HB 406

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                         R. Neil Walter proposes the following substitute bill:
1Homeowners' Association Modifications
                                     2026 GENERAL SESSION
                                           STATE OF UTAH
                                   Chief Sponsor: R. Neil Walter
                                            Senate Sponsor:
2
3   LONG TITLE
4   General Description:
5This bill amends provisions relating to homeowners' associations.
6   Highlighted Provisions:
7This bill:
8▸ defines terms;
9▸ provides the circumstances under which a homeowners' association may convey a portion
10   of the common areas;
11▸ requires that the Office of the Homeowners' Association Ombudsman (office) make
12   public each advisory opinion the office issues;
13▸ requires that the office publish educational materials on the office's website;
14▸ provides that a homeowners' association's declaration may not contain certain provisions;
15▸ provides that an action by an attorney employed by the office does not create an
16   attorney-client relationship;
17▸ provides that the filing fee a person pays for an advisory opinion from the office is
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18   nonrefundable;
19▸ provides that a homeowners' association may not require a person to engage in binding
20   arbitration before obtaining an advisory opinion from the office;
21▸ provides the requirements for the contents of a request for an advisory opinion;
22▸ amends the amount of the civil penalty a court may issue after qualifying conditions are
23   met;
24▸ repeals the requirement that the parties to an advisory opinion split the cost of the
25   advisory opinion;
26▸ provides that an association transfer fee may not exceed $200;
27▸ establishes the conditions under which Title 57, Chapter 8, Condominium Ownership Act,
28   or Title 57, Chapter 8a, Community Association Act, applies;
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29▸ requires that an association of unit owners prepare and adopt an annual budget for the
30   association;
31▸ amends provisions relating to the applicability of Title 57, Chapter 8, Condominium
32   Ownership Act, or Title 57, Chapter 8a, Community Association Act;
33▸ removes the requirement that a board member and president of an association provide a
34   physical address to the Department of Commerce for registration;
35▸ provides that certain documents are considered property of an association;
36▸ provides that if a person maintains a document considered property of an association, the
37   person shall provide the document to the association upon request;
38▸ provides that a declarant may sell a part of the common areas during the period of
39   administrative control to certain persons; and
40▸ makes technical changes.
41   Money Appropriated in this Bill:
42None
43   Other Special Clauses:
44None
45   Utah Code Sections Affected:
46   AMENDS:
4710-20-809, as renumbered and amended by Laws of Utah 2025, First Special Session,
48Chapter 15
4913-79-103, as enacted by Laws of Utah 2025, Chapter 226
5013-79-104, as enacted by Laws of Utah 2025, Chapter 226
5117-79-709, as renumbered and amended by Laws of Utah 2025, First Special Session,
52Chapter 14
5357-1-46, as last amended by Laws of Utah 2025, Chapter 226
5457-8-2, as enacted by Laws of Utah 1963, Chapter 111
5557-8-3, as last amended by Laws of Utah 2025, Chapter 291
5657-8-6.1, as enacted by Laws of Utah 2020, Chapter 75
5757-8-10, as last amended by Laws of Utah 2014, Chapter 397
5857-8-13.1, as last amended by Laws of Utah 2025, Chapter 226
5957-8-16.5, as last amended by Laws of Utah 2016, Chapter 210
6057-8-17, as last amended by Laws of Utah 2025, Chapters 197, 226
6157-8-32, as last amended by Laws of Utah 2025, First Special Session, Chapter 15
6257-8a-103, as enacted by Laws of Utah 2004, Chapter 153
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6357-8a-105, as last amended by Laws of Utah 2025, Chapter 226
6457-8a-105.1, as enacted by Laws of Utah 2020, Chapter 75
6557-8a-212, as last amended by Laws of Utah 2013, Chapter 152
6657-8a-215, as enacted by Laws of Utah 2011, Chapter 355
6757-8a-227, as last amended by Laws of Utah 2025, Chapters 197, 226
6857-8a-232, as last amended by Laws of Utah 2025, First Special Session, Chapter 15
69   ENACTS:
7057-8-7.6, Utah Code Annotated 1953
71
72   Be it enacted by the Legislature of the state of Utah:
73Section 1. Section 10-20-809 is amended to read:
7410-20-809 . Common area parcels on a plat -- No separate ownership --
75   Ownership interest equally divided among other parcels on plat and included in
76   description of other parcels.
77   (1) As used in this section:
78(a) "Association" means the same as that term is defined in:
79(i) regarding a common area, Section 57-8a-102; and
80(ii) regarding a common area and facility, Section 57-8-3.
81(b) "Common area" means the same as that term is defined in Section 57-8a-102.
82(c) "Common area and facility" means the same as that term is defined in Section 57-8-3.
83(d) "Condemnor" means the same as that term is defined in Section 78B-6-520.3.
84[(d)] (e) "Declarant" means the same as that term is defined in:
85(i) regarding a common area, Section 57-8a-102; and
86(ii) regarding a common area and facility, Section 57-8-3.
87[(e)] (f) "Declaration," regarding a common area and facility, means the same as that
88term is defined in Section 57-8-3.
89[(f)] (g) "Period of administrative control" means the same as that term is defined in:
90(i) regarding a common area, Section 57-8a-102; and
91(ii) regarding a common area and facility, Section 57-8-3.
92(h) "Under threat of condemnation" means the same as that term is defined in Section
9378B-6-520.3.
94   (2) A person may not separately own, convey, or modify a parcel designated as a common
95area or common area and facility, on a plat recorded in compliance with this part,
96independent of the other lots, units, or parcels created by the plat unless:
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97(a) an association holds in trust the parcel designated as a common area for the owners
98of the other lots, units, or parcels created by the plat;[ or]
99(b) the conveyance or modification is approved under Subsection (5)[.] ; or
100(c) the conveyance or modification is made in accordance with Subsection (6).
101   (3) If a conveyance or modification of a common area or common area and facility is
102approved in accordance with Subsection (5), the person who presents the instrument of
103conveyance to a county recorder shall:
104(a) attach a notice of the approval described in Subsection (5) as an exhibit to the
105document of conveyance; or
106(b) record a notice of the approval described in Subsection (5) concurrently with the
107conveyance as a separate document.
108   (4) When a plat contains a common area or common area and facility:
109(a) for purposes of assessment, each parcel that the plat creates has an equal ownership
110interest in the common area or common area and facility within the plat, unless the
111plat or an accompanying recorded document indicates a different division of interest
112for assessment purposes; and
113(b) each instrument describing a parcel on the plat by the parcel's identifying plat
114number implicitly includes the ownership interest in the common area or common
115area and facility, even if that ownership interest is not explicitly stated in the
116instrument.
117   (5) Notwithstanding Subsection (2), a person may modify the size or location of or
118separately convey a common area or common area and facility if the following approve
119the conveyance or modification:
120(a) the local government;
121(b)(i) for a common area that an association owns, 67% of the voting interests in the
122association; or
123(ii) for a common area that an association does not own, or for a common area and
124facility, 67% of the owners of lots, units, and parcels designated on a plat that is
125subject to a declaration and on which the common area or common area and
126facility is included; and
127(c) during the period of administrative control, the declarant.
128   (6)(a) Notwithstanding Subsection (2), an individual that the association's board
129designates by a vote, may convey a portion of a common area or a common area and
130facility in accordance with Section 57-8-32 or 57-8a-232, if:
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131(i) the individual makes the conveyance to a condemnor; and
132(ii) the common area or common area and facility is under threat of condemnation.
133(b) If an individual makes a conveyance in accordance with Subsection (6)(a), no lot
134owner or unit owner is required to approve the conveyance or modification.
135Section 2. Section 13-79-103 is amended to read:
13613-79-103 . Duties and jurisdiction of office.
137   (1) The attorneys of the office shall:
138(a) develop and maintain expertise in and understanding of issues and statutes impacting
139unit owners, lot owners, associations of lot owners, and associations of unit owners;
140and
141(b) upon request:
142(i) analyze a complaint from a lot owner, a unit owner, an association of lot owners,
143or an association of unit owners regarding the conduct of a lot owner, a unit
144owner, an association of lot owners, or an association of unit owners; and
145(ii) provide an advisory opinion as described in Section 13-79-104.
146   (2)(a) Neither the office nor the office's attorneys may represent private parties, state
147agencies, local governments, or any other individual or entity in a legal action that
148arises from or relates to a matter addressed in this chapter.
149(b) No attorney of the office may be compelled to testify in a civil action filed
150concerning the subject matter of any review or advisory opinion arranged through the
151office.
152   (3) Except as provided in [Section 13-75-105] Subsection 13-79-104(10), evidence of a
153review by the office and the opinions, writings, findings, and determinations of the
154office are not admissible as evidence in a judicial action or arbitration.
155   (4) The office[:]
156[(a)] shall:
157(a) [ ]analyze a complaint and issue an advisory opinion only for issues relating to a
158violation of a state statute;[ and]
159(b) make public each advisory opinion the office issues in accordance with Subsection
160(4)(a); and
161(c) publish educational materials on the office's website providing, in simple and easy to
162understand language, a brief overview of state law governing associations of unit
163owners and associations of lot owners, including:
164(i) a description of the rights and responsibilities provided in Title 57, Chapter 8,
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165Condominium Ownership Act, to a party under the jurisdiction of Title 57,
166Chapter 8, Condominium Ownership Act;
167(ii) a description of the rights and responsibilities provided in Title 57, Chapter 8a,
168Community Association Act, to a party under the jurisdiction of Title 57, Chapter
1698a, Community Association Act; and
170(iii) instructions regarding how an association of unit owners or an association of lot
171owners may be organized and dismantled in accordance with this chapter.
172   [(b)] (5) The office may not provide [any] a service that requires interpreting the governing
173documents of an association of lot owners or the governing documents of an association
174of unit owners, including determining whether a provision of the governing documents
175is reasonable.
176   (6) An action that an attorney employed by the office takes within the scope of the
177attorney's employment in the office does not create an attorney-client relationship
178between the office or the office's attorneys and any of the following:
179(a) a lot owner;
180(b) a unit owner;
181(c) an association of lot owners; or
182(d) an association of unit owners.
183Section 3. Section 13-79-104 is amended to read:
18413-79-104 . Advisory opinion -- Process of advisory opinions.
185   (1) A lot owner, a unit owner, an association of lot owners, or an association of unit owners
186may request a written advisory opinion:
187(a) from the office to determine compliance with:
188(i) Title 57, Chapter 8, Condominium Ownership Act, and Title 57, Chapter 8a,
189Community Association Act; or
190(ii) other applicable statutes of this state; and
191(b) at any time before the commencement of:
192(i) an action in a court with jurisdiction; or
193(ii) binding arbitration.
194   (2)(a) A person making a request for an advisory opinion described in Subsection (1)
195shall:
196(i) file the request with the office;
197(ii) pay a nonrefundable filing fee of $150;[ and]
198(iii)(A) file the request no later than one year after the day on which the person
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199making the request knew or should have known about the alleged act that is the
200subject of the advisory opinion; and
201(B) include in the request facts that demonstrate that the person submits the
202request no later than a year after the day on which the person making the
203request knew or should have known about the alleged act that is the subject of
204the advisory opinion[.] ; and
205(iv) in the request for an advisory opinion, describe:
206(A) the alleged act that is the subject of the advisory opinion; and
207(B) the impact of the alleged act that is the subject of the advisory opinion on the
208person making the request.
209(b) A person making a request under this Subsection (2) may allege actual damages as a
210result of the alleged act that is the subject of the advisory opinion.
211   (3) The office may establish policies providing for partial fee waivers for a person who is
212financially unable to pay the entire fee described in Subsection (2)(a)(ii).
213   (4)(a) [The] Except as provided in Subsection (4)(b), the office may not issue an advisory
214opinion unless the person requesting an advisory opinion exhausts all existing dispute
215resolution procedures provided in:
216(i) the governing documents of an association of lot owners, if the dispute involves a
217lot owner; or
218(ii) the governing documents of an association of unit owners, if the dispute involves
219a unit owner.
