2017 Legislative Update

1. Homeowners generally no longer need to give advance notice or request permission before making an audio or video recording of a meeting.
2. The Board may require advance notice or prohibit audio or videotaping by those attending only if the Board records the meeting and then makes the recording available upon request. The Board also may not restrict use of the recording as evidence in a dispute resolution process.
3. All meeting notices, both for meetings of the Members and Board meetings, must include the date, time, and place of the meeting.
4. A notice of any annual, regular, or special meeting must state the purpose for which the meeting is called.
5. Before entering into any closed portion of a meeting, or on a notice stating that a meeting will be closed, the Board must identify the section of the open meeting statute that authorizes the Board to close the meeting.
6. Emergency meetings may only be called for matters that cannot the wait the forty–eight (48) hours required for notice. At the emergency meeting, the Board may only act on emergency matters.
7. This legislation reiterates that it is the policy of this State that meetings be conducted openly and that notices contain all information necessary to inform the owners of the matters to be discussed at the meetings. Provides that owners may speak before a vote of the Board or Members is taken. Provides that both the Directors and Community Managers must take the policy in favor of open meetings into account.

PB&J: This new legislation strengthens the public policy that all associations should conduct their affairs in an open and transparent manner.

This legislation allows owners to record all open meetings without first providing notice to the Board. This law firm recommends that all Boards assume that everything that is said in an open meeting is being recorded and may end up on the internet – and behave accordingly. The Board may prohibit recordings if it records the meetings and makes those recordings available upon request. This law firm does not recommend recording every meeting. It can be cumbersome for every meeting. the association to maintain, store, and make the recordings available upon request. The recordings would also become discoverable if the association were sued.

This legislation provides that all meeting notices, for both meetings of the Members and Board meetings, must include the date, time, place, and purpose for which the meeting is called. This requirement also applies to closed executive meetings.  Additionally, before entering into the closed portion of a meeting, or on the notice of a closed meeting, the Board must identify the section of the open meeting statute that authorizes the Board to close meeting.

The permitted topics include; 1) Legal advice from an attorney 2) pending or contemplated litigation, 3) personal, health, or  financial information about a member, employee, or contractor of the association, 4) matters related to the job performance of, compensation of, or specific complaint against an employee of the association or a contractor of the association and 5) discussion of a member’s appeal of a violation or a penalty imposed by the association. We advise the Board that it is easiest to add the statue reference to the notice.

The legislation is not clear whether a Board may address additional topics that were not included in the original notice as they arise. This law firm suggests that if additional topics do arise, the Board may address that topic in the interest of efficiency.The Board should then provide notice to the members at the next open meeting that it discussed additional topics.

It is probably easiest to add a check the box table to the meeting notice.

□ Legal advice from an attorney

□ Pending or contemplated litigation,

□ Personal, health, or financial information about a member, employee, or contractor of the association.

□ The job performance of, compensation of, or specific complaint against an employee of the association or a contractor of the association.

□ Discussion of a member’s appeal of a violation or a penalty imposed by the association.

Arizona law currently provides that an association may hold an emergency meeting on a matter that cannot wait until the next regularly scheduled meeting. This legislation provides that emergency meetings may only be held on business than cannot wait the forty–eight (48) hours required to give notice to the members. The legislation is silent on specific topics that would be considered an emergency. It is up to the Board to determine what can and cannot wait forty-eight (48) hours. This law firm recommends that Boards take care not to abuse this statute. Emergency meetings should be reserved for matters that truly cannot wait forty–eight (48) hours. A circumstance that threatens personal injury, waste of assets (broken pipe) or property damage if not addressed for forty hours is an emergency.

 

Voting & Secret Ballots

1. Repeals the requirement enacted in 2016 requiring the envelope and related materials used for returning an absentee or mail–in ballot to contain the name, address, and signature of the person voting.
2. If an association uses secret ballots, only the envelope must contain the name, address, and signature of the person voting.

PB&J: In 2016, the legislature passed a requirement that all envelopes and related materials used for returning an absentee or mail–on ballot contain the name, address, and signature of the person voting. This created a lot of confusion. The 2016 requirement did not provide a remedy if the envelope was not signed, but the ballot was otherwise in compliance and could be authenticated. This new legislation makes the voting and ballot authentication process much easier. As long as the ballot is signed and contains the name, address, and signature of the Member it should be counted, If an association uses secret ballots, the envelope must still be signed, and the ballot should not be signed. Members quite rightfully do not want to place signatures on the exterior of a mailed envelope. To make it easier for Members to return  to secret ballots in compliance with this legislation, this law firm recommends that a two–envelope system be used.

Resale Disclosure

1. Provides that an association may charge an owner a fee of not more than an aggregate of four hundred dollars to  compensate the association for the costs incurred in the preparation and delivery of a statement or other documents furnished by the association for the purposes of resale disclosure, or other services related to the transfer or use of the property.

PB&J: This legislation includes costs related to the delivery of disclosure statement or package in the cap of $400.00. An association may no longer charge an owner $400.00 for the disclosure statement or package and additional fees for the delivery of the disclosure statement or package.

Senate Bill 1060:  Amends section 33–1803 of the Planned Community Act and section 33–1242 of the

Condominium Act.

Administrative Complaint Process

1. 1.        Arizona lawprovides that an owner may file an administrative complaint against an associa In the Arizona Legislature’s 2016 budget, the legislature moved this administrative complaint process from the department of Fire, Building, and Life Safety to the Real Estate Department. This bill makes a technical change updating the statue to reflect and formalize the jurisdictional change to the State Real Estate Department.

PB&J:  This legislation makes a technical change to formalize that the Arizona Department of Real Estate will have jurisdiction over homeowners association administrative complaints. Realtors are often hostile to associations. We can speculate that  associations will be met with more hostility on this shift.