Association Legal News

Navigating Arizona House Bill 2298: Essential Guide for Planned Communities

Arizona’s planned communities are facing a significant shift in governance with the enactment of House Bill 2298. Effective from October 30, 2023, HB 2298 alters the control that community associations have over public roadways within their jurisdictions. This article aims to provide an overview of the bill and outline actionable steps for compliance, helping to ensure Arizona HOAs and planned communities are well-prepared to navigate these changes.

Key Provisions of House Bill 2298: Understanding the Details

The essence of Arizona House Bill 2298 lies in its specific provisions, which bring about a substantial change in how planned communities in Arizona manage parking rules and public roadways. This part of the legislation focuses for which the declaration was recorded before January 1, 2015. Understanding these key provisions is the first step towards ensuring that your community is not only aware of the changes but is also taking proactive measures to align with the new legal requirements.

  1. Authority Restriction for Post-2014 Declarations: Planned communities in which the declaration was recorded after December 31, 2014, may not regulate the public roadways within their communities.

  2. Ongoing Regulations for Pre-2015 Declarations: For planned communities with declarations recorded before January 1, 2015, the situation is slightly different. These communities are currently allowed to maintain their existing public roadway regulations. However, this is not an indefinite grant of authority. By June 30, 2025, communities that wish to continue to regulate the public roadways are mandated to hold a vote among their members to decide whether they wish to continue exerting control over public roadways. At the meeting, a quorum must be present in-person or by absentee ballot. A majority of the votes cast must vote in favor of continuing to enforce on the public roadways in the community.  If the vote fails, the community does not get a second chance.  If the quorum is not met, then the association can attempt to call another meeting to hold the vote.  If the vote passes, then a notice must be recorded with a county recorder stating that the association will continue to enforce on the public roadways.

Having a clear understanding of these key provisions is crucial, but it’s just the first part of the equation. Each planned community must now consider the practical steps they need to take to ensure compliance with HB 2298.

Steps for Ensuring Compliance with House Bill 2298

As HOA and planned community boards and members across the state address this new law, here are some of the key steps to ensure that your community adheres to the legal requirements and continues to foster a supportive and well-managed environment for all residents:

  1. Initial Assessment: Start with identifying the date when your community’s declaration was recorded. This critical first step will determine your immediate priorities and legal needs in the context of HB 2298.

  2. Organizing the Vote (For Pre-2015 Communities): Communities with pre-2015 declarations must prepare for a crucial vote by June 30, 2025. This process includes scheduling a meeting, educating members about the importance of this vote, and encouraging active participation to meet quorum requirements. Boards may wish to survey the members prior to scheduling the vote.

  3. Documenting Outcomes: If your community votes to continue regulating public roadways, it’s imperative to officially document and record this decision. Our legal team is ready to assist in ensuring this documentation meets all legal standards.

  4. Amending Guidelines: Depending on the outcome of your assessment or vote, it may be necessary to update your community guidelines. Our experienced HOA attorneys are equipped to guide you in revising these documents to ensure they are in full compliance with HB 2298.

  5. Community Education: Transparency and clear communication are key in navigating these changes. Regular updates, informational meetings, and the dissemination of revised guidelines are essential to keep all community members informed and engaged.

  6. Get Expert HOA Legal Guidance: As your community works through these steps to stay in compliance, our law firm is here to offer expert legal advice and support. We are committed to helping your community make any necessary updates to your governing docs and guidelines.  We only represent HOAs and planned communities in Arizona.

These steps are designed to prepare your community for a seamless transition into compliance with HB 2298. By taking these actions, you ensure that your community is legally compliant and help avoid potential issues in the future.

Attorneys for HOAs Guiding You Through HB 2298 Compliance

Adapting to the changes brought about by House Bill 2298 is a significant undertaking for any planned community. However, with careful planning, clear communication, and expert legal support, this transition can be managed effectively, ensuring that your community continues to operate efficiently and in the best interests of its residents. Halk, Oetinger, and Brown is dedicated to guiding your community through every step of this process, providing the legal expertise necessary to navigate these changes efficiently and effectively.  Schedule an initial consultation with our attorneys for HOAs today using our contact us page here.

Halk, Oetinger, and Brown shares this article for informational purposes only, and it does not create an attorney-client relationship.


Association Legal News

The Crucial Importance of Reserve Funds for HOAs: Lessons from the Surfside Tragedy

In the aftermath of the tragic Surfside condominium collapse in Florida, the relevance and importance of Homeowners Association (HOA) reserve funds are shown in a new light. As we piece together the lessons from this unfortunate incident, it becomes abundantly clear that adequately funded reserve accounts are a vital part of responsible HOA management.  Here are the most important things to understand about HOA reserve funds and how to properly plan for emergency needs in your association.

What is an HOA Reserve Fund?

An HOA reserve fund is a pool of money set aside by the association to cover the costs of anticipated major repairs, replacements, and improvements in the community. This could include repairing shared roads, replacing roofs on community buildings, updating community amenities, and more. These funds ensure that the HOA can afford to maintain and improve shared assets without the need for sudden, large assessments on homeowners. These funds help the Association to plan for large expenses and to preserve the property values within the HOA.

Calculating HOA Reserve Fund Needs

Determining the right amount for your HOA’s reserve fund requires careful calculation and thoughtful forecasting. All HOAs should hire a reserve analyst to develop a reserve study. The primary elements that a reserve analyst will consider include:

  1. An inventory of the shared assets that the HOA is responsible for maintaining.
  2. An estimation of the remaining useful life of each of these assets.
  3. The projected cost of maintaining, replacing, or repairing these assets.

The reserve study will help the HOA to determine the amount necessary to hold in reserves. An ideal reserve fund should have enough money to cover these projected costs without causing significant financial burden to homeowners in the form of unexpected assessments.  If your association is unsure if your reserve fund has adequately saved for future expenses, it is vital to meet with qualified financial planners and an experienced HOA attorney for a complete review.  Reserve studies should be updated every 3-5 years.

What HOA Reserve Funds Can Be Used For

HOA reserve funds are specifically meant for substantial, long-term projects, not for routine expenses like lawn maintenance, utility bills, or other operational costs. The key purpose of these funds is to ensure the financial stability of the HOA and to facilitate the smooth management of the community’s common areas and amenities. Reserve funds should be prudently invested, in vehicles that preserve the principal. 

