It is that time of year again. As of May 8, 2018, a few minor, but important HOA laws went into effect. As a member of the Utah Legislative Action Committee, we recognized the need for a few clarifications and “clean ups” in the existing statutes. There are some new laws (stated below) but the session was relatively quite for HOAs.
We will see what happens next year. I will be give a very concise summary below. Any references to the “Code” or “U.C.A” means the Utah Code Annotated. For HOAs, we are primarily concerned with Title 57 of the Code. If you own a condominium, then Chapter 8 is applicable to you. If you live in a NON-CONDO, then Chapter 8a is the chapter to review. Both are cited below. If you are not sure which Code section applies to you, please give us a call.
If you are new to looking up the Code, simply “google” … “Utah Code.” The Code will be the first ‘hit’ that pops up. Click on the first link. Then, scroll down to Title 57. Once there, click on Chapter 8 or 8a, as the case may be for you. You will then see many Sections of relevant law.
Here we go – this will be very concise and only meant to give you the basic information you need to understand the laws that were passed. Please give us a call or send us an email at any time for further discussion (801-274-6800); (firstname.lastname@example.org)
Major Topics addressed: (1) Association Records (just wait – more to come this year); (2) Use of Reserves; (3) Rental Covenants.
1. U.C.A. 57-8-17 and U.C.A. 57-8a-227. Perhaps the most drastic addition to our HOA law was the requirement of an HOA to make specific records available on its website IF IT MAINTAINS A WEBSITE. There is NO requirement to maintain or have a website however.
WEBSITE RECORDS: (1) Declaration; (2) Bylaws; (3) Most recently approved minutes; and (4) Most recent budget and financial statements – all to be accessible via your website. THERE ARE PENALTIES FOR NOT COMPLYING.
If an Association does not maintain a website, these same records (and other per prior law already in place) are to be available at the address set forth on the Utah HOA Registry. IF YOU HAVE ANY QUESTIONS ABOUT THE HOA REGISTRY, PLEASE CONTACT US – you do not have any lien rights if the registry is not up-to-date. I am working on a change to this law for next session but for now, being ‘outdated’ on the registry is a pretty big deal and could cost you a lot of money- please contact us as needed as this is one matter you want to make sure is current.
2. U.C.A. 57-8-10.1 and U.C.A 57-8a-209. We made a very minor, yet very important clarification to the REQUIRED EXEMPTIONS an HOA must give if you impose a limitation or “cap” on the number of rentals.
One of the exemptions in place for the last few years, required you to exempt from your rental cap an owner whose employer had relocated them for “no less than two years…”
This was not our original intent.
Therefore, we corrected this exemption to require the HOA to exempt from its rental ‘cap’ any owner “whose employer has relocated the owner for TWO YEARS OR LESS.”
You can see the difference, the prior version required and exemption for long-term job relocations – this was not our intent. The intent was to allow an exemption for short-term job relocations and the new language fixed that issue.
3. U.C.A. 57-8-60 and U.C.A. 57-8a-211.
USE OF RESERVES FUNDS:
In the past, there was an argument that you could only take money out of your reserve fund if it was being taken out for the very purpose (roofs for example) for which the money was put into the account.
But what if you had excess money in a particular account, but needed money for another capital improvement – could you not use that money for another purpose or would you have to increase assessments or levy a special assessment despite having the money earmarked for another purpose. We clarified this situation.
NOW – an HOA may use money in a reserve fund for a purpose OTHER THAN the purpose for which the reserve fund was established if a majority of association members votes to approve the use of reserves funds for the needed purpose/project.
4. U.C.A. 57-8-7.5 and U.C.A. 57-8a-230.
CLARIFICATION ON NO CO-MINGLING OF FUNDS:
It has been clarified (and probably is your practice already) that all of the HOA’s funds are to be kept in an account in the name of the HOA and the HOA may not co-mingle the HOA’s funds with the funds of any other person or entity (this is a question to ask your property management company – as to how they handle your funds).
The above reflects the substantive changes to the Code. This was a relatively “light” year but every change is important. The 2018-2019 session will prove to be much more comprehensive and if you want to be involved with crafting Utah’s HOA laws, please contact this office and we will get you involved.
Thanks for taking a few minutes to read this blog entry. We appreciate your support of The Richards Law Office More to come.
Sincerely, John Richards