Everyone we know that buys a home in a planned community or homeowners association wants a neighborhood that will be a good, safe place to live and that their home will not lose value from neighbors that do not maintain their property. Board members should keep these goals in mind when making decisions for the community. Board members, and regular members, should have a general understanding of their AZ HOA laws and rules. They must also recognize that some issues require consulting with expert legal representation. Here are the key elements that everyone should know about Arizona HOA laws and rules.
What is the Purpose of an HOA?
A homeowners association (“HOA”) is a non-governmental organization that is tasked with maintaining and enforcing the rules and regulations that govern the community. These rules and regulations are called “equitable servitudes” and are set forth in the Declaration and other community documents. Arizona HOAs are authorized by statute, and often their Declaration, to collect association dues and to levy fines against members that violate the rules.
Each HOA is unique according to its location and community documents, but they are all governed and operated by a Board of Directors. The Board consists of volunteer community members that are elected by the HOA membership to operate the association and make decisions in the best interest of the community.
Many HOAs are tasked with maintaining aesthetic standards and property values. How do they accomplish this? Through a reasonable exercise of their discretionary powers!
Keeping the neighborhood clean and well maintained. Adopting and enforcing policies governing operating procedures, enforcement policies, landscaping guidelines, and collection policies. Collaborating with local and state government. Entering into maintenance and service contracts for community assets. Maintaining and tendering claims to insurance. These are all reasonable exercises of discretionary powers. It takes a lot of work to build and maintain a great community, but once accomplished property values and member enjoyment generally follow closely along.
How Can an AZ HOA Establish Effective Rules and Regulations?
The CC&Rs immediately go into effect against applicable property when they are recorded. Recorded documents are public records. When an individual buys a property subject to CC&Rs, that individual is contractually obligated to follow the CC&Rs upon accepting a deed to the property. You do not need to sign or accept the CC&Rs to be bound by them! You are automatically responsible upon accepting a deed to property controlled by CC&Rs.
Most CC&Rs even let the Board adopt extra rules they can make you follow! Those rules must be adopted and noticed according to the process in your community documents!
Can an AZ HOA Limit Which Members Can Join the Board?
Generally, no. Every owner in the community automatically becomes a member upon accepting the deed to their property. Each member is entitled to the rights and bound by the obligations set forth in the CC&Rs. This includes the right to run for the Board, subject to existing restrictions set forth in the CC&Rs or Bylaws. Some HOAs will require that a member be in good standing to run for the Board. All policies and processes to elect the board and govern the community need to take this into consideration.
Required Disclosures for AZ HOAs
Understanding disclosures and notifications is an important part of operating any planned community or HOA. These include but are not limited to providing adequate notice of all board meetings and disclose the meeting minutes, providing adequate notice before imposing fines, providing notice of adjusted assessment rates, responding to disclosure requests from its members, and providing an annual disclosure of the association budget and any changes to rules and regulations. It is important that HOAs are transparent and keep the members updated.
HOA Financial Responsibilities
Associations are often responsible for maintaining community property. Board members are responsible for making decisions and giving direction on the management, allocation and accounting of community resources and assets.
Understanding AZ HOA Laws and Rules
Every HOA board member should be willing to learn about the rules and laws that apply to planned communities and associations in their state. We posted a recent article on the key details that every HOA board member in Arizona needs to know to do their job effectively and represent the community.
In Arizona, the Planned Communities Act, Arizona Condominium Act and the Nonprofit Corporations Act are the main governing statutes for HOAs. These are important laws for every HOA board member to understand and make sure their board and community are staying in compliance.
Can an HOA in AZ be Represented by an HOA Law Firm?
Yes, HOAs as a whole can and should seek the representation of an experienced law firm to represent their collective interests. HOAs routinely run into legal issues that will require the expertise of an experienced law firm to resolve. Utilizing the services of an experienced law firm that specializes in representing associations and planned communities can help avoid exposure to many legal risks and an HOA law firm can address any claims that arise appropriately and expeditiously.
The complexities of the Planned Communities Act, Condominium Act and laws pertaining to non-profits are another important reason to rely on the legal expertise of a law firm that specializes in HOA representation. While board members should understand these laws in Arizona, an HOA should not pretend like members will be legal experts because they read the statutes a few times.
The Brown Law Group only represents planned communities and associations in Arizona. Our attorneys are experienced and knowledgeable on all things related to HOA governance and operation. We assist HOAs with everything from assessment collection to covenant enforcement to litigation. Our team can assist with every detail of operating a successful homeowners association in Arizona while avoiding many common legal pitfalls. Contact us today at 602-952-6925 to schedule an initial consultation or make an appointment on our website here.
The Brown Law Group shares this article for informational purposes only and it does not create an attorney-client relationship.