220(b) An association of unit owners or an association of lot owners may not require that a
221person engage in binding arbitration before requesting an advisory opinion from the
222office.
223[(b)] (c) A person requesting an advisory opinion shall include in the person's complaint
224a description of how that person [exhausted all existing procedures provided in the
225applicable governing documents] complied with this Subsection (4).
226   (5) Upon receipt of a request for an advisory opinion, the office shall:
227(a) inquire of all parties if there are other necessary parties to the dispute;
228(b) determine whether the person bringing the request has [exhausted all existing
229procedures provided in the applicable governing documents] complied with
230Subsections (1) through (4); and
231(c) deliver notice of the request to the opposing parties indicated in the request and any
232other necessary party identified in accordance with Subsection (5)(a).
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233   (6) Subject to Subsection (7), after analyzing a complaint, the office shall:
234(a) issue a written advisory opinion addressing the issues described in the request for an
235advisory opinion;
236(b) include in the advisory opinion a statement of the facts and law supporting the
237opinion's conclusions; and
238(c) deliver copies of the advisory opinion to all necessary parties identified in
239accordance with Subsection (5)(a).
240   (7)(a) The office shall issue a written statement declining to issue an advisory opinion
241when, in the opinion of the office:
242(i) the issues are not ripe for review;
243(ii) the person bringing the request has not exhausted all existing procedures provided
244in the applicable governing documents; or
245(iii) the issues raised are beyond the scope of the office's statutory duty to review.
246(b) Notwithstanding Subsection (7)(a), the office shall issue a written statement
247declining to review a request, if the request deals solely with a contractual dispute.
248   (8)(a)(i) If in the process of issuing an advisory opinion, the office determines that a
249person knowingly filed a false or fraudulent request for an advisory opinion, the
250office shall prohibit that person from filing a complaint with the office for two
251years after the day on which the office makes the determination.
252(ii) The office may impose a civil penalty of up to $1,000 against a person if the
253office determines under this Subsection (8)(a) that the person filed a false or
254fraudulent request for an advisory opinion.
255(b)(i) The office may designate a person as a vexatious filer if the person has filed a
256request for three or more advisory opinions and for each request the office:
257(A) determines that the person requesting the advisory opinion has not exhausted
258all existing procedures, as described in Subsection (4)(a);
259(B) declines to issue an advisory opinion, as described in Subsection (7)(a); or
260(C) determines that the request deals solely with a contractual dispute, as
261described in Subsection (7)(b).
262(ii) If the office designates a person as a vexatious filer under this Subsection (8)(b),
263the office may not accept a request by the person unless:
264(A) the person submits a written copy of the request to the executive director of
265the department; and
266(B) the executive director of the department authorizes the person to file the
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267request for the advisory opinion with the office.
268   [(9) The party that requests the advisory opinion shall pay the filing fee described in
269Subsection (2)(a)(ii), unless the office issues an advisory opinion in favor of the party
270that requests the advisory opinion, in which case all necessary parties shall share the cost
271of the filing fee equally.]
272   [(10)] (9) An advisory opinion issued under this section is neither binding on any party to,
273nor admissible as evidence in, a dispute involving an association of lot owners or an
274association of unit owners, except as provided in Subsection [(11)] (10).
275   [(11)] (10)(a) As used in this Subsection [(11)] (10), "qualifying conditions" means:
276(i) the office issues an advisory opinion described in this section;
277(ii) the same issue that is the subject of the advisory opinion is subsequently litigated
278in court; and
279(iii) the court rules in favor of the same party as the advisory opinion in a final
280judgment.
281(b) If the qualifying conditions are met, the court may award the substantially prevailing
282party:
283(i) reasonable attorney fees and court costs relating to the development of the cause
284of action from the date the office delivers the advisory opinion to the date of the
285court's resolution; and
286(ii) if the court finds that the opposing party knowingly and intentionally violated the
287law governing the cause of action, a civil penalty of [$250 for each day described
288in Subsection (12).] $5,000.
289   [(12) The civil penalty described in Subsection (11)(b):]
290[(a) begins to accrue on the later of:]
291[(i) 30 days after the day on which the office delivers the advisory opinion; or]
292[(ii) the day on which the substantially prevailing party or opposing party filed the
293action in court; and]
294[(b) ends the day on which the court enters a final judgment.]
295Section 4. Section 17-79-709 is amended to read:
29617-79-709 . Common area parcels on a plat -- No separate ownership --
297   Ownership interest equally divided among other parcels on plat and included in
298   description of other parcels.
299   (1) As used in this section:
300(a) "Association" means the same as that term is defined in:
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301(i) regarding a common area, Section 57-8a-102; and
302(ii) regarding a common area and facility, Section 57-8-3.
303(b) "Common area" means the same as that term is defined in Section 57-8a-102.
304(c) "Common area and facility" means the same as that term is defined in Section 57-8-3.
305(d) "Condemnor" means the same as that term is defined in Section 78B-6-520.3.
306[(d)] (e) "Declarant" means the same as that term is defined in:
307(i) regarding a common area, Section 57-8a-102; and
308(ii) regarding a common area and facility, Section 57-8-3.
309[(e)] (f) "Declaration," regarding a common area and facility, means the same as that
310term is defined in Section 57-8-3.
311[(f)] (g) "Period of administrative control" means the same as that term is defined in:
312(i) regarding a common area, Section 57-8a-102; and
313(ii) regarding a common area and facility, Section 57-8-3.
314(h) "Under threat of condemnation" means the same as that term is defined in Section
31578B-6-520.3.
316   (2) A person may not separately own, convey, or modify a parcel designated as a common
317area or common area and facility on a plat recorded in compliance with this part,
318independent of the other lots, units, or parcels created by the plat unless:
319(a) an association holds in trust the parcel designated as a common area for the owners
320of the other lots, units, or parcels created by the plat;[ or]
321(b) the conveyance or modification is approved under Subsection (5)[.] ; or
322(c) the conveyance or modification is made in accordance with Subsection (6).
323   (3) If a conveyance or modification of a common area or common area and facility is
324approved in accordance with Subsection (5), the person who presents the instrument of
325conveyance to a county recorder shall:
326(a) attach a notice of the approval described in Subsection (5) as an exhibit to the
327document of conveyance; or
328(b) record a notice of the approval described in Subsection (5) concurrently with the
329conveyance as a separate document.
330   (4) When a plat contains a common area or common area and facility:
331(a) each parcel that the plat creates has an equal ownership interest in the common area
332or common area and facility within the plat, unless the plat or an accompanying
333recorded document indicates a different division of interest for assessment purposes;
334and
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335(b) each instrument describing a parcel on the plat by the parcel's identifying plat
336number implicitly includes the ownership interest in the common area or common
337area and facility within the plat, even if that ownership interest is not explicitly stated
338in the instrument.
339   (5) Notwithstanding Subsection (2), a person may modify the size or location of or
340separately convey a common area or common area and facility if the following approve
341the conveyance or modification:
342(a) the local government;
343(b)(i) for a common area that an association owns, 67% of the voting interests in the
344association; or
345(ii) for a common area that an association does not own, or for a common area and
346facility, 67% of the owners of lots, units, and parcels designated on a plat that is
347subject to a declaration and on which the common area or common area and
348facility is included; and
349(c) during the period of administrative control, the declarant.
350   (6)(a) Notwithstanding Subsection (2), an individual that the association's board
351designates by a vote, may convey a portion of a common area or a common area and
352facility in accordance with Section 57-8-32 or 57-8a-232, if:
353(i) the individual makes the conveyance to a condemnor; and
354(ii) the common area or common area and facility is under threat of condemnation.
355(b) If an individual makes a conveyance in accordance with Subsection (6)(a), no lot
356owner or unit owner is required to approve the conveyance or modification.
357Section 5. Section 57-1-46 is amended to read:
35857-1-46 . Transfer fee and reinvestment fee covenants.
359   (1) As used in this section:
360(a) "Association expenses" means expenses incurred by a common interest association
361for:
362(i) the purchase, ownership, leasing, construction, operation, use, administration,
363maintenance, improvement, repair, or replacement of association facilities,
364including expenses for taxes, insurance, operating reserves, capital reserves, and
365emergency funds;
366(ii) providing, establishing, creating, or managing a facility, activity, service, or
367program for the benefit of property owners, tenants, common areas, the burdened
368property, or property governed by the common interest association; or
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369(iii) other facilities, activities, services, or programs that are required or permitted
370under the common interest association's organizational documents.
371(b) "Association facilities" means any real property, improvements on real property, or
372personal property owned, leased, constructed, developed, managed, or used by a
373common interest association, including common areas.
374(c) "Association transfer fee" means a fee, charge, or payment that is:
375(i) related to the sale of real property; and
376(ii) as a result of a transfer of the real property, is imposed on a buyer or seller by:
377(A) a common interest association; or
378(B) a person acting on behalf of the common interest association.
379(d) "Burdened property" means the real property that is subject to a reinvestment fee
380covenant or transfer fee covenant.
381(e) "Common areas" means areas described within:
382(i) the definition of "common areas and facilities" under Section 57-8-3; and
383(ii) the definition of "common areas" under Section 57-8a-102.
384(f)(i) "Common interest association" means:
385(A) an association, as defined in Section 57-8a-102;
386(B) an association of unit owners, as defined in Section 57-8-3; or
387(C) a nonprofit association.
388(ii) "Common interest association" includes a person authorized by an association,
389association of unit owners, or nonprofit association.
390(g) "Large master planned development" means an approved development:
391(i) of at least 500 acres or 500 units; and
392(ii) that includes a commitment to fund, construct, develop, or maintain:
393(A) common infrastructure;
394(B) association facilities;
395(C) community programming;
396(D) resort facilities;
397(E) open space; or
398(F) recreation amenities.
399(h) "Nonprofit association" means a nonprofit corporation organized under Title 16,
400Chapter 6a, Utah Revised Nonprofit Corporation Act, to benefit, enhance, preserve,
401govern, manage, or maintain burdened property.
402(i) "Organizational documents" means:
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403(i) for an association, as that term is defined in Section 57-8a-102, governing
404documents as that term is defined in Section 57-8a-102;
405(ii) for an association of unit owners, as that term is defined in Section 57-8-3, a
406declaration as that term is defined in Section 57-8-3; and
407(iii) for a nonprofit association:
408(A) a written instrument by which the nonprofit association exercises powers or
409manages, maintains, or otherwise affects the property under the jurisdiction of
410the nonprofit association; and
411(B) articles of incorporation, bylaws, plats, charters, the nonprofit association's
412rules, and declarations of covenants, conditions, and restrictions.
413      (j) "Reinvestment fee" means a fee imposed, directly or indirectly, by a common interest
414association:
415(i) upon a buyer or seller of real property;
416(ii) upon and as a result of a transfer of the real property; and
417(iii) that is dedicated to benefiting the common areas, including payment for:
418(A) common planning, facilities, and infrastructure;
419(B) obligations arising from an environmental covenant;
420(C) community programming;
421(D) resort facilities;
422(E) open space;
423(F) recreation amenities;
424(G) charitable purposes; or
425(H) association expenses.
426      (k) "Reinvestment fee covenant" means a covenant, restriction, or agreement that:
427(i) affects real property; and
428(ii) obligates a future buyer or seller of the real property to pay to a common interest
429association, upon and as a result of a transfer of the real property, a fee that is
430dedicated to benefitting the burdened property, including payment for:
431(A) common planning, facilities, and infrastructure;
432(B) obligations arising from an environmental covenant;
433(C) community programming;
434(D) resort facilities;
435(E) open space;
436(F) recreation amenities;
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437(G) charitable purposes; or
438(H) association expenses.
439(l) "Transfer fee covenant":
440(i) means an obligation, however denominated, expressed in a covenant, restriction,
441agreement, or other instrument or document:
442(A) that affects real property;
443(B) that is imposed on a future buyer or seller of real property, other than a person
444who is a party to the covenant, restriction, agreement, or other instrument or
445document; and
446(C) to pay a fee upon and as a result of a transfer of the real property; and
447(ii) does not include:
448(A) an obligation imposed by a court judgment, order, or decree;
449(B) an obligation imposed by the federal government or a state or local
450government entity; or
451(C) a reinvestment fee covenant.
