| 1 | 1 | | PREFILED JAN 10 2025 REFERENCE TITLE: homeowners' associations; declaration amendment; vote State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025 HB 2095 Introduced by Representative Kupper AN ACT amending sections 33-1227 and 33-1817, Arizona Revised Statutes; relating to condominiums and planned communities. (TEXT OF BILL BEGINS ON NEXT PAGE) |
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| 9 | 9 | | PREFILED JAN 10 2025 |
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| 11 | 11 | | REFERENCE TITLE: homeowners' associations; declaration amendment; vote |
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| 12 | 12 | | State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025 |
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| 13 | 13 | | HB 2095 |
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| 14 | 14 | | Introduced by Representative Kupper |
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| 16 | 16 | | REFERENCE TITLE: homeowners' associations; declaration amendment; vote |
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| 26 | 26 | | State of Arizona |
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| 28 | 28 | | House of Representatives |
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| 30 | 30 | | Fifty-seventh Legislature |
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| 32 | 32 | | First Regular Session |
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| 34 | 34 | | 2025 |
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| 42 | 42 | | HB 2095 |
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| 46 | 46 | | Introduced by |
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| 48 | 48 | | Representative Kupper |
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| 66 | 66 | | AN ACT |
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| 70 | 70 | | amending sections 33-1227 and 33-1817, Arizona Revised Statutes; relating to condominiums and planned communities. |
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| 76 | 76 | | (TEXT OF BILL BEGINS ON NEXT PAGE) |
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| 80 | 80 | | Be it enacted by the Legislature of the State of Arizona: Section 1. Section 33-1227, Arizona Revised Statutes, is amended to read: START_STATUTE33-1227. Amendment of declaration A. Except in cases of amendments that may be executed by a declarant under section 33-1220, by the association under section 33-1206 or section 33-1216, subsection D, or by certain unit owners under section 33-1218, subsection B, section 33-1222, section 33-1223 or section 33-1228, subsection D, and except to the extent allowed or required by other provisions of this chapter, the declaration, including the plat, may be amended only by a vote of the unit owners to which at least sixty-seven percent of the votes in the association are allocated, or any larger majority the declaration specifies by an affirmative vote or written consent of at least three-fourths of the number of unit owners in attendance at a meeting of the membership at which a quorum is present. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential use. The declaration may also provide that the consent of the declarant is required to an amendment during any period of declarant control pursuant to section 33-1243. Within thirty days after the adoption of any amendment pursuant to this subsection, the association shall prepare, execute and record a written instrument setting forth the amendment. B. An action to challenge the validity of an amendment adopted by the association pursuant to this section shall not be brought more than one year after the amendment is recorded. C. An amendment to the declaration shall be recorded in each county in which any portion of the condominium is located and is effective only on recordation in the same manner as required for the declaration under section 33-1211. D. Except to the extent expressly allowed or required by other provisions of this chapter, an amendment shall not create or increase special declarant rights, increase the number of units or change the boundaries of any unit, the allocated interests of a unit or the uses to which any unit is restricted, in the absence of unanimous consent of the unit owners. E. An amendment shall not terminate or decrease any unexpired development right, special declarant right or period of declarant control unless the declarant approves. F. Amendments to the declaration required by this chapter to be executed by the association shall be executed on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association. END_STATUTE Sec. 2. Section 33-1817, Arizona Revised Statutes, is amended to read: START_STATUTE33-1817. Declaration amendment; design, architectural committees; review A. Except during the period of declarant control, or if during the period of declarant control with the written consent of the declarant in each instance, the following apply to an amendment to a declaration: 1. NOTWITHSTANDING any provision in the declaration or other community DOCUMENTS, the declaration may be amended by the association, if any, or, if there is no association or board, the owners of the property that is subject to the declaration, by an affirmative vote or written consent of the number of owners or eligible voters specified in the declaration at least three-fourths of the number of owners or eligible voters in attendance at a meeting of the membership at which a quorum is present, including the assent of any individuals or entities that are specified in the declaration. 2. An amendment to a declaration may apply to fewer than all of the lots or less than all of the property that is bound by the declaration and an amendment is deemed to conform to the general design and plan of the community, if both of the following apply: (a) The amendment receives the affirmative vote or written consent of the number of owners or eligible voters specified in the declaration at least three-FOURTHS of the number of owners or ELIGIBLE voters in ATTENDANCE at a meeting of the membership at which a quorum is present, including the assent of any individuals or entities that are specified in the declaration. (b) The amendment receives the affirmative vote or written consent of all of the owners of the lots or property to which the amendment applies. 3. Within thirty days after the adoption of any amendment pursuant to this section, the association or, if there is no association or board, an owner that is authorized by the affirmative vote on or the written consent to the amendment shall prepare, execute and record a written instrument setting forth the amendment. 4. Notwithstanding any provision in the declaration that provides for periodic renewal of the declaration, an amendment to the declaration is effective immediately on recordation of the instrument in the county in which the property is located. B. Notwithstanding any provision in the community documents: 1. Membership on a design review committee, an architectural committee or a committee that performs similar functions, however denominated, for the planned community shall include at least one member of the board of directors who shall serve as chairperson of the committee. 