfer of a unit by deed;
287          (b) the granting of a life estate in the unit; or
288          (c) if the unit is owned by a limited liability company, corporation, partnership, or
289     other business entity, the sale or transfer of more than 75% of the business entity's share, stock,
290     membership interests, or partnership interests in a 12-month period.
291          [(5)] (4) This section does not limit or affect residency age requirements for an
292     association of unit owners that complies with the requirements of the Housing for Older
293     Persons Act, 42 U.S.C. Sec. 3607.
294          [(6)] (5) A declaration or amendment to a declaration recorded before transfer of the
295     first unit from the initial declarant may prohibit or restrict rentals without providing for the
296     exceptions, provisions, and procedures required under Subsection [(3)] (2)(a).
297          [(7)] (6) Subsections [(2)] (1) through [(6)] (5) do not apply to:
298          (a) a condominium project that contains a time period unit as defined in Section
299     57-8-3;
300          (b) any other form of timeshare interest as defined in Section 57-19-2; or
301          (c) a condominium project in which the initial declaration is recorded before May 12,
302     2009[.], unless, on or after May 12, 2015, the association of unit owners:
303          (i) adopts a rental restriction or prohibition; or
304          (ii) amends an existing rental restriction or prohibition.
305          [(8)] (7) Notwithstanding this section, an association of unit owners may Ĥ→ [, upon
306     unanimous approval by all unit owners,] ←Ĥ restrict or prohibit rentals without an exception
307     described in Subsection [(3)] (2) Ĥ→ [.] if:
307a      (a)      the restriction or prohibition receives unanimous approval by all unit owners; and
307b      (b)      when the restriction or prohibition requires an amendment to the association of unit
307c     owners' declaration, the association of unit owners fulfills all other requirements for amending
307d     the declaration described in the association of unit owners' governing documents. ←Ĥ
308          [(9)] (8) Except as provided in Subsection [(10)] (9), an association of unit owners may
309     not require a unit owner who owns a rental unit to:
310          (a) obtain the association of unit owners' approval of a prospective renter; [or]
311          (b) give the association of unit owners:
312          (i) a copy of a rental application;
313          (ii) a copy of a renter's or prospective renter's credit information or credit report;
314          (iii) a copy of a renter's or prospective renter's background check; or
315          (iv) documentation to verify the renter's age[.]; or
316          (c) pay an additional assessment, fine, or fee because the unit is a rental unit.
317          [(10)] (9) (a) A unit owner who owns a rental unit shall give an association of unit
318     owners the documents described in Subsection [(9)] (8)(b) if the unit owner is required to
319     provide the documents by court order or as part of discovery under the Utah Rules of Civil
320     Procedure.
321          (b) If an association of unit owners' declaration lawfully prohibits or restricts
322     occupancy of the units by a certain class of individuals, the association of unit owners may
323     require a unit owner who owns a rental unit to give the association of unit owners the
324     information described in Subsection [(9)] (8)(b), if:
325          (i) the information helps the association of unit owners determine whether the renter's
326     occupancy of the unit complies with the association of unit owners' declaration; and
327          (ii) the association of unit owners uses the information to determine whether the
328     renter's occupancy of the unit complies with the association of unit owners' declaration.
329          (10) The provisions of Subsections (8) and (9) apply to an association of unit owners
330     regardless of when the association of unit owners is created.
331          Section 4. Section 57-8-37 is amended to read:
332          57-8-37. Fines.
333          (1) [(a) If authorized in the declaration, bylaws, or association rules, the] A
334     management committee [of a residential condominium project] may assess a fine against a unit
335     owner [after the requirements of Subsection (2) have been met for a violation of the rules and
336     regulations of the association of unit owners which have been promulgated in accordance with
337     this chapter and the declaration and bylaws] for a violation of the association of unit owners'
338     governing documents in accordance with the provisions of this section.
339          [(b) The management committee of a nonresidential condominium project may not
340     assess a fine against a unit owner.]