452   (2) A transfer fee covenant recorded on or after March 16, 2010, is void and unenforceable.
453   (3)(a) Except as provided in Subsection (3)(b), a reinvestment fee covenant may not be
454sold, assigned, or conveyed unless the sale, assignment, or conveyance is to a
455common interest association that was formed to benefit the burdened property.
456(b) A common interest association may assign or pledge to a lender the right to receive
457payment under a reinvestment fee covenant if:
458(i) the assignment or pledge is as collateral for a credit facility; and
459(ii) the lender releases the collateral interest upon payment in full of all amounts that
460the common interest association owes to the lender under the credit facility.
461   (4) A reinvestment fee covenant recorded on or after March 16, 2010, is not enforceable if
462the reinvestment fee covenant is intended to affect property that is the subject of a
463previously recorded transfer fee covenant or reinvestment fee covenant.
464   (5) A reinvestment fee covenant recorded on or after March 16, 2010, may not obligate the
465payment of a fee that exceeds .5% of the value of the burdened property, unless the
466burdened property is part of a large master planned development.
467   (6)(a) A reinvestment fee covenant recorded on or after March 16, 2010, is void and
468unenforceable unless a notice of reinvestment fee covenant, separate from the
469reinvestment fee covenant, is recorded in the office of the recorder of each county in
470which any of the burdened property is located.
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02-08 21:24  1st Sub. (Buff) H.B. 406
471(b) A notice under Subsection (6)(a) shall:
472(i) state the name and address of the common interest association to which the fee
473under the reinvestment fee covenant is required to be paid;
474(ii) include the notarized signature of the common interest association's authorized
475representative;
476(iii) state that the burden of the reinvestment fee covenant is intended to run with the
477land and to bind successors in interest and assigns;
478(iv) state that the existence of the reinvestment fee covenant precludes the imposition
479of an additional reinvestment fee covenant on the burdened property;
480(v) state the duration of the reinvestment fee covenant;
481(vi) state the purpose of the fee required to be paid under the reinvestment fee
482covenant; and
483(vii) state that the fee required to be paid under the reinvestment fee covenant is
484required to benefit the burdened property.
485(c) A recorded notice of reinvestment fee covenant that substantially complies with the
486requirements of Subsection (6)(b) is valid and effective.
487   (7)(a) A reinvestment fee covenant or transfer fee covenant recorded before March 16,
4882010, is not enforceable after May 31, 2010, unless:
489(i) a notice that is consistent with the notice described in Subsection (6) is recorded in
490the office of the recorder of each county in which any of the burdened property is
491located; or
492(ii) a notice of reinvestment fee covenant or transfer fee covenant, as described in
493Subsection (7)(b), is recorded in the office of the recorder of each county in which
494any of the burdened property is located.
495(b) A notice under Subsection (7)(a)(ii) shall:
496(i) include the notarized signature of the beneficiary of the reinvestment fee covenant
497or transfer fee covenant, or the beneficiary's authorized representative;
498(ii) state the name and current address of the beneficiary under the reinvestment fee
499covenant or transfer fee covenant;
500(iii) state that the burden of the reinvestment fee covenant or transfer fee covenant is
501intended to run with the land and to bind successors in interest and assigns; and
502(iv) state the duration of the reinvestment fee covenant or transfer fee covenant.
503(c) A recorded notice of reinvestment fee covenant or transfer fee covenant that
504substantially complies with the requirements of Subsection (7)(b) is valid and
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505effective.
506(d) A notice under Subsection (7)(b):
507(i) that is recorded after May 31, 2010, is not enforceable; and
508(ii) shall comply with the requirements of Section 57-1-47.
509(e) An amendment to a notice under Subsection (7)(b) recorded after May 31, 2010,
510seeking to amend a notice under Subsection (7)(b) recorded before May 31, 2010, is
511not an enforceable amendment.
512   (8) A reinvestment fee covenant recorded on or after March 16, 2010, may not be enforced
513upon:
514(a) an involuntary transfer;
515(b) a transfer that results from a court order;
516(c) a bona fide transfer to a family member of the seller within three degrees of
517consanguinity who, before the transfer, provides adequate proof of consanguinity;
518(d) a transfer or change of interest due to death, whether provided in a will, trust, or
519decree of distribution; or
520(e) the transfer of burdened property by a financial institution, except to the extent that
521the reinvestment fee covenant requires the payment of a common interest
522association's costs directly related to the transfer of the burdened property, not to
523exceed $250.
524   (9)(a) An association transfer fee imposed on or after May 7, 2025, is void and
525unenforceable unless the association uses the fee only to pay expenses related to the
526transfer.
527(b) An association transfer fee imposed in accordance with this Subsection (9) may not
528exceed $200.
529   (10) On or after May 7, 2025, an association may not impose a reinvestment fee unless:
530(a) imposing the reinvestment fee is authorized in the declaration or a reinvestment fee
531covenant; and
532(b) a majority of voting interests in the association, or a higher percentage if required in
533the organizational documents, approves the reinvestment fee.
534   (11) After a vote approving the reinvestment fee described in Subsection (10)(b), an
535association may set the amount of a reinvestment fee only:
536(a) in accordance with the terms of the declaration or a reinvestment fee covenant; and
537(b) upon providing notice in accordance with Section 57-8a-214.
538   (12) Members of the association may remove or amend a reinvestment fee by holding a
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02-08 21:24  1st Sub. (Buff) H.B. 406
539vote at a special meeting:
540(a) called by the members for the purpose of removing or amending the reinvestment
541fee; and
542(b) at which:
543(i) at least 51% of the voting interests attend and vote; and
544(ii) a majority of the voting interests that attend vote to remove or amend the
545reinvestment fee.
546Section 6. Section 57-8-2 is amended to read:
54757-8-2 . Applicability of chapter.
548[This act shall be applicable only to property which the sole owner or all the owners
549   submit to the provisions of the act by duly executing and recording a declaration as provided in
550   the act.]
551   (1) This chapter applies to an association if:
552(a) the association's declaration states that this chapter applies; or
553(b) the association amends the association's declaration to state that this chapter applies
554in accordance with Section 57-8-10.5.
555   (2) This section applies regardless of when an association is created.
556Section 7. Section 57-8-3 is amended to read:
55757-8-3 . Definitions.
558As used in this chapter:
559   (1) "Assessment" means any charge [imposed by] that the association imposes, including:
560(a) common expenses on or against a unit owner [pursuant to] in accordance with the
561provisions of the declaration, bylaws, or this chapter; and
562(b) an amount that an association of unit owners assesses to a unit owner under
563Subsection 57-8-43(9)(g).
564   (2) "Association of unit owners" or "association" means all of the unit owners:
565(a) acting as a group in accordance with the declaration and bylaws; or
566(b) organized as a legal entity in accordance with the declaration.
567   (3) "Building" means a building, containing units, and comprising a part of the property.
568   (4) "Commercial condominium project" means a condominium project that has no
569residential units within the project.
570   (5) "Common areas and facilities" unless otherwise provided in the declaration or lawful
571amendments to the declaration means:
572(a) the land included within the condominium project, whether leasehold or in fee
                                                   - 17 -
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573simple;
574(b) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
575corridors, lobbies, stairs, stairways, fire escapes, entrances, and exits of the building;
576(c) the basements, yards, gardens, parking areas, and storage spaces;
577(d) the premises for lodging of janitors or persons in charge of the property;
578(e) installations of central services such as power, light, gas, hot and cold water, heating,
579refrigeration, air conditioning, and incinerating;
580(f) the elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all
581apparatus and installations existing for common use;
582(g) such community and commercial facilities as may be provided for in the declaration;
583and
584(h) all other parts of the property necessary or convenient to its existence, maintenance,
585and safety, or normally in common use.
586   (6) "Common expenses" means:
587(a) all sums lawfully assessed against the unit owners;
588(b) expenses of administration, maintenance, repair, or replacement of the common areas
589and facilities;
590(c) expenses agreed upon as common expenses by the association of unit owners; and
591(d) expenses declared common expenses by this chapter, or by the declaration or the
592bylaws.
593   (7) "Common profits," unless otherwise provided in the declaration or lawful amendments
594to the declaration, means the balance of all income, rents, profits, and revenues from the
595common areas and facilities remaining after the deduction of the common expenses.
596   (8) "Condominium" means the ownership of a single unit in a multiunit project together
597with an undivided interest in common in the common areas and facilities of the property.
598   (9) "Condominium plat" means a plat or plats of survey of land and units prepared in
599accordance with Section 57-8-13.
600   (10)(a) "Condominium project" means a real estate condominium project; a plan or
601project whereby two or more units, whether contained in existing or proposed
602apartments, commercial or industrial buildings or structures, or otherwise, are
603separately offered or proposed to be offered for sale.
604(b) [ ] "Condominium project" [also means ] includes the property when the context so
605requires.
606   (11)(a) "Condominium unit" means a unit together with the undivided interest in the
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02-08 21:24  1st Sub. (Buff) H.B. 406
607common areas and facilities appertaining to that unit.
608(b) [ Any reference in this chapter to a condominium unit] "Condominium unit" includes
609both a physical unit together with [its] the physical unit's appurtenant undivided
610interest in the common areas and facilities and a time period unit together with [its]
611the time period unit's appurtenant undivided interest, unless the [reference] term is
612specifically limited to a time period unit.
613   (12)(a) "Contractible condominium" means a condominium project from which one or
614more portions of the land within the project may be withdrawn in accordance with
615provisions of the declaration and of this chapter.
616(b) [ If] "Contractible condominium" does not include a condominium project where the
617withdrawal described in Subsection (12)(a) can occur only by the expiration or
618termination of one or more leases[, then the condominium project is not a
619contractible condominium within the meaning of this chapter.] .
620   (13) "Convertible land" means a building site which is a portion of the common areas and
621facilities, described by metes and bounds, within which additional units or limited
622common areas and facilities may be created in accordance with this chapter.
623   (14) "Convertible space" means a portion of the structure within the condominium project,
624which portion may be converted into one or more units or common areas and facilities,
625including limited common areas and facilities in accordance with this chapter.
626   (15)(a) "Declarant" means all persons who execute the declaration or on whose behalf
627the declaration is executed.[ From the time of the recordation of any amendment to
628the declaration expanding an expandable condominium, all persons who execute that
629amendment or on whose behalf that amendment is executed shall also come within
630this definition.]
631(b) [ Any successors of the persons referred to in this subsection who come ] "Declarant"
632includes:
633(i) a person that executes an amendment to the declaration expanding an expandable
634condominium;
635(ii) a person on whose behalf a person executes an amendment described in
636Subsection (15)(b)(i); and
637(iii) a successor of a person described in Subsection (15)(a) that comes to stand in the
638same relation to the condominium project as [their predecessors also come within
639this definition] the person's predecessor.
640   (16) "Declaration" means the instrument by which the property is submitted to the
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641provisions of this [act] chapter, as [it] the declaration from time to time may be lawfully
642amended.
643   (17) "Electrical corporation" means the same as that term is defined in Section 54-2-1.
644   (18) "Expandable condominium" means a condominium project to which additional land or
645an interest in [it] the condominium project may be added in accordance with the
646declaration and this chapter.
647   (19) "Gas corporation" means the same as that term is defined in Section 54-2-1.
648   (20) "Governing documents":
649(a) means a written instrument by which an association of unit owners may:
650(i) exercise powers; or
651(ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
652association of unit owners; and
653(b) includes:
654(i) articles of incorporation;
655(ii) bylaws;
656(iii) a plat;
657(iv) a declaration of covenants, conditions, and restrictions; and
658(v) rules of the association of unit owners.
659   (21) "Independent third party" means a person that:
660(a) is not related to the unit owner;
661(b) shares no pecuniary interests with the unit owner; and
662(c) purchases the unit in good faith and without the intent to defraud a current or future
663lienholder.
