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News/Blog

News/Blog

May 27, 2015

A Tennessee HOA has agreed to pay $156,000 to settle a lawsuit against the association alleging violations of the Fair Housing Act. The Association refused to grant permission to an owner to build a therapeutic space for two children with Down syndrome. The Association failed to grant the reasonable accommodation, in this instance a reasonable modification, to create the space. After years of effort to obtain approval and multile denials, the family finally move out of the neighborhood and sold their home at a loss. 

The Fair Housing Act is a field of landmines for a homeowners association, condominium, or townhome community. It is critical that the association engage competent legal counsel when anyone asks for an "accommodation" related to a disability. The failure to handle these requests properly or to grant some requests can result in serious fines, penalties, and awards of attorney fees against the association. Morris Sperry has worked on dozens of Fair Housing Act matters and fully understands how to navigate the process of receiving, analyzing, and responding to a request for an accommodation.

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May 27, 2015

In what could foretell the future for many Western State HOAs, a Nevada homeowners association removed dozens of mature pine trees to replace them with drought resistant and lower water consumption trees. According to the Association's manager, a healthy pine tree can consume twelve times as much water as more drought resistant trees. The owners in the community were upset by the change in the appearance of the community, but seemed to understand why the change had to be made. As population and world temperatures increase, HOAs in Utah and surrounding states will face more pressure to use less water and to replace thirsty lawn and landscaping. 

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May 27, 2015

A property manager is alleged to have stolen $228,000 from a Florida HOA by writing checks to a fake company she owned and controlled. The company had a name similar to the Association's insurance company name and it appears she was passing off the payments as insurance payments. The Association has filed suit and the police are investigating. This is one more reason to maintain a good crime insurance policy, commonly referred to as a bond or fidelity bond. Given the trust placed in managers and the limited interest each owner has in the operations of the association, there is simply no other way of properly protecting the association's money. Diligent oversight will help, but in the long run a clever manager determined to steal money will eventually figure out a way. For one of its client associations,

Morris Sperry aggressively pursued a manager who embezzled over $100,000 by initiating and supporting a criminal prosecution and by recovering a significant portion of the embezzled funds in a quickly filed civil lawsuit. With prompt notice from their client, Morris Sperry was able to quickly lien and obtain the sale of the manager's home to fund a significant part of the recovery. Morris Sperry also initiated quick action to properly preserve evidence and assist the association in a transition to new management in the middle of a financial crisis. In any situation where an association discovers that a manager has stolen or embezzled funds, the association's first call should be to Morris Sperry.  

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May 15, 2015

A management company in Florida has been called the "Condo crime family" by a Floriday state legislator who chairred a committee on condominium abuses. The management company is accused of stealing money, fraud, rigging elections, kicking board members off of boards who asked to many questions, threatening to sue owners who speak up in HOA meetings, and refusing to provide condominium financial information. Family members at the company have been convicted of forging checks and other crimes. Fortunately for HOA owners in Florida, managers must be licensed so this management company has been fined and penalized. Through the state licensing divisions, investigations and enforcement action continue.

Unfortunately for community associations in Utah, there is no regulation or oversight of HOA managers. A person could finish a ten-year prison sentence for embezzlement and fraud and start managing an HOA the next day, taking over control of hundreds of thousands of dollars of unkowning homeowner funds. The Utah CAI legislative action committee - of which John Morris of Morris Sperry is a member, has been working for years on a bill to provide for manager registration that would require some minimum certifications and education for managers. So far, that bill has been stalled in the legislative process but the Utah CAI LAC members remain committed to introducing and passing the bill. 

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May 2, 2015

John Morris presented at the CAI national conference in Las Vegas. He focused on defamation law and the various defenses to defamation that associations and board members can raise when defamation claims are made by owners. It was an interesting mix of legal analysis and actual real life examples. He responded to several questions from the audience and provided some general advice to minimize defamation claims.

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April 26, 2015

A Florida condominium president paid himself hundreds of thousands of dollars for "managing" the condominium and purchased a car with association funds that he used. He was criminally charged for managing without a license and as part of his plea deal, he agreed to resign from the board, do 25 hours community services, serve three months' probation, return the car, and write a letter admitting wrongdoing. The association has also filed a civil suit to recover the money he paid to himself.

Association boards should always be wary of hiring board members and their relatives to provide any services to the association and should carefully abide by conflict of interest procedures if they consider those relationships. Moreover, associations need to make sure multi-member boards are functioning properly to provide the oversight needed to manage conflict of interest transactions.

Unfortunately, Utah has no requirements for licensing or regulation of condo or HOA managers. Morris Sperry lawyers are part of a committee working hard on a new law that would provide at least a minimal amount of regulation over HOA managers in Utah. If passed, the new law would require managers to have a certain level of industry training, a minimum level of insurance, and require registration with the state. Unfortunately, this law has been stalled in the legislature for the last two years. Morris Sperry remains hopeful that this manager registration act can be passed so that situations like that in Florida are less likely to happen in Utah. 

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April 26, 2015

A recently released 2015 report of the Western United States identified 3,509 Utah properties worth 782 million dollars in high to very high wildfire areas. In addition to the impact this may have on insurance rates, community associations with homes in those areas should be thinking about an emergency plan for fires. They should also be taking proactive action to prevent both the spread of fires and to minimize the risks of damage. The report provides that wildfires are unique natural hazzard because they can be caused by humans (as opposed to earthquakes, storms, and other natural hazzards) and because it is possible to minimize the damage either through fire fighting or through earlier efforts of property owners.

If an association is in a wildfire risk area, Morris Sperry can assist in identifying the scope of authority and responsibility of an association board of directors in the governing documents. With a clear understanding of both the association's authority and responsibility to minimize these risks, the association can take action consistent with the governing documents or make necessary revisions to the documents to align them with the desires of the association. 

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April 8, 2015

Governor Herbert signed the ceremonial copy of H.B. 98 today at the Capitol. John Morris of Morris Sperry, members of the apartment association, and the sponsor Representative Gage Froerer attended. John Morris appeared representing the Utah CAI Legislative Action Committee, members of whom worked on this bill. This new HOA law in Utah further defines the relationship between landlords in condominium associations and community associations. It also adds needed clarity to the law applicable to HOA fines and warning letters. John Morris and the other members of the Utah CAI LAC worked hard on this bill and it represents a good compromise between all of the interests involved.