Lessons from the Surfside Tragedy

The Surfside condominium collapse in 2021 offers a sobering look at what can go wrong when HOAs neglect to appropriately fund and use their reserve accounts. The condominium, plagued by years of structural issues, failed to adequately address these problems due to a lack of funds. Over the years, the problems compounded and, tragically, resulted in the building’s eventual collapse and the tragic loss of many lives. This incident underscores the importance of proactively addressing maintenance issues and adequately funding reserve accounts to ensure the safety and well-being of all community residents.

The Importance of Legal Consultation for Arizona HOAs

Having an experienced HOA law firm review your current reserve fund strategy and emergency planning is crucial. Legal professionals specializing in HOA law can provide guidance on state requirements, and ensure that the board is meeting its fiduciary duties.

HOA reserve funds play a vital role in the preservation of a community’s integrity and the protection of its residents’ safety and financial well-being. The Surfside tragedy serves as a stark reminder of what can happen when reserve funds are not appropriately managed. We urge all HOAs to reassess their current reserve fund planning and consider seeking legal counsel to ensure they are sufficiently prepared for future needs.  Contact our firm today to schedule an initial consultation with our HOA attorneys by submitting your information on our contact us page.

Halk, Oetinger, and Brown shares this article for informational purposes only, and it does not create an attorney-client relationship.

Legislative Updates

2023 Legislative Update

As the end of the 2023 Legislative Session nears its end, Governor Hobbs has signed several pieces of legislation that affect planned communities and condominiums.  On April 18, 2023, Governor Hobbs signed legislation that regulates whether a planned community has the authority to regulate public streets within the community.  Find more details about that new law here.  The additional new laws are as follows:

Flag Display:  This new legislation applies to both planned communities and condominiums.  It provides that associations may not prohibit the display of any historic version of the American Flag, including the Betsey Ross Flag, without regard to how the stars and strips are arranged on the flag.  Under the current law, associations also may not prohibit the display of the American Flag, the POW/MIA flag, the Arizona State Flag, an Arizona Indian Nations Flag, the Gadsden Flag, a first responder flag, and a blue star or gold service flag. This law firm is happy to assist with determining if any flag displayed by an owner is protected by this statute.

Political Activity: This new legislation applies to both planned communities and condominiums.  It provides that, while an association may not prohibit door-to-door political activity, an association may prohibit a person who is not accompanied by a member or resident of the association from entering the association, if the association restricts vehicular or pedestrian access.  This will allow the association to require any person who wishes to conduct door-to-door political activity within a gated or otherwise closed community to be accompanied by a member or resident.  Currently, an association is also permitted to restrict political activity from sunset to sunrise, and to require identification tags for each person engaging in the activities, as well as the prominent display of the candidate or ballot issue.  This law firm is happy to assist with determining if a specific type of door-to-door political activity is permitted by this statute. 

Removal of Directors:  This new legislation applies to both planned communities and condominiums.  It is related to the process by which the members may vote to remove a director from the Board.  Currently, upon receipt of a petition calling for the removal of a director signed by 25% of the members in an association with 1,000 or less members, or by the lesser of 10% or 1,000 members in an association with more than 1,000 members, the Board must call, notice, and hold a special meeting to vote on the removal within 30 days of receipt of the petition.  This new law provides that if a valid petition is received, and the Board fails to call, notice, and hold the special meeting within 30 days of receipt of the petition, the members of the Board shall be deemed to have been removed from office effective at midnight of 31st day.  Under current law, there is no penalty for a failure to hold the meeting within the statutory timeline. This new law will require Boards to act promptly upon receipt of a valid petition.  If any association receives a petition calling for the removal of a director or directors, this law firm is happy to assist with ensuring that the Board conforms to the statutory timeline, as well as preparing the necessary documents for the special meeting.

Halk, Oetinger, and Brown routinely assists Arizona planned communities and condominium associations with reviews of how new legislation could impact their community.  Schedule an initial consultation on our contact us page to meet with one of our experienced HOA attorneys.

Association Legal News Legislative Updates

LEGISLATIVE UPDATE: Arizona HOAs and Public Streets

On April 18, 2023, Governor Hobbs signed legislation that regulates whether a planned community has the authority to regulate publics streets within the community.  The law does not apply to condominiums. This new law will go into effect 91 days after the legislative session concludes.

Under current law, planned communities have the authority to regulate the public streets within the association if the community’s declaration was recorded before and including December 31, 2014.  Planned communities in which the declaration was recorded after December 31, 2014 may not enforce public street parking, even if allowed by the governing documents. 

This new law provides that, for any planned community for which the declaration was recorded before January 1, 2015, and that currently regulates the public streets, the community may no longer regulate the public streets unless:

  1. The association calls a meeting of the membership no later than June 30, 2025.  The purpose of the meeting is vote on the question of whether to continue to regulate the public streets within the community.  If the number of owners voting at the meeting constitutes a quorum of the membership, and a majority of the votes cast are in favor of continuing to regulate the public streets, the community may continue to regulate and enforce violations on the public streets.  The Board of Directors must then record a notice confirming that the association will continue to regulate the public streets in the county recorder’s office. 
  1. If the vote fails, or the community declines to hold a vote, the association will no longer have the authority to regulate the public streets within the association. 

This law does not apply to public one-way streets.  It also does not apply to any private streets within planned communities. Associations may continue to regulate private roadways and enforce violations of the governing documents. 

This law firm recommends that any planned community for which the declaration was recorded before January 1, 2015, and that currently regulates public streets within the community begin discussing whether it wishes to continue to regulate the public streets.  Boards may consider sending out a survey to its members to gauge interest in continuing to regulate public streets.  If any community wishes to continue to regulate the public streets it must call a meeting to vote on the matter no later than June 30, 2025.  Associations should keep this deadline in mind.  Our firm is happy to assist with reviewing the governing documents, the voting documents, and if passed, the notice to be recorded with the county recorder.

Schedule an initial consultation with the firm to review how this legislation could impact your association using the form on our contact us page here.

Legislative Updates

2021 Arizona HOA Legislative Update

The COVID-19 pandemic shuttered the 2020 legislative session.  While there were several bills introduced in 2020 that would have impacted community associations, the legislature adjourned early and none of those bills were signed by Governor Ducey.   The Arizona legislature got back to work in 2021, passing several bills affecting community associations.


