Utah 2025 Regular Session

Utah House Bill HB0086 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Enrolled Copy H.B. 86
	1	+	02-25 17:22 5th Sub. (Salmon) H.B. 86
	2	+	Walt Brooks proposes the following substitute bill:
2	3		1
3	4		Homeowners' Association Requirements
4	5		2025 GENERAL SESSION
5	6		STATE OF UTAH
6	7		Chief Sponsor: Walt Brooks
7	8		Senate Sponsor: Don L. Ipson
8	9		2
9	10
10	11		3
11	12		LONG TITLE
12	13		4
13	14		General Description:
14	15		5
15	16		This bill amends provisions relating to homeowners' associations.
16	17		6
17	18		Highlighted Provisions:
18	19		7
19	20		This bill:
20	21		8
21	22		▸ increases the monetary amount a unit or lot owner may request if an association fails to
22	23		9
23	24		properly make records available for examination;
24	25		10
25	26		▸ prohibits a declarant from using association funds in a legal action brought by a
26	27		11
27	28		homeowner against the declarant before the end of the period of administrative control;
28	29		12
29	30		▸ defines "development right";
30	31		13
31	32		▸ amends the conditions for the termination of a period of administrative control for an
32	33		14
33	34		association of lot owners;
34	35		15
35		-	▸ provides requirements for a declarant of an association of lot owners during the period of
	36	+	▸ provides requirements for a declarant of a association of lot owners during the period of
36	37		16
37	38		administrative control; and
38	39		17
39	40		▸ makes technical and conforming changes.
40	41		18
41	42		Money Appropriated in this Bill:
42	43		19
43	44		None
44	45		20
45	46		Other Special Clauses:
46	47		21
47	48		None
48	49		22
49	50		Utah Code Sections Affected:
50	51		23
51	52		AMENDS:
52	53		24
53	54		57-8-17, as last amended by Laws of Utah 2022, Chapter 439
54	55		25
55	56		57-8-58, as enacted by Laws of Utah 2017, Chapter 284
56	57		26
57	58		57-8a-102, as last amended by Laws of Utah 2024, Chapter 519
58	59		27
59		-	57-8a-227, as last amended by Laws of Utah 2022, Chapter 439 ~~H.B. 86 Enrolled Copy~~
	60	+	57-8a-227, as last amended by Laws of Utah 2022, Chapter 439
60	61		28
61	62		57-8a-229, as enacted by Laws of Utah 2017, Chapter 284
	63	+	5th Sub. H.B. 86 5th Sub. (Salmon) H.B. 86 02-25 17:22
62	64		29
63	65		57-8a-502, as last amended by Laws of Utah 2016, Chapter 210
64	66		30
65	67
66	68		31
67	69		Be it enacted by the Legislature of the state of Utah:
68	70		32
69	71		Section 1. Section 57-8-17 is amended to read:
70	72		33
71	73		57-8-17 . Records -- Availability for examination.
72	74		34
73	75		(1)(a) Subject to Subsection (1)(b) and regardless of whether the association of unit
74	76		35
75	77		owners is incorporated under Title 16, Chapter 6a, Utah Revised Nonprofit
76	78		36
77	79		Corporation Act, an association of unit owners shall keep and make available to unit
78	80		37
79	81		owners:
80	82		38
81	83		(i) each record identified in Subsections 16-6a-1601(1) through (5), [in accordance
82	84		39
83	85		with] in the manner described in Sections 16-6a-1601, 16-6a-1602, 16-6a-1603,
84	86		40
85	87		16-6a-1605, 16-6a-1606, and 16-6a-1610; and
86	88		41
87	89		(ii) a copy of the association's:
88	90		42
89	91		(A) governing documents;
90	92		43
91	93		(B) most recent approved minutes;
92	94		44
93	95		(C) most recent budget and financial statement;
94	96		45
95	97		(D) most recent reserve analysis; and
96	98		46
97	99		(E) certificate of insurance for each insurance policy the association of unit
98	100		47
99	101		owners holds.
100	102		48
101	103		(b) An association of unit owners may redact the following information from any
102	104		49
103	105		document the association of unit owners produces for inspection or copying:
104	106		50
105	107		(i) a Social Security number;
106	108		51
107	109		(ii) a bank account number; or
108	110		52
109	111		(iii) any communication subject to attorney-client privilege.
110	112		53
111	113		(2)(a) In addition to the requirements described in Subsection (1), an association of unit
112	114		54
113	115		owners shall:
114	116		55
115	117		(i) make documents available to unit owners in accordance with the association of
116	118		56
117	119		unit owners' governing documents; and
118	120		57
119	121		(ii)(A) if the association of unit owners has an active website, make the documents
120	122		58
121	123		described in Subsections (1)(a)(ii)(A) through (C) available to unit owners, free
122	124		59
123	125		of charge, through the website; or
124	126		60
125	127		(B) if the association of unit owners does not have an active website, make
126	128		61
127	129		physical copies of the documents described in Subsections (1)(a)(ii)(A)
128		-	- 2 - Enrolled Copy H.B. 86
129	130		62
130	131		through (C) available to unit owners during regular business hours at the
	132	+	- 2 - 02-25 17:22 5th Sub. (Salmon) H.B. 86
131	133		63
132	134		association of unit owners' address registered with the Department of
133	135		64
134	136		Commerce under Section 57-8-13.1.
135	137		65
136	138		(b) Subsection (2)(a)(ii) does not apply to an association as defined in Section 57-19-2.
137	139		66
138	140		(c) If a provision of an association of unit owners' governing documents conflicts with a
139	141		67
140	142		provision of this section, the provision of this section governs.
