| 1 | 1 | | REFERENCE TITLE: homeowners' associations; meetings State of Arizona House of Representatives Fifty-sixth Legislature Second Regular Session 2024 HB 2270 Introduced by Representative Parker B An Act amending sections 33-1243, 33-1248, 33-1804 and 33-1813, Arizona Revised Statutes; relating to condominiums and planned communities. (TEXT OF BILL BEGINS ON NEXT PAGE) |
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| 9 | 9 | | REFERENCE TITLE: homeowners' associations; meetings |
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| 10 | 10 | | State of Arizona House of Representatives Fifty-sixth Legislature Second Regular Session 2024 |
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| 11 | 11 | | HB 2270 |
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| 12 | 12 | | Introduced by Representative Parker B |
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| 14 | 14 | | REFERENCE TITLE: homeowners' associations; meetings |
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| 24 | 24 | | State of Arizona |
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| 28 | 28 | | Fifty-sixth Legislature |
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| 30 | 30 | | Second Regular Session |
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| 32 | 32 | | 2024 |
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| 40 | 40 | | HB 2270 |
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| 44 | 44 | | Introduced by |
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| 46 | 46 | | Representative Parker B |
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| 64 | 64 | | An Act |
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| 68 | 68 | | amending sections 33-1243, 33-1248, 33-1804 and 33-1813, Arizona Revised Statutes; relating to condominiums and planned communities. |
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| 74 | 74 | | (TEXT OF BILL BEGINS ON NEXT PAGE) |
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| 78 | 78 | | Be it enacted by the Legislature of the State of Arizona: Section 1. Section 33-1243, Arizona Revised Statutes, is amended to read: START_STATUTE33-1243. Board of directors and officers; conflict; powers; limitations; removal; annual audit; applicability A. Except as provided in the declaration, the bylaws, subsection B of this section or other provisions of this chapter, the board of directors may act in all instances on behalf of the association. B. The board of directors shall not act on behalf of the association to amend the declaration, terminate the condominium, elect members of the board of directors or determine the qualifications, powers and duties or terms of office of board of directors members. Except as provided in subsection H of this section, the board of directors may fill vacancies in its membership for the unexpired portion of any term. C. If any contract, decision or other action for compensation taken by or on behalf of the board of directors would benefit any member of the board of directors or any person who is a parent, grandparent, spouse, child or sibling of a member of the board of directors or a parent or spouse of any of those persons, that member of the board of directors shall declare a conflict of interest for that issue. The member shall declare the conflict in an open meeting of the board before the board discusses or takes action on that issue and that member may then vote on that issue. Any contract entered into in violation of this subsection is void and unenforceable. D. Except as provided in the declaration, within thirty days after adoption of any proposed budget for the condominium, the board of directors shall provide a summary of the budget to all the unit owners. Unless the board of directors is expressly authorized in the declaration to adopt and amend budgets from time to time, any budget or amendment shall be ratified by the unit owners in accordance with the procedures set forth in this subsection. If ratification is required, the board of directors shall set a date for a meeting of the unit owners to consider ratification of the budget not fewer than fourteen or more than thirty days after mailing of the summary. Unless at that meeting a majority of all the unit owners or any larger vote specified in the declaration rejects the budget, the budget is ratified, whether or not a quorum is present. If the proposed budget is rejected, the periodic budget last ratified by the unit owners shall be continued until such time as the unit owners ratify a subsequent budget proposed by the board of directors. E. The declaration may provide for a period of declarant control of the association, during which period a declarant or persons designated by the declarant may appoint and remove the officers and members of the board of directors. Regardless of the period provided in the declaration, a period of declarant control terminates not later than the earlier of: 1. Ninety days after conveyance of seventy-five percent of the units that may be created to unit owners other than a declarant. 2. Four years after all declarants have ceased to offer units for sale in the ordinary course of business. F. A declarant may voluntarily surrender the right to appoint and remove officers and members of the board of directors before termination of the period prescribed in subsection E of this section, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or board of directors, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective. G. Not later than the termination of any period of declarant control the unit owners shall elect a board of directors of at least three members, at least a majority of whom must be unit owners. The board of directors shall elect the officers. The board members and officers shall take office on election. H. Notwithstanding any provision of the declaration or bylaws to the contrary, all of the following apply to a meeting at which a member of the board of directors, other than a member appointed by the declarant, is proposed to be removed from the board of directors: 1. The unit owners who are eligible to vote at the time of the meeting may remove any member of the board of directors, other than a member appointed by the declarant, by a majority vote of those voting on the matter at a meeting of the unit owners. 2. The meeting of the unit owners shall be called pursuant to this section and action may be taken only if a quorum is present. 3. The unit owners may remove any member of the board of directors with or without cause, other than a member appointed by the declarant. 4. For purposes of calling for removal of a member of the board of directors, other than a member appointed by the declarant, the following apply: (a) In an association with one thousand or fewer members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least twenty-five percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one hundred votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association as prescribed by section 33-1248, subsection B C. (b) Notwithstanding section 33-1248, subsection B, in an association with more than one thousand members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least ten percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one thousand votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association. The board shall provide written notice of a special meeting as prescribed by section 33-1248, subsection B C. (c) The special meeting shall be called, noticed and held within thirty days after receipt of the petition. (d) If all of the requirements of this subsection for calling a special meeting are met and the board of directors fails to call, notice and hold a special meeting within thirty days after receipt of the petition, the members of the board of directors are deemed removed from office effective at midnight of the thirty-first day. (e) For purposes of a special meeting called pursuant to this subsection, a quorum is present if the number of owners who are eligible to vote in the association at the time the person attends the meeting equal to at least twenty percent of the votes of the association or the number of persons who are eligible to vote in the association at the time the person attends the meeting equal to at least one thousand votes, whichever is less, is present at the meeting in person or as otherwise allowed by law. (f) If a civil action is filed regarding the removal of a board member, the prevailing party in the civil action shall be awarded its reasonable attorney fees and costs. (g) The board of directors shall retain all documents and other records relating to the proposed removal of the member of the board of directors and any election or other action taken for that director's replacement for at least one year after the date of the special meeting and shall allow members to inspect those documents and records pursuant to section 33-1258. (h) A petition that calls for the removal of the same member of the board of directors shall not be submitted subjected to a recall vote more than once during each term of office for that member. 5. On removal of at least one but fewer than a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, the vacancies shall be filled as provided in the condominium documents. 6. On removal of a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, or if the condominium documents do not provide a method for filling board vacancies, the association shall hold an election for the replacement of the removed directors at a separate meeting of the members of the association that is held not later than thirty days after the meeting at which the members of the board of directors were removed. 7. A member of the board of directors who is removed pursuant to this subsection is not eligible to serve on the board of directors again until after the expiration of the removed board member's term of office, unless the condominium documents specifically provide for a longer period of ineligibility. I. For an association in which board members are elected from separately designated voting districts, a member of the board of directors, other than a member appointed by the declarant, may be removed only by a vote of the members from that voting district, and only the members from that voting district are eligible to vote on the matter or be counted for purposes of determining a quorum. J. Unless any provision in the condominium documents requires an annual audit by a certified public accountant, the board of directors shall provide for an annual financial audit, review or compilation of the association. The audit, review or compilation shall be completed no later than one hundred eighty days after the end of the association's fiscal year and shall be made available on request to the unit owners within thirty days after its completion. K. This section does not apply to timeshare plans or associations, or the period of declarant control under timeshare instruments, that are subject to chapter 20 of this title. END_STATUTE Sec. 2. Section 33-1248, Arizona Revised Statutes, is amended to read: START_STATUTE33-1248. Open meetings; exceptions; notice; policy statement A. Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the unit owners' association and the board of directors, and any regularly scheduled RULEMAKING, enforcement, design CONTROL or financial advisory committee meetings, however denominated, are open to all members of the association or any person designated by a member in writing as the member's representative and all members or designated representatives so desiring shall be permitted allowed to attend and speak at an appropriate time during the deliberations and proceedings. The board or committee may place reasonable time restrictions on those persons speaking during the meeting but shall permit allow a member or a member's designated representative to speak once after the board or committee has discussed a specific agenda item but before the board or COMMITTEE takes formal action on that item in addition to any other opportunities to speak. The board or committee shall provide for a reasonable number of persons to speak on each side of an issue. Persons attending may audiotape or videotape those portions of the meetings of the board of directors, meetings of committees and meetings of the members that are open. The board of directors or committees of the association shall not require advance notice of the audiotaping or videotaping and may adopt reasonable rules governing the audiotaping or videotaping of open portions of the meetings of the board of directors, the committees and the membership, but such rules shall not preclude such audiotaping or videotaping by those attending, unless the board or committee audiotapes or videotapes the meeting and makes the unedited audiotapes or videotapes available to members unit owners on request without restrictions on its their use as evidence in any dispute resolution process. Any portion of a board of directors or DESIGNATED committee meeting may be closed only if that portion of the meeting is limited to consideration of one or more of the following, without action: 1. Legal advice from an attorney for the board or the association. On final resolution of any matter for which the board received legal advice or that concerned pending or contemplated litigation, the board may disclose information about that matter in an open meeting except for matters that are required to remain confidential by the terms of a settlement agreement or judgment. 2. Pending or contemplated litigation. 3. Personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association. Cited violations of the condominium documents and any associated penalty imposed, along with delinquencies in the payments of assessments and any fees or fines imposed by the association on any unit owner, do not constitute personal or financial information for the purposes of this paragraph, except that the consideration of personal health or financial hardships that affect the ability of the unit owner to pay the assessment or comply with the condominium documents may be considered in a closed meeting. 4. Matters relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association. 5. Discussion of a unit owner's appeal of any violation cited or penalty imposed by the association except on request of the affected unit owner that the meeting be held in an open session on the specific request of the unit owner for that appeal to be heard in closed session. 6. The review, negotiation and consideration of proprietary bid proposals from potential contractors before awarding a contract for the desired services. 7. Negotiations with a financial institution to obtain financing or any other entity to acquire property if the decision to enter into those negotiations was first approved by the board of directors in open session. B. Notwithstanding any provision in the condominium documents, all meetings of the unit owners' association and the board of directors and its designated committees shall be held in this state. After termination of the period of declarant control, a formal meeting of the unit owners' association shall be held at least once each year to elect board of directors members to fill new or expired terms and to conduct any other business of the unit owners. If an annual meeting of the unit owners is called but fails to reach a quorum, that meeting must be reconvened with a reduced quorum requirement of half of the original number of unit owners required for a quorum. If the original meeting participation would satisfy the reduced quorum requirement, the meeting may be reconvened immediately. If the original meeting participation would not satisfy the reduced quorum requirement, the reconvened meeting must be called not less than five or more than thirty days after the original meeting. All previously submitted absentee ballots remain valid for the reconvened meeting and the deadline for submitting any additional absentee ballots is extended to the reconvened meeting date. If the reconvened meeting quorum is not achieved, all current board of directors member terms are extended for one year. Special meetings of the unit owners' association may be called by the president, by a majority of the board of directors or by unit owners having at least twenty-five percent, or any lower percentage specified in the bylaws, of the votes in the association. C. Not fewer than ten nor or more than fifty calendar days in advance of any meeting of the unit owners, the secretary association shall cause written notice to be hand delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit owner, including an email address. The notice of any meeting of the unit owners shall state the date, time and place of the meeting. The notice of any annual, regular or special meeting of the unit owners shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws, any changes in assessments that require approval of the unit owners and any proposal to remove a director or officer. The failure of any unit owner to receive actual notice of a meeting of the unit owners does not affect the validity of any action taken at that meeting. C. Before entering into any closed portion of a meeting of the board of directors, or on notice of a meeting under subsection D of this section that will be closed, the board shall identify the paragraph under subsection A of this section that authorizes the board to close the meeting. D. Notwithstanding any provision in the declaration, bylaws or other condominium documents, for meetings of the board of directors that are held after the termination of declarant control of the association or designated committees, notice to unit owners of open meetings of the board of directors or committee shall be given at least forty-eight hours in advance of the meeting by newsletter, conspicuous posting or any other reasonable means as determined by the board of directors. An affidavit of notice by an officer of the association is prima facie evidence that notice was given as prescribed by this section. Notice to unit owners of meetings of the board of directors is not required if emergency circumstances require action by the board before notice can be given. Any notice of a board meeting or committee meeting shall state the date, time, and place and method of the meeting. The failure of any unit owner to receive actual notice of a meeting of the board of directors or committee does not affect the validity of any action taken at that meeting. E. Notwithstanding any provision in the declaration, bylaws or other condominium documents, for open meetings of the board of directors that are held after the termination of declarant control of the association or designated committees, all of the following apply: 1. The draft agenda shall be posted or otherwise made available to all unit owners attending At least forty-eight hours before the meeting and may be revised as required by the board president or committee chairperson to add or remove agenda items based on developments since the draft was issued. If the meeting agenda includes proposed approval of an annual budget or a policy or rule, that proposed budget, policy or rule shall be posted along with the notice of the meeting. 2. An emergency meeting of the board of directors may be called to discuss business or take action that cannot be delayed for the forty-eight hours required for notice. At any emergency meeting called by the board of directors, the board of directors may act only on emergency matters. The minutes of the emergency meeting shall state the reason necessitating the emergency meeting. The minutes of the emergency meeting shall be read and approved at the next regularly scheduled meeting of the board of directors. 3. A quorum of the board of directors or a designated committee may meet by means of a telephone conference voice, video or remote meeting technology if a speakerphone speaker is available in the actual or virtual meeting room that allows board members and unit owners to hear all parties who are speaking during the meeting. If remote meeting technology is used, the association shall provide access and opportunity to speak at that remote meeting pursuant to subsection a of this section to any unit owners wishing to participate. 4. Any motion brought forward for action related to the closed session topics authorized in subsection a of this section may be conducted in a manner that does not disclose any privileged or confidential information. Unit owners who are present must be provided an opportunity to speak to the issue pursuant to subsection a of this section. 4. 5. Any quorum of the board of directors that meets informally or communicates in the official capacity of the board of directors to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board of directors votes or takes any action on any matter at that informal meeting or during that communication. This paragraph does not apply to any discussion of association issues in social or personal gatherings or communications, informal meetings or discussions as unit owners, training sessions for board of directors members or communications to establish meeting agendas, even if a quorum of the board of directors participates. 6. Draft minutes of all open meetings of the board of directors, designated committees or unit owners shall be either posted or made available on request within ten business days after the meeting. F. It is the policy of this state as reflected in this section that all meetings of a condominium, whether meetings of the unit owners' association, or meetings of the board of directors or meetings of DESIGNATED committees of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the unit owners of the matters to be discussed or decided and to ensure that unit owners have the ability to speak after discussion of agenda items, but before a vote of the board of directors, committees or members is taken. Toward this end, any person or entity that is charged with the interpretation of these provisions, including members of the board or of directors and any community manager, shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings. Any action taken by the board of directors in violation of this policy statement is null and void. G. