NEW HOUSE BILL: Enforcing Community Association Liens in Utah
Effective July 1, 2011: Utah homeowner and condo associations must comply with a new registry, or they will be unable to enforce their liens
As of this May, community associations in Utah will need to take additional steps to ensure the enforceability of their liens at closing. This new development is incredibly important to note, as being able to record a lien against a lot or unit is vital for HOAs to collect outstanding assessments, and may be the only way for the association to receive the money it is owed.
In the past, associations have been able to enforce their liens and get paid at closing on a sale of a unit/lot without much trouble. However, in the 2011 Utah legislative session, certain changes were made that impact all Utah community associations in reference to enforcing liens. Under House Bill 104 (“H.B. 104”), sponsored by Representative Curt Webb, homeowner and condominium associations are now required to register with the Department of Commerce (in addition to being registered with the Division of Corporations). All associations must be registered by July 1, 2011. During any period of noncompliance with this new requirement—including not keeping the registration information current—a lien for nonpayment of common expenses may not arise, nor can the association enforce a previous lien.
Under the new registry with the Department of Commerce, associations are required to provide the following:
- The name and address of the homeowner or condominium association
- The name, address, and telephone number and—if applicable—email address of the president of the association
- The name and address of each management committee member
- The name, address, telephone number, and—if the contact wishes to use his email or facsimile transmission for communicating information—the email address or fax number [as applicable] of a primary contact person who has the information a closing agent needs in connection with the closing of a unit/lot, as well as the financing, refinancing, or sale of the owner’s unit
- A registration fee not to exceed 37.00
- The lien payoff information within five (5) business days of a closing agent making proper request for the same, or the lien is not enforceable at closing
Members of homeowner and condominium associations know and understand the importance of being able to lien real property in order to collect past-due assessments; therefore, the requirement to register in this additional location [and keep the information current] is of vital importance. Also, please note: H.B. 104 prohibits associations from charging a fee for providing payoff information needed for closing on the sale of a lot/unit, unless the fee is provided for in the declaration; this fee may not exceed .
Please contact our firm, VF Law, for assistance in complying with H.B. 104, or for any additional information and detail regarding the most recent legislative changes that impact community associations in Utah.
Salt Lake City Area: 801.355.9594
Southern Utah: 435.656.8200