Look out, Arizona board members! Another Congressional session has passed in this desert we call home, and with this new session a slew of new laws directed specifically towards regulating HOAs and boards have entered the political arena. And this time they mean business.

Though Arizona is historically unrestrictive when it comes to regulating the HOA industry, these new laws seem to be baby steps down a path that’s similar to that of Florida and California, both of which ensure board members cannot sneeze without their local governments’ say-so. And, while these laws may not seem particularly earth shaking at this point, they certainly represent a change that—up to this point—did not seem possible in the Arizona legislature.

In other words, if you live in Arizona, it’s time to pay strict attention.

But, before we begin, let me make perfectly clear that these laws only apply to those living in Arizona neighborhoods; those in Texas and elsewhere need not worry about them, and can give this article a skip (unless you plan on moving to Arizona, then you might want to stick around). Got it? Good, then let’s continue; here are some of the latest updates that may affect how you govern your HOA community:

Political Sign Placements

One interesting addendum to SB1482 is the inability for associations to prohibit political sign displays on the homeowners property.  This means that, unless the signs are up 71 days before the election or earlier or 3 days after, you have no power to remove or request the removal of political signs from a homeowners property. This includes within windows, patios, balconies, and—most importantly—limited common elements. Now, this may not be something that most association boards worry about; however, the bill’s definition of limited common elements is a bit murky, meaning if your community properties share lawns (like you would see in a condominium) these are open game. In many cases, this can even extend to locations not strictly owned or occupied by the owner. Obviously, this is an oversight that may cause havoc in certain communities; yet, it is something that must be dealt with for the time being, or at least until the next congressional session when this addendum can be more thoroughly defined.

Criminal Activity Nuisance

Fortunately, the news isn’t all bad for boards; some of the new laws introduce actually give boards more power, and the criminal activity nuisance section of SB1482 is a perfect example of that. With this, HOAs can file suit against the owners of a property where repeated crimes take place. In other words, regardless of whether it’s the homeowner him/herself doing the crime or a tenant, if the property is used in a continuous commission of a crime, the homeowners association can file an eviction lawsuit.

On top of this, the Vexatious Litigants bill—HB 2021—allows for the declaration of a litigant to be vexatious, restricting them from filing any new motions or lawsuits without leave of the court. What does this mean? It means that you no longer have to worry about Susan “Sue Happy” Johnston continually filing motions against your association, simply because they don’t want to put their garbage can away—even though it is quite plainly stated in your CC&Rs that they must. Joking aside, if you have a certain homeowner that continually files lawsuits to harass the board or a different homeowner, brings these lawsuits with little to no evidence or justification, or otherwise shows a pattern of being an irresponsible, harassing, or “vexatious” litigant, you or the court can make it extremely hard for them to continue. Which, in our opinion, is something that can benefit the board, the association as a whole, and the homeowners living there.

New Rental Restrictions

Up until now, HOA boards and CC&Rs have pretty much had complete control over renters in their neighborhoods. You could prohibit renting in general, perform background checks on prospective renters (if you allowed them) and collect as much information as you wanted; and, in some cases, this information was even more than what you had on the lot owners themselves. Overall, for boards that wanted as much control over who lived within their communities as possible, times were good; sadly, with SB1482, these times are coming to a close.

Now, unless your CC&Rs expressly prohibit rental activity, your community can’t do a thing to stop rental activity. You also may not require an owner to disclose any tenant information outside of the name and contacts for adults, the leasing period, and a description and license plate numbers of the new tenants’ vehicles. Other highlights of this bill include:

  • The ability for owners to designate an agent to deal with association matters
  • A legal obligation for owners to abide by rental term limit restrictions
  • Restrictions on paperwork associations may force homeowners to provide, including rental applications, credit reports, personal information, lease agreements, and rental contacts of the tenant.
  • Fee restrictions, limiting fees that HOAs can impose for late or incomplete information to $15.00

Overall, these are probably going to be the biggest changes you’re going to see on this docket, and it is certainly the one that’s going to affect your community the most; but, they are far from the only laws being introduced. For more information concerning the new AZ HOA laws that are coming into effect on July 24, 2014, click here to read the full text of the bills.

When Will these Laws Take Affect?

If you are currently embroiled in a situation that contradicts these laws, you’re in luck; you won’t have to worry about them until July 24, 2014. So get it out of your system as fast as possible. But, once that date comes to pass, any action outlined under these statutes will be considered illegal, opening your association up to potential lawsuits if you continue beyond this specified date. And yes, that’s still the case even if you are allowed to collect this information under your current CC&Rs—state law overrides any contracts in place, regardless of their legality at the point of passage.

Should you be Worried?

In a word, no, you don’t have to be quite yet. Arizona is still a very lax state when it comes to HOA regulation, even with these laws in place. Plus, some of these laws actually give you more power than before—particularly the vexatious litigants and criminal activity nuisance statutes. So, unless you deal with a lot of renters and unless the infrastructure of your community was based around the information that you’re now restricted from demanding, you shouldn’t be worried. Just don’t forget when the laws finally take effect (July 24), and you should be just fine (don’t worry; I’ll post an update once these laws are officially in place).

If you have any more questions regarding these new laws or our HOA management services in Phoenix, don’t hesitate to drop us a line. We’ll answer all your questions and more!