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April 3, 2015

The governor signed the remaining new HOA law, S.B. 118, on the last day allowed. Signficant changes to the procedure for requesting association documents now takes effect along with help for association amendments and the fine and attorney fee provision for associations who fail to comply with the new open meeting laws. All of the new 2015 condominium laws and PUD laws will now take effect. Watch for future articles on the Morris Sperry website analyzing the new legislation and providing specific implementation dates.

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April 2, 2015

John Morris presented on HOA laws and practical issues to a group of real estate agents at City Creek Center. The topics included reserves, new 2015 Utah HOA laws, and practical considerations when selling and buying homes in condominiums and PUDs. There were many questions and the discussion involved some of the unique aspects of the condominiums in City Creek. The real estate agents in attendance all received continuing education credit. Morris Sperry remains committed to providing education to the community on important HOA issues.

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January 29, 2015

Continuing their dedication to keeping ahead of the industry on important legal issues, five Morris Sperry lawyers are attending the CAI national law seminar in San Francisco California. Once again, Morris Sperry sends more Utah lawyers to the law seminar than any other firm in the state. The only Morris Sperry lawyer not attending has the one great excuse nobody could argue with - a new baby born two days ago!

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January 16, 2015

Morris Sperry's board member training seminar was a huge success. After filling up the first night, the seminar was extended to a second night that quickly filled up. Many of the attendees commented on the valuable information they received during the seminar. Topics such as doing business by email, the attorney client privilege, board member legal duties, how to select an insurance agent, and many others were packed into what turned into a two-hour seminar. The lawyers at Morris Sperry look forward to future seminars and continuing the strong relationship they are building with both their board member clients and the community. 

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January 13, 2015

John Morris appeared on ABC Channel 4 Utah this morning to talk about Morris Sperry's seminars in Park City. See the story at this link. Morris Sperry's board member seminar filled up quickly and they added a second day to satisfy the demand. Morris Sperry continues its efforts to educate HOA board members and plans on future seminars for board members. 

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January 13, 2015

John Morris and Quinn Sperry were chosen by their peers as members of Utah Business Magazine's 2015 Utah Legal Elite. Legal Elite honorees are selected by their peers in a statewide balloting process. Members of the Utah Bar were invited to participate by submitting a ballot of Utah lawyers they hold in the highest regard--lawyers they have observed firsthand and would recommend to others.

 

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January 9, 2015

Morris Sperry lawyers appeared on Park City Television this morning to talk about Morris Sperry's two days of board member training seminars. To watch the story, click HERE.

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December 1, 2014

Morris Sperry supported research to cure stomach cancer with a jeans day pledge.   

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October 31, 2014

In a packed house at the Park City Red Rock Brewery, Morris Sperry lawyers Ryan Connelly, Melyssa Davidson,and John Morris presented on the nuances of management contracts and the relationship between the manager and an HOA. They addressed some of the thorny issues like indemnification, fidelity bonds, and hidden fees. Manager and board member attendees commented that the seminar was extremely valuable and how much they appreciated the information. Morris Sperry remains committed to training and education in the community association industry and has already scheduled a Seminar in January to continue this education. 

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October 28, 2014

Morris Sperry lawyers Melyssa Davidson, Robert Rosing, and John Morris appeared on Park City TV Mountain Morning Show to talk about Morris Sperry's upcoming law seminar on condominium and hoa management contracts. To view the entire show, click HERE.

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October 28, 2014

John Morris appeared on ABC 4 news this morning on the Good Morning Utah show with Emily Clark to talk about Morris Sperry's HOA (condominium, PUD, community association, homeowners association) management contract seminar in Park City. To watch the story click HERE

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October 27, 2014

Morris Sperry lawyers including John Morris were on the The Local View last week and on the Morning Edition with Leslie Thatcher this morning. KPCW Park City radio hosted the Morris Sperry lawyers to talk about HOA management contracts and Morris Sperry's upcoming seminar tomorrow night. Morris Sperry is looking forward to an exciting evening talking about legal pitfalls and issues that can come up in a community association's most important contract, the contract with its manager. Condominium, Condo Hotel, Townhome, and HOA managers and board members are welcome to attend for free at Red Rock Brewing in Kimball Junction.

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April 8, 2015

Governor Herbert signed the ceremonial copy of H.B. 98 today at the Capitol. John Morris of Morris Sperry, members of the apartment association, and the sponsor Representative Gage Froerer attended. John Morris appeared representing the Utah CAI Legislative Action Committee, members of whom worked on this bill. This new HOA law in Utah further defines the relationship between landlords in condominium associations and community associations. It also adds needed clarity to the law applicable to HOA fines and warning letters. John Morris and the other members of the Utah CAI LAC worked hard on this bill and it represents a good compromise between all of the interests involved.

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April 3, 2015

The governor signed the remaining new HOA law, S.B. 118, on the last day allowed. Signficant changes to the procedure for requesting association documents now takes effect along with help for association amendments and the fine and attorney fee provision for associations who fail to comply with the new open meeting laws. All of the new 2015 condominium laws and PUD laws will now take effect. Watch for future articles on the Morris Sperry website analyzing the new legislation and providing specific implementation dates.

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April 1, 2015

Governor Herbert signed three more new condo laws and new community association laws in the last few days. H.B. 98 dealing with association rentals and fines will become law. S.B. 80 making minor modifications to the reserve statute will become law. Finally, S.B. 206 making significant changes the the revised nonprofit corporations act will become law. Keep updated on the Morris Sperry's website for more information on these important new hoa laws.

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March 31, 2015

Governor Gary Herbert signed H.B. 304 into law. H.B. 304 contains important new homeowners association laws and condo laws that will help associations minimize damage from flooding and freezing pipes. In short, the bill now allows community associations to give notice the electric and gas companies, stating that the association wants notice before the utility shuts off either eletrical or natural gas service. Upon receiving notice from the gas or electric company, the condominium association or HOA can take action to winterize the unit or pay the utilitites so that the pipes don't freeze. The Utah Community Association Institute Legislative Action Committee successfully introduced this bill in an effort to help with this destructive problem. Contact Morris Sperry for a complete outline of the new 2015 HOA laws. 

