Recent revisions to Utah law clarify the role and authority of homeowners associations in restricting owners’ renting out of their units, and may require associations to take action to comply.

House Bill 98, signed into law this spring, revised the state’s Condominium Ownership Act (COA) and Community Association Act (CAA). In light of these changes, associations should carefully review their governing documents and adopt revisions as necessary to ensure compliance. Designed to provide protections for owners who rent to tenants, the new law: 

(a) requires equal treatment of owners who rent,

(b) prohibits additional fees on owners who rent,

(c) permits rules regulating the use of common areas by owners who rent,

(d) requires tenants to comply with governing documents, and

(e) permits minimum lease term restrictions.

Associations governed by the COA or CAA are now required to “treat similarly situated owners similarly” regardless of whether an owner rents the property. Such equal treatment prohibits associations from charging owners “an additional assessment, fine, or fee” based on the owner renting out the unit. These new restrictions apply to associations regardless of when created.

While associations may not discriminate against owners who rent out units, they may adopt rules that target use of common areas by these owners. For example, an association may restrict an owner from using common areas while the owner’s property is rented, or may charge a fee, except for use related to attending association meetings and managing the property. Associations may also adopt rules requiring occupants, whether owners or tenants, to be members of a single housekeeping unit or limit the total number of occupants based on size of the home. Additionally, an association may require a minimum lease term.

Some homeowners associations in Utah will need to amend their governing documents to comply with the provisions for equal treatment of owners who rent, and all should perform a review in light of the changes. Ballard Spahr’s Real Estate Department provides counsel and representation on the full range of legal issues that arise for homeowners’ associations. Should you have any questions about the Utah law revisions or a related matter, please contact Thomas G. Bennett at 801.531.3060 or bennett@ballardspahr.com, or the Ballard Spahr attorney with whom you work.


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