This is a historical version of this section. See bottom of page for effective date.
57-8a-211 (Superseded 07/01/14). Reserve analysis -- Reserve fund.
(1) As used in this section:
analysis" means an analysis to determine:
(i) the need for a reserve fund to accumulate money to cover the cost of repairing, replacing, or restoring common areas that have a useful life of no fewer than three years but less than 30 years, when the cost cannot reasonably be funded from the association's general budget or from other association funds; and
(ii) the appropriate amount of any reserve fund.
(b) "Reserve fund line item" means a line item in the annual budget of an association that identifies the amount to be placed into a reserve fund.
(2) Except as otherwise provided in the governing documents, a board shall:
(a) (i) subject
to Subsection (2)(a)(ii), cause a reserve analysis to be conducted no less
frequently than every six years; and
(ii) if no reserve analysis has been conducted since March 1, 2008, cause a reserve analysis to be conducted before July 1, 2012; and
(b) review and, if necessary, update a previously conducted reserve analysis no less frequently than every three years.
(3) The board may conduct a reserve analysis itself or may engage a reliable person or organization, as determined by the board, to conduct the reserve analysis.
(4) A reserve analysis shall include:
(a) a list of the
components identified in the reserve analysis that will reasonably require
(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 may fund the annual contribution described in Subsection (4)(d).
(5) Each year, an association shall provide:
(a) a summary of
the most recent reserve analysis, including any updates, to each lot owner; and
(b) a complete copy of the most recent reserve analysis, including any updates, to a lot owner upon request.
(6) (a) An association shall include a reserve fund line
item in its annual budget.
(b) The amount of the reserve fund line item shall be determined by:
(i) the board, based on the reserve analysis and the amount that the board determines is prudent under the circumstances; or
(ii) the governing documents, if the governing documents require an amount greater than the amount determined under Subsection (6)(b)(i).
(c) Within 45 days after the day on which an association adopts its annual budget, the lot owners may veto the reserve fund line item by a 51% vote of the allocated voting interests in the association at a special meeting called by the lot owners for the purpose of voting whether to veto a reserve fund line item.
(d) If the lot owners veto a reserve fund line item under Subsection (6)(c) and a reserve fund line item exists in a previously approved annual budget of the association that was not vetoed, the association shall fund the reserve account in accordance with that prior reserve fund line item.
(7) (a) Subject to Subsection (7)(b), if an association does
not comply with the requirements described in Subsection (5) or (6) and fails
to remedy the noncompliance within the time specified in Subsection (7)(c), a
lot owner may file an action in state court for:
(i) injunctive relief requiring the association to comply with the requirements of Subsection (5) or (6);
(ii) $500 or the lot owner's 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 lot owner files a complaint under Subsection (7)(a), the lot owner shall deliver written notice described in Subsection (7)(c) to the association.
(c) A notice described in Subsection (7)(b) shall state:
(i) the requirement in Subsection (5) or (6) with which the association has failed to comply;
(ii) a demand that the association come into compliance with the requirements; and
(iii) a date, no fewer than 90 days after the day on which a lot owner delivers the notice, by which the association shall remedy its noncompliance.
(d) In a case filed under Subsection (7)(a), a court may summarily order an association to produce the summary of the reserve analysis or the complete reserve analysis on an expedited basis and at the association's expense.
(8) (a) A board may not use money in a reserve fund:
(i) for daily maintenance expenses, unless a majority of association members vote to approve the use of reserve fund money for that purpose; or
(ii) for any purpose other than the purpose for which the reserve fund was established.
(b) A board shall maintain a reserve fund separate from other association funds.
(c) This Subsection (4) may not be construed to limit a board from prudently investing money in a reserve fund, subject to any investment constraints imposed by the governing documents.
(9) Subsections (2), (3), (4), and (6) do not apply to an association during the period of administrative control.
(10) This section applies to each association, regardless of when the association was created.
Enacted 2010, ch. 46, eff. May 11, 2010. Amended 2011, ch. 134, eff. May 10, 2011; 2012, ch's. 83, 369, eff. May 8, 2012; 2013, ch. 419, eff. May 14, 2013; 2014, ch. 189, 2014.