Representative Carol Spackman Moss proposes the following substitute bill:


1     
HOMEOWNER AND CONDOMINIUM

2     
ASSOCIATION MODIFICATIONS

3     
2015 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Todd Weiler

6     
House Sponsor: Carol Spackman Moss

7     

8     LONG TITLE
9     General Description:
10          This bill modifies provisions relating to a homeowner association's governing
11     documents.
12     Highlighted Provisions:
13          This bill:
14          ▸     defines terms;
15          ▸     addresses the procedures, requirements, limitations, and enforcement mechanisms
16     that apply a request to inspect or copy association records;
17          ▸     addresses the requirements for an association to amend the association's governing
18     documents;
19          ▸     prohibits certain restrictions on the time at which an association may amend the
20     association's governing documents;
21          ▸     provides that the provisions of this bill apply regardless of when the association is
22     created; and
23          ▸     makes technical and conforming changes.
24     Money Appropriated in this Bill:
25          None

26     Other Special Clauses:
27          This bill provides a coordination clause to reconcile conflicts between this bill and
28     other legislation.
29     Utah Code Sections Affected:
30     AMENDS:
31          57-8-3, as last amended by Laws of Utah 2013, Chapters 95 and 152
32          57-8-7.5, as last amended by Laws of Utah 2014, Chapter 189
33          57-8-39, as enacted by Laws of Utah 2007, Chapter 223
34          57-8a-102, as last amended by Laws of Utah 2013, Chapters 95 and 152
35          57-8a-217, as enacted by Laws of Utah 2011, Chapter 355
36          57-8a-104, as last amended by Laws of Utah 2011, Chapter 137
37          57-8a-224, as enacted by Laws of Utah 2013, Chapter 152
38     ENACTS:
39          57-8a-225, Utah Code Annotated 1953
40     REPEALS AND REENACTS:
41          57-8-17, as last amended by Laws of Utah 2011, Chapter 95
42     Utah Code Sections Affected by Coordination Clause:
43          57-8-56, Utah Code Annotated 1953
44          57-8a-225, Utah Code Annotated 1953
45     

46     Be it enacted by the Legislature of the state of Utah:
47          Section 1. Section 57-8-3 is amended to read:
48          57-8-3. Definitions.
49          As used in this chapter:
50          (1) "Assessment" means any charge imposed by the association, including:
51          (a) common expenses on or against a unit owner pursuant to the provisions of the
52     declaration, bylaws, or this chapter; and
53          (b) an amount that an association of unit owners assesses to a unit owner under
54     Subsection 57-8-43(9)(g).
55          (2) "Association of unit owners" means all of the unit owners:
56          (a) acting as a group in accordance with the declaration and bylaws; or

57          (b) organized as a legal entity in accordance with the declaration.
58          (3) "Building" means a building, containing units, and comprising a part of the
59     property.
60          (4) "Commercial condominium project" means a condominium project that has no
61     residential units within the project.
62          (5) "Common areas and facilities" unless otherwise provided in the declaration or
63     lawful amendments to the declaration means:
64          (a) the land included within the condominium project, whether leasehold or in fee
65     simple;
66          (b) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
67     corridors, lobbies, stairs, stairways, fire escapes, entrances, and exits of the building;
68          (c) the basements, yards, gardens, parking areas, and storage spaces;
69          (d) the premises for lodging of janitors or persons in charge of the property;
70          (e) installations of central services such as power, light, gas, hot and cold water,
71     heating, refrigeration, air conditioning, and incinerating;
72          (f) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all
73     apparatus and installations existing for common use;
74          (g) such community and commercial facilities as may be provided for in the
75     declaration; and
76          (h) all other parts of the property necessary or convenient to its existence, maintenance,
77     and safety, or normally in common use.
78          (6) "Common expenses" means:
79          (a) all sums lawfully assessed against the unit owners;
80          (b) expenses of administration, maintenance, repair, or replacement of the common
81     areas and facilities;
82          (c) expenses agreed upon as common expenses by the association of unit owners; and
83          (d) expenses declared common expenses by this chapter, or by the declaration or the
84     bylaws.
85          (7) "Common profits," unless otherwise provided in the declaration or lawful
86     amendments to the declaration, means the balance of all income, rents, profits, and revenues
87     from the common areas and facilities remaining after the deduction of the common expenses.

88          (8) "Condominium" means the ownership of a single unit in a multiunit project
89     together with an undivided interest in common in the common areas and facilities of the
90     property.
91          (9) "Condominium plat" means a plat or plats of survey of land and units prepared in
92     accordance with Section 57-8-13.
93          (10) "Condominium project" means a real estate condominium project; a plan or
94     project whereby two or more units, whether contained in existing or proposed apartments,
95     commercial or industrial buildings or structures, or otherwise, are separately offered or
96     proposed to be offered for sale. Condominium project also means the property when the
97     context so requires.
98          (11) "Condominium unit" means a unit together with the undivided interest in the
99     common areas and facilities appertaining to that unit. Any reference in this chapter to a
100     condominium unit includes both a physical unit together with its appurtenant undivided interest
101     in the common areas and facilities and a time period unit together with its appurtenant
102     undivided interest, unless the reference is specifically limited to a time period unit.
103          (12) "Contractible condominium" means a condominium project from which one or
104     more portions of the land within the project may be withdrawn in accordance with provisions
105     of the declaration and of this chapter. If the withdrawal can occur only by the expiration or
106     termination of one or more leases, then the condominium project is not a contractible
107     condominium within the meaning of this chapter.
108          (13) "Convertible land" means a building site which is a portion of the common areas
109     and facilities, described by metes and bounds, within which additional units or limited common
110     areas and facilities may be created in accordance with this chapter.
111          (14) "Convertible space" means a portion of the structure within the condominium
112     project, which portion may be converted into one or more units or common areas and facilities,
113     including limited common areas and facilities in accordance with this chapter.
114          (15) "Declarant" means all persons who execute the declaration or on whose behalf the
115     declaration is executed. From the time of the recordation of any amendment to the declaration
116     expanding an expandable condominium, all persons who execute that amendment or on whose
117     behalf that amendment is executed shall also come within this definition. Any successors of
118     the persons referred to in this subsection who come to stand in the same relation to the

