57-8-10.1. Rental restrictions

 

Note that Subsections (1) through (5) do not apply to a project in which the initial declaration is recorded before May 12, 2009, unless, on or after May 12, 2015, the association adopts a rental restriction or prohibition, or amends an existing rental restriction or prohibition.  See Subsection (6) for more detail.

(1) (a) Subject to Subsections (1)(b), (5), and (6), an association of unit owners may:
            (i) create restrictions on the number and termfn1 of rentals in a condominium project; or
            (ii) prohibit rentals in the condominium project.
    (b) An association of unit owners that creates a rental restriction or prohibition in accordance with Subsection (1)(a) shall create the rental restriction or prohibition in a declaration or by amending the declaration.fn2

(2) If an association of unit owners prohibits or imposes restrictions on the number and term of rentals, the restrictions shall include:
    (a) a provision that requires a condominium project to exempt from the rental restrictions the following unit owner and the unit owner's unit:
            (i) a unit owner in the military for the period of the unit owner's deployment;
            (ii) a unit occupied by a unit owner's parent, child, or sibling;
            (iii) a unit owner whose employer has relocated the unit owner for two years or less;
            (iv) a unit owned by an entity that is occupied by an individual who:
                  (A) has voting rights under the entity's organizing documents; and
                  (B) has a 25% or greater share of ownership, control, and right to profits and losses of the entity; or
            (v) a unit owned by a trust or other entity created for estate planning purposes if the trust or other estate planning entity was created for the estate of:
                  (A) a current resident of the unit; or
                  (B) the parent, child, or sibling of the current resident of the unit;
     (b) a provision that allows a unit owner who has a rental in the condominium project before the time the rental restriction described in Subsection (1)(a) is recorded with the county recorder of the county in which the condominium project is located to continue renting until:
            (i) the unit owner occupies the unit;
            (ii) an officer, owner, member, trustee, beneficiary, director, or person holding a similar position of ownership or control of an entity or trust that holds an ownership interest in the unit, occupies the unit; or
            (iii) the unit is transferred; and
     (c) a requirement that the association of unit owners create, by rule or resolution, procedures to:
            (i) determine and track the number of rentals and units in the condominium project subject to the provisions described in Subsections (2)(a) and (b); and
            (ii) ensure consistent administration and enforcement of the rental restrictions. 

(3) For purposes of Subsection (2)(b)(iii), a transfer occurs when one or more of the following occur:
     (a) the conveyance, sale, or other transfer of a unit by deed;
     (b) the granting of a life estate in the unit; or
     (c) if the unit is owned by a limited liability company, corporation, partnership, or other business entity, the sale or transfer of more than 75% of the business entity's share, stock, membership interests, or partnership interests in a 12-month period.

(4) This section does not limit or affect residency age requirements for an association of unit owners that complies with the requirements of the Housing for Older Persons Act, 42 U.S.C. Sec. 3607.

(5) A declaration or amendment to a declaration recorded before transfer of the first unit from the initial declarant may prohibit or restrict rentals without providing for the exceptions, provisions, and procedures required under Subsection (2)(a).

(6)(a) Subsections (1) through (5) do not apply to:
           (i) a condominium project that contains a time period unit as defined in Section 57-8-3;
           (ii) any other form of timeshare interest as defined in Section 57-19-2; or
           (iii) subject to Subsection (6)(b), a condominium project in which the initial declaration is recorded before May 12, 2009, unless, on or after May 12, 2015, the association of unit owners:
                 (A) adopts a rental restriction or prohibition; or
                 (B) amends an existing rental restriction or prohibition.
     (b) An association that adopts a rental restriction or amends an existing rental restriction or prohibition before May 9, 2017, is not required to include the exemption described in Subsection (2)(a)(iv).

(7) Notwithstanding this section, an association of unit owners may restrict or prohibit rentals without an exception described in Subsection (2) if:
     (a) the restriction or prohibition receives unanimous approval by all unit owners; and
     (b) when the restriction or prohibition requires an amendment to the association of unit owners' declaration, the association of unit owners fulfills all other requirements for amending the declaration described in the association of unit owners' governing documents.

(8) Except as provided in Subsection (9), an association of unit owners may not require a unit owner who owns a unit to:
     (a) obtain the association of unit owners' approval of a prospective renter; or
     (b) give the association of unit owners:
            (i) a copy of a rental application;
            (ii) a copy of a renter's or prospective renter's credit information or credit report;
            (iii) a copy of a renter's or prospective renter's background check; or
            (iv) documentation to verify the renter's age; or
     (c) pay an additional assessment, fine, or fee because the unit is a rental unit. 

(9) (a) A unit owner who owns a rental unit shall give an association of unit owners the documents described in Subsection (8)(b) if the unit owner is required to provide the documents by court order or as part of discovery under the Utah Rules of Civil Procedure.
     (b) If an association of unit owners' declaration lawfully prohibits or restricts occupancy of the units by a certain class of individuals,fn3 the association of unit owners may require a unit owner who owns a rental unit to give the association of unit owners the information described in Subsection (8)(b), if:
            (i) the information helps the association of unit owners determine whether the renter's occupancy of the unit complies with the association of unit owners' declaration; and
            (ii) the association of unit owners uses the information to determine whether the renter's occupancy of the unit complies with the association of unit owners' declaration.

(10) The provisions of Subsections (8) and (9) apply to an association of unit owners regardless of when the association of unit owners is created.


Enacted 2014, ch. 397, eff. May 13, 2014 (Sections 1 - 8 carried over from 57-8-10(9) (2011), Sections 9 and 10 new 2014).  Amended: 2015, ch. 22, eff. May 12, 2015;  2017, ch. 131, eff. May 9, 2017;  2018, ch. 395, eff. May 8, 2018.


FN 1.  It is important to note that Subsections (1) and (2) of this statute are not nearly as broad as they may appear to be if the two important qualifying words, "number" and "term," are ignored.  Only restrictions on the "number and term" of rentals, and prohibitions of rentals, are dealt with in those Subsections.

FN 2.  Despite the requirement of Subsection (1) to "create the rental restriction or prohibition [in accordance with Subsection (1)(a)] in a declaration or by amending the declaration," Section 57-8-8.1(4) authorizes an association to require a minimum lease term in a rule, as opposed to in the recorded declaration.  (Specifically, Section 57-8-8.1(4) states, "Unless contrary to a declaration, a rule may require a minimum lease term").  Note also, that "lease" is not defined in the Condo Act but the term "rentals" is.  There is no indication that the definition of "rentals" applies to the term "lease" as the terms are not used interchangeably in the Condo Act.  (The term "lease" is defined in the Community Association Act, but a definition in the Community Association Act is irrelevant to the Condo Act, as each act is free-standing and independent of the other).

FN 3.  For instance, a declaration that restricts occupancy of units by people under 55 in a "55 & Older" community under the Housing for Older Persons Act.


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