Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 86 (2025GS)

Sponsor

Rep. Brooks, Walt

Final action

Governor Signed 3/25/2025

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• increases the monetary amount a unit or lot owner may request if an association fails to properly make records available for examination;
• prohibits a declarant from using association funds in a legal action brought by a homeowner against the declarant before the end of the period of administrative control;
• defines "development right";
• amends the conditions for the termination of a period of administrative control for an association of lot owners;
• provides requirements for a declarant of a association of lot owners during the period of administrative control; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

18
57-8-17
57-8-58
57-8a-102
57-8a-227
57-8a-229
57-8a-502
0
Homeowners' Association Requirements
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Walt Brooks
Senate Sponsor: Don L. Ipson
LONG TITLE
General Description:
This bill amends provisions relating to homeowners' associations.
Highlighted Provisions:
This bill:
increases the monetary amount a unit or lot owner may request if an association fails to 
properly make records available for examination;
prohibits a declarant from using association funds in a legal action brought by a 
homeowner against the declarant before the end of the period of administrative control;
defines "development right";
amends the conditions for the termination of a period of administrative control for an 
association of lot owners;
provides requirements for a declarant of an association of lot owners during the period of 
administrative control; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
57-8-17
, as last amended by Laws of Utah 2022, Chapter 439
57-8-58
, as enacted by Laws of Utah 2017, Chapter 284
57-8a-102
, as last amended by Laws of Utah 2024, Chapter 519
57-8a-227
, as last amended by Laws of Utah 2022, Chapter 439
57-8a-229
, as enacted by Laws of Utah 2017, Chapter 284
57-8a-502
, as last amended by Laws of Utah 2016, Chapter 210
Be it enacted by the Legislature of the state of Utah:
Section 1, Section 
57-8-17
 is amended to read:
57-8-17
. Records -- Availability for examination.
(1)
(a)
Subject to Subsection 
(1)(b)
 and regardless of whether the association of unit 
owners is incorporated under 
Title 16, Chapter 6a, Utah Revised Nonprofit 
Corporation Act
, an association of unit owners shall keep and make available to unit 
owners:
(i)
each record identified in Subsections 
16-6a-1601(1)
 through 
(5)
, 
in accordance 
with
in the manner described in
 Sections 
16-6a-1601
, 
16-6a-1602
, 
16-6a-1603
, 
16-6a-1605
, 
16-6a-1606
, and 
16-6a-1610
; and
(ii)
a copy of the association's:
(A)
governing documents;
(B)
most recent approved minutes;
(C)
most recent budget and financial statement;
(D)
most recent reserve analysis; and
(E)
certificate of insurance for each insurance policy the association of unit 
owners holds.
(b)
An association of unit owners may redact the following information from any 
document the association of unit owners produces for inspection or copying:
(i)
a Social Security number;
(ii)
a bank account number; or
(iii)
any communication subject to attorney-client privilege.
(2)
(a)
In addition to the requirements described in Subsection 
(1)
, an association of unit 
owners shall:
(i)
make documents available to unit owners in accordance with the association of 
unit owners' governing documents; and
(ii)
(A)
if the association of unit owners has an active website, make the documents 
described in Subsections 
(1)(a)(ii)
(A) through (C) available to unit owners, free 
of charge, through the website; or
(B)
if the association of unit owners does not have an active website, make 
physical copies of the documents described in Subsections 
(1)(a)(ii)
(A) 
through (C) available to unit owners during regular business hours at the 
association of unit owners' address registered with the Department of 
Commerce under Section 
57-8-13.1
.
(b)
Subsection 
(2)(a)(ii)
 does not apply to an association as defined in Section 
57-19-2
.
(c)
If a provision of an association of unit owners' governing documents conflicts with a 
provision of this section, the provision of this section governs.
(3)
In a written request to inspect or copy documents:
(a)
a unit owner shall include:
(i)
the association of unit owners' name;
(ii)
the unit owner's name;
(iii)
the unit owner's property address;
(iv)
the unit owner's email address;
(v)
a description of the documents requested; and
(vi)
any election or request described in Subsection 
(3)(b)
; and
(b)
a unit owner may:
(i)
elect whether to inspect or copy the documents;
(ii)
if the unit owner elects to copy the documents, request hard copies or electronic 
scans of the documents; or
(iii)
subject to Subsection 
(4)
, request that:
(A)
the association of unit owners make the copies or electronic scans of the 
requested documents;
(B)
a recognized third party duplicating service make the copies or electronic 
scans of the requested documents;
(C)
the unit owner be allowed to bring any necessary imaging equipment to the 
place of inspection and make copies or electronic scans of the documents while 
inspecting the documents; or
(D)
the association of unit owners email the requested documents to an email 
address provided in the request.
