Archive for the ‘Legislative News’ Category

Article by John Richards, LAC Secretary and attorney at Richards Law PC

What you need to know about new Utah Code 57-8a-701 – Solar Access in Community Associations (non-attached dwellings):
a. The law applies to “detached dwellings” which means a detached dwelling for which the association DOES NOT have an ownership interest in the detached dwelling roof.
b. Except for a limited circumstance described below, and only if expressly prohibited in your CC&Rs, a governing document (bylaws, rules, etc.) MAY NOT prohibit or restrict an owner of lot with a detached roof.
c. If language is contained in your CC&Rs here is the only “go forward” regulatory authority your HOA has with respect to solar panels or “solar energy systems:”
1. Your CC&Rs cannot impose a restriction that (based on location for example) decreases the solar energy system’s production of solar energy by 5% or less. (As you can see, this really means you can’t impose any meaningful restriction.)
2. Your CC&Rs cannot impose a restriction that would increase the solar energy system’s cost of installation by 5% or less.
3. However, you can by CC&R or a rule require that the solar energy system comply with applicable health, safety and building requirements, and if it is a solar energy system that is used to heat water, you can require that the system is certified by the Solar Rating and Certification Corporation; or a nationally recognized solar certification entity.

4. Finally, if the solar energy system is used to produce electricity, you can require that it complies with safety and performance standards established by (a) the National Electric Code; (b) the Institute of Electrical and Electronics Engineers; (c) Underwriters Laboratories; (d) an accredited electrical testing laboratory; or (e) the state or a political subdivision of the state.
5. Here are some aesthetic protections for the HOA: A CC&R or rule may be created for a solar energy system that is mounted on a roof as follows: (a) so it does not extend beyond the roof line; or (b) it can require that it has panel frame, support bracket, or visible piping or wiring that has a color or texture similar to the roof materials; or (c) if the solar energy system is mounted on the ground, you can make it so it is not visible from the street that front other lots (there are few more “things” an HOA can do such as review the application to install; and some unique rules applicable to indemnifying the HOA if such installation somehow causes a loss to the HOA but that is about it).
d. This new section 57-8a-701 will apply to an Association regardless of when the Declaration was recorded (this is what our legislative group fought hard to change and my hat is off to those that tried hard to make this part of the bill).
e. Strangely, the statute states that “this part does NOT apply to an express prohibition or an express restriction or solar energy installations if it was already in your CC&Rs and recorded before January 1, 2017; or created by official association action taken before January 1, 2017.” You’ll note that this date has already passed. I wonder how many CC&Rs already have a prohibition or restriction in the CC&Rs already – not many I would guess.
f. SO WHAT CAN YOU DO? – the statute does allow you to prohibit solar (that is, prohibit it in entirety – this is either an all or nothing proposition – you ban solar outright or you must allow it with very limited controls) but only if you vote to expressly prohibited solar energy installations by a 67% of your members – so you can amend to prohibit BUT THE CONCERN IS THAT BETWEEN THE TIME WHEN THIS LAW PASSES UNTIL YOU GET A VOTE, YOU WILL HAVE INSTALLATIONS THAT YOU ESSENTIALLY CANNOT STOP.
g. Like any amendment, an amendment to prohibit solar can be “undone” by an amendment to repeal the prohibition.
You will need to examine your community aesthetics, consistent look, uniform appeal, etc., to see how you might want to proceed. You may welcome solar, or you may want to control it – but to control you are going to have to act immediately. And unfortunately, despite our objections, the only real control is a complete prohibition.

 

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On the Hill

Tuesday, June 27, 2017 posted by Mindy Knudsen 1:58 PM

Article by Michael Johnson, CMCA, AMS, PCAM; LAC Chair and CEO at FCS Community Management AAMC.

On Thursday, March 9th – the last day of the 2017 Utah General Legislative Session – I was in a Seattle meeting room fulfilling my responsibilities as a member of the CAI National Faculty. As I flew out to Seattle the evening prior, I thought about the thousands of volunteer hours contributed by members of the Utah LAC and other industry partners and friends, throughout the previous 45-day legislative session. I would venture to say, more time at the Capitol during the session, than any other time in the history of LAC.

My classroom of new community managers attending the Seattle M-100 course had barely finished introductions when I noticed SB154 move up the board as it awaited its turn for its hearing in the House (having already sailed through the Senate on March 1st). I had previously told the students we would be getting some practical training of property rights, governing documents and roles and responsibilities of association boards and owners, by viewing the live stream of the SB154 debate. (A side note to thank our state government for providing live audio of committee hearings and live video streaming of senate and house floor debates.)

