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HB2397 - 572R - S Ver
Senate Engrossed
House Bill
homeowners'
associations; property covenants; disclosures
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2397
AN
ACT
amending sections 33-1260 and 33-1806,
Arizona Revised Statutes; relating to real property.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section
1. Section 33-1260, Arizona Revised Statutes, is amended to read:
START_STATUTE
33-1260.
Sale of units; information required; fees; civil penalty;
applicability; definition
A. For condominiums with fewer than fifty units, a
unit owner shall
mail
electronically
transmit
or deliver to a purchaser or a purchaser's
authorized
designated
agent
the
information required by this subsection
within ten days after
receipt of a written notice of a pending sale of the unit, and
acceptance of the purchaser's offer to purchase.
For
condominiums with fifty or more units,
the unit owner shall
provide a written notice to the association of the unit owner's acceptance of
the purchaser's offer to purchase
that contains the name,
email address and mailing address of the purchaser or the PURCHASER'S
designated agent.
�
The association shall
mail
electronically transmit
or deliver to
a
the
purchaser
or
a
the
purchaser's
authorized
designated
agent within ten days
after receipt of
a
the
written
notice of
a pending sale that contains the name and address
of the purchaser
a pending purchase offer
all of
the following in either paper or electronic format:
1. A copy of the
current
bylaws
and the
current
rules of the association.
2. A copy of the
current recorded
declaration
and
final plat
or an
ELECTRONIC copy of the final plat, if available
.
3. A copy of the board of directors-approved
minutes from the previous three open meetings of the board of directors.
3.
4.
A
dated statement containing:
(a) The telephone number and address of a principal
contact for the association, which may be an association manager, an
association management company, an officer of the association or any other
person designated by the board of directors.
(b) The amount of
and payment
schedule for
the
annual
common expense assessment
for the unit and
the
remaining installments
and payment schedules on any approved
and assessed special
assessment, if any.
(
c
) the amount
and purpose of any
special assessment approved
by the board of directors but not yet assessed or any special
assessment
submitted by the board of directors for unit
owner approval within the
previous four months, if any.
(
d
) any known
material deficiency or condition of the limited common elements associated with
the unit or common elements
known by the association for
which the purchaser will be liable for the directly assessed repair costs
within six months of the purchase, if any.
(
e
) the current
amount of
any unpaid common expense assessment
, special
assessment or other assessment, fee or charge currently due and payable from
the selling unit owner. If the request is made by a lienholder,
escrow agent, unit owner or person designated by a unit owner pursuant to
section 33-1256, failure to provide the information pursuant to this
subdivision within the time provided for in this subsection shall extinguish
any lien for any unpaid assessment then due against that unit
lien or judgment lien on the unit due to the association pursuant to
section 33-1256 and any lis pendens recorded by the association against
the unit
.
(c) A statement as to whether a
portion of the unit is covered by insurance maintained by the association.
(d) The total amount of money held by
the association as reserves.
(e) If the statement is being
furnished by the association, a statement as to whether the records of the
association reflect any alterations or improvements to the unit that violate
the declaration. The association is not obligated to provide information
regarding alterations or improvements that occurred more than six years before
the proposed sale. Nothing in this subdivision relieves the seller of a unit
from the obligation to disclose alterations or improvements to the unit that
violate the declaration, nor precludes the association from taking action
against the purchaser of a unit for violations that are apparent at the time of
purchase and that are not reflected in the association's records.
(f) If the statement is being
furnished by the unit owner, a statement as to whether the unit owner has any
knowledge of any alterations or improvements to the unit that violate the
declaration.
(g) A statement of case names and case
numbers for pending litigation with respect to the unit filed by the
association against the unit owner or filed by the unit owner against the
association. The unit owner or the association shall not be required to
disclose information concerning the pending litigation that would violate any
applicable rule of attorney-client privilege under Arizona law.
