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In a world where knowledge is power, having a good understanding of homeowners' association laws is crucial. If you are considering a career as an HOA manager, board member, or executive, then this article is for you.
Here, we will talk about some of the most important laws, rules, and regulations that govern homeowners' associations. We'll also discuss the roles and responsibilities of these organizations and introduce you to some of the tools you can use to streamline your HOA management processes.
Understanding Homeowners' Associations
Let's start by giving you a definition of the term "homeowners' association." These entities, often known as "HOAs," are non-government organizations created for the good of a community or neighborhood. They have the task of creating, maintaining, and enforcing certain rules and regulations to ensure that property values are maintained.
These organizations are governed by certain federal, state, and local HOA laws and also have their own governing documents, such as Bylaws, Articles of Incorporation, and the Declaration of Covenants, Conditions, and Restrictions.
They are also responsible for maintaining common areas, such as swimming pools and parks, and have the right to collect monthly assessments or dues.
Arizona HOA Laws That You Need to Know About
Without further ado, here is a guide to some of the most pertinent state and federal laws that regulate homeowners and condominium associations in Arizona.
Arizona Planned Communities Act
This act governs homeowners associations in Arizona and details a number of matters pertaining to planned communities, such as assessment collection limitations, the maintenance of a homeowner's association records, the management of such entities, and the requirements for meetings. It applies to all planned communities, including HOAs, condominium associations, and cooperatives.
Arizona Nonprofit Corporation Act
The Arizona Nonprofit Corporation Act oversees HOAs in terms of business organization and practices. Arizona condominium associations can be formed as for-profit or non-profit corporations or as unincorporated groups. However, most HOAs in Arizona are nonprofit organizations and will need to take note of the rules and regulations detailed in this act.
Arizona Civil Rights Act
Many states have laws in place to protect homeowners against housing discrimination. Arizona is one such state. The Arizona Civil Rights Act was passed to safeguard Arizona residents from prejudice regarding jobs, housing, and public accommodations.
Article 7 of the act preserves the right of individuals to obtain access to housing without discrimination due to color, sex, race, religion, national origin, or familial status. You will also need to see the federal Fair Housing Act, which also addresses discrimination.
Arizona Real Estate Administrative Hearings
This act creates a forum for Arizona residents to resolve conflicts outside of the legal system. The Homeowners Association Dispute Process is administered by the Arizona Department of Real Estate, which has the statutory jurisdiction to hear issues between residents and homeowner or condominium associations.
A.R.S. 32-2199.01 allows a homeowner or an association to apply to the department for an investigation on breaches of the organization's documents or legislation governing them. The administrative law judge presiding over the case can compel any party to comply with the applicable law, HOA governing documents, or contract clause and might impose a civil penalty for any violation.
The Rights and Responsibilities of an HOA in Arizona
A community association is normally in charge of administering and maintaining communal spaces as well as enforcing community rules. They have the authority to collect homeowner dues and assessments to pay for these services.
HOAs also need to hold regular meetings, keep financial records, and provide members with transparency. They can impose regulations in order to preserve property values and neighborhood appeal.
They must, however, do so within the confines of state and federal legislation, protecting homeowners' rights and guaranteeing due process in rule enforcement and dispute settlement. The particular powers and obligations of an HOA may differ based on the bylaws and governing documents of the community.
Issuing Fines for Violations and Late Payments
In Arizona, a community association may penalize a property owner for breaking its rules. An HOA may also levy reasonable penalties for failing to pay dues on time. In both circumstances, the association is required to provide sufficient notice and allow the member to plead his or her case.
Concerning fines for late payment, an HOA in Arizona may charge $15 or 10 percent of the amount owed (whichever is greater). Keep in mind that assessments are only considered late after 15 days.
Suppose a member violates the governing documents of the association. In that case, the HOA has the authority to levy reasonable charges and, in some situations, to demand attorney's fees for any legal actions.
According to Federal and Arizona Law, HOAs May Not Fine a Homeowner for Certain Elements
Homeowners and condominium associations in Arizona are not allowed to ban or fine a property owner from the following:
- Raising the Gadsden flag
- Putting up the Arizona state flag
- Displaying the flag of an Arizona Indian tribe
- Setting up antennas and satellite dishes
- Exhibiting the U national or the military flag, provided it is done in accordance with federal flag display law
- The installation of solar energy devices
Keep in mind that the association may include rules and guidelines for the manner in which these items are displayed.
Foreclosing on a Home Due to Non-payment
In the event that a homeowner fails to pay their dues, a homeowners' association is allowed to foreclose on a home in that area to secure the outstanding amount. However, this may only be done if the community member is behind in payment for at least a year or the total amount owed exceeds $1,200. Keep in mind that this excludes collection, late, and attorney's fees.
In Arizona, a HOA can foreclose on a homeowner's home for unpaid liens if the homeowner has been behind in payment for at least a year or the cumulative late fines exceed $1,200 (not counting late fees, collection fees, or attorney expenses).