664   (22) "Judicial foreclosure" means a foreclosure of a unit:
665(a) for the nonpayment of an assessment;
666(b) in the manner provided by law for the foreclosure of a mortgage on real property; and
667(c) as provided in this chapter.
668   (23)(a) "Leasehold condominium" means a condominium project in all or any portion of
669which each unit owner owns an estate for years in [his] the unit owner's unit, or in the
670land upon which that unit is situated, or both, with all those leasehold interests to
671expire naturally at the same time.
672(b) [ A] "Leasehold condominium" does not include a condominium project including
673leased land, or an interest in the land, upon which no units are situated or to be
674situated[ is not a leasehold condominium within the meaning of this chapter].
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02-08 21:24  1st Sub. (Buff) H.B. 406
675   (24) "Limited common areas and facilities" means [those ] the common areas and facilities
676designated in the declaration as reserved for use of a certain unit or units to the exclusion
677of the other units.
678   (25) "Majority" or "majority of the unit owners," unless otherwise provided in the
679declaration or lawful amendments to the declaration, means the owners of more than
68050% in the aggregate in interest of the undivided ownership of the common areas and
681facilities.
682   (26) "Management committee" means the committee as provided in the declaration charged
683with and having the responsibility and authority to make and to enforce all of the
684reasonable rules covering the operation and maintenance of the property.
685   (27) "Management committee meeting" means a gathering of a management committee,
686whether in person or by means of electronic communication, at which the management
687committee can take binding action.
688   (28)(a) "Means of electronic communication" means an electronic system that allows
689individuals to communicate orally in real time.
690(b) "Means of electronic communication" includes:
691(i) web conferencing;
692(ii) video conferencing; and
693(iii) telephone conferencing.
694   (29) "Mixed-use condominium project" means a condominium project that has both
695residential and commercial units in the condominium project.
696   (30) "Nonjudicial foreclosure" means the sale of a unit:
697(a) for the nonpayment of an assessment;
698(b) in the same manner as the sale of trust property under Sections 57-1-19 through
69957-1-34; and
700(c) as provided in this chapter.
701   (31) "Par value" means a number of dollars or points assigned to each unit by the
702declaration[.] in accordance with the following:
703(a) [ Substantially] the declaration shall assign substantially identical units [shall be
704assigned ]the same par value[,] ;
705(b) [ but ]units located at substantially different heights above the ground, or having
706substantially different views, or having substantially different amenities or other
707characteristics that might result in differences in market value, may be considered
708substantially identical [within the meaning of this subsection] for purposes of
                                                - 21 -
1st Sub. (Buff) H.B. 406  02-08 21:24
709Subsection (31)(a);
710(c) [. If] if the declaration states par value [is stated ]in terms of dollars[, that statement] :
711(i) the dollar amount may not be considered to reflect or control the sales price or fair
712market value of [any] a unit[,] ; and
713(ii) [ no] an opinion, an appraisal, or a fair market transaction at a different figure may
714not affect:
715(A) [ ]the par value of [any] a unit[,] ; or
716(B) [ any] an undivided interest in the common areas and facilities, voting rights in
717the unit owners' association, liability for common expenses, or right to
718common profits, [assigned] that the declaration assigns on the basis [thereof] of
719the par value.
720   (32) "Period of administrative control" means the period of control described in Subsection
72157-8-16.5(1).
722   (33) "Person" means an individual, corporation, partnership, association, trustee, or other
723legal entity.
724   (34) "Political sign" means [any] a sign or document that advocates for:
725(a) the election or defeat of a candidate for public office; or
726(b) the approval or defeat of a ballot proposition.
727   (35) "Property" means:
728(a) [ ]the land, whether leasehold or in fee simple[,] ;
729(b) [ ]the building, if any[,] ;
730(c) [ ]all improvements and structures [thereon,] on the land;
731(d) [ ]all easements, rights, and appurtenances belonging [thereto,] to the land; and
732(e) [ ]all articles of personal property intended for use in connection [therewith] with the
733land.
734   (36) "Protected area" means the same as that term is defined in Section 53-29-306.
735   (37) "Record," "recording," "recorded," and "recorder" [have the meaning stated] mean the
736same as the terms are defined in Chapter 3, Recording of Documents.
737   (38) "Rentals" or "rental unit" means:
738(a) a unit that:
739(i) is not owned by an entity or trust; and
740(ii) [is occupied by ]an individual occupies while the unit owner is not occupying the
741unit as the unit owner's primary residence; or
742(b) an occupied unit [owned by] that an entity or trust owns, regardless of who occupies
                                                  - 22 -
02-08 21:24  1st Sub. (Buff) H.B. 406
743the unit.
744   (39) "Rule" means a policy, guideline, restriction, procedure, or regulation of an association
745that:
746(a) is not set forth in a contract, easement, article of incorporation, bylaw, or declaration;
747and
748(b) governs:
749(i) the conduct of persons; or
750(ii) the use, quality, type, design, or appearance of real property or personal property.
751   [(39)] (40)(a) "Size" means the number of cubic feet, or the number of square feet of
752ground or floor space, within [each] a unit as computed by reference to the record of
753survey map and rounded off to a whole number.
754(b) [ Certain spaces ] "Size" does not include the following within [the units] a unit, if
755when making the calculation described in Subsection (40)(a), the following are
756omitted or partially discounted by the use of a ratio, the same basis of calculation is
757employed for all units in the condominium project, and that basis is described in the
758declaration:[ including attic, basement, or garage space may be omitted from the
759calculation or be partially discounted by the use of a ratio, if the same basis of
760calculation is employed for all units in the condominium project and if that basis is
761described in the declaration].
762(i) an attic;
763(ii) a basement; or
764(iii) a garage space.
765   [(40)] (41) "Time period unit" means an annually recurring part or parts of a year specified
766in the declaration as a period for which a unit is separately owned and includes a
767timeshare estate as that term is defined in Section 57-19-2.
768   [(41)] (42) "Unconstructed unit" means a unit that:
769(a) is intended, as depicted in the condominium plat, to be fully or partially contained in
770a building; and
771(b) is not constructed.
772   [(42)] (43)(a) "Unit" means a separate part of the property intended for any type of
773independent use, which is created by the recording of a declaration and a
774condominium plat that describes the unit boundaries.
775(b) "Unit" includes:
776(i) one or more rooms or spaces located in one or more floors or a portion of a floor
                                                - 23 -
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777in a building[.] ; and
778[(c)] (ii) ["Unit" includes ]a convertible space, in accordance with Subsection
77957-8-13.4(3).
780   [(43)] (44) "Unit number" means the number, letter, or combination of numbers and letters
781designating the unit in the declaration and in the record of survey map.
782   [(44)] (45) "Unit owner" means the person or persons owning a unit in fee simple and an
783undivided interest in the fee simple estate of the common areas and facilities in the
784percentage specified and established in the declaration or, in the case of a leasehold
785condominium project, the person or persons whose leasehold interest or interests in the
786condominium unit extend for the entire balance of the unexpired term or terms.
787   [(45)] (46) "Water wise landscaping" means:
788(a) installation of plant materials, suited to the microclimate and soil conditions, that can:
789(i) remain healthy with minimal irrigation once established; or
790(ii) be maintained without the use of overhead spray irrigation;
791(b) use of water for outdoor irrigation through proper and efficient irrigation design and
792water application; or
793(c) use of other landscape design features that:
794(i) minimize the landscape's need for supplemental water from irrigation;
795(ii) reduce the landscape area dedicated to lawn or turf; or
796(iii) encourage vegetative coverage.
797   [(46)] (47) "Water wise plant material" means a plant material suited to water wise
798landscaping.
799Section 8. Section 57-8-6.1 is amended to read:
80057-8-6.1 . Information required before sale to independent third party.
801   (1) Before the sale of [any] a unit under the jurisdiction of an association of unit owners to
802an independent third party, the grantor shall provide to the independent third party:
803(a) a copy of the association of unit owners' recorded governing documents; and
804(b) a link or other access point to the [department's ]educational materials described in
805Subsection [57-8-13.1(6)] 13-79-103(4).
806   (2) The grantor shall provide the information described in Subsection (1) before closing.
807   (3) The association of unit owners shall, upon request by the grantor, provide to the grantor
808the information described in Subsection (1).
809   (4) This section applies to each association of unit owners, regardless of when the
810association of unit owners is formed.
                                                 - 24 -
02-08 21:24  1st Sub. (Buff) H.B. 406
811Section 9. Section 57-8-7.6 is enacted to read:
81257-8-7.6 . Budget.
813   (1) At least once annually a management committee shall prepare and adopt a budget for
814the association.
815   (2) The management committee shall present the adopted budget to association members at
816a meeting of the members.
817   (3) A budget is disapproved if within 45 days after the date of the meeting under
818Subsection(2) at which the management committee presents the adopted budget:
819(a) at least 51% of all the allocated voting interests of the unit owners in the association
820vote to disapprove the adopted budget; and
821(b) the vote is taken at a special meeting called by unit owners under the declaration,
822articles, or bylaws to disapprove the budget.
823   (4) If a budget is disapproved under Subsection (3) or not adopted under Subsection (1), the
824budget that the management committee last adopted continues as the budget until the
825management committee prepares and adopts a new budget for the association.
826Section 10. Section 57-8-10 is amended to read:
82757-8-10 . Contents of declaration.
828   (1)(a) Before the conveyance of [any] a unit in a condominium project, a declaration
829shall be recorded that contains the covenants, conditions, and restrictions relating to
830the project that shall be enforceable equitable servitudes, where reasonable, and
831which shall run with the land.
832(b) [ ]Unless otherwise provided, [these servitudes may be enforced by a unit owner or
833a unit owner's successor in interest.] a unit owner or a unit owner's successor in
834interest may enforce a servitude described in Subsection (1)(a).
835   (2)(a) For every condominium project, the declaration shall:
836(i) include a description of the land or interests in real property included within the
837project;
838(ii) contain a description of any buildings that states the number of storeys and
839basements, the number of units, the principal materials of which the building is or
840is to be constructed, and a description of all other significant improvements
841contained or to be contained in the project;
842(iii) contain the unit number of each unit, the square footage of each unit, and any
843other description or information necessary to properly identify each unit;
844(iv) describe the common areas and facilities of the project;[ and]
                                                - 25 -
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845(v) describe any limited common areas and facilities and state to which units the use
846of the common areas and facilities is reserved[.] ; and
847(vi) include a statement that the project is:
848(A) designated as a condominium project; and
849(B) governed by this chapter.
850(b) Any shutters, awnings, window boxes, doorsteps, porches, balconies, patios, or other
851apparatus intended to serve a single unit, but located outside the boundaries of the
852unit, shall constitute a limited common area and facility appertaining to that unit
853exclusively, regardless of whether [or not ]the declaration makes such a provision.
854(c) The condominium plat recorded with the declaration may provide or supplement the
855information required under Subsections (2)(a) and (b).
856(d)(i) The declaration shall include the percentage or fraction of undivided interest in
857the common areas and facilities appurtenant to each unit and the unit owner for all
858purposes, including voting, derived and allocated in accordance with Subsection
85957-8-7(2).
860(ii) If any use restrictions are to apply, the declaration shall state the purposes for
861which the units are intended and the use restrictions that apply.
862(iii)(A) The declaration shall include the name and address of a person to receive
863service of process on behalf of the condominium project, in the cases provided
864by this chapter.
865(B) The person described in Subsection (2)(d)(iii)(A) shall be a resident of, or
866shall maintain a place of business within, this state.
867(iv) The declaration shall describe the method by which the declaration may be
868amended consistent with this chapter.
869(v) Any further matters in connection with the property may be included in the
870declaration, which the person or persons executing the declaration may consider
871desirable, consistent with this chapter.
872[(vi) The declaration shall contain a statement of intention that this chapter applies to
873the property.]
