Committee adopts second substitute to HOA bill with clarifications on fees, ombudsman guidance and condemnation
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Summary
The committee approved the second substitute to SB 122 (HOA amendments), adopting an amendment and accepting changes that clarify ombudsman publication practices, rename a transfer-related fee to an administrative setup fee with disclosure (no cap), add transparency provisions, and allow negotiation with government entities holding condemnation authority; Representative Hansen voted no on final substitute.
The House Political Subdivisions Committee on Wednesday approved the second substitute to Senate Bill 122, a package of amendments addressing homeowners association (HOA) governance, an HOA Ombudsman office and related clarifications.
Senator Harper, who originally sponsored the bill, said stakeholders suggested clarifications for the Ombudsman’s duties, including requiring the office to publish advisory opinions and explanatory materials. Senator Harper said those published opinions would report "the opinion of what the issue is" and would not identify who asked for the opinion or the specific HOA involved.
Representative Walter, who offered the second substitute to consolidate related bills, summarized negotiated changes that include renaming a previously discussed transfer fee to an "administrative setup fee," requiring disclosure to association boards about how much is collected in such fees (but not imposing a cap), clarifying that certain prohibitions on HOA regulation (for example, of public streets and political signs) apply in declarations as well as rules, and adding a provision to enable governmental entities that have condemnation authority (for example, UDOT, cities or counties) to negotiate with association boards rather than requiring a community-wide vote in some circumstances. Representative Walter said earlier fiscal estimates attributed to UDOT suggested a potential $25,000,000 fiscal effect for one provision, though the sponsor stressed final fiscal numbers remained under review.
Representative Musher Tuscher successfully moved an amendment to ensure the statutory guardrail that prevents HOAs from regulating basketball standards in rules also applies in declarations; the amendment was adopted unanimously. During final consideration, Representative Walter moved to recommend the second substitute as amended; the committee adopted the motion and recommended the bill favorably, with Representative Hansen registering the lone recorded no vote.
Public testimony included Ivory Holmes of the Property Rights Coalition, who spoke in favor of the negotiated changes and described a case where UDOT sought common-area property for a road design, underscoring the practical need for the condemnation/negotiation language.
What comes next: SB 122 (second substitute as amended) moves forward following the committee’s favorable recommendation.
