(1)  An association may not, after the period of declarant control, bring a legal action against a declarant, a management committee, or an employee, an independent contractor, or an agent of the declarant or the management committee related to the period of declarant control unless:

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Terms Used In Utah Code 57-8-58

  • Assessment: means any charge imposed by the association, including:
(a) common expenses on or against a unit owner pursuant to the provisions of the declaration, bylaws, or this chapter; and
(b) an amount that an association of unit owners assesses to a unit owner under Subsection 57-8-43(9)(g). See Utah Code 57-8-3
  • association: means all of the unit owners:
    (a) acting as a group in accordance with the declaration and bylaws; or
    (b) organized as a legal entity in accordance with the declaration. See Utah Code 57-8-3
  • Declarant: means all persons who execute the declaration or on whose behalf the declaration is executed. See Utah Code 57-8-3
  • Management committee: means the committee as provided in the declaration charged with and having the responsibility and authority to make and to enforce all of the reasonable rules covering the operation and maintenance of the property. See Utah Code 57-8-3
  • Person: means an individual, corporation, partnership, association, trustee, or other legal entity. See Utah Code 57-8-3
  • State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
  • Unit: includes one or more rooms or spaces located in one or more floors or a portion of a floor in a building. See Utah Code 57-8-3
  • Unit owner: means the person or persons owning a unit in fee simple and an undivided interest in the fee simple estate of the common areas and facilities in the percentage specified and established in the declaration or, in the case of a leasehold condominium project, the person or persons whose leasehold interest or interests in the condominium unit extend for the entire balance of the unexpired term or terms. See Utah Code 57-8-3
    • (a)  the legal action is approved in advance at a meeting where owners of at least 51% in aggregate in interest of the undivided ownership of the common areas and facilities are:

    (i)  present; or

    (ii)  represented by a proxy specifically assigned for the purpose of voting to approve or deny the legal action at the meeting;

    (b)  the legal action is approved by vote in person or by proxy of owners of the lesser of:

    (i)  more than 75% in aggregate in interest of the total aggregate interest of the undivided ownership of the common areas and facilities represented by those owners present at the meeting or represented by a proxy as described in Subsection (1)(a); or

    (ii)  more than 51% in aggregate in interest of the undivided ownership of the common areas and facilities;

    (c)  the association provides each unit owner with the items described in Subsection (2);

    (d)  the association establishes the trust described in Subsection (3); and

    (e)  the association first:

    (i)  notifies the person subject to the proposed action of the action and the basis of the association’s claim; and

    (ii)  gives the person subject to the proposed action a reasonable opportunity to resolve the dispute that is the basis of the action.

    • (2)  Before unit owners in an association may vote to approve an action described in Subsection (1), the association shall provide each unit owner:

    (a)  a written notice that the association is contemplating legal action; and

    (b)  after the association consults with an attorney licensed to practice in the state, a written assessment of:

    (i)  the likelihood that the legal action will succeed;

    (ii)  the likely amount in controversy in the legal action;

    (iii)  the likely cost of resolving the legal action to the association’s satisfaction; and

    (iv)  the likely effect the legal action will have on a unit owner’s or prospective unit buyer’s ability to obtain financing for a unit while the legal action is pending.

    (3)  Before the association commences a legal action described in Subsection (1), the association shall:

    (a)  allocate an amount equal to 10% of the cost estimated to resolve the legal action, not including attorney fees; and

    (b)  place the amount described in Subsection (3)(a) in a trust that the association may only use to pay the costs to resolve the legal action.

    (4)  This section does not apply to an association that brings a legal action that has an amount in controversy of less than $75,000.

    Enacted by Chapter 284, 2017 General Session

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