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Arizona HOA Board Members

Important Tips for New HOA Board Members in Arizona

As a new nominee to the Board, you were likely more focused on your agenda than the realities of serving as a volunteer Director for a non-profit homeowners’ association.

Then you were elected and in the thick of it all. Your agenda got lost in the sheer breadth of what you needed to handle as a director. You picked up on the broad strokes first. Then the finer points with time. More experienced Directors showed you the ropes. You learned a bit from watching the Community Manager. And you always kept a list of important questions to ask an Association attorney – the next time you saw one.

You grew wiser in the year. The election passed and new Directors came near. Would you explain this to them, they asked, if they brought the beer?

Never fear, you told them, hear the following and persevere!

You Are Your Community Documents

Your community documents are the lifeblood of your Association. They are the operating manuals that give you the Rules. They include, at a minimum, your Declaration of Covenants, Conditions, and Restrictions (“CC&Rs”) and your Bylaws. Other common community documents include Articles of Incorporation, Rules and Regulations, Fine Policies, Enforcement Policies, Architectural Guidelines, Amendments, and Resolutions of the Board.

You likely have general familiarity with your community documents. You know the structure and can navigate them. You must now begin the journey from familiar to knowledgeable.

Expand upon your knowledge issue by issue. Look to the community documents for answers first and always. Keep notes on sections or words you do not understand and ask other Board Members and industry professionals for their interpretations. As you use and rely on the community documents your understanding will deepen and you will see new connections in your documents you did not notice before. Still take notes and ask industry professionals for their interpretations. Mastery of your community documents, like the vinting of fine wine, comes only with time.

What You Need to Know About HOA Finances

Association finances may not be fun, but they set the functional stage for your work as a director.

They are also why you serve on the Board for free!

Your Association lives on assessments. Your Association likely has no other source of funds outside its assessment powers. The Board sets the assessment rate. The Association assesses. The Members, ideally, pay.

How does the Board decide on the assessment rate? Firstly, by reviewing the governing documents for limitations on assessment increases. Secondly by comparing expected financial obligations against current assets. Financial obligations include charges such as: property taxes, utilities, professional management or accounting, general and litigation counsel, landscaping charges, insurance, staffing and contractors, maintenance and replacement of capital assets, payments to the reserves for future maintenance, and other operating costs.

All this must be paid for with assessments.

Fortunately, you need not be an accountant to understand and manage Association finances. Start with a review of the most recent budget and go from there. The Treasurer or Community Manager can provide you with the financial statements and some basic understanding. The rest depends on your efforts of inquiry.

Patient, Selective Advocacy   

Only you know exactly why you ran for the Board, but we imagine it is because you care about how your community is operated and governed. There is also a good chance you have some strong opinions on how things, or one thing, should be done.

Take a cautious approach to your agenda as a new Board Member. Your first few board meetings are best spent getting a feel for how the Association operates, your Association’s current concerns, and the disposition of your fellow Board Members. Don’t be afraid to put in some work during this time to support the effort or decisions of other Board Members. You will gain valuable experience and will build relationships that may be helpful when it is time for you to undertake your project.

During this time, you can consider the goals you would like to accomplish. You should eventually settle on one and make this the focus of your efforts and accumulated political capital.

Open Communication with All Members is Key

The Association is a community endeavor. Substantive (and sometimes unsubstantive!) changes will need a majority of the Board and Members on your side. As a new Director, you need to understand the lay of the land. What are the priorities of the Board and other Directors? What are the Members concerned about? What of percolating intrigue, rumor, and scandal?

You need be a spymaster or political savant no longer! Modern technology makes it easier than ever to create online or email polls to gather information from your community.

A professional and well-considered poll can assist the Board with identifying community sentiment for a project or change. This information can be invaluable for a Board attempting to identify and tailor positive changes for their Association.

And don’t discount plain old feet on the street with an ear for your neighbors and fellow Directors. All types of communication are key.

