Do I Really Need Reserves (Savings)? Who Says?

The under-funding of your HOA’s reserve account is one of the greatest challenges you will face.  Failure to “start funding” and a failure to “have a reserve funding plan” could lead to claims of malfeasance against your Board.

Q.  Who says we need reserves?

A.  The legislature.  Reserve funding is required under 57-8a-211 if your community is a “non-condo” and 57-8-7.5 controls if you are in a condominium community.  The procedural requirements for both are the same.

Q.  Why can’t we just specially assess when we need money?

A.  First, as mentioned, reserves are required by statute.  Second, it is just not fair for a new(er) owner to come into a community and then have to pay for repairs or replacement of an asset that others enjoyed without saving up for the day it ultimately needs to be fixed or replaced.

Q.  How much do I need to have in reserves?

A.  The Board needs to tuck away each year an amount it deems prudent or the amount required in the CCRs (if any amount is stated in the CCRs).  Remember, reserve funds come from a portion of the regular assessment.  The secret is to have set your dues “high” enough to cover operating expenses and a reserve contribution.

Q.  How do I determine how much the Board should set aside for reserves each year?

A.  The law requires that a RESERVE ANALYSIS be done.  The Board uses the reserve analysis to determine what a prudent reserve contribution is for any given year.

Q.  What does a reserve analysis include?

A.  An itemization of funds needed to cover the cost of repairing, replacing or restoring common areas and facilities that have a useful life of three years or more and a remaining useful life of less than 30 years, if the cost cannot reasonably be funded from the general budget or other funds of the Association.

Q.  How often do I have to update or “re-do” our reserve analysis?

A.  You need a new reserve analysis every 6 years and an update every 3 years.

Q.  How is the reserve contribution for a given year announced?

A.  You must list a LINE ITEM in your annual budget which shows the amount of the reserve contribution for that year.  This implies that you will distribute the budget at least annually.

Q.  What if my HOA does not fund reserves?

A.  You can be sued for damages.  Trust me, you don’t want to be in this situation.  Get on a reserve funding plan.  There are experts that prepare reserve studies and we can refer them to you.

IMPORTANT NOTE:  A BOARD MAY NOT USE MONEY IN A RESERVE FUND FOR DAILY MAINTENANCE EXPENSES UNLESS A MAJORITY OF MEMBERS VOTE TO APPROVE THE USE FOR THAT PURPOSE.  FURTHER, YOU CANNOT USE ANY RESERVE FUNDS FOR A PURPOSE OTHER THAN FOR WHICH THE FUND WAS ESTABLISHED.

Let me know if you have any questions about reserves.  The above is general information only and not intended to be advice for your specific association but I’d sure love to help you out.

Thanks everyone – John Richards

Why is My HOA Losing Money? DELINQUENT ASSESSMENTS

Many Associations are extremely critical of their expenses (which they should be) but fail, until it is too late, to address one of the key reasons why their Association is having financial difficulties.

That reason is allowing delinquent assessments to accrue for far too long before formal collections begin.  This issue often gets overlooked because Board members don’t want to confront their neighbors on this sensitive issue.  Such a mindset must be changed.

This blog entry will provide tips to collect unpaid HOA “fees” or “dues.”  Please read the following seven (7) key points.

First, every Association needs to have a collections policy in place.  This policy sets forth the point in time the Board takes certain action and when a file will be turned over to your Attorney. It further states what the Board will d0 (warning letters, demands, etc.) and what the attorney will do so that everyone is treated the same.

Second, make sure that your Association has all of the collection remedies allowed by law.  Some key remedies are available to you but only if contained in your CCRs, Bylaws or Rules.  Rules can be easily adopted to give you a wide range of collection “tools.”

Examples of collection remedies (collection “tools”) include:

a.  Lien rights;

b.  The power to foreclose your lien;

c.  Late fees and interest on the unpaid balance;

d.  The ability to demand rent from a tenant if the absentee owner is not paying their HOA assessments (That is, the “landlord” is most likely getting paid rent by their tenant living in your HOA.  Upon following certain formalities, the law allows the HOA to receive this rent until the account is current and the “tenant” cannot be held in default under the lease from not paying their landlord.).

e.  The power to deny use of the common area amenities;

f.  The authority to terminate utilities paid for from assessments – water, electricity, cable and internet can all be “turned off” in many situations.  For obvious reasons, we should be consulted before using this remedy;

g.  Denying voting privileges if contained in your governing documents;

h.  Hold the delinquent owner responsible for attorney fees and collection costs;

i.  Make sure you use an HOA Attorney who specializes in HOA collections.

