The Utah General Legislative Session for 2023 ran from January to March, with most new laws taking effect on May 3, 2023. Several legislative changes impacted nonprofit organizations and homeowners’ associations (HOAs), addressing record access, rental restrictions, board member qualifications, political signs, landscaping rules, and governance procedures. Below is a summary of the most relevant updates.
Access to Nonprofit Records
Clarifications in Senate Bill 191 (2023)
Senate Bill 191 (SB 191) refines the Utah Revised Nonprofit Corporation Act to clarify what records a property owner can access when following the specified legal process under Subsection 16-6a-1602(2). Now, owners may only view:
- “Appropriate” accounting records
- A membership list that includes names, addresses, and voting rights of members
Previously, the law allowed access to “any of the other records of the nonprofit corporation,” which was vague. This update makes it clear that only the records listed in Subsections 16-6a-1601(2) through (4) are accessible under this process.
Definition of “Corporate Records”
SB 191 also introduces a definition for “corporate records,” specifying that it includes records described in Section 16-6a-1601 but excludes informal correspondence, notes, or communications. However, since the law does not use the term substantively, this definition has limited practical effect.
Rental Restrictions for Condo and Community Associations
Previously, Utah law prohibited HOAs from imposing extra fees on property owners who rent out their units. SB 191 introduces a modification:
- If an association allows at least 35% of its units to be rentals, it may charge landlords an annual fee of up to $200 to cover administrative costs directly related to the rental.
- The fee must be justified with a detailed accounting report provided to the owner.
These provisions are now codified in Utah Code Sections 57-8a-209(9)(c) and 57-8-10.1(9)(c).
Board Member Qualifications: Restrictions on Sex Offenders and Felons
SB 191 allows associations to adopt rules that disqualify individuals from serving as board members if they:
- Have been convicted of a felony
- Are registered sex offenders due to a conviction involving a minor (under 18)
This provision is reflected in Utah Code Sections 57-8a-501 and 57-8-59.
Restricted Access to Common Areas
Additionally, the bill permits HOAs to restrict access for registered sex offenders to certain common areas, including:
- Swimming pools
- Parks
- Playgrounds
However, these restrictions cannot apply when the individual is fulfilling parental responsibilities. This is outlined in Utah Code Sections 57-8a-218(18) and 57-8-8.1(10).
Definition of “Political Sign”
Utah law protects the right to display political signs, but the definition of such signs was previously unclear. SB 191 now defines a political sign as any sign or document that:
- Advocates for or against a candidate for public office
- Supports or opposes a ballot proposition
This definition is now included in Utah Code Sections 57-8a-102(21) and 57-8-3(34). The law continues to allow HOAs to regulate the time, place, and manner of sign placement, but not their content.
Water-Efficient Landscaping Requirements
Community Associations Must Adopt Rules
A 2022 law required community associations to adopt water-efficient landscaping rules, particularly for drought conditions. SB 191 mandates that these rules must be formally adopted by June 30, 2023. Associations cannot prohibit low-water-use landscaping during droughts (Utah Code Sections 57-8a-218(16) and 57-8-8.1(9)).
House Bill 450 (2023): Adjustments to Landscaping Rules
House Bill 450 (HB 450) updates the Community Association Act, clarifying that:
- HOAs cannot prohibit homeowners from using water-wise landscaping.
- HOAs may restrict or prohibit specific plant types, but not water-wise plants.
- HOAs cannot require homeowners to have more than 50% vegetative coverage that is not water-efficient.
These updates reinforce the state’s commitment to sustainable water use.
Changes to HOA Rule-Making Procedures
Rule Adoption and Challenge Period
Under Utah Code Section 57-8a-217, HOAs must follow these steps before adopting or changing rules:
- Notify owners about the proposed rule change
- Hold an open forum allowing owners to voice concerns
- Send a copy of the new rule to owners within 15 days of adoption
SB 152 (2023) adds a new provision: If an HOA fails to follow this process, a lawsuit challenging the rule must be filed within 18 months.
Definition of “Rule” for Community Associations
SB 191 also provides a legal definition for “rule” under Utah Code Section 57-8a-102(25):
A rule is any policy, guideline, restriction, or regulation that:
- Is not included in an official governing document (e.g., CC&Rs, bylaws, contracts)
- Governs people’s behavior or property use, design, or appearance
The law also clarifies that internal board procedures are not considered rules. Strangely, this definition applies only to community associations, not condominiums.
Community Association Act Applicability
To prevent disputes over whether the Community Association Act applies to older HOAs, SB 152 (2023) states that the Act applies to any HOA that registers or updates its registration with the Utah HOA Registry. Since registration is legally required, this ensures universal applicability (Utah Code Section 57-8a-105(7)).
Conclusion
The 2023 Utah legislative session introduced significant changes affecting nonprofit organizations, HOAs, and condo associations. Key reforms clarify record access, rental fees, board member qualifications, political signs, landscaping rules, and rule-making procedures. Homeowners, board members, and property managers should review these updates to ensure compliance with the latest state laws.