HB 217: Homeowners' Association Amendments - Utah

Substitute #5 → Enrolled · 8 edits · Mar 26, 2025

MODERATE

This bill establishes the Office of the Homeowners' Association Ombudsman to provide non-binding legal advice to residents and associations, while simultaneously repealing that office in 2030. It also bans new transfer fees for homeowners, restricts how associations can charge late fees and fees for document copies, and prohibits associations from restricting water-wise landscaping.

Scope change

The bill applies to all homeowners' associations (unit owners and lot owners) in Utah, introducing new oversight mechanisms and fee limitations that were previously absent or less strict.

REQUIREMENT

Created the Office of the Homeowners' Association Ombudsman to issue advisory opinions on legal disputes, though this office is scheduled for repeal on July 1, 2030.

Set a maximum late fee of 10% of the assessment amount or $50, whichever is greater, and capped interest on late fees at 1.5% per month.

Prohibited associations from charging fees for the electronic transmission of documents and raised the maximum fee for providing document copies from $15 to $20 per hour.

Banned associations from restricting, denying, or delaying approval of plans that include fire-resistant materials in wildfire-prone areas.

Prohibited associations from enforcing reinvestment fees or transfer fees imposed on or after May 7, 2025, unless the fees are used strictly to pay transfer-related expenses.

Allowed lot owners to install water-wise landscaping (such as mulch or drought-tolerant plants) without association prohibition, provided they maintain the landscape in a healthy condition.

Required associations to provide specific written reasons if they deny a unit plan, including the specific governing document provision violated.

Extended the period during which a developer (declarant) cannot sell common areas during administrative control to exclude exceptions for convertible land or space.

Introduced → Substitute #1 · 4 edits

MODERATE

This bill amends Utah's homeowners' association laws to create a new Office of the Homeowners' Association Ombudsman to provide free, non-binding legal advice on disputes. It also strengthens protections for buyers by voiding transfer fees imposed on or after May 7, 2025, unless they are strictly limited to transfer-related expenses and capped at $100. Additionally, the bill lowers the voting threshold required to amend governing documents from a supermajority (67%) to a simple majority, making it easier for associations to update their rules.

Scope change

The bill expands the scope of homeowners' association oversight by introducing a new state office for dispute resolution and applies new restrictions to transfer fees and amendment voting requirements for all associations covered under the relevant chapters of the Utah Code.

REQUIREMENT

Establishes a new Office of the Homeowners' Association Ombudsman to analyze complaints and issue non-binding advisory opinions on whether an association's actions violate the law.

Clarifies that declarants cannot sell common areas during the period of administrative control, with specific exceptions for certain legal processes.

ENFORCEMENT

Changes the voting requirement to amend governing documents from 67% to a simple majority, allowing associations to update rules more easily.

ELIGIBILITY

Makes transfer fees imposed on or after May 7, 2025, void and unenforceable unless the fee is used only for transfer expenses and does not exceed $100.

Substitute #4 → Substitute #5 · 10 edits

MAJOR

This bill expands and clarifies regulations for homeowners' associations in Utah by creating a new Office of the Homeowners' Association Ombudsman to provide advisory opinions on disputes, updating rules on transfer and reinvestment fees, and strengthening transparency requirements for record access and document production. The changes aim to protect homeowners from unfair fees, improve access to association records, and establish a neutral third party to help resolve disputes before litigation.

Scope change

The bill's scope expanded to include additional Utah Code sections not previously amended, including new provisions for lot owner associations and additional sections related to wildfire safety and declarant conduct during administrative control periods.

REQUIREMENT

Created a new Office of the Homeowners' Association Ombudsman to issue non-binding advisory opinions on statutory compliance, with provisions for fee waivers and penalties for frivolous requests.

Increased the late fee cap from $50 to $100 for homeowners' associations and updated the interest rate cap to 1.5% per month.

Added requirements for associations to notify owners in writing when denying unit or lot plans, particularly regarding fire-resistant materials in wildfire-prone areas.

Prohibited declarants from using association funds in legal actions brought by homeowners during the administrative control period.

Increased the penalty for associations failing to provide requested documents from $25 to $50 per day of noncompliance.

Restricted associations from charging costs for electronic transmission of documents, eliminating fees for email delivery of records.

Updated governing document amendment requirements to prohibit supermajority voting thresholds exceeding 67% and eliminate requirements for specific unit owner approvals.

Added new sections addressing wildfire safety planning restrictions and declarant conduct requirements during administrative control periods.

Expanded registration requirements for associations to include additional contact information and updated renewal procedures.

TIMELINE

Set the repeal date for the Office of the Homeowners' Association Ombudsman at July 1, 2030, requiring legislative review before repeal.