There is no reason why the Association should pay anything for collection services (except for perhaps hard costs) as those legal fees may be recovered from the debtor homeowner.  Please contact me to learn more about Common Sense Collections which basically provides that in most instances the HOA pays no legal fees for specialized collection services.  TIP:  Do not use a collection agency.  No company should take a percentage of what they collect as their fee leaving the HOA short of a full payment.

j.  Make sure that your CCRs make your owners both personally liable for the debt as well vesting your HOA with lien rights mentioned above.  You then have options if needed:  (1) seek a money judgment against the debtor; (2) foreclose your lien against the property.

These are just a few of the important collection remedies.  I would love to discuss all options with your Board.

Third, do not let delinquencies accrue and add up – this greatly diminishes your cash flow and the longer you wait, the harder it becomes to collect against someone.  I suggest that a collection matter be turned over to the HOA’s attorney no later than at 60 days’ delinquency.

Fourth, understand the difference between homes that have been foreclosed on (meaning the lien is wiped away but the owner remains personally obligated – if you can find them) and those owners that have filed for bankruptcy (which means the personal debt is wiped away, but in most cases the lien remains in tact and can be collected against).

Again, we can help you understand this process in more detail.  Don’t give up on these types of cases but realize that collections does become more difficult as you can understand when a bankruptcy or foreclosure occurs.

Fifth, demand that your manager keep detailed accounting ledgers for each owner (most management companies do this in the regular course of business).  However, make sure that if you change management companies, that you have access to past account information so that if a new manager starts a new ledger with a balance forward, you can explain the “balance forward” charges if ever questioned.

Sixth, have your HOA attorney file the lien as soon as possible once an account becomes delinquent.  PLEASE NOTE THAT HOA LIENS MUST CONTAIN SPECIFIC INFORMATION PER STATUTE.  IF YOU FAIL TO INCLUDE THE CORRECT LANGAUGE YOUR LIEN MAY BE VOID.

Seventh, make sure that your HOA is signed up on Utah’s HOA Registry and that it is updated within 90 days of a change in the Board member(s).  If the Registry is out of date, your lien is invalid until it becomes current.

That’s it for now!  I’d love to hear any suggested topics you’d like me to write about.  Call me at 801-274-6800 or email me at:  jrichards@balljanik.com

Until next time – YOUR ONE STOP, FULL SERVICE HOA ATTORNEY – John Richards, Esq.

What Can My HOA Regulate by Rule?

The following are some general guidelines for Boards/Management Committees to consider when adopting use restrictions by RULE (as opposed to what may already be in your CCRs or Bylaws).  The following is for general educational purposes only and is not a comprehensive list or discussion of what may be done by Rule.

THE BASICS.  Remember, that “rules and regulations” are distinct from “CCRs” and “Bylaws.”  If you have adopted a rule that conflicts with your CCRs or Bylaws, then the rule will likely be invalid.

Also note that a “Resolution” is the formal name of the procedure/policy that embodies your “rules and regulations.”

Finally, always keep in mind that an Association’s ability to regulate “use” or “behavior” within or on a private “lot” or “unit” is different from its ability to regulate activities within the “common area.”

Nevertheless, Utah law DOES grant Associations a wide degree of rule making power.  Rules are critical, especially if certain important restrictions and HOA “powers” are not expressly stated in your CCRs or Bylaws.

The key is to make sure that your Board/Committee has expressly adopted specific rules so that your HOA can utilize certain governance and enforcement actions allowed by Utah’s Community Association Act and Utah’s Condominium Act.  Extremely important issues ranging from collection remedies, regulating rentals to providing electronic notice of HOA meetings can be implemented by HOA Rule.

The following is only a sampling of what your Board/Management Committee can (and cannot) adopt by Rule.