141	143		68
142	144		(3) In a written request to inspect or copy documents:
143	145		69
144	146		(a) a unit owner shall include:
145	147		70
146	148		(i) the association of unit owners' name;
147	149		71
148	150		(ii) the unit owner's name;
149	151		72
150	152		(iii) the unit owner's property address;
151	153		73
152	154		(iv) the unit owner's email address;
153	155		74
154	156		(v) a description of the documents requested; and
155	157		75
156	158		(vi) any election or request described in Subsection (3)(b); and
157	159		76
158	160		(b) a unit owner may:
159	161		77
160	162		(i) elect whether to inspect or copy the documents;
161	163		78
162	164		(ii) if the unit owner elects to copy the documents, request hard copies or electronic
163	165		79
164	166		scans of the documents; or
165	167		80
166	168		(iii) subject to Subsection (4), request that:
167	169		81
168	170		(A) the association of unit owners make the copies or electronic scans of the
169	171		82
170	172		requested documents;
171	173		83
172	174		(B) a recognized third party duplicating service make the copies or electronic
173	175		84
174	176		scans of the requested documents;
175	177		85
176	178		(C) the unit owner be allowed to bring any necessary imaging equipment to the
177	179		86
178	180		place of inspection and make copies or electronic scans of the documents while
179	181		87
180	182		inspecting the documents; or
181	183		88
182	184		(D) the association of unit owners email the requested documents to an email
183	185		89
184	186		address provided in the request.
185	187		90
186	188		(4)(a) An association of unit owners shall comply with a request described in Subsection
187	189		91
188	190		(3).
189	191		92
190	192		(b) If an association of unit owners produces the copies or electronic scans:
191	193		93
192	194		(i) the copies or electronic scans shall be legible and accurate; and
193	195		94
194	196		(ii) the unit owner shall pay the association of unit owners the reasonable cost of the
195	197		95
196	198		copies or electronic scans and for time spent meeting with the unit owner, which
197		-	- 3 - H.B. 86 Enrolled Copy
198	199		96
199	200		may not exceed:
	201	+	- 3 - 5th Sub. (Salmon) H.B. 86 02-25 17:22
200	202		97
201	203		(A) the actual cost that the association of unit owners paid to a recognized third
202	204		98
203	205		party duplicating service to make the copies or electronic scans; or
204	206		99
205	207		(B) 10 cents per page and [$15 ] $20 per hour for the employee's, manager's, or
206	208		100
207	209		other agent's time making the copies or electronic scans.
208	210		101
209	211		(c) If a unit owner requests a recognized third party duplicating service make the copies
210	212		102
211	213		or electronic scans:
212	214		103
213	215		(i) the association of unit owners shall arrange for the delivery and pick up of the
214	216		104
215	217		original documents; and
216	218		105
217	219		(ii) the unit owner shall pay the duplicating service directly.
218	220		106
219	221		(d) Subject to Subsection (9), if a unit owner requests to bring imaging equipment to the
220	222		107
221	223		inspection, the association of unit owners shall provide the necessary space, light, and
222	224		108
223	225		power for the imaging equipment.
224	226		109
225	227		(5) If, in response to a unit owner's request to inspect or copy documents, an association of
226	228		110
227	229		unit owners fails to comply with a provision of this section, the association of unit
228	230		111
229	231		owners shall pay:
230	232		112
231	233		(a) the reasonable costs of inspecting and copying the requested documents;
232	234		113
233	235		(b) for items described in Subsections (1)(a)(ii)(A) through (C), $25 to the unit owner
234	236		114
235	237		who made the request for each day the request continues unfulfilled, beginning the
236	238		115
237	239		sixth day after the day on which the unit owner made the request; and
238	240		116
239	241		(c) reasonable attorney fees and costs incurred by the unit owner in obtaining the
240	242		117
241	243		inspection and copies of the requested documents.
242	244		118
243	245		(6)(a) In addition to any remedy in the association of unit owners' governing documents
244	246		119
245	247		or as otherwise provided by law, a unit owner may file an action in court under this
246	248		120
247	249		section if:
248	250		121
249	251		(i) subject to Subsection (9), an association of unit owners fails to make documents
250	252		122
251	253		available to the unit owner in accordance with this section, the association of unit
252	254		123
253	255		owners' governing documents, or as otherwise provided by law; and
254	256		124
255	257		(ii) the association of unit owners fails to timely comply with a notice described in
256	258		125
257	259		Subsection (6)(d).
258	260		126
259	261		(b) In an action described in Subsection (6)(a):
260	262		127
261	263		(i) the unit owner may request:
262	264		128
263	265		(A) injunctive relief requiring the association of unit owners to comply with the
264	266		129
265	267		provisions of this section;
266		-	- 4 - Enrolled Copy H.B. 86
267	268		130
268	269		(B) [$500 ] $1,000 or actual damage, whichever is greater; or
	270	+	- 4 - 02-25 17:22 5th Sub. (Salmon) H.B. 86
269	271		131
270	272		(C) any other relief provided by law; and
271	273		132
272	274		(ii) the court [shall] may award costs and reasonable attorney fees to the prevailing
273	275		133
274	276		party, including any reasonable attorney fees incurred before the action was filed
275	277		134
276	278		that relate to the request that is the subject of the action.
277	279		135
278	280		(c)(i) In an action described in Subsection (6)(a), upon motion by the unit owner
279	281		136
280	282		made in accordance with Subsection (6)(b), notice to the association of unit
281	283		137
282	284		owners, and a hearing in which the court finds a likelihood that the association of
283	285		138
284	286		unit owners failed to comply with a provision of this section, the court shall order
285	287		139
286	288		the association of unit owners to immediately comply with the provision.