(4)
(a)
An association of unit owners shall comply with a request described in Subsection 
(3)
.
(b)
If an association of unit owners produces the copies or electronic scans:
(i)
the copies or electronic scans shall be legible and accurate; and
(ii)
the unit owner shall pay the association of unit owners the reasonable cost of the 
copies or electronic scans and for time spent meeting with the unit owner, which 
may not exceed:
(A)
the actual cost that the association of unit owners paid to a recognized third 
party duplicating service to make the copies or electronic scans; or
(B)
10 cents per page and 
$15 
$20 
per hour for the employee's, manager's, or 
other agent's time making the copies or electronic scans.
(c)
If a unit owner requests a recognized third party duplicating service make the copies 
or electronic scans:
(i)
the association of unit owners shall arrange for the delivery and pick up of the 
original documents; and
(ii)
the unit owner shall pay the duplicating service directly.
(d)
Subject to Subsection 
(9)
, if a unit owner requests to bring imaging equipment to the 
inspection, the association of unit owners shall provide the necessary space, light, and 
power for the imaging equipment.
(5)
If, in response to a unit owner's request to inspect or copy documents, an association of 
unit owners fails to comply with a provision of this section, the association of unit 
owners shall pay:
(a)
the reasonable costs of inspecting and copying the requested documents;
(b)
for items described in Subsections 
(1)(a)(ii)
(A) through (C), $25 to the unit owner 
who made the request for each day the request continues unfulfilled, beginning the 
sixth day after the day on which the unit owner made the request; and
(c)
reasonable attorney fees and costs incurred by the unit owner in obtaining the 
inspection and copies of the requested documents.
(6)
(a)
In addition to any remedy in the association of unit owners' governing documents 
or as otherwise provided by law, a unit owner may file an action in court under this 
section if:
(i)
subject to Subsection 
(9)
, an association of unit owners fails to make documents 
available to the unit owner in accordance with this section, the association of unit 
owners' governing documents, or as otherwise provided by law; and
(ii)
the association of unit owners fails to timely comply with a notice described in 
Subsection 
(6)(d)
.
(b)
In an action described in Subsection 
(6)(a)
:
(i)
the unit owner may request:
(A)
injunctive relief requiring the association of unit owners to comply with the 
provisions of this section;
(B)
$500 
$1,000 
or actual damage, whichever is greater; or
(C)
any other relief provided by law; and
(ii)
the court 
shall
may
 award costs and reasonable attorney fees to the prevailing 
party, including any reasonable attorney fees incurred before the action was filed 
that relate to the request that is the subject of the action.
(c)
(i)
In an action described in Subsection 
(6)(a)
, upon motion by the unit owner
made in accordance with Subsection 
(6)(b)
, notice to the association of unit 
owners, and a hearing in which the court finds a likelihood that the association of 
unit owners failed to comply with a provision of this section, the court shall order 
the association of unit owners to immediately comply with the provision.
(ii)
The court shall hold a hearing described in Subsection 
(6)(c)(i)
 within 30 days 
after the day on which the unit owner files the motion.
(d)
At least 10 days before the day on which a unit owner files an action described in 
Subsection 
(6)(a)
, the unit owner shall deliver a written notice to the association of 
unit owners that states:
(i)
the unit owner's name, address, telephone number, and email address;
(ii)
each requirement of this section with which the association of unit owners has 
failed to comply;
(iii)
a demand that the association of unit owners comply with each requirement with 
which the association of unit owners has failed to comply; and
(iv)
a date by which the association of unit owners shall remedy the association of 
unit owners' noncompliance that is at least 10 days after the day on which the unit 
owner delivers the notice to the association of unit owners.
(7)
(a)
The provisions of Section 
16-6a-1604
 do not apply to an association of unit 
owners.