874(e) The initial recorded declaration shall include:
875(i) an appointment of a trustee who qualifies under Subsection 57-1-21(1)(a)(i) or (iv);
876and
877(ii) the following statement: "The declarant hereby conveys and warrants pursuant to
878U.C.A. Sections 57-1-20 and 57-8-45 to (name of trustee), with power of sale, the
                                                 - 26 -
02-08 21:24  1st Sub. (Buff) H.B. 406
879unit and all improvements to the unit for the purpose of securing payment of
880assessments under the terms of the declaration."
881   (3)(a) If the condominium project contains any convertible land, the declaration shall:
882(i) contain a legal description by metes and bounds of each area of convertible land
883within the condominium project;
884(ii) state the maximum number of units that may be created within each area of
885convertible land;
886(iii) state, with respect to each area of convertible land, the maximum percentage of
887the aggregate land and floor area of all units that may be created and the use of
888which will not or may not be restricted exclusively to residential purposes, unless
889none of the units on other portions of the land within the project are restricted
890exclusively to residential use;
891(iv) state the extent to which any structure erected on any convertible land will be
892compatible with structures on other portions of the land within the condominium
893project in terms of quality of construction, the principal materials to be used, and
894architectural style;
895(v) describe all other improvements that may be made on each area of convertible
896land within the condominium project;
897(vi) state that any units created within each area of convertible land will be
898substantially identical to the units on other portions of the land within the project
899or describe in detail what other type of units may be created; and
900(vii) describe the declarant's reserved right, if any, to create limited common areas
901and facilities within any convertible land in terms of the types, sizes, and
902maximum number of the limited common areas within each convertible land.
903(b) The condominium plat recorded with the declaration may provide or supplement the
904information required under Subsection (3)(a).
905   (4)(a) If the condominium project is an expandable condominium project, the
906declaration shall:
907(i) contain an explicit reservation of an option to expand the project;
908(ii) include a statement of any limitations on the option to expand, including a
909statement as to whether the consent of any unit owners is required and, a
910statement as to the method by which consent shall be ascertained, or a statement
911that there are no such limitations;
912(iii) include a time limit, not exceeding seven years after the day on which the
                                                - 27 -
1st Sub. (Buff) H.B. 406  02-08 21:24
913declaration is recorded, upon which the option to expand the condominium project
914expires and a statement of any circumstances that will terminate the option before
915expiration of the specified time limits;
916(iv) contain a legal description by metes and bounds of all land that may be added to
917the condominium project, which is known as additional land;
918(v) state:
919(A) if any of the additional land is added to the condominium project, whether all
920of it or any particular portion of it must be added;
921(B) any limitations as to what portions may be added; or
922(C) a statement that there are no such limitations;
923(vi) include a statement as to whether portions of the additional land may be added to
924the condominium project at different times, including any limitations fixing the
925boundaries of those portions by legal descriptions setting forth the metes and
926bounds of these lands and regulating the order in which [they] the lands may be
927added to the condominium project;
928(vii) include a statement of any limitations on the locations of any improvements that
929may be made on any portions of the additional land added to the condominium
930project, or a statement that no assurances are made in that regard;
931(viii)(A) state the maximum number of units that may be created on the additional
932land;
933(B) if portions of the additional land may be added to the condominium project
934and the boundaries of those portions are fixed in accordance with Subsection
935(4)(a)(vi), state the maximum number of units that may be created on each
936portion added to the condominium project; and
937(C) if portions of the additional land may be added to the condominium project
938and the boundaries of those portions are not fixed in accordance with
939Subsection (4)(a)(vi), state the maximum number of units per acre that may be
940created on any portion added to the condominium project;
941(ix) with respect to the additional land and to any portion of the additional land that
942may be added to the condominium project, state the maximum percentage of the
943aggregate land and floor area of all units that may be created on it, the use of
944which will not or may not be restricted exclusively to residential purposes, unless
945none of the units on the land originally within the project are restricted exclusively
946to residential use;
                                               - 28 -
02-08 21:24  1st Sub. (Buff) H.B. 406
947(x) state the extent to which any structures erected on any portion of the additional
948land added to the condominium project will be compatible with structures on the
949land originally within the project in terms of quality of construction, the principal
950materials to be used, and architectural style, or that no assurances are made in
951those regards;
952(xi) describe all other improvements that will be made on any portion of the
953additional land added to the condominium project, including any limitations on
954what other improvements may be made on the additional land, or state that no
955assurances are made in that regard;
956(xii) contain a statement that any units created on any portion of the additional land
957added to the condominium project will be substantially identical to the units on
958the land originally within the project, a statement of any limitations on what types
959of units may be created on the additional land, or a statement that no assurances
960are made in that regard; and
961(xiii) describe the declarant's reserved right, if any, to create limited common areas
962and facilities within any portion of the additional land added to the condominium
963project, in terms of the types, sizes, and maximum number of limited common
964areas within each portion, or state that no assurances are made in those regards.
965(b) The condominium plat recorded with the declaration may provide or supplement the
966information required under Subsections (4)(a)(iv) through (a)(vii) and (a)(x) through
967(a)(xiii).
968   (5)(a) If the condominium project is a contractible condominium, the declaration shall:
969(i) contain an explicit reservation of an option to contract the condominium project;
970(ii) contain a statement of any limitations on the option to contract, including a
971statement regarding whether the consent of any unit owners is required, and if so,
972a statement regarding the method by which this consent shall be ascertained, or a
973statement that there are no such limitations;
974(iii) state the time limit, not exceeding seven years after the day on which the
975declaration is recorded, upon which the option to contract the condominium
976project expires, together with a statement of any circumstances that will terminate
977the option before expiration of the specified time limit;
978(iv) include a legal description by metes and bounds of all land that may be
979withdrawn from the condominium project, which is known as withdrawable land;
980(v) include a statement as to whether portions of the withdrawable land may be
                                               - 29 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
981withdrawn from the condominium project at different times, together with any
982limitations fixing the boundaries of those portions by legal descriptions setting
983forth the metes and bounds and regulating the order in which they may be
984withdrawn from the condominium project; and
985(vi) include a legal description by metes and bounds of all of the land within the
986condominium project to which the option to contract the project does not extend.
987(b) The condominium plat recorded with the declaration may provide or supplement the
988information required under Subsections (5)(a)(iv) through (vi).
989   (6)(a) If the condominium project is a leasehold condominium, the declaration shall,
990with respect to any ground lease or other leases the expiration or termination of
991which will or may terminate or contract the condominium project:
992(i) include recording information enabling the location of each lease in the official
993records of the county recorder;
994(ii) include the date upon which each lease is due to expire;
995(iii) state whether any land or improvements will be owned by the unit owners in fee
996simple;
997(iv) if there is to be fee simple ownership of any land or improvement, as described in
998Subsection (6)(a)(iii), include:
999(A) a description of the land or improvements, including a legal description by
1000  metes and bounds of the land; or
1001  (B) a statement of [any rights] the right the unit owners have to remove [these] the
1002  improvements described in Subsection (6)(a)(iv)(A) within a reasonable time
1003  after the expiration or termination of the lease or leases involved, or a
1004  statement that [they shall have no such rights] the unit owners do not have that
1005  right; and
1006  (v) include a statement of the [rights] right the unit owners have to extend or renew
1007  any of the leases or to redeem or purchase any of the reversions, or a statement
1008  that [they have no such rights] the unit owners do not have that right.
1009  (b) After the recording of the declaration, a lessor who executed the declaration, or the
1010  lessor's successor in interest, may not terminate any part of the leasehold interest of [
1011  any] a unit owner who:
1012  (i) makes timely payment of the unit owner's share of the rent to the persons
1013  designated in the declaration for the receipt of the rent; and
1014  (ii) otherwise complies with all covenants which would entitle the lessor to terminate
                                                  - 30 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1015  the lease if the covenants were violated.
1016     (7)(a)(i) If the condominium project contains time period units, the declaration shall
1017  also contain the location of each condominium unit in the calendar year.
1018  (ii) [ This information] The information described in Subsection (7)(a)(i) shall be set
1019  out in a fourth column of the exhibit or schedule referred to in Subsection
1020  57-8-7(2), if the exhibit or schedule accompanies the declaration.
1021  (b) The declaration shall also put timeshare owners on notice that tax notices will be sent
1022  to the management committee, not each timeshare owner.
1023  (c) The time period units created with respect to any given physical unit shall be such
1024  that the aggregate of the durations involved constitute a full calendar year.
1025     (8)(a) The declaration, bylaws, and condominium plat shall be duly executed and
1026  acknowledged by all of the owners and any lessees of the land [which] that is [made ]
1027  subject to this chapter.
1028  (b) As used in Subsection (8)(a), "owners and lessees" does not include[, in their
1029  respective capacities,] :
1030  (i) [ any] a mortgagee[,] ;
1031  (ii) [ any] a trustee or beneficiary under a deed of trust[,] ;
1032  (iii) [ ]any other lien holder[,] ;
1033  (iv) [ any] a person [having] that has an equitable interest under [any] a contract for the
1034  sale or lease of a condominium unit[,] ; or
1035  (v) [ any] a lessee whose leasehold interest does not extend to any portion of the
1036  common areas and facilities.
1037     (9)(a) Except as provided in Subsection (9)(b), a declaration, or an amendment to a
1038  declaration, may not vary the requirements of Section 57-8-8.1 or Subsection
1039  57-8-8.1(1)(b)(ii).
1040  (b) A declaration, or an amendment to a declaration may vary the requirements of
1041  Subsections 57-8-8.1(1)(a), (b)(i) and (iii), and 57-8-8.1(2) through (5).
1042  Section 11. Section 57-8-13.1 is amended to read:
1043  57-8-13.1 . Registration with Department of Commerce.
1044     (1) As used in this section, "department" means the Department of Commerce created in
1045  Section 13-1-2.
1046     (2) No later than 90 days after the recording of a declaration, an association of unit owners
1047  shall register with the department in the manner [established by] that the department
1048  establishes.
                                                  - 31 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1049     (3) The department shall require an association of unit owners registering as required in this
1050  section to provide with each registration:
1051  (a) the name and address of the association of unit owners;
1052  (b) the name, [address, ]telephone number, and, if applicable, email address of the
1053  president of the association of unit owners;
1054  (c) the name, [and address ] telephone number, and, if applicable, email address of each
1055  manager or management committee member;
1056  (d) the name, address, telephone number, and, if the contact person wishes to use email
1057  or facsimile transmission for communicating payoff information, the email address or
1058  facsimile number, as applicable, of a primary contact person who has association
1059  payoff information that a closing agent needs in connection with the closing of a unit
1060  owner's financing, refinancing, or sale of the owner's unit; and
1061  (e) a registration fee [set by] that the department sets in accordance with Section
1062  63J-1-504.
1063     (4)(a) An association of unit owners shall annually renew the registration of the
1064  association of unit owners described in Subsection (2).
1065  (b) The department may impose and set the amount of a renewal registration fee in
1066  accordance with Section 63J-1-504.
1067     (5) An association of unit owners [that has registered under] that registers in accordance with
1068  Subsection (2) shall submit to the department an update to the association of unit
1069  owners' registration information, in the manner [established by ] that the department
1070  establishes, within 90 days after the day on which a change in any of the information
1071  provided under Subsection (3) occurs.
1072     (6)(a) During any period of noncompliance with the registration requirement described
1073  in Subsection (2) or the requirement for an updated registration described in
1074  Subsection (5):
1075  (i) a lien may not arise under Section 57-8-44; and
1076  (ii) an association of unit owners may not enforce an existing lien that arose under
1077  Section 57-8-44.
1078  (b) A period of noncompliance with the registration requirement of Subsection (2) or
1079  with the updated registration requirement of Subsection (5) does not begin until after
1080  the expiration of the 90-day period specified in Subsection (2) or (5), respectively.
1081  (c) An association of unit owners that is not in compliance with the registration
1082  requirement described in Subsection (2) may end the period of noncompliance by
                                                - 32 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1083  registering with the department in the manner [established by] that the department
1084  establishes under Subsection (2).
1085  (d) An association of unit owners that is not in compliance with the updated registration
1086  requirement described in Subsection (5) may end the period of noncompliance by
1087  submitting to the department an updated registration in the manner [established by]
1088  that the department establishes under Subsection (5).