287	289		140
288	290		(ii) The court shall hold a hearing described in Subsection (6)(c)(i) within 30 days
289	291		141
290	292		after the day on which the unit owner files the motion.
291	293		142
292	294		(d) At least 10 days before the day on which a unit owner files an action described in
293	295		143
294	296		Subsection (6)(a), the unit owner shall deliver a written notice to the association of
295	297		144
296	298		unit owners that states:
297	299		145
298	300		(i) the unit owner's name, address, telephone number, and email address;
299	301		146
300	302		(ii) each requirement of this section with which the association of unit owners has
301	303		147
302	304		failed to comply;
303	305		148
304	306		(iii) a demand that the association of unit owners comply with each requirement with
305	307		149
306	308		which the association of unit owners has failed to comply; and
307	309		150
308	310		(iv) a date by which the association of unit owners shall remedy the association of
309	311		151
310	312		unit owners' noncompliance that is at least 10 days after the day on which the unit
311	313		152
312	314		owner delivers the notice to the association of unit owners.
313	315		153
314	316		(7)(a) The provisions of Section 16-6a-1604 do not apply to an association of unit
315	317		154
316	318		owners.
317	319		155
318	320		(b) The provisions of this section apply regardless of any conflicting provision in Title
319	321		156
320	322		16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
321	323		157
322	324		(8) A unit owner's agent may, on the unit owner's behalf, exercise or assert any right that
323	325		158
324	326		the unit owner has under this section.
325	327		159
326	328		(9) An association of unit owners is not liable for identifying or providing a document in
327	329		160
328	330		error, if the association of unit owners identified or provided the erroneous document in
329	331		161
330	332		good faith.
331	333		162
332	334		Section 2. Section 57-8-58 is amended to read:
333	335		163
334	336		57-8-58 . Liability of declarant or management committee -- Period of declarant
335		-	- 5 - H.B. 86 Enrolled Copy
336	337		164
337	338		control.
	339	+	- 5 - 5th Sub. (Salmon) H.B. 86 02-25 17:22
338	340		165
339	341		(1) An association may not, after the period of declarant control, bring a legal action against
340	342		166
341	343		a declarant, a management committee, or an employee, an independent contractor, or an
342	344		167
343	345		agent of the declarant or the management committee related to the period of declarant
344	346		168
345	347		control unless:
346	348		169
347	349		(a) the legal action is approved in advance at a meeting where owners of at least 51% in
348	350		170
349	351		aggregate in interest of the undivided ownership of the common areas and facilities
350	352		171
351	353		are:
352	354		172
353	355		(i) present; or
354	356		173
355	357		(ii) represented by a proxy specifically assigned for the purpose of voting to approve
356	358		174
357	359		or deny the legal action at the meeting;
358	360		175
359	361		(b) the legal action is approved by vote in person or by proxy of owners of the lesser of:
360	362		176
361	363		(i) more than 75% in aggregate in interest of the total aggregate interest of the
362	364		177
363	365		undivided ownership of the common areas and facilities represented by those
364	366		178
365	367		owners present at the meeting or represented by a proxy as described in
366	368		179
367	369		Subsection (1)(a); or
368	370		180
369	371		(ii) more than 51% in aggregate in interest of the undivided ownership of the
370	372		181
371	373		common areas and facilities;
372	374		182
373	375		(c) the association provides each unit owner with the items described in Subsection (2);
374	376		183
375	377		(d) the association establishes the trust described in Subsection (3); and
376	378		184
377	379		(e) the association first:
378	380		185
379	381		(i) notifies the person subject to the proposed action of the action and the basis of the
380	382		186
381	383		association's claim; and
382	384		187
383	385		(ii) gives the person subject to the proposed action a reasonable opportunity to
384	386		188
385	387		resolve the dispute that is the basis of the action.
386	388		189
387	389		(2) Before unit owners in an association may vote to approve an action described in
388	390		190
389	391		Subsection (1), the association shall provide each unit owner:
390	392		191
391	393		(a) a written notice that the association is contemplating legal action; and
392	394		192
393	395		(b) after the association consults with an attorney licensed to practice in the state, a
394	396		193
395	397		written assessment of:
396	398		194
397	399		(i) the likelihood that the legal action will succeed;
398	400		195
399	401		(ii) the likely amount in controversy in the legal action;
400	402		196
401	403		(iii) the likely cost of resolving the legal action to the association's satisfaction; and
402	404		197
403	405		(iv) the likely effect the legal action will have on a unit owner's or prospective unit
404		-	- 6 - Enrolled Copy H.B. 86
405	406		198
406	407		buyer's ability to obtain financing for a unit while the legal action is pending.
	408	+	- 6 - 02-25 17:22 5th Sub. (Salmon) H.B. 86
407	409		199
408	410		(3) Before the association commences a legal action described in Subsection (1), the
409	411		200
410	412		association shall:
411	413		201
412	414		(a) allocate an amount equal to 10% of the cost estimated to resolve the legal action, not
413	415		202
414	416		including attorney fees; and
415	417		203
416	418		(b) place the amount described in Subsection (3)(a) in a trust that the association may
417	419		204
418	420		only use to pay the costs to resolve the legal action.
419	421		205
420	422		(4) This section does not apply to an association that brings a legal action that has an
421	423		206
422	424		amount in controversy of less than $75,000.
423	425		207
424	426		(5) In a legal action brought by one or more unit owners solely against the declarant before
425	427		208
426	428		the end of the period of declarant control, a declarant may not use any funds paid by a
427	429		209
428	430		unit owner to the association to pay for costs of the declarant's legal defense.