Collecting Attorney’s Fees for Garnishments

The legislature amended laws relating to garnishment in Arizona Revised Statutes §§ 12-1572, 12-1574, 12-1580, 12-1591, 12-1598.03, 12-1598.04, 12-1598.07, 12-1598.10, 12-1598.12, and 12-1598.15.

Collecting judgments in Arizona just became more cost effective. For some creditors, obtaining a judgment is just the start of collecting the money owed to them. A judgment in a collection lawsuit is simply a piece of paper ordering one party to pay another. When a judgment debtor fails to pay the money ordered by a court, garnishment can be a powerful tool.

In the past, garnishment proceedings only served to reduce the net proceeds due to a creditor as attorney fees and court costs were uncollectable in garnishment proceedings. The new legislation now places the monetary burden for failure to pay a judgment on the uncooperative debtor by allowing those attorney fees and costs to be awarded in a garnishment action.

When efforts to resolve a collection judgment through voluntary payments or settlement agreements cannot be reached, creditors may now proceed with garnishment and have a statutory basis to request an award of attorney fees and costs. Creditors no longer have to sacrifice money owed to them in pursuit of collection.  


This legislation amends Title 12, Chapter 5, Article 1, Arizona Revised Statutes, by adding section: 12-515; Relating to Civil Liability.

Civil Liability Protection Relating to Public Health Pandemic

This Senate Bill provides for a liability shield that would protect nonprofit organizations, including community associations, from lawsuits related to the Covid-19 pandemic. Throughout the pandemic, our firm recommended that our communities close their amenities due to a lack of insurance coverage and a lack of a liability shield.  Without a liability shield, if a Member or guest contracted Covid and alleged that it was contracted association’s amenities, the association would not have insurance to cover the defense of that claim.  Whether the claim is valid would not matter much when the Association is required to pay out of pocket for its defense.

This liability shield now provides protection for community associations from such potential claims. Associations are now able to open their amenities.  Reasonable precautions must still be taken.  The liability shield will protect an association if it acted in good faith to protect members from Covid-19.  The individual claiming that they contracted Covid-19 while using the association’s amenities must prove by clear and convincing evidence that the association failed to take adequate protection measures or acted with willful misconduct or gross negligence.  If associations continue to enact appropriate precautions including enhanced cleaning, encouraging distancing, and requiring masks while using indoor amenities, the associations will be protected under the statute. 

This legislation is retroactive and will protect community associations from claims for acts that occurred on or after March 11, 2020.



This legislation amends sections: 16-1019, 33-1261 and 33-1808, Arizona Revised Statutes.  This legislation applies to both Planned Communities and Condominium. 

Definition of Political Sign

Political signs can be a contentious issue in community associations.  In recent elections, tensions have increased in the political climate.  While community associations must allow certain political signs, it is not always clear what type of sign qualifies as a political sign.  This legislation adds some much-needed clarity by providing a definition of a political sign.  A political sign is defined as one that attempts to influence the outcome of an election, including supporting or opposing the recall of a public officer or supporting or opposing the circulation of a petition for a ballot measure, question or proposition, or the recall of a public officer. 

Display of Political Signs

The Arizona Planned Community Act and Arizona Condominium Acts previously provided that an association may prohibit the display of political signs earlier than seventy-one days before the day of an election and later than three days after an election.  This legislation amends these timelines and provides some clarity.

This legislation provides that an association may prohibit the display of political signs as follows: 

  1. Earlier than seventy-one days before the day of a primary election.
  2. Later than three days after the day of the general election.
  3. For a sign for a candidate in a primary election who does not advance to the general election, later than fifteen days after the primary election.

Let The Brown Law Group Assist Your Arizona Community Association

The Brown Law Group provides industry leading general counsel for HOAs and condominium associations throughout Arizona.  Our firm regularly works with clients to address legal questions related to the community, management, enforcement, and collection of money due pursuant to the CC&Rs, Declaration, and governing documents.  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.


Legislative Updates

2019 Legislative Update

2019 Legislative Update All new legislation here will be in effect on August 27, 2019, unless specifically stated otherwise below Senate Bill 1531

Amends section 33-1256 of the Condominium Act and section 33–1807 of the Planned Community Act.

Lien for Assessments

  1. The time to initiate a lien foreclosure is extended from three (3) years to six (6) years after the full amount of the assessments become due.
  2. Beginning August 27, 2019, the Association must send a notice at least thirty (30) days before sending a delinquent account to an attorney or collection agency. The notice must be sent to the Owner’s address provided to the association, certified mail, return receipt requested, and may be included with other correspondence sent to the Owner regarding the Owner’s delinquent account. The notice must be either boldfaced type or all capital letters and include the contact information for the person that the owner may contact to discuss payment. The notice must include the exact language below:



  1. BeginningJanuary 1, 2020except for associations with less than fifty (50) homes and that do not have a third party management company, an association must provide a statement of account instead of a periodic payment book. The statement of account must be sent with the same frequency that assessments are provided for in the declaration. The statement of account must include:
  2. a.  The current account balance; and
  3.  The immediately preceding ledger history. If the association offers the statement of account by electronic means, the Owner may opt to receive the statement electronically. The association may stop providing these statements if the account is sent to an attorney or collection agency. After collection activity begins, the Owner may request the statement by written request to the attorney or the collection agency. These requests must be fulfilled by the attorney or the collection agency. The statement of account provided by the attorney or collection agency must include all amounts claimed to be owing to resolve the delinquency, including attorney fees and costs, regardless of whether such amounts have been reduced to judgment.
  4. An agent for the association may collect on behalf of the association directly from the Owner the assessments and other amounts owed by cash or check, by mailed or hand–delivered bank drafts, checks, cashiers, or money orders, by credit, charge or debit card or by other electronic means. For any form of payment other than for cash for mailed or hand–delivered bank drafts, checks, cashier’s checks or money orders, the agent may charge a convenience fee that is approximately the amount charged to the agent by a third–party service provider.

PB&J: 1. This new legislation is intended to provide the owners with more time to enter into payment plans and to ensure that the owner is aware of exactly what is owed to the association. The extension of the lien foreclosure deadline will provide the association with more time to foreclose on its lien. Upon resale, title companies will now be permitted to collect six (6) years in delinquent assessments.

