homeowners' associations; open meetings

SB1151 - 572R - I Ver

REFERENCE TITLE:
homeowners' associations; open meetings

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1151

Introduced by

Senators
Rogers: Finchem

AN
ACT

amending sections 33-1202, 33-1243,
33-1248, 33-1249, 33-1802 and 33-1804, Arizona Revised
Statutes; amending title 33, chapter 16, article 1, Arizona Revised Statutes,
by adding section 33-1804.01; amending section 33-1813, 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 33-1202, Arizona Revised
Statutes, is amended to read:

START_STATUTE
33-1202.

Definitions

In the condominium documents, unless specifically provided
otherwise or the context otherwise requires, and in this chapter:

1. "Affiliate of a declarant" means any
person who controls, is controlled by or is under common control with a
declarant.

2. "Allocated interests" means the
undivided interests in the common elements, the common expense liability and
votes in the association allocated to each unit.

3. "Articles of incorporation" means the
instrument by which an incorporated association or unit owners' association is
formed and organized under this state's corporate statutes.

4. "Assessment" means the share of monies
that is required for the payment of common expenses and that the association
assesses periodically against each unit.

5. "Association" or "unit owners'
association" means the unit owners' association organized under section 33-1241.

6. "Board of directors" means the body,
regardless of its name, designated in the declaration and given general
management powers to act on behalf of the association.

7. "Bylaws" means the bylaws required by
section 33-1246.

8. "Common elements" means all portions of
a condominium other than the units.

9. "Common expense liability" means the
liability for common expenses allocated to each unit pursuant to section 33-1217
or 33-1255.

10. "Common expense lien" means the lien
for assessments, charges for late payment of assessments if authorized in the
declaration, reasonable collection fees and costs incurred or applied by the
association and reasonable attorney fees and costs that are incurred with
respect to those assessments, if the attorney fees and costs are awarded by a
court.

11. "Common expenses" means expenditures
made by or financial liabilities of the association, together with any
allocations to reserves.

12. "Condominium" means real estate,
portions of which are designated for separate ownership and the remainder of
which is designated for common ownership solely by the owners of the separate
portions. Real estate is not a condominium unless the undivided
interests in the common elements are vested in the unit owners.

13. "Condominium documents" means the
declaration, bylaws, articles of incorporation, if any, and rules, if any.

14. "Declarant"
means any person or group of persons who reserves, is granted or succeeds to
any special declarant right.

15. "Declaration"
means any instruments, however denominated, that create a condominium and any
amendments to those instruments.

16. "Development rights" means any right
or combination of rights reserved by or granted to a declarant in the
declaration to do any of the following:

(a) Add real estate to a condominium.

(b) Create easements, units, common elements or
limited common elements within a condominium.

(c) Subdivide units, convert units into common
elements or convert common elements into units.

(d) Withdraw real estate from a condominium.

(e) Make the condominium part of a larger
condominium or planned community.

(f) Amend the declaration during any period of
declarant control, pursuant to section 33-1243, subsection E, to comply
with applicable law or to correct any error or inconsistency in the
declaration, if the amendment does not adversely affect the rights of any unit
owner.

(g) Amend the declaration during any period of
declarant control, pursuant to section 33-1243, subsection E, to comply
with the rules or guidelines, in effect from time to time, of any governmental
or quasi-governmental entity or federal corporation guaranteeing or
insuring mortgage loans or governing transactions involving mortgage
instruments.

17. "Identifying number" means a symbol or
address that identifies one unit in a condominium.

18. "Leasehold condominium" means a
condominium in which all or a portion of the real estate is subject to a lease
the expiration or termination of which will terminate the condominium or reduce
its size.

19. "Limited common element" means a
portion of the common elements specifically designated as a limited common
element in the declaration and allocated by the declaration or by operation of
section 33-1212, paragraph 2 or 4 for the exclusive use of one or more
but fewer than all of the units.

20. "Meeting" means any
gathering or interaction, in person or through technological means, of a quorum
of the board of directors, a designated committee or the unit owners at which
they propose, discuss, deliberate or take legal action on association business.

20.

21.
"Person"
means:

(a) A natural person, corporation, business trust,
estate, trust, partnership, association, joint venture, government,
governmental subdivision or agency, or other legal or commercial
entity.

(b) In the case of a subdivision trust, as defined
in section 6-801, the beneficiary of the trust who holds the right to
subdivide, develop or sell the real estate rather than the trust or trustee.