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March 23, 2015

On Friday March 20, 2015, the Department of Justice announced that the Greenbrier Condominiums in Minnesota agreed to pay $100,000 in compensatory damages to six families that suffered discrimination and $10,000 in penalties to the United States. The settlement ends a Fair Housing Act case started by the Department of Justice against the Association and one of its employees. The Association also has to establish new non-discrimination policies and end discriminatory behavior. The Greenbrier and its employee were alleged to have created and enforced rules that prevented children from equally enjoying the common areas and to have made statements indicating a preference against families with children. This case highlights the importance of an annual review of a Condo or hoa's rules and policies by a qualified HOA lawyer - such as those from Morris Sperry. The lawyers at Morris Sperry have significant experience dealing with Utah Fair Housing issues and complaints, including successfully defending several complaints brought against Condominium Associations. More importantly, Morris Sperry can advise associations on how to avoid these complaints in the first place and comply with what can sometimes be very subtle Fair Housing laws.  

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March 15, 2015

The 2015 Utah legislative session ended Friday.New Utah laws on hundreds of topics including new HOA laws for 2015 all await the Governor's signature. With the passage of 528 bills, the Governor has started the long process of signing bills. None of the new community association laws have been signed yet, but there is no reason to believe they would be subject to a veto. For now, community associations in Utah just wait and see to find out which new 2015 HOA laws the governor will sign. The governor has 20 days from the end of the session to veto or sign a bill. If he vetos the bill, it obviously does not become law. However, whether he signs the bill, or does not sign it but does not veto, it becomes law.

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March 12, 2015

One resident in a D.C. townhome obtained a court order (temporary restraining order) preventing the neighbor from smoking in the neighboring townhome. Smoke from tobacco, cigarettes, or marijuana is clearly a nuisance under the law in most states, including Utah. The Court in this case found that the smoke was making its way into the neighboring home, where a couple lived with one child and another on the way. The couple also sued for $500,000 in damages. Apparently the couple had tried to work it out informally and had tried mediation, but he smoking neighbor refused to take action to minimize the transmission of smoke. 

Unfortunately, smokers frequently take a hard line position about smoking in their homes, assuming that they don't have to worry about where the smoke from their cigarettes or tabacco products actual drifts to. That, of course, is not the law in Utah and most other states. Utah has a very strong nuisance statute and tobacco smoke is clearly a nuisance, in any amount. It also doesn't matter how the smoke gets in, as long as it does.

Morris Sperry has dealt with complicated nuisance and HOA smoking cases representing parties on both sides, the HOA and the owner. They are difficult cases because most people are not excited about quitting smoking or moving out of their homes. 

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March 11, 2015

 

HB 304, a new Utah HOA law for 2015, is one step closer to passage. The bill, explained in a prior Morris Sperry news articles, passed the senate and is now waiting for the governor's signature along with several other new HOA laws for 2015.  

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March 7, 2015

After an unpredictable and wild legislative process that saw the bill transform several times, SB 118 finally passed the Senate and the House. It now awaits the governor's signature. This bill took more turns than a blind mouse in a mile long maze. In its final form, this bill is a compilation of three different concepts. First, community associations now have even better tools to get past mistakes and roadblocks in the governing documents that prevent amendments. Second, this bill ended up with owner protections against associations who fail to comply with the new open meeting laws in HB 99. The Utah Senate committee required these changes but, through simple inadvertence, they didn't make it into HB 99 before it passed both houses. So, they ended up in SB 118. Finally, SB 118 was amended to include significant clarifications to the procedures for an owner requesting association documents and a new penalty provision if condominium associations or other community associations fail to comply with owner document requests. These provisions came instead of another bill the Sponsor intended to run and were also part of a cooperative drafting effort between the CAI LAC and the senator.

This bill reflects a careful balance between owner and association rights. Those associations who take the "high road" of transparency and compliance with the law, will see no problems with these new penalty provisions. On the other hand, those management companies, HOA attorneys, and associations who tend to view HOA relationships with owners as an "us" - the board and its advisors, against "them" - the owners, had better beware. The days of obstructing owners who want to attend meetings or see association records are coming to an end. Owners in townhomes, condominiums, and homeowners associations will no longer have to stand for stonewalling, unexplained delay, exorbitant document copying charges, and other common strategies employed by the "low road" associations and their advisors who try to obstruct owners in their legitimate requests for association documents. Without needing an attorney, owners will be able to file a claim in small claims court and obtain a $500 damage award if the association fails to comply with either the open meeting or the document production laws. If an owner gets an attorney, he or she has a right to recover reasonable attorney fees.

This bill faced opposition from the "low road" attorneys who think that every law granting HOA owner rights is a threat to associations. And for those associations they advise, it probably is. Fortunately, that narrow minded opposition was fleeting, weak, and had no impact on the passage of the bill. The Utah legislature understood the importance of these types of balanced laws that support owners’ rights. How could they not – the same types of disclosure and access laws apply to the government they serve in!

John Morris, an attorney at Morris Sperry, is proud to have helped written the laws in this bill and to have testified in favor of this bill at the capitol. Morris Sperry applauds and supports this type of legislation. This new HOA law respects the balance between HOAs and their owners and helps remind as all who the HOA serves – the owners! The Utah community association institute HOA LAC (legislative action committee) worked hard on this bill with senators who have encountered the "low road" HOAs and were set on punishing them. The result was an excellent balance that good HOAs and their advisors will appreciate and respect. The work on this bill also continued and strengthened a good working relationship between the LAC and the Utah legislature.

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March 3, 2015

A veteran manager in the Utah HOA industry recently told a lawyer at Morris Sperry that he manages a Utah community association in which the board (with the help of an attorney member) has decided that it is just too hard to get the required 67% approval of owners necessary to approve declaration amendments. So, in a clever solution to this problem, they decided that they will treat any owner who does not respond to a voting request as a "yes" vote. Not surprisingly, amendments to their declarations are now easier than ever! In a perverted twist on voting, unless they get more than 33% of the owners to vote "no," every amendment the board propose passes without any problemYou don't need a single person to vote "yes," or at all, to get amendments to the declaration to pass!

It only takes a minute to think of the fun any owner in this association could have. Just get enough owners to demand a special meeting and vote on a particular issue and your are in business. Sometimes it only takes a handful of owners to demand a special meeting. The board must send out the ballots and apply the same rules they are applying to their amendments. You don't like that rental restrictions . . . demand a special meeting and watch the association board scramble to gather enough no votes to prevent your amendment from passing! 

