Utah Condominium and HOA Law

No other Utah law firm compares with our commitment to, and knowledge of, community association law (condominium law and homeowner association law). We were instrumental in starting the Utah Chapter of the Community Associations Institute, our condominium and HOA attorneys consistently attend the College of Community Association Lawyers' annual conferences, and Lincoln Hobbs was the first Utah member of the College of Community Association Lawyers (CCAL). Several years ago, Lincoln was selected by his CCAL peers in CCAL as a Governor of the College. He currently leads the College, which includes about 150 of the most distinguished condomium and HOA lawyers in the United States.

And our affiliation with the Arizona firm of Carpenter, Hazlewood, Delgado & Bolen, PLC allows us to more efficiently provide collection services to our condominium and HOA clients, with no fees paid by the association. That affiliation also brings the knowlege and experience of almost 30 more condominium and HOA lawyers.

Lincoln was the founder, initial President and initial Executive Director of the Utah Chapter of the Community Associations Institute. He is the Past-President of the Foundation for Community Association Research, a national, nonprofit 501(c)(3) organization devoted to common interest community research, development, and scholarship. In addition to continually gaining knowledge in the field, we are leaders in training board members, management professionals and other lawyers in community association law and management.

Lincoln Hobbs is a member of the CAI national faculty, and teaches several courses annually, throughout the United States. Courses regularly taught include The Essentials of Community Association Management, Communications in Community Associations, Community Governance, and Risk Management. He has repeatedly presented to the Utah State Bar on Community Association Law, and regularly presents courses to the Utah Chapter of the Community Associations Institute. Lincoln also regularly presents, occassionally with others, for Lorman Educational Seminars, the National Business Institute and Half Moon Seminars.

And, we develop and present periodic seminars at the Utahcondolaw learning center. Information respecting Utah condominium and HOA cases can be found at www.utahcondolaw.com.

Our community association practice encompasses all areas of community association law. Other subspecialties include:

Assessment and Fine Collections

The timely collection of condomium and homeowners' association assessments is critical to a well-functioning association; the board has a fiduciary obligation to assure the timely payment of assessments, and to pursue their collection when they are not paid in a timely fashion.

It is important to make certain that your association counsel has the experience and ability to collect from all members of the association, and to deal promptly and appropriately with bankruptcies and lender foreclosures. We've been collecting assessments for 30 years, and we collect them for associations of all sizes. We offer reasonable, flat fees for routine services, and our experience makes the process efficient and predictable.

Both the Utah Condominium Act and the Utah Community Association Act contain provisions that can help your association to collect assessments and fines, but they also contain provisions that can trap the unwary association and the unfamiliar practicioner. You should make certain that the counsel you select is familiar with the Utah Condominium Act and the Utah Community Association Act.

Changes in the Utah Condominium Act and the Utah Common Ownership Act, adopted by the 2011 Utah legislature, have the potential to assist associations and their counsel who are prepared, but to greatly impair those who are not. Make certain that your association benefits from, and doesn't suffer, as a result of these changes.

In connection with our collections, we follow and endorse the CAI policy on the subject:

EFFECTIVE COLLECTION OF COMMUNITY ASSOCIATION ASSESSMENTS

Policy
Community Associations Institute (CAI) supports the creation and continuation of effective methods to ensure efficient, economic and successful community association collection procedures. CAI opposes the enactment of governmental limitations on effective collection of assessments, fees and other charges of community associations. CAI supports laws strengthening such collection methods and lien rights by associations, provided collection methods are undertaken in a fair and reasonable manner, giving the affected owners notice, the opportunity to be heard, and other due process protections. CAI also supports reasonable procedures to accommodate unit owners experiencing difficulties meeting their assessment obligations.

Background

  • Like a local government's dependence on tax revenues, the financial viability of most community associations depends on their ability to collect assessments to meet their continuing expenses (some of which are for functions that serve public health and welfare requirements).
  • Community associations require the revenue from these assessments to maintain common areas, buildings and facilities at community benefit, to provide community services as mandated in their governing documents, and to fulfill their fiduciary responsibilities to members.
  • Community associations must be able to collect promptly and efficiently their budgetary obligations from delinquent owners by avoiding expensive litigation and to minimize the burden on remaining owners of the common expenses during a long period of time for collection.
  • State or local governments, by statute, ordinance or regulation, may jeopardize the ability of community associations to adopt reasonable and necessary collection procedures to adequately fund the association to pursue recalcitrant, delinquent owners or to effectively have a strong lien against the owner's units.
  • In times of difficulties, illness, loss of employment or other economic problems, CAI advocates flexibility and compassion in the application of collection policies and procedures.

