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7 LONG TITLE
8 General Description:
9 This bill amends provisions related to homeowner associations and their governing
10 documents.
11 Highlighted Provisions:
12 This bill:
13 ▸ imposes certain disclosure requirements before the closing of a sale of homeowner
14 association property to an independent third party;
15 ▸ requires the Department of Commerce to publish certain educational materials on its
16 website; and
17 ▸ makes technical and conforming changes.
18 Money Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 None
22 Utah Code Sections Affected:
23 AMENDS:
24 57-8-13.1, as last amended by Laws of Utah 2013, Chapter 95
25 57-8a-105, as last amended by Laws of Utah 2013, Chapter 95
26 ENACTS:
27 57-8-6.1, Utah Code Annotated 1953
28 57-8a-105.1, Utah Code Annotated 1953
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30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 57-8-6.1 is enacted to read:
32 57-8-6.1. Information required before sale to independent third party.
33 (1) Before the sale of any unit under the jurisdiction of an association of unit owners to
34 an independent third party, the grantor shall provide to the independent third party:
35 (a) a copy of the association of unit owners' recorded governing documents; and
36 (b) a link or other access point to the department's educational materials described in
37 Subsection 57-8-13.1(6).
38 (2) The grantor shall provide the information described in Subsection (1) before
39 closing.
40 (3) The association of unit owners shall, upon request by the grantor, provide to the
41 grantor the information described in Subsection (1).
42 (4) This section applies to each association of unit owners, regardless of when the
43 association of unit owners is formed.
44 Section 2. Section 57-8-13.1 is amended to read:
45 57-8-13.1. Registration with Department of Commerce.
46 (1) As used in this section, "department" means the Department of Commerce created
47 in Section 13-1-2.
48 (2) [
49 unit owners shall register with the department in the manner established by the department.
50 [
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53 (3) The department shall require an association of unit owners registering as required
54 in this section to provide with each registration:
55 (a) the name and address of the association of unit owners;
56 (b) the name, address, telephone number, and, if applicable, email address of the
57 president of the association of unit owners;
58 (c) the name and address of each manager or management committee member;
59 (d) the name, address, telephone number, and, if the contact person wishes to use email
60 or facsimile transmission for communicating payoff information, the email address or facsimile
61 number, as applicable, of a primary contact person who has association payoff information that
62 a closing agent needs in connection with the closing of a unit owner's financing, refinancing, or
63 sale of the owner's unit; and
64 (e) a registration fee not to exceed $37.
65 (4) An association of unit owners that has registered under Subsection (2) shall submit
66 to the department an updated registration, in the manner established by the department, within
67 90 days after a change in any of the information provided under Subsection (3).
68 (5) (a) During any period of noncompliance with the registration requirement described
69 in Subsection (2) or the requirement for an updated registration described in Subsection (4):
70 (i) a lien may not arise under Section 57-8-44; and
71 (ii) an association of unit owners may not enforce an existing lien that arose under
72 Section 57-8-44.
73 (b) A period of noncompliance with the registration requirement of Subsection (2) or
74 with the updated registration requirement of Subsection (4) does not begin until after the
75 expiration of the 90-day period specified in Subsection (2) or (4), respectively.
76 (c) An association of unit owners that is not in compliance with the registration
77 requirement described in Subsection (2) may end the period of noncompliance by registering
78 with the department in the manner established by the department under Subsection (2).
79 (d) An association of unit owners that is not in compliance with the updated
80 registration requirement described in Subsection (4) may end the period of noncompliance by
81 submitting to the department an updated registration in the manner established by the
82 department under Subsection (4).
83 (e) Except as described in Subsection (5)(f), beginning on the date an association of
84 unit owners ends a period of noncompliance:
85 (i) a lien may arise under Section 57-8-44 for any event that:
86 (A) occurred during the period of noncompliance; and
87 (B) would have given rise to a lien under Section 57-8-44 had the association of unit
88 owners been in compliance with the registration requirements described in this section; and
89 (ii) an association of unit owners may enforce a lien described in Subsection (5)(e) or a
90 lien that existed before the period of noncompliance.
91 (f) If an owner's unit is conveyed to an independent third party during a period of
92 noncompliance described in this Subsection (5):
93 (i) a lien that arose under Section 57-8-44 before the conveyance of the unit became
94 final is extinguished when the conveyance of the unit becomes final; and
95 (ii) an event that occurred before the conveyance of the unit became final, and that
96 would have given rise to a lien under Section 57-8-44 had the association of unit owners been
97 in compliance with the registration requirements of this section, may not give rise to a lien
98 under Section 57-8-44 if the conveyance of the unit becomes final before the association of unit
99 owners ends the period of noncompliance.
