Condominium Ownership Act
Utah Code Title 57, Chapter 8
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The below is not updated with new changes to the law after 2018!
57-8-7.5. Reserve
analysis -- Reserve fund.
(1) As used in this section:
(a)
"Reserve analysis" means an analysis to determine:
(i) the need for a reserve
fund to accumulate reserve funds; and
(ii)
the appropriate amount of any reserve fund.
(b) "Reserve fund line
item" means the line item in an association of unit owners' annual budget
that identifies the amount to be placed into a reserve fund.
(c) "Reserve funds" means money
to cover the cost of repairing, replacing, or restoring common areas and
facilities that have a useful life of three years or more and a remaining
useful life of less than 30 years, if the cost cannot reasonably be funded from
the general budget or other funds of the association of unit owners.
(2) Except as otherwise provided in the declaration, a
management committee shall:
(a) cause a reserve analysis to be conducted no
less frequently than every six years; and
(b) review and, if necessary, update a previously
conducted reserve analysis no less frequently than every three years.
(3) The management committee may conduct a reserve analysis
itself or may engage a reliable person or organization, as determined by the
management committee, to conduct the reserve analysis.
(4) A reserve fund analysis shall include:
(a) a list of
the components identified in the reserve analysis that will reasonably require
reserve funds;
(b) a statement of the probable remaining useful
life, as of the date of the reserve analysis, of each component identified in
the reserve analysis;
(c) an estimate of the cost to repair, replace,
or restore each component identified in the reserve analysis;
(d) an estimate of the total annual contribution
to a reserve fund necessary to meet the cost to repair, replace, or restore
each component identified in the reserve analysis during the component's useful
life and at the end of the component's useful life; and
(e) a reserve funding plan that recommends how
the association of unit owners may fund the annual contribution described in
Subsection (4)(d).
(5) An association of unit owners shall:
(a) annually
provide unit owners a summary of the most recent reserve analysis or update;
and
(b) provide a copy of the complete reserve
analysis or update to a unit owner who requests a copy.
(6) In formulating the association of unit owners' budget each year, an association of
unit owners shall include a reserve fund line item in:
(a) an amount the management committee
determines, based on the reserve analysis, to be prudent; or
(b) an amount required by the declaration, if the
declaration requires an amount higher than the amount determined under Subsection
(6)(a).
(7) (a) Within 45 days after the day on which an association of unit owners adopts the association of unit owners' annual budget, the unit owners may veto the reserve fund line item by a 51% vote of the allocated voting interests in the association of unit owners at a special meeting called by the unit owners for the purpose of voting whether to veto a reserve fund line item.
(b) If the unit owners veto a reserve fund line
item under Subsection (7)(a) and a reserve fund line item exists in a previously
approved annual budget of the association of unit owners that was not vetoed,
the association of unit owners shall fund the reserve account in accordance
with that prior reserve fund line item.
(8) (a) Subject to Subsection (8)(b), if an association of
unit owners does not comply with the requirements of Subsection (5), (6), or
(7) and fails to remedy the noncompliance within the time specified in
Subsection (8)(c), a unit owner may file an action in state court for:
(i) injunctive relief
requiring the association of unit owners to comply with the requirements of
Subsection (5), (6), or (7);
(ii) $500 or actual damages,
whichever is greater;
(iii) any other remedy
provided by law; and
(iv) reasonable costs and
attorney fees.
(b) No fewer than 90 days before the day on which
a unit owner files a complaint under Subsection (8)(a), the unit owner shall
deliver written notice described in Subsection (8)(c) to the association of
unit owners.
(c) A notice under Subsection (8)(b) shall state:
(i) the requirement in
Subsection (5), (6), or (7) with which the association of unit owners has
failed to comply;
(ii) a demand that the
association of unit owners come into compliance with the requirements; and
(iii) a date, no fewer than 90
days after the day on which the unit owner delivers the notice, by which the
association of unit owners shall remedy its noncompliance.
(d) In a case filed under Subsection (8)(a), a
court may order an association of unit owners to produce the summary of the
reserve analysis or the complete reserve analysis on an expedited basis and at
the association of unit owners' expense.
(9) (a) Unless a majority of the members of the association of unit owners vote to approve the use of reserve fund money for that purpose, a management committee may not use money in a reserve fund:
(i) for daily maintenance expenses; or
(ii) for any purpose other
than the purpose for which the reserve fund was established.
(b) A management
committee shall maintain a reserve fund separate from other funds of the
association of unit owners.
(c) This Subsection (9) may not be construed to
limit a management committee from prudently investing money in a reserve fund,
subject to any investment constraints imposed by the declaration.
(10) Subsections (2) through (9) do not apply to an
association of unit owners during the period of administrative control.
(11) For a condominium project whose initial declaration is
recorded on or after May 12, 2015, during the period of administrative control,
for any property that the declarant sells to a third party, the declarant shall
give the third party:
(a) a copy of the association of
unit owners' governing documents; and
(b) a copy of the association of
unit owners' most recent financial statement that includes any reserve funds
held by the association of unit owners or by a subsidiary of the association of
unit owners.
(12) Except as
otherwise provided in this section, this section applies to each association of
unit owners, regardless of when the association of unit owners was created.
Enacted 2010, ch. 46, eff. May 11, 2010. Amended 2011, ch. 134, eff. May 10, 2011; 2012, ch. 83, ch. 369