Adopted by the Executive Committee, April 10, 1983
Amended by the Public Policy Committee, October 6, 1993
Approved by the Board of Trustees, October 9, 1993

Community Association Transition

One of the most significant phases in a community association's existence -- probably the most critical -- is the period of transition from developer to unit owner control. A well orchestrated transition gets the association off to a successful future; conversely, a problematic transition cripples the association for years, if not forever.

Our considerable experience in representing dozens of associations in transition -- having done so on behalf of many developers and many associations -- allows us to assist new associations to make the transition smoothly and successfully when possible, and to resolve problematic and conflicted transitions.

Construction Defects

Hobbs & Olson, and its members, have significant experience in construction defect litigation. Lincoln Hobbs has participated in and settled two community association defect cases for over 1 million dollars, settled many others for smaller but still significant amounts, and received an award from a judge of almost 2 million dollars in a single family construction defect case. Many other cases, over the years, have been pursued and settled for smaller sums.

And Lincoln has been involved, as in several significant construction defect appeals, including the case of Hermansen v. Tasulis, and Davencourt v. Davencourt, both of which are among the leading cases in establishing protections for home and unit owners who face construction defects.

Document Preparation and Amendments

The operation of community associations, and the rights of members of those associations, are governed by many things, including federal and state laws.

An association's governing documents, however, may have the biggest impact on how well an association can be governed. Modern, well-drafted documents will appropriately balance the association's powers with the owners' rights, creating communities in which people want to live.

Times change, and association documents can change as well. We have years of experience in assiting associations in streamling, modernizing and improving their governing documents. Whether you are seeking to start anew with a new declaration or are simply wishing to make certain that you are in compliance with rapidly changing laws, we can help.

Recent 2011 amendments to the Utah Condominium Act and the Utah Community Associations Act may make it more feasible for your association to modernize its documents. Follow our sister site, www.Utahcondolaw.com, for more information on how to amend your documents.

Governance

How community associations are governed is, to say the least, rather important. Good governance leads to good communities; bad governance, and even average governance, leads to mediocre and sometimes even bad communities.

And when times are tough, as they have been for the past several years, good governance becomes even more important. Our years of collective experience, coupled with our extensive and regular training, allows us to provide the leadership that association leaders need to govern their associations.

Through our involvement with the Community Associations Institute, the Foundation for Community Association Research and the College of Community Association Lawyers, we keep ourselves and our clients at the forefront of trends and developments in the community association industry.

In 2011, the Utah State legislature adopted wide-ranging changes to the Utah laws dealing with community associations (condominiums and HOAs). We've taught many seminars on these laws, and can help your association come into compliance with them.

Litigation

It would be nice if we could all just get along. Unfortunately, that doesn't always happen. Community association disputes come in many forms. Sometimes, its a unit owner who won't obey the rules. Other times, it's a board who is overly aggressive in making or enforcing rules. Sometimes, its a neighboring property owner who wants to pollute, or to develop in an inappropriate manner. Sometimes its a developer or a contractor who cut corners to increase profits.

We have extensive litigation experience, inside and outside of the community association industry, that has prepared us to assist associations in whatever disputes may arise.Our community association representation has included the following:

Construction Defect Litigation

During the late 1970s and early 1980s, a major construction and development boom in Park City and Deer Valley Utah resulted in the development of dozens of community associations. Unfortunately, many of those projects were plagued with serious construction and design defects. Lincoln Hobbs was involved in many of the resulting lawsuits, representing several associations and dozens of unit owners in connection with these defects.

In 1996, the Utah Supreme Court decided a condominium defect suit in the case of American Towers Owners Association v. CCI Mech. In that case, the Utah Supreme Court significantly limited the rights of associations and individuals who suffer as the result of defective construction, by holding that the "economic loss rule" barred many claims related to negligence in construction and design. Lincoln challenged this ruling on behalf of individual homeowners who had suffered as the result of construction defects, in the case of Hermansen v. Tasulis, the Utah Supreme Court significantly limited the American Towers holding, by deciding that a claim in negligence does exist in those cases where "a duty exists independent of any contractual obligations of the parties."