  1. 2.BeginningAugust 27, 2019, this law firm will be required to verify that the thirty–day notice was sent to an Owner at least thirty (30) days prior to opening a collections account. Beginning January 1, 2020, this law firm will be required to verify that statements of account were sent in accordance with this statute prior to opening a collections account.
  2. The new legislation requires that the thirty–day notice be sent via certified mail. Serial debtors often refuse to sign for and accept certified mail as they know it means “bad news”.  This law firm advises also sending the thirty-day notice via regular mail to preemptively refute any claims that the Owner did not receive the thirty–day notice.  The cost of the certified mail will likely be addressed in the management contract.  It is this law firm’s opinion that this charge is also a cost of collection that may be passed on to the Owner.  There is no requirement that it be the “final notice”. An association may send the thirty–day notice with the first or second notice.

Associations will now be required to provide statements of account instead of periodic payment books. While this will increase costs for the association, this requirement will not go into effect until January 1, 2020, giving associations and their management companies time to plan for and implement this requirement. The management companies will likely address the increased mailing and labor costs in their contracts with the associations. The statement of account must include the current balance and the immediately preceding ledger history. The statute does not define “immediately preceding ledger history.”  It is this law firm’s opinion that this means one preceding period, but that the statement of account might include at least two periods to be safe.

Associations are permitted to provide the statement of account electronically, if the Owners opt–in. This will save considerable time and money for both the associations and their management companies. We advise that the association send a negative notice to the owners to opt–in – such that if the owner does not respond he or she is automatically enrolled to receive electronic statements. The association may also treat owners who have signed up for auto debit for payment of assessments as having opted in to receive electronic statements. The association must have a good e–mail address to do so. It is this law firm’s opinion that the mailing costs are a cost of collection as that term is used in most CC&Rs and Arizona statutes. We advise that Owners who opt in for electronic delivery may be charged a lower fee for providing the statement.

Most CC&Rs require uniform assessments. If owners who opt–in for electronic delivery are charged less that owners who do not, it can be argued there are non–uniform assessments. To avoid that legal challenge, please create a separate collection cost and not lump it into the regular assessment.

The statement of account must be sent at the same frequency as the assessments are charged. If an association’s declaration permits, associations may save costs caused by the statements by changing the frequency of assessments to quarterly, semi–annually, or annually. Changing the assessments from monthly to annually can have a significant impact on the association’s cash flow, and this law firm suggests that it may be more prudent to change to either quarterly or semi–annually.

  1. 4. Associations may accept payment in most forms of legal tender, and may charge a fee to the Owner equal to that charged by the credit or debit card

House Bill 2672:  Amends A.R.S. §§9–500.39, 11–269.17, 42-1125.02, 42–2001, 42–2003, and adds §42–5042

Short Term Rentals

  1. 1. The owner of a short-term rental must provide the city or town with contact information for the owner or the owner’s designee who is responsible for responding to complaints in a timely manner in person, over the phone or by email at any time of the day before offering the property for
  2. 2. Within thirty (30) days after a verified violation, a city or town shall notify the department of revenue and the owner of the short–term rental of the verified violation, and whether a civil penalty was imposed.
  1. 3. A short–termrental may not be used for nonresidential uses, including for a special event that would otherwise require a permit or license, or for a retail, restaurant, banquet space or other similar
  2. 4. The property may not be rented without a current transaction privilege tax licens The owner must list the current transaction privilege tax license number on all advertisements.

PB&J: This new legislation provides cities and towns with more authority to regulate short–term rentals. The cities and towns will be able to more effectively address problem behaviors of short–term tenants. Associations may report violations to the city or town, or to the Department of Revenue.  This will provide associations with additional options when dealing with short–term rental problems.

Senate Bill 1309:  Amends A.R.S. §§12–551, 12–1611, 12–1612, and 12–1613

Judgment Renewals

  1. 1. Provides that judgments may be renewed, except judgments that were entered on or before August 2, 2013 that were not renewed on or before August 2, 2018.

PB&J: In 2018, the legislature passed a bill that provided that judgments were now valid for ten (10) years, increased from five (5) years. This year’s legislation clarifies that to qualify, a judgment reaching its expiration date must have been renewed on or before August 2, 2018.

Arizona Registrar of Contractors

  1. 1. Provides that planned communities and condominiums are eligible for an award from the Residential

Contractors’ Recover Fund if both:

  1. The builder or developer transferred control to the association; and
  2. A licensed residential contractor’s failure to adequately build or improve a residential structure or appurtenance caused damage to the common elements within the complex.
  1. 2. Provides that the maximum award from the Residential Contractors’ Recover Fund is $30,0000, but that in no case may an award may not exceed the actual damages suffered as a direct result of a contractor’s violation.
  2. 3. The statute of limitations for an action for judgment that may result in collection from the Residential Contractors’ Recovery Fund is two years after the date of the commission of the act by the contractor. The claimant must notify the Registrar of Contractors of the commencement of the action within thirty (30) days. The Registrar may intervene and defend the action.

PB&J: The Residential Contractors’ Recovery Fund provides for financial protection to residential owners for work performed by licensed contractors. Associations did not previously qualify to recover monies from this fund. This new legislation allows for associations to recover up to $30,000.00 if a licensed contractor did not adequately complete work to a residential structure so that the common area/common elements were damaged.

House Bill 2151:  Amends A.R.S. §§12–1567, 22–247, and 22–525

Satisfaction of Judgment

  1. 1. A Satisfaction of Judgment must be filed within forty (40) days of the judgment has been paid in full, in Superior or Justice Court, and thirty (30) days after the judgment has been paid in full in Small Claims Court.
  2. 2. If the prevailing party fails to file a satisfaction of judgment, the opposing party may file a motion to compel satisfaction of the judg If the motion is granted, the judgment is deemed satisfied.

PB&J:  This new legislation creates a new deadline for a judgment creditor to file a Satisfaction of Judgment after a judgment is paid in full. This will prevent the judgment creditor from leaving the judgment on record indefinitely, possibly affecting the judgment debtor’s credit.

House Bill 2230:  Amends A.R.S. §§12–1574 and 12–1577

Writs of Garnishment

  1. 1. Awrit of garnishment may be served on any banking corporation by certified mail, return receipt requested, at the garnishee’s regular place of business, or to the garnishee’s statutory agent, or at a location designated by the garnishee. The effective date is the day of rece

PB&J: A judgment creditor is now permitted to serve a writ of garnishment on a banking corporation by certified mail. This helps to simplify the garnishment process and saves costs for the judgment creditor.