119     condominium project as their predecessors also come within this definition.
120          (16) "Declaration" means the instrument by which the property is submitted to the
121     provisions of this act, as it from time to time may be lawfully amended.
122          (17) "Expandable condominium" means a condominium project to which additional
123     land or an interest in it may be added in accordance with the declaration and this chapter.
124          (18) "Governing documents":
125          (a) means a written instrument by which an association of unit owners may:
126          (i) exercise powers; or
127          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
128     association of unit owners; and
129          (b) includes:
130          (i) articles of incorporation;
131          (ii) bylaws;
132          (iii) a plat;
133          (iv) a declaration of covenants, conditions, and restrictions; and
134          (v) rules of the association of unit owners.
135          (19) "Independent third party" means a person that:
136          (a) is not related to the unit owner;
137          (b) shares no pecuniary interests with the unit owner; and
138          (c) purchases the unit in good faith and without the intent to defraud a current or future
139     lienholder.
140          (20) "Leasehold condominium" means a condominium project in all or any portion of
141     which each unit owner owns an estate for years in his unit, or in the land upon which that unit
142     is situated, or both, with all those leasehold interests to expire naturally at the same time. A
143     condominium project including leased land, or an interest in the land, upon which no units are
144     situated or to be situated is not a leasehold condominium within the meaning of this chapter.
145          (21) "Limited common areas and facilities" means those common areas and facilities
146     designated in the declaration as reserved for use of a certain unit or units to the exclusion of the
147     other units.
148          (22) "Majority" or "majority of the unit owners," unless otherwise provided in the
149     declaration or lawful amendments to the declaration, means the owners of more than 50% in

150     the aggregate in interest of the undivided ownership of the common areas and facilities.
151          (23) "Management committee" means the committee as provided in the declaration
152     charged with and having the responsibility and authority to make and to enforce all of the
153     reasonable rules covering the operation and maintenance of the property.
154          (24) "Mixed-use condominium project" means a condominium project that has both
155     residential and commercial units in the condominium project.
156          (25) "Par value" means a number of dollars or points assigned to each unit by the
157     declaration. Substantially identical units shall be assigned the same par value, but units located
158     at substantially different heights above the ground, or having substantially different views, or
159     having substantially different amenities or other characteristics that might result in differences
160     in market value, may be considered substantially identical within the meaning of this
161     subsection. If par value is stated in terms of dollars, that statement may not be considered to
162     reflect or control the sales price or fair market value of any unit, and no opinion, appraisal, or
163     fair market transaction at a different figure may affect the par value of any unit, or any
164     undivided interest in the common areas and facilities, voting rights in the unit owners'
165     association, liability for common expenses, or right to common profits, assigned on the basis
166     thereof.
167          (26) "Period of administrative control" means the period of control described in
168     Subsection 57-8-16.5(1).
169          [(26)] (27) "Person" means an individual, corporation, partnership, association, trustee,
170     or other legal entity.
171          [(27)] (28) "Property" means the land, whether leasehold or in fee simple, the building,
172     if any, all improvements and structures thereon, all easements, rights, and appurtenances
173     belonging thereto, and all articles of personal property intended for use in connection
174     therewith.
175          [(28)] (29) "Record," "recording," "recorded," and "recorder" have the meaning stated
176     in Title 57, Chapter 3, Recording of Documents.
177          [(29)] (30) "Size" means the number of cubic feet, or the number of square feet of
178     ground or floor space, within each unit as computed by reference to the record of survey map
179     and rounded off to a whole number. Certain spaces within the units including attic, basement,
180     or garage space may be omitted from the calculation or be partially discounted by the use of a

