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S.B. 278
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HOMEOWNERS' ASSOCIATION AMENDMENTS
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2010 GENERAL SESSION
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STATE OF UTAH
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Chief Sponsor: Stephen H. Urquhart
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House Sponsor:
Don L. Ipson
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LONG TITLE
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General Description:
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This bill enacts provisions relating to condominium and community associations.
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Highlighted Provisions:
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This bill:
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. requires a reserve study to be conducted and a review of a reserve study on a
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periodic basis; and
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. enacts provisions governing reserve funds of condominium associations and
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community associations.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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None
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Utah Code Sections Affected:
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ENACTS:
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57-8-7.5, Utah Code Annotated 1953
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57-8a-211, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
57-8-7.5
is enacted to read:
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57-8-7.5. Reserve study -- Reserve fund.
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(1) As used in this section, "reserve study" means a study to determine:
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(a) the need for a reserve fund to accumulate money to cover the cost of repairing,
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replacing, and restoring common areas and facilities that have a useful life of three years or
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more, but excluding any cost that can reasonably be funded from the general budget or other
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funds of the association of unit owners; and
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(b) the appropriate amount of any reserve fund.
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(2) Except as otherwise provided in the declaration, a management committee shall:
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(a) (i) subject to Subsection (2)(a)(ii), cause a reserve study to be conducted no less
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frequently than every five years; and
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(ii) if no reserve study has been conducted since March 1, 2008, cause a reserve study
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to be conducted before July 1, 2012; and
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(b) review and, if necessary, update a previously conducted reserve study no less
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frequently than every two years.
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(3) The management committee may conduct a reserve study itself or may engage a
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reliable person or organization, as determined by the management committee, to conduct the
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reserve study.
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(4) (a) A management committee may not use money in a reserve fund:
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(i) for daily maintenance expenses, unless members of the association of unit owners
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vote to approve the use of reserve fund money for that purpose; or
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(ii) for any purpose other than the purpose for which the reserve fund was established.
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(b) A management committee shall maintain a reserve fund separate from other funds
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of the association of unit owners.
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(c) This Subsection (4) may not be construed to limit a management committee from
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prudently investing money in a reserve fund, subject to any investment constraints imposed by
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the declaration.
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(5) Subsections (2), (3), and (4) do not apply to an association of unit owners during
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the period of declarant management.
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Section 2.
Section
57-8a-211
is enacted to read:
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57-8a-211. Reserve study -- Reserve fund.
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(1) As used in this section, "reserve study" means a study to determine:
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(a) the need for a reserve fund to accumulate money to cover the cost of repairing,
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replacing, and restoring common areas that have a useful life of three years or more, but
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excluding any cost that can reasonably be funded from the association's general budget or from
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other association funds; and
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(b) the appropriate amount of any reserve fund.
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(2) Except as otherwise provided in the governing documents, a board shall:
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(a) (i) subject to Subsection (2)(a)(ii), cause a reserve study to be conducted no less
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frequently than every five years; and
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(ii) if no reserve study has been conducted since March 1, 2008, cause a reserve study
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to be conducted before July 1, 2012; and
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(b) review and, if necessary, update a previously conducted reserve study no less
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frequently than every two years.
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(3) The board may conduct a reserve study itself or may engage a reliable person or
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organization, as determined by the board, to conduct the reserve study.
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(4) (a) A board may not use money in a reserve fund:
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(i) for daily maintenance expenses, unless association members vote to approve the use
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of reserve fund money for that purpose; or
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(ii) for any purpose other than the purpose for which the reserve fund was established.
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(b) A board shall maintain a reserve fund separate from other association funds.
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(c) This Subsection (4) may not be construed to limit a board from prudently investing
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money in a reserve fund, subject to any investment constraints imposed by the governing
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documents.
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(5) Subsections (2), (3), and (4) do not apply to an association during the period of
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administrative control.
Legislative Review Note
as of 2-25-10 12:08 PM