Archive for the ‘ULAC News’ Category
Utah Common Ownership Interest Act – UCIOA / SB 182
(Introduction and Summary)
The purpose of UCIOA is to deal, in a single act, with all forms of residential common interest ownership: (i) condominiums; (ii) planned communities; and (iii) cooperatives. Collectively, these three forms of common ownership communities are referred to as “Common Interest Communities,” or more commonly “HOA’s.” Though they differ in how the owner hold “title” to an interest in real property, all three Common Interest Communities share commonalities in their creation and governance. And all have common or interdependent relationships necessary for the operation of the project and are best dealt with under a single act, rather than multiple acts. Even this session, problems in dealing with multiple acts for Common Interest Communities have been highlighted in SB161, HB 280 and HB 181.
Utah’s UCIOA is modeled after the Uniform Common Interest Ownership Act (developed by a multi-discipline national laws committee, including a representative from Utah) and draws significantly from the best of the Utah Condominium Ownership Act (the “Condominium Act”) and the Utah Community Association Act (the “Association Act”), both of which UCIOA will replace. Additionally, for the first time in Utah, UCIOA addresses the cooperative form of “real property” ownership. Through the drafting process care has been taken, where appropriate, to deal separately with condominiums, planned communities and cooperatives.
As an omnibus bill, UCIOA has been part of a four year drafting and vetting process, the last two years involving representatives from the HOA, home building, development, realtor, apartment association and insurance industries regularly participating in joint drafting meetings nearly every second or third month. Representatives from the timeshare industry and other industries have also participated.
The intent of UCIOA is three fold: (i) to provide a common language (definitions) for all involved with Common Interest Communities, (ii) to provide for the orderly creation of all Common Interest Communities through Declarations (CC&Rs), Plat Maps and other governing documents – in large part UCIOA has adapted to all Common Interest Communities the well established and prudent procedure for establishing condominiums through CC&Rs, Plats,etc. embodied in the current Condo Act; and (iii) to provide governance standards for Common Interest Communities, including (a) collection of common expense assessments, (b) reserve funding (optional), (c) uniformity in insurance, and (d) consistency in rulemaking.
UICOA does this while preserving the right to contract by allowing developers the right to include in CC&Rs special development rights and restrictions important to the character of the community.
CAI Utah LAC takes position on Transfer Fees
Community Association Institute Utah Legislative Action Committee
CAI ULAC
February 9, 2010
“Transfer Fee” Position Statement
The CAI ULAC (Community Association Institute Utah Legislative Action Committee) has considered the “transfer fee” issue and takes the following position.
The Issue
A few developers and/or owners of property are recording documents on the title to real property that require payments by future owners to either the party recording the document or a third party. These payments are triggered upon any sale or transfer of the home, in perpetuity. This practice is problematic because (1) as people take title to the home, they may not be provided with full disclosure regarding these future obligations; (2) this causes a potentially permanent reduction in the value of the property to the current and future owners either through the direct effect of the payment or through the threat of litigation and legal entanglements arising from the obligation; (3) the recorded document could negatively impact and/or restrain the future transfer of the property for purposes other than existing uses; and (4) this causes what is perceived to be a generally unfair and unreasonable burden on existing and future owners.
The CAI ULAC Position.
The CAI ULAC takes the position the particular practice described above should be outlawed because it is unfair, unreasonable, and contrary to the long term best interests of both individual owners and community associations.
Concerns Related to Potential Legislation on this Issue
The CAI ULAC is concerned that legislation aimed at solving the problem could inadvertently affect community associations (condominiums / PUDs) by outlawing appropriate administrative set-up charges. In addition, it could inadvertently, and without full consideration, impact or outlaw other fees that are required to be paid by owners in community associations.
The following is a description of certain types of charges and fees payable upon a transfer of a home along with CAI ULAC’s position on each type of charge:
(1) An administrative Set-up Charge payable upon any transfer of a home in a community association, that is payable to the association and is to compensate the association for real costs associated with the transfer, such as bookkeeping updates and changes, FHA and other lender and guarantor information and compliance requests, management charges, and producing and distributing welcome packets.
CAI ULAC’s Position. The CAI ULAC supports this type of administrative Set-up Charge and believes that any legislation should not prevent this type of charge. The transfer of a home does impose actual administrative costs on an association that can and should be compensated for by the Owners of the home that is being transferred.
(2) Fees payable only upon the first transfer of the home in a community association, that are payable to the association for whatever purpose (reserves, operations, etc).
CAI ULAC’s Position. The CAI ULAC supports this type of charge and believes that any legislation should not prevent this type of charge. This type of charge is equally shared by all owners, is arguably born by the original developer or declarant of the community association, and is generally viewed as a good way to fund either reserves or operations in the early stages of a community association.
(3) Fees payable upon any transfer of a home in a community association, that are payable to the association, for any purpose other than to compensate the association for administrative charges associated with the transfer of the home. Such fees might be to supplement reserves, for specific operational expenses, or for general unspecified operations.
CAI ULAC’s Position. The CAI ULAC takes no position on this type of fee. There are competing policy concerns, some of which weigh in favor of permitting these types of fees and some of which weigh in favor of outlawing these types of fees. The CAI ULAC takes no position on this issue and leaves to its members, members of CAI, and other industry representatives to advocate any position on their own behalf.
John Morris, Esq. Chairman CAI ULAC
JMorris@mbt-law.com
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2009-2010 Annual Reorganization
At our August 20 meeting, the following were elected to serve as leaders, effective September 1.
Chair – John Morris, Esq. McKay Burton & Thurman
Vice Chair – Bruce Jenkins, Esq., Jenkins, Ronnow, Jensen & Bayles
Secretary – Michael Miller, Esq., Vial Fotheringham
Treasurer – Michael Johnson, CEO FCS Community Management
Funding Chair – Marla Mott-Smith Bowers, Terrace Falls HOA
Funding Vice Chair – Jerry Jensen, CEO Community Association Management
Chair Legislative Analysis & Drafting – Bruce Jenkins, Esq., Jenkins, Ronnow, Jensen & Bayles
Vice Chair Legislative Analysis & Drafting – John Morris, Esq. McKay Burton & Thurman
Chair Public and Legislative Relations – Sabine Liedel, Regional Director Community Archives
Vice Chair Public and legislative Relations – David Houston, Community Manager Coral Canyon
Funding LAC – Money Talk
We all get tired of money talk. It seems to consume a lot of time and energy and there is never enough money (not talk), especially in these times. Here is a pitch to include LAC in your money talks:
• We need to fund our professional lobbyist for the 2010 legislative session.
• We need to pay transportation costs to bring our southern Utah LAC members to Salt Lake City for negotiating sessions.
• We need to communicate more effectively with you, our constituency, and be prepared to quickly initiate grass roots campaigns when issues arise. That involves funding a good website and newsletter.
• We need to hold an event during the legislative session so that legislators and other influential groups learn who we are and what we are about.
We were fortunate that last year many Southern Utah Communities made donations to LAC, including AOPC, a Southern Utah organizations made up of communities for the purpose of lobbying local government. They saw the need for political representation on a state wide basis and agreed with the LAC goals. I challenge Northern Utah Communities, to set aside at least $1 per unit as a donation to the Utah LAC. After all, there are more communities in the North.
Last year many business partners generously contributed. We need you to do so again this year and ask your colleagues to do the same.
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