Lawmakers address ills of the recession
March 15, 2011
Among the hundreds of bills passed by the Utah State Legislature last Thursday, dozens will impact small businesses. Several of those targeted the real estate industry. Many sought to protect the rights of homebuilders and homeowner associations.
Kate Riggs, director of government affairs for the Park City Board of Realtors, said she was pleased with how the session went. The Board had "unprecedented interface" with the Governor’s Office of Economic Development.
"I was encouraged by the level of focus our legislators placed on our issues," she said. "They clearly understood the importance of Summit County, and how our issues are important to the rest of the state."
Realtors state-wide were especially pleased with the passage of House Joint Resolution 39 asking Congress to relinquish control of lands managed by the Bureau of Land Management, she said.
"There would be wide-ranging economic-development implications from a state perspective," Riggs said. "It would put those lands in (Utah’s) control. It’s really something that would benefit the entire state and all our residents."
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Help fighting foreclosure
Rep. LaVar Christensen, R-Draper, said he sponsored a few bills trying to help residents fighting foreclosure, but the financial industry opposed the one he thought could help the most. A bill that did pass was House Bill 93 that permits attorneys to get involved in the disputes.
When out-of-state lenders refused to negotiate or communicate, Utahns were turning to attorneys for help. Unfortunately, because the end result sought was a loan modification, attorneys were afraid to get involved because they lacked a license to negotiate mortgages.
Christensen’s new law specifies that the domain and rights of an attorney do permit them to work on behalf of clients to slow or stop foreclosures.
"It’s one more professional who can be a possible solution for you," he said.
Contacting an HOA
It isn’t always easy to contact a homeowner association’s leadership. Rep. R. Curt Webb, R-Logan found that banks were struggling to find associations in order to pay off liens they held on property. House Bill 104 now creates a registry of associations with the Utah Department of Commerce open to all residents so financial institutions, title companies and others can contact them and clear liens.
Protecting architect liens
Rep. Michael Morley, R-Spanish Fork, was also interested in improving the transparency of liens to ease the arduous process of clearing them. His House Bill 115 will now require pre-construction services to register their liens with the state so they are visible.
Pre-construction professionals, like architects, have lien rights, but the liens aren’t always clearly filed the same way a plumber’s or roofer’s is, he said.
Better lien registry for all
Rep. David Clark, R-Santa Clara, worked with Morley on some of the same legislation to clarify how mechanic’s liens are filed. They ended up filing separate bills and Clark’s House Bill 260 also passed.
Clark said he wanted three things: First, to define when construction begins. Liens are filed by priority based on the date dirt is first turned. For years, builders took a dated photograph, but the process has gotten sloppy, he said. Now, all subcontractors will need to file their liens in a registry and date their claim.
Second, all firms should file their liens on the same documents in the same ways so there is no confusion on who needs to be paid.
Third, the law now requires a parcel’s tax identification number to be included on the mechanic’s lien.
If all three of these steps are followed, there will be an easy way for courts to determine lien rights and priorities so everyone can be paid and mistaken priorities can be rectified, he said.
Rep. Ryan Wilcox, R-Ogden, was concerned about the rights of homeowners before enough plots in a development are sold to create an association.
Under current law, developers maintain control of the development until about 70 percent of units or parcels are sold and an association is formed.
Wilcox said he heard many complaints that during the recession developers were collecting fees but not adequately performing maintenance. Without the rights of an association, homeowners had no recourse to investigate the accounting and take action on wrongful management.
Now, under House Bill 175, developers are required to give homeowners access to their accounting books to investigate wrongdoing.
"I wanted to include a stiff penalty for developers not fulfilling their obligations. In the end, the compromise was that developers were required to open their books," he explained.