(h) A statement that provides "I
hereby acknowledge that the declaration, bylaws and rules of the association
constitute a contract between the association and me (the
purchaser). By signing this statement, I acknowledge that I have
read and understand the association's contract with me (the purchaser). I also
understand that as a matter of Arizona law, if I fail to pay my association
assessments, the association may foreclose on my property." The
statement shall also include a signature line for the purchaser and shall be
returned to the association within fourteen calendar days.
(
f
) the amount
and purpose of any title transfer fee or other similar fee, however
denominated, that is authorized in the declaration.
(
g
) A copy of
the association's most recent income and expenses financial statement for all
operating and reserve accounts, as applicable.
(
h
) ANY
OUTSTANDING AND UNRESOLVED VIOLATION OF THE ASSOCIATION'S CONDOMINIUM DOCUMENTS
that was CITED AGAINST THE UNIT, IF ANY.
4.
5.
A
copy of the current operating budget of the association.
5.
6.
A
copy of the most recent annual
financial
audit,
review or compilation
report of the association
prescribed
by section 33-1243, subsection J
. If the report is more than
ten pages, the association may provide a summary of the report in lieu of the
entire report.
6.
7.
A
copy of the most recent reserve study of the association, if any.
If the report is more than ten pages, the association may provide a
summary of the report in lieu of the entire report.
7.
8.
A
statement summarizing any pending lawsuits, except those relating to the
collection of assessments owed by unit owners other than the selling unit
owner, in which the association is a named party, including the amount of any
money claimed.
9. A statement as to whether a
portion of the unit is covered by insurance maintained by the association and a
copy of all insurance certificates identifying the coverage limits and
deductibles maintained by the association pursuant to section 33-1253.
10. A statement as to whether the
condominium is under declarant control and the
approximate
percentage of units identified on the recorded plat that are currently owned by
the declarant.
11. A statement identifying whether
any
corporation or limited liability company owns
and leases thirty-five percent or more of the units.
12. a
statement that, For any report provided in summary format pursuant to this
subsection, the purchaser may request to view the entire report from the
association directly, and the association shall provide access to that report
within
ten days after a written request.
13. A statement to be signed by the
purchaser at the close of escrow that provides "I hereby acknowledge that
with the purchase of this home or property, I will be contractually bound to
the valid covenants, conditions and restrictions of the recorded declaration,
and will be
contractually bound to pay all common expense
assessments applied to my home or property as authorized in the declaration and
title 33, chapter 9 or 16, Arizona Revised Statutes, as
applicable. If I fail to pay common expense assessments, I may be
subject to collection activity by the association up to and including
foreclosure action, without the equity protection of the homestead act pursuant
to title 33, chapter 8, Arizona Revised Statutes."
14. If the unit is governed by
multiple associations, a statement identifying that the unit is subject to each
association's DISCLOSURE report and corresponding resale disclosure fee
authorized under subsection D of this section.
B. All INFORMATION that is provided
under subsection A of this section shall be based on the good faith reliance on
association records or information, without the need for INDEPENDENT
investigation or validation.
B.
c.
A purchaser or seller who is damaged by
the failure of
the unit owner or the association
knowingly or recklessly failing
to disclose the information
required by subsection A of this section
or
knowingly or recklessly providing materially false or misleading
STATEMENTS in the DISCLOSURE
may pursue all remedies at law or in equity
against the unit owner or the association, whichever failed to comply with
subsection A of this section, including the recovery of reasonable attorney
fees
as awarded by the court
.
C.
d.
The
association may charge the unit owner a fee of not more than an aggregate of
four hundred dollars
$400
to compensate
the association for the costs incurred in the preparation and delivery of a
statement
report
or other documents
furnished by the association pursuant to this section for purposes of resale
disclosure, lien estoppel and any other services related to the transfer or use
of the property. In addition, the association may charge a rush fee
of not more than
one hundred dollars
$100
if
the rush services are required to be performed within seventy-two hours after
the request for rush services
.