181     ratio, if the same basis of calculation is employed for all units in the condominium project and
182     if that basis is described in the declaration.
183          [(30)] (31) "Time period unit" means an annually recurring part or parts of a year
184     specified in the declaration as a period for which a unit is separately owned and includes a
185     timeshare estate as defined in Subsection 57-19-2(19).
186          [(31)] (32) "Unit" means either a separate physical part of the property intended for any
187     type of independent use, including one or more rooms or spaces located in one or more floors
188     or part or parts of floors in a building or a time period unit, as the context may require. A
189     convertible space shall be treated as a unit in accordance with Subsection 57-8-13.4(3). A
190     proposed condominium unit under an expandable condominium project, not constructed, is a
191     unit two years after the date the recording requirements of Section 57-8-13.6 are met.
192          [(32)] (33) "Unit number" means the number, letter, or combination of numbers and
193     letters designating the unit in the declaration and in the record of survey map.
194          [(33)] (34) "Unit owner" means the person or persons owning a unit in fee simple and
195     an undivided interest in the fee simple estate of the common areas and facilities in the
196     percentage specified and established in the declaration or, in the case of a leasehold
197     condominium project, the person or persons whose leasehold interest or interests in the
198     condominium unit extend for the entire balance of the unexpired term or terms.
199          Section 2. Section 57-8-7.5 is amended to read:
200          57-8-7.5. Reserve analysis -- Reserve fund.
201          (1) As used in this section:
202          (a) "Reserve analysis" means an analysis to determine:
203          (i) the need for a reserve fund to accumulate money to cover the cost of repairing,
204     replacing, or restoring common areas and facilities that have a useful life of three years or more
205     and a remaining useful life of less than 30 years, if the cost cannot reasonably be funded from
206     the general budget or other funds of the association of unit owners; and
207          (ii) the appropriate amount of any reserve fund.
208          (b) "Reserve fund line item" means the line item in an association of unit owners'
209     annual budget that identifies the amount to be placed into a reserve fund.
210          (2) Except as otherwise provided in the declaration, a management committee shall:
211          (a) cause a reserve analysis to be conducted no less frequently than every six years; and

212          (b) review and, if necessary, update a previously conducted reserve analysis no less
213     frequently than every three years.
214          (3) The management committee may conduct a reserve analysis itself or may engage a
215     reliable person or organization, as determined by the management committee, to conduct the
216     reserve analysis.
217          (4) A reserve fund analysis shall include:
218          (a) a list of the components identified in the reserve analysis that will reasonably
219     require reserve funds;
220          (b) a statement of the probable remaining useful life, as of the date of the reserve
221     analysis, of each component identified in the reserve analysis;
222          (c) an estimate of the cost to repair, replace, or restore each component identified in the
223     reserve analysis;
224          (d) an estimate of the total annual contribution to a reserve fund necessary to meet the
225     cost to repair, replace, or restore each component identified in the reserve analysis during the
226     component's useful life and at the end of the component's useful life; and
227          (e) a reserve funding plan that recommends how the association of unit owners may
228     fund the annual contribution described in Subsection (4)(d).
229          (5) An association of unit owners shall:
230          (a) annually provide unit owners a summary of the most recent reserve analysis or
231     update; and
232          (b) provide a copy of the complete reserve analysis or update to a unit owner who
233     requests a copy.
234          (6) In formulating its budget each year, an association of unit owners shall include a
235     reserve fund line item in:
236          (a) an amount the management committee determines, based on the reserve analysis, to
237     be prudent; or
238          (b) an amount required by the declaration, if the declaration requires an amount higher
239     than the amount determined under Subsection (6)(a).
240          (7) (a) Within 45 days after the day on which an association of unit owners adopts its
241     annual budget, the unit owners may veto the reserve fund line item by a 51% vote of the
242     allocated voting interests in the association of unit owners at a special meeting called by the

243     unit owners for the purpose of voting whether to veto a reserve fund line item.
244          (b) If the unit owners veto a reserve fund line item under Subsection (7)(a) and a
245     reserve fund line item exists in a previously approved annual budget of the association of unit
246     owners that was not vetoed, the association of unit owners shall fund the reserve account in
247     accordance with that prior reserve fund line item.
248          (8) (a) Subject to Subsection (8)(b), if an association of unit owners does not comply
249     with the requirements of Subsection (5), (6), or (7) and fails to remedy the noncompliance
250     within the time specified in Subsection (8)(c), a unit owner may file an action in state court for:
251          (i) injunctive relief requiring the association of unit owners to comply with the
252     requirements of Subsection (5), (6), or (7);
253          (ii) $500 or actual damages, whichever is greater;
254          (iii) any other remedy provided by law; and
255          (iv) reasonable costs and attorney fees.
256          (b) No fewer than 90 days before the day on which a unit owner files a complaint under
257     Subsection (8)(a), the unit owner shall deliver written notice described in Subsection (8)(c) to
258     the association of unit owners.
259          (c) A notice under Subsection (8)(b) shall state:
260          (i) the requirement in Subsection (5), (6), or (7) with which the association of unit
261     owners has failed to comply;
262          (ii) a demand that the association of unit owners come into compliance with the
263     requirements; and
264          (iii) a date, no fewer than 90 days after the day on which the unit owner delivers the
265     notice, by which the association of unit owners shall remedy its noncompliance.
266          (d) In a case filed under Subsection (8)(a), a court may order an association of unit
267     owners to produce the summary of the reserve analysis or the complete reserve analysis on an
268     expedited basis and at the association of unit owners' expense.
269          (9) (a) A management committee may not use money in a reserve fund:
270          (i) for daily maintenance expenses, unless a majority of the members of the association
271     of unit owners vote to approve the use of reserve fund money for that purpose; or
272          (ii) for any purpose other than the purpose for which the reserve fund was established.
273          (b) A management committee shall maintain a reserve fund separate from other funds

