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Arizona HOA Board Members

Arizona HOA: An Essential Guide to Cultivating Transparency and Trust

Best Practices for Fostering Transparency and Trust in HOA

Navigating the responsibilities of an Arizona HOA, transparency and trust emerge as pillars essential to cultivating a thriving community. Governed by the Arizona Planned Community and Condominium Acts, these associations are not just about enforcing rules or managing common areas; they’re also about fostering an environment where every member feels heard, valued, and engaged.

Crafting a culture of honesty in an Arizona HOA is akin to laying a solid foundation for a fort – it demands diligence, clarity, and adherence to HOA statutes. In the subsequent sections, we’ll outline effective strategies for enhancing transparency, methods to fortify trust with homeowners, and overcoming common challenges to ensure any HOA can shine as a model of integrity and accountability.

The Role of HOA Boards in Fostering Transparency

Transparency in financial reporting is a cornerstone for Arizona HOA boards to maintain trust and foster open communication with residents. Board members share equal responsibility in fulfilling their fiduciary duty and serving the best interests of the association.

Financial Reporting and Records Accessibility

  • Ensure that financial records are accessible to homeowners upon request, in line with Arizona Revised Statutes 33-1805 and 33-1258.
  • Establish a clear process for keeping and producing records, including financial statements, meeting minutes, and operational details.
  • Transparent and responsible budget management by HOA property managers and the board is crucial in building trust within the community.

Regular Communication and Meetings

  • Engage in regular communication about the budget to build trust between the HOA board and homeowners.
  • Regularly held board meetings with properly recorded minutes should be maintained to ensure transparency in financial management.
  • Open meetings to homeowners and allow them to speak on issues as permitted by A.R.S. 33-1804 and A.R.S. 33-1248, which fosters a positive environment and communication.

Addressing Issues and Legal Compliance

  • Address issues head-on by confronting concerns promptly and dealing with them head on.
  • Comply with various legal requirements at the federal, state, and local levels, as well as any governing documents.
  • Keep homeowners updated, acknowledge and resolve concerns, and ensure governing documents like bylaws are readily accessible.

Strategies for Enhancing Transparency in HOA Operations

Partnering with a reputable HOA management group can significantly enhance transparency in any Arizona HOA’s operations. These professionals bring expertise in handling the intricate details of association management, ensuring that the board remains in control while benefiting from:

  • Third-Party Oversight: Management companies provide essential oversight, reducing the risk of self-dealing claims and ensuring compliance with regulations. This layer of protection is invaluable for maintaining the integrity of the board’s activities.
  • Conflict Resolution: With a third-party perspective, management companies can offer neutral guidance on community issues, which is instrumental in reducing potential conflicts of interest and navigating sensitive situations.

To further promote transparency, employ the following strategies:

  • Embrace Technology: Use digital platforms for open communication and administrative task automation. An online portal can streamline access to information, maintenance requests, and communication, fostering transparency and engagement.
  • Financial Management: Ensure that a board member with financial expertise is involved or outsourced to a professional. This approach addresses financial challenges effectively and helps in detailed financial reporting, including profit & loss statements, balance sheets, and cash flow statements. Such transparency shows how funds are used and maintains trust in financial practices.
  • Education and Involvement: Educate homeowners on volunteer responsibilities and encourage involvement by starting with smaller roles, like joining committees. By encouraging homeowners to take an active role in their HOA, it not only increases transparency, but also builds a stronger community bond.
  • Effective Communication: Utilize communication tools like newsletters, email updates, and social media platforms effectively. Regular updates on association activities help homeowners understand and cooperate with the HOA’s decisions.
  • Dispute Resolution: Adopt an internal dispute resolution strategy and consider alternative methods when necessary. This proactive approach can prevent issues from escalating and maintain the community’s trust.

Building Trust with Homeowners through Effective Communication

Honest, interpersonal communication is the bedrock of trust between HOA board members and homeowners. When issues arise, addressing them directly and keeping homeowners well-informed are critical steps in nurturing a positive environment within the HOA.

