The HOA Annual Meeting

‘Tis the Season for Utah HOA Annual Meetings!

By: Douglas C. Shumway, Esq. 

Almost all homeowners associations in Utah are organized as non-profit corporations, and as such, Utah law requires such associations to hold at least one membership meeting per year.  UCA 16-6a-701. This meeting is commonly referred to as the annual meeting.  Associations oftentimes hold multiple meetings throughout the year.  The annual meeting, however, is specifically required by statute, and it provides an association’s members the opportunity to receive a recap of the association’s activities from the preceding year, as well as a snap shot of the association’s activities for the upcoming year.  The annual meeting also provides an association’s members an opportunity to chime in and make recommendations for the operation of the association, as well as to participate in the vote to elect an association’s newest members of its board of directors.

A homeowners association’s annual meeting provides an association the opportunity to address two additional requirements of Utah law that apply to homeowners associations.  First, an association’s board of directors is required to adopt an annual budget and to provide the association’s members a summary of the adopted budget. UCA 57-8a-215. The summary provides the association’s members information on the association’s recurring expenses (i.e. landscaping, utilities, security, etc.), as well as any significant or unusual expenditures (i.e. resurfacing a pool, reroofing buildings, installing playground equipment, etc.) that the association intends to make during the year. In addition, if the association’s governing documents do not expressly authorize the Board to adopt an annual budget, the annual meeting provides the association’s members the opportunity to ratify the budget.

Second, and as part of the budget process, homeowners association’s board of directors is required to complete a reserve analysis of the costs to repair, maintain and replace the common area and facilities that have a useful life of between 3 – 30 years. UCA 57-8-7.5; UCA 57-8a-211.  The association board must include a line item in the budget for reserve contributions, and the board must provide owners the opportunity to veto the reserve line-item amount proposed.  If the owners do not veto such reserve provision by a 51% vote of the entire membership within 45 days of the board’s adopting of the budget, the proposed budget shall be considered adopted. Id.

As mentioned above, a homeowners association may hold meetings in addition to its annual meeting throughout the year.  But if there is only one association meeting that you intend to sit in on during the year, plan on attending the annual meeting as it is oftentimes the most informative and most important meeting of the year.