Can single-family lots within a condominium project qualify as 'units' under Utah law? B. Investment v. Anderson Explained

In B. Investment LC v. Anderson, the Utah Court of Appeals addressed a fascinating question about the boundaries of condominium law: whether single-family dwelling lots within a condominium project can qualify as “units” under the Utah Condominium Ownership Act.

Background and Facts

The dispute arose at Spinnaker Point, a hybrid condominium project at Bear Lake that included both traditional condominium units on Lot 2 and four lots designated for single-family dwellings. The owners of the traditional units sued the lot owners over ownership of a Limited Common Area consisting of beachfront property. The case presented conflicting documents: the Amended Declaration granted all “unit owners” equal 14.286% interests in the Limited Common Area, while the Amended Plat stated that ownership remained with Lot 2 only.

Key Legal Issues

The court addressed two primary issues: first, whether single-family lots could qualify as “units” under the Act, and second, which document should govern when the declaration and plat conflict regarding common area ownership.

Court’s Analysis and Holding

The court applied the principle from Country Oaks that declarants have latitude in defining “units,” finding that the Act’s definition of “unit” as “a separate physical part of the property intended for any type of independent use” could reasonably include vacant lots or single-family dwelling lots. The court noted that Utah Code section 57-8-13 specifically contemplates “any unit…not contained…in a building.”

More significantly, the court held that Utah Code section 57-8-7(2) resolves conflicts between declarations and plats by specifying that unit owners are entitled to undivided interests “in the percentages or fractions expressed in the declaration.” The court rejected attempts to harmonize the conflicting documents, finding that Exhibit C’s plain language regarding “ownership” could not reasonably be reinterpreted as referring merely to access rights.

Practice Implications

This decision provides important guidance for practitioners handling condominium disputes. When documents conflict, the declaration controls ownership interests in common areas. The case also demonstrates that hybrid projects combining traditional condominiums with single-family lots are permissible under Utah law, provided the declaration properly defines all parcels as “units.” Practitioners should ensure consistency between declarations and plats, as courts will not strain to harmonize clearly conflicting provisions when the statute provides a hierarchy.