Must condominium associations appoint trustees for nonjudicial foreclosures? McQueen v. Jordan Pines Townhomes Explained

Background and Facts

Isaac McQueen purchased a condominium unit at Jordan Pines Townhomes in February 2006 and signed the required condominium declaration. After leasing the unit to tenants, McQueen fell behind on his assessment fees by $903.71. The Jordan Pines Townhomes Owners Association initiated nonjudicial foreclosure proceedings by recording a Notice of Lien, followed by a Notice of Default and Notice of Sale. Exchange Properties purchased the unit at auction for $3,312.76 and evicted McQueen’s tenants. McQueen filed suit seeking to quiet title and recover damages for slander of title.

Key Legal Issues

The central issue was whether the Condominium Ownership Act and Trust Deed Act require appointment of a qualified trustee for nonjudicial foreclosure of assessment liens. McQueen argued the Association’s foreclosure was ineffective because no qualified trustee was appointed. The Association contended that its attorney could properly conduct the sale without formal trustee appointment, and that the Condominium Ownership Act superseded Trust Deed Act requirements where they conflicted.

Court’s Analysis and Holding

The Utah Court of Appeals applied statutory interpretation principles, examining the plain language of both acts. The court concluded that Utah Code section 57-8-20(4)(b) requires assessment lien foreclosures to be conducted “in the same manner” as trust deed foreclosures. This incorporation by reference brings in the Trust Deed Act’s requirement for a qualified trustee. The court rejected the Association’s argument that only procedural requirements like timing and notice applied, holding that the trustee requirement was essential for a valid nonjudicial foreclosure. The court also denied McQueen’s request for attorney fees, finding his quiet title action did not arise under the condominium declaration.

Practice Implications

This decision establishes that condominium associations cannot simply delegate foreclosure authority to their attorneys without proper trustee appointment. The ruling clarifies that nonjudicial foreclosure procedures must comply with both the Condominium Ownership Act and Trust Deed Act requirements. Practitioners should note that the Legislature subsequently amended the statute in 2011 to address these issues prospectively, but the amendments do not apply retroactively to this case.