Assigned to GOV                                                                                                 FOR CAUCUS & FLOOR ACTION

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

AMENDED

FACT SHEET FOR S.B. 1007

condominiums; homeowners’ associations; records; fees

Purpose

Establishes a timeline for a homeowners’ association (HOA) to make records available for review and to provide copies of the records to an HOA member 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 an HOA member or their representative for making financial and other records of the HOA available for review. 

3. Requires an HOA to make the records available within 10 business days of the request and requires the HOA to provide copies of the requested records within 10 business days of the request.

4. Limits the copying fees to no more than 15 cents per page.

5. Makes conforming changes.

6. Becomes effective on the general effective date.

Amendments Adopted by Committee

1. Removes the limitation on charges for preparing the information statement required for resale units and requires and HOA to make records available for review at no charge.

2. Establishes a timeline for an HOA to make records available for review and to provide copies of the records for an HOA member.

3. Limits the copying fees to no more than 15 cents per page.

Senate Action

GOV               1/12/06     DPA    5-2-0

Prepared by Senate Research

January 12, 2006

NS/ac