| 1 | 1 | | REFERENCE TITLE: real property; litigation; limitation State of Arizona Senate Fifty-sixth Legislature Second Regular Session 2024 SB 1641 Introduced by Senators Hernandez: Borrelli, Farnsworth, Hatathlie; Representative Ortiz An Act amending sections 12-552 and 33-1242, Arizona Revised Statutes; relating to limitation on actions. (TEXT OF BILL BEGINS ON NEXT PAGE) |
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| 9 | 9 | | REFERENCE TITLE: real property; litigation; limitation |
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| 10 | 10 | | State of Arizona Senate Fifty-sixth Legislature Second Regular Session 2024 |
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| 11 | 11 | | SB 1641 |
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| 12 | 12 | | Introduced by Senators Hernandez: Borrelli, Farnsworth, Hatathlie; Representative Ortiz |
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| 14 | 14 | | REFERENCE TITLE: real property; litigation; limitation |
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| 24 | 24 | | State of Arizona |
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| 26 | 26 | | Senate |
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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 | | SB 1641 |
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| 44 | 44 | | Introduced by |
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| 46 | 46 | | Senators Hernandez: Borrelli, Farnsworth, Hatathlie; Representative Ortiz |
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| 64 | 64 | | An Act |
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| 68 | 68 | | amending sections 12-552 and 33-1242, Arizona Revised Statutes; relating to limitation on actions. |
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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 12-552, Arizona Revised Statutes, is amended to read: START_STATUTE12-552. Actions involving development of real property design, engineering and construction of improvements A. Notwithstanding any other statute, an action or arbitration based in contract may not be instituted or maintained against a person who develops or develops and sells real property, or performs or furnishes the design, specifications, surveying, planning, supervision, testing, construction or observation of construction of an improvement to real property more than eight four years after substantial completion of the improvement to real property. B. Notwithstanding any other statute, a municipality or a county may not institute or maintain an action or arbitration against a person who develops or develops and sells real property or performs or furnishes the design, specifications, surveying, planning, supervision, testing, construction or observation of construction of an improvement to real property that is dedicated to the municipality or county more than eight four years after the improvement to real property has been accepted by the municipality or county for ownership, operation and maintenance if the action or arbitration is based on either: 1. A municipal or county code, ordinance or other legal requirement. 2. A permit that is required as a condition of development. C. The limitations of subsection B of this section do not apply to an action or arbitration that is based on a claim of a wilful, reckless or concealed violation of a municipal or county requirement. D. Subsection B of this section does not limit any immunity or defense that is available to a municipality or county pursuant to chapter 7, article 2 of this title. E. Notwithstanding subsection A or B of this section, in the case of injury to real property or an improvement to real property, if the injury occurred during the eighth fourth year after the substantial completion or, in the case of a latent defect, was not discovered until the eighth fourth year after substantial completion, an action to recover damages for injury to the real property may be brought within one year two years after the date on which the injury to real property or an improvement to real property occurred or a latent defect was discovered, but an action may not be brought more than nine six years after the substantial completion of the improvement. F. The limitations in subsections A, B and E of this section include any action based on implied warranty arising out of the contract or the construction, including implied warranties of habitability, fitness or workmanship. G. This section does not apply to actions for personal injury or death or shorten the period of warranty provided in an express written warranty. H. For the purposes of subsections A, E and F of this section, an improvement to real property is considered substantially complete when any of the following first occurs: 1. It is first used by the owner or occupant of the improvement. 2. It is first available for use after having been completed according to the contract or agreement covering the improvement, including agreed changes to the contract or agreement. 3. Final inspection, if required, by the governmental body that issued the building permit for the improvement. I. In this section an action based in contract is an action based on a written real estate contract, sales agreement, construction agreement, conveyance or written agreement for construction or for the services set forth in subsection A of this section. This section does not extend the period prescribed by the laws of this state for bringing any action. If a shorter period of limitation is prescribed for a specific action, the shorter period governs. J. With respect to an improvement to real property that was substantially complete on or before September 15, 1989, the eight and nine-year periods established in subsections A and E of this section shall begin to run on September 15, 1989. Notwithstanding the provisions of subsection H of this section and section 12-505, subsection A, this subsection applies to claims that accrued before May 14, 1992. END_STATUTE Sec. 2. Section 33-1242, Arizona Revised Statutes, is amended to read: START_STATUTE33-1242. Powers of unit owners' association; notice to unit owner of violation A. Subject to the provisions of the declaration, the association may: 1. Adopt and amend bylaws and rules. 2. Adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from unit owners. 3. Hire and discharge managing agents and other employees, agents and independent contractors. 4. Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the condominium. in litigation matters brought pursuant to section 12-552, the board of directors shall obtain a two-thirds vote of the unit owners before the board of directors may institute, defend or intervene in litigation or administrative proceedings. 5. Make contracts and incur liabilities. 6. Regulate the use, maintenance, repair, replacement and modification of common elements. 7. Cause additional improvements to be made as a part of the common elements. 8. Acquire, hold, encumber and convey in its own name any right, title or interest to real or personal property, except that common elements may be conveyed or subjected to a security interest only pursuant to section 33-1252. 9. Grant easements, leases, licenses and concessions through or over the common elements. 10. Impose and receive any payments, fees or charges for the use, rental or operation of the common elements other than limited common elements described in section 33-1212, paragraphs 2 and 4 and for services provided to unit owners. 11. Impose charges for late payment of assessments after the association has provided notice that the assessment is overdue or provided notice that the assessment is considered overdue after a certain date and, after notice and an opportunity to be heard, impose reasonable monetary penalties on unit owners for violations of the declaration, bylaws and rules of the association. 12. Impose reasonable charges for the preparation and recordation of amendments to the declaration or statements of unpaid assessments. 13. Provide for the indemnification of its officers and executive board of directors and maintain directors' and officers' liability insurance. 14. Assign its right to future income, including the right to receive common expense assessments, but only to the extent the declaration expressly provides. 15. Be a member of a master association or other entity owning, maintaining or governing in any respect any portion of the common elements or other property benefitting or related to the condominium or the unit owners in any respect. 16. Exercise any other powers conferred by the declaration or bylaws. 17. Exercise all other powers that may be exercised in this state by legal entities of the same type as the association. 18. Exercise any other powers necessary and proper for the governance and operation of the association. B. A unit owner who receives a written notice that the condition of the property owned by the unit owner is in violation of a requirement of the condominium documents without regard to whether a monetary penalty is imposed by the notice may provide the association with a written response by sending the response by certified mail within twenty-one calendar days after the date of the notice. The response shall be sent to the address identified in the notice. C. Within ten business days after receipt of the certified mail containing the response from the unit owner, the association shall respond to the unit owner with a written explanation regarding the notice that shall provide at least the following information unless previously provided in the notice of violation: 1. The provision of the condominium documents that has allegedly been violated. 2. The date of the violation or the date the violation was observed. 3. The first and last name of the person or persons who observed the violation. 4. The process the unit owner must follow to contest the notice. D. Unless the information required in subsection C, paragraph 4 of this section is provided in the notice of violation, the association shall not proceed with any action to enforce the condominium documents, including the collection of attorney fees, before or during the time prescribed by subsection C of this section regarding the exchange of information between the association and the unit owner and shall give the unit owner written notice of the unit owner's option to petition for an administrative hearing on the matter in the state real estate department pursuant to section 32-2199.01. At any time before or after completion of the exchange of information pursuant to this section, the unit owner may petition for a hearing pursuant to section 32-2199.01 if the dispute is within the jurisdiction of the state real estate department as prescribed in section 32-2199.01.END_STATUTE |
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| 80 | 80 | | Be it enacted by the Legislature of the State of Arizona: |
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| 82 | 82 | | Section 1. Section 12-552, Arizona Revised Statutes, is amended to read: |
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| 83 | 83 | | |
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| 84 | 84 | | START_STATUTE12-552. Actions involving development of real property design, engineering and construction of improvements |
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| 86 | 86 | | A. Notwithstanding any other statute, an action or arbitration based in contract may not be instituted or maintained against a person who develops or develops and sells real property, or performs or furnishes the design, specifications, surveying, planning, supervision, testing, construction or observation of construction of an improvement to real property more than eight four years after substantial completion of the improvement to real property. |
