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Utah · Utah Code §57-1-46Utah HOA reinvestment fee: 2026 caps, exemptions and approval rules

A Utah reinvestment fee is a fee an HOA or condo association charges on the transfer of a home that must benefit the common areas (Utah Code §57-1-46). Transfer fee covenants recorded since March 16, 2010 are void, and a reinvestment fee covenant is enforceable only if a separate notice is recorded with the county recorder. For covenants recorded on or after May 6, 2026, outside a large master planned development, the fee may not exceed 0.5% of the property's value, or 0.25% in a low-amenity association of detached single-family homes.

The rules

  1. Caps (subsection 5)

    Covenants recorded on or after May 6, 2026: up to 0.5% of value, or 0.25% in a low-amenity association – unless the property is in a large master planned development (500+ acres or units with committed amenities).

  2. Recorded notice (subsection 6)

    A reinvestment fee covenant recorded since March 16, 2010 is void unless a separate notice is recorded naming the association, its purpose, duration and that it benefits the burdened property.

  3. Exempt transfers (subsection 8)

    Involuntary and court-ordered transfers, transfers to family within three degrees, transfers on death, and sales by a financial institution – except association transfer costs up to $250.

  4. Approval (subsections 10–12)

    From May 6, 2026 the fee needs authority in the declaration or covenant, approval by a majority of voting interests, and – outside large master planned developments – at least 50% deposited to reserves. Members can remove or amend it at a special meeting.

Good to know

  • Transfer fee covenants recorded on or after March 16, 2010 are void and unenforceable (subsection 2).
  • An administrative setup fee imposed on or after May 7, 2025 is void unless used only for transfer-related expenses (subsection 9).
  • A property already subject to a recorded transfer or reinvestment fee covenant cannot be burdened by another one recorded after March 16, 2010 (subsection 4).

What the TC tracks

  • Recorded notice of reinvestment fee covenant found in the title commitment.
  • Fee amount checked against the cap and the recording date of the covenant.
  • Exemption claimed when the transfer qualifies (family, estate, bank-owned).
  • Who pays the fee under the purchase contract, shown on the settlement statement.

Questions about the Utah reinvestment fee

What is the maximum HOA reinvestment fee in Utah?

For covenants recorded on or after May 6, 2026 outside a large master planned development: 0.5% of the property's value, or 0.25% in a low-amenity association (Utah Code §57-1-46(5)).

Is a Utah transfer fee covenant enforceable?

Not if recorded on or after March 16, 2010 – it is void and unenforceable (§57-1-46(2)).

Do bank-owned sales pay the Utah reinvestment fee?

A reinvestment fee covenant may not be enforced on a transfer by a financial institution, except for the association's transfer costs up to $250 (§57-1-46(8)(e)).

Does an inherited home pay the reinvestment fee?

No. Transfers due to death, by will, trust or decree of distribution are exempt (§57-1-46(8)(d)).

Can HOA members remove a reinvestment fee?

Yes. At a special meeting called for that purpose with at least 51% of voting interests attending, a majority of those voting can remove or amend it (§57-1-46(12)).

Related guides

Add the reinvestment fee check and the HOA payoff request as tasks with owners and due dates in ClosingCode, and keep the recorded notice with the deal documents.

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Source: Utah Code §57-1-46, as amended by ch. 123, 2026 General Session, effective May 6, 2026 (le.utah.gov, read October 24, 2026).

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage.