Utah Code 57-8-7.5. Reserve analysis — Reserve fund
Current as of: 2024 | Check for updates
|
Other versions
(1) As used in this section:
Terms Used In Utah Code 57-8-7.5
- association: means all of the unit owners:(2)(a) acting as a group in accordance with the declaration and bylaws; or(2)(b) organized as a legal entity in accordance with the declaration. See Utah Code 57-8-3
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Condominium: means the ownership of a single unit in a multiunit project together with an undivided interest in common in the common areas and facilities of the property. See Utah Code 57-8-3
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Declarant: means all persons who execute the declaration or on whose behalf the declaration is executed. See Utah Code 57-8-3
- Declaration: means the instrument by which the property is submitted to the provisions of this act, as it from time to time may be lawfully amended. 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
- Period of administrative control: means the period of control described in Subsection
Utah Code 57-8-3 - Person: means an individual, corporation, partnership, association, trustee, or other legal entity. See Utah Code 57-8-3
- Property: means the land, whether leasehold or in fee simple, the building, if any, all improvements and structures thereon, all easements, rights, and appurtenances belonging thereto, and all articles of personal property intended for use in connection therewith. 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
- Veto: The procedure established under the Constitution by which the President/Governor refuses to approve a bill or joint resolution and thus prevents its enactment into law. A regular veto occurs when the President/Governor returns the legislation to the house in which it originated. The President/Governor usually returns a vetoed bill with a message indicating his reasons for rejecting the measure. In Congress, the veto can be overridden only by a two-thirds vote in both the Senate and the House.
(1)(a) “Reserve analysis” means an analysis to determine:(1)(a)(i) the need for a reserve fund to accumulate reserve funds; and(1)(a)(ii) the appropriate amount of any reserve fund.(1)(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.(1)(c) “Reserve funds” means money to cover:(1)(c)(i) 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; or(1)(c)(ii) a shortfall in the general budget, if:(1)(c)(ii)(A) the shortfall occurs while a state of emergency declared in accordance with Section 53-2a-206 is in effect;(1)(c)(ii)(B) the geographic area for which the state of emergency described in Subsection (1)(c)(ii)(A) is declared extends to the entire state; and(1)(c)(ii)(C) at the time the money is spent, more than 10% of unit owners that are not members of the management committee in the association are delinquent in the payment of assessments as a result of events giving rise to the state of emergency described in Subsection (1)(c)(ii)(A).
(2) Except as otherwise provided in the declaration, a management committee shall:
(2)(a) cause a reserve analysis to be conducted no less frequently than every six years; and
(2)(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:
(4)(a) a list of the components identified in the reserve analysis that will reasonably require reserve funds;
(4)(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;
(4)(c) an estimate of the cost to repair, replace, or restore each component identified in the reserve analysis;
(4)(d) an estimate of the total annual contribution to a reserve fund necessary:
(4)(d)(i) 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
(4)(d)(ii) to prepare for a shortfall in the general budget that the association or management committee may use reserve funds to cover; and
(4)(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:
(5)(a) annually provide unit owners a summary of the most recent reserve analysis or update; and
(5)(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:
(6)(a) an amount the management committee determines, based on the reserve analysis, to be prudent; or
(6)(b) an amount required by the declaration, if the declaration requires an amount higher than the amount determined under Subsection (6)(a).
(7)
(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.
(7)(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)
(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:
(8)(a)(i) injunctive relief requiring the association of unit owners to comply with the requirements of Subsection (5), (6), or (7);
(8)(a)(ii) $500 or actual damages, whichever is greater;
(8)(a)(iii) any other remedy provided by law; and
(8)(a)(iv) reasonable costs and attorney fees.
(8)(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.
(8)(c) A notice under Subsection (8)(b) shall state:
(8)(c)(i) the requirement in Subsection (5), (6), or (7) with which the association of unit owners has failed to comply;
(8)(c)(ii) a demand that the association of unit owners come into compliance with the requirements; and
(8)(c)(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.
(8)(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)
(9)(a) A management committee may not use money in a reserve fund for any purpose other than the purpose for which the reserve fund was established, unless a majority of the members of the association of unit owners vote to approve the use of reserve fund money for that purpose.
(9)(b)
(9)(b)(i) A management committee may not use money in a reserve fund for daily maintenance expenses, unless:
(9)(b)(i)(A) a majority of the members of the association of unit owners vote to approve the use of reserve fund money for daily maintenance expenses; or
(9)(b)(i)(B) there exists in the general budget a shortfall that the management committee may use reserve funds to cover.
(9)(b)(ii) Members of the association of unit owners may prohibit the use of reserve fund money for daily maintenance expenses under the circumstances described in Subsection (9)(b)(i)(B) by a 51% vote of the allocated voting interest in the association of unit owners at a special meeting:
(9)(b)(ii)(A) for which each unit owner receives at least 48 hours notice; and
(9)(b)(ii)(B) the unit owners call for the purpose of voting whether to prohibit the use of reserve fund money for daily maintenance expenses under the circumstances described in Subsection (9)(b)(i)(B).
(9)(c) A management committee shall maintain a reserve fund separate from other funds of the association of unit owners.
(9)(d) This Subsection (9) may not be construed to:
(9)(d)(i) limit a management committee from prudently investing money in a reserve fund, subject to any investment constraints imposed by the declaration;
(9)(d)(ii) excuse an association from the requirements described in Section 57-8-58; or
(9)(d)(iii) permit the use of money in a reserve fund for a legal action described in Section 57-8-58.
(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:
(11)(a) a copy of the association of unit owners’ governing documents; and
(11)(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.