SB 1500

REFERENCE TITLE: condominiums; planned communities; assessments
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SB 1500
Introduced by
Senator
  Gowan
AN
ACT
amending sections 33-1242 and 33-1803,
Arizona Revised Statutes; relating to condominiums and planned communities.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 33-1242, Arizona Revised
Statutes, is amended to read:
START_STATUTE33-1242. Powers of unit owners' association; assessment limitation;
proposed increase requirements; notice to unit owner of violation; response;
hearing
A. Subject to the provisions of the declaration, the
association may:
1. Adopt and amend bylaws and rules.
2. Adopt and amend budgets for revenues,
expenditures and reserves and collect assessments for common expenses from unit
owners.
3. Hire and discharge managing agents and other
employees, agents and independent contractors.
4. Institute, defend or intervene in litigation or
administrative proceedings in its own name on behalf of itself or two or more
unit owners on matters affecting the condominium.
5. Make contracts and incur liabilities.
6. Regulate the use, maintenance, repair,
replacement and modification of common elements.
7. Cause additional improvements to be made as a
part of the common elements.
8. Acquire, hold, encumber and convey in its own
name any right, title or interest to real or personal property, except that
common elements may be conveyed or subjected to a security interest only
pursuant to section 33-1252.
9. Grant easements, leases, licenses and concessions
through or over the common elements.
10. Impose and receive any payments, fees or charges
for the use, rental or operation of the common elements other than limited
common elements described in section 33-1212, paragraphs 2 and 4 and for
services provided to unit owners.
11. Impose charges for late payment of assessments
after the association has provided notice that the assessment is overdue or
provided notice that the assessment is considered overdue after a certain date
and, after notice and an opportunity to be heard, impose reasonable monetary
penalties on unit owners for violations of the declaration, bylaws and rules of
the association.
12. Impose reasonable charges for the preparation
and recordation of amendments to the declaration or statements of unpaid
assessments.
13. Provide for the indemnification of its officers
and executive board of directors and maintain directors' and officers'
liability insurance.
14. Assign its right to future income, including the
right to receive common expense assessments, but only to the extent the
declaration expressly provides.
15. Be a member of a master association or other
entity owning, maintaining or governing in any respect any portion of the
common elements or other property benefitting or related to the condominium or
the unit owners in any respect.
16. Exercise any other powers conferred by the
declaration or bylaws.
17. Exercise all other powers that may be exercised
in this state by legal entities of the same type as the association.
18. Exercise any other powers necessary and proper
for the governance and operation of the association.
B. Unless limitations in the
condominium documents would result in a lower limit for the assessment or a
higher approval percentage, the association or the board of directors shall not
impose a regular assessment that is more than three
percent greater than the immediately preceding fiscal year's assessment without
the approval of at least sixty-seven percent of the members of the
association.
C. Before APPROVING any increase in
the regular assessment or an increase in a vendor contract, whether for a
specialized or routine project, the BOARD of directors must PROVIDE DETAILED
information and a detailed EXPLANATION TO THE unit owners.� staTEMENTS SUCH AS
"POTENTIAL INCREASE" or "PROJECTS TO BE DETERMINED", OR
SIMILAR STATEMENTS, DO NOT CONSTITUTE SUFFICIENTLY DETAILED INFORMATION OR
EXPLANATION.� tHE BOARD OF DIRECTORS SHALL make available to the unit owners
all of the folloWinG WITH RESPECT TO THE PROPOSED INCREASE:
1. A detailed financial justification
for the increase, to include line-by-line budget detail.
2. a COMPARISON OF EXPENSES, YEAR
OVER YEAR.
3. a DETAILED BREAKDOWN OF COSTS.
B. d. A
unit owner who receives a written notice that the condition of the property
owned by the unit owner is in violation of a requirement of the condominium
documents without regard to whether a monetary penalty is imposed by the notice
may provide the association with a written response by sending the response by
certified mail within twenty-one calendar days after the date of the
notice.� The response shall be sent to the address identified in the notice.
C. e. Within
ten business days after receipt of the certified mail containing the response
from the unit owner, the association shall respond to the unit owner with a
written explanation regarding the notice that shall provide at least the
following information unless previously provided in the notice of violation:
1. The provision of the condominium documents that
has allegedly been violated.
2. The date of the violation or the date the
violation was observed.
3. The first and last name of the person or persons
who observed the violation.
4. The process the unit owner must follow to contest
the notice.