(b)
The provisions of this section apply regardless of any conflicting provision in 
Title 
16, Chapter 6a, Utah Revised Nonprofit Corporation Act
.
(8)
A unit owner's agent may, on the unit owner's behalf, exercise or assert any right that 
the unit owner has under this section.
(9)
An association of unit owners is not liable for identifying or providing a document in 
error, if the association of unit owners identified or provided the erroneous document in 
good faith.
Section 2, Section 
57-8-58
 is amended to read:
57-8-58
. Liability of declarant or management committee -- Period of declarant 
control.
(1)
An association may not, after the period of declarant control, bring a legal action against 
a declarant, a management committee, or an employee, an independent contractor, or an 
agent of the declarant or the management committee related to the period of declarant 
control unless:
(a)
the legal action is approved in advance at a meeting where owners of at least 51% in 
aggregate in interest of the undivided ownership of the common areas and facilities 
are:
(i)
present; or
(ii)
represented by a proxy specifically assigned for the purpose of voting to approve 
or deny the legal action at the meeting;
(b)
the legal action is approved by vote in person or by proxy of owners of the lesser of:
(i)
more than 75% in aggregate in interest of the total aggregate interest of the 
undivided ownership of the common areas and facilities represented by those 
owners present at the meeting or represented by a proxy as described in 
Subsection 
(1)(a)
; or
(ii)
more than 51% in aggregate in interest of the undivided ownership of the 
common areas and facilities;
(c)
the association provides each unit owner with the items described in Subsection 
(2)
;
(d)
the association establishes the trust described in Subsection 
(3)
; and
(e)
the association first:
(i)
notifies the person subject to the proposed action of the action and the basis of the 
association's claim; and
(ii)
gives the person subject to the proposed action a reasonable opportunity to 
resolve the dispute that is the basis of the action.
(2)
Before unit owners in an association may vote to approve an action described in 
Subsection 
(1)
, the association shall provide each unit owner:
(a)
a written notice that the association is contemplating legal action; and
(b)
after the association consults with an attorney licensed to practice in the state, a 
written assessment of:
(i)
the likelihood that the legal action will succeed;
(ii)
the likely amount in controversy in the legal action;
(iii)
the likely cost of resolving the legal action to the association's satisfaction; and
(iv)
the likely effect the legal action will have on a unit owner's or prospective unit 
buyer's ability to obtain financing for a unit while the legal action is pending.
(3)
Before the association commences a legal action described in Subsection 
(1)
, the 
association shall:
(a)
allocate an amount equal to 10% of the cost estimated to resolve the legal action, not 
including attorney fees; and
(b)
place the amount described in Subsection 
(3)(a)
 in a trust that the association may 
only use to pay the costs to resolve the legal action.
(4)
This section does not apply to an association that brings a legal action that has an 
amount in controversy of less than $75,000.
(5)
In a legal action brought by one or more unit owners solely against the declarant before 
the end of the period of declarant control, a declarant may not use any funds paid by a 
unit owner to the association to pay for costs of the declarant's legal defense.
Section 3, Section 
57-8a-102
 is amended to read:
57-8a-102
. Definitions.
As used in this chapter:
(1)
(a)
"Assessment" means a charge imposed or levied:
(i)
by the association;
(ii)
on or against a lot or a lot owner; and
(iii)
pursuant to a governing document recorded with the county recorder.
(b)
"Assessment" includes:
(i)
a common expense; and
(ii)
an amount assessed against a lot owner under Subsection 
57-8a-405
(7).
(2)
(a)
Except as provided in Subsection (2)(b), "association" means a corporation or 
other legal entity, any member of which:
(i)
is an owner of a residential lot located within the jurisdiction of the association, as 
described in the governing documents; and
(ii)
by virtue of membership or ownership of a residential lot is obligated to pay:
(A)
real property taxes;
(B)
insurance premiums;
(C)
maintenance costs; or
(D)
for improvement of real property not owned by the member.
(b)
"Association" or "homeowner association" does not include an association created 
under Chapter 8, Condominium Ownership Act.
(3)
"Board meeting" means a gathering of a board, whether in person or by means of 
electronic communication, at which the board can take binding action.
(4)
"Board of directors" or "board" means the entity, regardless of name, with primary 
authority to manage the affairs of the association.
(5)
"Common areas" means property that the association:
(a)
owns;
(b)
maintains;
(c)
repairs; or
(d)
administers.