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title. END_STATUTE Sec. 3. Section 33-1804, Arizona Revised Statutes, is amended to read: START_STATUTE33-1804. Open meetings; exceptions; notice; policy statement A. Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members' association and the board of directors, and any regularly scheduled rulemaking, enforcement, DESIGN control or financial advisory committee meetings, however DENOMINATED, are open to all members of the association or any person designated by a member in writing as the member's representative and all members or designated representatives so desiring shall be permitted allowed to attend and speak at an appropriate time during the deliberations and proceedings. The board or committee may place reasonable time restrictions on those persons speaking during the meeting but shall permit allow a member or member's designated representative to speak once after the board or committee has discussed a specific agenda item but before the board or committee takes formal action on that item in addition to any other opportunities to speak. The board or committee shall provide for a reasonable number of persons to speak on each side of an issue. Persons attending may audiotape or videotape those portions of the meetings of the board of directors, meetings of committees and meetings of the members that are open. The board of directors and committees of the association shall not require advance notice of the audiotaping or videotaping and may adopt reasonable rules governing the audiotaping and videotaping of open portions of the meetings of the board, the committees and the membership, but such rules shall not preclude such audiotaping or videotaping by those attending, unless the board or committee audiotapes or videotapes the meeting and makes the unedited audiotapes or videotapes available to members on request without restrictions on its their use as evidence in any dispute resolution process. Any portion of a board or DESIGNATED committee meeting may be closed only if that closed portion of the meeting is limited to consideration of one or more of the following, without action: 1. Legal advice from an attorney for the board or the association. On final resolution of any matter for which the board received legal advice or that concerned pending or contemplated litigation, the board may disclose information about that matter in an open meeting except for matters that are required to remain confidential by the terms of a settlement agreement or judgment. 2. Pending or contemplated litigation. 3. Personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association. Cited violations of the community documents and any associated penalty imposed, along with delinquencies in the payments of assessments and any fees or fines imposed by the association on any member, do not constitute personal or financial information for the purposes of this paragraph, except that the consideration of personal health or financial hardships that affect the ability of the member to pay the assessment or comply with the community documents may be considered in a closed meeting. 4. Matters relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association. 5. Discussion of a member's appeal of any violation cited or penalty imposed by the association except on request of the affected member that the meeting be held in an open session on the specific request of the member for that appeal to be heard in closed session. 6. The review, negotiation and consideration of proprietary bid proposals from potential contractors before awarding a contract for the desired services. 7. Negotiations with a financial institution to obtain financing or any other entity to acquire property if the decision to enter into those negotiations was first approved by the board in open session. B. Notwithstanding any provision in the community documents, all meetings of the members' association and the board and its designated committees shall be held in this state. After termination of the period of declarant control, a formal meeting of the members' association shall be held at least once each year to elect board members to fill new or expired terms and to conduct any other business of the members. If an annual meeting of the members is called but fails to reach a quorum, that meeting must be reconvened with a reduced quorum requirement of half of the original number of members required for a quorum. If the original meeting participation would satisfy the reduced quorum requirement, the meeting may be reconvened immediately. If the original meeting participation would not satisfy the reduced quorum requirement, the reconvened meeting must be called not less than five or more than thirty days after the original meeting. All previously submitted absentee ballots remain valid for the reconvened meeting and the deadline for submitting any additional absentee ballots is extended to the reconvened meeting date. If the reconvened meeting quorum is not achieved, all current board member terms are extended for one year. Special meetings of the members' association may be called by the president, by a majority of the board of directors or by members having at least twenty-five percent, or any lower percentage specified in the bylaws, of the votes in the association. C. Not fewer than ten nor or more than fifty calendar days in advance of any meeting of the members the secretary association shall cause written notice to be hand-delivered hand delivered or sent prepaid by United States mail to the mailing address for each lot, parcel or unit owner or to any other mailing address designated in writing by a member, including an email address. The notice shall state the date, time and place of the meeting. A notice of any annual, regular or special meeting of the members shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws, changes in assessments that require approval of the members and any proposal to remove a director or an officer. The failure of any member to receive actual notice of a meeting of the members does not affect the validity of any action taken at that meeting. C. Before entering into any closed portion of a meeting of the board of directors, or on notice of a meeting under subsection D of this section that will be closed, the board shall identify the paragraph under subsection A of this section that authorizes the board to close the meeting. D. Notwithstanding any provision in the declaration, bylaws or other community documents, for meetings of the board of directors that are held after the termination of declarant control of the association or designated committees, notice to members of open meetings of the board of directors or committee shall be given at least forty-eight hours in advance of the meeting by newsletter, conspicuous posting or any other reasonable means as determined by the board of directors. An affidavit of notice by an officer of the corporation is prima facie evidence that notice was given as prescribed by this section. Notice to members of meetings of the board of directors is not required if emergency circumstances require action by the board before notice can be given. Any notice of a board meeting or committee meeting shall state the date, time, and place and method of the meeting. The failure of any member to receive actual notice of a meeting of the board of directors or committee does not affect the validity of any action taken at that meeting. E. Notwithstanding any provision in the declaration, bylaws or other community documents, for open meetings of the board of directors that are held after the termination of declarant control of the association or designated committees, all of the following apply: 1. The draft agenda shall be posted or otherwise made available to all members attending at least forty-eight hours before the meeting and may be revised as required by the board president or committee chairperson to add or remove agenda items based on developments since the draft was issued. If the meeting agenda includes proposed approval of an annual budget or a policy or rule, that proposed budget, policy or rule shall be posted along with the notice of the meeting. 2. An emergency meeting of the board of directors may be called to discuss business or take action that cannot be delayed for the forty-eight hours required for notice. At any emergency meeting called by the board of directors, the board of directors may act only on emergency matters. The minutes of the emergency meeting shall state the reason necessitating the emergency meeting. The minutes of the emergency meeting shall be read and approved at the next regularly scheduled meeting of the board of directors. 3. A quorum of the board of directors or a designated committee may meet by means of a telephone conference voice, video or remote meeting technology if a speakerphone speaker is available in the actual or virtual meeting room that allows board members and association members to hear all parties who are speaking during the meeting. If remote meeting technology is used, the association shall provide access and opportunity to speak at that remote meeting pursuant to subsection a of this section to any members wishing to participate. 4. Any motion brought forward for action related to the closed session topics authorized in subsection a of this section may be conducted in a manner that does not disclose any privileged or confidential information. Members who are present must be provided an opportunity to speak to the issue pursuant to subsection a of this section. 4. 5. Any quorum of the board of directors that meets informally or communicates in the official capacity of the board to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board votes or takes any action on any matter at that informal meeting or during that communication. This paragraph does not apply to any discussion of association issues in social or personal gatherings or communications, informal meetings or discussions as members, training sessions for board members or communications to establish meeting agendas, even if a quorum of the board participates. 