HB 306: Reinvestment Fee Amendments - Utah

Amended 2/24/2026 12:02:652 → Substitute #1 · 6 edits

MODERATE

This bill amends Utah laws governing reinvestment fees in homeowners' associations to clarify definitions, adjust fee limits based on community type, and require 50% of collected fees to be deposited into reserve funds. It also updates registration requirements for associations with the Department of Commerce and sets a new effective date of May 6, 2026.

Scope change

The bill applies to all common interest associations, including associations of unit owners, nonprofits, and traditional associations, with specific distinctions made for 'low-amenity' associations (single-family homes without major infrastructure).

DEFINITION

Added new definitions for 'Capital-intensive infrastructure maintenance' and 'Low-amenity association' to distinguish communities requiring major infrastructure upkeep from those with only detached single-family homes.

FISCAL

Modified the requirement that homeowners' associations must deposit at least 50% of reinvestment fees into reserve funds, unless the association is a large master-planned development.

ELIGIBILITY

Adjusted the maximum allowable reinvestment fee percentages based on association type: 0.5% for most associations and 0.25% for low-amenity associations.

REQUIREMENT

Updated registration requirements for associations with the Department of Commerce to include specific disclosures about reinvestment or transfer fees.

TIMELINE

Changed the effective date of the bill from May 7, 2025 to May 6, 2026.

TECHNICAL

Removed formatting artifacts and inconsistent line numbering from the original text.

Amended Excerpts 2/24/2026 12:02:652 → Amended 2/24/2026 12:02:652 · 4 edits

MODERATE

This bill amends Utah laws governing homeowners' associations (HOAs) to clarify definitions of fees and restrict how HOAs can use reinvestment fees. The most significant change requires HOAs to deposit at least 50% of any reinvestment fee collected into reserve funds, ensuring money is saved for future repairs rather than immediate expenses. The bill also adds new definitions for terms like 'capital-intensive infrastructure' and 'low-amenity association' to help determine which fees are allowed.

Scope change

The bill applies to all common interest associations, including homeowners' associations, associations of unit owners, and nonprofit associations, with specific new rules for large master-planned developments and low-amenity associations.

REQUIREMENT

Requires homeowners' associations to deposit at least 50% of any reinvestment fee collected into reserve funds.

Requires HOAs to state whether they impose reinvestment or transfer fees when registering with the Department of Commerce.

DEFINITION

Adds new definitions for 'capital-intensive infrastructure maintenance' and 'low-amenity association' to clarify fee eligibility.

Updates definitions for 'association expenses' and 'common areas' to align with other Utah statutes.

Enrolled → Amended Excerpts 2/24/2026 12:02:652 · 5 edits

MODERATE

This bill amends Utah laws governing homeowner association (HOA) reinvestment fees to require that 50% of collected fees be deposited into reserve funds and mandates that HOAs disclose whether they charge these fees during registration. It also clarifies definitions and registration requirements for both unit owner and common interest associations.

Scope change

The bill applies to all common interest associations, including associations of unit owners and nonprofit associations, requiring them to report reinvestment fee status to the Department of Commerce.

FISCAL

Requires associations to deposit at least 50% of reinvestment fees into reserve funds if the association is not a large master planned development.

REQUIREMENT

Mandates that associations state whether they impose a reinvestment fee or transfer fee when registering with the Department of Commerce.

DEFINITION

Updated and clarified definitions for terms such as 'capital-intensive infrastructure maintenance' and 'low-amenity association' to ensure consistent application of fee limits.

REGISTRATION

Revised registration forms for both unit owner and common interest associations to include specific disclosures about reinvestment fees and contact information.

TIMELINE

Set the effective date of the bill to May 6, 2026, replacing a previous placeholder date.

Introduced → Enrolled · 5 edits · Mar 18, 2026

MODERATE

This bill updates Utah's laws regarding fees charged by homeowners' associations, specifically clarifying definitions, adjusting fee limits based on community types, and mandating that 50% of reinvestment fees be deposited into reserve funds. It also modifies registration requirements for associations with the Department of Commerce to include disclosure of these fees.

Scope change

The bill applies to all common interest associations in Utah, including associations of unit owners, associations, and nonprofit associations, with specific fee limits differentiated by whether the community is a 'low-amenity,' 'mid-amenity,' or 'large master planned development.'

DEFINITION

Redefines 'low-amenity association' to explicitly exclude communities that provide capital-intensive infrastructure maintenance services, and clarifies that 'common interest association' includes authorized agents.

FISCAL

Requires homeowners' associations to deposit at least 50% of any collected reinvestment fee directly into reserve funds.

REQUIREMENT

Updates the registration process for associations with the Department of Commerce to require a statement on whether a reinvestment or transfer fee is imposed.

ENFORCEMENT

Clarifies that fees imposed on or after May 7, 2025, are void unless the association uses the fee only for transfer-related expenses and obtains specific member approval.

TIMELINE

Sets the effective date of the new provisions to May 6, 2026.

Reinvestment Fee Amendments

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