Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 201 (2017GS)

Sponsor

Rep. Moss, C.

Final action

Governor Signed 3/24/2017

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• addresses the hierarchy of the governing documents of a condominium or community association;
• enacts provisions related to the organization and reorganization of a community association; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

CONDOMINIUM AND COMMUNITY ASSOCIATION
AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Carol Spackman Moss
Senate Sponsor: 
 Don L. Ipson
LONG TITLE
General Description:
This bill modifies provisions of the Condominium Ownership Act and the Community
Association Act related to organization and governing documents.
Highlighted Provisions:
This bill:
▸ addresses the hierarchy of the governing documents of a condominium or
community association;
▸ enacts provisions related to the organization and reorganization of a community
association; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
57-8-39
, as last amended by Laws of Utah 2015, Chapter 325
57-8-40
, as last amended by Laws of Utah 2013, Chapter 152
ENACTS:
57-8a-228
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
57-8-39
 is amended to read:
57-8-39.
Limitation on requirements for amending governing documents --
Limitation on contracts.
(1) (a) (i) To amend the governing documents, the governing documents may not
require:
(A) for an amendment adopted after the period of administrative control, the vote or
approval of unit owners with more than 67% of the voting interests;
(B) the approval of any specific unit owner; or
(C) the vote or approval of lien holders holding more than 67% of the first position
security interests secured by a mortgage or trust deed in the association of unit owners.
(ii) Any provision in the governing documents that prohibits a vote or approval to
amend any part of the governing documents during a particular time period is invalid.
(b) Subsection (1)(a) does not apply to an amendment affecting only:
(i) the undivided interest of each unit owner in the common areas and facilities, as
expressed in the declaration;
(ii) unit boundaries; or
(iii) unit owners' voting rights.
(2) (a) A contract for services such as garbage collection, maintenance, lawn care, or
snow removal executed on behalf of the association of unit owners during a period of
administrative control is binding beyond the period of administrative control unless terminated
by the [
board of directors
] 
management committee
 after the period of administrative control
ends.
(b) Subsection (2)(a) does not apply to golf course and amenity management, utilities,
cable services, and other similar services that require an investment of infrastructure or capital.
(3) Voting interests under Subsection (1) are calculated in the manner required by the
governing documents.
(4) Nothing in this section affects any other rights reserved by the declarant.
(5) This section applies to an association of unit owners regardless of when the
association of unit owners is created.
Section 2. Section 
57-8-40
 is amended to read:
57-8-40.
Organization of an association of unit owners under other law --
Governing document hierarchy -- Reorganization.
(1) As used in this section, "organizational documents" means the documents related to
the formation or operation of a nonprofit corporation or other legal entity formed by the
management committee or the declarant.
(2) If permitted, required, or acknowledged by the declaration, the management
committee may organize an association of unit owners as:
(a) a nonprofit corporation in accordance with Title 16, Chapter 6a, Utah Revised
Nonprofit Corporation Act; or
(b) any other entity organized under other law.
(3) [
Organizational
] 
To the extent possible, organizational
 documents for a nonprofit
corporation or other entity formed in accordance with Subsection (2) [
shall, to the extent
possible,
] 
may
 not conflict with the rights and obligations found in the declaration [
and
] 
or
 any
of the [
association's
] 
association of unit owners'
 bylaws recorded at the time of the formation of
a nonprofit corporation or other entity.
(4) Notwithstanding any conflict with the declaration or any recorded bylaws, the
organizational documents of a nonprofit corporation or other entity formed in accordance with
Subsection (2) may include [
any
] 
an
 additional indemnification and liability limitation
provision for:
(a) [
board members, directors, and
] 
management committee members or
 officers; or
(b) similar persons in a position of control.
(5) In the event of a conflict between this chapter's provisions, a statute under which
the association of unit owners is organized, documents concerning the organization of the
association of unit owners as a nonprofit corporation or other entity, 
the plat,
 the declaration,
the bylaws, and [
association
] rules 
or policies of the association of unit owners
, the following
order prevails:
(a) this chapter controls over a conflicting provision found in any of the sources listed
in Subsections (5)(b) through (f);
(b) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, or any other law
under which an entity is organized controls over a conflicting provision in any of the sources
listed in Subsections (5)(c) through (f);
(c) the plat and the declaration control equally over a conflicting provision in any of the
sources listed in Subsections (5)(d) through (f);
[
(c)
] 
(d)
 an organizational document filed in accordance with Title 16, Chapter 6a,
Utah Revised Nonprofit Corporation Act, or any other law under which an entity is organized
,
controls over a conflicting provision in any of the sources listed in Subsections (5)[
(d)
]
(e)
through (f);
[
(d) the declaration controls over a conflicting provision in any of the sources listed in
Subsections (5)(e) or (f);
]
(e) the bylaws control over a conflicting provision in [