341          (2) (a) Before assessing a fine under Subsection (1), the management committee shall
342     give [notice to the unit owner of the violation and inform the owner that a fine will be imposed
343     if the violation is not cured within the time provided in the declaration, bylaws, or association
344     rules, which shall be at least 48 hours.] the unit owner a written warning that:
345          (i) describes the violation;
346          (ii) states the rule or provision of the association of unit owners' governing documents
347     that the unit owner's conduct violates;
348          (iii) states that the management committee may Ŝ→ , in accordance with the provisions of
348a     this section, ←Ŝ assess Ŝ→ [a fine] fines ←Ŝ against the unit owner if a
349     continuing violation is not cured or if the unit owner commits Ŝ→ [a] ←Ŝ similar Ŝ→ [violation]
349a     violations ←Ŝ within one
350     year after the day on which the management committee gives the unit owner the written
351     warning Ŝ→ or assesses a fine against the unit owner under this section ←Ŝ ; and
352          (iv) if the violation is a continuing violation, states a time that is not less than 48 hours
353     after the day on which the management committee gives the unit owner the written warning by
354     which the unit owner shall cure the violation.
355          (b) A management committee may assess a fine against a unit owner if:
356          (i) within one year after the day on which the management committee gives the unit
357     owner a written warning described in Subsection (2)(a), the unit owner commits another
358     violation of the same rule or provision identified in the written warning; or
359          (ii) for a continuing violation, the unit owner does not cure the violation within the
360     time period that is stated in the written warning described in Subsection (2)(a).
361          (c) If permitted by the association of unit owners' governing documents, after a
362     management committee assesses a fine against a unit owner under this section, the
363     management committee may, without further warning under this Subsection (2), assess an
364     additional fine against the unit owner each time the unit owner:
365          (i) commits a violation of the same rule or provision within one year after the day on
366     which the management committee assesses Ŝ→ [the initial] a ←Ŝ fine Ŝ→ for a violation of the
366a     same rule or provision ←Ŝ ; or
367          (ii) allows a violation to continue for 10 days or longer after the day on which the
368     management committee assesses the Ŝ→ [initial] ←Ŝ fine.
369          (d) The aggregate amount of fines assessed against a unit owner for violations of the
370     same rule or provision of the governing documents may not exceed $500 in any one calendar
371     month.
372          (3) [(a)] A fine assessed under Subsection (1) shall:
373          [(i)] (a) be made only for a violation of a rule [or regulation which is specifically listed
374     in the declaration, bylaws, or association rules as an offense which is subject to a fine],
375     covenant, condition, or restriction that is in the association of unit owners' governing
376     documents;
377          [(ii)] (b) be in the amount [specifically] provided for in the [declaration, bylaws, or
378     association rules for that specific type of violation, not to exceed $500] association of unit
379     owners' governing documents and in accordance with Subsection (2)(d); and
380          [(iii)] (c) accrue interest and late fees as provided in the [declaration, bylaws, or
381     association rules] association of unit owners' governing documents.
382          [(b) Cumulative fines for a continuing violation may not exceed $500 per month.]
383          (4) (a) A unit owner who is assessed a fine under Subsection (1) may request an
384     informal hearing before the management committee to [protest or] dispute the fine within 30
385     days [from the date] after the day on which the unit owner receives notice that the fine is
386     assessed. [The hearing shall be conducted in accordance with the standards provided in the
387     declaration, bylaws, or association rules. No]
388          (b) At a hearing described in Subsection (4)(a), the management committee shall:
389          (i) provide the unit owner a reasonable opportunity to present the unit owner's position
390     to the management committee; and
391          (ii) allow the unit owner, a committee member, or any other person involved in the
392     hearing to participate in the hearing by means of electronic communication.
393          (c) If a unit owner timely requests an informal hearing under Subsection (4)(a), no
394     interest or late fees may accrue until after the management committee conducts the hearing [has
395     been conducted] and the unit owner receives a final decision [has been rendered].
396          (5) A unit owner may appeal a fine [issued] assessed under Subsection (1) by initiating
397     a civil action within 180 days after:
398          [(a) a hearing has been held and a final decision has been rendered by the management
399     committee under Subsection (4); or]
400          (a) if the unit owner timely requests an informal hearing under Subsection (4), the day
401     on which the unit owner receives a final decision from the management committee; or
402          (b) if the unit owner does not timely request an informal hearing under Subsection (4),
403     the day on which the time to request an informal hearing under Subsection (4) [has expired
404     without the unit owner making such a request] expires.
405          (6) (a) Subject to Subsection (6)(b), a management committee may delegate the
406     management committee's rights and responsibilities under this section to a managing agent.
407          (b) A management committee may not delegate the management committee's rights or
408     responsibilities described in Subsection (4)(b).
