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57-8-7.5 (Superseded 07/01/14). 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 money to cover the cost of repairing, replacing, or
restoring common areas and facilities 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 general budget or other funds of the association of unit owners; 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 of unit
owners that identifies the amount to be placed into a reserve fund.
(2) Except as otherwise provided in the declaration, a
management committee 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 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 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) Each year, an association of unit owners shall provide:
(a) a summary of the most
recent reserve analysis, including any updates, to each unit owner; and
(b) a complete copy of the most recent reserve
analysis, including any updates, to a unit owner upon request.
(6) (a) An association of unit owners 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 management committee,
based on the reserve analysis and the amount that the management committee
determines is prudent under the circumstances; or
(ii) the declaration, if the
declaration requires an amount greater than the amount determined under
Subsection (6)(b)(i).
(c) Within 45 days after the day on which an
association of unit owners adopts its 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.
(d) If the unit 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 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.
(7) (a) Subject to Subsection (7)(b), if an association of
unit owners 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 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) or (6);
(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 (7)(a), the unit owner shall
deliver written notice described in Subsection (7)(c) to the association of
unit owners.
(c) A notice described in Subsection (7)(b) shall
state:
(i) the requirement in
Subsection (5) or (6) 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 (7)(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.
(8) (a) A management committee may not use money
in a reserve fund:
(i) for daily maintenance
expenses, unless a majority of the members of the association of unit owners
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 management committee shall maintain a
reserve fund separate from other funds of the association of unit owners.
(c) This
Subsection (4) 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.
(9) Subsections (2), (3), (4), and (6) do not apply to an
association of unit owners during the period of declarant management.
(10) This section applies to each association of unit
owners, regardless of when the association of unit owners was created.
Enacted 2011. Amended 2012, ch. 83, ch. 369; 2013, ch. 152 (coordination clause), ch. 152, ch. 419.