After you quit laughing, a hard reality sets in. The ultimate effect of this voting rule is a letter from an attorney hired by an owner demanding that the association undue all of its bogus declaration amendments and threatening a lawsuit. It is not a question of whether these amendments will be challenged, it is just a question of when and how much it will cost the Association in attorney fees to come to their senses and undue the amendments passed using this laughable voting rule.

Naturally, our veteran manager expressed concern over this voting practice and was told by the board that an outside attorney had offered a legal opinion and that this was a legal way of voting. This is why community associations (condominiums, PUDs, Townhomes, and homeowners associations) should seek out the advice of the HOA attorneys at the Morris Sperry law office. Community association law is a complex area of law with no mercy on general practicioners and dabblers who have one HOA case a year. Would you go to a divorce lawyer for estate planning? Would you want someone who handles personal injury cases to file your bankruptcy? The lawyers at Morris Sperry have one focus - HOA law. That's all they do. Why would you go anywhere else for your HOA legal questions and risk the type of advice that this poor association received?  

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February 26, 2015

Senate Bill 218 has passed out of committee in the Utah Senate and is now moving forward on the floor of the senate. This bill would make several changes to the Revised Nonprofit Corporation Act. Those HOAs that are incorporated, which 95% are, will be subject to the changes in all sorts of areas. Among other things, the new HOA law would: (1) clarify that notice and member participation by text, email, and other electronic means is acceptable in more circumstances, (2) eliminate the ability to use written ballots in a meeting if those ballots were solicited as part of an effort to take action without a meeting, (3) clarify that a proxy may be sent by text, email, or other means of electronic communication, (4) clarifying the right of board members to approve of board actions by text and email, (5) limit the authority of committees, (6) clarify that other types of notice may be permitted for meetings of the members and board, (7) clarifies the conflict of interest section application to relatives of board members, and (8) clarifies the contents of articles of restatement. 

If this bill passes, HOAs will need to update their procedures and practices applicable to daily decision making by board members and for member meetings and action. Morris Sperry will continue to monitor this bill and will be ready to provide any association with a complete overview of the changes if this new law passes.

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February 25, 2015

HOA bill HB 304 passed out of the House Public Utilities and Technology Committee yesterday and is off to the floor of the Senate. As explained in an earlier news article on this site, this law would allow community associations to get advance notice when utilities will be turned off so that Associations can try to avoid freezing pipes and all the damage they cause in community associations. Representative Dixon Pitcher (Representative Pitcher's Website) of the Utah House of Representatives is sponsoring this bill. Representative Pitcher has been a great supporter of fair and balanced HOA laws and his constuents in District 10 should be pleased by his efforts. 

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February 25, 2015

SB 118 was amended and substituted today to include an after-the-fact change to HB 99, the HOA open meetings bill that recently passed both houses of the Utah Legislature and is waiting for the governor's signature. If the governor signs it, HB 99 will require HOAs to have most board meetings and management committee meetings open to all owners and will require notice of most of those meetings to owners who request notice. Consistent with the desires of the Utah Senate, a provision was added to SB 118 that will modify the new HOA open meeting law to provide for a notice, right to cure, and cause of action for an owner against an HOA that refuses to comply with the open meeting laws. This cause of action will allow an owner to recover a $500 minimium damage amount, an order that the association comply, and attorney fees if an HOA ignores the new open meeting requirements after a warning from the owner. As one of the draftsman of both the original HB 99 open meeting bill and of the changes required by the Senate, John Morris and the Morris Sperry team of lawyers are ready to advise HOAs in Utah (condominiums, townhomes, homeowners associations) on what they need to do to comply with this new law and all HOA laws. As a frequent advocate of owner rights, the Morris Sperry attorneys also remain willing to assist owners with enforcing their rights under this law and any other.  

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February 24, 2015

John Morris of Morris Sperry testified in favor of Senate Bill 118 (SB 118) today in the House Business and Labor Committee with Senator Todd Weiler. (Senator Weiler's Website)  Senator Weiler graciously allowed his original senate bill to be expanded to provide more help for Community Associations trying to amend governing documents (declaration, bylaws, articles of incorporation). SB 118 will limit the restrictions on amending governing documents so that no more than 67% of the owners and mortgage holders are required to approve an amendment. It also fixes a couple of other limitations that exist in some documents, including in Senator Weiler's district. Morris Sperry commends the Utah legislature and Senator Todd Weiler for their serious consideration of the issues facing community associations and their willingness to help solve those problems. Owners and board members in Condominiums, Townhomes, and Homeowners Associations in Senator Weiler's district are well served by his Utah legislative efforts and for his balanced and practical approach to HOA legal issues.

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February 19, 2015

Agencies enforcing the Fair Housing Act have sometimes taken the position that community associations (HOAs, condominiums, townhomes, homeowners associations) must reasign limited common area parking to accomodate requests from disabled (handicapped) persons for more accessable parking. This reasignment can turn into a nightmare because limited common area parking is often assigned in deeds, CC&Rs, and plats. Owners typically rely on the location and convience of an assigned parking spot when making purchasing decisions. It is extremly disruptive and unfair to later force the owner to permanently trade for some parking spot that is often far less convenient after they have purchased. It is similar to informing an owner that they must trade backyards with their neighbor, or someone accross and down the street. Moreover, Associations are making these tough decisions under constant threat of a fair housing complaint that can cost thousands of dollars to defend.

In Commonwealth of Virginia v. Windsor Plaza Condominium Association, Inc., a Virginia Supreme Court found no fair housing act violation when the Assocaition refused to force a trade of limited common area parking assigned to owners, essentially stating that the Association had no right to confiscate the parking of another and therefore the requested accomodation was unreasonable. This case will provide new authority that Associations will have to consider when similar requests for accomodation are recieved.

This case highlights the difficulty Associations face when confronted with Fair Housing Act requests for accomodation. The Association undoubtedly spent tens of thousands of dollars to be vindicated in its ultimately correct decision, with no right to recover any of those attorney fees. If the Court had ruled the other way, the Association would have to pay the complainant's attorney fees, penalties, damages, and its own attorney fees. Morris Sperry understand the Utah Fair Housing Act (UFHA) and the Federal Fair Housing Act (FFHA) and can help associations navigate the difficult procedures that apply when responding to such as request. Moreover, Morris Sperry stays up to date on these and other cases to provide the very best substantive analysis possible.      