1089  (e) Except as described in Subsection (6)(f), beginning on the date an association of unit
1090  owners ends a period of noncompliance:
1091  (i) a lien may arise under Section 57-8-44 for any event that:
1092  (A) occurred during the period of noncompliance; and
1093  (B) would have given rise to a lien under Section 57-8-44 had the association of
1094  unit owners been in compliance with the registration requirements described in
1095  this section; and
1096  (ii) an association of unit owners may enforce a lien described in Subsection [(6)(c)]
1097  (6)(e)(i) or a lien that existed before the period of noncompliance.
1098  (f) If an owner's unit is conveyed to an independent third party during a period of
1099  noncompliance described in this Subsection (6):
1100  (i) a lien that arose under Section 57-8-44 before the conveyance of the unit became
1101  final is extinguished when the conveyance of the unit becomes final; and
1102  (ii) an event that occurred before the conveyance of the unit became final, and that
1103  would have given rise to a lien under Section 57-8-44 had the association of unit
1104  owners been in compliance with the registration requirements of this section, may
1105  not give rise to a lien under Section 57-8-44 if the conveyance of the unit becomes
1106  final before the association of unit owners ends the period of noncompliance.
1107     [(7) The department shall publish educational materials on the department's website
1108  providing, in simple and easy to understand language, a brief overview of state law
1109  governing associations of unit owners, including:]
1110  [(a) a description of the rights and responsibilities provided in this chapter to any party
1111  under the jurisdiction of an association of unit owners; and]
1112  [(b) instructions regarding how an association of unit owners may be organized and
1113  dismantled in accordance with this chapter.]
1114  Section 12. Section 57-8-16.5 is amended to read:
1115  57-8-16.5 . Period of administrative control -- Renewal or ratification of
1116     contracts -- Failure to establish association or committee -- Declarant responsibilities.
                                                 - 33 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1117     (1)(a) The declaration may authorize the declarant, [or ]a managing agent, or [some other]
1118  a person [or persons selected or to be selected by ] that the declarant selects, to:
1119  (i) [ ]appoint and remove some or all of:
1120  (A) [ ]the members of the management committee; or
1121  (B) [ some or all of ]the officers of the association of unit owners[,] ; or
1122  (ii) [ to ]exercise powers and responsibilities otherwise assigned by the declaration
1123  and by this [act] chapter to the association of unit owners, [its] the association's
1124  officers, or the management committee.
1125  (b) If the declaration authorizes the declarant to [appoint or remove some or all members
1126  of the management committee or some or all of the officers of the association of unit
1127  owners] conduct the actions described in Subsection (1)(a)(i) during the period of
1128  administrative control [contemplated by] described in this Subsection (1), the
1129  declarant may appoint the declarant's officers, employees or agents as members of the
1130  management committee or as officers of the association of unit owners.
1131  (c) [No ] An amendment to the declaration [not consented to by all unit owners shall] may
1132  not increase the scope of [this authorization] the authorization described in Subsection
1133  (1)(b), unless all unit owners unanimously consent to the amendment.
1134  (d) [, and no such authorization shall be valid after the first to occur of the following]
1135  The authorization described in Subsection (1)(b) terminates on the day on which the
1136  first of the following occurs:
1137  (i) [expiration of ]the time limit set by the declaration expires, [which shall] that may
1138  not exceed:
1139  (A) [ six years in the case of] for an expandable condominium, six years[,] ;
1140  (B) [ four years in the case of] for a condominium project containing any
1141  convertible land, four years; or
1142  (C) [ three years in the case of] for any other condominium project, three years;[ or]
1143  (ii) [after ]units to which three-fourths of the undivided interest in the common areas
1144  and facilities appertain have been conveyed[,] ; or
1145  (iii) [ after ]all additional land has been added to the project and all convertible land
1146  has been converted, whichever last occurs.
1147     (2) If entered into during the period of administrative control contemplated by Subsection
1148  (1), [no] a management contract, lease of recreational areas or facilities, or any other
1149  contract or lease designed to benefit the declarant which was executed by or on behalf of
1150  the association of unit owners or the unit owners as a group [shall be] is not binding after [
                                                 - 34 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1151  such] the period of administrative control unless [then renewed or ratified by the consent
1152  of ]unit owners of units to which a majority of the votes in the association of unit owners
1153  appertains renew and ratify the management contract, lease of recreational areas or
1154  facilities, or any other contract or lease designed to benefit the declarant.
1155     (3) If the association of unit owners or management committee is not in existence or does
1156  not have officers at the time of the creation of a condominium project, the declarant
1157  shall, until there is an association or management committee with these officers, have
1158  the power and responsibility to act in all instances where this [act] chapter or the
1159  declaration requires action by the association of unit owners, the management
1160  committee, or any of the officers of [them] the association of unit owners or the
1161  management committee.
1162     (4) This section shall be strictly construed to protect the rights of the unit owners.
1163     (5) During the period of administrative control, the declarant shall:
1164  (a) use reasonable care and prudence in managing and maintaining the common areas
1165  and facilities;
1166  (b) establish a sound fiscal basis for the association by imposing and collecting
1167  assessments and establishing reserves for the maintenance and replacement of
1168  common areas and facilities;
1169  (c) for a service that the association is or will be obligated to provide, disclose to the unit
1170  owners the amount of money the declarant provides for or subsidizes for that service;
1171  (d) comply with and enforce the terms of the declaration, including design controls,
1172  land-use restrictions, and the payment of assessments; and
1173  (e) disclose to the unit owners all material facts and circumstances affecting:
1174  (i) the condition of the property that the association is responsible for maintaining;
1175  and
1176  (ii) the financial condition of the association, including the interest of the declarant
1177  and the declarant's affiliates in a contract, lease, or other agreement entered into
1178  by the association.
1179  Section 13. Section 57-8-17 is amended to read:
1180  57-8-17 . Records -- Availability for examination.
1181     (1)(a) Subject to Subsection (1)(b) and regardless of whether the association of unit
1182  owners is incorporated under Title 16, Chapter 6a, Utah Revised Nonprofit
1183  Corporation Act, an association of unit owners shall keep and make available to unit
1184  owners:
                                                   - 35 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1185  (i) each record identified in Subsections 16-6a-1601(1) through (5), in the manner
1186  described in Sections 16-6a-1601, 16-6a-1602, 16-6a-1603, 16-6a-1605,
1187  16-6a-1606, and 16-6a-1610; and
1188  (ii) a copy of the association's:
1189  (A) governing documents;
1190  (B) most recent approved minutes;
1191  (C) most recent annual budget and financial statement;
1192  (D) most recent reserve analysis;
1193  (E) certificate of insurance for each insurance policy the association of unit
1194  owners holds;
1195  (F) management committee meeting minutes from the previous three calendar
1196  years;
1197  (G) [a ]profit and loss statement for the previous three fiscal years; and
1198  (H) [a ]balance sheet for the previous three fiscal years.
1199  (b) An association of unit owners may redact the following information from any
1200  document the association of unit owners produces for inspection or copying:
1201  (i) a Social Security number;
1202  (ii) a bank account number; or
1203  (iii) any communication subject to attorney-client privilege.
1204  (c) The following are considered property of the association:
1205  (i) a record or document described in Subsection (1)(a)(i) or (ii); and
1206  (ii) the funds contained in an account described in Section 57-8-60.
1207  (d) If a person other than the association of unit owners has control over or possession of
1208  a record described in Subsection (1)(a)(i) or (ii), the person shall, upon the
1209  association's request, provide the record to the association of unit owners without
1210  charge.
1211     (2)(a) In addition to the requirements described in Subsection (1), an association of unit
1212  owners shall:
1213  (i) make documents available to unit owners in accordance with the association of
1214  unit owners' governing documents; and
1215  (ii)(A) if the association of unit owners has an active website, make the documents
1216  described in Subsections (1)(a)(ii)(A) through (C) available to unit owners, free
1217  of charge, through the website; or
1218  (B) if the association of unit owners does not have an active website, make
                                                 - 36 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1219  physical copies of the documents described in Subsections (1)(a)(ii)(A)
1220  through (C) available to unit owners during regular business hours at the
1221  association of unit owners' address registered with the Department of
1222  Commerce under Section 57-8-13.1.
1223  (b) Subsection (2)(a)(ii) does not apply to an association as defined in Section 57-19-2.
1224  (c) If a provision of an association of unit owners' governing documents conflicts with a
1225  provision of this section, the provision of this section governs.
1226     (3) In a written request to inspect or copy documents:
1227  (a) a unit owner shall include:
1228  (i) the association of unit owners' name;
1229  (ii) the unit owner's name;
1230  (iii) the unit owner's property address;
1231  (iv) the unit owner's email address;
1232  (v) a description of the documents requested; and
1233  (vi) [any ] an election or a request described in Subsection (3)(b); and
1234  (b) a unit owner may:
1235  (i) elect whether to inspect or copy the documents;
1236  (ii) if the unit owner elects to copy the documents, request hard copies or electronic
1237  scans of the documents; or
1238  (iii) subject to Subsection (4), request that:
1239  (A) the association of unit owners make the copies or electronic scans of the
1240  requested documents;
1241  (B) a recognized third party duplicating service make the copies or electronic
1242  scans of the requested documents;
1243  (C) the unit owner be allowed to bring any necessary imaging equipment to the
1244  place of inspection and make copies or electronic scans of the documents while
1245  inspecting the documents; or
1246  (D) the association of unit owners email the requested documents to an email
1247  address provided in the request.
1248     (4)(a) An association of unit owners shall comply with a request described in Subsection
1249  (3) within [two weeks] 10 business days after the day on which the association of unit
1250  owners receives the request.
1251  (b) If an association of unit owners produces the copies or electronic scans:
1252  (i) the copies or electronic scans shall be legible and accurate;
                                                  - 37 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1253  (ii) the unit owner shall pay the association of unit owners the reasonable cost of the
1254  copies and for time spent meeting with the unit owner, which may not exceed:
1255  (A) the actual cost that the association of unit owners paid to a recognized third
1256  party duplicating service to make the copies or electronic scans; or
1257  (B) 10 cents per page and $20 per hour for the employee's, manager's, or other
1258  agent's time making the copies or electronic scans; and
1259  (iii) the association may not charge the unit owner for any costs associated with
1260  fulfilling a request for the electronic transmission of the documents described in
1261  Subsection (3).
1262  (c) If a unit owner requests a recognized third party duplicating service make the copies
1263  or electronic scans:
1264  (i) the association of unit owners shall arrange for the delivery and pick up of the
1265  original documents; and
1266  (ii) the unit owner shall pay the duplicating service directly.
1267  (d) Subject to Subsection (9), if a unit owner requests to bring imaging equipment to the
1268  inspection, the association of unit owners shall provide the necessary space, light, and
1269  power for the imaging equipment.
1270  (e) An association may comply with a request described in Subsection (3) by posting the
1271  documents described in Subsection (3) to the association's website or online owner
1272  portal.
1273     (5) If, in response to a unit owner's request to inspect or copy documents, an association of
1274  unit owners fails to comply with a provision of this section, the association of unit
1275  owners shall pay:
1276  (a) the reasonable costs of inspecting and copying the requested documents;
1277  (b) for items described in Subsections (1)(a)(ii)(A) through (C), $25 to the unit owner
1278  who made the request for each day the request continues unfulfilled, beginning the [
1279  sixth day] eleventh business day after the day on which the unit owner made the
1280  request; and
1281  (c) reasonable attorney fees and costs [incurred by] that the unit owner incurs in
1282  obtaining the inspection and copies of the requested documents.
