2023 Arizona Legislative Session - HOA Bills
In this session, there are a couple of bills currently on our radar that may directly impact Arizona HOAs.
HOA Priority Bills:
CONDOMINIUMS; INSURANCE COVERAGE; CLAIMS
Condominium associations are required to maintain property insurance on the units. Each unit owner has the right to report a loss under the association's property insurance policy. If the cause of damage to or destruction of any portion of a condominium originates from the common elements or an event outside of the units and common elements, the insurance deductible is a common expense for the association. If the cause originates from a unit, the owner of the unit is responsible for the deductible of up to $10,000.
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PLANNED COMMUNITY AUTHORITY; PUBLIC ROADWAYS
If a planned community regulates any public roadway, the planned community is required, by June 30, 2025, to hold a vote of the membership on the question of whether to continue to regulate public roadways. If a majority of a quorum of the membership of the community votes to continue regulating public roadways in the planned community, the planned community retains its authority to regulate those public roadways. If the vote fails or if the planned community does not hold a vote, the planned community no longer has authority to regulate the public roadways in the planned community and any existing regulations expire.
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HOMEOWNERS’ ASSOCIATIONS; POLITICAL ACTIVITY
Condominium associations and planned community associations cannot restrict a unit owner from conducting door-to-door political activity, and cannot prohibit a unit owner from circulating political petitions.
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MEETINGS; HOMEOWNERS' ASSOCIATIONS
The members of a homeowner's association or the unit owners of a condo association are allowed to call a special meeting to remove a member of an association board.
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CONDOMINIUMS; TERMINATION; AGREEMENT
An agreement to terminate the condominium declaration is required to contain the required number of unit owners' signatures and their printed names and unit numbers, and must be signed and notarized by the person or entity presenting the termination agreement. Additional requirements for the termination agreement are specified. The Board of Directors of the condo association is required to hold a public meeting to ratify the termination agreement. After termination, each unit owner is allowed to sell the unit owner's interest in the individual unit, its real estate, and the unit owner's interest in the common property as a single parcel that is subject to the recorded termination agreement. Following termination, all financial assets and loans or continuing obligations of the previous condominium association, if any, transfer to the owners in common as organized under the termination agreement.
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CONDOMINIUMS; UNIT SALES; TERMINATION
When a condominium association is terminated, the respective interests of unit owners is the sales price of each unit as negotiated in a sale between the unit owner and the association. A transfer of title for a unit cannot occur before the unit owner and the association agree on the sales price.
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HOMEOWNERS' ASSOCIATIONS; FLAG BAN; PROHIBITION
Condominium associations and homeowners' associations cannot prohibit the outdoor display of any flag unless the flag is obscene, defamatory, or likely to incite violence.
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HOMEOWNERS’ ASSOCIATIONS; BETSY ROSS FLAG
Homeowners' associations and condo associations cannot prohibit the outdoor display of any historic version of the American flag, including the "Betsy Ross flag" (defined), without regard to how the stars and stripes are arranged on the flag.
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HOME-BASED BUSINESSES; RESTRICTIONS; PROHIBITION
A home-based business must be allowed as a use by right if the home-based business does not supersede any deed restriction, covenant or agreement restricting the use of land, a master deed or any other document applicable to a common interest ownership community. Counties and municipalities cannot prohibit a "no-impact home-based business" (defined) or require a person to apply for, register, or obtain a permit, license, variance or other type of prior municipal approval to operate a no-impact home-based business. Counties and municipalities are authorized to establish reasonable regulations on a home-based business if the regulations are narrowly tailored for specified purposes, including protecting public health and safety and ensuring that the business activity is compatible with residential use of the property.
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HOMEOWNERS' ASSOCIATIONS; SOLAR, WATER DEVICES
A homeowners' association cannot prohibit the installation of a water saving device or indoor or outdoor water conservation practice. A homeowners' association is authorized to adopt reasonable rules ragarding placing a water saving device or using a water conservation practice if those rules do not prevent installing the device, impair the functioning of the device or pracitce, restrict using the device or practice, or adversely affect the cost of efficiency of the device or practice.
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HOMEOWNERS' ASSOCIATIONS; ANNUAL MEETING
For all homeowners' association and condo association directors' elections, cumulative voting is prohibited, nominations from the floor are prohibited, and the names of all eligible candidates nominated for the board of directors must appear on the ballot. For any meeting at which the election of directors occurs and for the annual meeting, the quorum requirement is 1/10 of the total number of votes entitled to be cast unless the homeowners' association or condo association documents specify a lesser amount. Homeowners' association or condo association votes cannot be cast by proxy but may be cast by absentee ballots, and the process for absentee ballot voting is specified.
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HOMEOWNER'S ASSOCIATIONS; BOARD DUTIES; INDEMNIFICATION
Homeowners' associations and condo associations (HOAs), through the board of directors, have a duty to the members or unit owners to act with the care an ordinarily prudent person in a like position would exercise under similar circumstances in managing and maintaining the common property and in protecting and managing the financial assets and affairs of the HOA, to treat members fairly, and to act reasonably in the exercise of discretionary powers. The directors and officers of an HOA have a duty to the HOA to act in good faith, in compliance with statute and the community documents, and to use ordinary care and prudence in performing their functions. The HOA and its directors and officers are indemnified from any liability for any action taken or any failure to take any action if the duties were performed in compliance with these requirements. A legislative intent section states that these changes are clarifying and do not provide any substantive change in the law.
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HOMEOWNERS' ASSOCIATIONS; RECORDS REQUESTS
Establishes a specific list of records that homeowners' associations and condo associations are required to make reasonably available to a member or unit owner on request, including financial statements and accounts, the operating budget, current contracts, and current insurance policies. Establishes requirements for a request to examine association records.
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HOMEOWNERS' ASSOCIATION LIENS; HOMESTEAD EXEMPTIONS
A homeowners' association or condo association lien is subject to the homestead exemption.
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