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February 15, 2015

Community Associations with units that share walls (condominiums and townhomes) frequently run into problems when an owner fails to pay utility bills and allows the heat to be shut off in the middle of the winter.  The pipes sometimes freeze and burst causing damage in that unit and others nearby.

House Bill (HB) 304 is an attempt to help solve that problem. In short, it would allow HOAs to give notice to the power and gas company and require them to: (1) give notice to the association if they intend to shut off power or gas to a unit, and (2) allow the association to pay the bill if it wants to keep the heat on.  It also clarifies the right of the association to enter any unit for the purpose of winterizing the unit if the association receives notice that the power or gas are going to be shutoff and the the association elects not to pay the bills. To read the bill, click HERE.

This bill is another effort by the Utah CAI Legislative Action Committee with the help of Represenative Dixon Pitcher. Morris Sperry remains heavily involved in this committee and with supporting both the Utah Legislative Action Committee and the Community Association Institute generally. 

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February 11, 2015

John Morris appeared and testified again before the Senate Business and Labor committee regarding House Bill 98 (HB 98) (HB0098S01), substituted Senate Bill 118 (SB 118) (SB0118S01), and substituted Senate Bill 80 (SB 80) (SB0080S01). All three bills passed out of committee today and are headed to the floor of the Senate. HB 98 is the compilation bill that will clarify and update the requirements for HOA fines in Utah. It will also have a big impact on an association's rights related to rental units in the association and the association's right to impose rental restrictions through amendments to the governing documents. Charges that an Association might impose on rental units just because they are rental units will be a thing of the past as will other blatently descriminatory practices against rental units in associations. SB 118 addresses restrictive provisions in governing documents that make it overly difficult to amend those documents. It will void requirements that 100% of the owners approve amendments in older condominiums, 100% requirements for mortgagee approvals for amendments, and any requirement that a particular owner approve an amendment. If it passes, SB 80 will require certain disclosures at the time of sale of a unit or home in a community association if the association is in the developer control period. This will help provide more information to purchasers about hoa reserve accounts as well as other association financial information.  

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February 5, 2015

Leon Benzer pleaded guilty Friday January 16, 2015, in a massive scheme to take over and defraud several homeowners association in the Las Vegas area.

Benzer, a former construction company boss and who prosecutors say is the mastermind behind the scheme, entered a total of 19 guilty pleas, which include conspiracy, fraud, and tax evasion in two separate federal indictments.

In his plea agreement with prosecutors, Benzer provides an explanation of his role in the multi-million dollar scheme. But his agreement does not include testifying against the remaining defendants charged in the HOA conspiracy. Prosecutors allege that this occurred at 11 HOAs across Las Vegas valley between 2003 and 2009.

Prosecutors are recommending that Benzer’s prison time be reduced because of his acceptance of responsibility for his crimes. However, Justice Department lawyer Charles La Bella said prison time will be left to Mahan and his assessment of the federal sentencing guidelines.

Benzer, who once owned Silver Lining Construction Company, and 10 other people were indicted in the scheme in January 2013. These charges relate to more than $7 million that Benzer and his company obtained through fraudulent contracts with the Vistana condominium development to do construction defect work.

The investigation that led to the indictments is thought to be the largest public corruption case federal authorities have brought to Southern Nevada. In all, 36 defendants have pleaded guilty since August 2011. Most are cooperating and waiting to be sentenced after the trial.

Prosecutors are seeking almost $25 million in restitution for the HOAs and lending institutions that were defrauded in the takeover scheme.

Benzer’s goal was to gain control of the HOA boards and steer construction defect litgation contracts to Quon’s (former construction defect lawyer) law office. Quon, now deceased, was to give Benzer 10% of any defect judgments she won. Benzer would also obtain construction defect repair contracts from the corrupted HOA boards.

According to prosecutors, Benzer, Quon and others are to believed to have funneled more than $8 million through secret bank accounts to help them land the contracts.

In his plea agreement, Benzer admits he had the scheme covered from all angles, including setting up buyers to infiltrate HOA communities and get elected to their boards.

Members that were loyal to Benzer were elected through ballot stuffing, bribery and other tricks. Attorneys on Benzer’s payroll were hired to provide legal advice to the boards and oversee the election rigging, putting the Benzer-friendly community management firms in place.

The conspirators gained control of half of the HOA boards and were working on the others until authorities broke up the scheme in 2008 with raids across the valley.

To read the full article, click here.

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July 9, 2014

In a recent decision, the Utah Supreme Court held, a condominium property manager owed no duty to a resident in the complex who tripped and fell on tree shoots in the lawn. In a lengthy decision addressing several legal theories, the Utah Supreme Court stated that the property manager was not a "possessor" or the land, did not owe an independent duty to the owner, and had generally complied with its contractual obligations. One lesson is clear from the decision. If a property manager takes any action to contribute to a dangerous or unsafe condition, the manager may be liable. Although the court was concerned that the property manager may have contributed to the danger caused by the tree shoots through repeated mowing instead of proper removal, the issue had not been properly addressed by the plaintiff and was therefore disregarded. The core lesson for associations and managers is to always strive to resolve unsafe conditions in HOAs. Nobody wants anyone to get injured enjoying the open space in an HOA, regardless of legal concerns.

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October 8, 2013

On October 3, 2013, a judge in Missouri ruled that an association's ban on political signs was unconstitutional. In a detailed opinion, the judge applied prior authority from a well known New Jersey case, holding that the community association's ban on political signs did not satisfy constitutional standards. Fortunately for Morris Sperry clients who have engaged us to review or draft their rules, we have been warning about this possibility since the ruling in New Jersey several years ago. If your association's rules ban political signs either expressly or implicitly, call the lawyers at Morris Sperry to help you consider your options with experienced, thoughtful, and balanced advice.