21.

22.
"Real
estate":

(a) Means any legal, equitable, leasehold or other
estate or interest in, over or under land, including structures, fixtures and
other improvements and interests which by custom, usage or law pass with a
conveyance of land though not described in the contract of sale or instrument
of conveyance.

(b) Includes parcels with or without upper or lower
boundaries and spaces that may be filled with air or water.

22.

23.
"Rules"
means the provisions, if any, adopted pursuant to the declaration or bylaws
governing maintenance and use of the units and common elements.

23.

24.
"Special
declarant rights" means any right or combination of rights reserved by or
granted to a declarant in the declaration to do any of the following:

(a) Construct improvements provided for in the
declaration.

(b) Exercise any development right.

(c) Maintain sales offices, management offices,
signs advertising the condominium, and models.

(d) Use easements through the common elements for
the purpose of making improvements within the condominium or within real estate
that may be added to the condominium.

(e) Appoint or remove any officer of the association
or any board member during any period of declarant control.

24.

25.
"Unit"
means a portion of the condominium designated for separate ownership or
occupancy.

25.

26.
"Unit
owner" means:

(a) A declarant or other person who owns a unit or,
unless otherwise provided in the lease, a lessee of a unit in a leasehold
condominium whose lease expires simultaneously with any lease the expiration or
termination of which will remove the unit from the condominium but does not
include a person having an interest in a unit solely as security for an
obligation.

(b) In the case of a contract for conveyance, as
defined in section 33-741, of real property, the purchaser of the unit.

26.

27.
"Unit
owner expenses":

(a) Means fees, charges, late charges and monetary
penalties or interest that is imposed pursuant to section 33-1242,
subsection A, paragraphs 10, 11 and 12.

(b) Does not include any amount that is included in
a common expense lien.
END_STATUTE

Sec. 2. Section 33-1243, Arizona Revised Statutes, is amended to read:

START_STATUTE
33-1243.

Board of directors and officers; conflict; powers; limitations;
removal; annual audit; applicability

A. Except as provided
in the declaration, the bylaws, subsection B of this section or other
provisions of this chapter, the board of directors may act in all instances on
behalf of the association.

B. The board of directors shall not act on behalf of
the association to amend the declaration, terminate the condominium, elect
members of the board of directors or determine the qualifications, powers and
duties or terms of office of board of directors members.� Except as provided in
subsection H of this section, the board of directors may fill vacancies in its
membership for the unexpired portion of any term.

C. If any contract, decision or other action for
compensation taken by or on behalf of the board of directors would benefit any
member of the board of directors or any person who is a parent, grandparent,
spouse, child or sibling of a member of the board of directors or a parent or
spouse of any of those persons, that member of the board of directors shall
declare a conflict of interest for that issue.� The member shall declare the
conflict in an open meeting of the board
of directors

before the board
of directors
discusses or takes action
on that issue and that member may then vote on that issue.� Any contract
entered into in violation of this subsection is void and unenforceable.

D. Except as provided in the declaration, within
thirty days after adoption of any proposed budget for the condominium, the
board of directors shall provide a summary of the budget to all the unit
owners.� Unless the board of directors is expressly authorized in the
declaration to adopt and amend budgets from time to time, any budget or
amendment shall be ratified by the unit owners in accordance with the
procedures set forth in this subsection. If ratification is
required, the board of directors shall set a date for a meeting of the unit
owners to consider ratification of the budget not fewer than fourteen or more
than thirty days after mailing of the summary.� Unless at that meeting a
majority of all the unit owners or any larger vote specified in the declaration
rejects the budget, the budget is ratified, whether or not a quorum is
present.� If the proposed budget is rejected, the periodic budget last ratified
by the unit owners shall be continued until such time as the unit owners ratify
a subsequent budget proposed by the board of directors.

E. The declaration may provide for a period of
declarant control of the association, during which period a declarant or
persons designated by the declarant may appoint and remove the officers and
members of the board of directors. Regardless of the period provided
in the declaration, a period of declarant control terminates not later than the
earlier of:

1. Ninety days after conveyance of seventy-five
percent of the units that may be created to unit owners other than a declarant.

2. Four years after all declarants have ceased to
offer units for sale in the ordinary course of business.

F. A declarant may voluntarily surrender the right
to appoint and remove officers and members of the board of directors before
termination of the period prescribed in subsection E of this section, but in
that event the declarant may require, for the duration of the period of
declarant control, that specified actions of the association or board of
directors, as described in a recorded instrument executed by the declarant, be
approved by the declarant before they become effective.