association rules
] 
a source
described in Subsection (5)(f)
; and
(f) [
the association rules yield
] 
a rule or policy of the association of unit owners that is
adopted by the management committee yields
 to a conflicting provision in any of the sources
listed in [
Subsection
] 
Subsections
 (5)(a) through (e).
(6) Immediately upon the legal formation of an entity in compliance with this section,
the association and unit owners are subject to any right, obligation, procedure, and remedy
applicable to that entity.
(7) (a) [
A
] 
The management committee may modify a
 form "articles of incorporation"
or similar organizational document attached to a declaration [
may be modified by the
management committee
] for filing or re-filing if the modified version is otherwise consistent
with this section's provisions.
(b) An organizational document attached to a declaration that is filed and concerns the
organization of an entity may be amended in accordance with [
its
] 
the organizational
document's
 own terms or any applicable law, [
notwithstanding the fact that
] 
regardless of
whether
 the organizational document [
might be
] 
is
 recorded.
(c) Except for amended bylaws, an initial or amended organizational document
properly filed with the state does not need to be recorded.
(8) This section applies to the reorganization of an association of unit owners
previously organized if the entity's status is terminated or dissolved without the possibility of
reinstatement.
(9) (a) This section applies to [
all
] 
a
 condominium [
projects, whether
] 
project
regardless of when the condominium project is
 established [
before or after May 5, 2008
].
(b) This section does not validate or invalidate the organization of an association 
of
unit owners
 that occurred before May 5, 2008, 
regardless of
 whether [
or not
] the association 
of
unit owners
 was otherwise in compliance with this section.
Section 3. Section 
57-8a-228
 is enacted to read:
 57-8a-228.
Organization of an association -- Governing document hierarchy --
Reorganization.
(1) As used in this section, "organizational documents" means the documents related to
the formation or operation of a nonprofit corporation or other legal entity formed by the board
or the declarant.
(2) If permitted, required, or acknowledged by the declaration, the board may organize
an association as:
(a) a nonprofit corporation in accordance with Title 16, Chapter 6a, Utah Revised
Nonprofit Corporation Act; or
(b) any other entity organized under other law.
(3) To the extent possible, organizational documents for a nonprofit corporation or
other entity formed in accordance with Subsection (2) may not conflict with the rights and
obligations found in the declaration or any of the association's bylaws recorded at the time of
the formation of a nonprofit corporation or other entity.
(4) Notwithstanding any conflict with the declaration or any recorded bylaws, the
organizational documents of a nonprofit corporation or other entity formed in accordance with
Subsection (2) may include an additional indemnification and liability limitation provision for:
(a) board members or officers; or
(b) similar persons in a position of control.
(5) In the event of a conflict between this chapter's provisions, a statute under which
the association is organized, documents concerning the organization of the association as a
nonprofit corporation or other entity, the plat, the declaration, the bylaws, and association rules
or policies, the following order prevails:
(a) this chapter controls over a conflicting provision found in any of the sources listed
in Subsections (5)(b) through (f);
(b) Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, or any other law
under which an entity is organized controls over a conflicting provision in any of the sources
listed in Subsections (5)(c) through (f);
(c) the plat and the declaration control equally over a conflicting provision in any of the
sources listed in Subsections (5)(d) through (f);
(d) an organizational document filed in accordance with Title 16, Chapter 6a, Utah
Revised Nonprofit Corporation Act, or any other law under which an entity is organized
controls over a conflicting provision in any of the sources listed in Subsections (5)(e) and (f);
(e) the bylaws control over a conflicting provision in a source described in Subsection
(5)(f); and
(f) an association rule or policy that is adopted by the board yields to a conflicting
provision in any of the sources listed in Subsections (5)(a) through (e).
(6) Immediately upon the legal formation of an entity in compliance with this section,
the association and unit owners are subject to any right, obligation, procedure, and remedy
applicable to that entity.
(7) (a) The board may modify a form "articles of incorporation" or similar
organizational document attached to a declaration for filing or re-filing if the modified version
is otherwise consistent with this section's provisions.
(b) An organizational document attached to a declaration that is filed and concerns the
organization of an entity may be amended in accordance with the organizational document's
own terms or any applicable law, regardless of whether the organizational document is
recorded.
(c) Except for amended bylaws, an initial or amended organizational document
properly filed with the state does not need to be recorded.
(8) This section applies to the reorganization of an association previously organized if
the entity's status is terminated or dissolved without the possibility of reinstatement.
(9) (a) This section applies regardless of when the association is created.
(b) This section does not validate or invalidate the organization of an association that
occurred before May 9, 2017, regardless of whether the association was otherwise in
compliance with this section.
Legislative Review Note
Office of Legislative Research and General Counsel