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March 6, 2015

HB 304 passed through the Utah Senate Transportation and Public Utilities and Technology Committee and was placed on the Senate consent calendar yesterday. The odds of this bill passing just went up significantly. Community Associations could soon have a tool that allows them to get notice from utility companies before power and natural gas are shut off by the utility company for lack of payment. The board or management committee will have a chance to either enter the unit and winterize the unit or pay the bill and keep the utilities on. The Utah Legislative Action Committee of the Utah chapter of the Community Association Institute worked on and proposed this bill to help reduce damage from freezing pipes and flooding in community associations. Hopefully, this will turn into a valuable tool for Utah condominium associations and PUDs. 

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March 3, 2015

A veteran manager in the Utah HOA industry recently told a lawyer at Morris Sperry that he manages a Utah community association in which the board (with the help of an attorney member) has decided that it is just too hard to get the required 67% approval of owners necessary to approve declaration amendments. So, in a clever solution to this problem, they decided that they will treat any owner who does not respond to a voting request as a "yes" vote. Not surprisingly, amendments to their declarations are now easier than ever! In a perverted twist on voting, unless they get more than 33% of the owners to vote "no," every amendment the board propose passes without any problemYou don't need a single person to vote "yes," or at all, to get amendments to the declaration to pass!

It only takes a minute to think of the fun any owner in this association could have. Just get enough owners to demand a special meeting and vote on a particular issue and your are in business. Sometimes it only takes a handful of owners to demand a special meeting. The board must send out the ballots and apply the same rules they are applying to their amendments. You don't like that rental restrictions . . . demand a special meeting and watch the association board scramble to gather enough no votes to prevent your amendment from passing! 

After you quit laughing, a hard reality sets in. The ultimate effect of this voting rule is a letter from an attorney hired by an owner demanding that the association undue all of its bogus declaration amendments and threatening a lawsuit. It is not a question of whether these amendments will be challenged, it is just a question of when and how much it will cost the Association in attorney fees to come to their senses and undue the amendments passed using this laughable voting rule.

Naturally, our veteran manager expressed concern over this voting practice and was told by the board that an outside attorney had offered a legal opinion and that this was a legal way of voting. This is why community associations (condominiums, PUDs, Townhomes, and homeowners associations) should seek out the advice of the HOA attorneys at the Morris Sperry law office. Community association law is a complex area of law with no mercy on general practicioners and dabblers who have one HOA case a year. Would you go to a divorce lawyer for estate planning? Would you want someone who handles personal injury cases to file your bankruptcy? The lawyers at Morris Sperry have one focus - HOA law. That's all they do. Why would you go anywhere else for your HOA legal questions and risk the type of advice that this poor association received?  

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February 26, 2015

Senate Bill 80 passed the Utah Senate yesterday and will now start its journey through the House of Representatives. SB 80, entitled "Homeowners' Association Reserve Fund" will require developers during the period of administrative control (the time developers control a new project) to provide a copy of the HOA governing documents and the most recent financials for the association in any sale of a unit or home in the community.

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February 26, 2015

Senate Bill 218 has passed out of committee in the Utah Senate and is now moving forward on the floor of the senate. This bill would make several changes to the Revised Nonprofit Corporation Act. Those HOAs that are incorporated, which 95% are, will be subject to the changes in all sorts of areas. Among other things, the new HOA law would: (1) clarify that notice and member participation by text, email, and other electronic means is acceptable in more circumstances, (2) eliminate the ability to use written ballots in a meeting if those ballots were solicited as part of an effort to take action without a meeting, (3) clarify that a proxy may be sent by text, email, or other means of electronic communication, (4) clarifying the right of board members to approve of board actions by text and email, (5) limit the authority of committees, (6) clarify that other types of notice may be permitted for meetings of the members and board, (7) clarifies the conflict of interest section application to relatives of board members, and (8) clarifies the contents of articles of restatement. 

If this bill passes, HOAs will need to update their procedures and practices applicable to daily decision making by board members and for member meetings and action. Morris Sperry will continue to monitor this bill and will be ready to provide any association with a complete overview of the changes if this new law passes.

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February 25, 2015

SB 118 was amended and substituted today to include an after-the-fact change to HB 99, the HOA open meetings bill that recently passed both houses of the Utah Legislature and is waiting for the governor's signature. If the governor signs it, HB 99 will require HOAs to have most board meetings and management committee meetings open to all owners and will require notice of most of those meetings to owners who request notice. Consistent with the desires of the Utah Senate, a provision was added to SB 118 that will modify the new HOA open meeting law to provide for a notice, right to cure, and cause of action for an owner against an HOA that refuses to comply with the open meeting laws. This cause of action will allow an owner to recover a $500 minimium damage amount, an order that the association comply, and attorney fees if an HOA ignores the new open meeting requirements after a warning from the owner. As one of the draftsman of both the original HB 99 open meeting bill and of the changes required by the Senate, John Morris and the Morris Sperry team of lawyers are ready to advise HOAs in Utah (condominiums, townhomes, homeowners associations) on what they need to do to comply with this new law and all HOA laws. As a frequent advocate of owner rights, the Morris Sperry attorneys also remain willing to assist owners with enforcing their rights under this law and any other.  

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February 25, 2015

HOA bill HB 304 passed out of the House Public Utilities and Technology Committee yesterday and is off to the floor of the Senate. As explained in an earlier news article on this site, this law would allow community associations to get advance notice when utilities will be turned off so that Associations can try to avoid freezing pipes and all the damage they cause in community associations. Representative Dixon Pitcher (Representative Pitcher's Website) of the Utah House of Representatives is sponsoring this bill. Representative Pitcher has been a great supporter of fair and balanced HOA laws and his constuents in District 10 should be pleased by his efforts. 

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February 24, 2015

John Morris of Morris Sperry testified in favor of Senate Bill 118 (SB 118) today in the House Business and Labor Committee with Senator Todd Weiler. (Senator Weiler's Website)  Senator Weiler graciously allowed his original senate bill to be expanded to provide more help for Community Associations trying to amend governing documents (declaration, bylaws, articles of incorporation). SB 118 will limit the restrictions on amending governing documents so that no more than 67% of the owners and mortgage holders are required to approve an amendment. It also fixes a couple of other limitations that exist in some documents, including in Senator Weiler's district. Morris Sperry commends the Utah legislature and Senator Todd Weiler for their serious consideration of the issues facing community associations and their willingness to help solve those problems. Owners and board members in Condominiums, Townhomes, and Homeowners Associations in Senator Weiler's district are well served by his Utah legislative efforts and for his balanced and practical approach to HOA legal issues.