409          (7) The provisions of this section apply to an association of unit owners regardless of
410     when the association of unit owners is created.
411          Section 5. Section 57-8a-102 is amended to read:
412          57-8a-102. Definitions.
413          As used in this chapter:
414          (1) (a) "Assessment" means a charge imposed or levied:
415          (i) by the association;
416          (ii) on or against a lot or a lot owner; and
417          (iii) pursuant to a governing document recorded with the county recorder.
418          (b) "Assessment" includes:
419          (i) a common expense; and
420          (ii) an amount assessed against a lot owner under Subsection 57-8a-405(7).
421          (2) (a) Except as provided in Subsection (2)(b), "association" means a corporation or
422     other legal entity, any member of which:
423          (i) is an owner of a residential lot located within the jurisdiction of the association, as
424     described in the governing documents; and
425          (ii) by virtue of membership or ownership of a residential lot is obligated to pay:
426          (A) real property taxes;
427          (B) insurance premiums;
428          (C) maintenance costs; or
429          (D) for improvement of real property not owned by the member.
430          (b) "Association" or "homeowner association" does not include an association created
431     under Title 57, Chapter 8, Condominium Ownership Act.
432          (3) "Board of directors" or "board" means the entity, regardless of name, with primary
433     authority to manage the affairs of the association.
434          (4) "Common areas" means property that the association:
435          (a) owns;
436          (b) maintains;
437          (c) repairs; or
438          (d) administers.
439          (5) "Common expense" means costs incurred by the association to exercise any of the
440     powers provided for in the association's governing documents.
441          (6) "Declarant":
442          (a) means the person who executes a declaration and submits it for recording in the
443     office of the recorder of the county in which the property described in the declaration is
444     located; and
445          (b) includes the person's successor and assign.
446          (7) (a) "Governing documents" means a written instrument by which the association
447     may:
448          (i) exercise powers; or
449          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
450     association.
451          (b) "Governing documents" includes:
452          (i) articles of incorporation;
453          (ii) bylaws;
454          (iii) a plat;
455          (iv) a declaration of covenants, conditions, and restrictions; and
456          (v) rules of the association.
457          (8) "Independent third party" means a person that:
458          (a) is not related to the owner of the residential lot;
459          (b) shares no pecuniary interests with the owner of the residential lot; and
460          (c) purchases the residential lot in good faith and without the intent to defraud a current
461     or future lienholder.
462          (9) "Judicial foreclosure" means a foreclosure of a lot:
463          (a) for the nonpayment of an assessment; and
464          (b) (i) in the manner provided by law for the foreclosure of a mortgage on real
465     property; and
466          (ii) as provided in Part 3, Collection of Assessments.
467          (10) "Lease" or "leasing" means regular, exclusive occupancy of a lot:
468          (a) by a person or persons other than the owner; and
469          (b) for which the owner receives a consideration or benefit, including a fee, service,
470     gratuity, or emolument.
471          (11) "Limited common areas" means common areas described in the declaration and
472     allocated for the exclusive use of one or more lot owners.
473          (12) "Lot" means:
474          (a) a lot, parcel, plot, or other division of land:
475          (i) designated for separate ownership or occupancy; and
476          (ii) (A) shown on a recorded subdivision plat; or
477          (B) the boundaries of which are described in a recorded governing document; or
478          (b) (i) a unit in a condominium association if the condominium association is a part of
479     a development; or
480          (ii) a unit in a real estate cooperative if the real estate cooperative is part of a
481     development.
482          (13) (a) "Means of electronic communication" means an electronic system that allows
483     individuals to communicate orally in real time.
484          (b) "Means of electronic communication" includes:
485          (i) web conferencing;
486          (ii) video conferencing; and
487          (iii) telephone conferencing.
488          [(13)] (14) "Mixed-use project" means a project under this chapter that has both
489     residential and commercial lots in the project.
490          [(14)] (15) "Nonjudicial foreclosure" means the sale of a lot:
491          (a) for the nonpayment of an assessment; and
492          (b) (i) in the same manner as the sale of trust property under Sections 57-1-19 through
493     57-1-34; and
494          (ii) as provided in Part 3, Collection of Assessments.
495          (16) "Rentals" or "rental lot" means:
496          (a) a lot owned by an individual not described in Subsection (16)(b) that is occupied by
497     someone while no lot owner occupies the lot as the lot owner's primary residence; and
498          (b) a lot owned by an entity or trust, regardless of who occupies the lot.
