New Arizona Homeowners Association Laws

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June 1st, 2016

New Arizona Homeowners Association Laws

  In the Arizona legislative session for 2016 the legislature enacted many new Arizona homeowners association (“HOA”) laws that may affect your HOA. Most new HOA laws will go into effect on August 6, 2016.

Notice of violation written response deadlines extended

A.R.S. § 33-1242 concerning condominium units and A.R.S. § 33-1803 concerning planned communities are amended. These laws involve the notice of violation that an HOA must give to homeowners.  The change that will take effect later this year is an additional grace period for homeowners responding to a notice of violation. Homeowners will now be given 21 calendar days to provide the HOA with a written response. Homeowners previously had 10 business days to make such a response. In effect, homeowners have been given approximately an extra week to respond to an HOA’s notice of violation.

Approval for a construction project’s architectural designs and plans

A.R.S. § 33-1817 pertains to the design review of new construction within a planned community. This law will be amended to include that design review committees, architectural committees, or any committee that performs a similar review function cannot “unreasonably withhold” approval of a construction project. Although the language in this amendment to A.R.S. § 33-1817 is ambiguous as to what constitutes unreasonable withholding of approval, this law could impose additional liability for HOAs if their review boards fail to make a reasonable approval of a new construction project.

Association late fees

An amendment to Arizona law will be made requiring an HOA to notify a homeowner when applying a late fee. The language does not say how the notification must be made, just that a member being subjected to a late fee must now have reason to know that a late fee has been applied. As a practical matter, this new law requiring notification of a late fee will probably have the most significant impact on the day-to-day operations of an HOA.  The HOA will now have to inform a member prior to applying a late fee to their account.

Amendments to CC&Rs

Although most developer declarations have provisions for amending Covenants, Conditions, and Restrictions (“CC&Rs”), there is a new Arizona law allowing the CC&Rs to be amended by an HOA. The amendments to the CC&Rs authorized by state law would then need to be approved by an affirmative vote or consent of the number of eligible voters or homeowners required under the developer declaration.  This new law clarifies the process for making amendments to CC&Rs on a state-wide level instead of association-by-association. However, the voting requirements necessary for an amendment remain unchanged.

Removal of Directors and filling of vacancies

Arizona law will prohibit an HOA from appointing a Director that has been removed by the membership in a recall election.  The removed member may run for reelection by a vote of homeowners, but is no longer eligible for a board appointment.

Vacation & short-term rentals

A new law prohibiting cities, towns and counties from restricting short-term rentals because a property is not classified as a hotel does not have a direct effect on homeowners associations. However, some HOAs that are silent on the issue of short term rentals, have relied on the laws of certain municipalities (such as Fountain Hills) to restrict rental periods. An HOA’s reliance on a city, town or county’s laws will no longer be available to protect against the proliferation of short-term, home-sharing services like Airbnb or VRBO.

  This article is a recap of recent Arizona legislation applying to HOAs. It is not meant to be a comprehensive review of all new laws pertaining to HOAs.  As always, all Arizona legislation, among other factors, will be evaluated by Combs Gottlieb & MacQueen, P.C. prior to any specific recommendation to an HOA or homeowner. For more information on these new Arizona Homeowners Association laws, or any other HOA query, please do not hesitate to contact us at info@cgmlawgroup.com or (602)957-9810.