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| 88 | 88 | | B. Notwithstanding any other statute, a municipality or a county may not institute or maintain an action or arbitration against a person who develops or develops and sells real property or performs or furnishes the design, specifications, surveying, planning, supervision, testing, construction or observation of construction of an improvement to real property that is dedicated to the municipality or county more than eight four years after the improvement to real property has been accepted by the municipality or county for ownership, operation and maintenance if the action or arbitration is based on either: |
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| 90 | 90 | | 1. A municipal or county code, ordinance or other legal requirement. |
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| 92 | 92 | | 2. A permit that is required as a condition of development. |
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| 94 | 94 | | C. The limitations of subsection B of this section do not apply to an action or arbitration that is based on a claim of a wilful, reckless or concealed violation of a municipal or county requirement. |
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| 96 | 96 | | D. Subsection B of this section does not limit any immunity or defense that is available to a municipality or county pursuant to chapter 7, article 2 of this title. |
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| 97 | 97 | | |
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| 98 | 98 | | E. Notwithstanding subsection A or B of this section, in the case of injury to real property or an improvement to real property, if the injury occurred during the eighth fourth year after the substantial completion or, in the case of a latent defect, was not discovered until the eighth fourth year after substantial completion, an action to recover damages for injury to the real property may be brought within one year two years after the date on which the injury to real property or an improvement to real property occurred or a latent defect was discovered, but an action may not be brought more than nine six years after the substantial completion of the improvement. |
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| 100 | 100 | | F. The limitations in subsections A, B and E of this section include any action based on implied warranty arising out of the contract or the construction, including implied warranties of habitability, fitness or workmanship. |
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| 102 | 102 | | G. This section does not apply to actions for personal injury or death or shorten the period of warranty provided in an express written warranty. |
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| 104 | 104 | | H. For the purposes of subsections A, E and F of this section, an improvement to real property is considered substantially complete when any of the following first occurs: |
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| 106 | 106 | | 1. It is first used by the owner or occupant of the improvement. |
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| 108 | 108 | | 2. It is first available for use after having been completed according to the contract or agreement covering the improvement, including agreed changes to the contract or agreement. |
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| 110 | 110 | | 3. Final inspection, if required, by the governmental body that issued the building permit for the improvement. |
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| 112 | 112 | | I. In this section an action based in contract is an action based on a written real estate contract, sales agreement, construction agreement, conveyance or written agreement for construction or for the services set forth in subsection A of this section. This section does not extend the period prescribed by the laws of this state for bringing any action. If a shorter period of limitation is prescribed for a specific action, the shorter period governs. |
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| 114 | 114 | | J. With respect to an improvement to real property that was substantially complete on or before September 15, 1989, the eight and nine-year periods established in subsections A and E of this section shall begin to run on September 15, 1989. Notwithstanding the provisions of subsection H of this section and section 12-505, subsection A, this subsection applies to claims that accrued before May 14, 1992. END_STATUTE |
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| 116 | 116 | | Sec. 2. Section 33-1242, Arizona Revised Statutes, is amended to read: |
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| 118 | 118 | | START_STATUTE33-1242. Powers of unit owners' association; notice to unit owner of violation |
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| 120 | 120 | | A. Subject to the provisions of the declaration, the association may: |
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| 122 | 122 | | 1. Adopt and amend bylaws and rules. |
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| 124 | 124 | | 2. Adopt and amend budgets for revenues, expenditures and reserves and collect assessments for common expenses from unit owners. |
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| 126 | 126 | | 3. Hire and discharge managing agents and other employees, agents and independent contractors. |
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| 128 | 128 | | 4. Institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the condominium. in litigation matters brought pursuant to section 12-552, the board of directors shall obtain a two-thirds vote of the unit owners before the board of directors may institute, defend or intervene in litigation or administrative proceedings. |
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| 129 | 129 | | |
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| 130 | 130 | | 5. Make contracts and incur liabilities. |
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| 132 | 132 | | 6. Regulate the use, maintenance, repair, replacement and modification of common elements. |
