Utah Updates its HOA Laws – Alabama Should Do The Same

Utah’s 2023 General Legislative Session ran from January through March, and most of the new laws it passed took effect on May 3, 2023. Several of those changes affected nonprofit organizations and homeowners associations (HOAs), covering record access, rental restrictions, board member qualifications, political signs, landscaping rules and governance procedures. Here is an overview of the most relevant updates — the kind of clear, homeowner-focused rules Alabama should consider adopting.

Access to Nonprofit Records

Senate Bill 191 Clarifies What Owners Can See

Senate Bill 191 (SB 191) refines Utah’s Revised Nonprofit Corporation Act to spell out which records a property owner may inspect by following the legal process in Subsection 16-6a-1602(2). Owners may now review only:

• “Appropriate” accounting records
• A membership list showing members’ names, addresses and voting rights

The earlier law allowed access to “any of the other records of the nonprofit corporation,” wording that was vague. The update makes clear that this process covers only the records listed in Subsections 16-6a-1601(2) through (4).

Defining “Corporate Records”

SB 191 also adds a definition of “corporate records,” which includes the records described in Section 16-6a-1601 but excludes informal correspondence, notes and communications. Because the statute does not actually use the term in a substantive way, the new definition has little practical impact.

Rental Restrictions for Condo and Community Associations

Utah law previously barred HOAs from charging extra fees to owners who rent out their units. SB 191 changes that rule:

• An association that permits at least 35% of its units to be rented may charge landlords an annual fee of up to $200 to cover administrative costs directly tied to the rental.
• The association must back up the fee with a detailed accounting report provided to the owner.

These provisions are now found in Utah Code Sections 57-8a-209(9)(c) and 57-8-10.1(9)(c).

Board Member Qualifications: Limits on Felons and Sex Offenders

Under SB 191, associations may adopt rules that bar a person from serving on the board if that person:

• Has been convicted of a felony
• Is a registered sex offender because of a conviction involving a minor under 18

This provision appears in Utah Code Sections 57-8a-501 and 57-8-59.

Restricted Access to Common Areas

The bill also lets HOAs limit registered sex offenders’ access to certain common areas, including:

• Swimming pools
• Parks
• Playgrounds

Those limits cannot apply when the person is carrying out parental responsibilities. The details are in Utah Code Sections 57-8a-218(18) and 57-8-8.1(10).

What Counts as a “Political Sign”

Utah law protects homeowners’ right to display political signs, but the term had not been clearly defined. 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

The definition is codified in Utah Code Sections 57-8a-102(21) and 57-8-3(34). HOAs may still regulate the time, place and manner of displaying signs, but not what the signs say.

Water-Efficient Landscaping Requirements

Associations Must Adopt Rules

A 2022 law required community associations to adopt water-efficient landscaping rules, especially for drought conditions. SB 191 set a deadline of June 30, 2023, for formally adopting those rules. Associations may not ban low-water-use landscaping during droughts (Utah Code Sections 57-8a-218(16) and 57-8-8.1(9)).

House Bill 450 Adjusts Landscaping Rules

House Bill 450 (HB 450) amends the Community Association Act to make clear that:

• HOAs cannot forbid homeowners from using water-wise landscaping.
• HOAs may restrict or prohibit particular plant types, but not water-wise plants.
• HOAs cannot require more than 50% of a yard’s vegetative coverage to be non-water-efficient plants.

Together, these changes strengthen the state’s commitment to conserving water.

Changes to HOA Rule-Making Procedures

Adopting and Challenging Rules

Under Utah Code Section 57-8a-217, an HOA must take these steps before adopting or changing a rule:

• Notify owners of the proposed change
• Hold an open forum where owners can raise concerns
• Send owners a copy of the new rule within 15 days of adopting it

Senate Bill 152 (2023) adds that if an HOA skips this process, any lawsuit challenging the rule must be filed within 18 months.

Defining a “Rule” for Community Associations

SB 191 also gives “rule” a legal definition under Utah Code Section 57-8a-102(25). A rule is any policy, guideline, restriction or regulation that:

• Is not part of an official governing document, such as CC&Rs, bylaws or contracts
• Governs people’s conduct or the use, design or appearance of property

The law also specifies that internal board procedures are not rules. Oddly, this definition applies only to community associations and not to condominiums.

Which HOAs the Community Association Act Covers

To head off disputes over whether the Community Association Act applies to older HOAs, SB 152 provides that the act covers any HOA that registers, or updates its registration, with the Utah HOA Registry. Because registration is required by law, the change effectively makes the act apply to every HOA (Utah Code Section 57-8a-105(7)).

Conclusion

Utah’s 2023 legislative session brought meaningful changes for nonprofits, HOAs and condominium associations, clarifying record access, rental fees, board qualifications, political signs, landscaping rules and rule-making procedures. Homeowners, board members and property managers in Utah should review the updates to make sure they are following current law — and Alabama lawmakers would do well to look at Utah’s example.