6. Draft minutes of all open meetings of the board of directors, designated committees or members shall be either posted or made available on request within ten business days after the meeting. F. It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members' association, or meetings of the board of directors or meetings of designated committees of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the members of the matters to be discussed or decided and to ensure that members have the ability to speak after discussion of agenda items, but before a vote of the board of directors, committees or members is taken. Toward this end, any person or entity that is charged with the interpretation of these provisions, including members of the board of directors and any community manager, shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings. Any action taken by the board of directors in violation of this policy statement is null and void.END_STATUTE Sec. 4. Section 33-1813, Arizona Revised Statutes, is amended to read: START_STATUTE33-1813. Removal of board member; special meeting A. Notwithstanding any provision of the declaration or bylaws to the contrary, all of the following apply to a meeting at which a member of the board of directors, other than a member appointed by the declarant, is proposed to be removed from the board of directors: 1. The members of the association who are eligible to vote at the time of the meeting may remove any member of the board of directors, other than a member appointed by the declarant, by a majority vote of those voting on the matter at a meeting of the members. 2. The meeting of the members shall be called pursuant to this section and action may be taken only if a quorum is present. 3. The members of the association may remove any member of the board of directors with or without cause, other than a member appointed by the declarant. 4. For purposes of calling for removal of a member of the board of directors, other than a member appointed by the declarant, the following apply: (a) In an association with one thousand or fewer members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least twenty-five percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one hundred votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association as prescribed by section 33-1804, subsection B C. (b) Notwithstanding section 33-1804, subsection B, in an association with more than one thousand members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least ten percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one thousand votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association. The board shall provide written notice of a special meeting as prescribed by section 33-1804, subsection B C. (c) The special meeting shall be called, noticed and held within thirty days after receipt of the petition. (d) If all of the requirements of this subsection for calling a special meeting are met and the board of directors fails to call, notice and hold a special meeting within thirty days after receipt of the petition, the members of the board of directors are deemed removed from office effective at midnight of the thirty-first day. (e) For purposes of a special meeting called pursuant to this subsection, a quorum is present if the number of owners who are eligible to vote in the association at the time the person attends the meeting equal to at least twenty percent of the votes of the association or the number of persons who are eligible to vote in the association at the time the person attends the meeting equal to at least one thousand votes, whichever is less, is present at the meeting in person or as otherwise allowed by law. (f) If a civil action is filed regarding the removal of a board member, the prevailing party in the civil action shall be awarded its reasonable attorney fees and costs. (g) The board of directors shall retain all documents and other records relating to the proposed removal of the member of the board of directors and any election or other action taken for that director's replacement for at least one year after the date of the special meeting and shall allow members to inspect those documents and records pursuant to section 33-1805. (h) A petition that calls for the removal of the same member of the board of directors shall not be submitted subjected to a recall vote more than once during each term of office for that member. 5. On removal of at least one but fewer than a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, the vacancies shall be filled as provided in the community documents. 6. On removal of a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, or if the community documents do not provide a method for filling board vacancies, the association shall hold an election for the replacement of the removed directors at a separate meeting of the members of the association that is held not later than thirty days after the meeting at which the members of the board of directors were removed. 7. A member of the board of directors who is removed pursuant to this subsection is not eligible to serve on the board of directors again until after the expiration of the removed board member's term of office, unless the community documents specifically provide for a longer period of ineligibility. B. For an association in which board members are elected from separately designated voting districts, a member of the board of directors, other than a member appointed by the declarant, may be removed only by a vote of the members from that voting district, and only the members from that voting district are eligible to vote on the matter or be counted for purposes of determining a quorum. END_STATUTE |
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| 79 | 79 | | |
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| 80 | 80 | | Be it enacted by the Legislature of the State of Arizona: |
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| 81 | 81 | | |
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| 82 | 82 | | Section 1. Section 33-1243, Arizona Revised Statutes, is amended to read: |
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| 83 | 83 | | |
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| 84 | 84 | | START_STATUTE33-1243. Board of directors and officers; conflict; powers; limitations; removal; annual audit; applicability |
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| 85 | 85 | | |
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| 86 | 86 | | A. Except as provided in the declaration, the bylaws, subsection B of this section or other provisions of this chapter, the board of directors may act in all instances on behalf of the association. |
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| 87 | 87 | | |
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| 88 | 88 | | B. The board of directors shall not act on behalf of the association to amend the declaration, terminate the condominium, elect members of the board of directors or determine the qualifications, powers and duties or terms of office of board of directors members. Except as provided in subsection H of this section, the board of directors may fill vacancies in its membership for the unexpired portion of any term. |
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| 89 | 89 | | |
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| 90 | 90 | | C. If any contract, decision or other action for compensation taken by or on behalf of the board of directors would benefit any member of the board of directors or any person who is a parent, grandparent, spouse, child or sibling of a member of the board of directors or a parent or spouse of any of those persons, that member of the board of directors shall declare a conflict of interest for that issue. The member shall declare the conflict in an open meeting of the board before the board discusses or takes action on that issue and that member may then vote on that issue. Any contract entered into in violation of this subsection is void and unenforceable. |
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| 91 | 91 | | |
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| 92 | 92 | | D. Except as provided in the declaration, within thirty days after adoption of any proposed budget for the condominium, the board of directors shall provide a summary of the budget to all the unit owners. Unless the board of directors is expressly authorized in the declaration to adopt and amend budgets from time to time, any budget or amendment shall be ratified by the unit owners in accordance with the procedures set forth in this subsection. If ratification is required, the board of directors shall set a date for a meeting of the unit owners to consider ratification of the budget not fewer than fourteen or more than thirty days after mailing of the summary. Unless at that meeting a majority of all the unit owners or any larger vote specified in the declaration rejects the budget, the budget is ratified, whether or not a quorum is present. If the proposed budget is rejected, the periodic budget last ratified by the unit owners shall be continued until such time as the unit owners ratify a subsequent budget proposed by the board of directors. |
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| 93 | 93 | | |
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| 94 | 94 | | E. The declaration may provide for a period of declarant control of the association, during which period a declarant or persons designated by the declarant may appoint and remove the officers and members of the board of directors. Regardless of the period provided in the declaration, a period of declarant control terminates not later than the earlier of: |
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| 95 | 95 | | |
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| 96 | 96 | | 1. Ninety days after conveyance of seventy-five percent of the units that may be created to unit owners other than a declarant. |
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| 97 | 97 | | |
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| 98 | 98 | | 2. Four years after all declarants have ceased to offer units for sale in the ordinary course of business. |
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| 99 | 99 | | |
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| 100 | 100 | | F. A declarant may voluntarily surrender the right to appoint and remove officers and members of the board of directors before termination of the period prescribed in subsection E of this section, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or board of directors, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective. |
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| 101 | 101 | | |
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| 102 | 102 | | G. Not later than the termination of any period of declarant control the unit owners shall elect a board of directors of at least three members, at least a majority of whom must be unit owners. The board of directors shall elect the officers. The board members and officers shall take office on election. |
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| 103 | 103 | | |
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| 104 | 104 | | H. Notwithstanding any provision of the declaration or bylaws to the contrary, all of the following apply to a meeting at which a member of the board of directors, other than a member appointed by the declarant, is proposed to be removed from the board of directors: |