429	431		210
430	432		Section 3. Section 57-8a-102 is amended to read:
431	433		211
432	434		57-8a-102 . Definitions.
433	435		212
434	436		As used in this chapter:
435	437		213
436	438		(1)(a) "Assessment" means a charge imposed or levied:
437	439		214
438	440		(i) by the association;
439	441		215
440	442		(ii) on or against a lot or a lot owner; and
441	443		216
442	444		(iii) pursuant to a governing document recorded with the county recorder.
443	445		217
444	446		(b) "Assessment" includes:
445	447		218
446	448		(i) a common expense; and
447	449		219
448	450		(ii) an amount assessed against a lot owner under Subsection 57-8a-405(7).
449	451		220
450	452		(2)(a) Except as provided in Subsection (2)(b), "association" means a corporation or
451	453		221
452	454		other legal entity, any member of which:
453	455		222
454	456		(i) is an owner of a residential lot located within the jurisdiction of the association, as
455	457		223
456	458		described in the governing documents; and
457	459		224
458	460		(ii) by virtue of membership or ownership of a residential lot is obligated to pay:
459	461		225
460	462		(A) real property taxes;
461	463		226
462	464		(B) insurance premiums;
463	465		227
464	466		(C) maintenance costs; or
465	467		228
466	468		(D) for improvement of real property not owned by the member.
467	469		229
468	470		(b) "Association" or "homeowner association" does not include an association created
469	471		230
470	472		under Chapter 8, Condominium Ownership Act.
471	473		231
472	474		(3) "Board meeting" means a gathering of a board, whether in person or by means of
473		-	- 7 - H.B. 86 Enrolled Copy
474	475		232
475	476		electronic communication, at which the board can take binding action.
	477	+	- 7 - 5th Sub. (Salmon) H.B. 86 02-25 17:22
476	478		233
477	479		(4) "Board of directors" or "board" means the entity, regardless of name, with primary
478	480		234
479	481		authority to manage the affairs of the association.
480	482		235
481	483		(5) "Common areas" means property that the association:
482	484		236
483	485		(a) owns;
484	486		237
485	487		(b) maintains;
486	488		238
487	489		(c) repairs; or
488	490		239
489	491		(d) administers.
490	492		240
491	493		(6) "Common expense" means costs incurred by the association to exercise any of the
492	494		241
493	495		powers provided for in the association's governing documents.
494	496		242
495	497		(7) "Declarant":
496	498		243
497	499		(a) means the person who executes a declaration and submits it for recording in the
498	500		244
499	501		office of the recorder of the county in which the property described in the declaration
500	502		245
501	503		is located; and
502	504		246
503	505		(b) includes the person's successor and assign.
504	506		247
505	507		(8) "Development right" means any right or combination of rights a declarant reserves in
506	508		248
507	509		the declaration to:
508	510		249
509	511		(a) add real estate to an association;
510	512		250
511	513		(b) create lots, common elements, or limited common elements within an association;
512	514		251
513	515		(c) subdivide lots or convert lots into common elements; or
514	516		252
515	517		(d) withdraw real estate from an association.
516	518		253
517	519		[(8)] (9) "Director" means a member of the board of directors.
518	520		254
519	521		[(9)] (10) "Electrical corporation" means the same as that term is defined in Section 54-2-1.
520	522		255
521	523		[(10)] (11) "Gas corporation" means the same as that term is defined in Section 54-2-1.
522	524		256
523	525		[(11)] (12)(a) "Governing documents" means a written instrument by which the
524	526		257
525	527		association may:
526	528		258
527	529		(i) exercise powers; or
528	530		259
529	531		(ii) manage, maintain, or otherwise affect the property under the jurisdiction of the
530	532		260
531	533		association.
532	534		261
533	535		(b) "Governing documents" includes:
534	536		262
535	537		(i) articles of incorporation;
536	538		263
537	539		(ii) bylaws;
538	540		264
539	541		(iii) a plat;
540	542		265
541	543		(iv) a declaration of covenants, conditions, and restrictions; and
542		-	- 8 - Enrolled Copy H.B. 86
543	544		266
544	545		(v) rules of the association.
	546	+	- 8 - 02-25 17:22 5th Sub. (Salmon) H.B. 86
545	547		267
546	548		[(12)] (13) "Independent third party" means a person that:
547	549		268
548	550		(a) is not related to the owner of the residential lot;
549	551		269
550	552		(b) shares no pecuniary interests with the owner of the residential lot; and
551	553		270
552	554		(c) purchases the residential lot in good faith and without the intent to defraud a current
553	555		271
554	556		or future lienholder.
555	557		272
556	558		[(13)] (14) "Judicial foreclosure" means a foreclosure of a lot:
557	559		273
558	560		(a) for the nonpayment of an assessment;
559	561		274
560	562		(b) in the manner provided by law for the foreclosure of a mortgage on real property; and
561	563		275
562	564		(c) as provided in Part 3, Collection of Assessments.
563	565		276
564	566		[(14)] (15) "Lease" or "leasing" means regular, exclusive occupancy of a lot:
565	567		277
566	568		(a) by a person or persons other than the owner; and
567	569		278
568	570		(b) for which the owner receives a consideration or benefit, including a fee, service,
569	571		279
570	572		gratuity, or emolument.
571	573		280
572	574		[(15)] (16) "Limited common areas" means common areas described in the declaration and
573	575		281
574	576		allocated for the exclusive use of one or more lot owners.
