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Arizona HOA Laws

What are Federal HOA Laws and How Do They Impact Arizona HOAs?

Arizona has many state specific laws for planned communities and condominiums, but there are several overriding federal laws that apply to all HOAs.  All HOA board members and individual property owners should understand the federal HOA laws that apply to their association and how they impact operations in Arizona HOAs.

HOAs: Federal and State Laws

Homeowners associations in Arizona are governed by many state laws, including the Nonprofit Corporation Act, the Planned Community Act, and the Condominium Act.  There are also several federal laws which apply to Arizona HOAs. These federal laws are superior to state or local laws. That means, if the laws conflict, the federal law will take precedence. The federal laws will also take precedence over any confliction provision of the community’s governing document.

Federal Laws Governing the Operation of HOAs in Arizona

State authorities allow for the creation of associations and planned communities to ensure smooth running and maintenance of all the houses within that defined area. From maintenance to fee collection, the association is responsible for all governance and operation of that community detailed in the covenants, conditions and restrictions (CC&Rs).  State laws include statutes that govern the HOA’s ability to file a lawsuit against an owner to collect delinquent HOA dues. For instance, if the homeowner owes more than $1200 to the HOA or the homeowner has not paid his or her dues in at least 12 months, the HOA can even pursue a lien foreclosure on the property.

Although HOAs do everything to make the area safe for homeowners, they might sometimes make unfair decisions. That’s why federal laws include a set of rules and restrictions that govern the operation of any HOAs in Arizona. Here are the main federal HOA laws all Arizona HOAs need to follow:

Arizona HOAs and Americans with Disabilities Act of 1990

The Americans with Disabilities Act (ADA) impacts Arizona HOAs that have publicly accessible common areas and employees. The law was established in the 1990s to protect disabled people from discrimination at work, transportation, and public accommodations. The public accommodations include recreational areas, gyms, swimming pools, and other areas open to the general public. For any place to be considered a public accommodation, it must be accessible to the public, not just the HOA members. If the HOA is building a recreational spot or a pool in the area that is open to the general public, it must be built and maintained to ADA specifications for accessibility.  If the HOA’s amenities are not open to the general public, and only to its members and guests, the ADA will not apply.

Applying the Fair Housing Act as an HOA

The Fair Housing Act prevents discrimination in residential housing based on race, color, religion, sex (including gender identity and sexual orientation), disability, familial status, or national origin. The law prohibits any HOA in Arizona from taking any action against a member based on their membership in a protected class.  Most people understand that overt discrimination is unacceptable and illegal.  However, there are many ways the Fair Housing Act can be violated unintentionally.  Issues most often arise when a disabled owner requests a reasonable accommodation to assist with a disability. It is important to forward all such requests to an Arizona HOA attorney to review the request. All HOA board members need to be familiar with the Fair Housing Act and generally aware of any potential violations related to discrimination.

What HOAs Need to Know about the Fair Debt Collection Practices Act

Federal laws have established legal ways to collect debts. Association dues, assessments and other charges that homeowners owe to the HOA are considered valid and enforceable debts. HOAs are not considered debt collectors as long as the association collects the dues and assessment from their own members. The Fair Debt Collection Practices Act (FDCPA) does apply when an HOA utilizes an HOA law firm to collect those same debts. Attorneys and debt collectors appointed by the HOA must comply with the FDCPA while collecting dues from homeowners. These laws put restrictions on the language and collection techniques they can use when attempting to collect any debt for an HOA.

Freedom to Display the American Flag Act

The Freedom to Display the American Flag Act (FDAFA) is unique among the federal HOA laws because it speaks directly to associations and planned communities.  The 2005 Act made it illegal for any HOA to restrict the ability of residents and members of the community from displaying the American flag.  The FDAFA does allow reasonable restrictions on displaying the flag properly as defined by law and community rules on the time, place and manner that protects a substantial interest of the association members.

Benefits of Working with an Arizona HOA Law Firm

Arizona HOA board members need to understand the federal HOA laws and state HOA laws that govern the association.  Having a basic understanding of these federal laws and how they can impact your decisions helps guide board members, but any legal matter or issue with a member that delves into these laws should not be taken lightly.  Working with an Arizona HOA law firm that specializes in representing associations and planned communities means your association will know that your rules and regulations are in line with federal and state laws.  The Brown Law Group can help Arizona HOAs review any matters related to state and federal HOA laws.  Contact us today at 602-952-6925 to schedule an initial consultation or make an appointment for your association on our contact us page.