Construction Defects

  1. 1. Amendsthe Purchaser Dwelling Act to provide that, at the onset of a claim alleging construction defects, the subcontractors must be provided notice of the cla
  2. 2. Providesthe purchaser with the option of having the original subcontractor perform the repairs, or a different subcontra  If the homeowner selects a different subcontractor, the new subcontractor’s liability is limited only to that subcontractor’s scope of work.
  3. 3. Establishes a streamlined process for construction defect claims, by allowing for the bifurcation of the dwelling actions to dismiss claims without merit, release parties without fault, and assign remaining responsibility based on the relative degree of fault of a defendant or third–party defenda
  4. 4. Establishes proportional liability for developers by limiting the scope of permissible indemnity agreements, ensuring that responsible parties pay their respective share of any loss to the extent of fault.
  5. 5. Allows a court to award attorney fees to the prevailing party for each contested iss Provides guidelines for the court to consider when determining whether attorneys’ fees are reasonable.  Allows for the recovery of expert witness fees in cases involving a single homeowner.

PB&J: This new legislation is intended to create a more accelerated and streamlined process for the resolution of construction defect claims that is more efficient, fair, and convenient for the parties. It is intended help the contractors to identify and make the repairs to avoid a costly and complex litigation. The addition of the attorney fee and expert witness fee provisions will help to prohibit the incurrence of excessive fees.

House Bill 2687:  Amends the Condominium Act, sections 33–1228

Termination of Condominium

  1. 1. Atleast thirty (30) days before recording a termination agreement, the Board must hold a regular or special meeting, at which a person or entity that purports to have the agreement of at least 80% of the votes, shall either produce 1) copies of a signed notarized statement for each Owner that has executed a termination agreement or 2) a signed termination agreement that includes a sufficient number of Unit Owners.
  2. 2. TheBoard may not take action by written consent or any other method that does not provide for an actual meeting that is open to all unit owners.
  3. 3. Any termination agreement that is recorded without compliance of the above provisions is inva
  4. 4. The fair market value of the Unit will also include the pro rata share of any monies in the association’s reserve fund and the operating account and an additional five percent of that total for relocation costs
  5. 5. A UnitOwner may obtain a second independent appraisal at the Unit Owner’s expense, and if it differs from the Association’s appraisal by 5% or less, the higher appraisal is fina If it is more than 5% higher than the amount   determined by the Association’s appraiser, the Unit Owner shall submit to arbitration, at the association’s expense, and the arbitration amount is the final sale amount.  As part of the arbitration process, the appraisers shall fully disclose their appraisal methodologies and shall disclose any other transaction occurring between the buyer and the sellers.

PB&J:  This new legislation provides some additional protections for the Unit Owners in the termination of a condominium.  It provides for more transparency regarding the vote to terminate the condominium.  The Unit Owners will also be entitled to their pro rata shares of the reserve fund and operating account upon termination of the condominium

Senate Bill 1094:  Amends sections 33–1801 and 33–1802 of the Planned Community Act

Definition of Planned Community

  1. 1. Does not apply to condominiums.
  2. Provides that the Planned Community Act does not apply to a nonprofit corporation or unincorporated association or owners association that was created before January 1, 1974 and that does not have the authority to enforce covenants related to the use, occupancy, or appearance of the lots, unless a majority of all of the members elect subject the corporation or association to the Planned Community Act.
  3. The majority of all of the Members may elect to subject a nonprofit corporation or unincorporated association that has the power to assess members to pay the costs and expenses incurred in the performance of obligations created by recorded covenants for a real estate development to the Planned Community Act. If approved, a Notice of Election must be recorded with the County Recorder.  The Notice of Election is effective on the date of recordation. A Notice of Election may be rescinded in the same manner as an election.

PB&J: This new legislation clarifies which nonprofit corporations and owners associations will be subject to the laws contained in the Planned Community Act. It allows corporations and associations that would otherwise be exempt to elect to subject the corporation or association to the Planned Community Act. This legislation was passed for a specific community (Sun City in Maricopa County) that does not have architectural controls

Legislative Updates

2018 Legislative Update

2018 Legislative Update

All new legislation effective as of August 3, 2018

House Bill 2262Amends sections 33-1228 of the Condominium Act.

Condominium Termination

  1. In the event of a termination of a condominium, the unit owners’ interests are valued at the fair market values of their units, limited common elements, and common element interests, plus an additional five percent (5%) of the total amount for relocation costs forowner-occupied units.
  2. The association shall select an independent appraiser to determine the total fair market value.
  3. The determination of the independent appraiser shall be distributed to the unit owners and is final unless disapproved by unit owners within sixty days.
  4. Any unit owner may obtain a second independent appraisal at the unit owner’s expense, and if the appraisal amount differs from the association’s appraisal amount by five percent (5%) or less, the higher appraisal is final.
  5. If the amount determined by the second appraiser is more than five percent (5%) higher than the association’s appraisal amount, the unit owner shall submit to arbitration at the association’s expense, and the arbitration amount is the final sale amount.
  6. An additional five percent of the final sale amount shall be added for relocation costs forowner-occupied units.

PB&J:  This new legislation adds an additional five percent (5%) to the final sale price of a unit in the event of termination for owner-occupied units.  Tenant occupied or unoccupied units will not receive the additional funds.  This will help to assist owners with moving expenses in the event of termination. This legislation also increases the time period for review of the association’s independent appraisal from thirty (30) to sixty (60) days, thus allowing the owners additional time to obtain an independent appraisal.

Senate Bill 1465:  Amends A.R.S. §36-2061.


Sober Living Homes

  1. The Arizona Department of Health Services is required to to certify and license each sober living home in Arizona using rules and minimum standards adopted by a recognized national organization.
  2. The licensure of a sober living home is for one (1) year.  Any person operating a sober living home without a license shall pay a civil penalty of up to one thousand dollars ($1,000) for each violation.
  3. A sober living home must comply with all federal, state, and local laws.

PB&J:  Under the Fair Housing Act, an association must allow sober living homes within the community.  Prior to this legislation, sober living homes in Arizona were largely unregulated.  Associations have had difficulty enforcing violations of the community rules with improperly run sober living homes.  This new legislation provides standards and guidelines for the operation of a sober living home.


House Bill 2240:  Amends A.R.S. §12-1551.


Judgment Renewal

  1. Provides that judgments are now valid for ten (10) years, increased from five (5) years.

PB&J:  Allows an association an additional five (5) years to collect on a judgment before renewal. PBJ provides renewal at no cost to the Association.