  • Direct Addressing of Concerns: It’s important that HOA board members don’t shy away from difficult conversations. Promptly dealing with concerns and providing clear explanations can alleviate tensions and demonstrate a commitment to transparency.
  • Educational Outreach: Ensure homeowners are familiar with their rights, including non-discrimination, fair housing, and access to financial records. This knowledge empowers them to engage in open communication with the HOA, fostering a partnership rather than a hierarchy.

Clear and consistent communication channels are indispensable for informing stakeholders about meetings, projects, and policy changes, which in turn reduces misunderstandings and enhances transparency.

Consider these methods:

  • Regular Updates: Implementing regular newsletters and email updates ensures that all homeowners are kept in the loop about community happenings, upcoming projects, and any changes in policy.
  • Online Platforms: Utilize online platforms for real-time updates and as a repository for important documents and meeting minutes. This digital approach provides homeowners with easy access to information whenever they need it, further promoting transparency.

Community forums play a pivotal role in fostering direct communication between homeowners and HOA management, creating a transparent atmosphere in decision-making processes.

Facilitate these forums in the following ways:

  • Scheduled Community Forums: Organize regular community forums that allow for face-to-face discussions between homeowners and HOA management. These forums can be structured to include Q&A sessions, feedback opportunities, and open discussions on community matters.
  • Inclusive Decision-Making: Encourage homeowner participation in decision-making processes by engaging in nonbinding and informal surveys. The results can help to guide the Board in its decision making. When homeowners feel their voices are heard and their opinions matter, trust in the HOA management strengthens.

Overcoming Challenges to Transparency in HOAs

Overcoming challenges to transparency in Homeowners Associations (HOAs) requires a proactive approach and a commitment to the community’s best interests. Navigating these challenges, keep in mind the importance of balancing autonomy with professional oversight, addressing conflicts of interest, and maintaining consistent enforcement of rules.

  • Balancing Self-Management with Professional Oversight: While self-managed HOAs offer the benefits of autonomy and potential cost savings, they also come with significant responsibilities.

To ensure tasks such as fee collection, financial management, and legal compliance are handled effectively:

  • Consider partnering with an HOA management company to handle complex tasks, allowing community members to focus on broader decision-making and advocacy.
  • Establish clear roles and responsibilities for board members to prevent conflicts of interest and ensure that personal biases do not affect the community’s wellbeing.

Education and Conflict Resolution: Board members often come into their roles without formal HOA education, which can lead to challenges in managing the association. To overcome this hurdle, be proactive in providing resources to board members.

  • Provide training and resources to board members to enhance their understanding of HOA laws and financial management. Engage your attorney to provide a training the fiduciary duties a Director has to the HOA as well as on open meetings laws.
  • Implement an internal dispute resolution strategy, such as the Arizona Department of Real Estate (ADRE) HOA Dispute Process, to handle conflicts efficiently and fairly.

Enforcement and Financial Management:

  • Consistent rule enforcement and transparent financial practices are crucial for building trust within the community.
  • Take the following into account when enforcing HOA rules:
  • Enforce community rules and standards uniformly to avoid accusations of selective enforcement or favoritism.
  • Prepare and adhere to annual budgets, assess fair and reasonable fees, and maintain open financial records, as transparency in these areas builds homeowner trust.

Implementing these strategies helps to create a culture of trust and transparency that leads to increased homeowner involvement, reduced conflict, and confidence in the board’s decisions. Remember, good communication isn’t just about talking; it’s about fostering a two-way street where information flows freely, and concerns are met with earnest attention.

Final Thoughts on HOA Transparency and Trust

In championing these values, associations pave the way for communities that are not only compliant with regulations but also reflective of a shared commitment to the welfare of their members. When legal complexities arise or further guidance is needed, the expertise of Halk Oetinger and Brown can be invaluable in navigating the nuances of HOA management and real estate law.  Halk, Oetinger, and Brown offers Board training for new and old Directors alike. The journey towards transparent and trustful HOA cultures is ongoing, with each step taken a testament to the collective dedication to the principles that underpin vibrant, cooperative neighborhoods.

