Other Utah Statutes Relevant to HOAs

Service Contracts Act

Utah Code Title 15, Chapter 10

Summary

This law requires two main things for a "service contract" to be able to automatically renew after an initial period ("service contract" means a contract for service, maintenance, or repair: (i) in connection with real property; or (ii) that provides a benefit to the real property):

     1.  No sooner than 90 days and not later than 30 days before the deadline to terminate a service contract the person providing service, maintenance, or repair under a service contract must provide the HOA written notice, personally, by certified mail, or prominently displayed on the first page of a monthly statement, that informs the HOA of the automatic renewal provision in the contract, and

     2.  A contract executed on or after July 1, 2011, with a renewal period exceeding 12 months, must prominently display on the first page of the contract notice of the automatic renewal provision.

The Act was enacted in 2003 and amended in 2006, 2011 and 2014.

15-10-101.   Title.

This chapter is known as the "Service Contracts Act."


Enacted by Chapter 46, 2003 General Session


15-10-102.   Definitions.

As used in this chapter:

(1) "Automatic renewal provision" means a provision under which a service contract is renewed for one or more specified periods if:
     (a) the renewal causes the service contract to be in effect more than six months after the day of the initiation of the service contract; and
     (b) the renewal is effective unless the consumer gives notice to the seller of the consumer's intention to terminate the service contract.

(2) "Business consumer" means a person engaged in business if the person enters into a service contract as part of the person's business activities.

(3) (a) "Consumer" means a person receiving service, maintenance, or repair under a service contract.
     (b) "Consumer" includes a representative of an association subject to:
            (i) Title 57, Chapter 8, Condominium Ownership Act; or
            (ii) Title 57, Chapter 8a, Community Association Act.

(4) "Seller" means a person providing service, maintenance, or repair under a service contract.

(5) (a) "Service contract" means a contract for service, maintenance, or repair:
            (i) in connection with real property; or
            (ii) that provides a benefit to the real property.
     (b) "Service contract" does not include a contract affecting any right, title, estate, or interest in real property, including:
            (i) a fee title interest;
            (ii) a leasehold interest;
            (iii) an option contract relating to real property;
            (iv) a real estate purchase contract;
            (v) an easement; or
            (vi) any other real property interest governed by Title 57, Real Estate.


Amended by Chapter 262, 2011 General Session


15-10-201.   Notice requirement.

(1) Except as provided in Subsection (2)(b), a service contract may not contain an automatic renewal provision unless the seller provides the consumer written notice complying with Subsection (2) that informs the consumer of the automatic renewal provision.

(2) (a) For a service contract executed on or after July 1, 2011, that exceeds 12 months for a renewal period, a seller shall provide written notice of an automatic renewal provision prominently displayed on the first page of the service contract.
     (b) In addition to complying with Subsection (2)(a), a seller shall provide written notice required under Subsection (1) to the consumer:
            (i) personally;
            (ii) by certified mail; or
            (iii) prominently displayed on the first page of a monthly statement.
     (c) (i) A seller shall provide written notice under Subsection (2)(b):
                  (A) no later than 30 calendar days before the last day on which the consumer may give notice of the consumer's intention to terminate the service contract; and
                  (B) no sooner than 90 calendar days before the last day on which the consumer may give notice of the consumer's intention to terminate the service contract.
            (ii) A seller may not provide written notice required under Subsection (1) except:
                  (A) as provided in Subsection (2)(a); or
                  (B) during the time period described in Subsection (2)(c)(i).
     (d) Written notice required under Subsection (1) shall be:
            (i) written in clear and understandable language; and
            (ii) printed in an easy-to-read type size and style.


Amended:  2011, ch. 262;  2014, ch. 189 (only change was in subsection (1), changed "in Subsection (1)" to "in Subsection (2)(b)").


15-10-202.   Remedy for violation.

(1) Subject to Subsection (2), if a seller does not comply with Section 15-10-201 with respect to a service contract containing an automatic renewal provision:
     (a) the automatic renewal provision is void and unconscionable as a matter of public policy; and
     (b) the service contract shall automatically renew on a month-to-month basis.

(2) Subsection (1) applies to an automatic renewal provision in a service contract with a business consumer1 for which a seller does not comply with Section 15-10-201 only if the service contract is executed on or after July 1, 2011.