But most of all, don’t forget to…

Communicate with Experienced HOA Attorneys in Arizona

Most new board members quickly realize that being on a community association board requires a lot of time and effort, especially at the start.  One of the ways that you can make sure that effort is productive and benefiting the association long term is to work with a law firm that specializes in association representation in Arizona.  The Brown Law Group only represents Arizona associations and planned communities.  We can handle general counsel needs, covenants enforcement, assessment collections, litigation and more.  Contact us today at 602-952-6925 to schedule an initial consultation with our team.

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

Categories
Arizona HOA Board Members

HOA Board Meeting Boot-Camp: What Every HOA Board Member in Arizona Needs to Know

The nominations tendered. The ballots cast and tallied. Suddenly you are on the Board. What was once whim gone as reality settles in and the first Board Meeting closes in on you… What’s your job again?

Getting on the Board is easier than you might think! Serving is something else. As a volunteer, you are required to serve and protect the fiduciary interests of the Association for no pay! Did they even train you for this? Probably not!

Never fear! We are here to help with these just-in-time emergency boot-camp pointers for handling and managing your meetings with professional precision. We address the most popular question at the end, but don’t skip ahead!

1.The Association is required to have an annual meeting of the membership every year. You can have more than this. But you need at least one. Also, all your meetings need to be held in Arizona. Don’t worry, you can still attend remotely, or even virtually! We dig into the advent of virtual meetings, virtual attendance and e-voting in our article <name>. Read more there to find out!

2. Notice of meetings must be provided to all members at least 48 hours before the meeting. Notice may be provided by any reasonable form of communication, including the Association newsletter, a clear and visible posting in the community, or email.

3. Emergency meetings do not require 48-hours’ notice. An emergency is any business or action that cannot be delayed for the 48-hour notice period. Not sure if it’s an emergency? Check with Association counsel!

At an emergency meeting, you must state the reason requiring the emergency meeting in your minutes. You also must read and approve those minutes at the next regular meeting of the Board.

4. Special meetings may be called by: (A) the president, (B) a majority of the Board, (C) by a vote of 25% of the members or any lower percentage provided in the Bylaws. If your Bylaws require more than 25% of the members to call a special meeting, it is unenforceable.

5. The agenda must be available to all attending members. It can be provided to the Members at, or before, the meeting.

6. All Association business must be done at meetings open to the Members, unless the business is subject to a statutory exemption.

This is called a sunshine law. It is a common fixture of public governance.

Under Arizona’s sunshine law, all member meeting, board meetings, or regularly scheduled committee meetings must be open to the Members or the Member’s written representative unless it is a topic that may be discussed in a closed session meeting pursuant to A.R.S. § 33-1804(A) or A.R.S. § 33-1248(A).

7. Each Member is entitled to speak to the Board and community on agenda issues. The Board may adopt time limits on a Member’s right to speak per issue as long as the restriction is reasonable and applied equally to all Members.

How do we determine what is reasonable? It depends!

The Association is installing a new ‘Children at Play’ sign near the clubhouse? The Board might reasonably limit each Member that wishes to speak to 3 minutes.

The Association discovered oil and is converting the Association monument into an oil derrick? We are gonna need more time for that one…

What? They brought cameras?

8. Members are permitted by law to audiotape and videotape open meetings of the Association. The Association may adopt reasonable rules governing recording of open meetings but may not preclude recording unless the Association records the meeting and makes the unedited recordings available to members on request without restrictions on its use.

This isn’t everything, but it’s a start! When you reach a question you have no answer for, and it will happen, remember you have an entire industry of professionals to help you learn, develop and grow as a Director of your Association!

When in doubt, reach out! Don’t forget we are…

Experienced Arizona HOA Attorneys

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.

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.

Categories
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.

H2170 WRITS OF GARNISHMENT; ATTORNEY’S FEES 

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.  

S1377 CIVIL LIABILITY; PUBLIC HEALTH PANDEMIC 

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.

S1722

POLITICAL SIGNS; CONDOMINIUMS; PLANNED COMMUNITIES 

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.