ACTIONS BOARDS MAY TAKE BY RULE

(NON-CONDOMINUM COMMUNITIES)

57-8a-106. Fee for providing payoff information needed at closing.

IF specifically authorized by Rule, an Association may charge a fee for providing payoff information. However, per code, the Association cannot require that this fee be paid before closing or exceed $50.

57-8a-208. Fines

Your HOA may assess fines for violations but the behavior that constitutes a violation must first be contained in a written Rule (or CCRs or Bylaw) and the fines associated with such violations must also be contained in a “Schedule of Fines.”

57-8a-209. Rental Restrictions.

Associations may by Rule, create procedures to determine and track the number of rentals and lots in the Association.

57-8a-214. Fair and reasonable notice.

If you want to utilize electronic means for notice of HOA actions, then a Rule needs to be created to outlining the procedure of providing notice via electronic means, including text messages, email or the Association’s website.

57-8a-217. Association rules, including design criteria – Requirements and limitations relating to board’s action on rules and design criteria – Vote of disapproval.

By Rule, Associations may adopt, amend, modify, cancel, limit, create exceptions to, expand, or enforce the rules and design criterial of the Association.

57-8a-218. Equal treatment by rules required – Limits on association rules and design criteria.

A Rule may vary according to level and type of service the association provides to lot owners and differ between residential and nonresidential uses.

A Rule may not treat lot owner differently because lot owner rents BUT a rule may (with exceptions):

  • Limit or prohibit a rental lot owner from using common areas for other than attending meetings and managing their rental lot.
  • Charge a rental lot owner a fee to use the common areas
  • Require tenants to abide by terms of the governing documents and hold tenant and lot owner jointly and severally liable for a violation of governing documents.

A Rule may not limit rights of owner to display religious and holiday signs and decorations inside a dwelling BUT may adopt restrictions regarding displays visible from outside the lot.

A Rule may not regulate content of political signs, BUT a rule may regulate the time, place and manner of posting political signs.

A Rule may not interfere with the freedom of owner to determine the composition of the household, BUT a Rule may require that all occupants be members of a single housekeeping unit or limit the number of occupants permitted in each dwelling based on the dwelling’s size and facilities and fair use of the common areas.

A Rule may not interfere with legal activities within the dwelling, BUT MAY prohibit an activity within the dwelling if:

  • It is not normally associated with residential use
  • Or creates monetary costs for the association or other lot owners; creates a danger, generates excessive noise or traffic; creates unsightly conditions visible from outside the dwelling; creates an unreasonable source of annoyance to others or creates the potential for smoke to enter another’s dwelling or common areas.

A Rule may not alter the allocation of financial burdens among various lots BUT MAY (a) change common areas available to lot owner, (b) deny the use of common areas or deny use priviledges to a lot owner if the lot owners is delinquent in paying  assessments or abuses the common areas or violates the governing documents.

A Rule may require a minimum lease term unless contrary to declaration.

Also, a Rule MAY:

  • Regulate the use of common areas
  • Impose and receive payment of fee for use of common areas (except limited common areas) and a service provided to a lot owner;
  • Impose a charge for a late payment of an assessment;
  • Provide for the indemnification of the officers and Board consistent with nonprofit Act; (this will be the topic of a separate blog entry);

Always remember that a Rule must be reasonable and consistent with the HOA’s governing documents.

57-8a-221. Reincorporation of terminated or dissolved association.

A Rule is needed to  reincorporate a dissolved Association and to readopt the bylaws in existence at the time of termination or dissolution.

57-8a-225. Association’s right to pay delinquent utilities.

The Board may, if permitted in its Rules (or CCRs or Bylaws)  and after reasonable notice to owner: enter and winterize the lot.

57-8a-309. Termination of a delinquent owner’s right – Notice – Informal hearing.

If not contained in the CCRs or Bylaws, a Rule is needed to allow a Board to terminate a delinquent lot owner’s right to receive utility service for which the lot owner pays as a common expense or to access and use of recreational facilities. Boards must give notice before terminating utility service or access to facilities.

It is important to note that before your HOA levies a fine, the Board must conduct an informal hearing if requested.  The procedure for the hearing must be spelled out in your CCRs or RULES.

57-8a-310. Requiring tenant in residential lot to pay rent to association if owner fails to pay assessment.