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

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Arizona HOA Laws

What Arizona HOAs Need to Know About HB2131 and Artificial Turf Laws in Planned Communities

It should come as no surprise to Arizona residents that the state needs to find ways to effectively conserve water.  This can be at odds with Arizona associations and planned communities that restricted members from replacing natural grass with artificial turf.  In response to some property owners that faced substantial fines from their HOA for installing artificial turf in their yard, Arizona passed HB2131 to establish laws that prevent HOAs from restricting members from replacing natural grass with artificial tur =if that HOA permits natural grass.  Here is what HOAs and members need to know about HB2131 and artificial turf laws in Arizona planned communities.

Debate on Water Usage and Artificial Turf in Arizona

The debate over appropriate measures for water conservation and sustainable growth in Arizona has been going on for decades.  However, the drought impacting the Southwest and some of the recent decisions regarding the Colorado river has made the issue more important than ever before.  For the first time ever in August 2021, the Bureau of Reclamation announced a water shortage at Lake Mead and mandatory water restrictions were put in place for Arizona, Nevada and Mexico.  The federal government agency’s plans to release less water this year has left Arizona cities and towns scrambling to find immediate ways to reduce water usage in their areas.

Natural grass lawns require a lot of water, especially in places as hot as the Phoenix valley.  Any areas where natural grass can be removed will cut down on water usage.  Installing artificial turf keeps the same aesthetic appeal without any need for water and maintenance.  One of the main problems is that artificial turf gets extremely hot during Arizona summers.  Recent studies have shown that artificial turf actually gets hotter than asphalt during the day so homeowners should not assume covering their whole yard in artificial grass is the perfect solution.

What is Arizona HB2131?

Governor Ducey signed HB2131 into law on March 30, 2022 to establish rules against banning artificial turf by associations and planned communities.  The bill faced substantial debate before being passed in the first Arizona legislative session of the year.  Here are the most important aspects of HB2131 for HOAs and association members to understand:

Planned communities in Arizona that allow natural grass on a member’s property cannot ban the installation or use of artificial turf on the property of any of its members. This new law does not apply to condominiums. 

Planned communities can adopt and enforce reasonable regulations regarding installation, aesthetics, and appearance of the artificial turf, as long as those rules do not prevent installing artificial turf the same way that natural grass is allowed by the community documents.

HB2131 affirms that planned communities can establish rules regarding the location on the property and the percentage of the property that can be covered with natural grass or artificial turf, as long as they are treated the same.

Planned communities can prohibit the installation of artificial turf in the following circumstances:

If the planned community has banned new installation of natural grass on member properties, it can also ban installation of artificial turf.  However, the HOA cannot deny a member from converting natural grass to artificial turf on their property.

If the area of the property is maintained or irrigated by the association in the governing documents, like a common area or front yard, the planned community can prohibit the installation of artificial turf.

For artificial turf, HOAs can require the following:

Remove and replace the artificial turf if it is not maintained according to the HOA’s maintenance standards.

Removal of the artificial turf that the member has already installed if that artificial turf creates any health or safety issues or hazards, especially if the member has not corrected the problem.

This law will not apply to any planned community with some unique vegetation or geologic characteristics that need preservation by the HOA. Those characteristics and features are enhanced, supported, or viably protected because of the natural landscaping materials that have continuously existed.

Handling Artificial Turf Laws as an Arizona HOA

When new laws pass that impact associations and planned communities specifically, it is advisable to review your covenants, conditions and restrictions (CC&Rs) to make sure there are no rules that need to be updated.  If your community has debated how to handle landscaping issues like artificial turf or removal of natural grass, it is an important time to work with an HOA law firm to make sure your governing documents are not at odds with HB2131 and the new artificial turf laws in Arizona.  The Brown Law Group only represents associations and planned communities in Arizona.  Our experienced HOA attorneys can quickly review your governing documents and assess any required updates.  Contact us today at 602-952-6925 to schedule an initial consultation or make an appointment online here.