(6)
"Common expense" means costs incurred by the association to exercise any of the 
powers provided for in the association's governing documents.
(7)
"Declarant":
(a)
means the person who executes a declaration and submits it for recording in the 
office of the recorder of the county in which the property described in the declaration 
is located; and
(b)
includes the person's successor and assign.
(8)
"Development right" means any right or combination of rights a declarant reserves in 
the declaration to:
(a)
add real estate to an association;
(b)
create lots, common elements, or limited common elements within an association;
(c)
subdivide lots or convert lots into common elements; or
(d)
withdraw real estate from an association.
(8)
(9)
"Director" means a member of the board of directors.
(9)
(10)
"Electrical corporation" means the same as that term is defined in Section 
54-2-1
.
(10)
(11)
"Gas corporation" means the same as that term is defined in Section 
54-2-1
.
(11)
(12)
(a)
"Governing documents" means a written instrument by which the 
association may:
(i)
exercise powers; or
(ii)
manage, maintain, or otherwise affect the property under the jurisdiction of the 
association.
(b)
"Governing documents" includes:
(i)
articles of incorporation;
(ii)
bylaws;
(iii)
a plat;
(iv)
a declaration of covenants, conditions, and restrictions; and
(v)
rules of the association.
(12)
(13)
"Independent third party" means a person that:
(a)
is not related to the owner of the residential lot;
(b)
shares no pecuniary interests with the owner of the residential lot; and
(c)
purchases the residential lot in good faith and without the intent to defraud a current 
or future lienholder.
(13)
(14)
"Judicial foreclosure" means a foreclosure of a lot:
(a)
for the nonpayment of an assessment;
(b)
in the manner provided by law for the foreclosure of a mortgage on real property; and
(c)
as provided in Part 3, Collection of Assessments.
(14)
(15)
"Lease" or "leasing" means regular, exclusive occupancy of a lot:
(a)
by a person or persons other than the owner; and
(b)
for which the owner receives a consideration or benefit, including a fee, service, 
gratuity, or emolument.
(15)
(16)
"Limited common areas" means common areas described in the declaration and 
allocated for the exclusive use of one or more lot owners.
(16)
(17)
"Lot" means:
(a)
a lot, parcel, plot, or other division of land:
(i)
designated for separate ownership or occupancy; and
(ii)
(A)
shown on a recorded subdivision plat; or
(B)
the boundaries of which are described in a recorded governing document; or
(b)
(i)
a unit in a condominium association if the condominium association is a part of 
a development; or
(ii)
a unit in a real estate cooperative if the real estate cooperative is part of a 
development.
(17)
(18)
(a)
"Means of electronic communication" means an electronic system that 
allows individuals to communicate orally in real time.
(b)
"Means of electronic communication" includes:
(i)
web conferencing;
(ii)
video conferencing; and
(iii)
telephone conferencing.
(18)
(19)
"Mixed-use project" means a project under this chapter that has both residential 
and commercial lots in the project.
(19)
(20)
"Nonjudicial foreclosure" means the sale of a lot:
(a)
for the nonpayment of an assessment;
(b)
in the same manner as the sale of trust property under Sections 
57-1-19
 through 
57-1-34
; and
(c)
as provided in Part 3, Collection of Assessments.
(20)
(21)
"Period of administrative control" means the period during which the person who 
filed the association's governing documents or the person's successor in interest retains 
authority to:
(a)
appoint or remove members of the association's board of directors; or
(b)
exercise power or authority assigned to the association under the association's 
governing documents.
(21)
(22)
"Political sign" means any sign or document that advocates:
(a)
the election or defeat of a candidate for public office; or
(b)
the approval or defeat of a ballot proposition.
(22)
(23)
"Protected area" means the same as that term is defined in Section 
77-27-21.7
.
(23)
(24)
"Rentals" or "rental lot" means:
(a)
a lot that:
(i)
is not owned by an entity or trust; and
(ii)
is occupied by an individual while the lot owner is not occupying the lot as the lot 
owner's primary residence;
(b)
an occupied lot owned by an entity or trust, regardless of who occupies the lot; or
(c)
an internal accessory dwelling unit as defined in Section 
10-9a-530
 or 
17-27a-526
.