575	577		282
576	578		[(16)] (17) "Lot" means:
577	579		283
578	580		(a) a lot, parcel, plot, or other division of land:
579	581		284
580	582		(i) designated for separate ownership or occupancy; and
581	583		285
582	584		(ii)(A) shown on a recorded subdivision plat; or
583	585		286
584	586		(B) the boundaries of which are described in a recorded governing document; or
585	587		287
586	588		(b)(i) a unit in a condominium association if the condominium association is a part of
587	589		288
588	590		a development; or
589	591		289
590	592		(ii) a unit in a real estate cooperative if the real estate cooperative is part of a
591	593		290
592	594		development.
593	595		291
594	596		[(17)] (18)(a) "Means of electronic communication" means an electronic system that
595	597		292
596	598		allows individuals to communicate orally in real time.
597	599		293
598	600		(b) "Means of electronic communication" includes:
599	601		294
600	602		(i) web conferencing;
601	603		295
602	604		(ii) video conferencing; and
603	605		296
604	606		(iii) telephone conferencing.
605	607		297
606	608		[(18)] (19) "Mixed-use project" means a project under this chapter that has both residential
607	609		298
608	610		and commercial lots in the project.
609	611		299
610	612		[(19)] (20) "Nonjudicial foreclosure" means the sale of a lot:
611		-	- 9 - H.B. 86 Enrolled Copy
612	613		300
613	614		(a) for the nonpayment of an assessment;
	615	+	- 9 - 5th Sub. (Salmon) H.B. 86 02-25 17:22
614	616		301
615	617		(b) in the same manner as the sale of trust property under Sections 57-1-19 through
616	618		302
617	619		57-1-34; and
618	620		303
619	621		(c) as provided in Part 3, Collection of Assessments.
620	622		304
621	623		[(20)] (21) "Period of administrative control" means the period during which the person who
622	624		305
623	625		filed the association's governing documents or the person's successor in interest retains
624	626		306
625	627		authority to:
626	628		307
627	629		(a) appoint or remove members of the association's board of directors; or
628	630		308
629	631		(b) exercise power or authority assigned to the association under the association's
630	632		309
631	633		governing documents.
632	634		310
633	635		[(21)] (22) "Political sign" means any sign or document that advocates:
634	636		311
635	637		(a) the election or defeat of a candidate for public office; or
636	638		312
637	639		(b) the approval or defeat of a ballot proposition.
638	640		313
639	641		[(22)] (23) "Protected area" means the same as that term is defined in Section 77-27-21.7.
640	642		314
641	643		[(23)] (24) "Rentals" or "rental lot" means:
642	644		315
643	645		(a) a lot that:
644	646		316
645	647		(i) is not owned by an entity or trust; and
646	648		317
647	649		(ii) is occupied by an individual while the lot owner is not occupying the lot as the lot
648	650		318
649	651		owner's primary residence;
650	652		319
651	653		(b) an occupied lot owned by an entity or trust, regardless of who occupies the lot; or
652	654		320
653	655		(c) an internal accessory dwelling unit as defined in Section 10-9a-530 or 17-27a-526.
654	656		321
655	657		[(24)] (25) "Residential lot" means a lot, the use of which is limited by law, covenant, or
656	658		322
657	659		otherwise to primarily residential or recreational purposes.
658	660		323
659	661		[(25)] (26)(a) "Rule" means a policy, guideline, restriction, procedure, or regulation of an
660	662		324
661	663		association that:
662	664		325
663	665		(i) is not set forth in a contract, easement, article of incorporation, bylaw, or
664	666		326
665	667		declaration; and
666	668		327
667	669		(ii) governs:
668	670		328
669	671		(A) the conduct of persons; or
670	672		329
671	673		(B) the use, quality, type, design, or appearance of real property or personal
672	674		330
673	675		property.
674	676		331
675	677		(b) "Rule" does not include the internal business operating procedures of a board.
676	678		332
677	679		[(26)] (27) "Sex offender" means the same as that term is defined in Section 77-27-21.7.
678	680		333
679	681		[(27)] (28) "Solar energy system" means:
680		-	- 10 - Enrolled Copy H.B. 86
681	682		334
682	683		(a) a system that is used to produce electric energy from sunlight; and
	684	+	- 10 - 02-25 17:22 5th Sub. (Salmon) H.B. 86
683	685		335
684	686		(b) the components of the system described in Subsection [(27)(a)] (28)(a).
685	687		336
686	688		Section 4. Section 57-8a-227 is amended to read:
687	689		337
688	690		57-8a-227 . Records -- Availability for examination.
689	691		338
690	692		(1)(a) Subject to Subsection (1)(b) and regardless of whether the association is
691	693		339
692	694		incorporated under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, an
693	695		340
694	696		association shall keep and make available to lot owners:
695	697		341
696	698		(i) each record identified in Subsections 16-6a-1601(1) through (5), [in accordance
697	699		342
698	700		with] in the manner described in Sections 16-6a-1601, 16-6a-1602, 16-6a-1603,
699	701		343
700	702		16-6a-1605, 16-6a-1606, and 16-6a-1610; and
701	703		344
702	704		(ii) a copy of the association's:
703	705		345
704	706		(A) governing documents;
705	707		346
706	708		(B) most recent approved minutes;
707	709		347
708	710		(C) most recent budget and financial statement;
709	711		348
710	712		(D) most recent reserve analysis; and
711	713		349
712	714		(E) certificate of insurance for each insurance policy the association holds.
713	715		350
714	716		(b) An association may redact the following information from any document the
715	717		351
716	718		association produces for inspection or copying:
717	719		352
718	720		(i) a Social Security number;
719	721		353
720	722		(ii) a bank account number; or
721	723		354
722	724		(iii) any communication subject to attorney-client privilege.
