New Case for the New Year

Park West Condominium Ass'n v. Deppe, 2006 UT App. 507

On the eve of the Winter Solstice, the Utah Court of Appeals shined some further light upon the conflicts between the Utah Condominium Act and the Utah Nonprofit Corporations Act. While the impact of the case is somewhat limited by subsequent amendments to the Utah Revised Nonprofit Corporations Act, it serves as an important reminder of the need for care in the meeting and voting process.

The case involved the voting upon, and apparent passage of, a special assessment. The sellers and purchasers of a condominium both refused to pay a special assessment of $32,965; the association sued. The appelate court found that the assessment had not validly passed, because the association received only a majority of votes in favor of the special assessment, whereas the statutes in place at the time required unanamity in the case of mail-in ballots. (Since the meeting in question, the non-profit act has been amended; unanimity of mail-in ballots is no longer required. See Utah Code Ann. 16-6a-707 and 709.)

The Park West case left a few unanswered questions; what is to happen with those who did pay the assessments on the assumption that they were valid, and how is the association to deal with the dilemna presented by this decision? Undoubtedly, this opinion is only the beginning of a long series of challenges for the association.