(24)
(25)
"Residential lot" means a lot, the use of which is limited by law, covenant, or 
otherwise to primarily residential or recreational purposes.
(25)
(26)
(a)
"Rule" means a policy, guideline, restriction, procedure, or regulation of an 
association that:
(i)
is not set forth in a contract, easement, article of incorporation, bylaw, or 
declaration; and
(ii)
governs:
(A)
the conduct of persons; or
(B)
the use, quality, type, design, or appearance of real property or personal 
property.
(b)
"Rule" does not include the internal business operating procedures of a board.
(26)
(27)
"Sex offender" means the same as that term is defined in Section 
77-27-21.7
.
(27)
(28)
"Solar energy system" means:
(a)
a system that is used to produce electric energy from sunlight; and
(b)
the components of the system described in Subsection 
(27)(a)
(28)(a)
.
Section 4, Section 
57-8a-227
 is amended to read:
57-8a-227
. Records -- Availability for examination.
(1)
(a)
Subject to Subsection 
(1)(b)
 and regardless of whether the association is 
incorporated under 
Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act
, an 
association shall keep and make available to lot owners:
(i)
each record identified in Subsections 
16-6a-1601(1)
 through 
(5)
, 
in accordance 
with
in the manner described in
 Sections 
16-6a-1601
, 
16-6a-1602
, 
16-6a-1603
, 
16-6a-1605
, 
16-6a-1606
, and 
16-6a-1610
; and
(ii)
a copy of the association's:
(A)
governing documents;
(B)
most recent approved minutes;
(C)
most recent budget and financial statement;
(D)
most recent reserve analysis; and
(E)
certificate of insurance for each insurance policy the association holds.
(b)
An association may redact the following information from any document the 
association produces for inspection or copying:
(i)
a Social Security number;
(ii)
a bank account number; or
(iii)
any communication subject to attorney-client privilege.
(2)
(a)
In addition to the requirements described in Subsection 
(1)
, an association shall:
(i)
make documents available to lot owners in accordance with the association's 
governing documents; and
(ii)
(A)
if the association has an active website, make the documents described in 
Subsections 
(1)(a)(ii)
(A) through (C) available to lot owners, free of charge, 
through the website; or
(B)
if the association does not have an active website, make physical copies of the 
documents described in Subsections 
(1)(a)(ii)
(A) through (C) available to lot 
owners during regular business hours at the association's address registered 
with the Department of Commerce under Section 
57-8a-105
.
(b)
Subsection 
(2)(a)(ii)
 does not apply to an association as defined in Section 
57-19-2
.
(c)
If a provision of an association's governing documents conflicts with a provision of 
this section, the provision of this section governs.
(3)
In a written request to inspect or copy documents:
(a)
a lot owner shall include:
(i)
the association's name;
(ii)
the lot owner's name;
(iii)
the lot owner's property address;
(iv)
the lot owner's email address;
(v)
a description of the documents requested; and
(vi)
any election or request described in Subsection 
(3)(b)
; and
(b)
a lot owner may:
(i)
elect whether to inspect or copy the documents;
(ii)
if the lot owner elects to copy the documents, request hard copies or electronic 
scans of the documents; or
(iii)
subject to Subsection 
(4)
, request that:
(A)
the association make the copies or electronic scans of the requested 
documents;
(B)
a recognized third party duplicating service make the copies or electronic 
scans of the requested documents;
(C)
the lot owner be allowed to bring any necessary imaging equipment to the 
place of inspection and make copies or electronic scans of the documents while 
inspecting the documents; or
(D)
the association email the requested documents to an email address provided in 
the request.
(4)
(a)
An association shall comply with a request described in Subsection 
(3)
.
(b)
If an association produces the copies or electronic scans:
(i)
the copies or electronic scans shall be legible and accurate; and
(ii)
the lot owner shall pay the association the reasonable cost of the copies or 
electronic scans and for time spent meeting with the lot owner, which may not 
exceed:
(A)
the actual cost that the association paid to a recognized third party duplicating 
service to make the copies or electronic scans; or
(B)
10 cents per page and 
$15 
$20 
per hour for the employee's, manager's, or 
other agent's time.
(c)
If a lot owner requests a recognized third party duplicating service make the copies 
or electronic scans:
(i)
the association shall arrange for the delivery and pick up of the original 
documents; and
(ii)
the lot owner shall pay the duplicating service directly.