Halk, Oetinger And Brown only represent Arizona associations and planned communities. Our firm focuses on providing unique HOA solutions, not on racking up billable hours. We have industry-leading monthly plans available that are cost-effective and we can make an immediate impact on your assessment collections process. Schedule an initial consultation 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.

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Arizona HOA Laws

Arizona Legislative Update for 2022

Brown Law Group - Arizona HOA Legislative Update for 2022

In 2022, the Arizona legislature passed several bills affecting community associations, all of which are effective as of September 24, 2022.

House Bill 2158: Political Signs and Assemblies

The legislature amended laws related to political signs and assemblies, Arizona Revised Statutes §§33-1261 and 33-1808. This legislation applies to both planned communities and condominiums.

Association Specific Political Signs: This legislation allows owners to place signs on their property in support of or opposition to 1) candidates in a Board election, 2) a recall effort, or 3) ballot measures, such as amendments to the Governing documents. This will allow owners to become more politically involved in the community. The association may adopt reasonable rules regarding the placement, location, and manner of display of association-specific political signs, except that the association may not:

  • Prohibit the display of association-specific political signs between the date that the association provides written or absentee ballots to members and three days after the vote.
  • Limit the number of association-specific signs, except that the aggregate total dimensions of all association-specific signs may be limited to no more than nine square feet.
  • Require association-specific signs to be commercially produced or professionally manufactured.
  • Prohibit using both sides of the sign.
  • Regulate the number of candidates supported or opposed in an election, the number of board members supported or opposed in a recall, or the number of ballot measures supported or opposed on an association-specific political sign.
  • Regulate the content of an association-specific sign, except that an association may prohibit the use of profanity, discriminatory text, images, or content based on race, color, religion, sex, familial status or national origin as prescribed by federal or state fair housing laws.

Unfortunately, the ability to regulate profanity on non-association-specific political signs was not included in this new law. This law firm advises that an association encourage respectful political signs for all elections. This law firm advises that associations adopt the following statement of values regarding political signs:

STATEMENT OF VALUES

The Board values the divergent and different political beliefs and values seeing those beliefs in an atmosphere of mutual respect. To that end the Board asks the Members and Residents to join us in committing to not displaying signs that contain curse words, are intentionally offensive, or are obvious symbols of racial or religious oppression. 

Right to Peacefully Assemble: This legislation prevents planned communities and condominiums from restricting a member’s ability to use the common areas of a planned community or the common elements of a condominium to peacefully assemble, if done in compliance with reasonable restrictions. Specifically, it provides that:

  • That a member, or group of members, may assemble on the common areas/elements to discuss matters related to the association, including, but not limited to elections, recalls, potential or actual ballot issues, revisions to the governing documents, safety issues, or property maintenance.
  • That a member may invite 1 political candidate or 1 non-member guest to speak at an assembly about matters related to the association.
  • That the association shall not prohibit a member from posting notices regarding an assembly of members on bulletin boards located within the common areas/elements. 
  • That an assembly of members does not constitute an official members’ meeting unless it is properly noticed and convened pursuant to Arizona law and the governing documents.

The association may adopt reasonable restrictions that govern the assemblies. These may include permitted hours during which the assemblies may take place, proper security and event insurance, or preapproved locations for the assemblies, such as the clubhouse or pool area. The Brown Law Group is happy to assist with adopting a policy that complies with this new law.

House Bill 2010: First Responder Flags

The legislature amended Arizona Revised Statutes §33-1261 and §33-1808 to add certain first responder flags to the list of flags an association cannot prohibit an owner from displaying. 

The Association cannot prohibit an owner from displaying 1) first responder flags, and 2) blue star service flags or gold star service flags. A first responder flag may incorporate the design of one or two other first responder flags to form a combined flag, for example, a flag that honors both the police and fire departments.