But before I get to the end of the story, let me tell you how we got to March 9th (and this is an example of the process for most controversial bills) . . .

Back in 2015, yes 2015, Representative Lowry Snow, St. George, began communicating with LAC member (St. George attorney) Bruce Jenkins about a solar bill for community associations. Unfortunately, the understanding of what kind of bill Representative Snow would introduce in the 2016 general session, did not match with the bill (HB 451) that was eventually introduced. Through committee testimony from a handful of LAC members, the 2016 bill died a quick death in the House Public Utilities, Energy, and Technology Committee. Our argument was simply the State of Utah should not interfere in the previously known contractual relationship provided in community associations through the CC&R’s. The committee agreed.

During 2016 there was casual conversation between the solar industry (as the bill is really more of a special interest bill than a property rights bill) and the community association industry. In May 2016, a solar town hall was held in the Salt Lake area and on November 2nd a solar town hall was held in St. George. The St. George event was very well attended and Representative Snow heard loud and clear from his constituents that they were not interested in the state government dictating solar policy that would override each community’s CC&R’s. As a result, Representative Snow dropped his sponsorship and Senator Fillmore (South Jordan) became the principle solar legislation sponsor.

Thank you Southern Utah for coming strong, with articulate and passionate objections to the bill – it made a difference!

Now let’s be honest, our objections to this bill were like my son’s third grade Bingham Youth Football team playing the Superbowl Champion New England Patriots. Solar access in community associations legislation was going to pass – the only question is what would it look like at the end. Our goal has always been to protect the previously agreed to contractual rights established by CC&R’s. Our objections have nothing to do with the solar industry.

If you look at only the end result, it looks like we lost but if you look at all the events leading up to the final vote, we had many victories:

  1. Southern Utah constituents coming out in force and forcing Representative Snow to drop sponsorship – WIN;
  2. Amending the original bill language to remove applicability to attached townhomes (and any association maintained roofs whether attached or not) – WIN;
  3. Stretching out the final debate until the last day of the 2017 legislature – WIN;
  4. The House of Representatives passionately debating all sides of the bill for an incredible 45 minutes on the last day of the 2017 legislature – WIN;
  5. Increasing our database of email addresses from less than 300 to over 30,000 – WIN; and
  6. Increasing the legislature’s knowledge of our industry, our principles and our industry’s voice represented by the Utah LAC – WIN!

 

Take 45 minutes and do what myself and my Seattle M-100 class did on March 9th, and watch the Utah House of Representatives debate the Solar Access bill – http://utahlegislature.granicus.com/MediaPlayer.php?clip_id=21569&meta_id=694727 (doesn’t work in Chrome). While you may be disappointed in some of the absolute untruths told and believed by some misinformed representatives, in the end I hope you are like me, and take pride in having given every possible last ounce of effort in championing your cause and being an active participate in democracy.

 

I hope you enjoy this Legislative Issue of Utah Community Living and thanks to all those who contributed summaries of this year’s association-related bills.

 

We are actively working to enlarge our “tent” to obtain your comments, thoughts, ideas, concerns, questions and/or interests in current and future association-related legislation. Town Halls have been held in the past month in St. George and the Salt Lake area. If you were not able to attend and would like to share any of the above with us, please email me directly at michael.johnson@hoaliving.com. 

 

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HB253: Short-term Rental Amendments

Tuesday, June 27, 2017 posted by Mindy Knudsen 1:54 PM

Article by LaMond Woods, LAC member and Senior Partner at SentryWest Insurance.

“This bill prevents a political subdivision from prohibiting the use of a short-term rental website.”

Some cities and towns currently restrict or ban short-term rentals – renting out your home, or a portion thereof, for fewer that 30 days. In some instances a method of enforcement has been to identify possible offenders by referencing websites like Airbnb and VRBO (Vacation Rental By Owner). When identified on a website the city or town might then issue a warning or citation to the property owner.

H.B. 253 prohibits this method of enforcement. The bill further states that a legislative body may not: (a) enact or enforce an ordinance that prohibits an individual from listing a short-term rental on a website; or (b) use a rental website in combination with an ordinance to fine, charge, prosecute, or otherwise punish an individual solely for the act of listing a short-term rental on a short-term rental website.

This legislation passed through both bodies of the legislature with little to no opposition.  In a committee hearing the director of government relations for the League of Cities and Towns testified in favor of the legislation stating “the sharing economy is here to stay and that we anticipate this dialogue will continue.”