Amended by Chapter 262, 2011 General Session

FN 1.  "Business consumer" is defined in Subsection 102(2) as "a person engaged in business if the person enters into a service contract as part of the person's business activities."  This open-ended language opens a possibility for argument that a condominium or community association is a business consumer (as well as simply a "consumer") and is not entitled to the remedy of this Act for contracts signed before July 1, 2011 (although that argument is flawed because the common definition of "business" requires participation in commerce or profit, which excludes most HOAs).  However, the legislative histories are very clear that one of the fundamental purposes of this Act is to protect condominium and community associations from automatic renewal provisions.   Thus, an association is not a business consumer for the purposes of this Act.


15-10-301.   Exemptions.

This chapter does not apply to a contract made pursuant to Title 11, Chapter 13, Interlocal Cooperation Act.


Enacted by Chapter 46, 2003 General Session


--------------(End of Act)---------------


Historical Service Contracts Act 

 

Because the notice-on-the-first-contract-page requirement as well as subsection 15-10-202(1) in the current Act do not apply to contracts executed before July 1, 2011 (see Sections 15-10-201(2)(a) and 202(2) above), the 2003 and 2006 versions of the Act are included below.  Certain provisions may be applicable to a particular contract, depending on when the contract was entered into.

 --------2006 Enactment-------

2006 Utah Laws Ch. 167 (S.B. 191):

SERVICE CONTRACTS ACT AMENDMENTS
2006 GENERAL SESSION
S.B. 191 Enrolled
STATE OF UTAH

 (Additions are indicated by underlined text; deletions by strikethrough text.)

This bill amends the Service Contracts Act. This bill amends the definition of “consumer” under the act; clarifies the time period during which notice may be provided by a seller; and makes technical changes.

AMENDS: 
15–10–102, as enacted by Chapter 46, Laws of Utah 2003
15–10–201, as enacted by Chapter 46, Laws of Utah 2003

Be it enacted by the Legislature of the state of Utah:

Section 1. Section 15–10–102 is amended to read:

§ 15–10–102. Definitions
As used in this chapter: 
(1) “Automatic renewal provision” means a provision under which a service contract is renewed for a specified period if: 
      (a) the renewal causes the service contract to be in effect more than six months after the day of the initiation of the service contract; and
      (b) the renewal is effective unless the consumer gives notice to the seller of the consumer's intention to terminate the service contract. 
(2) (a)  “Consumer” Except as provided in Subsection (2)(c), “consumer” means a person receiving service, maintenance, or repair under a service contract. 
      (b) “Consumer” includes a representative of an association subject to: 
            (i) Title 57, Chapter 8, Condominium Ownership Act; or
            (ii) Title 57, Chapter 8a, Community Association Act. 
      (c) “Consumer” does not include a person engaged in business for profit if the person enters into the service contract as part of the person's business activities. 
(3) “Seller” means a person providing service, maintenance, or repair under a service contract. 
(4)(a) “Service contract” means any contract for service, maintenance, or repair: 
            (i) in connection with any real property; or
            (ii) that provides a benefit to any real property. 
      (b) “Service contract” does not include a contract affecting any right, title, estate, or interest in real property, including: 
            (i) a fee title interest; 
            (ii) a leasehold interest; 
            (iii) an option contract relating to real property; 
            (iv) a real estate purchase contract; 
            (v) an easement; or
            (vi) any other real property interest governed by Title 57, Real Estate. 

Section 2. Section 15–10–201 is amended to read: 

§ 15–10–201. Notice requirement
(1) A service contract may not contain an automatic renewal provision unless the seller provides the consumer written notice complying with Subsection (2) that informs the consumer of the automatic renewal provision. 
(2)(a) The seller shall provide the written notice required under Subsection (1) to the consumer: 
       (i) personally, ; 
       (ii) by certified mail, ; or
       (iii) prominently displayed on the first page of a monthly statement:. 
    (b)(i) The seller shall provide the written notice required under Subsection (1): 
 (a)at least (A) no later than 30 calendar days prior to before the last day on which the consumer may give notice of the consumer's intention to terminate the contract; and
 (b)not more (B) no sooner than 90 calendar days prior to before the last day on which the consumer may give notice of the consumer's intention to terminate the contract; and.
        (ii) The seller may not provide the written notice required under Subsection (1) except during the time period described in Subsection (2)(b)(i).
    (c) The written notice required under Subsection (1) shall be:   (c) (i) written in clear and understandable language; and  (ii) printed in an easy-to-read type size and style.

Effective May 1, 2006.