, and
The unit owner
may
REQUEST the ASSOCIATION
to update the report if thirty days or more have passed since the date of the
original disclosure report. The association may
charge a
statement or other documents
document
update
fee of not more than
fifty dollars if thirty days or more have
passed since the date of the original disclosure statement or the date the
documents were delivered
$50
. The
association shall make available to any interested party the amount of any fee
established from time to time by the association.
If the
aggregate fee for purposes of resale disclosure, lien estoppel and any other
services related to the transfer or use of a property is less than four hundred
dollars on January 1, 2010, the fee may increase at a rate of not more than
twenty percent per year based on the immediately preceding fiscal year's amount
not to exceed the four hundred dollar aggregate fee.
The association
may charge the same fee without regard to whether the association is furnishing
the statement or other documents in paper or electronic format.
D.
e.
The
fees prescribed by this section shall be collected
no
not
earlier than at the close of escrow
and
may only be charged once to a unit owner for that transaction between the
parties
specified in the notice required pursuant to subsection A
of this section
. An association shall not charge or collect a
fee relating to services for resale disclosure, lien estoppel and any other
services related to the transfer or use of a property except as specifically
authorized in this section.� An association that charges or collects a fee in
violation of this section is subject to a civil penalty of not more than
one thousand two hundred dollars
$1,200
.
E.
f.
This
section applies to a managing agent for an association that is acting on behalf
of the association.
F.
g.
The
following are exempt from this section:
1. A sale in which a public report is issued
pursuant to section 32-2183 or 32-2197.02.
2. A sale pursuant to section 32-2181.02.
3. A conveyance by recorded deed that bears an
exemption listed in section 11-1134, subsection B, paragraph 3 or 7. On
recordation of the deed
and for no additional charge
, the
unit owner
purchaser
shall provide the
association with the changes in ownership
,
including the
unit owner's name, billing address and phone number. Failure to provide the
information shall not prevent the unit owner from qualifying for the exemption
pursuant to this section.
G.
h.
This
section does not apply to timeshare plans or associations that are subject to
chapter 20 of this title.
H.
i.
For
the purposes of this section, unless the context otherwise requires, "unit
owner"
:
1.
Means the seller of the
condominium unit title
.
and excludes
2. does not include:
(
a
)
Any
real estate salesperson or real estate broker who is licensed under title 32,
chapter 20 and who is acting as a salesperson or broker
.
,
(
b
)
Any
escrow agent who is licensed under title 6, chapter 7 and who is acting as an
escrow agent
.
and also excludes
(
c
)
A
trustee of a deed of trust who is selling the property in a trustee's sale
pursuant to chapter 6.1 of this title.
END_STATUTE
Sec. 2. Section 33-1806, Arizona Revised
Statutes, is amended to read:
START_STATUTE
33-1806.
Sale of properties; information required; fees; civil penalty;
definition
A. For planned communities with fewer than fifty
units
properties
, a member shall
mail
electronically transmit
or deliver to
a purchaser or a purchaser's
authorized
designated
agent
the information required by this subsection
within
ten days after
receipt of a written notice of a pending sale of
the unit, and
acceptance of the purchaser's offer to
purchase.�
For planned communities with fifty or more
units
properties
,
the member shall provide a written
notice to the association of the member's acceptance of the PURCHASEr's offer
to purchase
that contains the name, email address and
mailing address of the purchaser or the purchaser's designated agent.
The association shall
mail
electronically transmit
or deliver to
a
the
purchaser or
a
the
purchaser's
authorized
designated
agent within ten days after receipt of
a
the
written notice of
a pending sale that
contains the name and address of the purchaser
a pending
purchase offer
all of the following in either paper or electronic
format:
1. A copy of the
current
bylaws
and the
current
rules of the association.
2. A copy of the
current
declaration
and
final plat
or an
electronic copy of the final plat, if available
.
3. A copy of the board-approved
minutes for the previous three open meetings of the board of directors.
3.
4.
A
dated statement containing:
(a) The telephone number and address of a principal
contact for the association, which may be an association manager, an
association management company, an officer of the association or any other
person designated by the board of directors.