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| 105 | 105 | | |
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| 106 | 106 | | 1. The unit owners who are eligible to vote at the time of the meeting may remove any member of the board of directors, other than a member appointed by the declarant, by a majority vote of those voting on the matter at a meeting of the unit owners. |
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| 107 | 107 | | |
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| 108 | 108 | | 2. The meeting of the unit owners shall be called pursuant to this section and action may be taken only if a quorum is present. |
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| 109 | 109 | | |
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| 110 | 110 | | 3. The unit owners may remove any member of the board of directors with or without cause, other than a member appointed by the declarant. |
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| 111 | 111 | | |
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| 112 | 112 | | 4. For purposes of calling for removal of a member of the board of directors, other than a member appointed by the declarant, the following apply: |
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| 113 | 113 | | |
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| 114 | 114 | | (a) In an association with one thousand or fewer members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least twenty-five percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one hundred votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association as prescribed by section 33-1248, subsection B C. |
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| 115 | 115 | | |
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| 116 | 116 | | (b) Notwithstanding section 33-1248, subsection B, in an association with more than one thousand members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least ten percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one thousand votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association. The board shall provide written notice of a special meeting as prescribed by section 33-1248, subsection B C. |
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| 117 | 117 | | |
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| 118 | 118 | | (c) The special meeting shall be called, noticed and held within thirty days after receipt of the petition. |
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| 119 | 119 | | |
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| 120 | 120 | | (d) If all of the requirements of this subsection for calling a special meeting are met and the board of directors fails to call, notice and hold a special meeting within thirty days after receipt of the petition, the members of the board of directors are deemed removed from office effective at midnight of the thirty-first day. |
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| 121 | 121 | | |
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| 122 | 122 | | (e) For purposes of a special meeting called pursuant to this subsection, a quorum is present if the number of owners who are eligible to vote in the association at the time the person attends the meeting equal to at least twenty percent of the votes of the association or the number of persons who are eligible to vote in the association at the time the person attends the meeting equal to at least one thousand votes, whichever is less, is present at the meeting in person or as otherwise allowed by law. |
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| 123 | 123 | | |
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| 124 | 124 | | (f) If a civil action is filed regarding the removal of a board member, the prevailing party in the civil action shall be awarded its reasonable attorney fees and costs. |
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| 125 | 125 | | |
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| 126 | 126 | | (g) The board of directors shall retain all documents and other records relating to the proposed removal of the member of the board of directors and any election or other action taken for that director's replacement for at least one year after the date of the special meeting and shall allow members to inspect those documents and records pursuant to section 33-1258. |
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| 127 | 127 | | |
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| 128 | 128 | | (h) A petition that calls for the removal of the same member of the board of directors shall not be submitted subjected to a recall vote more than once during each term of office for that member. |
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| 129 | 129 | | |
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| 130 | 130 | | 5. On removal of at least one but fewer than a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, the vacancies shall be filled as provided in the condominium documents. |
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| 131 | 131 | | |
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| 132 | 132 | | 6. On removal of a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, or if the condominium documents do not provide a method for filling board vacancies, the association shall hold an election for the replacement of the removed directors at a separate meeting of the members of the association that is held not later than thirty days after the meeting at which the members of the board of directors were removed. |
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| 133 | 133 | | |
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| 134 | 134 | | 7. A member of the board of directors who is removed pursuant to this subsection is not eligible to serve on the board of directors again until after the expiration of the removed board member's term of office, unless the condominium documents specifically provide for a longer period of ineligibility. |
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| 135 | 135 | | |
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| 136 | 136 | | I. For an association in which board members are elected from separately designated voting districts, a member of the board of directors, other than a member appointed by the declarant, may be removed only by a vote of the members from that voting district, and only the members from that voting district are eligible to vote on the matter or be counted for purposes of determining a quorum. |
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| 137 | 137 | | |
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| 138 | 138 | | J. Unless any provision in the condominium documents requires an annual audit by a certified public accountant, the board of directors shall provide for an annual financial audit, review or compilation of the association. The audit, review or compilation shall be completed no later than one hundred eighty days after the end of the association's fiscal year and shall be made available on request to the unit owners within thirty days after its completion. |
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| 139 | 139 | | |
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| 140 | 140 | | K. This section does not apply to timeshare plans or associations, or the period of declarant control under timeshare instruments, that are subject to chapter 20 of this title. END_STATUTE |
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| 141 | 141 | | |
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| 142 | 142 | | Sec. 2. Section 33-1248, Arizona Revised Statutes, is amended to read: |
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| 143 | 143 | | |
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| 144 | 144 | | START_STATUTE33-1248. Open meetings; exceptions; notice; policy statement |
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| 145 | 145 | | |
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| 146 | 146 | | A. Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the unit owners' association and the board of directors, and any regularly scheduled RULEMAKING, enforcement, design CONTROL or financial advisory committee meetings, however denominated, are open to all members of the association or any person designated by a member in writing as the member's representative and all members or designated representatives so desiring shall be permitted allowed to attend and speak at an appropriate time during the deliberations and proceedings. The board or committee may place reasonable time restrictions on those persons speaking during the meeting but shall permit allow a member or a member's designated representative to speak once after the board or committee has discussed a specific agenda item but before the board or COMMITTEE takes formal action on that item in addition to any other opportunities to speak. The board or committee shall provide for a reasonable number of persons to speak on each side of an issue. Persons attending may audiotape or videotape those portions of the meetings of the board of directors, meetings of committees and meetings of the members that are open. The board of directors or committees of the association shall not require advance notice of the audiotaping or videotaping and may adopt reasonable rules governing the audiotaping or videotaping of open portions of the meetings of the board of directors, the committees and the membership, but such rules shall not preclude such audiotaping or videotaping by those attending, unless the board or committee audiotapes or videotapes the meeting and makes the unedited audiotapes or videotapes available to members unit owners on request without restrictions on its their use as evidence in any dispute resolution process. Any portion of a board of directors or DESIGNATED committee meeting may be closed only if that portion of the meeting is limited to consideration of one or more of the following, without action: |
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| 147 | 147 | | |
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| 148 | 148 | | 1. Legal advice from an attorney for the board or the association. On final resolution of any matter for which the board received legal advice or that concerned pending or contemplated litigation, the board may disclose information about that matter in an open meeting except for matters that are required to remain confidential by the terms of a settlement agreement or judgment. |
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| 149 | 149 | | |
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| 150 | 150 | | 2. Pending or contemplated litigation. |
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| 151 | 151 | | |
