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Monday
May022011

2011 Legislative Update

The below bills will become effective on July 19, 2011.

  1. Recording Board and Members’ Meetings. HB 2245 amends the open meeting statutes for both condominiums (A.R.S. §33-1248) and planned communities (A.R.S. §33-1804). Owners are now permitted to tape record or video tape the open portions of Board meetings and member meetings. The Board may adopt reasonable rules to regulate taping, but may not preclude taping. This law will require directors to dress nicely for the meetings. Recording meetings will likely encourage civility. Directors can be on You-tube against their wills.
  2. Member Participation in Board Meetings HB 2609. The law provides that “a member” is now allowed to speak after the Board has deliberated on a motion, and before the Board votes on a motion. Associations may no longer limit Owner participation to a general homeowner forum period. Depending on how the law is interpreted, this law could be a disaster in large communities, or contentious communities. Imagine a large community with many interested Owners. There are 10 items on the agenda. Fifty members attend the meeting. If they all speak for 2 minutes on every agenda item, the meeting is extended by 16 hours. This is the result if the law is interpreted to mean that “all members” can speak before the Board votes on every agenda item. This result will obviously discourage competent directors from serving. It would also effective empower a determined group of members to filibuster Board proceedings.
    At the beginning of the open meeting law, the legislature wrote that “all members” are permitted to speak at an appropriate time. We believe that a Board may permit “all members” to speak at the Owner forum portion of the meeting, and then permit “a member” to speak after the Board deliberates on a matter and before the Board votes on the matter.
  3. Committee Meetings are Subject to the Open Meeting Laws HB 2609. This law only applies to regularly scheduled committee meetings. For those, the committee must provide 48 hours notice to the membership of a committee meeting. Members may attend and address the committee. This law firm supports this legislation. Having committee meetings open to the membership is sound public policy. For committee meetings that are not regularly scheduled, the open meeting laws do not apply. So if an architectural committee must address a submittal by a deadline that precedes the next regularly scheduled committee meeting, the committee members can still deliberate and vote by email.
  4. Closed Meetings for Violations HB 2609. The Board can now consider violation hearings in Executive Session, unless the affected Owner(s) demand that it be done in an open meeting. This law prevents embarrassment to the Owners who are in violation. Please know that in the wake of this law, the records of these closed violation hearings need not be produced to a requesting Owner. However the records relating to the violation that pre-date the hearing must still be produced if requested.
  5. Agendas Must be Provided to Members who Attend Board Meetings HB 2609. The new law provides that the agenda must be made “available” to members attending a Board meeting. The Board should make copies, but not hand out the last one. The Board can make the last one available for review by the rest of the Members who did not receive a copy.
  6. Emergency Meetings HB 2609. This is a meeting in which an emergency rendered it impracticable to notice a Board meeting to the Members. Before this law was passed, we defined these emergency circumstances to be where there will likely be significant injuries to a person or property if the Board does not take immediate action. An example would be a broken water line. The Board must contact a plumber immediately and can’t wait 48 hours for a plumber.
    The new law vastly expands the definition of emergency meeting. It defines the circumstances as where action may not be delayed until the next regular Board meeting. Before the new law, those were just known as “Special Board Meetings.” This is a very helpful clarification.
    For an emergency meeting, the new law requires that the minutes of an emergency meeting must state the reason for the meeting and the minutes must be read and approved at the next regular meeting.
  7. Board Meetings by Teleconference HB 2609. The new law corroborates an existing practice in which Board meetings can be done by teleconference as long as everyone can speak and hear each other, including the Members. This is extremely helpful for directors who travel or are winter visitors.
  8. Definition of Board Meeting HB 2609. The new law codifies an attorney general opinion that if a quorum of the Board is deliberating or voting on Association business, that is a Board meeting. It is subject to the open meeting laws unless it is an emergency. Workshops and informal discussions by a quorum of Association business are definitely subject to the open meeting laws. This includes deliberation by a quorum via email. Directors should be careful to not “reply all”.
  9. Charging Owners for “For Sale” or “For Lease” Signs HB 2609. Associations may not do this and for those who do, they forfeit lien rights against the property for six months.
  10. Administrative Hearings are Back SB 1148. An aggrieved Owner can file a complaint with the Department of Building, Fire and Life Safety against his/her Association. This law firm found this process to be swift, inexpensive and fair.
  11. Political Signs HB 2609. There is no limit to the number of political signs a Member may place on his/her property. The only limitation now is nine square feet of political signage on one property. An Association may not restrict the number of candidates, public officers or candidates on a political sign.
  12. Resales HB 1149. This new law extends the class of people who can receive a resale statement disclosure statement to the “purchaser’s authorized agent.” This is presumably the realtor. Associations may ask the purchaser to provide written corroboration of the representation. There are a number of new restrictions on the fees that can be charged on a resale:
    1. A new cap of $400.00 for the preparation of a resale disclosure statement and transfer work;
    2. A ‘rush fee’ of $100.00 if the above services are required within 72 hours;
    3. An update fee of $50.00 if thirty (30) days or more has passed since the original disclosure;
    4. Associations are prohibited from charging the $400.00 fee if the transfer/disclosure fee as of January 1, 2010 was less than $400.00. If so, the fee may increase no more than 20% per annum until the cap of $400.00 is reached;
    5. A civil penalty is imposed of no more than $1,200 for violations of the new fee cap requirements.
    Associations must also add a new document to the list of documents that must be sent to the buyer within ten (10) days of receiving a notice of impending sale: A statement summarizing any lawsuits pending in which the association is a named party, with amounts claimed (does not apply to assessment collection lawsuits not against the selling owner).
    Also, a statement detailing unpaid assessments must now be provided within ten (10) days of a written request. If the assessment statement is not provided as required by the statute, the lien for any unpaid assessments against the unit will be extinguished. The resale disclosure provisions now explicitly apply to the association’s managing agent as well.
  13. Flags SB1326. The Gadsen Flag is a historical American flag displaying a coiled rattlesnake prepared to strike on a yellow background. The motto, “Don’t Tread on Me,” is displayed beneath the snake. This joins the list of flags Associations may not prohibit. An Association may limit an Owner to no more than two flags, and may prohibit flag poles that are higher than an Owner’s building.
  14. Door to Door Politicking SB 1540. Associations must allow door-to-door political activity on property normally open to visitors with the following restrictions:
    1. An Association may restrict or prohibit door-to-door political activity from sunset to sunrise.
    2. An Association may require the prominent display of an identification tag for each person engaged in a political activity, with a prominent display of the candidate or political issue that is the subject of support or opposition.

Reader Comments (5)

This is not enough. How about HOAs cannot prevent you from installling SOLAR? how about HOAs cannot prevent you from changing your fencing to other fencing that is similar or the same as other fencing already present?

How about TERM LIMITS for board members? How about a prohibition on paid inspectors? If it doesn't bother your IMMEDIATE neighbors, there should be NO HOA involvement.

DO NOT BUY PROPERTY IN AN HOA, you WILL regret it. It is NOT your property EVER. It belongs to them, and they will foreclose over a few WEEDS. Get used to being told via mail that you have chores you already knew about.

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