499          [(15)] (17) "Residential lot" means a lot, the use of which is limited by law, covenant,
500     or otherwise to primarily residential or recreational purposes.
501          Section 6. Section 57-8a-208 is amended to read:
502          57-8a-208. Fines.
503          (1) [Unless otherwise provided in the association's governing documents, the] A board
504     [of an association] may assess a fine against a lot owner for a violation of the association's
505     governing documents [after the requirements described in Subsection (2) are met] in
506     accordance with the provisions of this section.
507          (2) (a) Before assessing a fine under Subsection (1), the board shall give the lot owner
508     a written warning that:
509          [(a) notify the lot owner of the violation; and]
510          [(b) inform the owner that a fine will be imposed if the violation is not remedied within
511     the time provided in the association's governing documents, which shall be at least 48 hours.]
512          (i) describes the violation;
513          (ii) states the rule or provision of the association's governing documents that the lot
514     owner's conduct violates;
515          (iii) states that the board may Ŝ→ , in accordance with the provisions of this section, ←Ŝ
515a      assess Ŝ→ [a fine] fines ←Ŝ against the lot owner if a continuing
516     violation is not cured or if the lot owner commits Ŝ→ [a] ←Ŝ similar Ŝ→ [violation] violations ←Ŝ
516a      within one year after the
517     day on which the board gives the lot owner the written warning Ŝ→ or assesses a fine against the
517a     lot owner under this section ←Ŝ ; and
518          (iv) if the violation is a continuing violation, states a time that is not less than 48 hours
519     after the day on which the board gives the lot owner the written warning by which the lot
520     owner shall cure the violation.
521          (b) A board may assess a fine against a lot owner if:
522          (i) within one year after the day on which the board gives the lot owner a written
523     warning described in Subsection (2)(a), the lot owner commits another violation of the same
524     rule or provision identified in the written warning; or
525          (ii) for a continuing violation, the lot owner does not cure the violation within the time
526     period that is stated in the written warning described in Subsection (2)(a).
527          (c) If permitted by the association's governing documents, after the board assesses a
528     fine against a lot owner under this section, the board may, without further warning under this
529     Subsection (2), assess an additional fine against the lot owner each time the lot owner:
530          (i) commits a violation of the same rule or provision within one year after the day on
531     which the board assesses Ŝ→ [the initial] a ←Ŝ fine Ŝ→ for a violation of the same rule or
531a     provision ←Ŝ ; or
532          (ii) allows a violation to continue for 10 days or longer after the day on which the
533     board assesses the Ŝ→ [initial] ←Ŝ fine.
534          (3) [(a)] A fine assessed under Subsection (1) shall:
535          [(i)] (a) be made only for a violation of a rule, covenant, condition, or restriction that is
536     [specifically listed] in the association's governing documents;
537          [(ii)] (b) be in the amount [specifically] provided for in the association's governing
538     documents [for that specific type of violation or in an amount commensurate with the nature of
539     the violation]; and
540          [(iii)] (c) accrue interest and late fees as provided in the association's governing
541     documents.
542          [(b) Unpaid fines may be collected as an unpaid assessment as set forth in the
543     association's governing documents or in this chapter.]
544          (4) (a) A lot owner who is assessed a fine under Subsection (1) may request an
545     informal hearing before the board to [protest or] dispute the fine within 30 days after the day on
546     which the lot owner receives notice that the fine is assessed.
547          [(b) A hearing requested under Subsection (4)(a) shall be conducted in accordance with
548     standards provided in the association's governing documents.]
549          (b) At a hearing described in Subsection (4)(a), the board shall:
550          (i) provide the lot owner a reasonable opportunity to present the lot owner's position to
551     the board; and
552          (ii) allow the lot owner, a board member, or any other person involved in the hearing to
553     participate in the hearing by means of electronic communication.
554          (c) [No] If a lot owner timely requests an informal hearing under Subsection (4)(a), no
555     interest or late fees may accrue until after the board conducts the hearing [has been conducted]
556     and the lot owner receives a final decision [has been rendered].
