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Arizona HOA Laws

Bomb or a Balm? Navigating New Technologies for Associations with Aplomb

Virtual Meetings and Electronic Voting for Arizona HOA Boards

Our Associations have taken notice of the efficiencies and cost savings offered by new virtual methods of public. They are simply too good to be ignored. But their dangers are not always obvious.

While our advice may be cutting edge, the legal landscape we live and work in is still digitally lacking. Our statutes and community documents still require notice be sent postage paid. Exceptions carved out in the law for remote meetings were intended to address the advent of Telephone Conferencing, not computers. We expect the legislature may hear something about electronic mail in the next decade or so. Until then, we have no guidance beyond the statutes… and our wits. How is an Association to know if a technology solution is a balm or a bomb?

Well, it requires a case-by-case assessment by a qualified attorney! But before we get to our shameless plug, let’s take a look at the two most popular and impactful technologies we get questions about all the time: virtual meetings and electronic mail!

Virtual Meetings – Balm for a Tortured Board?

Virtual meeting technology synergizes well with Arizona open meetings laws! The archaic telephone conferencing laws we mentioned are very helpful here. Virtual meetings are not a solution for every problem, but these following pointers will help you identify the pitfalls and powers presented by taking your meetings into virtuality:

  1. Check with counsel before adopting virtual, digital, or electronic technologies. Your Association may have terms in the CC&Rs, Bylaws, or Articles of Incorporation that pose a unique obstacle to your Association’s adoption of a new technology for operating purposes. Let counsel identify these issues first, lest an unsavory Member do so after the next annual meeting.

  2. Don’t assume your Members are tech savvy! Provide your Members clear instructions for attending virtual meetings. Include directions on downloading and using the virtual meeting client, with clear instructions for each attendance option offered. Don’t be surprised if some of your Members still have issues!

  3. Use a service that provides a direct dial-in option. It is nearly guaranteed that someone in your Association will be unable to access the meeting virtually. Always provide a dial-in option.

  4. Use a service that has tools that let you control the meeting, instead of allowing the meeting to control you! Look for options that allow you to: (1) control who accesses the meeting; (2) add and remove folks from the meeting quickly and easily; (3) mute meeting attendants; (4) easily record and share recordings of meetings; (5) control and moderate the in-meeting text chat.

  5. Assign someone to be Meeting Manager. The Meeting Manager is responsible for muting, un-muting, managing waiting rooms, moderating in-meeting chat, and any other tasks that are necessary to run the virtual meeting. Thanks Meeting Manager!

  6. Configure your service so that attendees join the meeting muted. When it is time for attendee participation, any attendee wishing to speak can inform the Meeting Manager via in-meeting chat.

  7. Have a clear, noticed virtual meeting procedure that includes a way for Members to have an opportunity to speak reasonably on issues during the meeting.

Electronic Mail for Associations – Avoiding a Ticking Time Bomb?

Your email procedure must be very precise to meet Arizona open meeting requirements. In Arizona, the Attorney General has opined that deliberations and voting conducted via email violate the open meeting law statutes.  The Arizona Legislature has made clear that is policy is to strive for as much transparency as possible.  When a quorum of the Board is discussing association business via email, that Board may be violating the open meeting laws.  Even if discussing an executive matter, the Members have a right to know that the meeting is taking place, and 48 hours’ notice is required.

We advise approaching email with caution. Email is problematic because it is not easily controlled. A member can include, exclude, forward, copy, blind copy, or spam anyone that they wish with little to no recourse.  We advise only deliberating and voting via email in the event of an emergency.  The Arizona Planned Community and Condominium Acts provide that an emergency meeting may be held if the matter cannot wait the 48 hours required for notice.   In that case, the emails can serve as the minutes of the meeting. 

A Board Member keeps leaving Sally off the thread? The Board is meeting by email to discuss topics that are not technically privy to executive session? The Association is not maintaining complete records of emails subject to open meeting requirements? A Member doesn’t have email or email access? These and many other scenarios could lead to an open meeting violation by your Association. And they are no fun. Trust us.

However, your Association may have an interesting or useful role for email in your community. In that situation, if you wish to proceed with incorporating email or any other technology into your Association’s process responsibly, we strongly advise that you obtain…

An Experienced Arizona HOA Attorney

The Brown Law Group specializes in HOA representation in Arizona.  Our firm only represents homeowners associations and condominium communities in the state.  We routinely work with associations to make sure their board meetings are adhering to open meeting laws in Arizona.  We can also review any changes your association has made during the past year to use technology in your voting process.  It is understandable to want to use technology wherever possible to make meeting and voting decisions easier, but these choices can cause more problems down the road for an association if they are not done the right way.  Contact the Brown Law Group today at 602-952-6925 to schedule an initial consultation or make an appointment with our attorneys on our contact us page.