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February 15, 2015

Community Associations with units that share walls (condominiums and townhomes) frequently run into problems when an owner fails to pay utility bills and allows the heat to be shut off in the middle of the winter.  The pipes sometimes freeze and burst causing damage in that unit and others nearby.

House Bill (HB) 304 is an attempt to help solve that problem. In short, it would allow HOAs to give notice to the power and gas company and require them to: (1) give notice to the association if they intend to shut off power or gas to a unit, and (2) allow the association to pay the bill if it wants to keep the heat on.  It also clarifies the right of the association to enter any unit for the purpose of winterizing the unit if the association receives notice that the power or gas are going to be shutoff and the the association elects not to pay the bills. To read the bill, click HERE.

This bill is another effort by the Utah CAI Legislative Action Committee with the help of Represenative Dixon Pitcher. Morris Sperry remains heavily involved in this committee and with supporting both the Utah Legislative Action Committee and the Community Association Institute generally. 

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February 11, 2015

John Morris appeared and testified again before the Senate Business and Labor committee regarding House Bill 98 (HB 98) (HB0098S01), substituted Senate Bill 118 (SB 118) (SB0118S01), and substituted Senate Bill 80 (SB 80) (SB0080S01). All three bills passed out of committee today and are headed to the floor of the Senate. HB 98 is the compilation bill that will clarify and update the requirements for HOA fines in Utah. It will also have a big impact on an association's rights related to rental units in the association and the association's right to impose rental restrictions through amendments to the governing documents. Charges that an Association might impose on rental units just because they are rental units will be a thing of the past as will other blatently descriminatory practices against rental units in associations. SB 118 addresses restrictive provisions in governing documents that make it overly difficult to amend those documents. It will void requirements that 100% of the owners approve amendments in older condominiums, 100% requirements for mortgagee approvals for amendments, and any requirement that a particular owner approve an amendment. If it passes, SB 80 will require certain disclosures at the time of sale of a unit or home in a community association if the association is in the developer control period. This will help provide more information to purchasers about hoa reserve accounts as well as other association financial information.  

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February 8, 2015

John Morris testified before the Senate Business and Labor committee last week regarding new HOA laws in Utah. HB 99 will require condominium, townhome, HOA, PUD, and homeowner associtaions to all open their board of directors', management committee', or board of trustees' meetings to owners. John Morris answered questions about the law and addressed concerns of Senators that the law does not go far enough in protecting the rights of owners to attend board member meetings. John explained that the law is a first step and that the industry does not want to create to much of a burden on managers or associations, while nonetheless preserving the right of an owenr to attend board meetings. John continues his work on good laws in Utah on the Community Association Insitute (CAI) Utah Legislative Action committee. House Bill 99 is sponsored by representative Mike Shultz in District 12. HB 99 originated in the local Utah Chapter and was the product of almost three years of discussion among managers, owners in HOAs, board members, HOA attorneys, and other industry vendors and participants.   

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April 3, 2015

The governor signed the remaining new HOA law, S.B. 118, on the last day allowed. Signficant changes to the procedure for requesting association documents now takes effect along with help for association amendments and the fine and attorney fee provision for associations who fail to comply with the new open meeting laws. All of the new 2015 condominium laws and PUD laws will now take effect. Watch for future articles on the Morris Sperry website analyzing the new legislation and providing specific implementation dates.

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April 1, 2015

Governor Herbert signed three more new condo laws and new community association laws in the last few days. H.B. 98 dealing with association rentals and fines will become law. S.B. 80 making minor modifications to the reserve statute will become law. Finally, S.B. 206 making significant changes the the revised nonprofit corporations act will become law. Keep updated on the Morris Sperry's website for more information on these important new hoa laws.

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March 31, 2015

Governor Gary Herbert signed H.B. 304 into law. H.B. 304 contains important new homeowners association laws and condo laws that will help associations minimize damage from flooding and freezing pipes. In short, the bill now allows community associations to give notice the electric and gas companies, stating that the association wants notice before the utility shuts off either eletrical or natural gas service. Upon receiving notice from the gas or electric company, the condominium association or HOA can take action to winterize the unit or pay the utilitites so that the pipes don't freeze. The Utah Community Association Institute Legislative Action Committee successfully introduced this bill in an effort to help with this destructive problem. Contact Morris Sperry for a complete outline of the new 2015 HOA laws. 

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March 23, 2015

On Friday March 20, 2015, the Department of Justice announced that the Greenbrier Condominiums in Minnesota agreed to pay $100,000 in compensatory damages to six families that suffered discrimination and $10,000 in penalties to the United States. The settlement ends a Fair Housing Act case started by the Department of Justice against the Association and one of its employees. The Association also has to establish new non-discrimination policies and end discriminatory behavior. The Greenbrier and its employee were alleged to have created and enforced rules that prevented children from equally enjoying the common areas and to have made statements indicating a preference against families with children. This case highlights the importance of an annual review of a Condo or hoa's rules and policies by a qualified HOA lawyer - such as those from Morris Sperry. The lawyers at Morris Sperry have significant experience dealing with Utah Fair Housing issues and complaints, including successfully defending several complaints brought against Condominium Associations. More importantly, Morris Sperry can advise associations on how to avoid these complaints in the first place and comply with what can sometimes be very subtle Fair Housing laws.  

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March 15, 2015

The 2015 Utah legislative session ended Friday.New Utah laws on hundreds of topics including new HOA laws for 2015 all await the Governor's signature. With the passage of 528 bills, the Governor has started the long process of signing bills. None of the new community association laws have been signed yet, but there is no reason to believe they would be subject to a veto. For now, community associations in Utah just wait and see to find out which new 2015 HOA laws the governor will sign. The governor has 20 days from the end of the session to veto or sign a bill. If he vetos the bill, it obviously does not become law. However, whether he signs the bill, or does not sign it but does not veto, it becomes law.

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March 12, 2015

One resident in a D.C. townhome obtained a court order (temporary restraining order) preventing the neighbor from smoking in the neighboring townhome. Smoke from tobacco, cigarettes, or marijuana is clearly a nuisance under the law in most states, including Utah. The Court in this case found that the smoke was making its way into the neighboring home, where a couple lived with one child and another on the way. The couple also sued for $500,000 in damages. Apparently the couple had tried to work it out informally and had tried mediation, but he smoking neighbor refused to take action to minimize the transmission of smoke. 