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| 134 | 134 | | 7. Cause additional improvements to be made as a part of the common elements. |
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| 135 | 135 | | |
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| 136 | 136 | | 8. Acquire, hold, encumber and convey in its own name any right, title or interest to real or personal property, except that common elements may be conveyed or subjected to a security interest only pursuant to section 33-1252. |
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| 137 | 137 | | |
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| 138 | 138 | | 9. Grant easements, leases, licenses and concessions through or over the common elements. |
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| 140 | 140 | | 10. Impose and receive any payments, fees or charges for the use, rental or operation of the common elements other than limited common elements described in section 33-1212, paragraphs 2 and 4 and for services provided to unit owners. |
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| 141 | 141 | | |
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| 142 | 142 | | 11. Impose charges for late payment of assessments after the association has provided notice that the assessment is overdue or provided notice that the assessment is considered overdue after a certain date and, after notice and an opportunity to be heard, impose reasonable monetary penalties on unit owners for violations of the declaration, bylaws and rules of the association. |
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| 144 | 144 | | 12. Impose reasonable charges for the preparation and recordation of amendments to the declaration or statements of unpaid assessments. |
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| 145 | 145 | | |
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| 146 | 146 | | 13. Provide for the indemnification of its officers and executive board of directors and maintain directors' and officers' liability insurance. |
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| 147 | 147 | | |
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| 148 | 148 | | 14. Assign its right to future income, including the right to receive common expense assessments, but only to the extent the declaration expressly provides. |
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| 149 | 149 | | |
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| 150 | 150 | | 15. Be a member of a master association or other entity owning, maintaining or governing in any respect any portion of the common elements or other property benefitting or related to the condominium or the unit owners in any respect. |
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| 152 | 152 | | 16. Exercise any other powers conferred by the declaration or bylaws. |
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| 154 | 154 | | 17. Exercise all other powers that may be exercised in this state by legal entities of the same type as the association. |
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| 155 | 155 | | |
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| 156 | 156 | | 18. Exercise any other powers necessary and proper for the governance and operation of the association. |
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| 157 | 157 | | |
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| 158 | 158 | | B. A unit owner who receives a written notice that the condition of the property owned by the unit owner is in violation of a requirement of the condominium documents without regard to whether a monetary penalty is imposed by the notice may provide the association with a written response by sending the response by certified mail within twenty-one calendar days after the date of the notice. The response shall be sent to the address identified in the notice. |
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| 160 | 160 | | C. Within ten business days after receipt of the certified mail containing the response from the unit owner, the association shall respond to the unit owner with a written explanation regarding the notice that shall provide at least the following information unless previously provided in the notice of violation: |
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| 162 | 162 | | 1. The provision of the condominium documents that has allegedly been violated. |
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| 164 | 164 | | 2. The date of the violation or the date the violation was observed. |
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| 166 | 166 | | 3. The first and last name of the person or persons who observed the violation. |
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| 167 | 167 | | |
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| 168 | 168 | | 4. The process the unit owner must follow to contest the notice. |
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| 169 | 169 | | |
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| 170 | 170 | | D. Unless the information required in subsection C, paragraph 4 of this section is provided in the notice of violation, the association shall not proceed with any action to enforce the condominium documents, including the collection of attorney fees, before or during the time prescribed by subsection C of this section regarding the exchange of information between the association and the unit owner and shall give the unit owner written notice of the unit owner's option to petition for an administrative hearing on the matter in the state real estate department pursuant to section 32-2199.01. At any time before or after completion of the exchange of information pursuant to this section, the unit owner may petition for a hearing pursuant to section 32-2199.01 if the dispute is within the jurisdiction of the state real estate department as prescribed in section 32-2199.01.END_STATUTE |
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