The Brown Law Group shares this article for informational purposes only and it does not create an attorney-client relationship.

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Arizona HOA Laws

What You Need to Know About HOAs and Short-Term Rental Laws in Arizona

Short-term rentals are on the rise. Snowbirds migrate here in the winter. All seasons are ripe for outdoor escapades. Arizona attracts short-term renters year-round.  

The short-term rental landlord is no longer only the sophisticated commercial property investor. Even casual owners now routinely use electronic short-term rental listings to drive rental income into their pockets. Their neighbors bear the consequences of irregular traffic, late-night parties, sound ordinance violations, littering, and impolite parking…

It’s hectic! And we get lots of questions about it. Like…

Can HOAs Restrict Short-Term Rentals in Arizona?

The Arizona Planned Community Act and Condominium Act provide that Associations may only regulate short term rentals if the Declaration of Covenants, Conditions and Restrictions (“CC&Rs”) contains a restriction prohibiting rentals or providing that rentals must be of a certain duration. An example of a short-term rental restriction we often see is a provision that a property may not be leased for less than thirty (30) days.

If your CC&Rs are silent on rental restrictions, there are no rental restrictions. Rental restrictions may only be added to the CC&Rs by amendment.  Rentals may not simply be restricted by a rule or regulation passed by the Board. The restriction must be in the CC&Rs.

We Have Problem Renters. What Can We Do?

You need to answer a question first — do your CC&Rs have a written restriction against rentals?

            Yes, they do!

Your rental restriction might allow the Association to prohibit all rentals. It might only allow a restriction of short-term rentals. Either way, the Association can enforce the restriction. Check with your Association’s counsel on the best way to enforce your Association’s rental restriction before you take action!

            No! They Don’t!

Your Association will not be able to deal with the short-term renters with a rental restriction. Don’t worry! There are other options, which leads us into another question we get…

Who Cares? Can’t We Just Go After the Owner!?

Yes! The Owner is responsible for making sure the property is compliant with the CC&Rs and community rules. The Association may fine an Owner for noise complaints, loud parties, parking violations, misuse of the common area amenities, trash can violations, and any other community rule violations by the Owner or the Owner’s renters.

Can’t the City or State Do Something About It?

Probably not. Unless it is a serious problem.

In 2019, the Arizona Legislature passed a law providing that a city or municipality many only regulate a vacation or short-term rental for: (1) requiring the Owner provide contact information for responding to short-term rental complaints; (2) protecting public health and safety; (3) enforcing zoning ordinances; (4) preventing use of short-term rental as a sober living home, for selling illegal or controlled substances, or for pornography, obscenity, topless dancing, or other adult-oriented businesses or unauthorized uses.

If you are dealing with one of these issues, the Association should consider submitting a complaint to the appropriate regulatory entity. Otherwise, the Association is the last line of defense against short-term renter shenanigans.

Rental issues are often tricky or difficult to manage. The Association industry has a wealth of resources available to help you manage the situation professionally. All you need do is…

Find an Experienced HOA Attorney in Arizona

The Brown Law Group provides industry leading general counsel for planned communities and condominiums of all types throughout Arizona.  Our firm can assist with any issues related to short term rentals in your Association or assist with amendments to your CC&Rs.  Contact us today in our Phoenix office at 602-952-6925 or our Tucson office at 520-299-3377 to schedule an initial consultation.  You can also make an appointment on our contact us page.

The Brown Law Group provided this article for informational purposes only and it does not create an attorney-client relationship.

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Arizona HOA Laws

What an Arizona HOA Needs to Know about Fines and CC&R Violations

Arizona HOAs are obligated to enforce the restrictions contained in the Declaration of Covenants, Conditions and Restrictions (CC&Rs) and Rules and Regulations. Enforcing these restrictions can help to preserve the property values within the communities.  HOAs may send friendly reminders and violation notices to those homeowners that break the rules.  Arizona HOAs may also impose reasonable fines for violations of the restrictions and rules.  

