57-8-20 - Lien for nonpayment of common expenses.
57-8-20. Lien for nonpayment of common expenses.
(1) Every unit owner shall pay his proportionate share of the common expenses. Payment shall be in the amounts and at the times determined by the management committee inaccordance with the terms of the declaration or the bylaws.
(2) (a) An assessment levied against each unit is a debt of the owner at the time theassessment is made and is collectible as such.
(b) The association is entitled to recover all expenses incurred by the association incollecting any unpaid assessment, including reasonable attorney fees, whether an action isbrought against an owner under Subsection (3), or whether a suit to foreclose the lien upon theunit is instituted under Subsection (4).
(3) Suit to recover a money judgment for any unpaid assessment is maintainable withoutforeclosing or waiving the lien securing it. The prevailing party in the action is entitled torecover its costs of suit and reasonable attorney fees.
(4) (a) Subject to Subsection 57-8-37(6), if any unit owner fails or refuses to pay anassessment when due, that amount constitutes a lien on the interest of the owner in the property,and upon the recording of notice of lien by the manager or management committee it is a lienupon the unit owner's interest in the property prior to all other liens and encumbrances, recordedor unrecorded, except:
(i) tax and special assessment liens on the unit in favor of any assessing unit or specialimprovement district; and
(ii) encumbrances on the interest of the unit owner recorded prior to the date such noticeis recorded which by law would be a lien prior to subsequently recorded encumbrances.
(b) The lien for nonpayment of an assessment may be enforced by sale or foreclosure ofthe unit owner's interest by the manager or management committee. The sale or foreclosure shallbe conducted in the same manner as foreclosures in deeds of trust or mortgages or in any othermanner permitted by law.
(c) In any foreclosure or sale, the unit owner shall pay the costs and expenses of suchproceedings and reasonable attorney fees. If so provided in the declaration or bylaws, in the caseof foreclosure, the owner shall pay a reasonable rental for the unit, and the plaintiff in theforeclosure action may require the appointment of a receiver to collect the rental without regardto the value of the mortgage security.
(d) Unless otherwise provided in the declaration, the manager or management committeemay bid in the unit at foreclosure or other sale and hold, lease, mortgage, or convey the unit.
(5) (a) When authorized in the declaration, bylaws, or rules adopted by the managementcommittee, if the owner fails or refuses to pay any assessment when due, the managementcommittee may, after giving notice and an opportunity to be heard in accordance with Subsection(5)(b):
(i) terminate an owner's right to receive utility services paid as a common expense; and
(ii) terminate an owner's right of access and use of recreational facilities.
(b) Before terminating utility services or right of access and use of recreational facilitiesunder Subsection (5)(a), the manager or management committee shall give written notice to theunit owner in the manner provided in the declaration, bylaws, or association rules. The noticeshall state:
(i) utility services or right of access and use of recreational facilities will be terminated ifpayment of the assessment is not received within the time provided in the declaration, bylaws, or
association rules, which time shall be stated and be at least 48 hours;
(ii) the amount of the assessment due, including any interest or late payment fee; and
(iii) the right to request a hearing under Subsection (5)(c).
(c) A unit owner who is given notice under Subsection (5)(b) may request an informalhearing to dispute the assessment by submitting a written request to the management committeewithin 14 days from the date the notice is received.
(i) The hearing shall be conducted in accordance with the standards provided in thedeclaration, bylaws, or association rules.
(ii) If a hearing is requested, utility services or right of access and use or recreationalfacilities may not be terminated until after the hearing has been conducted and a final decisionhas been entered.
(d) Upon payment of the assessment due, including any interest or late payment fee, themanager or management committee shall immediately take action to reinstate the terminatedutility services to the unit.
(e) The remedies provided in this Subsection (5) shall only apply to residentialcondominium units.
(6) (a) If authorized in the declaration or bylaws, the owner of a unit who is leasing theunit fails to pay any assessment for a period of more than 60 days after it is due and payable, themanagement committee, upon compliance with this Subsection (6)(a), may demand the tenant topay to the association all future lease payments due the owner, commencing with the nextmonthly or other periodic payment, until the amount due to the association is paid.
(b) The manager or management committee must give the unit owner written notice, inaccordance with the declaration, bylaws, or association rules, of its intent to demand full paymentfrom the tenant. This notice shall:
(i) provide notice to the tenant that full payment of remaining lease payments willcommence with the next monthly or other periodic payment unless the assessment is receivedwithin the time period provided in the declaration, bylaws, or association rules;
(ii) state the amount of the assessment due, including any interest or late payment fee;
(iii) state that any costs of collection, not to exceed $150, and other assessments thatbecome due may be added to the total amount due; and
(iv) provide the requirements and rights described in Subsections (6)(b) through (f).
(c) If the unit owner fails to pay the amount of the assessment due by the date specifiedin the notice, the manager or management committee may deliver written notice to the tenant, inaccordance with the declaration, bylaws, or association rules, that demands future payments dueto the owner be paid to the association pursuant to Subsection (6)(d). A copy of the notice mustbe mailed to the unit owner. The notice provided to the tenant must state:
(i) that due to the owner's failure to pay the assessment within the time period allowed,the owner has been notified of the management committee's intent to collect all lease paymentsdue to the association pursuant to Subsection (6)(a);
(ii) that until notification by the association that the assessment due, including anyinterest or late payment fee, has been paid, all future lease payments due to the owner are to bepaid to the association; and
(iii) payment by the tenant to the association in compliance with this Subsection (6) willnot constitute a default under the terms of the lease agreement. If payment is in compliance withthis Subsection (6) suit or other action may not be initiated by the owner against the tenant for
failure to pay.
(d) All funds paid to the association pursuant to Subsection (6)(c) shall be deposited in aseparate account and disbursed to the association until the assessment due, together with any costof administration which may not exceed $25, is paid in full. Any remaining balance must be paidto the owner within five business days of payment in full to the association.
(e) Within five business days of payment in full of the assessment, including any interestor late payment fee, the manager or management committee must notify the tenant in writing thatfuture lease payments are no longer due to the association. A copy of this notification must bemailed to the unit owner.
(f) As used in this Subsection (6), "lease" or "leasing" means regular, exclusiveoccupancy of a unit by any person or persons, other than the unit owner, for which the unit ownerreceives any consideration or benefit, including a fee, service, gratuity, or emolument.
(7) (a) The manager or management committee shall, upon the written request of any unitowner and upon payment of a reasonable fee not to exceed $10, issue a written statementindicating any unpaid assessments with respect to the unit covered by the request. This writtenstatement of unpaid assessments is conclusive upon the remaining unit owners and upon themanager and management committee in favor of all persons who rely on the written statement ingood faith.
(b) Unless the manager or management committee complies with the request for astatement of any unpaid assessments within 10 days, all unpaid assessments which became dueprior to the date the request was made are subordinate to the lien held by the person requestingthe statement.
(8) Any encumbrancer holding a lien on a unit may pay any unpaid assessment due withrespect to the unit. Upon payment, the encumbrancer has a lien on the unit for the amounts paid.
(9) Remedies provided in this section, by law, or in equity are not considered to bemutually exclusive.
Amended by Chapter 309, 2010 General Session