274     of the association of unit owners.
275          (c) This Subsection (9) may not be construed to limit a management committee from
276     prudently investing money in a reserve fund, subject to any investment constraints imposed by
277     the declaration.
278          (10) Subsections (2) through (9) do not apply to an association of unit owners during
279     the period of [declarant] administrative control [described in Subsection 57-8-16.5(1)].
280          (11) This section applies to each association of unit owners, regardless of when the
281     association of unit owners was created.
282          Section 3. Section 57-8-17 is repealed and reenacted to read:
283          57-8-17. Records -- Availability for examination.
284          (1) (a) Subject to Subsection (1)(b), an association of unit owners shall keep and make
285     documents available to unit owners in accordance with Sections 16-6a-1601 through 1603,
286     16-6a-1605, 16-6a-1606, and 16-6a-1610, regardless of whether the association of unit owners
287     is incorporated under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
288          (b) An association of unit owners may redact the following information from any
289     document the association of unit owners produces for inspection or copying:
290          (i) a Social Security number;
291          (ii) a bank account number; and
292          (iii) any communication subject to attorney-client privilege.
293          (2) (a) In addition to the requirements described in Subsection (1), an association of
294     unit owners shall make documents available to unit owners in accordance with the association
295     of unit owners' governing documents.
296          (b) If a provision of an association of unit owners' governing documents conflicts with
297     a provision of this section, the provision of this section governs.
298          (3) In a request to inspect or copy documents, a unit owner may:
299          (a) elect whether to inspect or copy the documents;
300          (b) if the unit owner elects to copy the documents, request hard copies or electronic
301     scans of the documents; or
302          (c) subject to Subsection (4), request that:
303          (i) the association of unit owners make the copies or electronic scans of the requested
304     documents;

305          (ii) a recognized third party duplicating service make the copies or electronic scans of
306     the requested documents; or
307          (iii) the unit owner bring any necessary imaging equipment to the place of inspection
308     and make copies or electronic scans of the documents while inspecting the documents.
309          (4) (a) An association of unit owners shall comply with a request described in
310     Subsection (3).
311          (b) If an association of unit owners produces the copies or electronic scans:
312          (i) the copies or electronic scans shall be legible and accurate; and
313          (ii) the unit owner shall pay the association of unit owners the reasonable cost of the
314     copies or electronic scans, which may not exceed:
315          (A) the actual cost that the association of unit owners paid to a recognized third party
316     duplicating service to make the copies or electronic scans; or
317          (B) if an employee, manager, or other agent of the association of unit owners makes the
318     copies or electronic scans, 10 cents per page and $15 per hour for the employee's, manager's, or
319     other agent's time making the copies or electronic scans.
320          (c) If a unit owner requests a recognized third party duplicating service make the copies
321     or electronic scans:
322          (i) the association of unit owners shall arrange for the delivery and pick up of the
323     original documents; and
324          (ii) the unit owner shall pay the duplicating service directly.
325          (d) If a unit owner requests to bring imaging equipment to the inspection, the
326     association of unit owners shall provide the necessary space, light, and power for the imaging
327     equipment.
328          (5) If, in response to a unit owner's request to inspect or copy documents, an
329     association of unit owners fails to comply with a provision of this section, the association of
330     unit owners shall pay:
331          (a) the reasonable costs of inspecting and copying the requested documents; and
332          (b) reasonable attorney fees and costs incurred by the unit owner in obtaining the
333     inspection and copies of the requested documents.
334          (6) (a) In addition to any remedy in the association of unit owners' governing
335     documents or as otherwise provided by law, a unit owner may file an action in court under this

336     section if:
337          (i) an association of unit owners fails to make documents available to the unit owner in
338     accordance with this section, the association of unit owners' governing documents, or as
339     otherwise provided by law; and
340          (ii) the association of unit owners fails to timely comply with a notice described in
341     Subsection (6)(d).
342          (b) In an action described in Subsection (6)(a):
343          (i) the unit owner may request:
344          (A) injunctive relief requiring the association of unit owners to comply with the
345     provisions of this section;
346          (B) $500 or actual damage, whichever is greater; or
347          (C) any other relief provided by law; and
348          (ii) the court shall award costs and reasonable attorney fees to the prevailing party,
349     including any reasonable attorney fees incurred before the action was filed that relate to the
350     request that is the subject of the action.
351          (c) (i) In an action described in Subsection (6)(a), upon motion by the unit owner,
352     notice to the association of unit owners, and a hearing in which the court finds a likelihood that
353     the association of unit owners failed to comply with a provision of this section, the court shall
354     order the association of unit owners to immediately comply with the provision.
355          (ii) The court shall hold a hearing described in Subsection (6)(c)(i) within 30 days after
356     the day on which the unit owner files the motion.
357          (d) At least 10 days before the day on which a unit owner files an action described in
358     Subsection (6)(a), the unit owner shall deliver a written notice to the association of unit owners
359     that states:
360          (i) the unit owner's name, address, telephone number, and email address;
361          (ii) each requirement of this section with which the association of unit owners has
362     failed to comply;
363          (iii) a demand that the association of unit owners comply with each requirement with
364     which the association of unit owners has failed to comply; and
365          (iv) a date by which the association of unit owners shall remedy the association of unit
366     owners' noncompliance that is at least 10 days after the day on which the unit owner delivers

