14.01.110 Prohibition of Sham Property Transactions.
(1) It shall be unlawful for a person to avoid an owner occupancy requirement set forth in this Title by engaging in a sham property transaction. For the purpose of this Section a “sham property transaction” means a transaction that:
(a) is designed primarily to avoid an owner occupancy requirement set forth in this Title;
(b) but for the avoidance of an owner occupancy requirement has no commercially reasonable purpose and would be unlikely to occur; and
(c) in substance does not completely transfer the property to another person because:
(i) the original owner maintains beneficial title to the property pursuant to an oral or written agreement; or
(ii) has executed documents whereby the property will be transferred back to the owner upon the happening of a future event.
(2) A sham transaction shall be presumed regarding premises required by this Title to be owner occupied when:
(a) the name of a person who does not occupy the premises periodically appears as the owner of the property in the chain of title over a period of time; or
(b) the name of the person who occupies premises and claims to be the property owner does not appear in any instrument in the land records of Utah County which grants a fifty-one percent (51%) or greater property interest in the property to such person; or
(c) a property owner who does not occupy the premises transfers the owner’s interest in the property, or a portion thereof, to another person who:
(i) occupies the premises as the purported property owner and agrees to transfer the property back to the non-occupying property owner upon termination of person’s occupancy of the premises on the property or some other event, or
(ii) executes, as a condition of occupancy, documents that will have the effect of transferring the title to the property back to the first property owner upon termination of the person’s occupancy of the property.
(3) When a presumption of a sham transaction arises, the burden of proving otherwise shall be upon the persons alleged to have engaged in such a transaction. Such burden of proof may be met if each person involved a given transaction provides a notarized affidavit:
(a) acknowledging the person has read and understands the requirements of this Section; and
(b) swearing the transaction at issue is not a sham transaction as set forth in this section and was entered into for a valid, good faith purpose.
(4) A person who is a party to a sham transaction shall be guilty of a class B misdemeanor. A person who falsely furnishes an affidavit under this Section shall be guilty of a class A misdemeanor.