1283     (6)(a) In addition to any remedy in the association of unit owners' governing documents
1284  or as otherwise provided by law, a unit owner may file an action in court under this
1285  section if:
1286  (i) subject to Subsection (9), an association of unit owners fails to make documents
                                                 - 38 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1287  available to the unit owner in accordance with this section, the association of unit
1288  owners' governing documents, or as otherwise provided by law; and
1289  (ii) the association of unit owners fails to timely comply with a notice described in
1290  Subsection (6)(d).
1291  (b) In an action described in Subsection (6)(a):
1292  (i) the unit owner may request:
1293  (A) injunctive relief requiring the association of unit owners to comply with the
1294  provisions of this section;
1295  (B) $1,000 or actual [damage] damages, whichever is greater; or
1296  (C) any other relief provided by law; and
1297  (ii) the court may award costs and reasonable attorney fees to the prevailing party,
1298  including any reasonable attorney fees incurred before the action was filed that
1299  relate to the request that is the subject of the action.
1300  (c)(i) In an action described in Subsection (6)(a), upon motion by the unit owner
1301  made in accordance with Subsection (6)(b), notice to the association of unit
1302  owners, and a hearing in which the court finds a likelihood that the association of
1303  unit owners failed to comply with a provision of this section, the court shall order
1304  the association of unit owners to immediately comply with the provision.
1305  (ii) The court shall hold a hearing described in Subsection (6)(c)(i) within 30 days
1306  after the day on which the unit owner files the motion.
1307  (d) At least 10 days before the day on which a unit owner files an action described in
1308  Subsection (6)(a), the unit owner shall deliver a written notice to the association of
1309  unit owners that states:
1310  (i) the unit owner's name, address, telephone number, and email address;
1311  (ii) each requirement of this section with which the association of unit owners has
1312  failed to comply;
1313  (iii) a demand that the association of unit owners comply with each requirement with
1314  which the association of unit owners has failed to comply; and
1315  (iv) a date by which the association of unit owners shall remedy the association of
1316  unit owners' noncompliance that is at least 10 days after the day on which the unit
1317  owner delivers the notice to the association of unit owners.
1318     (7)(a) The provisions of Section 16-6a-1604 do not apply to an association of unit
1319  owners.
1320  (b) The provisions of this section apply regardless of any conflicting provision in Title
                                                    - 39 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1321  16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
1322     (8) A unit owner's agent may, on the unit owner's behalf, exercise or assert any right that
1323  the unit owner has under this section.
1324     (9) An association of unit owners is not liable for identifying or providing a document in
1325  error, if the association of unit owners identified or provided the erroneous document in
1326  good faith.
1327  Section 14. Section 57-8-32 is amended to read:
1328  57-8-32 . Sale of property and common areas and facilities.
1329     (1) As used in this section:
1330  (a) "Condemnor" means the same as that term is defined in Section 78B-6-520.3.
1331  (b) "Under threat of condemnation" means the same as that term is defined in Section
1332  78B-6-520.3.
1333     [(1)] (2) Subject to Subsection 10-20-809(5) or 17-79-709(5), unless otherwise provided in
1334  the declaration or bylaws, and notwithstanding the provisions of Sections 57-8-30 and
1335  57-8-31, the unit owners may by an affirmative vote of at least 67% of unit owners, elect
1336  to sell, convey, transfer, or otherwise dispose of the property or all or part of the
1337  common areas and facilities.
1338     [(2)] (3) An affirmative vote described in Subsection [(1)] (2) is binding upon all unit
1339  owners, and each unit owner shall execute and deliver the appropriate instruments and
1340  perform all acts as necessary to affect the sale, conveyance, transfer, or other disposition
1341  of the property or common areas and facilities.
1342     [(3)] (4) The general easement of ingress, egress, and use of the common areas and facilities
1343  granted to an association and unit owners through recorded governing documents is
1344  extinguished in any portion of the common areas and facilities the unit owners sell,
1345  convey, transfer, or otherwise dispose of, if:
1346  (a) the unit owners, in selling, conveying, transferring, or otherwise disposing of the
1347  portion of the common areas and facilities, comply with:
1348  (i) the provisions of this section; and
1349  (ii) Section 10-20-809 or 17-79-709; and
1350  (b) the sale, conveyance, transfer, or other disposition of the portion of the common
1351  areas and facilities results in a person other than the association owning the portion of
1352  the common areas and facilities.
1353     [(4)] (5) This section applies to an association of unit owners regardless of when the
1354  association of unit owners is created.
                                                  - 40 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1355     [(5)] (6) A declarant may not sell or otherwise encumber any part of the common areas and
1356  facilities during the period of administrative control, except:
1357  (a) as allowed for convertible land or convertible space within a condominium project;[
1358  or]
1359  (b) as provided in Section 10-20-809 or 17-79-709[.] ; or
1360  (c) if the declarant sells or otherwise encumbers a part of the common areas and
1361  facilities that are under threat of condemnation to a condemnor.
1362     [(6)] (7) Unless otherwise prohibited by the association's declaration or bylaws, an
1363  authorized representative of the association may act as attorney-in-fact for the
1364  association's unit owners in executing a sale, conveyance, transfer, or other disposition
1365  of the common areas and facilities following an affirmative vote described in Subsection [
1366  (1)] (2).
1367  Section 15. Section 57-8a-103 is amended to read:
1368  57-8a-103 . Scope of chapter -- Applicability of chapter.
1369     (1) Remedies provided in this chapter, by law, or in equity are not mutually exclusive.
1370     (2) This chapter applies to an association if:
1371  (a) the association's declaration states that this chapter applies;
1372  (b) the association amends the association's declaration to state that this chapter applies
1373  in accordance with Section 57-8a-107; or
1374  (c) the association's declaration does not state whether this chapter or Chapter 8,
1375  Condominium Ownership Act, applies.
1376     (3) This section applies regardless of when an association is created.
1377  Section 16. Section 57-8a-105 is amended to read:
1378  57-8a-105 . Registration with Department of Commerce.
1379     (1) As used in this section, "department" means the Department of Commerce created in
1380  Section 13-1-2.
1381     (2)(a) No later than 90 days after the recording of a declaration of covenants, conditions,
1382  and restrictions establishing an association, the association shall register with the
1383  department in the manner [established by] that the department establishes.
1384  (b) An association existing under a declaration of covenants, conditions, and restrictions
1385  recorded before May 10, 2011, shall, no later than July 1, 2011, register with the
1386  department in the manner [established by] that the department establishes.
1387     (3) The department shall require an association registering as required in this section to
1388  provide with each registration:
                                                    - 41 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1389  (a) the name and address of the association;
1390  (b) the name, [address, ]telephone number, and, if applicable, email address of the chair
1391  of the association board;
1392  (c) [contact information for the manager] the name, telephone number, and, if applicable,
1393  email address of each manager or board member;
1394  (d) the name, address, telephone number, and, if the contact person wishes to use email
1395  or facsimile transmission for communicating payoff information, the email address or
1396  facsimile number, as applicable, of a primary contact person who has association
1397  payoff information that a closing agent needs in connection with the closing of a lot
1398  owner's financing, refinancing, or sale of the owner's lot; and
1399  (e) a registration fee[ set by] that the department sets in accordance with Section
1400  63J-1-504.
1401     (4)(a) An association shall annually renew the association's registration described in
1402  Subsection (2).
1403  (b) The department may impose and set the amount of a renewal registration fee in
1404  accordance with Section 63J-1-504.
1405     (5) An association that has registered under Subsection (2) shall submit to the department
1406  an update to the association's registration information, in the manner [established by] that
1407  the department establishes, within 90 days after a change in any of the information
1408  provided under Subsection (3).
1409     (6)(a) During any period of noncompliance with the registration requirement described
1410  in Subsection (2) or the requirement for an updated registration described in
1411  Subsection (5):
1412  (i) a lien may not arise under Section 57-8a-301; and
1413  (ii) an association may not enforce an existing lien that arose under Section 57-8a-301.
1414  (b) A period of noncompliance with the registration requirement of Subsection (2) or
1415  with the updated registration requirement of Subsection (5) does not begin until after
1416  the expiration of the 90-day period specified in Subsection (2) or (5), respectively.
1417  (c) An association that is not in compliance with the registration requirement described
1418  in Subsection (2) may end the period of noncompliance by registering with the
1419  department in the manner [established by] that the department establishes under
1420  Subsection (2).
1421  (d) An association that is not in compliance with the updated registration requirement
1422  described in Subsection (5) may end the period of noncompliance by submitting to
                                                - 42 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1423  the department an updated registration in the manner [established by] that the
1424  department establishes under Subsection (5).
1425  (e) Except as described in Subsection (6)(f), beginning on the date an association ends a
1426  period of noncompliance:
1427  (i) a lien may arise under Section 57-8a-301 for any event that:
1428  (A) occurred during the period of noncompliance; and
1429  (B) would have given rise to a lien under Section 57-8a-301 had the association
1430  been in compliance with the registration requirements described in this section;
1431  and
1432  (ii) an association may enforce a lien described in this Subsection (6)(e) or a lien that
1433  existed before the period of noncompliance.
1434  (f) If an owner's residential lot is conveyed to an independent third party during a period
1435  of noncompliance described in this Subsection (6):
1436  (i) a lien that arose under Section 57-8a-301 before the conveyance of the residential
1437  lot became final is extinguished when the conveyance of the residential lot
1438  becomes final; and
1439  (ii) an event that occurred before the conveyance of the residential lot became final,
1440  and that would have given rise to a lien under Section 57-8a-301 had the
1441  association been in compliance with the registration requirements of this section,
1442  may not give rise to a lien under Section 57-8a-301 if the conveyance of the
1443  residential lot becomes final before the association ends the period of
1444  noncompliance.
1445     [(7) The department shall publish educational materials on the department's website
1446  providing, in simple and easy to understand language, a brief overview of state law
1447  governing associations, including:]
1448  [(a) a description of the rights and responsibilities provided in this chapter to any party
1449  under the jurisdiction of an association; and]
1450  [(b) instructions regarding how an association may be organized and dismantled in
1451  accordance with this chapter.]
1452     [(8)(a) Unless otherwise expressly exempted, this chapter applies to an association that
1453  registers, or renews or updates the association's registration, with the department
1454  under this section.]
1455  [(b) This section applies to an association regardless of when the association is created.]
1456  Section 17. Section 57-8a-105.1 is amended to read:
                                                 - 43 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1457  57-8a-105.1 . Information required before sale to independent third party.
1458     (1) Before the sale of [any] a lot under the jurisdiction of an association to an independent
1459  third party, the grantor shall provide to the independent third party:
1460  (a) a copy of the association's recorded governing documents; and
1461  (b) a link or other access point to the [department's ]educational materials described in
1462  Subsection [57-8a-105(6)] 13-79-103(4).
1463     (2) The grantor shall provide the information described in Subsection (1) before closing.
1464     (3) The association shall, upon request by the grantor, provide to the grantor the
1465  information described in Subsection (1).
1466     (4) This section applies to each association, regardless of when the association is formed.
1467  Section 18. Section 57-8a-212 is amended to read:
1468  57-8a-212 . Content of a declaration.
1469     (1) An initial declaration [recorded on or after May 10, 2011 ]shall contain:
1470  (a) the name of the project;
1471  (b) the name of the association;
1472  (c) a statement that the project is not a cooperative;
1473  (d) a statement indicating any portions of the project that contain condominiums
1474  governed by Chapter 8, Condominium Ownership Act;
1475  (e) a statement that the project is governed by this chapter;
1476  [(e)] (f) if the declarant desires to reserve the option to expand the project, a statement
1477  reserving the option to expand the project;
1478  [(f)] (g) the name of each county in which any part of the project is located;
1479  [(g)] (h) a legally sufficient description of the real estate included in the project;
1480  [(h)] (i) a description of any limited common areas and any real estate that is or is
1481  required to become common areas;
1482  [(i)] (j) any restriction on the alienation of a lot, including a restriction on leasing; and
1483  [(j)] (k)(i) an appointment of a trustee who qualifies under Subsection 57-1-21(1)(a)(i)
1484  or (iv); and
1485  (ii) the following statement: "The declarant hereby conveys and warrants pursuant to
1486  U.C.A. Sections 57-1-20 and 57-8a-302 to (name of trustee), with power of sale,
1487  the lot and all improvements to the lot for the purpose of securing payment of
1488  assessments under the terms of the declaration."