367     the notice to the association of unit owners.
368          (7) (a) The provisions of Section 16-6a-1604 do not apply to an association of unit
369     owners.
370          (b) The provisions of this section apply regardless of any conflicting provision in Title
371     16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
372          Section 4. Section 57-8-39 is amended to read:
373          57-8-39. Limitation on requirements for amending governing documents --
374     Limitation on contracts.
375          [(1) When the period of control described in Section 57-8-16.5 ends, neither the
376     declaration nor bylaws may require that an amendment to the declaration or bylaws be
377     approved by more than 67% of the voting interests.]
378          [(2) Voting interests under Subsection (1) are calculated in the manner required by the
379     declaration or bylaws.]
380          [(3) Nothing in this section affects any other rights reserved by a declarant.]
381          (1) (a) (i) To amend the governing documents, the governing documents may not
382     require:
383          (A) for an amendment adopted after the period of administrative control, the vote or
384     approval of unit owners with more than 67% of the voting interests;
385          (B) the approval of any specific unit owner; or
386          (C) the vote or approval of lien holders holding more than 67% of the first position
387     security interests secured by a mortgage or trust deed in the association of unit owners.
388          (ii) Any provision in the governing documents that prohibits a vote or approval to
389     amend any part of the governing documents during a particular time period is invalid.
390          [(4)] (b) Subsection (1)(a) does not apply to an amendment affecting only:
391          [(a)] (i) the undivided interest of each unit owner in the common areas and facilities, as
392     expressed in the declaration;
393          [(b)] (ii) unit boundaries; or
394          [(c) members'] (iii) unit owners' voting rights.
395          [(5)] (2) (a) A contract for services such as garbage collection, maintenance, lawn care,
396     or snow removal executed on behalf of the association of unit owners during a period of
397     administrative control is binding beyond the period of administrative control unless terminated

398     by the board of directors after the period of administrative control ends.
399          (b) Subsection [(5)] (2)(a) does not apply to golf course and amenity management,
400     utilities, cable services, and other similar services that require an investment of infrastructure
401     or capital.
402          (3) Voting interests under Subsection (1) are calculated in the manner required by the
403     governing documents.
404          (4) Nothing in this section affects any other rights reserved by the declarant.
405          (5) This section applies to an association of unit owners regardless of when the
406     association of unit owners is created.
407          Section 5. Section 57-8a-102 is amended to read:
408          57-8a-102. Definitions.
409          As used in this chapter:
410          (1) (a) "Assessment" means a charge imposed or levied:
411          (i) by the association;
412          (ii) on or against a lot or a lot owner; and
413          (iii) pursuant to a governing document recorded with the county recorder.
414          (b) "Assessment" includes:
415          (i) a common expense; and
416          (ii) an amount assessed against a lot owner under Subsection 57-8a-405(7).
417          (2) (a) Except as provided in Subsection (2)(b), "association" means a corporation or
418     other legal entity, any member of which:
419          (i) is an owner of a residential lot located within the jurisdiction of the association, as
420     described in the governing documents; and
421          (ii) by virtue of membership or ownership of a residential lot is obligated to pay:
422          (A) real property taxes;
423          (B) insurance premiums;
424          (C) maintenance costs; or
425          (D) for improvement of real property not owned by the member.
426          (b) "Association" or "homeowner association" does not include an association created
427     under Title 57, Chapter 8, Condominium Ownership Act.
428          (3) "Board of directors" or "board" means the entity, regardless of name, with primary

429     authority to manage the affairs of the association.
430          (4) "Common areas" means property that the association:
431          (a) owns;
432          (b) maintains;
433          (c) repairs; or
434          (d) administers.
435          (5) "Common expense" means costs incurred by the association to exercise any of the
436     powers provided for in the association's governing documents.
437          (6) "Declarant":
438          (a) means the person who executes a declaration and submits it for recording in the
439     office of the recorder of the county in which the property described in the declaration is
440     located; and
441          (b) includes the person's successor and assign.
442          (7) (a) "Governing documents" means a written instrument by which the association
443     may:
444          (i) exercise powers; or
445          (ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
446     association.
447          (b) "Governing documents" includes:
448          (i) articles of incorporation;
449          (ii) bylaws;
450          (iii) a plat;
451          (iv) a declaration of covenants, conditions, and restrictions; and
452          (v) rules of the association.
453          (8) "Independent third party" means a person that:
454          (a) is not related to the owner of the residential lot;
455          (b) shares no pecuniary interests with the owner of the residential lot; and
456          (c) purchases the residential lot in good faith and without the intent to defraud a current
457     or future lienholder.
458          (9) "Judicial foreclosure" means a foreclosure of a lot:
459          (a) for the nonpayment of an assessment; and

