LEGISLATIVE GENERAL COUNSEL H.B. 315
6 Approved for Filing: A. Weenig 6
6 01-17-24 9:49 AM 6
1 AMENDING GOVERNING DOCUMENTS MODIFICATIONS
2 2024 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Carol S. Moss
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill addresses the process to amend an association's governing documents.
10 Highlighted Provisions:
11 This bill:
12 < authorizes a court to grant a petition to amend an association's governing documents
13 if:
14 C the association's vote on the amendment failed to meet the required vote
15 threshold;
16 C the vote otherwise complied with the governing documents;
17 C more than 50% of the owners voted in favor of the amendment;
18 C the petitioner provides notice to each person affected by the petition; and
19 C the amendment is not against public policy or illegal.
20 Money Appropriated in this Bill:
21 None
22 Other Special Clauses:
23 None
24 Utah Code Sections Affected:
25 AMENDS:
H.B. 315
26 57-8-39, as last amended by Laws of Utah 2017, Chapter 324
27 57-8a-104, as last amended by Laws of Utah 2015, Chapters 34, 325 and 387
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28
29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 57-8-39 is amended to read:
31 57-8-39. Limitation on requirements for amending governing documents --
32 Petition to amend governing documents -- Limitation on contracts.
33 (1) (a) (i) To amend the governing documents, the governing documents may not
34 require:
35 (A) for an amendment adopted after the period of administrative control, the vote or
36 approval of unit owners with more than 67% of the voting interests;
37 (B) the approval of any specific unit owner; or
38 (C) the vote or approval of lien holders holding more than 67% of the first position
39 security interests secured by a mortgage or trust deed in the association of unit owners.
40 (ii) Any provision in the governing documents that prohibits a vote or approval to
41 amend any part of the governing documents during a particular time period is invalid.
42 (b) Subsection (1)(a) does not apply to an amendment affecting only:
43 (i) the undivided interest of each unit owner in the common areas and facilities, as
44 expressed in the declaration;
45 (ii) unit boundaries; or
46 (iii) unit owners' voting rights.
47 (2) Subject to Subsection (3), a unit owner may file, and a court may grant a petition to
48 amend the governing documents if:
49 (a) each requirement to amend the governing documents as provided in the governing
50 documents is satisfied, except that the vote on the proposed amendment failed to meet the vote
51 threshold;
52 (b) the association conducted the vote on the proposed amendment in accordance with
53 the governing documents;
54 (c) unit owners with more than 50% of the voting interests voted in favor of the
55 amendment;
56 (d) a court determines the amendment is not against public policy or illegal; and
57 (e) at least 15 days before the day on which the court holds a hearing on the petition,
58 the petitioner gives notice of the hearing to:
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59 (i) each unit owner;
60 (ii) any mortgagee of a mortgage or beneficiary of a deed of trust who is entitled to
61 notice under the terms of the governing documents; and
62 (iii) each municipality and county in which the association is located that is entitled to
63 notice under terms of the governing documents.
64 (3) A court may not grant a petition to amend an association's governing documents if
65 the amendment would:
66 (a) impair the security interest of a mortgagee of a mortgage or the beneficiary of a
67 deed of trust; or
68 (b) eliminate any special right, preference, or privilege designated in the governing
69 documents.
70 [(2)] (4) (a) A contract for services such as garbage collection, maintenance, lawn care,
71 or snow removal executed on behalf of the association of unit owners during a period of
72 administrative control is binding beyond the period of administrative control unless terminated
73 by the management committee after the period of administrative control ends.
74 (b) [Subsection (2)(a)] Subsection (4)(a) does not apply to golf course and amenity
75 management, utilities, cable services, and other similar services that require an investment of
76 infrastructure or capital.
77 [(3)] (5) Voting interests under Subsection (1) are calculated in the manner required by
78 the governing documents.
79 [(4)] (6) Nothing in this section affects any other rights reserved by the declarant.
80 [(5)] (7) This section applies to an association of unit owners regardless of when the
81 association of unit owners is created.
82 Section 2. Section 57-8a-104 is amended to read:
83 57-8a-104. Limitation on requirements for amending governing documents --
84 Petition to amend governing documents -- Limitation on contracts.
85 (1) (a) (i) To amend the governing documents, the governing documents may not
86 require:
87 (A) for an amendment adopted after the period of administrative control, the vote or
88 approval of lot owners with more than 67% of the voting interests;
89 (B) the approval of any specific lot owner; or
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90 (C) the vote or approval of lien holders holding more than 67% of the first position
91 security interests secured by a mortgage or trust deed in the association.
92 (ii) Any provision in the governing documents that prohibits a vote or approval to
93 amend any part of the governing documents during a particular time period is invalid.
94 (b) Subsection (1)(a) does not apply to an amendment affecting only:
95 (i) lot boundaries; or
96 (ii) lot owner's voting rights.
97 (2) Subject to Subsection (3), a lot owner may file, and a court may grant a petition to
98 amend the governing documents if:
99 (a) each requirement to amend the governing documents as provided in the governing
100 documents is satisfied, except that the vote on the proposed amendment failed to meet the vote
101 threshold;
102 (b) the association conducted the vote on the amendment in accordance with the
103 governing documents;
104 (c) lot owners with more than 50% of the voting interests voted in favor of the
105 amendment;
106 (d) a court determines the amendment is not against public policy or illegal; and
107 (e) at least 15 days before the day on which the court holds a hearing on the petition,
108 the petitioner gives notice to the hearing to:
109 (i) each member of the association;
110 (ii) any mortgagee of a mortgage or beneficiary of a deed of trust who is entitled to
111 notice under the terms of the governing documents; and
112 (iii) each municipality and county in which the association is located and that is
113 entitled to notice under terms of the governing documents.
114 (3) A court may not grant a petition to amend an association's governing documents if
115 the amendment would:
116 (a) impair the security interest of a mortgagee of a mortgage or the beneficiary of a
117 deed of trust; or
118 (b) eliminate any special right, preference, or privilege designated in the governing
119 documents.
120 [(2)] (4) (a) A contract for services such as garbage collection, maintenance, lawn care,
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121 or snow removal executed on behalf of the association during a period of administrative control
122 is binding beyond the period of administrative control unless terminated by the board of
123 directors after the period of administrative control ends.
124 (b) [Subsection (2)(a)] Subsection (4)(a) does not apply to golf course and amenity
125 management, utilities, cable services, and other similar services that require an investment of
126 infrastructure or capital.
127 [(3)] (5) Voting interests under Subsection (1) are calculated in the manner required by
128 the governing documents.
129 [(4)] (6) Nothing in this section affects any other rights reserved by the person who
130 filed the association's original governing documents or a successor in interest.
131 [(5)] (7) This section applies to an association regardless of when the association is
132 created.
133 Section 3. Effective date.
134 This bill takes effect on May 1, 2024.
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Statutes affected: Introduced: 57-8-39