723	725		355
724	726		(2)(a) In addition to the requirements described in Subsection (1), an association shall:
725	727		356
726	728		(i) make documents available to lot owners in accordance with the association's
727	729		357
728	730		governing documents; and
729	731		358
730	732		(ii)(A) if the association has an active website, make the documents described in
731	733		359
732	734		Subsections (1)(a)(ii)(A) through (C) available to lot owners, free of charge,
733	735		360
734	736		through the website; or
735	737		361
736	738		(B) if the association does not have an active website, make physical copies of the
737	739		362
738	740		documents described in Subsections (1)(a)(ii)(A) through (C) available to lot
739	741		363
740	742		owners during regular business hours at the association's address registered
741	743		364
742	744		with the Department of Commerce under Section 57-8a-105.
743	745		365
744	746		(b) Subsection (2)(a)(ii) does not apply to an association as defined in Section 57-19-2.
745	747		366
746	748		(c) If a provision of an association's governing documents conflicts with a provision of
747	749		367
748	750		this section, the provision of this section governs.
749		-	- 11 - H.B. 86 Enrolled Copy
750	751		368
751	752		(3) In a written request to inspect or copy documents:
	753	+	- 11 - 5th Sub. (Salmon) H.B. 86 02-25 17:22
752	754		369
753	755		(a) a lot owner shall include:
754	756		370
755	757		(i) the association's name;
756	758		371
757	759		(ii) the lot owner's name;
758	760		372
759	761		(iii) the lot owner's property address;
760	762		373
761	763		(iv) the lot owner's email address;
762	764		374
763	765		(v) a description of the documents requested; and
764	766		375
765	767		(vi) any election or request described in Subsection (3)(b); and
766	768		376
767	769		(b) a lot owner may:
768	770		377
769	771		(i) elect whether to inspect or copy the documents;
770	772		378
771	773		(ii) if the lot owner elects to copy the documents, request hard copies or electronic
772	774		379
773	775		scans of the documents; or
774	776		380
775	777		(iii) subject to Subsection (4), request that:
776	778		381
777	779		(A) the association make the copies or electronic scans of the requested
778	780		382
779	781		documents;
780	782		383
781	783		(B) a recognized third party duplicating service make the copies or electronic
782	784		384
783	785		scans of the requested documents;
784	786		385
785	787		(C) the lot owner be allowed to bring any necessary imaging equipment to the
786	788		386
787	789		place of inspection and make copies or electronic scans of the documents while
788	790		387
789	791		inspecting the documents; or
790	792		388
791	793		(D) the association email the requested documents to an email address provided in
792	794		389
793	795		the request.
794	796		390
795	797		(4)(a) An association shall comply with a request described in Subsection (3).
796	798		391
797	799		(b) If an association produces the copies or electronic scans:
798	800		392
799	801		(i) the copies or electronic scans shall be legible and accurate; and
800	802		393
801	803		(ii) the lot owner shall pay the association the reasonable cost of the copies or
802	804		394
803	805		electronic scans and for time spent meeting with the lot owner, which may not
804	806		395
805	807		exceed:
806	808		396
807	809		(A) the actual cost that the association paid to a recognized third party duplicating
808	810		397
809	811		service to make the copies or electronic scans; or
810	812		398
811	813		(B) 10 cents per page and [$15 ] $20 per hour for the employee's, manager's, or
812	814		399
813	815		other agent's time.
814	816		400
815	817		(c) If a lot owner requests a recognized third party duplicating service make the copies
816	818		401
817	819		or electronic scans:
818		-	- 12 - Enrolled Copy H.B. 86
819	820		402
820	821		(i) the association shall arrange for the delivery and pick up of the original
	822	+	- 12 - 02-25 17:22 5th Sub. (Salmon) H.B. 86
821	823		403
822	824		documents; and
823	825		404
824	826		(ii) the lot owner shall pay the duplicating service directly.
825	827		405
826	828		(d) If a lot owner requests to bring imaging equipment to the inspection, the association
827	829		406
828	830		shall provide the necessary space, light, and power for the imaging equipment.
829	831		407
830	832		(5) Subject to Subsection (9), if, in response to a lot owner's request to inspect or copy
831	833		408
832	834		documents, an association fails to comply with a provision of this section, the
833	835		409
834	836		association shall pay:
835	837		410
836	838		(a) the reasonable costs of inspecting and copying the requested documents;
837	839		411
838	840		(b) for items described in Subsections (1)(a)(ii)(A) through (C), $25 to the lot owner
839	841		412
840	842		who made the request for each day the request continues unfulfilled, beginning the
841	843		413
842	844		sixth day after the day on which the lot owner made the request; and
843	845		414
844	846		(c) reasonable attorney fees and costs incurred by the lot owner in obtaining the
845	847		415
846	848		inspection and copies of the requested documents.
847	849		416
848	850		(6)(a) In addition to any remedy in the association's governing documents or otherwise
849	851		417
850	852		provided by law, a lot owner may file an action in court against the association under
851	853		418
852	854		this section if:
853	855		419
854	856		(i) subject to Subsection (9), an association fails to make documents available to the
855	857		420
856	858		lot owner in accordance with this section, the association's governing documents,
857	859		421
858	860		or as otherwise provided by law; and
859	861		422
860	862		(ii) the association fails to timely comply with a notice described in Subsection (6)(d).
