HOA Omnibus Update

Last month, the Capitol Insider featured an article on SB 1482: homeowners’ association’s amendments; omnibus. In the time since the article, the bill has made significant progress receiving an affirmative vote in the Senate Rules Committee that the bill is “proper for consideration.” Late last week, the bill was approved in the Senate Committee of the Whole and on Thursday was Third Read by the entire body, receiving a vote of 30 ayes, zero nays. The bill has now been transmitted to the House of Representatives where it will continue through the process.

Meanwhile, Representative Michelle Ugenti (sponsor of last year’s HOA omnibus) has also introduced a mirrored version of the senate bill; HB 2695: homeowners’ association’s amendments; omnibus. The bill was heard in the House Government Committee, where it received an affirmative vote of nine ayes and zero nays.

Today, the bill was heard in the House of Representatives Rules Committee where the committee voted that the bill is “constitutional and in proper form.” The next step for the bill is the Republican and Democratic caucus to discuss the components of the legislation.

Provisions of both SB 1482 and HB 2695 as it relates to rental properties:

  • Permits an owner of a condominium unit and planned community’s owners to rent their property, unless prohibited in the declaration, and requires the owner to comply with the declaration’s rental time-period restrictions.
  • Allows an owner to make a written designation to the HOA, of a third party to act as the person’s agent with respect to all HOA matters relating to the rental property except voting in HOA elections and serving on the board of directors.
  • Specifies that a HOA notice to an agent regarding the property constitutes notice to the owner.
  • Prohibits a HOA from requiring any tenant information other than: the name and contact information for the adult tenants, the lease’s beginning and ending dates, a description and the license plate number of the tenants’ vehicles, and a government-issued ID that confirms the tenant meets the communities’ age restrictions, if any.
  • Permits a HOA to charge a maximum fee of $25 for the permitted disclosures to be paid within 15-days after the postmarked request.
  • Authorizes the fee to be charged for each new tenancy, but not for a lease renewal.
  • Prohibits a HOA or managing agent from assessing, levying or charging any other fee or fine or otherwise imposing a requirement on a rental unit or property any differently than on an owner-occupied property.
  • Prohibits a HOA from:
    • requiring an owner to provide the HOA with a copy of the tenants rental application, credit report, lease agreement, rental contract or other personal information;
    • requiring the tenant to sign a waiver or other document limiting the tenant’s due process rights as a condition of occupancy;
    • restricting or prohibiting an owner from serving on the board of directors based on the owner not being an occupant of the property; or
    • imposing on an owner or managing agent any fee, assessment, penalty or other charge that is greater than $15 for incomplete or late information regarding the information the HOA is permitted to request.
  • Stipulates that any attempt by a HOA to exceed either fee, voids the fee.
  • Specifies that a HOA can acquire a credit report on a person in an attempt to collect a debt.
  • Establishes that the requirements and restrictions within the bill, do not prevent an HOA from:
    • complying with the Housing for Older Persons Act of 1995;
    • restricting, in the community documents, the residency of class two or three registered sex offenders; or
    • the enforcement of such residency restrictions.
  • Permits an owner to use a crime-free addendum as part of a lease agreement.
  • Requires owners to abate the criminal activity of the nuisance property.

Legislative Update

Every year the legislature begins session with the intentions of wrapping up all legislative work by the 100th day of session. In order to achieve this task, both the House of Representatives and Senate set hard deadlines on how long each chamber has to hear bills in the house of origin. For both chambers the deadline was last week, with today marking the 50th day of the legislative session; in theory the legislative session is halfway completed.

This legislative session, 1,186 bills and 106 memorials and resolutions were introduced. As of today, five bills have been signed into law, one bill has been vetoed and 14 memorials and resolutions have passed. Out of the 1,292 combined bills, memorials and resolutions that were introduced, a total of 644 bills either did not receive a committee assignment, were never heard in committee or failed to receive the necessary votes to proceed in the process.

Though the number of bills that have not moved on in the process may seem like a high number, it is important to remember that until the legislative session has adjourned sine die, anything is possible. Bills can be amended in committee with “strike everything” amendments, which have the potential to completely change the subject of the underlying legislation to being amended in the Committee of the Whole in floor session.

As a result of the potential for change to occur at the legislature, it is the primary function of Arizona Association of REALTORS® Government Affairs team to remain vigilant. This is done through continuous daily monitoring of legislation, both in committees and on the floor as well as meeting with legislators to become keenly aware of their objectives. Through these efforts, the association is able to decrease the potential for detrimental legislation to pass as well as promote the objectives of our membership for continued success at the legislature.

Look for future Capitol Insider updates on the progress of this legislation and other bills that affect your ability to do business in the State of Arizona.

About the Author

Michelle Lind

K. Michelle Lind, CEO of Arizona REALTORS®, is also an attorney, State Bar of Arizona board certified real estate specialist, and the author of Arizona Real Estate: A Professional’s Guide to Law and Practice.
Please note that this article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice and you should not act upon it without seeking independent legal counsel.