460          (b) (i) in the manner provided by law for the foreclosure of a mortgage on real
461     property; and
462          (ii) as provided in Part 3, Collection of Assessments.
463          (10) "Lease" or "leasing" means regular, exclusive occupancy of a lot:
464          (a) by a person or persons other than the owner; and
465          (b) for which the owner receives a consideration or benefit, including a fee, service,
466     gratuity, or emolument.
467          (11) "Limited common areas" means common areas described in the declaration and
468     allocated for the exclusive use of one or more lot owners.
469          (12) "Lot" means:
470          (a) a lot, parcel, plot, or other division of land:
471          (i) designated for separate ownership or occupancy; and
472          (ii) (A) shown on a recorded subdivision plat; or
473          (B) the boundaries of which are described in a recorded governing document; or
474          (b) (i) a unit in a condominium association if the condominium association is a part of
475     a development; or
476          (ii) a unit in a real estate cooperative if the real estate cooperative is part of a
477     development.
478          (13) "Mixed-use project" means a project under this chapter that has both residential
479     and commercial lots in the project.
480          (14) "Nonjudicial foreclosure" means the sale of a lot:
481          (a) for the nonpayment of an assessment; and
482          (b) (i) in the same manner as the sale of trust property under Sections 57-1-19 through
483     57-1-34; and
484          (ii) as provided in Part 3, Collection of Assessments.
485          (15) "Period of administrative control" mean the period during which the person who
486     filed the association's governing documents or the person's successor in interest retains
487     authority to:
488          (a) appoint or remove members of the association's board of directors; or
489          (b) exercise power or authority assigned to the association under the association's
490     governing documents.

491          [(15)] (16) "Residential lot" means a lot, the use of which is limited by law, covenant,
492     or otherwise to primarily residential or recreational purposes.
493          Section 6. Section 57-8a-104 is amended to read:
494          57-8a-104. Limitation on requirements for amending governing documents --
495     Limitation on contracts.
496          [(1) As used in this section, "period of administrative control" means the period during
497     which the person who filed the association's governing documents or a successor in interest
498     retains authority to:]
499          [(a) appoint or remove members of the association's board of directors; or]
500          [(b) exercise power or authority assigned to the association under its governing
501     documents.]
502          [(2) (a) (i) Governing documents may not require that an amendment to the governing
503     documents adopted after the period of administrative control be approved by more than 67% of
504     the voting interests.]
505          [(ii) The vote required to adopt an amendment to governing documents may not be
506     greater than 67% of the voting interests, notwithstanding a provision of the governing
507     documents requiring a greater percentage and regardless of whether the governing documents
508     were adopted before, on, or after May 10, 2011.]
509          (1) (a) (i) To amend the governing documents, the governing documents may not
510     require:
511          (A) for an amendment adopted after the period of administrative control, the vote or
512     approval of lot owners with more than 67% of the voting interests;
513          (B) the approval of any specific lot owner; or
514          (C) the vote or approval of lien holders holding more than 67% of the first position
515     security interests secured by a mortgage or trust deed in the association.
516          (ii) Any provision in the governing documents that prohibits a vote or approval to
517     amend any part of the governing documents during a particular time period is invalid.
518          (b) Subsection [(2)] (1)(a) does not apply to an amendment affecting only:
519          (i) lot boundaries; or
520          (ii) [members'] lot owner's voting rights.
521          [(3)] (2) (a) A contract for services such as garbage collection, maintenance, lawn care,

522     or snow removal executed on behalf of the association during a period of administrative control
523     is binding beyond the period of administrative control unless terminated by the board of
524     directors after the period of administrative control ends.
525          (b) Subsection [(3)] (2)(a) does not apply to golf course and amenity management,
526     utilities, cable services, and other similar services that require an investment of infrastructure
527     or capital.
528          [(4)] (3) Voting interests under [Subsections (2) and (3)] Subsection (1) are calculated
529     in the manner required by the governing documents.
530          [(5)] (4) Nothing in this section affects any other rights reserved by the person who
531     filed the association's original governing documents or a successor in interest.
532          (5) This section applies to an association regardless of when the association is created.
533          Section 7. Section 57-8a-217 is amended to read:
534          57-8a-217. Association rules, including design criteria -- Requirements and
535     limitations relating to board's action on rules and design criteria -- Vote of disapproval.
536          (1) (a) Subject to Subsection (1)(b), a board may adopt, amend, modify, cancel, limit,
537     create exceptions to, expand, or enforce the rules and design criteria of the association.
538          (b) A board's action under Subsection (1)(a) is subject to:
539          (i) this section;
540          (ii) any limitation that the declaration imposes on the authority stated in Subsection
541     (1)(a);
542          (iii) the limitation on rules in Sections 57-8a-218 and 57-8a-219;
543          (iv) the board's duty to exercise business judgment on behalf of:
544          (A) the association; and
545          (B) the lot owners in the association; and
546          (v) the right of the lot owners or declarant to disapprove the action under Subsection
547     (4).
548          (2) Except as provided in Subsection (3), before adopting, amending, modifying,
549     canceling, limiting, creating exceptions to, or expanding the rules and design criteria of the
550     association, the board shall:
551          (a) at least 15 days before the board will meet to consider a change to a rule or design
552     criterion, deliver notice to lot owners, as provided in Section 57-8a-214, that the board is