Rules may require that a tenant under lease with a lot owner pay the association all future lease payments due to the owner if the owner is more than 60 days late.

ACTIONS MANGEMENT COMMITTEES MAY TAKE BY RULE

 (CONDOMINIUM COMMNITIES)

57-8-10.1 Rental Restrictions.

If your Association has rental restrictions, it is required to create by rule, procedures to determine and track the number of rentals in the project and to ensure enforcement of the rental restrictions.

57-8-37 Fines

See the same discussion above – Associations may assess fines against owner for violation of governing documents (with certain conditions) but the behavior that constitutes a violation must be first adopted in the form of a Rule.

57-8-42 Fair and Reasonable Notice

Just as in non-condominium associations, a condominium association can provide notice to unit owners by methods not mentioned in Nonprofit act if, considering all the circumstances, the notice is fair and reasonable and a Rule has been adopted allowing notice by electronic means, including text message, email or website of the association.

57-8-43 Insurance

By Rule, an Association may obtain an additional type of insurance other than required; or a policy with greater coverage than otherwise required.

57-8-52 Termination of delinquent owner’s rights – Notice – Informal Hearing.

Also as discussed above, a management committee of a condominium community may terminate a delinquent owner’s right to: 1) receive a utility service for which unit owner pays as a common expense; or 2) access and use recreational facilities.

Before terminating rights, association shall give notice in a manner provided in declaration, bylaws or RULES that they will terminate rights within a certain time provided by governing documents or rule, amount due, right to request hearing, time provided and estimate cost to reinstate if service is terminated.

57-8-53 Requiring tenant in residential condo unit to pay rent to association of unit owners if owner fails to pay assessments

Management committees may require a tenant under a lease with a unit owner to pay the association all future lease payments do to the unit owner if unit owner fails to pay assessment for more than 60 days.  BUT THERE MUST BE A CCR PROVISION OR A RULE IN PLACE TO UTILIZE THIS REMEDY.

** Remember, the real benefit of a rule is to supplement deficiencies in your CCRs and Bylaws.  Rules are an invaluable tool for effective community governance.  The above reflects only a few statutory examples of rule making power.  Never hesitate to contact us to discuss this issue further.

THANKS FOR READING!  More to come.

HOA University – Thursday – 8-13-15 – IMPORTANT INFORMATION

Dear Clients, Managers and Friends:

I have some very informative blog entries that I will be posting soon. Please “STAY TUNED.”

However, I wanted to let you know of a free educational HOA seminar (we call it “HOA University”) this Thursday at 7pm.  This is one you should not miss.

We will be discussing the latest Utah HOA legislation in a fun and memorable format. We will also be discussing HOA Liens, Foreclosures and Reserves.

The class is free with light refreshments provided.

Many of you have attended our HOA University “classes” in the past and I am sure you will agree that you will leave with invaluable information for your community.

HOPE TO SEE YOU THERE!

Place: Courtyard by Marriott in Draper
10701 So. Holiday Park Drive, Draper, UT
When: August 13, 2015, Thursday (THIS WEEK)
Time: 7:00 pm to 8:30 pm

John Richards, Esq. will be the presenter for these informational and important topics.

PLEASE RSVP at: slasson@balljanik.com or call 801-274-6800.

This will be time well spent to help you understand your obligations as a Board member or Manager in Utah’s ever changing HOA environment.  I look forward to seeing you then!  My best, John Richards

How to Levy a Fine – New Statutory Changes

THIS IS HOW UTAH’S NEW HOA LAWS REGARDING FINES SHOULD BE HANDLED.

I’LL SIMPLY LIST A STEP BY STEP FORMULA BELOW.  As always, this is for general education & information only.  Please contact me directly for application of the new law (this or others) to your specific fact pattern.