In addition, a homeowners' association in Arizona may not foreclose on a home unless it first sends a notice to the delinquent property owner and gives him or her the opportunity to pay their dues. The homeowner must be given a minimum of 30 days to pay the outstanding amount.
However, in the event that the debt is not paid within this time frame, the association will need to file a foreclosure action and go through the same legal procedure as a mortgage lender who wants to foreclose on a home.
Another important thing to note is that unless explicitly stated in the governing documents, a community association cannot evict a resident or their tenant. The HOA also lacks the authority to compel an owner to remove their tenant. Nevertheless, the HOA's governing documents might include additional authorities or restrictions regarding rental properties.
How to Join or Leave an Arizona Homeowners' Association
In Arizona, as in many other states, joining a homeowner' association is not optional. When you purchase a property that is in an area governed by such an entity, you will be obligated to join. This also means that the only way that you can leave the association is by selling your house.
Alternatively, you could request that your home be removed from the boundaries of the HOA, but there is no guarantee that this petition will be granted.
Dissolving an HOA in Arizona
There are no state laws that detail the process for dissolving a homeowners' association in the state of Arizona. However, the association's governing documents should contain a detailed procedure for dissolution.
Suppose the governing documents do not contain any provisions concerning dissolution. In that case, it will be up to the board members to present the proposition to the community members.
Thereafter, the members will need to vote in favor of the action, and if a majority vote is acquired, the board of directors will have to create a plan and have the relevant parties sign it, as specified in the governing documents.
Except in cases where the governing documents specify otherwise, the request for dissolution must be approved by a majority of the votes or a majority of the voting power, whichever is less.
If the dissolution is granted, the participating members will sign a termination approval, clear all outstanding debts, dispose of the association's assets, and file the proper papers, such as Articles Of Dissolution, with the Arizona Corporate Commission.
Dealing with Complaints
The truth is that disputes are part of the job when running planned communities, and before you take advantage of attorney-client privilege and take legal action against a community member, you might want to read this comprehensive guide on how to deal with complaints.
You should also know who homeowners can turn to in the event that they feel that the HOA is unfair or discriminatory.
Complaints Concerning HOA Fees and Charges
Homeowners in Arizona can approach the following organizations for assistance with fee disputes:
It's also important to remember that property owners can take legal action against an HOA within one year of the alleged violation, so maintaining a good attorney-client relationship with your lawyer might not be such a bad decision after all!
Discrimination
Suppose a community member feels that they are being treated unfairly. In that case, they may approach the US Department of Housing and Urban Development to obtain assistance or file a lawsuit at a federal or state court.
About DoorLoop's Innovative HOA
To ensure that an HOA complies with the relevant laws, board members must ensure that proper records are maintained. However, with a host of tasks to do, it's easy to become overwhelmed and drop the ball.
The good news is that there are intuitive tools designed especially for HOAs with the goal of helping you manage your association more efficiently. Whether you need powerful accounting tools to help you track expenses and generate financial statements or a communication portal designed to make sending out notices to members much easier, DoorLoop has you covered.
Our property management software is designed to be incredibly user-friendly, so you can navigate and utilize its tools quickly and easily. Plus, with world-class support and affordable packages, what more could you ask for?
To learn more about DoorLoop or try it out yourself, get in touch with us today to get a free demo!
The Bottom Line
Successfully managing a homeowner' association in Arizona starts with a comprehensive understanding of the relevant HOA laws. Now that we have covered most of the basics, you are well on your way to ensuring that your association is compliant.
Be sure to check local and federal rules in addition to state laws to ensure that you are abiding by all the relevant legislature. If you require assistance with managing the books, keeping track of expenses, producing provisional budgets, and providing notices to residents in accordance with Arizona law, be sure to give DoorLoop a try!
With powerful features at your fingertips, you can improve your efficiency and remain compliant with the relevant laws, rules, and regulations in place.
Contact us today to find out how you can streamline your workflow and revolutionize your operations with DoorLoop!
Frequently Asked Questions
1. What power does a homeowners' association have in Arizona?
In Arizona, HOAs are permitted to collect dues for the maintenance of shared areas, impose fines for late payments or the violation of its rules and regulations as indicated in the governing documents, and foreclose on a property if a homeowner fails to make payment of overdue assessments.
These organizations may also regulate the landscapes, architecture, and general aesthetic qualities of the community.
2. Are Arizona HOAs allowed to enter units in the community?
There is no legislation in Arizona that authorizes community associations to gain access to a homeowner's private property. However, it's important to note that most organizations have provisions in their governing documents to detail when and how the association is to enter the premises. Reasonable notice must be provided if the HOA needs to conduct planned maintenance on a shared facility.
3. Are HOAs in Arizona allowed to restrict the use of the US national flag?
No, a homeowner's association may not restrict or ban the use of the American flag. However, if its use breaks the guidelines set out by the federal flag display law, the HOA may take action.
4. Where can I find HOA regulations in Arizona?
In Arizona, a planned community's governing documents are considered public records, and the association will need to file them with the county land records. If this is not done, the documents are not legally enforceable. To get these records, go to your local county clerk's office. You can also try visiting the website of your local county recorder's office to access it online.
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