Fine Enforcement in Arizona HOAs

When homeowners purchase property in a community governed by an HOA they are bound by the restrictions contained in the (CC&Rs). The CC&Rs define what homeowners can and cannot do with their property. It is important that HOAs hold each homeowner accountable to the CC&Rs. In many communities, the CC&Rs also permit the Board to enact rules for the community to which homeowners are contractually obliged to follow. 

Homeowners that fail to comply with their community rules and adequately maintain their property are in breach of their contractual obligations under the CC&Rs. HOAs have the ability to enforce these obligations with demand letters and lawsuits if necessary. To pursue a successful claim for fine enforcement actions, there are several preliminary considerations to set a foundation for successful enforcement.

Fine Policies & Notice Requirements

Before HOAs can impose fines for non-compliance to regulations, they should ensure that the CC&R or community rules have provisions that give the HOA authority to issue fines for the violation.

To fairly and uniformly enforce these fine, community associations need to have a fine policy laying out the process by which fines in a particular community shall be imposed. These fine policies often provide the number of notices, time between notices, time to cure a violation, and the monetary penalty imposed for each violation notice.  This law firm advises a “presumptive” policy that the HOA can follow for run of the mill violations, while allowing the HOA to deviate from the standard procedure to address more severe violations.  For example, a fine policy that provides for a 14-day time to cure period does not make sense for violations like loud parties.  Parties are usually over by the morning, and with a 14-day time to cure period, the HOA could not address that behavior. 

HOAs may assess “reasonable” fines.  Imposing a $2,000.00 fine for a homeowner’s failure to remove weeds from their property is unreasonable and would not be enforceable. The reasonableness element is subject to judicial discretion and depends on the particular facts of the case. The legal standard comes from the case of Tierra Ranchos v. Kitchukov where the court obligated HOAs to use their powers reasonably. Reasonableness should be the primary focus when an HOA is creating or enforcing its fine policy.

Fines must also be sufficient to compel the homeowner to comply.  Imposing a $25.00 monthly fine for storing a boat on the property is not likely sufficient.  It is more expensive for that homeowner to pay for off-site storage.  It makes financial sense for that homeowner to simply pay the fine and keep breaking the HOAs rules.  The fine policy must allow for the HOA to fine a larger amount. 

The Arizona Planned Community and Condominium Acts, A.R.S. §33-1803 and §33-1243 require  that homeowners are given notice of violations and an opportunity to be heard before fines are imposed. .

Collection of HOA Fines

Once a community has adopted a fine policy, an HOA may begin prosecuting enforcement. It is important to note that fines and related charges may not be included in the HOA’s assessment lien. Successful fine cases need documentation and adherence to the fine policy. Letters and notice are great, but a picture is truly worth a thousand words in fine cases.

Put yourself in the judge’s position on the bench who reviews a case with well-documented letters and notes detailing fines for weeds. The words alone do not give the judge a sense of the violation. Is there a single weed in a pristinely manicured lawn, or are the rocks in the front yard no longer visible due to the severity of the weeds? Showing a photo of the violation provides tremendous leverage to prove the reasonableness requirement for the HOAs use of power.

The best practice for HOAs is to have documentation, which includes:

  • Clear photographs of the violation(s),
  • Detailed record of violation, 
  • Violation notices sent in accordance with the fine policy,
  • Violation fines assessed in accordance with the fine policy, and
  • Record of notices given.

As the CC&Rs are a legally binding contract, breach of this contract gives an HOA authority to file a lawsuit against homeowners. Unlike Assessments, fines cannot be recovered through foreclosure. Instead, an HOA may obtain a judgment against the violating homeowner and attempt collection through settlement, garnishment, or by placing a judgment lien upon the subject property. Lawsuits are a last resort and most fine issues are resolved after an initial notice.

It is best to seek counsel from an HOA attorney on the best approach to take with regards to enforcing fine compliance as well as options to collect attorney fees on violations. 

Work with an Experienced HOA Attorney

If your HOA or association board is dealing with enforcing CC&R violations on a regular basis, The Brown Law Group can help guide your HOA through any potential legal issues.  Our experienced team of attorneys and collection specialists only represent HOAs and condominium associations in Arizona.  We offer an alternative to the traditional hourly billing and it’s one of the major reasons we lead the state in HOA assessment collections.  Contact us today in our Tempe office at 602-952-6925 or our Tucson office at 520-299-3377 to schedule an initial consultation.  You can also make an appointment on our contact us page.

The Brown Law Group provided this article for informational purposes only and it does not create an attorney-client relationship.

