57-8a-104. Limitation on requirements for amending governing documents -- Limitation on contracts

(1) (a) (i) To amend the governing documents, the governing documents may not require:
                  (A) for an amendment adopted after the period of administrative control, the vote or approval of lot owners with more than 67% of the voting interests;
                  (B) the approval of any specific lot owner; or
                  (C) the vote or approval of lien holders holding more than 67% of the first position security interests secured by a mortgage or trust deed in the association.
            (ii) Any provision in the governing documents that prohibits a vote or approval to amend any part of the governing documents during a particular time period is invalid.fn1
      (b) Subsection (1)(a) does not apply to an amendment affecting only:
            (i) lot boundaries; or
            (ii) lot owner's voting rights.

(2) (a) A contract for services such as garbage collection, maintenance, lawn care, or snow removal executed on behalf of the association during a period of administrative control is binding beyond the period of administrative control unless terminated by the board of directors after the period of administrative control ends.
      (b) Subsection (2)(a) does not apply to golf course and amenity management, utilities, cable services, and other similar services that require an investment of infrastructure or capital.

(3) Voting interests under Subsection (1) are calculated in the manner required by the governing documents.

(4) Nothing in this section affects any other rights reserved by the person who filed the association's original governing documents or a successor in interest. 

(5) This section applies to an association regardless of when the association is created.

Enacted 2007, ch. 223.  Amended 2011, ch. 137; 2015, ch’s 38732534, eff. May 12, 2015.
(Composite with SB80, Chapter 34, and HB99, Chapter 387, resulted in language identical to future section. No need for future section.)

FN 1.  Subsection 1(a)(ii) was adopted in response to the interpretation by the Utah Supreme Court of certain language found in some governing documents as requiring that the documents may only be amended upon the expiration of specified intervals (such as 10 year periods), such as the following language contained in the CC&Rs of the HOA in Swenson v. Erickson (2007):

These covenants are to run with the land and shall be binding on all parties claiming under them until January 1, 1994, at which time said covenants shall be automatically extended for successive periods of 10 years unless by vote of a majority of the then owners of the building sites covered by these covenants it is agreed to change said covenants in whole or part.

The Utah Supreme Court in Swenson v. Erickson interpreted that very language and held that the property owners in the subdivision were only able to vote to change their restrictive covenants every 10 years, and specifically only on January 1, during the daylight hours (and not just within the sixty seconds between midnight and 12:01 a.m., as, incredibly, one of the party's asserted). 

Even requiring that covenants may only be amended on one specific day every ten years is just simply bizarre and a terrible result. Thus, this subsection was enacted.

Print   Email