(d)
If a lot owner requests to bring imaging equipment to the inspection, the association 
shall provide the necessary space, light, and power for the imaging equipment.
(5)
Subject to Subsection 
(9)
, if, in response to a lot owner's request to inspect or copy 
documents, an association fails to comply with a provision of this section, the 
association shall pay:
(a)
the reasonable costs of inspecting and copying the requested documents;
(b)
for items described in Subsections 
(1)(a)(ii)
(A) through (C), $25 to the lot owner 
who made the request for each day the request continues unfulfilled, beginning the 
sixth day after the day on which the lot owner made the request; and
(c)
reasonable attorney fees and costs incurred by the lot owner in obtaining the 
inspection and copies of the requested documents.
(6)
(a)
In addition to any remedy in the association's governing documents or otherwise 
provided by law, a lot owner may file an action in court 
against the association 
under 
this section if:
(i)
subject to Subsection 
(9)
, an association fails to make documents available to the 
lot owner in accordance with this section, the association's governing documents, 
or as otherwise provided by law; and
(ii)
the association fails to timely comply with a notice described in Subsection 
(6)(d)
.
(b)
In an action described in Subsection 
(6)(a)
:
(i)
the lot owner may request:
(A)
injunctive relief requiring the association to comply with the provisions of this 
section;
(B)
$500 
$1,000 
or actual damage, whichever is greater; or
(C)
any other relief provided by law; and
(ii)
the court 
shall
may
 award costs and reasonable attorney fees to the prevailing 
party, including any reasonable attorney fees incurred before the action was filed 
that relate to the request that is the subject of the action.
(c)
(i)
In an action described in Subsection 
(6)(a)
, upon motion by the lot owner
 made 
in accordance with Subsection 
(6)(b)
, notice to the association, and a hearing in 
which the court finds a likelihood that the association failed to comply with a 
provision of this section, the court shall order the association to immediately 
comply with the provision.
(ii)
The court shall hold a hearing described in Subsection 
(6)(c)(i)
 within 30 days 
after the day on which the lot owner files the motion.
(d)
At least 10 days before the day on which a lot owner files an action described in 
Subsection 
(6)(a)
, the lot owner shall deliver a written notice to the association that 
states:
(i)
the lot owner's name, address, telephone number, and email address;
(ii)
each requirement of this section with which the association has failed to comply;
(iii)
a demand that the association comply with each requirement with which the 
association has failed to comply; and
(iv)
a date by which the association shall remedy the association's noncompliance 
that is at least 10 days after the day on which the lot owner delivers the notice to 
the association.
(7)
(a)
The provisions of Section 
16-6a-1604
 do not apply to an association.
(b)
The provisions of this section apply regardless of any conflicting provision in 
Title 
16, Chapter 6a, Utah Revised Nonprofit Corporation Act
.
(8)
A lot owner's agent may, on the lot owner's behalf, exercise or assert any right that the 
lot owner has under this section.
(9)
An association is not liable for identifying or providing a document in error, if the 
association identified or provided the erroneous document in good faith.
Section 5, Section 
57-8a-229
 is amended to read:
57-8a-229
. Liability of declarant or board of directors -- Period of 
administrative control.
(1)
An association may not, after the period of administrative control, bring a legal action 
against a declarant, a board of directors, or an employee, an independent contractor, or 
the agent of the declarant or the previous board of directors related to the period of 
administrative control unless:
(a)
the legal action is approved in advance at a meeting where owners of at least 51% of 
the allocated voting interests of the lot owners in the association are:
(i)
present; or
(ii)
represented by a proxy specifically assigned for the purpose of voting to approve 
or deny the legal action at the meeting;
(b)
the legal action is approved by vote in person or by proxy of owners of the lesser of:
(i)
more than 75% of the allocated voting interests of the lot owners present at the 
meeting or represented by a proxy as described in Subsection 
(1)(a)
; or
(ii)
more than 51% of the allocated voting interests of the lot owners in the 
association;
(c)
the association provides each lot owner with the items described in Subsection 
(2)
;
(d)
the association establishes the trust described in Subsection 
(3)
; and
(e)
the association first:
(i)
notifies the person subject to the proposed legal action of the legal action and basis 
of the association's claim; and
(ii)
gives the person subject to the claim a reasonable opportunity to resolve the 
dispute that is the basis of the proposed legal action.