Lincoln remains active in representing individual unit owners and community associations that have suffered as a result of construction defects; he remains an advocate for the reconsideration of several Utah Supreme Court opinions that he feels unduly restrict homeowners' rights to redress for construction defects.

Intra-association Litigation

Sometimes, disputes arise within an association. It may be the unit owner who cannot, or will not, comply with the association's reasonable rules, sometimes it's the unit owner (or owners) who challenge the board's authority, and sometimes, it's a board that improperly asserts its authority, or breaches its duties to the association.While these intra-association disputes are never pleasant, they must be addressed, and an association that faces them needs experienced counsel with experience in the industry. These disputes are not simple commercial disputes, rather they are disputes that involve peoples homes, their lives, and their communities. We can help your association, or you as an individual, if you face these problems, and we have the knowledge and experience to seek their resolution through litigation alternatives.

Litigation Alternatives

Sometimes, as we've noted, people just cannot get along. Sometimes, the best solution to those disputes may be litigation.More often than not, however, there are superior methods of resolving disputes.

Recently, an increasing amount of attention has been given to alternative dispute resolution, which can take many forms. Oftentimes, these alternatives are faster, cheaper and less divisive than litigation. Sometimes, in fact, alternative dispute resolution can increase, rather than decrease, community harmony.

One alternative to litigation involves arbitration. Arbitration is a process whereby the parties hire a third party to consider, evaluate and decide the outcome of a dispute. Unlike litigation, arbitration usually involves a decision maker who is selected and hired by the parties. Generally, arbitration is quicker than litigation, and in many cases, arbitration can be less expensive than litigation. For this reason, many of our clients request that arbitration be established in their governing documents as the means for resolution of disputes.

Another alternative to litigation, and one which we think should always be seriously considered in connection with virtually all disputes, is mediation. Mediation is a process in which parties attempt to reach a mutually acceptable solution to a problem with the assistance of a neutral third party. Unlike litigation where a judge makes a decision, mediation is a process that empowers parties with information and allows them to make decisions based on their interests, needs and objectives.

Risk Management and Insurance

For many years, Lincoln Hobbs has been teaching risk management and insurance courses, all around the United States, for the Community Associations Institute. In connection with that teaching, and in connection with his annual attendance at the College of Community Association Insitute's annual law conference, he has become very familiar with and knowledgeable about all aspects of condominium and HOA insurance.

In its 2011 session, the Utah Legislature significantly modified Utah's Condominium Act and Utah Community Association Act's insurance provisions. Associations can and should take advantage of these amendments to modernize their association's and unit owners' insurance options, to reduce the expenses associated with insurance.

To register for a low-cost seminar on your association's options under the new law, visit our Utahcondolaw blog. Or, if you want to skip the seminar and just improve your association's risk management practices, give us a call or send an email.

2011 Amendments to Utah Condominium Act and Utah Community Association Act

Several bills were considered and passed during the 2011 session of the Utah State Legislature that will significantly change the way that community associations in Utah -- including condominiums, homeowner associations (HOAs and PUDs) will operate. We're spending a lot of time in analyzing and preparing our clients for those chnages, and we're teaching courses on what the changes mean.

The most publicized change involves what we see as a clarification of the law dealing with condominium insurance and HOA insurance -- it's now absolutely clear that if you have attached units, the association will need to have insurance on them. The law takes effect for all renewed policies, starting on July 1.

But there are many other changes, as well -- all associations will also need to become registered with the Utah State Department of Commerce by July 1, or they'll forfeit their rights to enforce their liens. And members now have more of a say in rulemaking, budgets and reserves.

Want to know what's going to change? Visit Utahcondolaw.com to see about, and register for, our series of upcoming seminars.

We prepared a list of links to the legislation for our blog, www.utahcondolaw.com. Feel free to visit that site, if you wish. Here's a list of links to the legislation. Here, for the attendees of the seminar who requested access to the bills discussed at today’s seminar, are links to the bills:

  • Senate Bill 167 — the major bill, referenced as “UCIOA lite,” which significantly amends association governance, collections and insurance.
  • House Bill 104 — requiring all Utah community associations to register as a prerequisite to lien-based assessment collections.
  • House Bill 175 — dealing with record keeping and disclosure requirements
  • Senate Bill 89 — modifies associations’ obligations respecting reserve accounts
  • Senate Bill 117 — modifies the voting requirements for community associations that want to amend their declarations.
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