2020-2021 Utah Legislative Update – HOA LEGISLATION YOU NEED TO KNOW!!!

Hi Everyone. Thank you for your continued support of our law firm. I wanted to give you an update on the bills that passed this latest legislative session related to “HOAs.” Some bills only affect single family homes, some affect condominium and non-condominiums. Please take a moment to review and, as always, do not hesitate to reach out to us with any questions.

We appreciate working with you. HB – means “House Bill” and SB means “Senate Bill” with the bill number below.

John Richards

HB 82: Internal Accessory Dwelling Units

HB 82 only affects non-condominium projects with detached and separated homes. HB 82 does not affect condominiums or townhouses.

Of all the new laws, HB 82 is the most controversial and is passed in response to the affordable housing crisis. HB 82 restricts a city or an Association from prohibiting the owner of a detached home from renting out part of their home. The bill refers to this part of the home as an “internal accessory dwelling unit.” Typically, this is a basement apartment, but could also include a remodeled garage.

For an owner to lawfully lease under HB 82, they must comply with the following regulations:

  1. The rented dwelling must be a detached home;
  2. The rented space must be within the aforementioned detached home;
  3. The owner must occupy and use the home as their primary residence;
  4. The rental must be for a term of at least 30 days or more; and
  5. The rental must not violate any municipal ordinances, building codes, and health and fire codes. 

While HB 82 does prevent cities from outright banning rentals, it does authorize municipalities to impose conditions on such rentals. Such conditions can include requiring the homeowner obtain a leasing permit or prohibiting rentals on a home under a certain square footage.  However, HOAs are not allowed to impose such restrictions or regulations.

If your Association forecasts issues resulting from this bill, there are some courses of action: First, you may reach out to your local zoning boards and municipal councils and propose restrictions. Secondly, enforcement of parking restrictions, assessing larger common area maintenance fees due to increased use, and other restrictions that do not outright prohibit renting out the space may prevent an owner from realizing a return on investment, making the lease financially impractical. Finally, enforcement of restrictions on new constructions or attachments to the dwelling within the CC&Rs may limit the construction of an attached “mother-in-law” style apartments. If your HOA has further questions, please give us a call.

SB 31: Security Cameras

SB 31 is applicable to both condominiums and non-condominium projects.

SB 31 prevents associations from adopting rules which restrict an owner’s installation of a security camera that is immediately adjacent to an entryway, window, or other outside entry point of the owner’s residence. The new law does prohibit owners from installing such a camera in the common area that is not physically connected to the owner’s unit.

SB 31 only applies to the rules created by HOAs. Thus, it is still possible to prohibit such security cameras if the prohibition was a restrictive covenant in the CC&Rs. There is some concern that the installation of such cameras by owners may affect the weatherproofing or water-retention issues of the building. If your HOA is confronted with such an issue, you should consult your HOA’s legal counsel on how to enforce other regulations on the owner without violating the new law.  

SB 75: Emergency Use of Reserve Funds

SB 75 affects both condominiums and non-condominium projects.

SB 75 – passed in response to the COVID-19 pandemic as we saw a need for use of reserve funds in emergencies – this legislation allows the Association to utilize reserve funds for budget shortfalls when a state of emergency has been declared. Prior to the passage of the bill, both the Condo Act and the PUD Act prohibited the use of reserve funds for any purpose other than the maintenance, repair, and replacement of the common areas unless approved by more than 50% of the owners.

Now, under SB 75, the Association can use reserve funds for shortfalls in the general budgets when: (1) a “state of emergency” that “extends to the entire state” of Utah has been declared; AND (2) more than 10% of the Association’s non-board members are delinquent in the payment of assessments because of events directly resulting from the state of emergency.

HB 374: Amendments to Discriminatory CC&Rs 

HB 374 applies to both condominiums and non-condominium projects.

Believe it or not, many of your documents (CC&Rs and Bylaws) currently contain language that is unlawful such as “no children in the pool.” How do you get rid of such language if an amendment/vote is required?

Current state and federal laws prohibit the discrimination or preferential treatment to individuals that is based on a protected class: race, color, religion, sex, national origin, familial status, source of income, disability, sexual orientation, gender identity, and age (with special exceptions for legally recognized senior communities). However, older CC&Rs contain provisions that blatantly discriminate against protected classes, even if they are rendered invalid by the state and federal laws.

HB 374 allows an owner to submit a complaint to the HOA regarding discriminatory language within the CC&Rs. After a 90-day investigation, if the HOA’s Board determines the provision is discriminatory against a protected class, the Board may (without the vote of the owners) by majority vote record an amendment to strike the discriminatory language from the CC&Rs.

If your development has such a provision within the CC&Rs, HB 374 allows for greater flexibility to remove such language.

New Towing Regulations:

Effective January 2021, the state’s new towing regulations requires HOAs trying to enforce parking to use specialized towing signs – with specific sizes and colors – placed in certain locations. See Utah Code Ann. §72-9-603 and 604. The specific type of sign your HOA is required to use depends on the towing policy and the agreement with the HOA’s towing company. Many towing companies have already worked with their clients to implement the new regulations by providing the new signs.

If the HOA is not compliant with the new signage regulations, the HOA may still tow the vehicle if it gives written notice by attaching a notice of violation to the vehicle and the vehicle remains for 24 hours. 

NEXT SESSION – I am very interested in proposing a bill this next session that defines and clarifies what “RECORDS” an Association must maintain and produce for inspection. The current status of the law allows owners to go on “fishing expeditions” with tremendously burdensome and irrelevant document requests – if you do not produce there are statutory penalties. If you are interested in being part of such legislation, give us a call.

We will post another entry soon. Until then…

3 thoughts on “2020-2021 Utah Legislative Update – HOA LEGISLATION YOU NEED TO KNOW!!!

  1. All of our homes are detached single family homes, each on its own lot. A number of years ago we were having problems with renters and revised our CC&R’s to address those problems. Would you please review our attached CC&R’s Article VIII, Section 13 with regard to whether we will need to tolerate internal ADU’s being rented, given our pre-existing language?

    Many thanks for your updates!

    Larry

    Larry Eggert, MD, Retired
    President, Spyglass Hill HOA
    2235 S 1400 E Unit 15
    Saint George, UT 84790
    Cell: 435-668-7850

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  2. Thanks, John, for keeping us up to date. I’m aware of how difficult it is to pore through the number of bills passed during our legislative session to find those are important for a particular issue or population, and whether passed or failed. Thanks for your diligence on our behalf. Thanks again, Tom Metcalf

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  3. Thanks, John, for keeping us up to date.  I’m aware of how difficult it is to pore through the number of bills passed during our legislative sessi

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