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

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Arizona HOA Laws

What Board Members Need to Know About Arizona HOA Disclosure Requirements and Record Keeping

There are not many people that get excited about record keeping, but it must be a top priority for any Arizona HOA.  Arizona law makes any association or planned community responsible for accurate record keeping and providing those records to any individual member upon request.  This ensures that homeowners associations are transparent, and members can hold them accountable.  These HOA disclosure requirements also mean that board members must understand their responsibilities and have an organized process for record keeping.  Here is what all board members need to know about Arizona HOA disclosure requirements and some tips on best practices for HOA record keeping.

Arizona HOA Disclosure Requirements

Arizona Revised Statutes 33-1805 and 33-1258 defines the HOA disclosure requirements that all AZ HOA board members need to understand.  Other than some specific exceptions, all financial records and other governing documents need to be readily available for any individual member to review upon request.  Individual members can request copies of these documents and HOAs must provide those copies within 10 business days of the request.  HOAs can charge nominal fee per page to the member for producing copies of the requested documents.  The amount that the association can charge is set by the statutes.

Arizona HOA Disclosure Exceptions

A.R.S. 33-1805  and 33-1258 also detail the records that are exempt from Arizona’s HOA disclosure requirements.  All privileged communications between the association and the association’s attorney do not have to be shared with individual members. The details of pending litigation do not need to be made available upon request either. Any personal information on the finances or health of an individual member in the possession of the association or board members must not be shared or made available to other members.  These exceptions also apply to any information on the job performance or personal details of any association employees. Any meeting minutes from closed executive sessions of board meetings for need not to be disclosed to individual members. Open meeting minutes and annual meeting minutes must be provided. 

Best Practices for HOA Record Keeping and Producing Documents

Every Arizona HOA must have an established process for keeping all meeting minutes, financial records and general details of the operations.  Typically, a homeowners association will hire a management company that will assist with organizing and storing the records.  The Association will be responsible for keeping and producing these records upon request.  This also means it is the association’s responsibility to maintain a process for separating out or redacting any records that should not be disclosed.  If this process is not strictly maintained, it can be easy to accidentally share privileged information when processing a routine record request.  This is an important process to review regularly with the association’s attorney to make sure that you have appropriately separated or redacted any information or records that should not be disclosed.

Some HOA records must always be kept on file. These records include the covenants, conditions and restrictions (CC&Rs), original articles of incorporation, bylaws, deeds, and easements.  Other records, such as Board meeting minutes should be kept for at least seven (7) years.  This helps to protect the HOA for any litigation that might arise within the statute of limitations for claims filed against the association.  The attorneys at the Brown Law Group can assist with developing a document retention policy and schedule for adoption by a homeowners association. 

Many HOAs still keep these records in paper copies in storage.  If an HOA has not already explored moving as many records as possible to digital storage, that is an excellent goal for this year.  Moving as much document storage as possible to a secure online storage option will make it much easier to produce any requested documents for individual members.  It should generally make it easier to stay organized all around. 

Establish a Better Disclosure Process with an AZ HOA Law Firm

If an Arizona HOA does not have an established and organized process for record keeping and disclosure, it can be overwhelming for the board when many different individual members start asking for copies of key documents.  This is one of the most important reasons to work with an experienced HOA law firm on keeping the right records up to date and segmenting those records that should not be shared with individual members.  The Brown Law Group only represents Arizona associations and planned communities.  Our team specializes in keeping your HOA in compliance with all Arizona statutes related to association governance.  Our attorneys can make sure your record keeping practices are optimal and disclosure requests go through a standard process.  Contact us today at 602-952-6925 to schedule a consultation with our experienced HOA attorneys or make an appointment online.

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

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Arizona HOA Laws

Arizona HOAs 101: What Everyone Needs to Know About Arizona HOA Laws and Rules

Everyone we know that buys a home in a planned community or homeowners association wants a neighborhood that will be a good, safe place to live and that their home will not lose value from neighbors that do not maintain their property.  Board members should keep these goals in mind when making decisions for the community.  Board members, and regular members, should have a general understanding of their AZ HOA laws and rules. They must also recognize that some issues require consulting with expert legal representation.  Here are the key elements that everyone should know about Arizona HOA laws and rules.

What is the Purpose of an HOA?