(2)
Before lot owners in an association may vote to approve an action described in 
Subsection 
(1)
, the association shall provide each lot owner:
(a)
a written notice that the association is contemplating legal action; and
(b)
after the association consults with an attorney licensed to practice in the state, a 
written assessment of:
(i)
the likelihood that the legal action will succeed;
(ii)
the likely amount in controversy in the legal action;
(iii)
the likely cost of resolving the legal action to the association's satisfaction; and
(iv)
the likely effect the legal action will have on a lot owner's or prospective lot 
buyer's ability to obtain financing for a lot while the legal action is pending.
(3)
Before the association commences a legal action described in Subsection 
(1)
, the 
association shall:
(a)
allocate an amount equal to 10% of the cost estimated to resolve the legal action, not 
including attorney fees; and
(b)
place the amount described in Subsection 
(3)(a)
 in a trust that the association may 
only use to pay the costs to resolve the legal action.
(4)
This section does not apply to an association that brings a legal action that has an 
amount in controversy of less than $75,000.
(5)
In a legal action brought by one or more lot owners solely against the declarant before 
the end of the period of declarant control, a declarant may not use any funds paid by a 
lot owner to the association to pay for costs of the declarant's legal defense.
Section 6, Section 
57-8a-502
 is amended to read:
57-8a-502
. Period of administrative control.
(1)
Unless otherwise provided for in a declaration
 and subject to Subsection 
(2)
, a period of 
administrative control terminates 
on the first to occur of the following:
60 days after the 
day on which 80% of the lots that may be created in the association are conveyed to lot 
owners other than a declarant.
(a)
60 days after 75% of the lots that may be created are conveyed to lot owners other 
than a declarant;
(b)
seven years after all declarants have ceased to offer lots for sale in the ordinary 
course of business; or
(c)
the day the declarant, after giving written notice to the lot owners, records an 
instrument voluntarily surrendering all rights to control activities of the association.
(2)
Notwithstanding Subsection 
(1)
, the period of administrative control terminates no later 
than the earlier of:
(a)
the day on which the declarant no longer owns any lot and no longer possesses any 
development right; or
(b)
seven years after the day on which a declarant has ceased to offer lots, including lots 
that may be created, for sale in the ordinary course of business.
(2)
(3)
(a)
A declarant may voluntarily surrender the right to appoint and remove a 
member of the board before the period of administrative control terminates under 
Subsection 
(1)
.
(b)
Subject to Subsection 
(2)(a)
(3)(a)
, the declarant may require, for the duration of the 
period of administrative control, that actions of the association or board, as specified 
in a recorded instrument executed by the declarant, be approved by the declarant 
before they become effective.
(c)
During a period of administrative control, except as provided in Subsection 
(2)(a)
(3)(a)
, a declarant may appoint the declarant's officers, employees, or agents as 
members of the board.
(3)
(4)
(a)
Upon termination of the period of administrative control, the lot owners shall 
elect a board consisting of an odd number of at least three members, a majority of 
whom shall be lot owners.
(b)
Unless the declaration provides for the election of officers by the lot owners, the 
board shall elect officers of the association.
(c)
The board members and officers shall take office upon election or appointment.
(5)
During the period of administrative control, the declarant shall:
(a)
use reasonable care and prudence in managing and maintaining the common areas;
(b)
establish a sound fiscal basis for the association by imposing and collecting 
assessments and establishing reserves for the maintenance and replacement of 
common areas;
(c)
for a service that the association is or will be obligated to provide, disclose to the lot 
owners the amount of money the declarant provides for or subsidizes for that service;
(d)
maintain records and account for the financial affairs of the association from the 
association's inception;
(e)
comply with and enforce the terms of the declaration, including design controls, 
land-use restrictions, and the payment of assessments; and
(f)
disclose to the lot owners all material facts and circumstances affecting:
(i)
the condition of the property that the association is responsible for maintaining; 
and
(ii)
the financial condition of the association, including the interest of the declarant 
and the declarant's affiliates in any contract, lease, or other agreement entered into 
by the association.
Section 7. 
Effective Date.
This bill takes effect on 
May 7, 2025
.
3-7-25 9:52 PM