Utah Community Association Case Law and Legislative Updates - Presented by Carson B. Bagley and Quinn A. Sperry of Jenkins Bagley Sperry, PLLC ...
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Utah Community Association
Case Law and Legislative Updates
Presented by Carson B. Bagley and Quinn A. Sperry
of Jenkins Bagley Sperry, PLLC
Session Sponsored by
Community Association Law Section
President: Quinn Sperry
1st Chair: Andrew Blonquist
2nd Chair: Lauren DeVoe
Secretary: James Purcell
Treasurer: Isaac James
Recent Utah Community
Association Cases
Equine Holdings LLC v. Auburn Woods LLC
2021 UT App 14
[Easements in the Plat and/or CC&Rs]
March 2006 Plat Special Use Areas advocated by Simmons
Equine Holdings LLC v. Auburn Woods LLC 2021 UT App 14 • Original Plat identified “Special Use Area” but original CCRs referred to the shaded area as a “use corridor” • Amended CCRs have botched legal description for the “Special Use Area”… • “East” does not mean “West”!!! Equine v. Auburn, 2021 UT App 14, ¶ 32 • Affirmed the owners of the lots in the Subdivision could alter the description of the Special Use Area by amending the CCRs, and did not need to undertake a formal amendment of the Subdivision plat. • However, the district court erred by determining the Simmons’ proffered interpretation of the June 2006 CCRs’ description was reasonable. East does not mean West! • Reversed and remanded.
Pioneer HOA v. TaxHawk 2019 UT App 213 • Boundary by Acquiescence
Pioneer HOA v. TaxHawk
2019 UT App 213
• Trees and fence treated as the boundary for years before the property was sold.
• HOA files lawsuit 1 asserting boundary by acquiescence based on prior owner’s
conduct. Trial court dismissed on summary judgment because HOA didn’t have a
deed for the disputed property.
• HOA obtains quitclaim deed for the disputed property and files lawsuit 2. Trial court
consolidates and dismisses on res judicata. HOA’s affirmative defense of boundary
by acquiescence was barred and counterclaim granted.
• Court of Appeals affirmed dismissal of lawsuit 1, but remanded to allow HOA to
assert boundary by acquiescence claim and defense based on the quitclaim deed
that didn’t exist when lawsuit 1 was filed.
Vanderwood v. Woodward
2019 UT App 140
Tear down your garage!
• CCRs require approval by ACC, inactive ACC from the outset.
• Unapproved Detached Garage. CCRs also have provisions re materials and set-back requirements.
• Trial court enters injunction requiring Woodward to tear down the garage.
• Abandonment of a covenant occurs when there is substantial and general noncompliance with the
covenant.
• Covenant is not abandoned by noncompliance if the violations are slight, unimportant, and unsubstantial,
are of a minor nature and do not destroy the general building scheme or are inoffensive.
• Strict reading of CCRs. The limitations on building materials applied to dwellings, not the garage.
• Remanded to determine issue of abandonment as to the set-back requirements.
• Injunctive relief: “balancing of equities test” to determine whether to order injunctive relief to remedy
the violation. See Carrier v. Lindquist, 2001 UT 105, ¶ 31, 37 P.3d 1112.
Timber Lakes v. Cowan 2019 UT App 160 • Detached Garage being constructed within County setback… • Discussion of circumstances under which an association is entitled to a permanent injunction for violation of the restrictive covenants. • Must show irreparable harm that cannot be compensated by monetary damages. • HOA was not entitled to enforce the County’s setback requirements.
Fuja v. Adams 2021 UT App 55 • TRO/Injunction entered, but later determined to be improvidently entered. • Defendants did not seek monetary damages during injunction stage, but submitted an affidavit of attorney fees and costs and declaration of damages after the injunction was vacated. • Trial court ruled pursuit of monetary damages was untimely. • Court of Appeals reversed and remanded to allow Defendants to seek monetary damages.
Bell Canyon Acres HOA v. McLelland 2019 UT 17 • “Good fences, it appears, stop making good neighbors right about where they start to encroach on bridle paths” • Fences encroached bridle path easements and not all owners were named in declaratory action by the HOA. • Trial court declined to enter judgment because all members of the HOA were not named parties. • Defendants argued all members were necessary parties and the trial court declined to rule unless all members were named. • Utah Supreme Court held HOA is permitted to file suit to determine only their own rights and all members of the HOA do not need to be named. • Declaratory judgment would not impact persons not joined and not in privity with a party to the action.