Categories
Arizona HOA Laws

What Your HOA Needs to Know About Assessment Payments in Arizona

Homeowners’ Associations carry a great deal of responsibility when it comes to maintaining the community. HOAs are often required by their governing documents to perform many actions, which may include maintaining insurance policies, paying for water or sewer charges, maintaining landscaping, caring for community facilities such as pools, playgrounds or golf courses, repairing roofing damages, maintaining common element areas, and much more.

HOAs cannot effectively meet these obligations without homeowners paying their assessments. Owners that are unable or unwilling to pay assessments may face legal action collect these unpaid assessments. Here is what you need to know about Assessment Payments. 

Obligation To Pay Assessments

All homes located within an HOA are governed by a contract called the Covenants, Conditions, and Restrictions (CC&Rs). By purchasing a property within an HOA, homeowners become contractually obligated to comply with the CC&Rs. Failure to comply is a breach of contract. The CC&Rs obligate homeowners to pay assessments to fund the various obligations of the community. 

Special assessments cover expenses which an HOA may not have sufficient funds to pay for from regular assessment payments.

Assessment payments are contractual in nature. A homeowner’s failure to pay these assessments is a breach of contract. HOAs can enforce their contractual rights to assessments by filing a lawsuit against delinquent homeowners when notices, letters, and requests from the HOA are ignored.

Arizona’s Property Lien Law & Foreclosure

In addition to the owner’s personal contractual obligations to pay assessments under the CC&Rs, property located within an HOA have a statutory assessment lien securing the assessment charges. A lien generally prevents an owner from selling or refinancing a property until the lien is released and assessments are paid, as it clouds the title to the property. 

Arizona Revised Statutes § 33-1807 and 33-1256 provide the statutory basis for the assessment lien. This statute provides that as soon as assessments become due, a lien is automatically placed against the property. HOAs frequently record a lien in their local county recorder’s office to make a public record of the lien in the event the home is refinanced or placed for sale.. 

When demand letters, breach of contract claims, and liens against a property fail to obtain payment of delinquent assessments, an HOA has the power to foreclose on its assessment lien. Foreclosure provides an avenue for HOAs to collect assessments, late fees, collection charges, attorney fees, and court costs for filing the foreclosure lawsuit.

HOAs may only employ the foreclosure option if one of the following is satisfied:

  • Assessments have not been paid for a period of one year; or
  • $1,200.00 or more in assessments are outstanding.

If either prong is satisfied, an HOA may proceed to collect the assessments due through foreclosure.

When evaluating a claim for foreclosure, it is important to note that some properties may already have liens in place. State and federal tax liens and first mortgages have priority over an HOA assessment lien. Other liens can include judgment liens, a second deed of trust, or a home equity line of credit.  The HOA assessment lien is superior to these liens.  It is important to discuss the implications of these liens in relation to the foreclosure process with your attorney.

Procedure To Collect Delinquent Assessment Fees in Arizona

Before an HOA can send an account to collections, homeowners must be afforded at least 30 days’ notice. The notice must be in writing and mailed via certified mail to the homeowner’s address. This is requirement is set out in A.R.S.. § 33-1807(K)  and A.R.S. 33-1256 which also outline that the notice must be boldface typed or in all capital letters. It must also include the contact information of the representative of the HOA that the homeowner can contact to discuss payment. The notice must also provide the following statement:

Your account is delinquent. If you do not bring your account current or make arrangements that are approved by the association to bring your account current within thirty days after the date of this notice, your account will be turned over for further collection proceedings. Such collection proceedings could include bringing a foreclosure action against your property. 

Once a homeowner is provided the statutorily required notice, and fails to satisfy the delinquent assessment balance, an HOA may send a homeowners’ account to collections and enforce its rights under contract and statute.

Find a Law Firm Dedicated to Representing HOAs with Assessment Collection

Whether your HOA is planning changes to your assessments or having issues with collection, The Brown Law Group can offer a many benefits to your association.  Our experienced team of attorneys and collection specialists only represent HOAs and condominium associations in Arizona.  We offer an alternative to the traditional hourly billing and it’s one of the major reasons we lead the state in HOA assessment collections.  Contact us today in our Tempe office at 602-952-6925 or our Tucson office at 520-299-3377 to schedule an initial consultation.  You can also make an appointment on our contact us page.

The Brown Law Group provided this article for informational purposes only and it does not create an attorney-client relationship.