Reinvestment Fees 

What Changed on May 6, 2026

Two significant limits on reinvestment fees took effect recently, and they limit how much can be charged and how the money can be used.

First, a couple of definitions:

• Low-amenity association: an association comprised only of detached single-family homes that does not provide capital-intensive infrastructure maintenance to its members. 
• Large master-planned development: an approved development of at least 500 acres or 500 units that includes a commitment to fund, construct, develop, or maintain common infrastructure, association facilities, community programming, resort facilities, open space, or recreational amenities.
• Capital-intensive infrastructure: infrastructure owned by the association that:
  • Has a projected useful life of more than 5 years;
  • Requires periodic replacement, reconstruction, or major rehabilitation; and
  • Reasonably requires advance funding through capital reserves, replacement reserves, or special assessments.

Capital-intensive infrastructure does not include things like: routine maintenance, landscaping, installing signage, or installing perimeter fencing.

A cap on the fee. Unless the burdened property is part of a large master planned development, a reinvestment fee covenant recorded on or after May 6, 2026, may not obligate payment of a fee exceeding:

• 0.5% of the value of the burdened property, in an association that is not a low-amenity association; or
• 0.25% of the value of the burdened property, in a low-amenity association.

Three new conditions for imposing the fee at all. On or after May 6, 2026, an association may not impose a reinvestment fee unless all three are met:

1. imposing the fee is authorized in the declaration or a reinvestment fee covenant;
2. a majority of voting interests in the association approves it, or a higher percentage if the organizational documents require one; and
3. if the association is not a large master planned development, the association deposits at least 50% of the reinvestment fee into reserve funds.

The reserve deposit requirement is the one to notice. Half the money has to go into reserves, which is a use restriction on the association, not just a procedural step.

After the approving vote, the association may set the amount only in accordance with the declaration or covenant, and only upon providing notice under Section 57-8a-214. That cross-reference is unusual: it points to a Community Association Act notice section, regardless of whether the association is a community association or a condominium association.

Owners Can Vote a Reinvestment Fee Out

Members may remove or amend a reinvestment fee by holding a vote at a special meeting called by the members for that purpose, at which at least 51% of the voting interests attend and vote, and a majority of the voting interests that attend vote to remove or amend it.

Note the two different thresholds in that sentence. The attendance requirement is 51% of all voting interests. The approval requirement is a majority of those who attend, not a majority of all interests. Getting 51% to the meeting is the hard part; once there, a simple majority of attendees decides.

When a Reinvestment Fee Cannot Be Charged

A reinvestment fee covenant recorded on or after March 16, 2010, may not be enforced upon:

• an involuntary transfer;
• a transfer resulting from a court order;
• a bona fide transfer to a close family member, like a parent, child, grandparent, or niece or nephew, who provides adequate proof of the relationship before the transfer;
• a transfer or change of interest due to death, whether by will, trust, or decree of distribution; or
• a transfer by a financial institution, except for the association's costs directly related to the transfer, not to exceed $250.

The family exemption has a timing condition. Proof of the relationship must be provided before the transfer, so a buyer who is a qualifying family member should document it in advance rather than dispute the fee afterward.

The Recorded Notice Requirement, and Why It Matters to You

A reinvestment fee covenant recorded on or after March 16, 2010, is void and unenforceable unless a separate notice of reinvestment fee covenant is recorded in the office of the county recorder for each county where any burdened property sits.

That notice must state the name and address of the association to be paid; carry the notarized signature of the association's authorized representative; state that the burden runs with the land and binds successors; state that the covenant's existence precludes an additional reinvestment fee covenant on the property; and state the duration, the purpose, and that the fee is required to benefit the burdened property. Substantial compliance is enough.

This is a checkable thing. The notice is a public record at the county recorder. If you are charged a reinvestment fee and no notice was recorded, the covenant is unenforceable under Subsection (6)(a). The notice also states the duration and the stated purpose, which is what the fee must be dedicated to.

Older covenants have their own rule. A reinvestment fee or transfer fee covenant recorded before March 16, 2010, is not enforceable after May 31, 2010, unless a conforming notice was recorded. A notice of that kind recorded after May 31, 2010, is not enforceable, and an amendment recorded after that date to a pre-deadline notice is not an enforceable amendment.

One Covenant Per Property

A reinvestment fee covenant recorded on or after March 16, 2010, is not enforceable if it is intended to affect property already subject to a previously recorded transfer fee covenant or reinvestment fee covenant. Associations cannot stack these. 

Sometimes, in the event of a master association and sub-association, the reinvestment fee will be recorded by the master association and then split with the sub-association. If you see two reinvestment fees at closing, make sure only one has been recorded against your property, and that the sum total doesn’t exceed the caps above. 

A reinvestment fee covenant also may not be sold, assigned, or conveyed except to a common interest association formed to benefit the burdened property. The one exception: an association may assign or pledge the right to receive payment to a lender as collateral for a credit facility, provided the lender releases the collateral interest when the association pays the facility in full.