Cochegrus v. Herriman City 2020 UT 14 • Plaintiff tripped, fell, and was injured while walking across park strip adjacent to HOA property. (Premises Liability) • Plaintiff sued Herriman, Rosecrest HOA, and community management company for personal injury. • Trial court ruled in favor of defendants. • Reversed and remanded. • Metal rod showed a “durable, nontransitory, and rusted” allowed a jury to infer a duty to warn. • By ordinance, Rosecrest had a duty to maintain adjacent city owned park strip.
WDIS, LLC V. HI-COUNTRY ESTATES HOMEOWNERS ASS’N
2019 UT 45
• WDIS (group of owners) sought to have court declare its
properties were NOT encumbered by restrictions and
covenants.
• Trial court dismissed based on statute of limitations related to
issues with underlying governing documents.
• “[i]f the party’s claim for quiet title relief can be granted only
if the party succeeds on another claim, then the statute of
limitations applicable to the other claim will also apply to the
quiet title claim.”
• Clarifies claims for Quiet Title and application of Statutes of
Limitation.Thompson v. Capener 2019 UT App 119 • Enforceability of Restrictive Covenants • Protective covenants were not signed by both owners of property (spouses). • Spouse was not an agent for the other. • Exceptions to the statute of frauds did not apply, restrictive covenants not enforceable against these lots.
Blackhawk Townhouses Owners Association v, J.S.
2018 UT App 56
• “We leave for another day the question of
what additional steps a plaintiff must take to
ensure adequate notice when the plaintiff
knows or has reason to know of a defendant’s
alleged incompetency.” (❡ 34)Lauritzen v. First American Title Insurance Co. 2018 UT App 58 • Dispute as to coverage under title insurance where there was a defect in the original plat. • Original plat had one Lot that overlapped with the adjacent parcel. • The concept of ‘marketability of title’ is limited to “questions of ownership and possession of property” • “With regard to [Lot 54], the overlapping legal description resulted in someone elsethe adjoining landownerhaving a claim to ownership and possession of at least part of Lot 54, and therefore ‘title’ to Lot 54 was implicated.”
Rapoport v. Martin 2018 UT App 163 HOA authority to approve construction in common area??? • Neighbors get approval from the HOA to extend their deck into common area. • Plaintiffs file lawsuit seeking to have deck extension removed, arguing approval of membership was necessary. • Read the CCRs carefully as to scope of authority and approval. • “The Rapoports’ argument that previous HOA decisions dictate disapproval in this case is unconvincing; we need only look beyond the four corners of the CC&Rs when the provisions are ambiguous, which in this context they are not.” • Attorney fees awarded against plaintiffs. “[T]he phrase ‘judicial action’ is broad enough to encompass both the assertion of and the defense against a claim.”
2020 & 2021 Legislation
UpdatesStatutory Amendments – 2020 & 2021 2020 • Non-Police, Non-Consent Towing Signage • HOA Sale Disclosures & Educational Materials • Nonjudicial Foreclosures • COVID-19 Provisions 2021 • Use of Reserve Funds during Emergency • Accessory Dwelling Units • Security Cameras • Remove Discriminatory Language
Non-Police, Non-Consent Towing Signage HB 57 (2020) Amended Utah Code §§ 72-9-603 & -604 Effective January 1, 2021 Changes signage requirements in locations where parking is enforced by towing Project must also post “clear instructions” – someone new to the area will know where parking is permitted
Non-Police, Non-Consent Towing Signage HB 57 (2020) Department of Public Safety’s examples of required signage:
Non-Police, Non-Consent Towing Signage HB 57 (2020) Department of Public Safety’s examples of required signage:
Sale Disclosures & Educational Materials HB 155 (2020) Amended Utah Code §§ 57-8-6.1, 57-8-13.1, 57-8a-105 & 57-8a- 105.1 Requires the seller of a property in a community association to make certain disclosures prior to closing Community association must provide disclosure information to seller upon request Department of Commerce must publish informational materials on its website concerning overview of community association laws
Sale Disclosures & Educational Materials HB 155 (2020) • Department of Commerce Educational Materials (https://secure.utah.gov/hoa/index.html)
Nonjudicial Foreclosures SB 183 (2020) Amended Utah Code §§ 57-8-3, 57-8-46, 57-8a-102 & 57-8a-303 Changes language in notice to owner regarding nonjudicial foreclosure Owner has 30 days from delivery of notice to demand judicial foreclosure Notice must be delivered at least 30 days before initiating nonjudicial foreclosure Assessments must be delinquent at least 180 days Cannot pursue fines through nonjudicial foreclosure
COVID-19 Provisions
SB 3007 (2020 Special Session)
• Enacted Utah Code § 78B-4-517
• Community Associations fall within scope of the term “person”
(U.C.A. § 68-3-12.5)
• Provides immunity from “civil liability from damages or an
injury resulting from exposure of an individual to COVID-19 on
the premises owned or operated by the person, or during an
activity managed by the person.”
• Immunity does not apply if:
o Willful misconduct;
o Reckless infliction of harm; or
o Intentional infliction of harm.Reserve Funds SB 75 (2021) • Amended Utah Code §§ 57-8-7.5; 57-8a-211 • Response to COVID/Emergency Concerns • Reserve funds generally only used for specific allocated purposes (and not daily maintenance expenses) unless approved by majority of the association’s voting interests • Amendment provides Board the ability to use Reserve Funds for daily maintenance expenses under certain emergency conditions
Reserve Funds SB 75 (2021) • Statewide Emergency declared pursuant to Utah Code § 53-2a-206: • Shortfall in general budget • More than 10% of Owners (excluding Board members) are delinquent in paying assessments • Owners holding 51% of the association’s voting interests may still veto Board’s use of Reserve Funds
Internal Accessory Dwelling Units HB 82 (2021) • Amended Utah Code §§ 57-8a-209 & - 218; State Construction & Fire Codes Act; Land Use, Development, and Management Acts • Effort to address housing crisis • Effective Dates: • Building Code provisions – May 5, 2021 • All other provisions – October 1, 2021
Internal Accessory Dwelling Units
HB 82 (2021)
• Primary Dwelling
• Single-family dwelling
• Detached (Does not apply to attached products such as condominiums and townhomes
with party walls)
• Occupied as Owner’s Primary Residence of Owner
• Internal Dwelling Unit
• The owner of the home must use the home as his/her primary residence.
• ADU must be within footprint of existing dwelling when created
• For purpose of long-term rental (at least 30 days)
• ADU must comply with local land use ordinance, building code, health code, or
fire codeInternal Accessory Dwelling Units
HB 82 (2021)
• Community Associations cannot restrict creation of ADU which is compliant with:
• Land Use Ordinance
• Building Code
• Health Code
• Fire Code
• However, Community Associations can continue to enforce other use restrictions that could impact ADUs. These
include, architectural controls, noise and nuisance policies, etc.
• Community Association may also request/require:
• Copy of ADU permit from City or County
• Copy of business license for operating ADU
• Proof of any additional parking required by the City or County
• Verification of minimum lot size in City or County ordinance, if any, for ADU.
• Copy of Lien, if any, held on ADU by City or CountyInternal Accessory Dwelling Units
HB 82 (2021)
• Municipalities have some authority to restrict:
• Primary dwelling at least 6,000 square feet
• No short-term rental
• Require owner-occupied
• Require business license or permit
• Prohibit in mobile home
• Some Zoning limitation but not more than 25% of residential
• Near college campus
• Municipalities may adopt restrictions prior to October 1, 2021. Community Associations should
contact local leaders to express concerns and encourage adoption of restrictions.
• Municipality may record notice with County Recorder if permit or license to rent ADU is issued after
October 1, 2021
• Municipality may record a lien against property if Owner violates applicable ADU provisionsSecurity Cameras SB 31 (2021) • Amended Utah Code §§ 57-8a-8.a; 57-8a-218 • Community Association may not prohibit cameras adjacent to: • Entryway to dwelling • Window • Other outside entry point • May restrict in common area not physically connected to Unit • Policies regarding maintenance and liability issues
Removing Discriminatory Language
HB 374 (2021)
• Amended Utah Code §§ 57-21.6.1
• Discriminatory language in existing recorded
document
• Race, color, religion, sex, national origin,
familial status, source of income, disability,
sexual orientation, or gender identityRemoving Discriminatory Language HB 374 (2021) • Non-community association documents “Any provision in a previously recorded written instrument that expresses any preference, limitation, or discrimination based on race, color, religion, sex, national origin, familial stat, source of income, disability, sexual orientation, or gender identity is void under Utah Code Section 57-21-6.1.”
Removing Discriminatory Language
HB 374 (2021)
• Community Association documents
• Owner makes request
• HOA has 90 days to investigate
• If discriminatory, Board may adopt and record
amendment to governing documents
• County Recorder should not charge fees for this
amendmentThank You!
Disclaimer This presentation is for informational purposes only and is not to be construed or relied upon as legal advice or a formal legal opinion. Publication or other use of this presentation is expressly prohibited without the express consent of Jenkins Bagley Sperry, PLLC.
St. George Office: South Jordan Office: 285 W Tabernacle St. Suite 301 10757 S. River Front Pkwy, Suite 110 St. George, UT 84770 South Jordan, UT 84095
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