A homeowners association (“HOA”) is a non-governmental organization that is tasked with maintaining and enforcing the rules and regulations that govern the community. These rules and regulations are called “equitable servitudes” and are set forth in the Declaration and other community documents. Arizona HOAs are authorized by statute, and often their Declaration, to collect association dues and to levy fines against members that violate the rules.

Each HOA is unique according to its location and community documents, but they are all governed and operated by a Board of Directors. The Board consists of volunteer community members that are elected by the HOA membership to operate the association and make decisions in the best interest of the community.

Many HOAs are tasked with maintaining aesthetic standards and property values. How do they accomplish this? Through a reasonable exercise of their discretionary powers!

Keeping the neighborhood clean and well maintained. Adopting and enforcing policies governing operating procedures, enforcement policies, landscaping guidelines, and collection policies. Collaborating with local and state government. Entering into maintenance and service contracts for community assets. Maintaining and tendering claims to insurance. These are all reasonable exercises of discretionary powers. It takes a lot of work to build and maintain a great community, but once accomplished property values and member enjoyment generally follow closely along. 

How Can an AZ HOA Establish Effective Rules and Regulations?

The CC&Rs immediately go into effect against applicable property when they are recorded. Recorded documents are public records. When an individual buys a property subject to CC&Rs, that individual is contractually obligated to follow the CC&Rs upon accepting a deed to the property. You do not need to sign or accept the CC&Rs to be bound by them! You are automatically responsible upon accepting a deed to property controlled by CC&Rs.

Most CC&Rs even let the Board adopt extra rules they can make you follow! Those rules must be adopted and noticed according to the process in your community documents!

Can an AZ HOA Limit Which Members Can Join the Board?

Generally, no.  Every owner in the community automatically becomes a member upon accepting the deed to their property. Each member is entitled to the rights and bound by the obligations set forth in the CC&Rs. This includes the right to run for the Board, subject to existing restrictions set forth in the CC&Rs or Bylaws.  Some HOAs will require that a member be in good standing to run for the Board. All policies and processes to elect the board and govern the community need to take this into consideration.

Required Disclosures for AZ HOAs

Understanding disclosures and notifications is an important part of operating any planned community or HOA. These include but are not limited to providing adequate notice of all board meetings and disclose the meeting minutes, providing adequate notice before imposing fines, providing notice of adjusted assessment rates, responding to disclosure requests from its members, and providing an annual disclosure of the association budget and any changes to rules and regulations.  It is important that HOAs are transparent and keep the members updated.  

HOA Financial Responsibilities

Associations are often responsible for maintaining community property.  Board members are responsible for making decisions and giving direction on the management, allocation and accounting of community resources and assets. 

Understanding AZ HOA Laws and Rules

Every HOA board member should be willing to learn about the rules and laws that apply to planned communities and associations in their state.  We posted a recent article on the key details that every HOA board member in Arizona needs to know to do their job effectively and represent the community.

In Arizona, the Planned Communities Act, Arizona Condominium Act and the Nonprofit Corporations Act are the main governing statutes for HOAs.  These are important laws for every HOA board member to understand and make sure their board and community are staying in compliance.

Can an HOA in AZ be Represented by an HOA Law Firm?

Yes, HOAs as a whole can and should seek the representation of an experienced law firm to represent their collective interests.  HOAs routinely run into legal issues that will require the expertise of an experienced law firm to resolve.  Utilizing the services of an experienced law firm that specializes in representing associations and planned communities can help avoid exposure to many legal risks and an HOA law firm can address any claims that arise appropriately and expeditiously.

The complexities of the Planned Communities Act, Condominium Act and laws pertaining to non-profits are another important reason to rely on the legal expertise of a law firm that specializes in HOA representation.  While board members should understand these laws in Arizona, an HOA should not pretend like members will be legal experts because they read the statutes a few times.

The Brown Law Group only represents planned communities and associations in Arizona.  Our attorneys are experienced and knowledgeable on all things related to HOA governance and operation.  We assist HOAs with everything from assessment collection to covenant enforcement to litigation.  Our team can assist with every detail of operating a successful homeowners association in Arizona while avoiding many common legal pitfalls.  Contact us today at 602-952-6925 to schedule an initial consultation or make an appointment on our website here.

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

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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.

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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.

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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.

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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.