HB 86: Homeowners' Association Requirements - Utah

Substitute #5 → Enrolled · 6 edits · Mar 25, 2025

MODERATE

This bill updates Utah's Homeowners' Association laws to strengthen homeowner rights and clarify developer responsibilities. Key changes include increasing penalties for associations that fail to provide requested records, adding a new definition for 'development right,' and refining the rules for when a developer's control over an association ends. The bill also clarifies that developers cannot use homeowner funds to defend themselves in lawsuits filed by homeowners before the developer's control period ends.

Scope change

The scope of the bill remains focused on homeowners' associations, but the applicability of specific penalties and definitions has been expanded or clarified to cover more scenarios, particularly regarding record availability and the definition of development rights.

ENFORCEMENT

Increased the daily penalty for associations that fail to provide requested documents from $25 to $25 (no change in amount, but the text shows a formatting update where '$15 $20' appears, suggesting a potential increase to $20 per hour for labor costs in some sections, though the daily penalty remains $25).

Increased the maximum court award for a unit owner suing an association for failing to provide records from $500 to $1,000.

DEFINITION

Added a new definition for 'development right,' which covers rights to add real estate, create lots, subdivide lots, or withdraw real estate from an association.

REQUIREMENT

Clarified that a developer cannot use funds paid by homeowners to pay for the developer's own legal defense in lawsuits brought by homeowners before the end of the developer's control period.

TIMELINE

Refined the conditions under which a developer's administrative control over an association ends, specifically linking termination to the loss of 'development rights' and adjusting the surrender of control procedures.

TECHNICAL

Corrected minor formatting issues in the text, such as removing redundant numbers in section headers and fixing spacing in penalty amounts.

Introduced → Substitute #1 · 5 edits

MODERATE

This bill updates Utah's homeowners' association laws to improve transparency and limit developer control. It increases the penalty for failing to provide records from $25 to $100 per day, raises the sales threshold for ending developer control from 75% to 80% of lots, and adds a definition for 'undeveloped land' to prevent developers from delaying the transfer of control by counting vacant land as sold lots. It also prohibits developers from changing the community's rules after selling just one lot.

Scope change

The bill applies to all homeowners' associations and condominium associations in Utah, specifically targeting associations with 300 or more lots and those with fewer than 300 lots regarding the timeline for ending developer control.

ENFORCEMENT

Increased the daily penalty for an association failing to provide requested records from $25 to $100 per day.

REQUIREMENT

Raised the percentage of lots that must be sold to end the developer's period of administrative control from 75% to 80% for both large (300+ lots) and small (fewer than 300 lots) associations.

Prohibited developers from amending the community's declaration rules after they have sold at least one lot to a buyer.

DEFINITION

Added a new definition for 'undeveloped land' to ensure developers cannot count vacant or unfinished land toward the 80% sales requirement.

TECHNICAL

Corrected a clerical error in the penalty amount in Section 57-8a-227 where the text read '$500 $1,000' instead of '$1,000'.

Substitute #4 → Substitute #5 · 6 edits

MODERATE

This bill updates Utah's homeowners' association record-keeping and disclosure requirements, increases penalties for non-compliance, and adds new provisions related to declarant liability and administrative control periods. The changes strengthen homeowner protections by improving access to association records and increasing financial penalties when associations fail to comply with disclosure requests.

Scope change

The bill expands applicability to include additional code sections (57-8a-102 and 57-8a-502) related to lot owners and development rights, broadening the scope beyond just unit owners to include lot owners in homeowners' associations.

REQUIREMENT

Increased the penalty for associations failing to provide requested documents from $25 per day to $1,000 per day starting on the sixth day after the request.

Updated the hourly rate for association staff time when producing copies from $15 per hour to $20 per hour.

Added new provisions requiring associations to define 'development right' and amend conditions for terminating administrative control periods for lot owner associations.

Added requirements for declarants of lot owner associations during the administrative control period.