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| 152 | 152 | | 3. Personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association. Cited violations of the condominium documents and any associated penalty imposed, along with delinquencies in the payments of assessments and any fees or fines imposed by the association on any unit owner, do not constitute personal or financial information for the purposes of this paragraph, except that the consideration of personal health or financial hardships that affect the ability of the unit owner to pay the assessment or comply with the condominium documents may be considered in a closed meeting. |
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| 153 | 153 | | |
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| 154 | 154 | | 4. Matters relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association. |
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| 155 | 155 | | |
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| 156 | 156 | | 5. Discussion of a unit owner's appeal of any violation cited or penalty imposed by the association except on request of the affected unit owner that the meeting be held in an open session on the specific request of the unit owner for that appeal to be heard in closed session. |
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| 157 | 157 | | |
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| 158 | 158 | | 6. The review, negotiation and consideration of proprietary bid proposals from potential contractors before awarding a contract for the desired services. |
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| 159 | 159 | | |
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| 160 | 160 | | 7. Negotiations with a financial institution to obtain financing or any other entity to acquire property if the decision to enter into those negotiations was first approved by the board of directors in open session. |
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| 161 | 161 | | |
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| 162 | 162 | | B. Notwithstanding any provision in the condominium documents, all meetings of the unit owners' association and the board of directors and its designated committees shall be held in this state. After termination of the period of declarant control, a formal meeting of the unit owners' association shall be held at least once each year to elect board of directors members to fill new or expired terms and to conduct any other business of the unit owners. If an annual meeting of the unit owners is called but fails to reach a quorum, that meeting must be reconvened with a reduced quorum requirement of half of the original number of unit owners required for a quorum. If the original meeting participation would satisfy the reduced quorum requirement, the meeting may be reconvened immediately. If the original meeting participation would not satisfy the reduced quorum requirement, the reconvened meeting must be called not less than five or more than thirty days after the original meeting. All previously submitted absentee ballots remain valid for the reconvened meeting and the deadline for submitting any additional absentee ballots is extended to the reconvened meeting date. If the reconvened meeting quorum is not achieved, all current board of directors member terms are extended for one year. Special meetings of the unit owners' association may be called by the president, by a majority of the board of directors or by unit owners having at least twenty-five percent, or any lower percentage specified in the bylaws, of the votes in the association. |
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| 163 | 163 | | |
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| 164 | 164 | | C. Not fewer than ten nor or more than fifty calendar days in advance of any meeting of the unit owners, the secretary association shall cause written notice to be hand delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit owner, including an email address. The notice of any meeting of the unit owners shall state the date, time and place of the meeting. The notice of any annual, regular or special meeting of the unit owners shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws, any changes in assessments that require approval of the unit owners and any proposal to remove a director or officer. The failure of any unit owner to receive actual notice of a meeting of the unit owners does not affect the validity of any action taken at that meeting. |
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| 165 | 165 | | |
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| 166 | 166 | | C. Before entering into any closed portion of a meeting of the board of directors, or on notice of a meeting under subsection D of this section that will be closed, the board shall identify the paragraph under subsection A of this section that authorizes the board to close the meeting. |
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| 167 | 167 | | |
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| 168 | 168 | | D. Notwithstanding any provision in the declaration, bylaws or other condominium documents, for meetings of the board of directors that are held after the termination of declarant control of the association or designated committees, notice to unit owners of open meetings of the board of directors or committee shall be given at least forty-eight hours in advance of the meeting by newsletter, conspicuous posting or any other reasonable means as determined by the board of directors. An affidavit of notice by an officer of the association is prima facie evidence that notice was given as prescribed by this section. Notice to unit owners of meetings of the board of directors is not required if emergency circumstances require action by the board before notice can be given. Any notice of a board meeting or committee meeting shall state the date, time, and place and method of the meeting. The failure of any unit owner to receive actual notice of a meeting of the board of directors or committee does not affect the validity of any action taken at that meeting. |
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| 169 | 169 | | |
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| 170 | 170 | | E. Notwithstanding any provision in the declaration, bylaws or other condominium documents, for open meetings of the board of directors that are held after the termination of declarant control of the association or designated committees, all of the following apply: |
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| 171 | 171 | | |
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| 172 | 172 | | 1. The draft agenda shall be posted or otherwise made available to all unit owners attending At least forty-eight hours before the meeting and may be revised as required by the board president or committee chairperson to add or remove agenda items based on developments since the draft was issued. If the meeting agenda includes proposed approval of an annual budget or a policy or rule, that proposed budget, policy or rule shall be posted along with the notice of the meeting. |
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| 173 | 173 | | |
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| 174 | 174 | | 2. An emergency meeting of the board of directors may be called to discuss business or take action that cannot be delayed for the forty-eight hours required for notice. At any emergency meeting called by the board of directors, the board of directors may act only on emergency matters. The minutes of the emergency meeting shall state the reason necessitating the emergency meeting. The minutes of the emergency meeting shall be read and approved at the next regularly scheduled meeting of the board of directors. |
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| 175 | 175 | | |
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| 176 | 176 | | 3. A quorum of the board of directors or a designated committee may meet by means of a telephone conference voice, video or remote meeting technology if a speakerphone speaker is available in the actual or virtual meeting room that allows board members and unit owners to hear all parties who are speaking during the meeting. If remote meeting technology is used, the association shall provide access and opportunity to speak at that remote meeting pursuant to subsection a of this section to any unit owners wishing to participate. |
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| 177 | 177 | | |
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| 178 | 178 | | 4. Any motion brought forward for action related to the closed session topics authorized in subsection a of this section may be conducted in a manner that does not disclose any privileged or confidential information. Unit owners who are present must be provided an opportunity to speak to the issue pursuant to subsection a of this section. |
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| 179 | 179 | | |
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| 180 | 180 | | 4. 5. Any quorum of the board of directors that meets informally or communicates in the official capacity of the board of directors to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board of directors votes or takes any action on any matter at that informal meeting or during that communication. This paragraph does not apply to any discussion of association issues in social or personal gatherings or communications, informal meetings or discussions as unit owners, training sessions for board of directors members or communications to establish meeting agendas, even if a quorum of the board of directors participates. |
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| 181 | 181 | | |
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| 182 | 182 | | 6. Draft minutes of all open meetings of the board of directors, designated committees or unit owners shall be either posted or made available on request within ten business days after the meeting. |
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| 183 | 183 | | |
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| 184 | 184 | | F. It is the policy of this state as reflected in this section that all meetings of a condominium, whether meetings of the unit owners' association, or meetings of the board of directors or meetings of DESIGNATED committees of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the unit owners of the matters to be discussed or decided and to ensure that unit owners have the ability to speak after discussion of agenda items, but before a vote of the board of directors, committees or members is taken. Toward this end, any person or entity that is charged with the interpretation of these provisions, including members of the board or of directors and any community manager, shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings. Any action taken by the board of directors in violation of this policy statement is null and void. |