553     considering a change to a rule or design criterion;
554          (b) provide an open forum at the board meeting giving lot owners an opportunity to be
555     heard at the board meeting before the board takes action under Subsection (1)(a); and
556          (c) deliver a copy of the change in the rules or design criteria approved by the board to
557     the lot owners as provided in Section 57-8a-214 within 15 days after the date of the board
558     meeting.
559          (3) (a) Subject to Subsection (3)(b), a board may adopt a rule without first giving
560     notice to the lot owners under Subsection (2) if there is an imminent risk of harm to a common
561     area, a limited common area, a lot owner, an occupant of a lot, a lot, or a dwelling.
562          (b) The board shall provide notice under Subsection (2) to the lot owners of a rule
563     adopted under Subsection (3)(a).
564          (4) A board action in accordance with Subsections (1), (2), and (3) is disapproved if
565     within 60 days after the date of the board meeting where the action was taken:
566          (a) (i) there is a vote of disapproval by at least 51% of all the allocated voting interests
567     of the lot owners in the association; and
568          (ii) the vote is taken at a special meeting called for that purpose by the lot owners
569     under the declaration, articles, or bylaws; or
570          (b) (i) the declarant delivers to the board a writing of disapproval; and
571          (ii) (A) the declarant is within the period of [declarant] administrative control; or
572          (B) for an expandable project, the declarant has the right to add real estate to the
573     project.
574          (5) (a) The board has no obligation to call a meeting of the lot owners to consider
575     disapproval, unless lot owners submit a petition, in the same manner as the declaration,
576     articles, or bylaws provide for a special meeting, for the meeting to be held.
577          (b) Upon the board receiving a petition under Subsection (5)(a), the effect of the
578     board's action is:
579          (i) stayed until after the meeting is held; and
580          (ii) subject to the outcome of the meeting.
581          (6) During the period of administrative control, a declarant may exempt the declarant
582     from association rules and the rulemaking procedure under this section if the declaration
583     reserves to the declarant the right to exempt the declarant.

584          Section 8. Section 57-8a-224 is amended to read:
585          57-8a-224. Responsibility for the maintenance, repair, and replacement of
586     common area and lots.
587          (1) As used in this section:
588          (a) "Emergency repair" means a repair that, if not made in a timely manner, will likely
589     result in immediate and substantial damage to a common area or to another lot.
590          (b) "Reasonable notice" means:
591          (i) written notice that is hand delivered to the lot at least 24 hours before the proposed
592     entry; or
593          (ii) in the case of an emergency repair, notice that is reasonable under the
594     circumstances.
595          (2) Except as otherwise provided in the declaration or Part 4, Insurance:
596          (a) an association is responsible for the maintenance, repair, and replacement of
597     common areas; and
598          (b) a lot owner is responsible for the maintenance, repair, and replacement of the lot
599     owner's lot.
600          (3) After reasonable notice to the occupant of the lot being entered, the board may
601     access a lot:
602          (a) from time to time during reasonable hours, as necessary for the maintenance, repair,
603     or replacement of any of the common areas; or
604          (b) for making an emergency repair.
605          (4) (a) An association is liable to repair damage it causes to the common areas or to a
606     lot the association uses to access the common areas.
607          (b) An association shall repair damage described in Subsection (4)(a) within a time that
608     is reasonable under the circumstances.
609          (5) Subsections (2), (3), and (4) do not apply during the period of administrative
610     control [as defined in Section 57-8a-104].
611          Section 9. Section 57-8a-225 is enacted to read:
612          57-8a-225. Records -- Availability for examination.
613          (1) (a) Subject to Subsection (1)(b), an association shall keep and make documents
614     available to lot owners in accordance with Sections 16-6a-1601 through 1603, 16-6a-1605,

615     16-6a-1606, and 16-6a-1610, regardless of whether the association is incorporated under Title
616     16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
617          (b) An association may redact the following information from any document the
618     association produces for inspection or copying:
619          (i) a Social Security number;
620          (ii) a bank account number; and
621          (iii) any communication subject to attorney-client privilege.
622          (2) (a) In addition to the requirements described in Subsection (1), an association shall
623     make documents available to lot owners in accordance with the association's governing
624     documents.
625          (b) If a provision of an association's governing documents conflicts with a provision of
626     this section, the provision of this section governs.
627          (3) In a request to inspect or copy documents, a lot owner may:
628          (a) elect whether to inspect or copy the documents;
629          (b) if the lot owner elects to copy the documents, request hard copies or electronic
630     scans of the documents; or
631          (c) subject to Subsection (4), request that:
632          (i) the association make the copies or electronic scans of the requested documents;
633          (ii) a recognized third party duplicating service make the copies or electronic scans of
634     the requested documents; or
635          (iii) the lot owner bring any necessary imaging equipment to the place of inspection
636     and make copies or electronic scans of the documents while inspecting the documents.
637          (4) (a) An association shall comply with a request described in Subsection (3).
638          (b) If an association produces the copies or electronic scans:
639          (i) the copies or electronic scans shall be legible and accurate; and
640          (ii) the lot owner shall pay the association the reasonable cost of the copies or
641     electronic scans, which may not exceed:
642          (A) the actual cost that the association paid to a recognized third party duplicating
643     service to make the copies or electronic scans; or
644          (B) if an employee, manager, or other agent of the association makes the copies or
645     electronic scans, 10 cents per page and $15 per hour for the employee's, manager's, or other

