The Fiftieth First Regular Arizona State Legislative Session began on January 10, 2011. After the November general elections, Republicans overwhelmingly gained control over both chambers. Ultimately, this resulted in the ability to pass bills with extreme ease and no need for votes from members of the Democratic Party. Although bipartisanship between both parties has long been expressed as necessary, many involved in this legislative session would say there was little crossover between the two parties, and in some cases, members might even describe the interactions as one political party steamrolling right over the other.

When all was said and done, Senate President Russell Pearce and House Speaker Kirk Adams managed to stick to their ultimate goal of completing the legislative session in 100 days. The legislature adjourned sine die at 5:25am on April 20, 2011. After the 10-day grace period granted to the governor to allow her time to review legislation, the outcome breaks down as follows:

Out of the 1,350 bills “dropped” by members of the legislature,

• 386 bills passed both chambers and were sent to the governor;
• 29 bills were vetoed by the governor; and
• 357 bills were signed by the governor.

In addition, 146 memorials or resolutions were “dropped” by members of the legislature, and 36 memorials or resolutions were passed.

Each session, the Arizona Association of REALTORS®, represented by its lobbyist and statewide volunteers on the Legislative Committee, track roughly 200 bills with potential impact on the real estate industry. Issues are prioritized based on the potential positive or negative impact of the legislation. As the more than 1,300 bills proceed through the process, there is ample opportunity for them to be modified with amendments, resulting in a continuous “sports-like” game of offense and defense.

Prior to session beginning, members of AAR’s Legislative Committee are asked to join specialized tasks forces to study and give expert input on specific fields, such as taxation, water issues, land use, industry practices, etc. These members assist AAR staff by providing a great deal of knowledge on specific industry experience and regional application. This collaboration between staff and REALTORS® provides the industry with its first line of defense in the annual season of lawmaking and stakeholder competition.

Below is a summary of the major policy issues that AAR was involved with during the 2011 session. Note: The regular effective date for the new laws passed this session is July 20, 2011, unless the legislation includes a specific effective date or delayed effective date.

HB 2153 — Municipalities: Counties; Fire Sprinklers; Code

The topic of mandated fire sprinklers once again surfaced as many municipalities were requiring new homes to be equipped with fire sprinklers. Our members voiced their concerns as to the intrusion on private property rights, and as a result, this bill was brought forward. The bill forbids cities, towns or county boards of supervisors from adopting an ordinance that prevents a person or entity from choosing whether to install or not install fire sprinklers in a single-family detached residence or any residential building containing no more than two dwelling units. Furthermore, the bill prohibits a city, town or county board of supervisors from imposing any fine, penalty or other requirement if the property owner chooses not to install fire sprinklers.

HB 2005 — Subdivisions; Acting in Concert

This bill initially surfaced in past sessions and was brought forward by a constituent of the sponsor, Representative Burges. Due to the fact that AAR had previously been involved in this issue during past sessions, we once again became involved with the legislation. AAR’s legislative committee took the position to monitor the legislation, but directed that our lobbyist actively work with the bill sponsor, her constituent and the legislative liaison from the Arizona Department of Real Estate to make sure that our industry was protected and the ultimate goal of the legislation was reached.

The bill, as signed by the governor, does the following:

• states that either the county where a division occurred or the Arizona Department of Real Estate, but not both, may enforce “acting in concert” statutes;
• states that a familial relationship alone is not sufficient to constitute unlawful acting in concert;
• permits the county to waive the requirement to prepare, submit and receive approval of a preliminary plat as a condition precedent to submitting a final plat, as well as waive or reduce infrastructure standards or requirements;
• states that a creation of six or more lots, parcels or fractional interest is not subject to public report requirements when the sale or lease of a lot, parcel or fractional interest occurs ten or more years after the sale or lease of another lot, parcel or fractional interest and the other lot, parcel or fractional interest is not subject to public report requirements and is treated as an independent parcel, unless upon investigation by the Commissioner, it is found that there was evidence of intent to circumvent the subdivision laws;
• removes the provision that states that the commissioner may “take whatever other action he deems necessary to ensure compliance with the subdivision laws of this state;” states that the Commissioner has no longer than five years after an initial complaint is received or the Commissioner initiates an investigation to determine if there was a violation of the subdivision statutes;
• limits the liability for developers when an untrue statement of material fact or omission of material fact on a public report is made by limiting the amount in damages that have to be paid.

HB 2193 — Municipal Water Charges; Responsibility

This bill was brought forward by AAR in conjunction with Representative Jim Weiers in an effort to resolve concerns regarding municipal requirements that held property owners liable for the unpaid water bills of tenants or prior owners. The bill specifies that for a residential property of four or fewer units, a municipality may require payment only from the person who has contracted for water and wastewater service, physically resides or resided at the location and receives or received the services. The bill additionally allows other entities (property owners or immediate family members), at their sole discretion, to contract for water and wastewater service with a municipality and provide payment for those services. Furthermore, the bill prohibits a municipality from refusing service due to unpaid service charges to anyone other than the person who resided and received the service at the property. The passage of this legislation once again recognizes the importance of personal accountability and the continued protection of personal property rights.

HB 2717 — Homeowners’ Associations; Penalties; Attorney Fees

Last year, AAR was successful in passing legislation that would provide private parcel access to “for sale” signs within HOA communities. Alas, many unscrupulous HOA communities found sneaky ways to skirt the legislation by charging a homeowner for the use or placement of “for sale” signs. Once again, AAR educated members of the legislature on these overreaching practices and the sponsor of HB 2717 (Representative Carter) agreed to amend her bill to include language that would curb this practice. The bill as signed by the governor prohibits a condominium community from charging a fee for the use or placement of a “for sale” or “for lease” sign by a unit/property owner.

SB 1149 — Planned Communities; Condominiums; Document Fees

Once again, AAR had to address the overbearing and costly regulations that HOAs are continuing to force on homeowners. This bill addressed current statute that permitted an association to charge a fee for required documents as long as the fee is “reasonable”. The problem with the law was that in many instances, the fee charged was not only astronomical but extraordinarily unreasonable. This bill curtails this outlandish practice by limiting the fee that a planned community and condominium association can charge a unit owner for the preparation of the required documents associated with the resale of a unit to an aggregate of $400. This bill contained a delayed effective date; it will go into effect on January 1, 2012.

SB 1292 — Real Estate; Education; Broker Requirements

One common theme we hear from REALTORS® is the importance of continuing education being up-to-date and relevant to today’s industry issues. Time and time again, members of the association have voiced their disappointment about outdated and irrelevant courses that are offered for continuing education hours. This bill addresses those concerns by raising the continuing education standards for those in the real estate industry. As signed by the governor, the bill holds educators to a higher standard and accountable for the courses they teach.

To review any bill discussed above, visit www.azleg.gov. Insert the bill number at the top, right-hand corner of the screen, then click “Show Versions.” If you have questions about AAR’s legislative efforts, you can reach me at nicole@aaronline.com.