861	863		423
862	864		(b) In an action described in Subsection (6)(a):
863	865		424
864	866		(i) the lot owner may request:
865	867		425
866	868		(A) injunctive relief requiring the association to comply with the provisions of this
867	869		426
868	870		section;
869	871		427
870	872		(B) [$500 ] $1,000 or actual damage, whichever is greater; or
871	873		428
872	874		(C) any other relief provided by law; and
873	875		429
874	876		(ii) the court [shall] may award costs and reasonable attorney fees to the prevailing
875	877		430
876	878		party, including any reasonable attorney fees incurred before the action was filed
877	879		431
878	880		that relate to the request that is the subject of the action.
879	881		432
880	882		(c)(i) In an action described in Subsection (6)(a), upon motion by the lot owner made
881	883		433
882	884		in accordance with Subsection (6)(b), notice to the association, and a hearing in
883	885		434
884	886		which the court finds a likelihood that the association failed to comply with a
885	887		435
886	888		provision of this section, the court shall order the association to immediately
887		-	- 13 - H.B. 86 Enrolled Copy
888	889		436
889	890		comply with the provision.
	891	+	- 13 - 5th Sub. (Salmon) H.B. 86 02-25 17:22
890	892		437
891	893		(ii) The court shall hold a hearing described in Subsection (6)(c)(i) within 30 days
892	894		438
893	895		after the day on which the lot owner files the motion.
894	896		439
895	897		(d) At least 10 days before the day on which a lot owner files an action described in
896	898		440
897	899		Subsection (6)(a), the lot owner shall deliver a written notice to the association that
898	900		441
899	901		states:
900	902		442
901	903		(i) the lot owner's name, address, telephone number, and email address;
902	904		443
903	905		(ii) each requirement of this section with which the association has failed to comply;
904	906		444
905	907		(iii) a demand that the association comply with each requirement with which the
906	908		445
907	909		association has failed to comply; and
908	910		446
909	911		(iv) a date by which the association shall remedy the association's noncompliance
910	912		447
911	913		that is at least 10 days after the day on which the lot owner delivers the notice to
912	914		448
913	915		the association.
914	916		449
915	917		(7)(a) The provisions of Section 16-6a-1604 do not apply to an association.
916	918		450
917	919		(b) The provisions of this section apply regardless of any conflicting provision in Title
918	920		451
919	921		16, Chapter 6a, Utah Revised Nonprofit Corporation Act.
920	922		452
921	923		(8) A lot owner's agent may, on the lot owner's behalf, exercise or assert any right that the
922	924		453
923	925		lot owner has under this section.
924	926		454
925	927		(9) An association is not liable for identifying or providing a document in error, if the
926	928		455
927	929		association identified or provided the erroneous document in good faith.
928	930		456
929	931		Section 5. Section 57-8a-229 is amended to read:
930	932		457
931	933		57-8a-229 . Liability of declarant or board of directors -- Period of
932	934		458
933	935		administrative control.
934	936		459
935	937		(1) An association may not, after the period of administrative control, bring a legal action
936	938		460
937	939		against a declarant, a board of directors, or an employee, an independent contractor, or
938	940		461
939	941		the agent of the declarant or the previous board of directors related to the period of
940	942		462
941	943		administrative control unless:
942	944		463
943	945		(a) the legal action is approved in advance at a meeting where owners of at least 51% of
944	946		464
945	947		the allocated voting interests of the lot owners in the association are:
946	948		465
947	949		(i) present; or
948	950		466
949	951		(ii) represented by a proxy specifically assigned for the purpose of voting to approve
950	952		467
951	953		or deny the legal action at the meeting;
952	954		468
953	955		(b) the legal action is approved by vote in person or by proxy of owners of the lesser of:
954	956		469
955	957		(i) more than 75% of the allocated voting interests of the lot owners present at the
956		-	- 14 - Enrolled Copy H.B. 86
957	958		470
958	959		meeting or represented by a proxy as described in Subsection (1)(a); or
	960	+	- 14 - 02-25 17:22 5th Sub. (Salmon) H.B. 86
959	961		471
960	962		(ii) more than 51% of the allocated voting interests of the lot owners in the
961	963		472
962	964		association;
963	965		473
964	966		(c) the association provides each lot owner with the items described in Subsection (2);
965	967		474
966	968		(d) the association establishes the trust described in Subsection (3); and
967	969		475
968	970		(e) the association first:
969	971		476
970	972		(i) notifies the person subject to the proposed legal action of the legal action and basis
971	973		477
972	974		of the association's claim; and
973	975		478
974	976		(ii) gives the person subject to the claim a reasonable opportunity to resolve the
975	977		479
976	978		dispute that is the basis of the proposed legal action.
977	979		480
978	980		(2) Before lot owners in an association may vote to approve an action described in
979	981		481
980	982		Subsection (1), the association shall provide each lot owner:
981	983		482
982	984		(a) a written notice that the association is contemplating legal action; and
983	985		483
984	986		(b) after the association consults with an attorney licensed to practice in the state, a
985	987		484
986	988		written assessment of:
987	989		485
988	990		(i) the likelihood that the legal action will succeed;
989	991		486
990	992		(ii) the likely amount in controversy in the legal action;
991	993		487
992	994		(iii) the likely cost of resolving the legal action to the association's satisfaction; and
993	995		488
994	996		(iv) the likely effect the legal action will have on a lot owner's or prospective lot
995	997		489
996	998		buyer's ability to obtain financing for a lot while the legal action is pending.
997	999		490
998	1000		(3) Before the association commences a legal action described in Subsection (1), the
999	1001		491
1000	1002		association shall:
1001	1003		492
1002	1004		(a) allocate an amount equal to 10% of the cost estimated to resolve the legal action, not
1003	1005		493
1004	1006		including attorney fees; and
1005	1007		494
1006	1008		(b) place the amount described in Subsection (3)(a) in a trust that the association may
1007	1009		495
1008	1010		only use to pay the costs to resolve the legal action.
