Conduct, Review and Update
Both community associations and condo associations are required to conduct a reserve analysis every six years and review and, if necessary, update it every three years, unless the community association's governing documents or the condo association's declaration provides something different. The board may conduct the reserve analysis itself or engage someone else to conduct it. See Utah Code §§ 57-8a-211(2), (3) and 57-8-7.5(2), (3).
A "reserve analysis" is an analysis to determine the need for a reserve fund to accumulate reserve funds, and the appropriate amount of any reserve fund. "Reserve funds" means money to cover the cost of repairing, replacing, or restoring common areas and facilities that have a useful life of three years or more and a remaining useful life of less than 30 years, if the cost cannot reasonably be funded from the general budget or other funds of the association. See id. at subsection (1).
The law requires a reserve fund analysisfn1 to include:
(a) a list of the components identified in the reserve analysis that will reasonably require reserve funds;
(b) a statement of the probable remaining useful life, as of the date of the reserve analysis, of each component identified in the reserve analysis;
(c) an estimate of the cost to repair, replace, or restore each component identified in the reserve analysis;
(d) an estimate of the total annual contribution to a reserve fund necessary to meet the cost to repair, replace, or restore each component identified in the reserve analysis during the component's useful life and at the end of the component's useful life; and
(e) a reserve funding plan that recommends how the association may fund the annual contribution described in Subsection (d).
Id. at subsection (4).
Provide to Owners
Once a year, an association must provide owners a summary of the most recent reserve analysis or update. Additionally, an association must provide a copy of the complete reserve analysis or update to an owner who requests a copy. Id. at subsection (5).
Each yearly budget of an association must include a line item that identifies the amount to be placed into a reserve fund in an amount the board determines, based on the reserve analysis, to be prudent; or an amount required by the governing documents, if the governing documents require a higher amount. The owners may veto the line item by following the procedure specified by law and outlined in Index, budget.
If an association does not do the things under "Provide to Owners" and "Budget" above, and still doesn't do them within 90 days of receiving the statutory notice from an owner under 57-8a-211(8)(b) or 57-8-7.5(8)(b), the owner may obtain a court injunction requiring compliance and payment of $500 or the owner's actual damages, whichever is more, and the association will be required to pay the owner's costs and attorney fees. See id. at subsection (8).
The above requirements do not apply during the declarant (developer) control period. See id. at subsection (10).
FN 1. The Acts do not define "reserve fund analysis," nor do they explain the distinction between a "reserve fund analysis" and the required "reserve analysis."
|57-8-7.5. Reserve analysis -- Reserve fund|
|57-8a-211. Reserve analysis -- Reserve fund|
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