2. For new construction of the main residential structure on a lot or for rebuilds of the main residential structure on a lot and only in a planned community that has enacted design guidelines, architectural guidelines or other similar rules, however denominated, and if the association documents permit allow the association to charge the member a security deposit and the association requires the member to pay a security deposit to secure completion of the member's construction project or compliance with approved plans, all of the following apply: (a) The deposit shall be placed in a trust account with the following instructions: (i) The cost of the trust account shall be shared equally between the association and the member. (ii) If the construction project is abandoned, the board of directors may determine the appropriate use of any deposit monies. (iii) Any interest earned on the refundable security deposit shall become part of the security deposit. (b) The association or the design review committee must hold a final design approval meeting for the purpose of issuing approval of the plans, and the member or member's agent must have the opportunity to attend the meeting. If the plans are approved, the association's design review representative shall provide written acknowledgement that the approved plans, including any approved amendments, are in compliance with all rules and guidelines in effect at the time of the approval and that the refund of the deposit requires that construction be completed in accordance with those approved plans. (c) The association must provide for at least two on-site formal reviews during construction for the purpose of determining compliance with the approved plans. The member or member's agent shall be provided the opportunity to attend both formal reviews. Within five business days after the formal reviews, the association shall cause a written report to be provided to the member or member's agent specifying any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association. (d) Within thirty business days after the second formal review, the association shall provide to the member a copy of the written report specifying any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association. If the written report does not specify any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association, the association shall promptly release the deposit monies to the member. If the report identifies any deficiencies, violations or unapproved variations from the approved plans, as amended, the association may hold the deposit for one hundred eighty days or until receipt of a subsequent report of construction compliance, whichever is less. If a report of construction compliance is received before the one hundred eightieth day, the association shall promptly release the deposit monies to the member. If a compliance report is not received within one hundred eighty days, the association shall release the deposit monies promptly from the trust account to the association. (e) Neither the approval of the plans nor the approval of the actual construction by the association or the design review committee shall constitute a representation or warranty that the plans or construction comply with applicable governmental requirements or applicable engineering, design or safety standards. The association in its discretion may release all or any part of the deposit to the member before receiving a compliance report. Release of the deposit to the member does not constitute a representation or warranty from the association that the construction complies with the approved plans. 3. Approval of a construction project's architectural designs, plans and amendments shall not unreasonably be withheld. END_STATUTE |
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| 82 | 82 | | Be it enacted by the Legislature of the State of Arizona: |
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| 84 | 84 | | Section 1. Section 33-1227, Arizona Revised Statutes, is amended to read: |
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| 86 | 86 | | START_STATUTE33-1227. Amendment of declaration |
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| 88 | 88 | | A. Except in cases of amendments that may be executed by a declarant under section 33-1220, by the association under section 33-1206 or section 33-1216, subsection D, or by certain unit owners under section 33-1218, subsection B, section 33-1222, section 33-1223 or section 33-1228, subsection D, and except to the extent allowed or required by other provisions of this chapter, the declaration, including the plat, may be amended only by a vote of the unit owners to which at least sixty-seven percent of the votes in the association are allocated, or any larger majority the declaration specifies by an affirmative vote or written consent of at least three-fourths of the number of unit owners in attendance at a meeting of the membership at which a quorum is present. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential use. The declaration may also provide that the consent of the declarant is required to an amendment during any period of declarant control pursuant to section 33-1243. Within thirty days after the adoption of any amendment pursuant to this subsection, the association shall prepare, execute and record a written instrument setting forth the amendment. |
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| 90 | 90 | | B. An action to challenge the validity of an amendment adopted by the association pursuant to this section shall not be brought more than one year after the amendment is recorded. |
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| 92 | 92 | | C. An amendment to the declaration shall be recorded in each county in which any portion of the condominium is located and is effective only on recordation in the same manner as required for the declaration under section 33-1211. |
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| 94 | 94 | | D. Except to the extent expressly allowed or required by other provisions of this chapter, an amendment shall not create or increase special declarant rights, increase the number of units or change the boundaries of any unit, the allocated interests of a unit or the uses to which any unit is restricted, in the absence of unanimous consent of the unit owners. |
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| 96 | 96 | | E. An amendment shall not terminate or decrease any unexpired development right, special declarant right or period of declarant control unless the declarant approves. |
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| 98 | 98 | | F. Amendments to the declaration required by this chapter to be executed by the association shall be executed on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association. END_STATUTE |
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| 100 | 100 | | Sec. 2. Section 33-1817, Arizona Revised Statutes, is amended to read: |
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| 102 | 102 | | START_STATUTE33-1817. Declaration amendment; design, architectural committees; review |
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| 104 | 104 | | A. Except during the period of declarant control, or if during the period of declarant control with the written consent of the declarant in each instance, the following apply to an amendment to a declaration: |