D. f. Unless
the information required in subsection C  E, paragraph 4 of this section is provided in the notice of
violation, the association shall not proceed with any action to enforce the
condominium documents, including the collection of attorney fees, before or
during the time prescribed by subsection C  E of this section regarding the exchange of information
between the association and the unit owner and shall give the unit owner
written notice of the unit owner's option to petition for an administrative
hearing on the matter in the state real estate department pursuant to section�
32-2199.01.� At any time before or after completion of the exchange of
information pursuant to this section, the unit owner may petition for a hearing
pursuant to section 32-2199.01 if the dispute is within the jurisdiction
of the state real estate department as prescribed in section 32-2199.01.END_STATUTE
Sec. 2. Section 33-1803, Arizona Revised
Statutes, is amended to read:
START_STATUTE33-1803. Assessment limitation; proposed increase requirements; penalties;
notice to member of violation; response; hearing
A. Unless limitations in the community documents
would result in a lower limit for the assessment or a higher
approval percentage, the association or the board of
directors shall not impose a regular assessment that is more than twenty three percent greater than the
immediately preceding fiscal year's assessment without the approval of the majority at least sixty-seven percent of
the members of the association.
b. Before APPROVING any increase in
the regular assessment or an increase in a vendor contract, whether for a
specialized or routine project, the BOARD of directors must PROVIDE DETAILED
INFORMATION AND a detailed EXPLANATION TO THE MEMBERS.� sTateMENTS SUCH AS
"POTENTIAL INCREASE" or "PROJECTS TO BE DETERMINED", OR
SIMILAR STATEMENTS, DO NOT CONSTITUTE SUFFICIENTLY DETAILED INFORMATION OR
EXPLANATION.� tHE BOARD OF DIRECTORS SHALL make available to the members all of
the folloWinG WITH RESPECT TO THE PROPOSED INCREASE:
1. A detailed financial justification
for the increase, to include line-by-line budget detail.
2. a COMPARISON OF EXPENSES, YEAR
OVER YEAR.
3. a DETAILED BREAKDOWN OF COSTS.
c. Unless reserved to the
members of the association, the board of directors may impose reasonable
charges for the late payment of assessments.� A payment by a member is deemed
late if it is unpaid fifteen or more days after its due date, unless the
community documents provide for a longer period. Charges for the
late payment of assessments are limited to the greater of fifteen
dollars $15 or ten percent of the amount of the
unpaid assessment and may be imposed only after the association has provided
notice that the assessment is overdue or provided notice that the assessment is
considered overdue after a certain date.� Any monies paid by the member for an
unpaid assessment shall be applied first to the principal amount unpaid and
then to the interest accrued.
B. d. After
notice and an opportunity to be heard, the board of directors may impose
reasonable monetary penalties on members for violations of the declaration,
bylaws and rules of the association. Notwithstanding any provision
in the community documents, the board of directors shall not impose a charge
for a late payment of a penalty that exceeds the greater of fifteen
dollars $15 or ten percent of the amount of the
unpaid penalty. A payment is deemed late if it is unpaid fifteen or
more days after its due date, unless the declaration, bylaws or rules of the
association provide for a longer period.� Any monies paid by a member for an
unpaid penalty shall be applied first to the principal amount unpaid and then
to the interest accrued.� Notice pursuant to this subsection shall include
information pertaining to the manner in which the penalty shall be enforced.
C. e. A
member who receives a written notice that the condition of the property owned
by the member is in violation of the community documents without regard to
whether a monetary penalty is imposed by the notice may provide the association
with a written response by sending the response by certified mail within twenty-one
calendar days after the date of the notice. The response shall be
sent to the address identified in the notice.
D. f. Within
ten business days after receipt of the certified mail containing the response
from the member, the association shall respond to the member with a written
explanation regarding the notice that shall provide at least the following
information unless previously provided in the notice of violation:
1. The provision of the community documents that has
allegedly been violated.
2. The date of the violation or the date the
violation was observed.
3. The first and last name of the person or persons
who observed the violation.
4. The process the member must follow to contest the
notice.
E. g. Unless
the information required in subsection D  f, paragraph 4 of this section is provided in the notice of
violation, the association shall not proceed with any action to enforce the
community documents, including the collection of attorney fees, before or
during the time prescribed by subsection D  F of this section regarding the exchange of information between
the association and the member and shall give the member written notice of the
member's option to petition for an administrative hearing on the matter in the
state real estate department pursuant to section 32-2199.01. At
any time before or after completion of the exchange of information pursuant to
this section, the member may petition for a hearing pursuant to section 32-2199.01
if the dispute is within the jurisdiction of the state real estate department
as prescribed in section 32-2199.01. END_STATUTE