557          (5) A lot owner may appeal a fine [issued] assessed under Subsection (1) by initiating a
558     civil action within 180 days after:
559          (a) if the lot owner timely requests an informal hearing under Subsection (4), [within
560     180 days after] the day on which the lot owner receives a final decision from the [informal
561     hearing is issued] board; or
562          (b) if the lot owner does not timely request an informal hearing under Subsection (4),
563     [within 180 days after] the day on which the time to request an informal hearing under
564     Subsection (4) expires.
565          (6) (a) Subject to Subsection (6)(b), a board may delegate the board's rights and
566     responsibilities under this section to a managing agent.
567          (b) A board may not delegate the board's rights or responsibilities described in
568     Subsection (4)(b).
569          (7) The provisions of this section apply to an association regardless of when the
570     association is created.
571          Section 7. Section 57-8a-209 is amended to read:
572          57-8a-209. Rental restrictions.
573          [(1) As used in this section, "rentals" or "rental lot" means:]
574          [(a) a lot owned by an individual not described in Subsection (1)(b) that is occupied by
575     someone while no lot owner occupies the lot as the lot owner's primary residence; and]
576          [(b) a lot owned by an entity or trust, regardless of who occupies the lot.]
577          [(2)] (1) (a) Subject to Subsections [(2)] (1)(b), [(6)] (5), and [(7)] (6), an association
578     may:
579          (i) create restrictions on the number and term of rentals in an association; or
580          (ii) prohibit rentals in the association.
581          (b) An association that creates a rental restriction or prohibition in accordance with
582     Subsection (1)(a)[(i)] shall create the rental restriction or prohibition in a recorded declaration
583     of covenants, conditions, and restrictions, or by amending the recorded declaration of
584     covenants, conditions, and restrictions.
585          [(3)] (2) If an association prohibits or imposes restrictions on the number and term of
586     rentals, the restrictions shall include:
587          (a) a provision that requires the association to exempt from the rental restrictions the
588     following lot owner and the lot owner's lot:
589          (i) a lot owner in the military for the period of the lot owner's deployment;
590          (ii) a lot occupied by a lot owner's parent, child, or sibling;
591          (iii) a lot owner whose employer has relocated the lot owner for no less than two years;
592     or
593          (iv) a lot owned by a trust or other entity created for estate planning purposes if the
594     trust or other estate planning entity was created for:
595          (A) the estate of a current resident of the lot; or
596          (B) the parent, child, or sibling of the current resident of the lot;
597          (b) a provision that allows a lot owner who has a rental in the association before the
598     time the rental restriction described in Subsection [(2)] (1)(a) is recorded with the county
599     recorder of the county in which the association is located to continue renting until:
600          (i) the lot owner occupies the lot; or
601          (ii) an officer, owner, member, trustee, beneficiary, director, or person holding a
602     similar position of ownership or control of an entity or trust that holds an ownership interest in
603     the lot, occupies the lot; and
604          (c) a requirement that the association create, by rule or resolution, procedures to:
605          (i) determine and track the number of rentals and lots in the association subject to the
606     provisions described in Subsections [(3)] (2)(a) and (b); and
607          (ii) ensure consistent administration and enforcement of the rental restrictions.
608          [(4)] (3) For purposes of Subsection [(3)] (2)(b), a transfer occurs when one or more of
609     the following occur:
610          (a) the conveyance, sale, or other transfer of a lot by deed;
611          (b) the granting of a life estate in the lot; or
612          (c) if the lot is owned by a limited liability company, corporation, partnership, or other
613     business entity, the sale or transfer of more than 75% of the business entity's share, stock,
614     membership interests, or partnership interests in a 12-month period.
615          [(5)] (4) This section does not limit or affect residency age requirements for an
616     association that complies with the requirements of the Housing for Older Persons Act, 42
617     U.S.C. Sec. 3607.
618          [(6) The] (5) A declaration of covenants, conditions, and restrictions or amendments
619     to the declaration of covenants, conditions, and restrictions recorded before the transfer of the
620     first lot from the initial declarant may prohibit or restrict rentals without providing for the
621     exceptions, provisions, and procedures required under Subsection [(3)] (2)(a).
622          [(7)] (6) Subsections [(2)] (1) through [(6)] (5) do not apply to:
623          (a) an association that contains a time period unit as defined in Section 57-8-3;
624          (b) any other form of timeshare interest as defined in Section 57-19-2; or
625          (c) an association in which the initial declaration of covenants, conditions, and
626     restrictions is recorded before May 12, 2009[.], unless, on or after May 12, 2015, the
627     association:
628          (i) adopts a rental restriction or prohibition; or
629          (ii) amends an existing rental restriction or prohibition.
