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Utah’s Top HOA Trouble Spots and How Associations Can Stay Out of Them

Written by: Peter Harrison

Utah homeowners’ associations rarely find themselves in legal trouble because someone forgot the secret HOA handshake. More often, disputes arise from familiar issues: inconsistent enforcement, confusing assessments, unanswered records requests, poorly documented board decisions, and rules adopted without following the proper procedure.

Recent data provided by the Utah HOA Ombudsman’s Office illustrates the point. Of 146 opinions submitted during the reporting period, the leading issues were:

  • Compliance with and enforcement of governing documents: 27.2%
  • Fees and assessments: 11.4%
  • Records requests: 10.5%
  • Board authority and conduct: 10.5%
  • Budgets: 9.6%
  • Fines and enforcement procedures: 7.9%
  • Rule adoption: 7%
  • Amendments to governing documents: 5.3%
  • Meeting notices: 5.3%
  • Board or management committee meetings: 5.3%

Those numbers tell a fairly clear story: most HOA disputes are preventable.

As Ted Lasso reminds us, “Be curious, not judgmental.” That is excellent advice for soccer coaches, HOA boards, owners, and lawyers. Before assuming an owner is unreasonable—or that the board is operating a miniature dictatorship—ask what the governing documents actually say, what procedures were followed, and whether everyone received the same information.  Let’s examine the 5 biggest trouble spots.

1. Enforcement Is the Biggest Source of Disputes

More than one-quarter of the Ombudsman opinions concerned compliance with or enforcement of governing documents. That should surprise no one. Enforcement becomes combustible when one owner receives a violation letter while another owner’s identical violation is ignored.

Utah law generally requires similarly situated owners to be treated similarly. An association should therefore avoid selective enforcement, personal exceptions, informal “handshake” deals, and rules that exist only in the institutional memory of the longest-serving board member.

Before enforcing a restriction, the board should confirm:

  1. The restriction actually appears in an enforceable governing document or properly adopted rule.
  2. The association has authority to enforce it.
  3. The restriction has been applied consistently.
  4. The notice accurately identifies the violation and the controlling provision.
  5. The owner receives any hearing or cure rights required by statute or the governing documents.

Utah courts generally interpret recorded covenants under ordinary principles of contract interpretation. If the language is unambiguous, courts apply its plain meaning rather than rewriting it to produce the result one side prefers. See Fort Pierce Industrial Park Phases II, III & IV Owners Association v. Shakespeare, 2016 UT 28; Gables at Sterling Village Homeowners Association v. Castlewood-Sterling Village I, LLC, 2018 UT 04.

That means a board should read the documents before sending the violation letter—not after the owner responds with a seven-page email copied to the entire neighborhood.

2. Fees and Assessments Require More Than a Spreadsheet

Fees and assessments accounted for 11.4% of the opinions. Assessments are essential: roofs, roads, insurance, landscaping, water systems, and snow removal are not paid for with goodwill and leftover refreshments from the annual meeting.

But assessments must be imposed under the declaration, bylaws, and applicable statutes. Boards should document:

  • The authority for the assessment;
  • The board action approving it;
  • The allocation among owners;
  • The due date and payment schedule;
  • The notice delivered to owners;
  • The account ledger for each owner; and
  • The statutory and contractual basis for late fees, interest, collection costs, and attorney fees.

Utah law currently limits late fees in community associations to the greater of 10% of the assessment or $50, and permits interest of up to 1.5% per month, provided the board has adopted and distributed the required fee schedule. Associations should review older collection policies rather than assuming that a fee adopted years ago remains enforceable.

In Hi-Country Estates Homeowners Association v. MountainTop Properties, LLC, 2023 UT 8, the Utah Supreme Court upheld an HOA’s ability to recover assessments where the association’s authority had been ratified. The case also demonstrates why associations should maintain clear records establishing the source of their assessment authority and the calculation of the amount claimed.

3. Treat Records Requests as a Compliance Function

Records requests represented 10.5% of the Ombudsman opinions, including the very first opinion issued by the office. Many of these disputes could be avoided by having a written records-request procedure and one designated person responsible for administering it.

Utah law requires associations to maintain and make available specified records, including governing documents, approved minutes, budgets, financial statements, reserve analyses, insurance certificates, recent board minutes, profit-and-loss statements, and balance sheets.   These records are likely to change in the near future, always pay attention to the new legislation.  Certain information—including Social Security numbers, bank account numbers, and privileged communications—may be redacted.

Associations should:

  • Date-stamp every request;
  • Identify the records requested;
  • Determine which records must be produced;
  • Identify lawful redactions or exclusions;
  • Respond within the statutory period;
  • Keep a copy of the production; and
  • Document when and how access was provided.

Ignoring the request is rarely the winning strategy, particularly when you could have statutory damages and be liable for attorney fees. Producing 1,500 pages without an index and announcing “it’s somewhere in there” is only marginally better.  Good counsel can help distinguish between a legitimate statutory request, duplicative demands, privileged information, personnel records, owner-specific information, and discovery requests that should proceed through pending litigation.

4. Board Authority Must Be Exercised Through Board Action

Board issues accounted for another 10.5% of opinions. The board normally manages the association’s affairs, but authority must be exercised in accordance with the declaration, bylaws, statutes, and proper meeting procedures.

Board members should understand the difference between:

  • A director and an officer;
  • Board authority and membership authority;
  • Regular assessments and special assessments;
  • Rules and amendments;
  • Open sessions and properly closed sessions;
  • Individual director preferences and formal board decisions.

Meeting minutes should identify attendance, motions, seconds, votes, recusals, and the substance of material decisions. Remember they are minutes, not an extended Phish jam session, but they should allow a future board, owner, judge, or auditor to understand what happened.

In Behar v. Johnson, 2024 UT App 129, a dispute arose over whether fellow directors had authority to remove an HOA board member. The Court found that the HOA members did not follow their Declaration when they removed Behar from the Board, and ultimately awarded attorney fees against the HOA.  The litigation illustrates that governance procedures are not mere technicalities. When the governing documents assign a decision to the membership, the board cannot simply take it over because holding an owner meeting seems inconvenient.

5. Budgets Are Governance Documents, Not Just Accounting Documents

Budget questions accounted for 9.6% of the opinions. Utah law generally requires a community association board to prepare and adopt an annual budget and present it to the members. Owners may disapprove the budget through the statutory process if the required voting threshold is reached.

Boards should connect the budget to:

  • Historical operating expenses;
  • Current contracts;
  • Insurance increases;
  • Reserve-study recommendations;
  • Anticipated repairs;
  • Delinquencies;
  • Inflation; and
  • Contingency planning.

A budget should not be created by taking last year’s total, adding an amount that “feels about right,” and hoping the roof remains emotionally committed to the building for another twelve months.

Reserve studies should also be updated when required. Even when reserve recommendations are not binding, they provide evidence that the board investigated long-term needs and made an informed decision.

The Ombudsman data demonstrates that Utah’s leading HOA disputes arise from repeatable governance problems. Associations can substantially reduce their risk by following their governing documents, applying rules consistently, maintaining accurate records, documenting board decisions, and communicating clearly.

Boards should be curious:

  • What authority permits this action?
  • What procedure applies?
  • Have similar owners been treated similarly?
  • What documents support the decision?
  • How will this look to a neutral judge two years from now?

That approach is better than assuming bad motives on either side. It also makes meetings shorter, records cleaner, and legal bills considerably less dramatic.  Be curious, not judgmental—and keep the association’s governance from drifting toward the dark side of the moon.