--------2003 Enactment-------

2003 Utah Laws Ch. 46 (S.B. 86)

UTAH 2003 SESSION LAWS
55th LEGISLATURE, 2003 GENERAL SESSION
Ch. 46 (S.B. 86) 
PROHIBITION OF AUTOMATIC RENEWAL OF SERVICE CONTRACTS

This act modifies the title dealing with Contracts and Obligations in General by enacting provisions that prohibit the automatic renewal of service contracts unless the seller notifies the consumer of the automatic renewal. The act provides exemptions.

ENACTS: 
15–10–101, Utah Code Annotated 1953
15–10–102, Utah Code Annotated 1953
15–10–201, Utah Code Annotated 1953
15–10–202, Utah Code Annotated 1953
15–10–301, Utah Code Annotated 1953

Be it enacted by the Legislature of the state of Utah:

Section 1. Section 15–10–101 is enacted to read:

CHAPTER 10. SERVICE CONTRACTS ACT

Part 1. General Provisions

§15–10–101. Title. 
This chapter is known as the “Service Contracts Act.”

Section 2. Section 15–10–102 is enacted to read:

§ 15–10–102. Definitions.
As used in this chapter: 
(1) “Automatic renewal provision” means a provision under which a service contract is renewed for a specified period if: 
 (a) the renewal causes the service contract to be in effect more than six months after the day of the initiation of the service contract; and
 (b) the renewal is effective unless the consumer gives notice to the seller of the consumer's intention to terminate the service contract. 
(2) “Consumer” means a person receiving service, maintenance, or repair under a service contract. 
(3) “Seller” means a person providing service, maintenance, or repair under a service contract. 
(4)(a) “Service contract” means any contract for service, maintenance, or repair: 
 (i) in connection with any real property; or
 (ii) that provides a benefit to any real property. 
 (b) “Service contract” does not include a contract affecting any right, title, estate, or interest in real property, including: 
 (i) a fee title interest; 
 (ii) a leasehold interest; 
 (iii) an option contract relating to real property; 
(iv) a real estate purchase contract; 
 (v) an easement; or
 (vi) any other real property interest governed by Title 57, Real Estate.

Section 3. Section 15–10–201 is enacted to read:

Part 2. Restrictions on Automatic Renewal Provisions

15–10–201. Notice requirement. 
(1) A service contract may not contain an automatic renewal provision unless the seller provides the consumer written notice complying with Subsection (2) that informs the consumer of the automatic renewal provision. 
(2) The seller shall provide the written notice required under Subsection (1) to the consumer personally, by certified mail, or prominently displayed on the first page of a monthly statement: 
 (a) at least 30 calendar days prior to the last day on which the consumer may give notice of the consumer's intention to terminate the contract; 
 (b) not more than 90 calendar days prior to the last day on which the consumer may give notice of the consumer's intention to terminate the contract; and
 (c) written in clear and understandable language printed in an easy-to-read type size and style.  

Section 4. Section 15–10–202 is enacted to read:

§ 15–10–202. Remedy for violation. 
If a seller does not comply with Section 15–10–201 with respect to a service contract containing an automatic renewal provision: 
(1) the automatic renewal provision is void and unconscionable as a matter of public policy; and
(2) the service contract shall automatically renew on a month-to-month basis.

Section 5. Section 15–10–301 is enacted to read:

§ Part 3. Exemptions

15–10–301. Exemptions. 
This chapter does not apply to a contract made pursuant to Title 11, Chapter 13, Interlocal Cooperation Act.

Effective May 5, 2003.
Approved March 15, 2003.


Print   Email

Questions and Answers

Have questions about a statute? Ask it and an experienced Utah HOA attorney will answer it, plus see all the previous questions and answers.

Only members may post and view questions and answers. Join us by subscribing today!

Key Concepts explained

The index is the main hub of the site, where key concepts are explained

The 6 resolutions & 5 forms every HOA should have

Procedures required by law, updated as the laws change yearly, so your HOA is always in compliance. Plus other policy resolutions
*Prudent-Legal plan only

Step-by-Step Guides

Guides to walk board through owner requests for: records, assistance animal (disability), satellite dish, solar device. Avoid violating federal and Utah law!
Guides to walk a homeowner through making request for records and to keep an assistance animal for a person with a disability.

2 Hours Attorney Time

Counsel from a Utah HOA specialist attorney
*Prudent-Legal plan only

Q & A

Have questions about a statute? Ask it and an experienced HOA attorney will answer it. Plus, see all the other Q & A.

Legal Updates

Stay informed! Get updates of new HOA laws with explanations of how they affect your community and what to do to comply and minimize risk.

Tools to help you understand the law

Key words defined in hovercards, powerful search, comments, footnotes, tags, explanations and case law summaries

Plus more!