100 (6) The department shall publish educational materials on the department's website
101 providing, in simple and easy to understand language, a brief overview of state law governing
102 associations of unit owners, including:
103 (a) a description of the rights and responsibilities provided in this chapter to any party
104 under the jurisdiction of an association of unit owners; and
105 (b) instructions regarding how an association of unit owners may be organized and
106 dismantled in accordance with this chapter.
107 Section 3. Section 57-8a-105 is amended to read:
108 57-8a-105. Registration with Department of Commerce.
109 (1) As used in this section, "department" means the Department of Commerce created
110 in Section 13-1-2.
111 (2) (a) No later than 90 days after the recording of a declaration of covenants,
112 conditions, and restrictions establishing an association, the association shall register with the
113 department in the manner established by the department.
114 (b) An association existing under a declaration of covenants, conditions, and
115 restrictions recorded before May 10, 2011, shall, no later than July 1, 2011, register with the
116 department in the manner established by the department.
117 (3) The department shall require an association registering as required in this section to
118 provide with each registration:
119 (a) the name and address of the association;
120 (b) the name, address, telephone number, and, if applicable, email address of the chair
121 of the association board;
122 (c) contact information for the manager;
123 (d) the name, address, telephone number, and, if the contact person wishes to use email
124 or facsimile transmission for communicating payoff information, the email address or facsimile
125 number, as applicable, of a primary contact person who has association payoff information that
126 a closing agent needs in connection with the closing of a lot owner's financing, refinancing, or
127 sale of the owner's lot; and
128 (e) a registration fee not to exceed $37.
129 (4) An association that has registered under Subsection (2) shall submit to the
130 department an updated registration, in the manner established by the department, within 90
131 days after a change in any of the information provided under Subsection (3).
132 (5) (a) During any period of noncompliance with the registration requirement described
133 in Subsection (2) or the requirement for an updated registration described in Subsection (4):
134 (i) a lien may not arise under Section 57-8a-301; and
135 (ii) an association may not enforce an existing lien that arose under Section 57-8a-301.
136 (b) A period of noncompliance with the registration requirement of Subsection (2) or
137 with the updated registration requirement of Subsection (4) does not begin until after the
138 expiration of the 90-day period specified in Subsection (2) or (4), respectively.
139 (c) An association that is not in compliance with the registration requirement described
140 in Subsection (2) may end the period of noncompliance by registering with the department in
141 the manner established by the department under Subsection (2).
142 (d) An association that is not in compliance with the updated registration requirement
143 described in Subsection (4) may end the period of noncompliance by submitting to the
144 department an updated registration in the manner established by the department under
145 Subsection (4).
146 (e) Except as described in Subsection (5)(f), beginning on the date an association ends
147 a period of noncompliance:
148 (i) a lien may arise under Section 57-8a-301 for any event that:
149 (A) occurred during the period of noncompliance; and
150 (B) would have given rise to a lien under Section 57-8a-301 had the association been in
151 compliance with the registration requirements described in this section; and
152 (ii) an association may enforce a lien described in Subsection (5)(e) or a lien that
153 existed before the period of noncompliance.
154 (f) If an owner's residential lot is conveyed to an independent third party during a
155 period of noncompliance described in this Subsection (5):
156 (i) a lien that arose under Section 57-8a-301 before the conveyance of the residential
157 lot became final is extinguished when the conveyance of the residential lot becomes final; and
158 (ii) an event that occurred before the conveyance of the residential lot became final,
159 and that would have given rise to a lien under Section 57-8a-301 had the association been in
160 compliance with the registration requirements of this section, may not give rise to a lien under
161 Section 57-8a-301 if the conveyance of the residential lot becomes final before the association
162 ends the period of noncompliance.
163 (6) The department shall publish educational materials on the department's website
164 providing, in simple and easy to understand language, a brief overview of state law governing
165 associations, including:
166 (a) a description of the rights and responsibilities provided in this chapter to any party
167 under the jurisdiction of an association; and
168 (b) instructions regarding how an association may be organized and dismantled in
169 accordance with this chapter.
170 Section 4. Section 57-8a-105.1 is enacted to read:
171 57-8a-105.1. Information required before sale to independent third party.
172 (1) Before the sale of any lot under the jurisdiction of an association to an independent
173 third party, the grantor shall provide to the independent third party:
174 (a) a copy of the association's recorded governing documents; and
175 (b) a link or other access point to the department's educational materials described in
176 Subsection 57-8a-105(6).
177 (2) The grantor shall provide the information described in Subsection (1) before
178 closing.
179 (3) The association shall, upon request by the grantor, provide to the grantor the
180 information described in Subsection (1).
181 (4) This section applies to each association, regardless of when the association is
182 formed.