ENFORCEMENT

Added new code sections 57-8a-102 and 57-8a-502 to extend record-keeping and liability provisions to lot owners and development rights.

TECHNICAL

Made technical corrections to existing code sections including updating cross-references and conforming language changes.

Substitute #3 → Substitute #4 · 7 edits

MODERATE

This bill updates Utah's homeowners' association laws to improve transparency and accountability. It increases penalties for associations that fail to provide records, clarifies when developers can no longer control associations, and adjusts thresholds for when administrative control ends.

Scope change

The bill applies to both unit owners (condominiums/apartments) and lot owners (planned communities) and makes technical corrections to align language between these two association types.

ENFORCEMENT

Increased the penalty amount from $500 to $1,000 per day when an association fails to provide requested records after notice.

REQUIREMENT

Raised the cost cap for association staff time reviewing records from $15 to $20 per hour.

Changed the percentage threshold for ending administrative control from 75% to 80% of lots conveyed to owners.

Added a restriction preventing declarants from amending declarations after conveying 80% of lots without owner approval.

Prohibited declarants from using association funds to pay legal costs in lawsuits filed by homeowners before administrative control ends.

DEFINITION

Added a definition of 'undeveloped land' to clarify what cannot be counted toward lot totals when calculating administrative control periods.

TECHNICAL

Corrected cross-references to section numbers and made technical formatting changes throughout the bill.

Substitute #2 → Substitute #3 · 7 edits

MODERATE

This bill updates Utah's homeowners' association laws to improve transparency and accountability. It increases penalties for associations that fail to provide records, clarifies when developers lose control over associations, and prevents developers from using homeowner funds in legal disputes during the control period.

Scope change

The bill applies to both unit owner associations and lot owner associations, with specific provisions for associations with 300+ lots versus smaller associations.

ENFORCEMENT

Increased the penalty for associations failing to provide records from $500 to $1,000 per incident, plus daily penalties of $25 for each day the request remains unfulfilled after the sixth day.

REQUIREMENT

Added requirement that associations with websites must make governing documents, minutes, and financial statements available free of charge online.

Changed the administrative control period threshold from 75% to 80% of lots conveyed for associations with 300+ lots, and from 80% to 80% (unchanged) for smaller associations.

Added prohibition preventing developers from amending declarations after conveying at least one lot to a homeowner during the administrative control period.

DEFINITION

Defined 'undeveloped land' as land designated for potential development where no new construction or infrastructure has been installed, preventing developers from counting it toward lot totals.

FISCAL

Maintained requirement that associations must set aside 10% of estimated legal costs in a trust before suing declarants, and prohibited declarants from using homeowner funds for legal costs during the control period.

TECHNICAL

Made technical and conforming changes to align language between unit owner and lot owner association sections.

Substitute #1 → Substitute #2 · 7 edits

MODERATE

This bill substitutes a new version of HB 86 that strengthens homeowner protections by increasing penalty amounts for associations that fail to provide records, adding restrictions on using association funds in legal disputes during administrative control, and clarifying how undeveloped land is counted when determining when administrative control ends. The changes also update affected code sections to include provisions for lot owners in addition to unit owners.

Scope change

The bill now explicitly applies to both unit owners (condominiums) and lot owners (HOAs), whereas the original version focused primarily on unit owners. It also adds new provisions about declarant restrictions that were not in the original version.

ENFORCEMENT

Increased penalty from $500 to $1,000 per day for associations that fail to provide requested records

REQUIREMENT

Prohibits declarants from using association funds in legal actions brought by homeowners before administrative control ends

Prohibits declarants from amending declarations after conveying at least one lot to a lot owner

Changed percentage thresholds for ending administrative control from 75% to 80% for associations with 300+ lots

DEFINITION

Added specific definition of 'undeveloped land' for calculating administrative control periods

SCOPE

Expanded applicability to include lot owners in addition to unit owners

TECHNICAL

Updated affected code sections to include 57-8a-229 and 57-8-58

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