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HB4011 - 572R - H Ver
House Engrossed
HOAs; duties
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 4011
AN
ACT
amending section 33-1242, Arizona Revised
Statutes; amending title 33, chapter 16, article 1, Arizona Revised Statutes,
by adding section 33-1821; relating to property.
(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_STATUTE
33-1242.
Powers of unit owners' association; notice to unit owner of
violation; definition
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. 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. 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. Unless the information required in subsection C,
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 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.
e. THE
ASSOCIATION HAS A DUTY TO ACT REASONABLY IN THE EXERCISE OF ITS DISCRETIONARY
POWERS. foR THE PURPOSES OF THIS SUBSECTION, "DUTY TO ACT
REASONABLY" INCLUDES THE DuTY TO EXERCISE DISCRETIONARY POWERS NEUTRALLY,
FAIRLY, WITHOUT FAVORITISM and in a nonarbitrary fashion.
END_STATUTE
Sec. 2. Title 33, chapter 16, article 1,
Arizona Revised Statutes, is amended by adding section 33-1821, to read:
START_STATUTE
33-1821.
Association's duty to act reasonably; definition
A. THE ASSOCIATION HAS A DUTY TO ACT
REASONABLY IN THE EXERCISE OF ITS DISCRETIONARY POWERS.
B. foR THE PURPOSES OF THIS SECTION,
"DUTY TO ACT REASONABLY" INCLUDES THE DuTY TO EXERCISE DISCRETIONARY
POWERS NEUTRALLY, FAIRLY, WITHOUT FAVORITISM and in a nonarbitrary fashion.
END_STATUTE