Legislative Updates

2016 Legislative Update

2016 Legislative Update

All new legislation here will be in effect on August 6, 2016

House Bill 2172: Adds section 33-1817 (3) to the Planned Community Act. Does not apply to condominiums. 

Architectural Review Standard

  1. An association shall not unreasonably withhold the approval of an owner’s construction project’s architectural designs, plans and amendments.

PB&J: This is already the law. Whether a particular ARC decision is “unreasonable” is determined by a judge or a jury. They essentially are empowered to second guess the Board. The word “unreasonable” is vague and subjective. Please know that many judges and most juries in Arizona do not favor homeowner associations.

House Bill 2592: Adds section 10-3708(F) to the Arizona Nonprofit Corporation Act. Applies to both planned communities and condominiums.

Electronic Voting

  1. If an association is conducting a member vote via written ballot without a meeting, the association may provide notice to the owners that the vote shall be conducted by electronic means, including an online voting system.
  2. The written ballot can be delivered electronically if the online voting system 1) authenticates the voter’s identity, 2) authenticates the validity of the vote to ensure that it was not altered in transit, 3) transmits a receipt to the voter, and 4) stores electronic votes for recount, inspection, and review. The initial notice must include a reasonable procedure by which an owner may obtain and cast a ballot via some other form of delivery, including U.S. mail and fax.  The

PB&J:  This new legislation represents a shift toward moving elections toward a fully electronic process. If an association begins using an online voting platform, it must be sure to continue to allow voting via other forms of delivery at the request of the member. This new law will save some money.


House Bill 2341:  Revises A.R.S. §36-136(I)(4)(a). Applies to both planned communities and condominiums.


  1. Exempts an association holding a social event, like a potluck, from rules relating to food preparation, serving, and storage of food and drink.

PB&J:  The association may hold informal, noncommercial social events without the regulation of the state.

House Bill 2106:    Amends section 33-1242(B) of the Condominium Act and section 33-1803(C) of the

Planned Community Act.

Enforcement Procedure

  1. A member who receives a written notice of violation now has a longer grace period of twenty-one (21) days to send a response via certified mail regarding the notice of violation.  The law currently provides for a grace period of ten (10) days.
  2. If the Owner sends the response via certified mail within 21 days, the Association is required to respond with the following information: 1) the provision of the community documents violated, 2) the date of the violation or the date the violation was observed, 3) the first and last name of the person who observed the violation, and 4) the process the owner must follow to contest the violation.

PB&J:  If the association includes the information in paragraph 2 above in the original notice of violation, this new legislation should not have much of an impact on the association. Associations may wish to add the provisions of paragraph 2 into their initial “Friendly Reminder” notice to the Owner. If all of the information is contained in the original notice, the association does not have to wait the 21 days to proceed. On the other hand, if the association does not include this information in the original notice, the association must wait 21 days to proceed. Owners rarely send in the request by certified mail therefore this certified mail provision is rarely implicated. These provisions only apply to violations related to the condition of the property, not the behavior of the owner or a resident.

House Bill 2382:  Amends A.R.S. §33-440.  Adds section 33-1817(A) to the Planned Community Act.  Does not apply to the Condominium Act. Does not apply during the period of Declarant control without the written consent of the Declarant.

Declaration Amendments

  1. An amendment to the declaration may apply to fewer than all of the lots and the amendment is deemed to conform to the general design of the community if: 1) the amendment receives the affirmative vote of the number of eligible voters as prescribed in the declaration and 2) the amendment receives the affirmative vote or written consent of all of the owners of the lots to which the amendment applies.
  2. Amendments must be recorded thirty (30) days after the adoption of the amendment.
  3. Amendments are effective immediately upon recordation of the instrument in the County in which the association is located, notwithstanding any other provision in the declaration 

PB&J:  Arizona courts have previously held that a non-uniform amendment must be approved by 100% of the Owners. Now, the association can pass a non-uniform amendment that affects fewer than all of the lots without a unanimous vote of the owners. If the association’s declaration requires 75% of the owners to vote in favor of an amendment for passage, then to pass a non-uniform amendment, 75% of alof the owners must vote in favor of the amendment for passage, as well as 100% of all of the owners affected by the amendment.

Amendments will now be effective immediately upon recordation in the County Recorder’s Office.. This provision will supersede any duration or periodic renewal clause in the declaration to the contrary.

Senate Bill 1498:  Amends sections 33-1242 and 33-1250 of the Condominium Act and sections 33-1803 and

33-1812 of the Planned Community Act.

Voting, Late Fees, and Administrative Complaint Rights

  1. Late charges may only be imposed after the association has provided notice that the assessment is overdue or has provided notice that the assessment is considered overdue after a certain date.
  2. With a notice of violation, the association must provide an owner notice of his option to petition for an administrative hearing the matter with the Department of Real Estate.
  3. If there will be voting at a members’ meeting, and absentee ballots are provided, the completed ballot and envelope and any related materials shall contain the name, address, and either the actual or electronic signature of the person voting.
  4. If the community documents allow secret ballots, only the envelope or any non-ballot related materials shall contain the name, address and either the actual or electronic signature of the vote.
  5. Ballots, envelopes, and related materials, including sign in-sheets, shall be retained in electronic or paper format and made available for member inspection for at least one year after completion of the election.

PB&J:  Most associations are likely already notifying owners that a late fee will be charged if the assessment is not paid by a certain date, and this provision should not affect most associations.

Arizona law currently provides for an owner to file a petition with the Department of Fire, Building, and Life Safety against a homeowners association. Under the budget that the Arizona legislature recently passed, this administrative complaint process will move to the Arizona Department of Real Estate. Most homeowners are likely not aware of this complaint process, and the new law requiring the association to notify owners of this option will likely increase the number of complaints filed. Realtors are often hostile to associations. We can speculate that associations will be met with more hostility on this shift.

The new provisions related to ballots will allow the association to more easily authenticate validity of the ballots and streamline the election process.

Senate Bill 1449: Adds A.R.S. §13-3729, and amends A.R.S. §28-8242 and §28-8280.

Unmanned Aircraft

  1. Provides that a person may not operate a model airplane or drone if the operation is 1) prohibited by a federal law or regulation or 2) interferes with law enforcement or emergency operation.
  2. A person who operates an aircraft in the air, on the ground, or on the water in a careless or reckless manner that endangers the life or property of another is guilty of a class 1 misdemeanor. In determining whether the operation was careless or reckless, the court shall consider the standards of safe operation prescribed by federal statutes.
  3. A city, town, or county generally may not adopt any ordinance that relates to the ownership or operation of a drone.