646     agent's time making the copies or electronic scans.
647          (c) If a lot owner requests a recognized third party duplicating service make the copies
648     or electronic scans:
649          (i) the association shall arrange for the delivery and pick up of the original documents;
650     and
651          (ii) the lot owner shall pay the duplicating service directly.
652          (d) If a lot owner requests to bring imaging equipment to the inspection, the association
653     shall provide the necessary space, light, and power for the imaging equipment.
654          (5) If, in response to a lot owner's request to inspect or copy documents, an association
655     fails to comply with a provision of this section, the association shall pay:
656          (a) the reasonable costs of inspecting and copying the requested documents; and
657          (b) reasonable attorney fees and costs incurred by the lot owner in obtaining the
658     inspection and copies of the requested documents.
659          (6) (a) In addition to any remedy in the association's governing documents or otherwise
660     provided by law, a lot owner may file an action in court under this section if:
661          (i) an association fails to make documents available to the lot owner in accordance
662     with this section, the association's governing documents, or as otherwise provided by law; and
663          (ii) the association fails to timely comply with a notice described in Subsection (6)(d).
664          (b) In an action described in Subsection (6)(a):
665          (i) the lot owner may request:
666          (A) injunctive relief requiring the association to comply with the provisions of this
667     section;
668          (B) $500 or actual damage, whichever is greater; or
669          (C) any other relief provided by law; and
670          (ii) the court shall award costs and reasonable attorney fees to the prevailing party,
671     including any reasonable attorney fees incurred before the action was filed that relate to the
672     request that is the subject of the action.
673          (c) (i) In an action described in Subsection (6)(a), upon motion by the lot owner, notice
674     to the association, and a hearing in which the court finds a likelihood that the association failed
675     to comply with a provision of this section, the court shall order the association to immediately
676     comply with the provision.

677          (ii) The court shall hold a hearing described in Subsection (6)(c)(i) within 30 days after
678     the day on which the lot owner files the motion.
679          (d) At least 10 days before the day on which a lot owner files an action described in
680     Subsection (6)(a), the lot owner shall deliver a written notice to the association that states:
681          (i) the lot owner's name, address, telephone number, and email address;
682          (ii) each requirement of this section with which the association has failed to comply;
683          (iii) a demand that the association comply with each requirement with which the
684     association has failed to comply; and
685          (iv) a date by which the association shall remedy the association's noncompliance that
686     is at least 10 days after the day on which the lot owner delivers the notice to the association.
687          (7) (a) The provisions of Section 16-6a-1604 do not apply to an association.
688          (b) The provisions of this section apply regardless of any conflicting provision in Title
689     16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
690          Section 10. Coordinating S.B. 118 with H.B. 99 -- Substantive amendment.
691          If this S.B. 118 and H.B. 99, Association Open Meeting Amendments, both pass and
692     become law, the Legislature intends that the Office of Legislative Research and General
693     Counsel, in preparing the Utah Code database for publication, on July 1, 2015:
694          (1) enact a new Subsection 57-8-56(8) to read:
695          "(8) (a) Subject to Subsection (8)(d), if an association of unit owners fails to comply
696     with a provision of Subsections (1) through (4) and fails to remedy the noncompliance during
697     the 90-day period described in Subsection (8)(d), a unit owner may file an action in court for:
698          (i) injunctive relief requiring the association of unit owners to comply with the
699     provisions of Subsections (1) through (4);
700          (ii) $500 or actual damages, whichever is greater; or
701          (iii) any other relief provided by law.
702          (b) In an action described in Subsection (8)(a), the court may award costs and
703     reasonable attorney fees to the prevailing party.
704          (c) Upon motion from the unit owner, notice to the association of unit owners, and a
705     hearing in which the court finds a likelihood that the association of unit owners has failed to
706     comply with a provision of Subsections (1) through (4), the court may order the association of
707     unit owners to immediately comply with the provisions of Subsections (1) through (4).

708          (d) At least 90 days before the day on which a unit owner files an action described in
709     Subsection (8)(a), the unit owner shall deliver a written notice to the association of unit owners
710     that states:
711          (i) the unit owner's name, address, telephone number, and email address;
712          (ii) each requirement of Subsections (1) through (4) with which the association of unit
713     owners has failed to comply;
714          (iii) a demand that the association of unit owners comply with each requirement with
715     which the association of unit owners has failed to comply; and
716          (iv) a date by which the association of unit owners shall remedy the association of unit
717     owners' noncompliance that is at least 90 days after the day on which the unit owner delivers
718     the notice to the association of unit owners."; and
719          (2) enact a new Subsection 57-8a-225(8) in H.B. 99 to read:
720          "(8) (a) Subject to Subsection (8)(d), if an association fails to comply with a provision
721     of Subsections (1) through (4) and fails to remedy the noncompliance during the 90-day period
722     described in Subsection (8)(d), a lot owner may file an action in court for:
723          (i) injunctive relief requiring the association to comply with the provisions of
724     Subsections (1) through (4);
725          (ii) $500 or actual damages, whichever is greater; or
726          (iii) any other relief provided by law.
727          (b) In an action described in Subsection (8)(a), the court may award costs and
728     reasonable attorney fees to the prevailing party.
729          (c) Upon motion from the lot owner, notice to the association, and a hearing in which
730     the court finds a likelihood that the association has failed to comply with a provision of
731     Subsections (1) through (4), the court may order the association to immediately comply with
732     the provisions of Subsections (1) through (4).
733          (d) At least 90 days before the day on which a lot owner files an action described in
734     Subsection (8)(a), the lot owner shall deliver a written notice to the association that states:
735          (i) the lot owner's name, address, telephone number, and email address;
736          (ii) each requirement of Subsections (1) through (4) with which the association has
737     failed to comply;
738          (iii) a demand that the association comply with each requirement with which the

739     association has failed to comply; and
740          (iv) a date by which the association shall remedy the association's noncompliance that
741     is at least 90 days after the day on which the lot owner delivers the notice to the association."