Substitute #3 → Substitute #4 · 8 edits

MODERATE

This bill creates a new Office of the Homeowners' Association Ombudsman to provide free legal guidance to homeowners on disputes with their associations, establishes stricter rules on transfer and reinvestment fees, limits late fees, and requires associations to register with the Department of Commerce. The bill also clarifies how associations can sell common areas and amend their governing documents.

Scope change

New scope: Creates a new state office (Office of the Homeowners' Association Ombudsman) that did not previously exist. Existing scope remains for fee limits, registration requirements, and document access rules.

REQUIREMENT

Establishes a new Office of the Homeowners' Association Ombudsman to provide free advisory opinions on legal disputes between homeowners and associations.

Requires homeowners' associations to register annually with the Department of Commerce and pay a registration fee.

Reduces maximum late fees from the greater of 10% or $50 to the lesser of 10% or $50.

Requires associations to provide certain financial documents to owners free of charge via website or physical copies.

Prohibits associations from charging fees for producing requested documents.

Clarifies rules on when associations can sell common areas and amend governing documents.

TIMELINE

Sets May 7, 2025 as the effective date for the new provisions.

Establishes July 1, 2030 as the repeal date for the new Ombudsman office.

Substitute #2 → Substitute #3 · 8 edits

MODERATE

This bill modifies the Office of the Homeowners' Association Ombudsman by removing requirements for the office to issue advisory opinions and adding a repeal date for the office, while simultaneously strengthening protections for homeowners' associations by limiting late fees, clarifying transfer and reinvestment fee rules, and expanding record-keeping requirements. The changes aim to reduce administrative burdens on associations while maintaining consumer protections through clearer fee structures and documentation access.

Scope change

The bill's scope was narrowed by removing the Office of the Homeowners' Association Ombudsman's advisory opinion function and adding a repeal mechanism, while expanding applicability to include more detailed record-keeping and fee limitations for all homeowners' associations.

REQUIREMENT

Removed the requirement for the Office of the Homeowners' Association Ombudsman to issue advisory opinions on homeowners' association disputes, eliminating a formal dispute resolution mechanism.

Changed late fee limits from the greater of 10% or $50 to the lesser of 10% or $50, reducing potential late fee amounts for homeowners' associations.

Expanded record-keeping requirements to include board meeting minutes from the previous three calendar years and profit and loss statements for the previous three fiscal years.

Added requirements prohibiting homeowners' associations from charging costs associated with producing documents requested by owners.

TIMELINE

Added a repeal date for the Office of the Homeowners' Association Ombudsman, requiring legislative review before the office is fully eliminated.

DEFINITION

Updated definitions of transfer fees and reinvestment fees to clarify what expenses qualify as association expenses and how fees must be used.

ELIGIBILITY

Modified rules for amending governing documents to allow amendments with majority votes (51% attendance) rather than supermajority votes (67%) in most cases.

FISCAL

Changed registration fee language to allow the Department of Commerce to set fees rather than limiting them to a specific amount.

Substitute #1 → Substitute #2 · 10 edits

MAJOR

This bill adds a new Office of the Homeowners' Association Ombudsman to help resolve disputes between homeowners and their associations, clarifies rules about transfer and reinvestment fees, and expands document access requirements for homeowners. The changes aim to increase transparency, reduce unfair fees, and provide an independent resource for homeowners facing association disputes.

Scope change

The bill expands applicability by adding new sections for the Ombudsman office and modifying requirements for both lot owners (HOAs) and unit owners (condominiums). It also adds a new Utah Code section 57-8a-105 to the list of affected sections.

REQUIREMENT

Created a new Office of the Homeowners' Association Ombudsman within the Department of Commerce to provide advisory opinions on unlawful conduct by homeowners' associations.

Established a $150 filing fee for requesting advisory opinions from the Ombudsman office, with possible fee waivers for financially unable individuals.

Changed the voting threshold for amending governing documents from requiring more than 67% approval to requiring only a majority of voting interests.

Added new requirements for associations to provide certain documents online free of charge if they have an active website.

Prohibits associations from charging costs associated with producing documents requested by homeowners.

Added new highlighted provision authorizing the Department of Commerce to set and impose an annual registration fee on homeowners' associations.

Added new highlighted provision requiring homeowners' associations to renew their registration annually.

DEFINITION

Added Section 57-8a-105 to the list of Utah Code sections affected by this bill.

TECHNICAL

Changed Senate Sponsor line from 'LONG TITLE' to blank in the new version.

Reformatted the bill text with different numbering and spacing conventions.

Homeowners' Association Amendments

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