(b) The amount of
and payment
schedule for
the
annual
common regular assessment
and the
remaining installments and payment
schedules on any approved
and assessed special
assessment, if any.
(
c
) the amount
and purpose of any
special assessment approved
by the board of directors but not yet assessed or any special
assessment
submitted by the board for member approval within
the
previous four months, if any.
(
d
) the current
amount of any
unpaid common regular assessment
, special
assessment or other assessment, fee or charge currently due and payable from
the selling member. If the request is made by a lienholder, escrow agent,
member or person designated by a member pursuant to section 33-1807,
failure to provide the information pursuant to this subdivision within the time
provided for in this subsection shall extinguish any lien for any unpaid
assessment then due against that property
lien or
judgment lien on the property due to the association pursuant to section 33-1807
and any lis pendens recorded by the association against the property
.
(c) A statement as to whether a
portion of the unit is covered by insurance maintained by the association.
(d) The total amount of money held by
the association as reserves.
(e) If the statement is being
furnished by the association, a statement as to whether the records of the
association reflect any alterations or improvements to the unit that violate
the declaration. The association is not obligated to provide
information regarding alterations or improvements that occurred more than six
years before the proposed sale. Nothing in this subdivision relieves the seller
of a unit from the obligation to disclose alterations or improvements to the
unit that violate the declaration, nor precludes the association from taking
action against the purchaser of a unit for violations that are apparent at the
time of purchase and that are not reflected in the association's records.
(f) If the statement is being
furnished by the member, a statement as to whether the member has any knowledge
of any alterations or improvements to the unit that violate the declaration.
(g) A statement of case names and case
numbers for pending litigation with respect to the unit filed by the
association against the member or filed by the member against the
association. The member shall not be required to disclose information
concerning such pending litigation that would violate any applicable rule of
attorney-client privilege under Arizona law.
(h) A statement that provides "I
hereby acknowledge that the declaration, bylaws and rules of the association
constitute a contract between the association and me (the
purchaser). By signing this statement, I acknowledge that I have
read and understand the association's contract with me (the purchaser). I also
understand that as a matter of Arizona law, if I fail to pay my association
assessments, the association may foreclose on my property." The
statement shall also include a signature line for the purchaser and shall be
returned to the association within fourteen calendar days.
(
e
) the amount
and purpose of any title transfer fee or other similar fee, however
denominated, that is authorized in the declaration.
(
f
) A copy of
the association's most recent income and expenses financial statement for all
operating and reserve accounts, as applicable.
(
g
) ANY
OUTSTANDING AND UNRESOLVED VIOLATION OF THE ASSOCIATION'S COmmunity DOCUMENTS
that was CITED AGAINST THE property, IF ANY.
4.
5.
A
copy of the current operating budget of the association.
5.
6.
A
copy of the most recent annual
financial
audit,
review or
compilation
report of the association
pursuant to section 33-1810
. If the report is more than ten
pages,
the association may provide
a summary of the report
in lieu
may be provided in place
of
the entire report.
6.
7.
A
copy of the most recent reserve study of the association, if any.
If the report is more than ten pages, the association may provide a
summary of the report in place of the entire report.
7.
8.
A
statement summarizing any pending lawsuits, except those relating to the
collection of assessments owed by members other than the selling member, in
which the association is a named party, including the amount of any money
claimed.
9. A statement as to whether the
planned community is under declarant control and the
approximate
percentage of lots identified on the recorded plat that are currently owned by
the declarant.
10. a statement that, For any report
provided in summary format pursuant to this subsection, the purchaser may
request to view the entire report from the association directly, and the
association shall provide access to that report within
ten
days after a written request.
11. A statement to be signed by the
purchaser at the close of escrow that provides "I hereby acknowledge that
with the purchase of this home or property, I will be contractually bound to
the valid covenants, conditions and restrictions of the recorded declaration,
and will be
contractually bound to pay all common expense
assessments applied to my home or property as authorized in the declaration and
title 33, chapter 9 or 16, Arizona Revised Statutes, as
applicable. If I fail to pay common expense assessments, I may be
subject to collection activity by the association up to and including
foreclosure action, without the equity protection of the homestead act pursuant
to title 33, chapter 8, Arizona Revised Statutes."