Unfortunately, smokers frequently take a hard line position about smoking in their homes, assuming that they don't have to worry about where the smoke from their cigarettes or tabacco products actual drifts to. That, of course, is not the law in Utah and most other states. Utah has a very strong nuisance statute and tobacco smoke is clearly a nuisance, in any amount. It also doesn't matter how the smoke gets in, as long as it does.

Morris Sperry has dealt with complicated nuisance and HOA smoking cases representing parties on both sides, the HOA and the owner. They are difficult cases because most people are not excited about quitting smoking or moving out of their homes. 

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March 11, 2015

 

HB 304, a new Utah HOA law for 2015, is one step closer to passage. The bill, explained in a prior Morris Sperry news articles, passed the senate and is now waiting for the governor's signature along with several other new HOA laws for 2015.  

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March 7, 2015

After an unpredictable and wild legislative process that saw the bill transform several times, SB 118 finally passed the Senate and the House. It now awaits the governor's signature. This bill took more turns than a blind mouse in a mile long maze. In its final form, this bill is a compilation of three different concepts. First, community associations now have even better tools to get past mistakes and roadblocks in the governing documents that prevent amendments. Second, this bill ended up with owner protections against associations who fail to comply with the new open meeting laws in HB 99. The Utah Senate committee required these changes but, through simple inadvertence, they didn't make it into HB 99 before it passed both houses. So, they ended up in SB 118. Finally, SB 118 was amended to include significant clarifications to the procedures for an owner requesting association documents and a new penalty provision if condominium associations or other community associations fail to comply with owner document requests. These provisions came instead of another bill the Sponsor intended to run and were also part of a cooperative drafting effort between the CAI LAC and the senator.

This bill reflects a careful balance between owner and association rights. Those associations who take the "high road" of transparency and compliance with the law, will see no problems with these new penalty provisions. On the other hand, those management companies, HOA attorneys, and associations who tend to view HOA relationships with owners as an "us" - the board and its advisors, against "them" - the owners, had better beware. The days of obstructing owners who want to attend meetings or see association records are coming to an end. Owners in townhomes, condominiums, and homeowners associations will no longer have to stand for stonewalling, unexplained delay, exorbitant document copying charges, and other common strategies employed by the "low road" associations and their advisors who try to obstruct owners in their legitimate requests for association documents. Without needing an attorney, owners will be able to file a claim in small claims court and obtain a $500 damage award if the association fails to comply with either the open meeting or the document production laws. If an owner gets an attorney, he or she has a right to recover reasonable attorney fees.

This bill faced opposition from the "low road" attorneys who think that every law granting HOA owner rights is a threat to associations. And for those associations they advise, it probably is. Fortunately, that narrow minded opposition was fleeting, weak, and had no impact on the passage of the bill. The Utah legislature understood the importance of these types of balanced laws that support owners’ rights. How could they not – the same types of disclosure and access laws apply to the government they serve in!

John Morris, an attorney at Morris Sperry, is proud to have helped written the laws in this bill and to have testified in favor of this bill at the capitol. Morris Sperry applauds and supports this type of legislation. This new HOA law respects the balance between HOAs and their owners and helps remind as all who the HOA serves – the owners! The Utah community association institute HOA LAC (legislative action committee) worked hard on this bill with senators who have encountered the "low road" HOAs and were set on punishing them. The result was an excellent balance that good HOAs and their advisors will appreciate and respect. The work on this bill also continued and strengthened a good working relationship between the LAC and the Utah legislature.

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March 6, 2015

HB 304 passed through the Utah Senate Transportation and Public Utilities and Technology Committee and was placed on the Senate consent calendar yesterday. The odds of this bill passing just went up significantly. Community Associations could soon have a tool that allows them to get notice from utility companies before power and natural gas are shut off by the utility company for lack of payment. The board or management committee will have a chance to either enter the unit and winterize the unit or pay the bill and keep the utilities on. The Utah Legislative Action Committee of the Utah chapter of the Community Association Institute worked on and proposed this bill to help reduce damage from freezing pipes and flooding in community associations. Hopefully, this will turn into a valuable tool for Utah condominium associations and PUDs. 

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March 3, 2015

A veteran manager in the Utah HOA industry recently told a lawyer at Morris Sperry that he manages a Utah community association in which the board (with the help of an attorney member) has decided that it is just too hard to get the required 67% approval of owners necessary to approve declaration amendments. So, in a clever solution to this problem, they decided that they will treat any owner who does not respond to a voting request as a "yes" vote. Not surprisingly, amendments to their declarations are now easier than ever! In a perverted twist on voting, unless they get more than 33% of the owners to vote "no," every amendment the board propose passes without any problemYou don't need a single person to vote "yes," or at all, to get amendments to the declaration to pass!

It only takes a minute to think of the fun any owner in this association could have. Just get enough owners to demand a special meeting and vote on a particular issue and your are in business. Sometimes it only takes a handful of owners to demand a special meeting. The board must send out the ballots and apply the same rules they are applying to their amendments. You don't like that rental restrictions . . . demand a special meeting and watch the association board scramble to gather enough no votes to prevent your amendment from passing! 

After you quit laughing, a hard reality sets in. The ultimate effect of this voting rule is a letter from an attorney hired by an owner demanding that the association undue all of its bogus declaration amendments and threatening a lawsuit. It is not a question of whether these amendments will be challenged, it is just a question of when and how much it will cost the Association in attorney fees to come to their senses and undue the amendments passed using this laughable voting rule.

Naturally, our veteran manager expressed concern over this voting practice and was told by the board that an outside attorney had offered a legal opinion and that this was a legal way of voting. This is why community associations (condominiums, PUDs, Townhomes, and homeowners associations) should seek out the advice of the HOA attorneys at the Morris Sperry law office. Community association law is a complex area of law with no mercy on general practicioners and dabblers who have one HOA case a year. Would you go to a divorce lawyer for estate planning? Would you want someone who handles personal injury cases to file your bankruptcy? The lawyers at Morris Sperry have one focus - HOA law. That's all they do. Why would you go anywhere else for your HOA legal questions and risk the type of advice that this poor association received?  

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