1489     (2) A declaration may contain any other information the declarant considers appropriate,
1490  including [any] a restriction on the use of a lot, the number of persons who may occupy a
                                                  - 44 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1491  lot, or other qualifications of a person who may occupy a lot.
1492     (3) The location of a limited common area or real estate described in Subsection (1)(g) may
1493  be shown on a subdivision plat.
1494     (4)(a) Except as provided in Subsection (4)(b), a declaration, or an amendment to a
1495  declaration, may not vary the requirements of Section 57-8a-218 or Subsection
1496  57-8a-218(1)(b)(ii).
1497  (b) A declaration, or an amendment to a declaration may vary the requirements of
1498  Subsections 57-8a-218(1)(a), (b)(i) and (iii), 57-8a-218(2), 57-8a-218(6), and
1499  57-8a-218(8) through (14).
1500  Section 19. Section 57-8a-215 is amended to read:
1501  57-8a-215 . Budget.
1502     (1) At least once annually the board shall prepare and adopt a budget for the association.
1503     (2) The board shall present the adopted budget to association members at a meeting of the
1504  members.
1505     (3) A budget is disapproved if within 45 days after the date of the meeting under Subsection
1506  (2) at which the board presents the adopted budget:
1507  (a) there is a vote of disapproval by at least 51% of all the allocated voting interests of
1508  the lot owners in the association; and
1509  (b) the vote is taken at a special meeting called for that purpose by lot owners under the
1510  declaration, articles, or bylaws.
1511     (4) If a budget is disapproved under Subsection (3)[,] or not adopted under Subsection (1),
1512  then the budget that the board last adopted [that was not disapproved by members ]
1513  continues as the budget until [and unless the board presents another budget to members
1514  and that budget is not disapproved] the board prepares and adopts a new budget for the
1515  association.
1516     [(5) During the period of administrative control, association members may not disapprove a
1517  budget.]
1518  Section 20. Section 57-8a-227 is amended to read:
1519  57-8a-227 . Records -- Availability for examination.
1520     (1)(a) Subject to Subsection (1)(b) and regardless of whether the association is
1521  incorporated under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, an
1522  association shall keep and make available to lot owners:
1523  (i) each record identified in Subsections 16-6a-1601(1) through (5), in the manner
1524  described in Sections 16-6a-1601, 16-6a-1602, 16-6a-1603, 16-6a-1605,
                                                 - 45 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1525  16-6a-1606, and 16-6a-1610; and
1526  (ii) a copy of the association's:
1527  (A) governing documents;
1528  (B) most recent approved minutes;
1529  (C) most recent annual budget and financial statement;
1530  (D) most recent reserve analysis;
1531  (E) certificate of insurance for each insurance policy the association holds;
1532  (F) board meeting minutes from the previous three calendar years;
1533  (G) [a ]profit and loss statement for the previous three fiscal years; and
1534  (H) [a ]balance sheet for the previous three fiscal years[;] .
1535  (b) An association may redact the following information from any document the
1536  association produces for inspection or copying:
1537  (i) a Social Security number;
1538  (ii) a bank account number; or
1539  (iii) any communication subject to attorney-client privilege.
1540  (c) The following are considered property of the association:
1541  (i) a record or document described in Subsection (1)(a)(i) or (ii); and
1542  (ii) the funds contained in an account described in Section 57-8a-230.
1543  (d) If a person other than the association has control over or possession of a record
1544  described in Subsection (1)(a)(i) or (ii), the person shall, upon the association's
1545  request, provide the record to the association without charge.
1546     (2)(a) In addition to the requirements described in Subsection (1), an association shall:
1547  (i) make documents available to lot owners in accordance with the association's
1548  governing documents; and
1549  (ii)(A) if the association has an active website, make the documents described in
1550  Subsections (1)(a)(ii)(A) through (C) available to lot owners, free of charge,
1551  through the website; or
1552  (B) if the association does not have an active website, make physical copies of the
1553  documents described in Subsections (1)(a)(ii)(A) through (C) available to lot
1554  owners during regular business hours at the association's address registered
1555  with the Department of Commerce under Section 57-8a-105.
1556  (b) Subsection (2)(a)(ii) does not apply to an association as defined in Section 57-19-2.
1557  (c) If a provision of an association's governing documents conflicts with a provision of
1558  this section, the provision of this section governs.
                                                 - 46 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1559     (3) In a written request to inspect or copy documents:
1560  (a) a lot owner shall include:
1561  (i) the association's name;
1562  (ii) the lot owner's name;
1563  (iii) the lot owner's property address;
1564  (iv) the lot owner's email address;
1565  (v) a description of the documents requested; and
1566  (vi) any election or request described in Subsection (3)(b); and
1567  (b) a lot owner may:
1568  (i) elect whether to inspect or copy the documents;
1569  (ii) if the lot owner elects to copy the documents, request hard copies or electronic
1570  scans of the documents; or
1571  (iii) subject to Subsection (4), request that:
1572  (A) the association make the copies or electronic scans of the requested
1573  documents;
1574  (B) a recognized third party duplicating service make the copies or electronic
1575  scans of the requested documents;
1576  (C) the lot owner be allowed to bring any necessary imaging equipment to the
1577  place of inspection and make copies or electronic scans of the documents while
1578  inspecting the documents; or
1579  (D) the association email the requested documents to an email address provided in
1580  the request.
1581     (4)(a) An association shall comply with a request described in Subsection (3) within [
1582  two weeks] 10 business days after the day on which the association receives the
1583  request.
1584  (b) If an association produces the copies or electronic scans:
1585  (i) the copies or electronic scans shall be legible and accurate;
1586  (ii) the lot owner shall pay the association the reasonable cost of the copies and for
1587  time spent meeting with the lot owner, which may not exceed:
1588  (A) the actual cost that the association paid to a recognized third party duplicating
1589  service to make the copies or electronic scans; or
1590  (B) 10 cents per page and $20 per hour for the employee's, manager's, or other
1591  agent's time; and
1592  (iii) the association may not charge the lot owner for any costs associated with
                                                   - 47 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1593  fulfilling a request for electronic transmission of the documents described in
1594  Subsection (3).
1595  (c) If a lot owner requests a recognized third party duplicating service make the copies
1596  or electronic scans:
1597  (i) the association shall arrange for the delivery and pick up of the original
1598  documents; and
1599  (ii) the lot owner shall pay the duplicating service directly.
1600  (d) If a lot owner requests to bring imaging equipment to the inspection, the association
1601  shall provide the necessary space, light, and power for the imaging equipment.
1602  (e) An association may fulfill the request described in Subsection (3) by posting the
1603  documents described in Subsection (3) to the association's website or online owner
1604  portal.
1605     (5) Subject to Subsection (9), if, in response to a lot owner's request to inspect or copy
1606  documents, an association fails to comply with a provision of this section, the
1607  association shall pay:
1608  (a) the reasonable costs of inspecting and copying the requested documents;
1609  (b) for items described in Subsections (1)(a)(ii)(A) through (C), $25 to the lot owner
1610  who made the request for each day the request continues unfulfilled, beginning the [
1611  sixth] eleventh business day after the day on which the lot owner made the request;
1612  and
1613  (c) reasonable attorney fees and costs incurred by the lot owner in obtaining the
1614  inspection and copies of the requested documents.
1615     (6)(a) In addition to any remedy in the association's governing documents or otherwise
1616  provided by law, a lot owner may file an action in court against the association under
1617  this section if:
1618  (i) subject to Subsection (9), an association fails to make documents available to the
1619  lot owner in accordance with this section, the association's governing documents,
1620  or as otherwise provided by law; and
1621  (ii) the association fails to timely comply with a notice described in Subsection (6)(d).
1622  (b) In an action described in Subsection (6)(a):
1623  (i) the lot owner may request:
1624  (A) injunctive relief requiring the association to comply with the provisions of this
1625  section;
1626  (B) $1,000 or actual damage, whichever is greater; or
                                                 - 48 -
 02-08 21:24  1st Sub. (Buff) H.B. 406
1627  (C) any other relief provided by law; and
1628  (ii) the court may award costs and reasonable attorney fees to the prevailing party,
1629  including any reasonable attorney fees incurred before the action was filed that
1630  relate to the request that is the subject of the action.
1631  (c)(i) In an action described in Subsection (6)(a), upon motion by the lot owner made
1632  in accordance with Subsection (6)(b), notice to the association, and a hearing in
1633  which the court finds a likelihood that the association failed to comply with a
1634  provision of this section, the court shall order the association to immediately
1635  comply with the provision.
1636  (ii) The court shall hold a hearing described in Subsection (6)(c)(i) within 30 days
1637  after the day on which the lot owner files the motion.
1638  (d) At least 10 days before the day on which a lot owner files an action described in
1639  Subsection (6)(a), the lot owner shall deliver a written notice to the association that
1640  states:
1641  (i) the lot owner's name, address, telephone number, and email address;
1642  (ii) each requirement of this section with which the association has failed to comply;
1643  (iii) a demand that the association comply with each requirement with which the
1644  association has failed to comply; and
1645  (iv) a date by which the association shall remedy the association's noncompliance
1646  that is at least 10 days after the day on which the lot owner delivers the notice to
1647  the association.
1648     (7)(a) The provisions of Section 16-6a-1604 do not apply to an association.
1649  (b) The provisions of this section apply regardless of any conflicting provision in Title
1650  16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
1651     (8) A lot owner's agent may, on the lot owner's behalf, exercise or assert any right that the
1652  lot owner has under this section.
1653     (9) An association is not liable for identifying or providing a document in error, if the
1654  association identified or provided the erroneous document in good faith.
1655  Section 21. Section 57-8a-232 is amended to read:
1656  57-8a-232 . Sale of common areas.
1657     (1) As used in this section:
1658  (a) "Condemnor" means the same as that term is defined in Section 78B-6-520.3.
1659  (b) "Under threat of condemnation" means the same as that term is defined in Section
1660  78B-6-520.3.
                                                  - 49 -
 1st Sub. (Buff) H.B. 406  02-08 21:24
1661     [(1)] (2) Subject to Subsection 10-20-809(5) or 17-79-709(5), unless otherwise provided in
1662  the governing documents, an association may by an affirmative vote of at least 67% of
1663  the voting interests of the association, elect to sell, convey, transfer, or otherwise dispose
1664  of all or part of the common areas.
1665     [(2)] (3) An affirmative vote described in Subsection [(1)] (2) is binding upon all lot owners,
1666  and each lot owner shall execute and deliver the appropriate instruments and perform all
1667  acts as necessary to effect the sale, conveyance, transfer, or other disposition of the
1668  common areas.
1669     [(3)] (4) The general easement of ingress, egress, and use of the common areas and facilities
1670  granted to an association and lot owners through recorded governing documents is
1671  extinguished in any portion of the common areas the association sells, conveys,
1672  transfers, or otherwise disposes of, if:
1673  (a) the lot owners, in selling, conveying, transferring, or otherwise disposing of the
1674  portion of the common areas, comply with:
1675  (i) the provisions of this section; and
1676  (ii) Section 10-20-809 or 17-79-709; and
1677  (b) the sale, conveyance, transfer, or other disposition of the portion of the common
1678  areas results in a person other than the association owning the portion of the common
1679  areas.
1680     [(4)] (5) This section applies to an association regardless of when the association is created.
1681     [(5)] (6) A declarant may not sell or otherwise encumber any part of the common areas
1682  during the period of administrative control, except:
1683  (a) [ ]as provided in Section 10-20-809 or 17-79-709[.] ; or
1684  (b) if the declarant sells or otherwise encumbers a part of the common areas and
1685  facilities that are under threat of condemnation to a condemnor.
1686     [(6)] (7) Unless otherwise prohibited by the association's governing documents, an
1687  authorized representative of the association may act as attorney-in-fact for the
1688  association's lot owners in executing a sale, conveyance, transfer, or other disposition of
1689  the common areas following an affirmative vote described in Subsection [(1)] (2).
1690  Section 22. Effective Date.
1691     This bill takes effect on May 6, 2026.
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