Bill > SB0196

This bill amends existing Utah law regarding wrongful liens and related financial obligations on real property, primarily by updating definitions and adding new requirements for certain types of liens and covenants. Key changes include refining the definition of a "wrongful lien" to encompass documents that improperly create a lien or encumbrance, and specifically including certain types of transfer fee covenants that are not properly recorded or are otherwise unenforceable. The bill also introduces new requirements for associations of unit owners and community associations to register with the Department of Commerce and provide proof of compliance before they can record a lien for unpaid assessments or fines, aiming to prevent improper lien filings. Furthermore, it clarifies rules around "reinvestment fee covenants" and "transfer fee covenants," which are fees imposed on property owners during a sale, by specifying when they are void, unenforceable, or require separate notice filings to be valid, and adds a provision that a notice of a reinvestment fee covenant or transfer fee covenant is not valid if it is considered a wrongful lien. The bill also sets an effective date of May 6, 2026.

Business and Industry

https://le.utah.gov/~2026/bills/static/SB0196.html