The Arizona Legislature passed seven bills, which Governor Hobbs then signed, that have a direct impact on the community association industry. 

House Bill 2648, House Bill 2662, House Bill 2698, Senate Bill 1432, Senate Bill 1016, House Bill 2141, and House Bill 2119 will become law on September 14, 2024, which is 90 days after the adjournment of the legislature. Below is an overview of these four new laws.

House Bill 2648: Common Expense Lien 

HB2648 amends A.R.S. §33-1202 and A.R.S. §33-1802 to add a definition of “Common Expense Lien” and “Member Expenses.” “Common Expense Lien” includes assessments, late charges for assessments IF authorized in the declaration, collection fees and costs incurred or applied by the association, and Court awarded attorneys’ fees and court costs. “Member Expenses” includes “fees, charges, late charges and monetary penalties or interest.” 

HB2648 also amends A.R.S. §33-1256 and A.R.S. §33-1807. An association can only foreclose on the “Common Expense Lien” if assessments are delinquent for a period of one year or the amount of at least $1,200.00 on the date the foreclosure lawsuit is filed. “Member Expenses” cannot be foreclosed upon and are not part of the lien regardless of any language in the association’s declaration. An association has a judgment lien for “Member Expenses” only after awarded by a Court in a Judgment and the Judgment is recorded. An association may not transfer or sell a debt for “Common Expense Lien” or “Member Expenses.”

House Bill 2662: Agenda to Members 

HB2662 amends A.R.S. §33-1248 and A.R.S. §33-1804 to require the association to provide an agenda for member and board meetings by hand-delivery, mail, website posting, email or other posting in advance of the meeting. The agenda must accompany the meeting notice. Member meetings must include the agenda not less than 10 days and not more than 50 days before the meeting. Board meetings must include the agenda at least 48 hours prior to the meeting. Failure of a member to receive an agenda does affect the validity of the meeting.

House Bill 2141: Interior Improvements in Condominiums 

HB2141 amends A.R.S §33-1221 of the Condominium Act. An association must allow an owner to improve or alter the interior of his/her Unit which may cause noise 

disturbances to the adjacent occupants, if the owner installs materials that would minimize those disturbances. This means that condominium association must allow tile, hard wood, or other hard surface flooring in units. The association can require the owner to install materials to minimize the noise to other units. Also, an association cannot prohibit an owner from “using any manner of decoration on the interior of the unit.”

Senate Bill 1432: Removal of Unlawful Restrictions 

SB1432 creates A.R.S §33-531, et seq. titled “Uniform Unlawful Restrictions in Land Records Act” which provides a process to remove unlawful restrictions. Unlawful Restrictions are any provision restricting the transfer, use or occupancy of real property by a Federal or State protected class. The association or any member of the association (as to his /her property only) may record an amendment to remove an Unlawful Restriction without a vote of the members.

Senate Bill 1016: Flagpole Holders 

SB1016 amends A.R.S §33-1808 to allow a community association to limit a member to two wall mounted flagpole holders.

HB2119: Transfer Fees 

HB2119 amends A.R.S §33-442 to add subsection E. The new subsection prohibits an association from charging a transfer fee when the conveyance of title is between family per A.R.S §11-1134(B)(3) or between related entities per A.R.S §11-1134(B)(7). Management companies may charge a fee to the association for administration of records as authorized in management contract.

House Bill 2698: End of Declarant Control 

HB2698 adds A.R.S. §33-1820 to the Planned Community Act to require that a declaration identify a date or method for calculating when termination of declarant control will occur. If a declaration is silent, then declarant control ends on the date when the declarant sells the second to last lot to a buyer. As long as declarant owns one or more lots, the association shall maintain the common areas in the same, existing standards and not impede the declarant’s ability to construct and sell lots.

The information provided herein is for reference purposes only, is general in nature, and is not intended as legal advice. For specific questions or legal issues regarding your association, please contact us at 480-219-3633.