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2020 Utah Code
Title 57 - Real Estate
Chapter 8 - Condominium Ownership Act
Section 58 - Liability of declarant or management committee -- Period of declarant control.
Universal Citation: UT Code § 57-8-58 (2020)
Effective 5/9/2017
57-8-58. Liability of declarant or management committee -- Period of declarant control.
Enacted by Chapter 284, 2017 General Session
57-8-58. Liability of declarant or management committee -- Period of declarant control.
- (1) An association may not, after the period of declarant control, bring a legal action against a declarant, a management committee, or an employee, an independent contractor, or an agent of the declarant or the management committee related to the period of declarant control unless:
- (a) the legal action is approved in advance at a meeting where owners of at least 51% in aggregate in interest of the undivided ownership of the common areas and facilities are:
- (i) present; or
- (ii) represented by a proxy specifically assigned for the purpose of voting to approve or deny the legal action at the meeting;
- (b) the legal action is approved by vote in person or by proxy of owners of the lesser of:
- (i) more than 75% in aggregate in interest of the total aggregate interest of the undivided ownership of the common areas and facilities represented by those owners present at the meeting or represented by a proxy as described in Subsection (1)(a); or
- (ii) more than 51% in aggregate in interest of the undivided ownership of the common areas and facilities;
- (c) the association provides each unit owner with the items described in Subsection (2);
- (d) the association establishes the trust described in Subsection (3); and
- (e) the association first:
- (i) notifies the person subject to the proposed action of the action and the basis of the association's claim; and
- (ii) gives the person subject to the proposed action a reasonable opportunity to resolve the dispute that is the basis of the action.
- (a) the legal action is approved in advance at a meeting where owners of at least 51% in aggregate in interest of the undivided ownership of the common areas and facilities are:
- (2) Before unit owners in an association may vote to approve an action described in Subsection (1), the association shall provide each unit owner:
- (a) a written notice that the association is contemplating legal action; and
- (b) after the association consults with an attorney licensed to practice in the state, a written assessment of:
- (i) the likelihood that the legal action will succeed;
- (ii) the likely amount in controversy in the legal action;
- (iii) the likely cost of resolving the legal action to the association's satisfaction; and
- (iv) the likely effect the legal action will have on a unit owner's or prospective unit buyer's ability to obtain financing for a unit while the legal action is pending.
- (3) Before the association commences a legal action described in Subsection (1), the association shall:
- (a) allocate an amount equal to 10% of the cost estimated to resolve the legal action, not including attorney fees; and
- (b) place the amount described in Subsection (3)(a) in a trust that the association may only use to pay the costs to resolve the legal action.
- (4) This section does not apply to an association that brings a legal action that has an amount in controversy of less than $75,000.
Enacted by Chapter 284, 2017 General Session
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