ARIZONA STATE SENATE
Forty-seventh Legislature, Second Regular Session
FACT SHEET FOR S.B. 1007
condominiums; homeowners’ associations; records; fees
Purpose
Limits the fees a homeowners’ association (HOA) may charge for records and removes the ability to consider contemplated litigation in executive session.
Background
Condominium and planned community HOAs are regulated by statute. Condominium HOAs and their boards of directors have been regulated in Arizona since 1986. Laws 1994, Chapter 310 established regulations pertaining to the formation and operation of master planned community HOAs.
An HOA is a common interest organization to which all the owners of lots in a planned community or owners of units in a condominium must belong. The four defining characteristics of an HOA are: 1) all owners are automatically members; 2) governing documents create mutual obligations; 3) mandatory fees or assessments are generally levied against owners and used for the operation of the association; and 4) owners share a property interest in the community.
Statute requires all financial and other records of the HOA to be made reasonably available for examination by any HOA member or the member’s designated representative with some exception. Statute also requires meetings of the HOA and board of directors to be open to the HOA members. The board is authorized to hold a closed meeting to consider legal advice from their attorney, pending or contemplated litigation and other personnel issues.
There is no fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Removes contemplated litigation from the conditions in which a portion of the meeting may be closed and from the conditions in which records may be withheld.
2. Prohibits an HOA from charging more than $20 per hour for making financial and other records of the HOA available for review.
3. Limits the fee that an HOA may charge the unit owner to cover costs incurred in the preparation of the statement of information to no more than 20 cents per page and $20 dollars per hour of labor incurred.
4. Makes conforming changes.
5. Becomes effective on the general effective date.
Prepared by Senate Research
January 10, 2006
NS/ac