  1.  YOU CREATE A SCHEDULE OF FINES WHICH ALSO ARTICULATES THE AMOUNT AND BEHAVIOR SUBJECT TO A FINE.  THE LAW STATES THAT A FINE SHALL ONLY BE LEVIED FOR A VIOLATION OF A RULE COVENANT, CONDITION OR RESTRICTION THAT IS IN THE ASSOCIATION’S GOVERNING DOCUMENTS (WHICH ALSO MEANS YOUR SET OF RULES & REGULATIONS).
  2. AN OWNER COMMITS A VIOLATION AND THE BOARD FEELS THAT A FINE IS APPROPRIATE TO CORRECT BEHAVIOR.  SUCH A FINDING IS DULY VOTED ON AT A BOARD MEETING – BUT THAT IS NOT THE END OF THE PROCESS – JUST THE BEGINNING.
  3. BEFORE ASSESSING THE FINE, THE BOARD SENDS A WRITTEN WARNING TO THE “ALLEGED” OFFENDER WHICH:
    1. DESCRIBES THE VIOLATION;
    2. IDENTIFIES WHICH RULE OR PROVISION OF THE CCRS OR BYLAWS WAS VIOLATED;
    3. ALSO THE WRITTEN WARNING MUST STATE THAT PURSUANT TO UTAH CODE (either Title 57-8 if a Condo or 57-8a if not a Condo), THE BOARD MAY ASSESS A FINE AGAINST THE OWNER IF A CONTINUING VIOLATION IS NOT CURED BY “X DATE” (YOU PICK THIS DATE) WHICH MUST BE AT LEAST 48 HOURS FROM RECEIPT OF THE WRITTEN WARNING OR  THAT THE BOARD MAY LEVY A FINE FOR  SIMILAR REPEAT VIOLATIONS THAT OCCUR WITHIN ONE YEAR AFTER THE DAY ON WHICH THE NOTICE OF VIOLATION IS RECEIVED.
  4. YOU DO NOT PUT THE FOLLOWING IN THE WARNING LETTER BUT PLEASE KNOW:  THAT AFTER THE WARNING LETTER IS SENT AS DESCRIBED ABOVE, THE BOARD MAY ASSESS A FINE AGAINST A LOT OWNER (AKA UNIT OWNER) IF THE LOT OWNER COMMITS ANOTHER VIOLATION OF THE SAME RULE IDENTIFIED IN THE ORIGINAL WARNING WITHIN 1 YEAR OF THE ORIGINAL WARNING.  YOU MUST PUT LANGAUGE IN YOUR RULES THAT STATES IN CASE OF REPEAT OFFENSES, AND AFTER THE ORIGNAL WARNING IS GIVEN AND THE VIOLATION OCCURS AGAIN, THAT NO ADDITIONAL NOTICE IS REQUIRED IF THE SAME VIOLATION OCCURS WITHIN ONE YEAR FROM THE ORIGINAL NOTICE.   THEY KEY PIECE HERE IS THAT YOU MUST HAVE THIS IN YOUR WRITTEN RULES ABOUT HOW YOU WILL HANDLE REPEAT VIOLATIONS AND THAT NO FUTURE NOTICE WILL BE GIVEN UPON THESE CONDITIONS BEING MET.  IN OTHER WORDS, NO MORE WARNING LETTERS – YOU CAN JUST GO TO YOUR FINE SCHEDULE FOR EACH AND EVERY VIOLATION THAT OCCURS DURING THE NEXT 12 MONTHS AND LEVY FINES WITHOUT WARNING (BUT AGAIN THIS STATEMENT NEEDS TO BE IN YOUR RULES).
  5. REMEMBER, #4 IS ADDRESSING “NON CONTINUING” VIOLATIONS – SUCH AS A POOL VIOLATION (if the pool violation happens again, this is a repeat violation)…  A POOL VIOLATION OCCURS, YOU SEND WARNING AS MENTIONED ABOVE, BUT BECAUSE THIS HAPPENED ON A SATURDAY (FOR EXAMPLE), YOU DO NOT NEED TO GIVE AT LEAST 48 HOURS TO CURE.  YOU HAVE SENT YOUR WARNING.  IF IT HAPPENS AGAIN, IN THE NEXT 12 MONTHS, YOU CAN FINE WITHOUT FURTHER WARNING OF ANY KIND IF YOUR RULES ARE WRITTEN PROPERLY.
  6. REMEMBER, THE 48 HOUR REQUIREMENT APPLIES TO CONTINUING VIOLATIONS.
  7. I REALIZE THAT A “REPEAT VIOLATION” AND A “CONTINUING VIOLATION” MAY BE BLURRY SOME TIMES.  A CLASSIC CONTINUING VIOLATION IS SOMEONE WHO PARKS THEIR CAR IN GUEST PARKING IN VIOLATION OF THE RULES AND LEAVES IT THERE.  YOU MUST GIVE THEM A WARNING LETTER AND 48 HOURS TO CURE.  IN YOUR WARNING LETTER FOR A CONTINUING VIOLATION, GIVE AT LEAST 48 HOURS FOR THEM TO CURE/STOP THE VIOLATION AND TELL THEM WHEN THEY MUST COME INTO COMPLIANCE.  IF THE OFFENDER DOES NOT COME INTO COMPLIANCE, YOU MAY ASSESS A FINE BASED ON YOUR FINE SCHEDULE.  AFTER YOU’VE DONE YOUR WARNING AND CURE LETTER, IF THE VIOLATION CONTINUES FOR 10 DAYS OR LONGER, THEN YOU DO NOT HAVE TO GIVE ANY ADDITIONAL WARNINGS AND CAN GO SIMPLY TO YOUR FINE SCHEDULE, AS DRAFTED BUT THE 10 DAYS OF A CONTINUAL VIOLATION MUST OCCUR IN ORDER TO GOT TO THE NEXT LEVEL OF FINES IN YOUR SCHEDULE.  (REMEMBER, CONDOMINIUMS ARE CAPPED AT $500/MONTH)IF MUSIC IS PLAYING FOR A PERIOD OF TIME, STOPS AND STARTS AGAIN, THEN PLEASE FOLLOW THE RULES IN #4 ABOVE.  IF NON-CONTINUAL BEHAVIORAL VIOLATIONS OCCUR, STOP, AND REPEAT AGAIN, THEN PLEASE FOLLOW #4 ABOVE.  IF, HOWEVER,  A CAR IS PARKED CONTINUALLY IN THE WRONG PLACE, OR IF A VIOLATION OF AN ARCHITECTURAL NATURE IS CONTINUING, THEN FOLLOW THE MINIMUM 48 HOURS TO CURE RULE, SEND THE WARNING LETTER, AND IF THE VIOLATION CONTINUES FOR 10 DAYS, YOU CAN STOP SENDING WARNINGS AND FOLLOW YOUR FINE SCHEDULE.  IF THE VIOLATION CONTINUES FOR AN ADDITIONAL 10 DAYS (AFTER THE FIRST 10 DAYS), YOU CAN FINE AGAIN WITHOUT WARNING.