“First responder flag” is defined as one that recognizes and honors the services of 1) law enforcement, 2) fire departments, or 3) paramedics or emergency medical technicians. The specific requirements for each are below:

  • Law Enforcement:  Is limited to the colors blue, black and white, the words “law enforcement”, “police”, “officers”, “first responder”, “honor our”, “support our”, and “department”, and the symbol of a generic police shield in a crest or star shape.
  • Fire Department: Is limited to the colors red, gold, black and white, the words “fire”, “fighters”, “F”, “D”, “FD”, “First Responder”, “department”, “honor our”, and “support our”, and the symbol of a generic Maltese cross.
  • Paramedics or Emergency Medical Technicians:  Is limited to the colors blue, black, and white, the words “first responder”, “paramedic”, “emergency medical”, “service”, “technician”, “honor our”, and “support our”, and the symbol of a generic star of life.

There are many types of first responder flags with varying designs and language. Associations may prohibit all first responder flags that do not conform to the above specifications. If any association is unsure whether a flag a member is displaying complies with the above statute, BLG is happy to evaluate the flag for compliance.

House Bill 2131: Artificial Turf 

House Bill 2131 amends the Planned Community Act by adding section 33-1819 to prevent communities from prohibiting owners from installing artificial turf on their property. This section does not apply to condominiums.

This new law will help to preserve water by lowering water usage and costs. The association must allow artificial turf where natural grass is allowed. If natural grass is not permitted within the association, the association is not required to allow artificial turf. The association is permitted to create reasonable rules and regulations that govern the installation and quality of the artificial turf. Specifically, this new law provides that:

  • If a planned community allows for natural grass, the association may not prohibit the installation of artificial turf.
  • The association may adopt reasonable rules governing the installation and appearance of the artificial turf, but only if those rules do not prevent the installation of artificial turf in the same manner that natural grass would be allowed by the association.
  • The association may adopt reasonable rules governing the location and the percentage of the property that may be covered with artificial turf to the same extent as natural grass. The association may also adopt rules governing the quality of the artificial turf.
  • The association may require removal of artificial turf if it causes a health or safety issue that the owner fails to correct. The association may require replacement or removal of artificial turf if it is not maintained in accordance with the association’s maintenance standards.
  • An association can prohibit the installation of artificial turf if: 1) it is installed in an area that the association maintains or irrigates–for example front yards of Lots– and 2) if an association prohibits the new installation of natural grass on an owner’s property, the association can also prohibit the new installation of artificial turf on an owner’s property, except that, an association may not prohibit a member from converting natural grass to artificial turf.
  • If an owner files a lawsuit against the association for violating this new law, and the court finds in favor of the owner, the court will award reasonable attorneys’ fees and costs to the owner.
  • The law does not apply to associations that have unique vegetation or geologic characteristics that require preservation by the association and the viability of those characteristics is protected, supported, or enhanced as a result of the continued existence of natural landscaping materials.

House Bill 2275: Condominium Termination

This legislation amends Arizona Revised Statutes §33-1228 of the Condominium Act to update the percentage of members that most vote to terminate a condominium. This section does not apply to planned communities.

This legislation provides that an already existing condominium may only be terminated by the approval of 80% of the votes in the association, except:

  1. In the case of a taking of all of the units by eminent domain.
  2. If the declaration specifics a smaller percentage, but only if the units are restricted to non-residential uses.

This legislation provides that condominiums created on or after September 24, 2022 may only be terminated if 95% of the members vote in favor of the termination, or any larger percentage specified in the declaration.

Work with an Arizona HOA Law Firm

Following, establishing, and enforcing HOA rules and the law can be tricky. There are many factors to take into account. From keeping tabs on recent legislation that impacts your HOA to complying with state and federal laws to enacting protocols and objective enforcement policies, there are a long list of reasons why your association should be working with experienced HOA attorneys.  Halk, Oetinger, and Brown is a leader in HOA representation in Arizona because it is our only practice area.  We only represent associations and planned communities in Arizona. Schedule an initial consultation to review your HOA representation needs on our contact us page.

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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.