Utah Real Estate & HOA Law
Utah business attorney, real property and contract law
Published June 26, 2026
Utah quietly rewrote what your homeowners association can charge when you sell your home, and the new rules are already in force. As of May 6, 2026, the state caps reinvestment fees, invents a new class of “low-amenity” association, and forces most associations to bank half of every fee they collect.
If you sit on an HOA board or you are about to close on a home in a planned community, this is not a footnote. It changes real dollars at the closing table and creates real obligations for boards that ignore it.
A reinvestment fee is the charge an association collects when a property changes hands, money that is supposed to flow back into common areas, infrastructure, and reserves. For years the ceiling sat at 0.5 percent of value with very little structure around it. Two 2026 bills, House Bill 306 and Senate Bill 122, changed that, and both took effect the same day. You can read the amended statute on the Legislature’s site at Utah Code Section 57-1-46.
The new caps, and a new tier
For any reinvestment fee covenant recorded on or after May 6, 2026, the fee may not exceed 0.5 percent of the burdened property’s value in a standard association, or 0.25 percent in a “low-amenity association.” Large master planned developments stay exempt from the cap, as they were before.
That new low-amenity category, introduced by House Bill 306, covers associations made up only of detached single-family homes that do not provide capital-intensive infrastructure maintenance. In plain terms, a bare-bones subdivision can now collect only half of what an amenity-heavy community can.
Half of every fee goes to reserves
Here is the change boards cannot afford to miss. Unless the association is a large master planned development, it must now deposit at least 50 percent of every reinvestment fee directly into its reserve funds. The fee is no longer discretionary cash. Half of it is spoken for the moment it is collected.
The authorization rules also remain strict. An association still may not impose a reinvestment fee unless the fee is authorized in the declaration or a recorded reinvestment fee covenant, and unless a majority of the voting interests, or a higher percentage set in the governing documents, approves it.
A rename, an accounting duty, and a disclosure
Senate Bill 122 did the cleanup work. It renamed the old “association transfer fee” to “administrative setup fee,” and it added a duty: a manager who collects one must give the association an annual accounting of those fees by December 31 each year.
House Bill 306 also added a transparency step. When an association registers, renews, or updates its registration, it must now state whether it imposes a reinvestment fee or a transfer fee at all. And the triennial notice re-filing rules that apply to private transfer fee obligations under Section 57-1-47 do not apply to reinvestment fee covenants governed by Section 57-1-46.
Boards will argue that the caps and the reserve set-aside squeeze a legitimate funding tool, and that the exemption for large master planned developments leaves the biggest projects untouched. Both points are fair. But the reserve requirement is the entire point of the reform. A fee justified as “reinvestment” should actually be reinvested, and Utah just made the label mean something.
The practical takeaway is simple. Boards should pull their declaration and any reinvestment fee covenant now, confirm the math against the new caps, decide whether they fall into the low-amenity tier, and route the reserve deposits correctly before the next closing. Buyers should ask, in writing, exactly what fee transfers at the table. The fee did not disappear on May 6. It just got a rulebook.
This article is general information about a change in Utah law and is not legal advice. For advice about a specific association, covenant, or transaction, consult a licensed Utah attorney.
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