2015 HOA LEGISLATIVE UPDATE – HOUSE BILL 98

HOUSE BILL 98

CONDOMINIUM ACT CHANGES

(NON-CONDO COMMUNITES – SEE BELOW)

The following is a summary only of HB 98.  Future posts will be of other important bills for your community.  Right now, let’s focus on HB 98 .”Rules and Rentals” are the important topics.  More to come with subsequent frequent posts.  As always, should you have any questions, please contact me.  john@rkw-law.com     THANKS FOR READING

57-8-3 – Definitions:

  1. Sec. 24 “Means of electronic communication” means an electronic system that allows individuals to communicate orally in real time – which includes web conferencing; video conferencing; and telephone conferencing.
  2. Sec. 30 “Rentals” or “Rental Unit” means (a) a unit owned by an individual that is occupied by someone while no unit owner occupies the unit as their primary residence; and (b) means a unit owned by an entity or trust, regardless of who occupies by the unit (see exemptions later)

57-8-8.1 – Equal treatment by rules required – Limits on Rules.

  1. A RULE MAY vary according to the level and type of service that the association provides to unit owners AND may differ between residential and non-residential uses.
  2. Any rule that the association adopts MAY NOT treat the unit owner differently because the unit owner owns a rental unit. (note – this does not say CCRs)
  3. However, a RULE MAY:

(a) limit or prohibit a rental unit owner from using common areas unless they are attending an association meeting or managing the rental unit;

(b) a rule may charge a rental unit owner a fee to use the common area if the unit owner retains that right in their lease with their tenant; or rule may

(c) include a provision in the governing documents that requires tenants to abide by the governing documents or be liable for violations of the governing documents. AGAIN – THIS IS BY RULE.

  1. An association RULE MAY NOT interfere with a unit owners right to determine the composition of the unit owner’s household BUT MAY require all occupants to be members of a single housekeeping unit OR limit the number of occupants per dwelling.

(UNANSWERED QUESTION: What does SINGLE HOUSEKEEPING UNIT MEAN? HOW DO YOU LIMIT THE NUMBER OF OCCUPANTS?)

– You can limit the number of occupants on the basis of the dwelling’s (a) size and facilities; and (b) fair use of the common areas.

  1. A RULE MAY require a minimum lease term (unless contrary to the Declaration).
  2. UNLESS OTHERWISE PROVIDED IN THE DECLARTION: A RULE MAY:

(a) regulate the use, maintenance, repair, replacement and modification of the common area;

(b) impose and receive any payment, fee or charge for: (i) the use, rental or operation of the common areas, (except limited common areas); and a service provided to unit owners

  1. A RULE MAY impose a charge for a late payment or assessments.
  2. A RULE MAY provide for the indemnification of the Board.

57-8-10.1 – Rental Restrictions.

  1. The current requirements to provide certain exemptions for rental restrictions adopted by an association remain in place.

– military service

– occupied by parent, child or sibling

– employer who relocated the unit owner for no less than two years; or

– a unit owned by a trust – if the trust was created for the estate of the current resident of the unit or the parent, child or sibling of the current resident of the unit.

– grandfathering clause required.

ALL OF THE ABOVE ARE CURRENTLY THE LAW – with some exceptions depending on when your CCRs were created (earlier than 5/12/2009). IF YOU HAVE A RENTAL POLICY IN PLACE RIGHT NOW – YOU ARE FINE.

  1. HOWEVER, if you adopt rental restrictions after 5/12/2015, then all the exemptions and grandfathering requirements apply (you cannot ignore the require exemptions of the Code EVEN IF your CCRs were recorded before 5/12/2009 but you ADOPT RENTAL POLICYS AFTER 5/12/2015.
  2. BUT – you can still adopt restrictions without the statutory exemptions after 5/12/2015 – IF IT IS A UNANIMOUS VOTE.
  3. The Association MAY NOT require a unit owner who rents a unit to pay an additional assessment, fine or fee because the unit is a rental unit. (no “rental surcharges”)

57-8-37 – Fines.

A management committee can assess a fine for violations of governing documents.

  1. Before assessing a fine, the management committee must give the unit owner a written warning that: (a) describes violation, (b) references rule or governing document that prohibits the conduct, (c) states that the management committee may assess fines if violations continue (d) a day by which the unit owner may cure the violation,
  2. The management committee may assess a fine if:  (a) a continuing violation is not cured OR if the unit owner commits similar violations within 1 year after the day on which the management committee gives the unit owner the written warning or assesses a fine….      (b) if the violation is a continuing violation, the committee must state a time that is not less than 48 hours after the day on which the management committee gives the unit owner the written warning to cure the violation.      (c) WHAT ABOUT ADDITIONAL FINES? A management committee may assess additional fines if (I.) within 1 year after the day on which the management committee gives the unit owner a written warning (above) AND the unit owner commits another violation of the same rule or provision identified in the original written warning (I call these repeat but not continuing violations) OR   (II) or a continuing violation, if the unit owner does not cure the violation within the time period that is stated in the original written warning, THEN IF PERMITTED BY THE ASSOCIATION’S GOVERNING DOCUMENT (HINT – RULES) THE MANAGEMENT COMMITTEE MAY, WITHOUT FURTHER WARNING, ASSESS AN ADDITIONAL FINE AGAINST THE UNIT OWNER EACH TIME THE UNIT OWNER commits a violation of the same rule or provision within 1 year after the day on which the management committee assessed a fine for a violation of the same rule or provision (repeat fine) OR the offending owner allows a violation to continue for 10 days or longer after the day on which the management committee first assessed the fine.FINES STILL CANNOT EXCEED $500 for the same violation in any one calendar month and must be made based on a schedule of offenses and fines.

A unit owner assessed a fine may request a hearing to dispute the fine within 30 days after notice of the fine is given.

  1. At the hearing the management committee must give the owner, if requested, an opportunity to present their side and allow any involved to participate in the hearing through electronic communication. Such offending owners have 30 days to request a hearing to dispute the fine.
  2. No interest or late fees should accrue until after the hearing and a final decision is reached;
  3. A unit owner can appeal the fine by initiating their own lawsuit within 180 days after the final decision from the hearing is reached, or if a hearing was not requested, the day final day to request a formal hearing.

 HOUSE BILL 98

COMMUNITY ASSOCIATION ACT CHANGES

SAME AS CONDOMINIUM AMENDMENTS

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