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| 185 | 185 | | |
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| 186 | 186 | | G. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title. END_STATUTE |
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| 187 | 187 | | |
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| 188 | 188 | | Sec. 3. Section 33-1804, Arizona Revised Statutes, is amended to read: |
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| 189 | 189 | | |
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| 190 | 190 | | START_STATUTE33-1804. Open meetings; exceptions; notice; policy statement |
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| 191 | 191 | | |
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| 192 | 192 | | A. Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members' association and the board of directors, and any regularly scheduled rulemaking, enforcement, DESIGN control or financial advisory committee meetings, however DENOMINATED, are open to all members of the association or any person designated by a member in writing as the member's representative and all members or designated representatives so desiring shall be permitted allowed to attend and speak at an appropriate time during the deliberations and proceedings. The board or committee may place reasonable time restrictions on those persons speaking during the meeting but shall permit allow a member or member's designated representative to speak once after the board or committee has discussed a specific agenda item but before the board or committee takes formal action on that item in addition to any other opportunities to speak. The board or committee shall provide for a reasonable number of persons to speak on each side of an issue. Persons attending may audiotape or videotape those portions of the meetings of the board of directors, meetings of committees and meetings of the members that are open. The board of directors and committees of the association shall not require advance notice of the audiotaping or videotaping and may adopt reasonable rules governing the audiotaping and videotaping of open portions of the meetings of the board, the committees and the membership, but such rules shall not preclude such audiotaping or videotaping by those attending, unless the board or committee audiotapes or videotapes the meeting and makes the unedited audiotapes or videotapes available to members on request without restrictions on its their use as evidence in any dispute resolution process. Any portion of a board or DESIGNATED committee meeting may be closed only if that closed portion of the meeting is limited to consideration of one or more of the following, without action: |
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| 193 | 193 | | |
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| 194 | 194 | | 1. Legal advice from an attorney for the board or the association. On final resolution of any matter for which the board received legal advice or that concerned pending or contemplated litigation, the board may disclose information about that matter in an open meeting except for matters that are required to remain confidential by the terms of a settlement agreement or judgment. |
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| 195 | 195 | | |
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| 196 | 196 | | 2. Pending or contemplated litigation. |
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| 197 | 197 | | |
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| 198 | 198 | | 3. Personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association. Cited violations of the community documents and any associated penalty imposed, along with delinquencies in the payments of assessments and any fees or fines imposed by the association on any member, do not constitute personal or financial information for the purposes of this paragraph, except that the consideration of personal health or financial hardships that affect the ability of the member to pay the assessment or comply with the community documents may be considered in a closed meeting. |
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| 199 | 199 | | |
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| 200 | 200 | | 4. Matters relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association. |
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| 201 | 201 | | |
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| 202 | 202 | | 5. Discussion of a member's appeal of any violation cited or penalty imposed by the association except on request of the affected member that the meeting be held in an open session on the specific request of the member for that appeal to be heard in closed session. |
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| 203 | 203 | | |
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| 204 | 204 | | 6. The review, negotiation and consideration of proprietary bid proposals from potential contractors before awarding a contract for the desired services. |
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| 205 | 205 | | |
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| 206 | 206 | | 7. Negotiations with a financial institution to obtain financing or any other entity to acquire property if the decision to enter into those negotiations was first approved by the board in open session. |
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| 207 | 207 | | |
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| 208 | 208 | | B. Notwithstanding any provision in the community documents, all meetings of the members' association and the board and its designated committees shall be held in this state. After termination of the period of declarant control, a formal meeting of the members' association shall be held at least once each year to elect board members to fill new or expired terms and to conduct any other business of the members. If an annual meeting of the members is called but fails to reach a quorum, that meeting must be reconvened with a reduced quorum requirement of half of the original number of members required for a quorum. If the original meeting participation would satisfy the reduced quorum requirement, the meeting may be reconvened immediately. If the original meeting participation would not satisfy the reduced quorum requirement, the reconvened meeting must be called not less than five or more than thirty days after the original meeting. All previously submitted absentee ballots remain valid for the reconvened meeting and the deadline for submitting any additional absentee ballots is extended to the reconvened meeting date. If the reconvened meeting quorum is not achieved, all current board member terms are extended for one year. Special meetings of the members' association may be called by the president, by a majority of the board of directors or by members having at least twenty-five percent, or any lower percentage specified in the bylaws, of the votes in the association. |
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| 209 | 209 | | |
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| 210 | 210 | | C. Not fewer than ten nor or more than fifty calendar days in advance of any meeting of the members the secretary association shall cause written notice to be hand-delivered hand delivered or sent prepaid by United States mail to the mailing address for each lot, parcel or unit owner or to any other mailing address designated in writing by a member, including an email address. The notice shall state the date, time and place of the meeting. A notice of any annual, regular or special meeting of the members shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws, changes in assessments that require approval of the members and any proposal to remove a director or an officer. The failure of any member to receive actual notice of a meeting of the members does not affect the validity of any action taken at that meeting. |
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| 211 | 211 | | |
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| 212 | 212 | | C. Before entering into any closed portion of a meeting of the board of directors, or on notice of a meeting under subsection D of this section that will be closed, the board shall identify the paragraph under subsection A of this section that authorizes the board to close the meeting. |
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| 213 | 213 | | |
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| 214 | 214 | | D. Notwithstanding any provision in the declaration, bylaws or other community documents, for meetings of the board of directors that are held after the termination of declarant control of the association or designated committees, notice to members of open meetings of the board of directors or committee shall be given at least forty-eight hours in advance of the meeting by newsletter, conspicuous posting or any other reasonable means as determined by the board of directors. An affidavit of notice by an officer of the corporation is prima facie evidence that notice was given as prescribed by this section. Notice to members of meetings of the board of directors is not required if emergency circumstances require action by the board before notice can be given. Any notice of a board meeting or committee meeting shall state the date, time, and place and method of the meeting. The failure of any member to receive actual notice of a meeting of the board of directors or committee does not affect the validity of any action taken at that meeting. |
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| 215 | 215 | | |
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| 216 | 216 | | E. Notwithstanding any provision in the declaration, bylaws or other community documents, for open meetings of the board of directors that are held after the termination of declarant control of the association or designated committees, all of the following apply: |
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| 217 | 217 | | |
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| 218 | 218 | | 1. The draft agenda shall be posted or otherwise made available to all members attending at least forty-eight hours before the meeting and may be revised as required by the board president or committee chairperson to add or remove agenda items based on developments since the draft was issued. If the meeting agenda includes proposed approval of an annual budget or a policy or rule, that proposed budget, policy or rule shall be posted along with the notice of the meeting. |
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| 219 | 219 | | |