This legislation is aimed directly at cities and towns attempting to regulate short-term rentals. No mention of community associations is contained in the bill.

http://le.utah.gov/~2017/bills/hbillenr/HB0253.pdf

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HB243: Transfer of Common Property

Tuesday, June 27, 2017 posted by Mindy Knudsen 1:47 PM

Article by Bruce Jenkins, LAC Chair of Legislative Analysis and attorney at Jenkins Bagley PLLC.

For decades the Utah Land Use Development and Management Act, Utah Code 10-9a-606 and 17-27a-606 (“LUDMA”), has been inconsistent with the common practice of non-condominium associations owning the common area.  Until the passage of HB243, LUDMA ostensibly prevented a non-condominium homeowner association (a planned development) from owning the common area.  Moreover, LUDMA has been at odds with the Uniform Common Interest Ownership Act (“UCIOA”) on this point.  Fortunately, with the assistance and cooperation of Curt Webb of the House of Representative and Jodi Hoffman, attorney for the Utah League of Cities and Towns, LAC was finally able to fix the problems with LUDMA and bring Utah Law in line with the common practice of having non-condominium homeowner associations own the common property within the association.

The prior problem with LUDMA stemmed from the following requirements:

Utah Code 10-9a-606/17-271-606:  (1) (a) A parcel designated as a common or community area on a plat recorded . . . may not be separately owned or conveyed independent of the other lots, units, or parcels created by the plat map unless: (1) the parcel is being acquired by a municipality or governmental purpose and (2) the conveyance is approved by the owners of at least 75% of the lots, units, or parcels on the plat, after the municipality gives approval.  (Emphasis added).

Few declarations (CC&Rs) for non-condominium homeowner associations provide for the common property of the association to be owned as a part of the title of the individual lots in joint tenancy.  Rather, the declarations provide that the common area is to be owned by the association.  The owners then have rights to the common area as members of the homeowner association.  This is consistent with UCIOA which, in the committee notes, makes it clear that in planned communities it is the association, not the lot owners, that own the common area. (UCIOA committee note: the definition of “condominium” “[in UCIOA] makes clear that, unless the real estate title to the common elements is vested in the owners of the units, the project is not a condominium. Thus, for example, if the title to a common element is in an association in which each unit owner is a member, a project is not a condominium, but a planned community.”) LUDMA was directly contrary to this and required that, even in planned communities, the common elements are to be owned by the unit members.

The problems with LUDMA were real and not just theoretical. A few years ago the author of this article had a county recorder, citing LUDMA, attempt to reject an amendment to a planned community’s plat map until the association obtained from the original developer a rescission of the deed that conveyed the common areas to the association. Fortunately, the recorder relented and did not require the rescission deed before allowing the plat to be amended.

LUDMA also contained the additional problem of requiring that any transfer of common area must only be to a municipality.  If, for example, a condominium or non-condominium homeowner association wanted to sell a parcel of common area which was “landlocked” and not accessible to all unit owners, the association could not convey that common area to a third-party or to a unit owner who might be able to benefit from the property. Instead, the common area could only be transferred to the local municipality. This problem has now been resolved with the amendments to LUDMA. Under HB 243 an association can now convey a parcel of common area to a third-party or a member of the association upon: (i) the affirmative vote of 67% of the voting interest of the association, (ii) the approval of the local governmental authority, and, (iii) during the period of declarant control, the declarant.

It is fortunate that Utah now treats the ownership of common area by a non-condominium association in a way that is consistent with UCIOA, common practice, and the rest of the country.

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Article by Michael Miller, LAC Vice Chair of Legislative Analysis and attorney at Miller Harrison LLC.

The Utah Legislature has finally established a hierarchy for governing documents for non-condominium associations.  In addition, the hierarchy that was established for condominium associations back in 2008 has been modified to better reflect industry standards.  As set forth in HB 201, the hierarchy of governing documents for all Utah homeowner and condominium associations is as follows:

  1. Condo Act (for condos) or Community Association Act (for non-condos);
  2. Utah Revised Nonprofit Corporation Act (for incorporated associations);
  3. Declaration and Plat (to be construed together);
  4. Articles of Incorporation;
  5. Bylaws; and
  6. Rules and Regulations.

In addition, this bill allows an association board to incorporate the association when the governing documents “permit, require, or acknowledge” incorporation.  The most common scenarios are: (1) the situation where the developer forgets to incorporate the association even though the Declaration and/or Bylaws refer to the association as a nonprofit corporate entity; or (2) the corporate status of the association has expired with the State for failing to be renewed.  Under these most common scenarios, the association board would be able to incorporate (or reincorporate) the association.  However, in so doing, the Articles of Incorporation that are filed with the State must not contradict the other governing documents having priority over the Articles of Incorporation.  This bill should have a positive effect on Utah community associations.

 

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