630          [(8)] (7) Notwithstanding this section, an association may Ĥ→ [, upon unanimous approval
631     by all lot owners,] ←Ĥ restrict or prohibit rentals without an exception described in Subsection [(3)]
632     (2) Ĥ→ [.] if:
632a      (a)     the restriction or prohibition receives unanimous approval by all lot owners; and
632b      (b)     when the restriction or prohibition requires an amendment to the association's
632c     recorded declaration of covenants, conditions, and restrictions, the association fulfills all other
632d     requirements for amending the recorded declaration of covenants, conditions, and restrictions
632e     described in the association's governing documents. ←Ĥ
633          [(9)] (8) Except as provided in Subsection [(10)] (9), an association may not require a
634     lot owner who owns a rental lot to:
635          (a) obtain the association's approval of a prospective renter; [or]
636          (b) give the association:
637          (i) a copy of a rental application;
638          (ii) a copy of a renter's or prospective renter's credit information or credit report;
639          (iii) a copy of a renter's or prospective renter's background check; or
640          (iv) documentation to verify the renter's age[.]; or
641          (c) pay an additional assessment, fine, or fee because the lot is a rental lot.
642          [(10)] (9) (a) A lot owner who owns a rental lot shall give an association the
643     documents described in Subsection [(9)] (8)(b) if the lot owner is required to provide the
644     documents by court order or as part of discovery under the Utah Rules of Civil Procedure.
645          (b) If an association's declaration of covenants, conditions, and restrictions lawfully
646     prohibits or restricts occupancy of the lots by a certain class of individuals, the association may
647     require a lot owner who owns a rental lot to give the association the information described in
648     Subsection [(9)] (8)(b), if:
649          (i) the information helps the association determine whether the renter's occupancy of
650     the lot complies with the association's declaration of covenants, conditions, and restrictions;
651     and
652          (ii) the association uses the information to determine whether the renter's occupancy of
653     the lot complies with the association's declaration of covenants, conditions, and restrictions.
654          (10) The provisions of Subsections (8) and (9) apply to an association regardless of
655     when the association is created.
656          Section 8. Section 57-8a-218 is amended to read:
657          57-8a-218. Equal treatment by rules required -- Limits on association rules and
658     design criteria.
659          (1) (a) Except as provided in Subsection (1)(b), a rule shall treat similarly situated lot
660     owners similarly.
661          (b) Notwithstanding Subsection (1)(a), a rule may:
662          (i) vary according to the level and type of service that the association provides to lot
663     owners; and
664          (ii) differ between residential and nonresidential uses.
665          (2) (a) If a lot owner owns a rental lot and is in compliance with the association's
666     governing documents and any rule that the association adopts under Subsection (4), a rule may
667     not treat the lot owner differently because the lot owner owns a rental lot.
668          (b) Notwithstanding Subsection (2)(a), a rule may:
669          (i) limit or prohibit a rental lot owner from using the common areas for purposes other
670     than attending an association meeting or managing the rental lot;
671          (ii) if the rental lot owner retains the right to use the association's common areas, even
672     occasionally, charge a rental lot owner a fee to use the common areas; or
673          (iii) include a provision in the association's governing documents that:
674          (A) requires each tenant of a rental lot to abide by the terms of the governing
675     documents; and
676          (B) holds the tenant and the rental lot owner jointly and severally liable for a violation
677     of a provision of the governing documents.
678          [(2)] (3) (a) A rule criterion may not abridge the rights of a lot owner to display
679     religious and holiday signs, symbols, and decorations inside a dwelling on a lot.
680          (b) Notwithstanding Subsection [(2)] (3)(a), the association may adopt time, place, and
681     manner restrictions with respect to displays visible from outside the dwelling or lot.
682          [(3)] (4) (a) A rule may not regulate the content of political signs.
683          (b) Notwithstanding Subsection [(3)] (4)(a):
684          (i) a rule may regulate the time, place, and manner of posting a political sign; and
685          (ii) an association design provision may establish design criteria for political signs.
686          [(4)] (5) (a) A rule may not interfere with the freedom of a lot owner to determine the
687     composition of the lot owner's household.