Senate Bill 80 – HOA Reserves; Penalties; Board versus Declarant Obligations

Thanks for reading this brief insert regarding RESERVES.  Please review the continuing requirements for Boards/Committees; the Reserve Analysis requirements; penalties; and new DECLARANT OBLIGATIONS.  (as always more to come)

SENATE BILL 80

CONDOMINUM ACT CHANGES

57-8-7.5 – Reserve Analysis

“Reserve funds” means money to cover the cost of repairing, replacing or restoring common areas and facilities that have a useful life of 3 years or more and a remaining useful life of less than 30 years, if the cost cannot reasonably be funded from the general budget or other funds of the association of unit owners.

  1. The requirements for an association to have a reserve analysis remain the same but do not apply to an association during the period of administrative control. Those requirements repeated here are:
  2. Committee shall do a reserve analysis no less than every 6 years;
  3. Review and if necessary update prior reserve analysis no less than every 3 years
  4. Committee can conduct their own reserve analysis or hire someone else to do it.
  5. The reserve analysis shall include:

(a) a list of what components will require reserve funds

(b) statement of the probably meaning useful life of each component

(c) estimate of the cost for each component

(d) estimate of the total annual contribution to a reserve fund necessary to meet the cost to fund each component identified

(e) reserve funding plan recommending how the association can fund the contribution to the reserve fund.

6.  An association should annual provide unit owners a summary of the most recent reserve analysis, provide a copy to anyone who requests it, within 45 days after owners adopt the annual budget, owners may veto the reserve fund line item by a 51% vote.

7.  If the association does not comply with requirements, a unit owner may file an action for injunctive relief requiring association to comply. $500 fine or actual damages plus attorney fees may be recovered.