12. If the property is governed by
multiple associations, a statement identifying that the property is subject to
each association's DISCLOSURE report and corresponding resale disclosure fee
authorized under subsection D of this section.
B.
All
INFORMATION that is provided under subsection A of this section shall be based
on the good faith reliance on association records or information, without the
need for INDEPENDENT investigation or validation.
B.
c.
A
purchaser or seller who is damaged by
the failure of
the
member or the association
knowingly or
recklessly failing
to disclose the information required by subsection A
of this section
or
knowingly or recklessly
providing materially false or misleading STATEMENTS in the DISCLOSURE
may pursue all remedies at law or in equity against the member or the
association, whichever failed to comply with subsection A of this section,
including the recovery of reasonable attorney fees
as awarded by
the court
.
C.
d.
The
association may charge the member a fee of not more than an aggregate of
four hundred dollars
$400
to compensate
the association for the costs incurred in the preparation and delivery of a
statement
report
or other documents
furnished by the association pursuant to this section for purposes of resale
disclosure, lien estoppel and any other services related to the transfer or use
of the property. In addition, the association may charge a rush fee
of not more than
one hundred dollars
$100
if
the rush services are required to be performed within seventy-two hours after
the request for rush services
.
, and
The member
may
REQUEST the ASSOCIATION to
update the report if thirty days or more have passed since the date of the
original disclosure report. The association may
charge a
statement
or other documents
document
update fee of not more
than
fifty dollars if thirty days or more have passed since the
date of the original disclosure statement or the date the documents were
delivered
$50
.� The association shall make
available to any interested party the amount of any fee established from time
to time by the association.
If the aggregate fee for purposes of
resale disclosure, lien estoppel and any other services related to the transfer
or use of a property is less than four hundred dollars on January 1, 2010, the
fee may increase at a rate of not more than twenty percent per year based on
the immediately preceding fiscal year's amount not to exceed the four hundred
dollar aggregate fee.
The association may charge the same fee without
regard to whether the association is furnishing the statement or other
documents in paper or electronic format.
D.
E.
The
fees prescribed by this section shall be collected
no
not
earlier than at the close of escrow and may only be
charged once to a member for that transaction
between the parties
specified in the notice required pursuant to subsection A of this
section
.
An association shall not
charge or collect a fee relating to services for resale disclosure, lien
estoppel and any other services related to the transfer or use of a property
except as specifically authorized in this section. An association that
charges or collects a fee in violation of this section is subject to a civil
penalty of not more than
one thousand two hundred dollars
$1,200
.
E.
F.
This
section applies to a managing agent for an association that is acting on behalf
of the association.
F.
G.
The
following are exempt from this section:
1. A sale in which a public report is issued
pursuant to section 32-2183 or 32-2197.02.
2. A sale pursuant to section 32-2181.02.
3. A conveyance by recorded deed that bears an
exemption listed in section 11-1134, subsection B, paragraph 3 or 7. On
recordation of the deed
and for no additional charge
, the
member
purchaser
shall provide the
association with the changes in ownership
,
including the
member's name, billing address and phone number. Failure to provide
the information shall not prevent the member from qualifying for the exemption
pursuant to this section.
G.
H.
For
the purposes of this section, unless the context otherwise requires, "member"
:
1.
Means the seller of the
unit
property
title
.
and excludes
2. does not include:
(
a
)
Any
real estate salesperson or real estate broker who is licensed under title 32,
chapter 20 and who is acting as a salesperson or broker
.
,
(
b
)
Any
escrow agent who is licensed under title 6, chapter 7 and who is acting as an
escrow agent
.
and also excludes
(
c
)
A
trustee of a deed of trust who is selling the property in a trustee's sale
pursuant to chapter 6.1 of this title.
END_STATUTE