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| 106 | 106 | | 1. NOTWITHSTANDING any provision in the declaration or other community DOCUMENTS, the declaration may be amended by the association, if any, or, if there is no association or board, the owners of the property that is subject to the declaration, by an affirmative vote or written consent of the number of owners or eligible voters specified in the declaration at least three-fourths of the number of owners or eligible voters in attendance at a meeting of the membership at which a quorum is present, including the assent of any individuals or entities that are specified in the declaration. |
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| 108 | 108 | | 2. An amendment to a declaration may apply to fewer than all of the lots or less than all of the property that is bound by the declaration and an amendment is deemed to conform to the general design and plan of the community, if both of the following apply: |
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| 110 | 110 | | (a) The amendment receives the affirmative vote or written consent of the number of owners or eligible voters specified in the declaration at least three-FOURTHS of the number of owners or ELIGIBLE voters in ATTENDANCE at a meeting of the membership at which a quorum is present, including the assent of any individuals or entities that are specified in the declaration. |
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| 112 | 112 | | (b) The amendment receives the affirmative vote or written consent of all of the owners of the lots or property to which the amendment applies. |
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| 114 | 114 | | 3. Within thirty days after the adoption of any amendment pursuant to this section, the association or, if there is no association or board, an owner that is authorized by the affirmative vote on or the written consent to the amendment shall prepare, execute and record a written instrument setting forth the amendment. |
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| 116 | 116 | | 4. Notwithstanding any provision in the declaration that provides for periodic renewal of the declaration, an amendment to the declaration is effective immediately on recordation of the instrument in the county in which the property is located. |
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| 118 | 118 | | B. Notwithstanding any provision in the community documents: |
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| 120 | 120 | | 1. Membership on a design review committee, an architectural committee or a committee that performs similar functions, however denominated, for the planned community shall include at least one member of the board of directors who shall serve as chairperson of the committee. |
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| 122 | 122 | | 2. For new construction of the main residential structure on a lot or for rebuilds of the main residential structure on a lot and only in a planned community that has enacted design guidelines, architectural guidelines or other similar rules, however denominated, and if the association documents permit allow the association to charge the member a security deposit and the association requires the member to pay a security deposit to secure completion of the member's construction project or compliance with approved plans, all of the following apply: |
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| 124 | 124 | | (a) The deposit shall be placed in a trust account with the following instructions: |
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| 126 | 126 | | (i) The cost of the trust account shall be shared equally between the association and the member. |
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| 128 | 128 | | (ii) If the construction project is abandoned, the board of directors may determine the appropriate use of any deposit monies. |
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| 130 | 130 | | (iii) Any interest earned on the refundable security deposit shall become part of the security deposit. |
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| 132 | 132 | | (b) The association or the design review committee must hold a final design approval meeting for the purpose of issuing approval of the plans, and the member or member's agent must have the opportunity to attend the meeting. If the plans are approved, the association's design review representative shall provide written acknowledgement that the approved plans, including any approved amendments, are in compliance with all rules and guidelines in effect at the time of the approval and that the refund of the deposit requires that construction be completed in accordance with those approved plans. |
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| 133 | 133 | | |
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| 134 | 134 | | (c) The association must provide for at least two on-site formal reviews during construction for the purpose of determining compliance with the approved plans. The member or member's agent shall be provided the opportunity to attend both formal reviews. Within five business days after the formal reviews, the association shall cause a written report to be provided to the member or member's agent specifying any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association. |
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| 136 | 136 | | (d) Within thirty business days after the second formal review, the association shall provide to the member a copy of the written report specifying any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association. If the written report does not specify any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association, the association shall promptly release the deposit monies to the member. If the report identifies any deficiencies, violations or unapproved variations from the approved plans, as amended, the association may hold the deposit for one hundred eighty days or until receipt of a subsequent report of construction compliance, whichever is less. If a report of construction compliance is received before the one hundred eightieth day, the association shall promptly release the deposit monies to the member. If a compliance report is not received within one hundred eighty days, the association shall release the deposit monies promptly from the trust account to the association. |
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| 138 | 138 | | (e) Neither the approval of the plans nor the approval of the actual construction by the association or the design review committee shall constitute a representation or warranty that the plans or construction comply with applicable governmental requirements or applicable engineering, design or safety standards. The association in its discretion may release all or any part of the deposit to the member before receiving a compliance report. Release of the deposit to the member does not constitute a representation or warranty from the association that the construction complies with the approved plans. |
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| 140 | 140 | | 3. Approval of a construction project's architectural designs, plans and amendments shall not unreasonably be withheld. END_STATUTE |
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