1009	1011		496
1010	1012		(4) This section does not apply to an association that brings a legal action that has an
1011	1013		497
1012	1014		amount in controversy of less than $75,000.
1013	1015		498
1014	1016		(5) In a legal action brought by one or more lot owners solely against the declarant before
1015	1017		499
1016	1018		the end of the period of declarant control, a declarant may not use any funds paid by a
1017	1019		500
1018	1020		lot owner to the association to pay for costs of the declarant's legal defense.
1019	1021		501
1020	1022		Section 6. Section 57-8a-502 is amended to read:
1021	1023		502
1022	1024		57-8a-502 . Period of administrative control.
1023	1025		503
1024	1026		(1) Unless otherwise provided for in a declaration and subject to Subsection (2), a period of
1025		-	- 15 - H.B. 86 Enrolled Copy
1026	1027		504
1027	1028		administrative control terminates [on the first to occur of the following:] 60 days after the
	1029	+	- 15 - 5th Sub. (Salmon) H.B. 86 02-25 17:22
1028	1030		505
1029	1031		day on which 80% of the lots that may be created in the association are conveyed to lot
1030	1032		506
1031	1033		owners other than a declarant.
1032	1034		507
1033	1035		[(a) 60 days after 75% of the lots that may be created are conveyed to lot owners other
1034	1036		508
1035	1037		than a declarant;]
1036	1038		509
1037	1039		[(b) seven years after all declarants have ceased to offer lots for sale in the ordinary
1038	1040		510
1039	1041		course of business; or]
1040	1042		511
1041	1043		[(c) the day the declarant, after giving written notice to the lot owners, records an
1042	1044		512
1043	1045		instrument voluntarily surrendering all rights to control activities of the association.]
1044	1046		513
1045	1047		(2) Notwithstanding Subsection (1), the period of administrative control terminates no later
1046	1048		514
1047	1049		than the earlier of:
1048	1050		515
1049		-	(a) the day on which the declarant no longer owns any lot and no longer ~~possesses~~ any
	1051	+	(a) the day on which the declarant no longer owns any lot and no longer possess any
1050	1052		516
1051	1053		development right; or
1052	1054		517
1053	1055		(b) seven years after the day on which a declarant has ceased to offer lots, including lots
1054	1056		518
1055	1057		that may be created, for sale in the ordinary course of business.
1056	1058		519
1057	1059		[(2)] (3)(a) A declarant may voluntarily surrender the right to appoint and remove a
1058	1060		520
1059	1061		member of the board before the period of administrative control terminates under
1060	1062		521
1061	1063		Subsection (1).
1062	1064		522
1063	1065		(b) Subject to Subsection [(2)(a)] (3)(a), the declarant may require, for the duration of the
1064	1066		523
1065	1067		period of administrative control, that actions of the association or board, as specified
1066	1068		524
1067	1069		in a recorded instrument executed by the declarant, be approved by the declarant
1068	1070		525
1069	1071		before they become effective.
1070	1072		526
1071	1073		(c) During a period of administrative control, except as provided in Subsection [(2)(a)]
1072	1074		527
1073	1075		(3)(a), a declarant may appoint the declarant's officers, employees, or agents as
1074	1076		528
1075	1077		members of the board.
1076	1078		529
1077	1079		[(3)] (4)(a) Upon termination of the period of administrative control, the lot owners shall
1078	1080		530
1079	1081		elect a board consisting of an odd number of at least three members, a majority of
1080	1082		531
1081	1083		whom shall be lot owners.
1082	1084		532
1083	1085		(b) Unless the declaration provides for the election of officers by the lot owners, the
1084	1086		533
1085	1087		board shall elect officers of the association.
1086	1088		534
1087	1089		(c) The board members and officers shall take office upon election or appointment.
1088	1090		535
1089	1091		(5) During the period of administrative control, the declarant shall:
1090	1092		536
1091	1093		(a) use reasonable care and prudence in managing and maintaining the common areas;
1092	1094		537
1093	1095		(b) establish a sound fiscal basis for the association by imposing and collecting
1094		-	- 16 - Enrolled Copy H.B. 86
1095	1096		538
1096	1097		assessments and establishing reserves for the maintenance and replacement of
	1098	+	- 16 - 02-25 17:22 5th Sub. (Salmon) H.B. 86
1097	1099		539
1098	1100		common areas;
1099	1101		540
1100	1102		(c) for a service that the association is or will be obligated to provide, disclose to the lot
1101	1103		541
1102	1104		owners the amount of money the declarant provides for or subsidizes for that service;
1103	1105		542
1104	1106		(d) maintain records and account for the financial affairs of the association from the
1105	1107		543
1106	1108		association's inception;
1107	1109		544
1108	1110		(e) comply with and enforce the terms of the declaration, including design controls,
1109	1111		545
1110	1112		land-use restrictions, and the payment of assessments; and
1111	1113		546
1112	1114		(f) disclose to the lot owners all material facts and circumstances affecting:
1113	1115		547
1114	1116		(i) the condition of the property that the association is responsible for maintaining;
1115	1117		548
1116	1118		and
1117	1119		549
1118	1120		(ii) the financial condition of the association, including the interest of the declarant
1119	1121		550
1120	1122		and the declarant's affiliates in any contract, lease, or other agreement entered into
1121	1123		551
1122	1124		by the association.
1123	1125		552
1124	1126		Section 7. Effective Date.
1125	1127		553
1126	1128		This bill takes effect on May 7, 2025.
1127	1129		- 17 -