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| 220 | 220 | | 2. An emergency meeting of the board of directors may be called to discuss business or take action that cannot be delayed for the forty-eight hours required for notice. At any emergency meeting called by the board of directors, the board of directors may act only on emergency matters. The minutes of the emergency meeting shall state the reason necessitating the emergency meeting. The minutes of the emergency meeting shall be read and approved at the next regularly scheduled meeting of the board of directors. |
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| 221 | 221 | | |
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| 222 | 222 | | 3. A quorum of the board of directors or a designated committee may meet by means of a telephone conference voice, video or remote meeting technology if a speakerphone speaker is available in the actual or virtual meeting room that allows board members and association members to hear all parties who are speaking during the meeting. If remote meeting technology is used, the association shall provide access and opportunity to speak at that remote meeting pursuant to subsection a of this section to any members wishing to participate. |
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| 223 | 223 | | |
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| 224 | 224 | | 4. Any motion brought forward for action related to the closed session topics authorized in subsection a of this section may be conducted in a manner that does not disclose any privileged or confidential information. Members who are present must be provided an opportunity to speak to the issue pursuant to subsection a of this section. |
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| 225 | 225 | | |
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| 226 | 226 | | 4. 5. Any quorum of the board of directors that meets informally or communicates in the official capacity of the board to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board votes or takes any action on any matter at that informal meeting or during that communication. This paragraph does not apply to any discussion of association issues in social or personal gatherings or communications, informal meetings or discussions as members, training sessions for board members or communications to establish meeting agendas, even if a quorum of the board participates. |
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| 227 | 227 | | |
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| 228 | 228 | | 6. Draft minutes of all open meetings of the board of directors, designated committees or members shall be either posted or made available on request within ten business days after the meeting. |
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| 229 | 229 | | |
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| 230 | 230 | | F. It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members' association, or meetings of the board of directors or meetings of designated committees of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the members of the matters to be discussed or decided and to ensure that members have the ability to speak after discussion of agenda items, but before a vote of the board of directors, committees or members is taken. Toward this end, any person or entity that is charged with the interpretation of these provisions, including members of the board of directors and any community manager, shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings. Any action taken by the board of directors in violation of this policy statement is null and void.END_STATUTE |
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| 231 | 231 | | |
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| 232 | 232 | | Sec. 4. Section 33-1813, Arizona Revised Statutes, is amended to read: |
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| 233 | 233 | | |
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| 234 | 234 | | START_STATUTE33-1813. Removal of board member; special meeting |
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| 235 | 235 | | |
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| 236 | 236 | | A. Notwithstanding any provision of the declaration or bylaws to the contrary, all of the following apply to a meeting at which a member of the board of directors, other than a member appointed by the declarant, is proposed to be removed from the board of directors: |
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| 237 | 237 | | |
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| 238 | 238 | | 1. The members of the association who are eligible to vote at the time of the meeting may remove any member of the board of directors, other than a member appointed by the declarant, by a majority vote of those voting on the matter at a meeting of the members. |
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| 239 | 239 | | |
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| 240 | 240 | | 2. The meeting of the members shall be called pursuant to this section and action may be taken only if a quorum is present. |
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| 241 | 241 | | |
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| 242 | 242 | | 3. The members of the association may remove any member of the board of directors with or without cause, other than a member appointed by the declarant. |
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| 243 | 243 | | |
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| 244 | 244 | | 4. For purposes of calling for removal of a member of the board of directors, other than a member appointed by the declarant, the following apply: |
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| 245 | 245 | | |
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| 246 | 246 | | (a) In an association with one thousand or fewer members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least twenty-five percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one hundred votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association as prescribed by section 33-1804, subsection B C. |
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| 247 | 247 | | |
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| 248 | 248 | | (b) Notwithstanding section 33-1804, subsection B, in an association with more than one thousand members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least ten percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one thousand votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association. The board shall provide written notice of a special meeting as prescribed by section 33-1804, subsection B C. |
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| 249 | 249 | | |
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| 250 | 250 | | (c) The special meeting shall be called, noticed and held within thirty days after receipt of the petition. |
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| 251 | 251 | | |
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| 252 | 252 | | (d) If all of the requirements of this subsection for calling a special meeting are met and the board of directors fails to call, notice and hold a special meeting within thirty days after receipt of the petition, the members of the board of directors are deemed removed from office effective at midnight of the thirty-first day. |
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| 253 | 253 | | |
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| 254 | 254 | | (e) For purposes of a special meeting called pursuant to this subsection, a quorum is present if the number of owners who are eligible to vote in the association at the time the person attends the meeting equal to at least twenty percent of the votes of the association or the number of persons who are eligible to vote in the association at the time the person attends the meeting equal to at least one thousand votes, whichever is less, is present at the meeting in person or as otherwise allowed by law. |
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| 255 | 255 | | |
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| 256 | 256 | | (f) If a civil action is filed regarding the removal of a board member, the prevailing party in the civil action shall be awarded its reasonable attorney fees and costs. |
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| 257 | 257 | | |
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| 258 | 258 | | (g) The board of directors shall retain all documents and other records relating to the proposed removal of the member of the board of directors and any election or other action taken for that director's replacement for at least one year after the date of the special meeting and shall allow members to inspect those documents and records pursuant to section 33-1805. |
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| 259 | 259 | | |
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| 260 | 260 | | (h) A petition that calls for the removal of the same member of the board of directors shall not be submitted subjected to a recall vote more than once during each term of office for that member. |
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| 261 | 261 | | |
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| 262 | 262 | | 5. On removal of at least one but fewer than a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, the vacancies shall be filled as provided in the community documents. |
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| 263 | 263 | | |
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| 264 | 264 | | 6. On removal of a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, or if the community documents do not provide a method for filling board vacancies, the association shall hold an election for the replacement of the removed directors at a separate meeting of the members of the association that is held not later than thirty days after the meeting at which the members of the board of directors were removed. |
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| 265 | 265 | | |
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| 266 | 266 | | 7. A member of the board of directors who is removed pursuant to this subsection is not eligible to serve on the board of directors again until after the expiration of the removed board member's term of office, unless the community documents specifically provide for a longer period of ineligibility. |
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| 267 | 267 | | |
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| 268 | 268 | | B. For an association in which board members are elected from separately designated voting districts, a member of the board of directors, other than a member appointed by the declarant, may be removed only by a vote of the members from that voting district, and only the members from that voting district are eligible to vote on the matter or be counted for purposes of determining a quorum. END_STATUTE |
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