688          (b) Notwithstanding Subsection [(4)] (5)(a), an association may:
689          (i) require that all occupants of a dwelling be members of a single housekeeping unit;
690     [and] or
691          (ii) limit the total number of occupants permitted in each residential dwelling on the
692     basis of the residential dwelling's:
693          (A) size and facilities; and
694          (B) fair use of the common areas.
695          [(5)] (6) (a) A rule may not interfere with an activity of a lot owner within the confines
696     of a dwelling or lot, to the extent that the activity is in compliance with local laws and
697     ordinances.
698          (b) Notwithstanding Subsection [(5)] (6)(a), a rule may prohibit an activity within a
699     dwelling on an owner's lot if the activity:
700          (i) is not normally associated with a project restricted to residential use; or
701          (ii) (A) creates monetary costs for the association or other lot owners;
702          (B) creates a danger to the health or safety of occupants of other lots;
703          (C) generates excessive noise or traffic;
704          (D) creates unsightly conditions visible from outside the dwelling;
705          (E) creates an unreasonable source of annoyance to persons outside the lot; or
706          (F) if there are attached dwellings, creates the potential for smoke to enter another lot
707     owner's dwelling, the common areas, or limited common areas.
708          (c) If permitted by law, an association may adopt rules described in Subsection [(5)]
709     (6)(b) that affect the use of or behavior inside the dwelling.
710          [(6)] (7) (a) A rule may not, to the detriment of a lot owner and over the lot owner's
711     written objection to the board, alter the allocation of financial burdens among the various lots.
712          (b) Notwithstanding Subsection [(6)] (7)(a), an association may:
713          (i) change the common areas available to a lot owner;
714          (ii) adopt generally applicable rules for the use of common areas; or
715          (iii) deny use privileges to a lot owner who:
716          (A) is delinquent in paying assessments;
717          (B) abuses the common areas; or
718          (C) violates the governing documents.
719          (c) This Subsection [(6)] (7) does not permit a rule that:
720          (i) alters the method of levying assessments; or
721          (ii) increases the amount of assessments as provided in the declaration.
722          [(7)] (8) (a) Subject to Subsection [(7)] (8)(b), a rule may not:
723          (i) prohibit the transfer of a lot; or
724          (ii) require the consent of the association or board to transfer a lot.
725          (b) Unless contrary to a declaration, a rule may require a minimum lease term.
726          [(8)] (9) (a) A rule may not require a lot owner to dispose of personal property that was
727     in or on a lot before the adoption of the rule or design criteria if the personal property was in
728     compliance with all rules and other governing documents previously in force.
729          (b) The exemption in Subsection [(8)] (9)(a):
730          (i) applies during the period of the lot owner's ownership of the lot; and
731          (ii) does not apply to a subsequent lot owner who takes title to the lot after adoption of
732     the rule described in Subsection [(8)] (9)(a).
733          [(9)] (10) A rule or action by the association or action by the board may not
734     unreasonably impede a declarant's ability to satisfy existing development financing for
735     community improvements and right to develop:
736          (a) the project; or
737          (b) other properties in the vicinity of the project.
738          [(10)] (11) A rule or association or board action may not interfere with:
739          (a) the use or operation of an amenity that the association does not own or control; or
740          (b) the exercise of a right associated with an easement.
741          [(11)] (12) A rule may not divest a lot owner of the right to proceed in accordance with
742     a completed application for design review, or to proceed in accordance with another approval
743     process, under the terms of the governing documents in existence at the time the completed
744     application was submitted by the owner for review.
745          [(12)] (13) Unless otherwise provided in the declaration, an association may by rule:
746          (a) regulate the use, maintenance, repair, replacement, and modification of common
747     areas;
748          (b) impose and receive any payment, fee, or charge for:
749          (i) the use, rental, or operation of the common areas, except limited common areas; and
750          (ii) a service provided to a lot owner;
751          (c) impose a charge for a late payment of an assessment; or
752          (d) provide for the indemnification of [its] the association's officers and board
753     consistent with Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
754          [(13)] (14) A rule shall be reasonable.
755          [(14)] (15) A declaration, or an amendment to a declaration, may vary any of the
756     requirements of Subsections (1) through [(12)] (13), except Subsection (1)(b)(ii).
757          [(15)] (16) A rule may not be inconsistent with a provision of [a] the association's
758     declaration, bylaws, or articles of incorporation.
759          (17) This section applies to an association regardless of when the association is
760     created.