8.  90 days before an owner files a complaint, the owner shall give association notice that statements the requirement the association failed to comply with, a demand to comply and a date, no less than 90 days, by which the association shall comply.

9.  A management committee may not use money in a reserve fund for daily maintenance expenses, unless a majority of the members vote for it. The reserve fund should be separate from other funds of the association.

NEW – PART OF SENATE BILL 80 – Declarant and documents.

  1. For a condominium’s declaration recorded after May 12, 2015, and during administrative control, the Declarant shall give the third party:

(a) a copy of the governing documents and

(b) a copy of the association’s most recent financial statement that includes any reserve funds held by the association.

SENATE BILL 80

COMMUNITY ASSOCIATION ACT CHANGES –SAME AS ABOVE

House Bill 99. Open Board Meetings – IMPORTANT CHANGE

OK – Everyone, the following is an important change regarding Board Meetings (not member meetings) and explains the process and requirements for making BOARD/COMMITTEE meetings “open” to members who request, in writing, to be invite to, and participate in Board meetings.  The following is for informational purposes – please contact me directly for follow up:  john@rkw-law.com or 801-274-6800.

HOUSE BILL 99

CONDOMINIUM ACT CHANGES

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. 25 “Meeting” means a gathering of a management committee, whether in person of by electronic communication, at which meeting the committee can take binding action.
  3. Sec. 28 “Period of administrative control” means the period of control described in 57-8-16.5(1).

57-8-56 – Management committee meetings – Open meetings.

  1. The association shall give written notice of a meeting via email to each unit owner who requests notice of a meeting unless:

(a) notice was previously provided to the owner; or

(b) the meeting is to address an emergency and the committee member received notice of the meeting less than 48 hrs before the meeting.

  1. The notice of the meeting shall:

(a) be delivered to the unit owner by email, which unit owner provides to management committee;

(b) state the time, date and location of meeting; and

(c) if a committee member participates by electronic communication, provide the unit owner information to participate in the same way.

  1. Meetings shall be open to all unit owners or their representatives (designated by owner in writing).

4.  EXECUTIVE SESSION:   A management committee may close a meeting to:

(a) consult with attorney to obtain legal advice;

(b) discuss litigation, mediation or administrative proceedings;

(c) discuss a personnel matter;

(d) discuss a matter regarding contracts, bids or proposals;

(e) discuss a matter which may cause an individual undue embarrassment or violate their privacy; and

(f) discuss a delinquent assessment or fine.

  1. At a management committee unit owners should be allowed reasonable opportunity to offer comments. However, they may limit comments to one specific time during the meeting.

HOUSE BILL 99

COMMUNITY ASSOCIATION ACT CHANGES

SAME AS CONDOMINIUM AMENDMENTS – simply repeated below

57-8a-102 – Definitions

  1. Sec. 13 “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. 14 “Meeting” means a gathering of a management committee, whether in person of by electronic communication, at which meeting the committee can take binding action.
  3. Sec. 17 “Period of administrative control” means the period during which the person who filed the association’s governing documents or their successor retains authority to appoint or remove members of the board or exercise power or authority assigned to the association under their governing documents.

57-8a-225 – Board meetings – Open meetings

  1. The association shall give written notice of a meeting via email to each lot owner who requests notice of a meeting unless:

(a) notice was previously provided to the owner or

(b) the meeting is to address an emergency and the board members received notice of the meeting less than 48 hrs before the meeting.

  1. The notice of the meeting shall:

(a) be delivered to the lot owner by email, which the lot owner provides to management committee;

(b) state the time, date and location of meeting

(c) and if a board member participates by electronic communication, provide the lot owner information to participate in the same way.

  1. Meetings shall be open to all lot owners or their representatives (designated by owner in writing.
  2. EXECUTIVE SESSION: A board may close a meeting to:

(a) consult with attorney to obtain legal advice

(b) discuss litigation, mediation or administrative proceedings,

(c) discuss a personnel matter; (d) discuss a matter regarding contracts, bids or proposals

(e) discuss a matter which may cause an individual undue embarrassment or violate their privacy

(f) discuss a delinquent assessment or fine.

  1. At a management committee unit owners must be allowed reasonable opportunity to offer comments. However, they may limit comments to one specific time during the meeting.