This HOA law update summarizes five new laws that affect owners and residents in Arizona HOA-governed communities, effective November 2023.
By Deborah Goonan, Independent American Communities email@example.com
Update to state law allows automatic removal of HOA board for failing to hold a special recall meeting
The intent of this updated law is to prevent the HOA from holding a special meeting, which often occurs when the HOA wants to avoid a contentious recall of one of more members of its governing board.
Let’s face it. It’s not easy for members of a community to organize a recall of board members. The process requires owners to gather the required number of signatures to petition the board for a special meeting.
And it’s extremely frustrating when the HOA board simply dismisses the owners’ demand for the purposes of a recall. The community cannot move forward unless they have a way to force change.
In practice, the only way to force a recall is for members to lawyer up and sue their HOA board. That approach is very expensive and time-consuming. Owners needed a better way to exercise their rights to recall and appoint new board members.
That’s the purpose of new provisions in state law affecting HOAs in planned communities and condominiums. When the law becomes effective later this year, if the HOA board fails to schedule, notice and hold a special meeting within 30 days of receiving the members’ petition, then the entire HOA board is automatically recalled on day 31, without a vote!
Hopefully, this will help owners to avoid the stalemate that occurs when stubborn HOA board members remain in place, against of the will of members.
New legislation says HOA can no longer enforce traffic, parking restrictions on public roads — unless members vote to opt in
This bill applies to planned communities with municipal or county-owned streets.
In recent years, IAC has seen countless reports of homeowners opposed to HOA regulation of speed and parking on public roads. It’s not surpirsing that owners object to their HOA writing citations. After all HOA board members and managers are not police officers. And HOA fees can potentially ecome a lien against their homes.
Understandably, when the roads in the community are not privately owned by the HOA, many owners think that the HOA has no right to issue traffic tickets.
On the other hand, some owners insist that enforcement is necessary to ensure safety.
This new law gives HOA membership one chance to conduct a community vote on allowing their Association to enforce road restrictions. The community must conduct a ballot measure and vote on the issue by June 30, 2025. If the vote to grant the HOA traffic control authority is unsuccessful, then the HOA is forever forbidden to enforce traffic and parking restrictions on public roads.
Caution to homeowners.
Be alert for any notice of a meeting and ballot measure. The requirements for approval of a ballot measure to retain HOA control over public roads are not difficult to obtain. According to the language in the law, it only takes a simple majority vote of members present at the special meeting, assuming the quorum requirements are met.
By way of example, let’s assume you have 100 properties in your community, and a quorum requirement of 25%. If owners of 25 homes attend a meeting and cast a ballot, then only 13 votes are required to allow the HOA to continue to police public roads!
You read that right – 13 votes out of 100 possible votes can decide the issue of HOA control over public roads. If you oppose this kind of HOA control, you must stay involved in the process. You must be certain to vote NO on the ballot measure.
Note that HOAs are still legally permitted to maintain traffic and parking regulations on private roads that they own. This applies to communities both prior to and following turnover of control by the real estate developer.
Condo owner can file insurance claims against Master policy, but there’s a catch
In a previous post, I summarized this bill involving a condominium unit owner’s potential liability for the Association’s insurance deductible.
After much discussion and debate, the final version of this bill makes the following changes to state law:
First, it allows a condo unit owner – with damages to their private unit caused by issues with common property – to file a claim against the condo association’s Master Insurance policy.
However, before any unit owner files a claim, they must notify their condo association of their intent to do so. Then the owner must allow the condo board 10 days to decide whether or not they want to pursue a claim on behalf of the Association. Within that 10-day period, if the HOA decides not to file a claim, it must notify the unit owner in writing. The HOA’s written notice must explain the reason for not filing a claim.
The unit owner can still choose to file a claim against the Master Association’s policy, subject to the deductible.
A unit owner can obtain a low-cost rider on their HO insurance policy for their unit, which will pay the deductible in most cases.
The unresolved issue here is that there’s no clarification that a condo association must treat all its Master policy deductibles as a common expense.
Depending on the governing documents of each condo association, a unit owner could be obligated to pay the entire HOA policy deductible. Unless a particular unit owner is directly responsible for damages, all owners should share the cost of the Master Policy deductible.
That’s why the new law requires condo HOAs to annually inform its members, in writing, of their responsibility for insurance deductibles on the Master policy, and the amount of those deductibles.
Clarification: Gated community HOAs must allow political activity
This law applies to gated planned communities and condominium communities. It clarifies that HOAs in these communities may not prohibit political activity, simply because of the community’s restricted access.
In gated communities, however, the HOA can require any non-resident engaging in political activity to be accompanied by a home (unit) owner or resident of the community.
Historical U.S. flags must be allowed by HOAs
This bill simply adds that HOAs must permit display of “any historical version of the U.S. flag” including a Betsy Ross flag.
Membership update, Arizona Homeowners Coalition (AZHOC)