PB&J:  The private operation of drones is a relatively new trend.  There a few laws that currently regulate the private use of drones. This statute takes steps towards this type of regulation, by providing that an operator may not use a drone in a manner that endangers the life or property of another. There are many issues left to be addressed, such as privacy issues associated with flying a drone over another’s property within an association.

The U.S. Federal Aviation Administration (“FAA”) recently published rules for the commercial use of small drones.  These rules provide that the drone must always remain within sight of the pilot, and the drone may only be operated during daylight hours.  The rules also provide for a maximum altitude of 400 feet. The FAA rules apply only to the use of commercial drones.

Senate Bill 1248 :  Amends A.R.S. §§ 9-499.04, 11-005 and 44-1799.08.

Breed Based Dog Regulations

  1.  A city or town may regulate the control of dogs if the regulation is not specific to any breed.

PB&J:  Cities and towns may no longer enact or enforce regulations that are specific to dangerous breeds such as pit bulls, bull mastiffs, and rottweilers.  Associations may continue to regulate and prohibit dangerous breeds. Associations may no longer rely on city and town ordinances restricting dangerous breeds as an enforcement tool.  Although it does not apply to associations, this is another example of our legislators passing bills that have no basis in fact. There are many reputable studies that compile data regarding dog attacks. Some breeds simply attack more than others. An open question is whether cities and towns can prohibit wolf hybrids.

Senate Bill 1496:   Amends section 33-1243 of the Condominium Act and section 33-1813 of the Planned

Community Act.

Removal of Directors

  1. If at least one, but fewer than a majority of the directors are removed by the members, the vacancies shall be filled as provided in the community documents.
  2. If a majority of the directors are removed by the members, or if the community documents do not provide a method for filling board vacancies, the association must hold a separate election for the replacement of the removed directors within thirty (30) days of the special meeting to remove the directors.
  3. If a director is removed, he is not eligible to serve on the board again until after the expiration of his term, unless the community documents provide for a longer period of ineligibility.
  4. The association must retain all documents related to the removal process and election for at least one year.


PB&J:  This new legislation prevents the remaining directors from appointing new directors if a majority of the directors are removed. An election must be held, allowing the members to exercise their votes. This is a welcome improvement to the statute.

Senate Bill 1350:  Adds A.R.S. §9-500.38, A.R.S. §11-269.15 and A.R.S. §15-1650.01.

Limitations on Regulation of Vacation Rentals and Short-Term Rentals.

  1. Cities, towns, and counties have the right to tax online vacation rentals.
  2. Cities, towns, and counties cannot prohibit, restrict the use of, or regulate vacation and short-term rentals, unless for a health, safety, or welfare purpose.

PB&J:  This new legislation prevents cities from prohibiting short term vacation rentals. Associations may no

longer rely on city and town ordinances restricting short term vacation rentals as an enforcement tool. Associations may continue to prohibit shorter term rentals. This rental restriction must be in the declaration. An association cannot prohibit short term vacation rentals via rule or resolution.

Legislative Updates

2017 Legislative Update

2017 Legislative Update

All new legislation here will be in effect on August 8, 2017

House Bill 2411: Amends A.R.S. §33–440. Amends sections 33–1804, 33–1806, and 33 1812 of the Planned Community Act. Amends section 33-1248, 33-1250, 33-1260 of the Condominium Act

Open Meetings

  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.

Legislative Updates

2015 Legislative Update


SENATE BILL 1091: Amends section 33-1813 of the Planned Community Act and section 33-1243 of the Condominium Act.

Procedure for Removal of Director

1. Will be effective on December 31, 2015. Members may petition to call a Special Meeting of the Members to vote on the removal of one or more Directors. SB 1091

amends the procedure by providing that only Members eligible to vote may:

a. Sign the petition to call a Special Meeting of the Members;

b. Count towards the quorum requirement at the Special Meeting of the Members; and

c. Vote on the removal of a Director(s) at the Special Meeting of the Members.

PB&J: Only Members eligible to vote at the time of signing the petition or at the time of the Special Meeting of the Members may participate in the removal process. An Association must be careful to follow the procedure in its Declaration for deeming a Member ineligible to vote. Some Declarations provide that a Member is automatically ineligible to vote if that Member is delinquent or in violation of the use restrictions, while other Declarations require a hearing prior to declaring a Member ineligible to vote.

House Bill 2084: Amends A.R.S. §10-11622, sections 33-1803 and 33-1807 of the Planned Community Act, and sections 33-1242 and 33-1256 of the Condominium Act. Applies to both Planned Communities and Condominiums.

Annual Report

1. Effective on July 3, 2015. Provides that all Associations must attach and submit with its annual report to the Arizona Corporation

Commissions a separate statement containing:

a. The name of its designated agent or management company;

b. The address and phone number for the Association; and

c. The website and fax number of the Association, if any.

2. If the designated agent or management company changes, the Association must file an amended statement reflecting those

changes within thirty (30) days of that change.

3. Removes requirement that an Association record a notice with the county recorder’s office containing its name, address, telephone number, and recording information of Declaration.

PB&J: These changes will allow title companies to easily locate contact information for the Association. These changes will allow the title company to obtain resale disclosure information in a more timely manner.

House Bill 2578: Amends A.R.S. § § 12-1361, 12-1362, 12-1363, 12-1366, 33-2001, and 33-2002, and repeals 12-1364. Applies to both Planned Communities and Condominiums.

Purchaser Dwelling Actions

1.Effective on July 3, 2015. Provides that, before bringing a construction defect case, the Association must:

a. Provide written disclosure to the members describing:

i. The nature of the action and relief sought;

ii. The expenses and fees that the Association anticipates will be incurred in the lawsuit;

iii. The impact that the lawsuit will have on the values of the homes within the Association, whether or not they are subject to the alleged construction defect.

b. Provide the Developer with written notice of the alleged construction defects and with an opportunity to repair or replace the

alleged construction defects; and

c. Demonstrate that the Association has complied with the statutory requirements for bringing a construction defect case against

the Developer.

2. Removes the requirement that a notice of claim must be provided ninety (90) days before filing a case and provides that:

a. Upon receipt of a notice of claim, a Developer has a right to repair or replace the alleged construction defects;

b. Within sixty (60) days of receiving the notice of claim, the Developer shall send the Association a response.

The response may include a notice of intent to repair or replace alleged construction defects, or an offer of monetary

compensation. The Association may file a case if the Developer does not provide a response within sixty (60) days

of the notice of claim;

c. A notice of intent to repair or replace alleged construction defects must describe in reasonable detail all repairs or

replacements that the Developer intends to make and a reasonable estimate of the date by which the repairs or replacements

will be made;

d. The Association may reject an offer of monetary compensation. The Association may not reject an offer to repair or

replace alleged construction defects. The Association must allow the Developer reasonable access to inspect and perform

repairs or replacements;

e. The Association must offer the Developer a reasonable opportunity to repair or replace defects. Repairs and replacements

must be coordinated within thirty (30) days of Developer notice of intent. Developer shall make reasonable efforts to make

repairs or replacements within thirty-five (35) days after the notice of intent, or within ten (10) days of

receipt of required permits, whichever is later;

f. The Developer shall use reasonable care and shall complete repairs or replacements within a commercially reasonable

time period for the repairs or replacements being performed. The Developer is

not liable for access issues or unforeseen events that are not caused by the Developer or its contractors;

g. The Developer is not entitled to a release or waiver in exchange for repair or replacement. The Association may

file a case against the Developer after repairs or replacements are completed. The case may include any claim for inadequate

repair or replacement.

h. Repair and replacement efforts are admissible as evidence; and

i. The Association may file a case if the Developer does not follow statutory requirements. A case filed by the

Association shall be dismissed if the Association does not follow statutory requirements.

3. Notice of alternative dispute provisions must be conspicuously provided in the

contract for the sale. A disclosure statement on the face of the contract must

disclose the alternative dispute provision in bold and capital letters of at

least twelve-point font. The disclosure must include the location of the

alternative dispute resolution procedures within the contract of sale or CC&Rs.

PB&J: The Association is required to disclose the construction defect claim to the members before the Association can bring a construction defect case. The disclosure must include a description of the defect(s) and the relief that will be sought. The disclosure must also include an estimate of all attorneys’ fees, witness fees, costs of court, and other costs that the Association anticipates will be spent on the lawsuit. The Association must inform the members of how the value of the property within the Association will be impacted by the lawsuit.

This bill removes the prior ninety (90) notice requirement for construction defect cases. The Developer now has sixty (60) days to respond to the Association’s Notice of Claim. A major new change is that the Developer now has a right to repair or replace the alleged construction defects. The Association may not refuse an offer to repair or replace the alleged construction defects. The Developer must give the Association written notice of its intent to repair or replace. This notice must be given within sixty (60) days of the Association’s Notice of Claim. The Association cannot file a construction defect case while the Developer is repairing or replacing the alleged construction defects. The Association can file a construction defect case if the Developer does not respond within sixty (60) days of the Associations Notice of Claim.

The Association must allow the Developer access to the community to inspect and to perform repairs or replacements. The Developer is required to perform repairs and replacements in a reasonable and timely manner. When repairs and replacements are completed, the Association may bring a construction defect case against the Developer. The construction defect case may include claims for inadequate replacements or repairs.

The Association is obligated to demonstrate that it has complied with the statutory requirements for bring a construction defect case. A construction defect case shall be dismissed if the Association fails to comply with the statutory requirements. The Developer is also required to comply with the statutory requirements. The Association may file a construction defect case against the Developer if the Developer fails to comply with the statutory requirements.

This bill requires that all purchase contracts must have a disclaimer on their face providing the location of any alternative dispute procedures in the CC&Rs. The disclaimer must be in bold, capital letters of at least 12-point size font.

SENATE BILL 1048: Amends A.R.S. § § 12-302 and 12-3201. Applies to both Planned Communities and Condominiums.

Vexatious Litigants

1. Effective on July 3, 2015. Provides that a waiver of court fees or costs shall not be

granted for a pro se litigant who has been previously declared a vexatious

litigant by any court (except for a family court).

2. If an applicant who is granted a deferral or a waiver is later found to be a vexatious litigant, the court shall order the applicant to pay

the deferred or waived fees and costs.

3. A party may request that the party’s opponent be declared a vexatious litigant. If the request is denied, that party may make an

amended request if the party obtains new information or evidence that is relevant to the determination.

4. A vexatious litigant is one who repeatedly files court actions, unreasonably delays court proceedings, brings frivolous lawsuits,

engages in the abuse of discovery, engages in a pattern of making unreasonable, repetitive and excessive requests for information,

and/or repeatedly files documents, motions, or requests for relief.

PB&J: A pro se litigant is a litigant that is not represented by an attorney. Many Associations have encountered vexatious litigants or “sue happy” Owners. These are the Owners who file a lawsuit over every small grievance he or she has with the Association, or frivolously defend a collections claim by filing any type of motion he or she can think of, rather than working out a reasonable settlement. This statute allows courts to impose sanctions on these individuals.

House Bill 2311: Amends A.R.S. § § 33-961 and 33-962. Applies to both Planned Communities and Condominiums.

Judgment Liens

1. Will be effective on December 31, 2015. Provides that the clerk of a Justice Court shall issue a certified copy of any judgment upon

request. On issuance of the certified copy of the judgment, it may be recorded and executed upon in the same manner as a judgment

of the Superior Court.

PB&J: Justice Courts have jurisdiction over all claims of $10,000.00 or less. Unless the Association has filed a foreclosure complaint, most collections lawsuits are filed in a Justice Court. Currently, an Association is required to transfer a Justice Court judgment to the Superior Court before it may record that judgment. This new statute provides that Justice Court judgment may be recorded without first transferring the judgment to the Superior Court. This statute will allow the Association to record its Justice Court judgment much sooner.

Senate Bill 1163: Amends A.R.S. § 11-819. Applies to both Planned Communities and Condominiums.

Regulation of Home-Based Businesses

1.Effective July 3, 2015. Allows for installation of doors, shelving or display racks in home.

2. Allows for temporary display of sign during business hours. Sign can’t be larger than 2 feet by 2


3. Resident must be properly licensed.

PB&J: A resident with a proper license may add shelving and display racks. During regular business hours a properly licensed resident may display temporary signs up to 2 by 2 in size. The Association must review “Residential Use” and other provisions in the Declaration. The Association may be more restrictive than the zoning regulation.