G. Not later than the termination of any period of
declarant control the unit owners shall elect a board of directors of at least
three members, at least a majority of whom must be unit owners.� The board of
directors shall elect the officers.� The board
of directors

members and officers shall take office on election.

H. Notwithstanding any provision of the declaration
or bylaws to the contrary, all of the following apply to a meeting at which a
member of the board of directors, other than a member appointed by the
declarant, is proposed to be removed from the board of directors:

1. The unit owners who are eligible to vote at the
time of the meeting may remove any member of the board of directors, other than
a member appointed by the declarant, by a majority vote of those voting on the
matter at a meeting of the unit owners.

2. The meeting of the unit owners shall be called
pursuant to this section and action may be taken only if a quorum is present.

3. The unit owners may remove any member of the
board of directors with or without cause, other than a member appointed by the
declarant.�

4. For purposes of calling for removal of a member
of the board of directors, other than a member appointed by the declarant, the
following apply:

(a) In an association with one thousand or fewer
members
unit owners
, on receipt of a
petition that calls for removal of a member of the board of directors and that
is signed by the number of persons who are eligible to vote in the association
at the time the person signs the petition equal to at least twenty-five percent
of the votes in the association or by the number of persons who are eligible to
vote in the association at the time the person signs the petition equal to at
least one hundred votes in the association, whichever is less, the board
of directors
shall call and provide written notice of a special
meeting of the association as prescribed by section 33-1248, subsection
B
C
.

(b) Notwithstanding section 33-1248,
subsection
B
C
, in an
association with more than one thousand
members
unit OWNERS
, on receipt of a petition that calls for removal
of a member of the board of directors and that is signed by the number of
persons who are eligible to vote in the association at the time the person
signs the petition equal to at least ten percent of the votes in the
association or by the number of persons who are eligible to vote in the
association at the time the person signs the petition equal to at least one
thousand votes in the association, whichever is less, the board
of
directors
shall call and provide written notice of a special meeting of
the association. The board
of directors
shall
provide written notice of a special meeting as prescribed by section 33-1248,
subsection
B
C
.

(c) The special meeting shall be called, noticed and
held within thirty days after receipt of the petition.

(d) If all of the requirements of this subsection
for calling a special meeting are met and the board of directors fails to call,
notice and hold a special meeting within thirty days after receipt of the
petition, the members of the board of directors are deemed removed from office
effective at midnight of the thirty-first day.

(e) For purposes of a special meeting
called pursuant to this subsection, a quorum is present if the number of owners
who are eligible to vote in the association at the time the person attends the
meeting equal to at least twenty percent of the votes of the association or the
number of persons who are eligible to vote in the association at the time the
person attends the meeting equal to at least one thousand votes, whichever is
less, is present at the meeting in person or as otherwise allowed by law.

(f)

(
e
)
If a civil action is filed regarding the removal
of a board
of directors
member, the prevailing party in
the civil action shall be awarded its reasonable attorney fees and costs.

(g)

(
f
)
The board of directors shall retain all documents
and other records relating to the proposed removal of the member of the board
of directors and any election or other action taken for that director's
replacement for at least one year after the date of the special meeting and
shall allow members to inspect those documents and records pursuant to section
33-1258.

(h)

(
g
)
A
petition that calls for the
removal of the same
member of the board of directors shall not be
submitted

subject to a recall vote
more
than once during each term of office for that member.

5. On removal of at least one but fewer than a
majority of the members of the board of directors at a special meeting of the
membership called pursuant to this subsection, the vacancies shall be filled as
provided in the condominium documents
for the remainder of the
original terms
.

6. On removal of a majority of the members of the
board of directors at a special meeting of the membership called pursuant to
this subsection, or if the condominium documents do not provide a method for
filling board
of directors
vacancies, the association
shall hold an election for the replacement of the removed directors
for the remainder of the directors' original terms
at a
separate meeting of the members of the association that is held not later than
thirty days after the meeting at which the members of the board of directors
were removed.

7. A member of the board of directors who is removed
pursuant to this subsection is not eligible to serve on the board of directors
again until after the expiration of the removed board
of
directors
member's term of office, unless the condominium documents
specifically provide for a longer period of ineligibility.

I. For an association in which board
of
directors
members are elected from separately designated voting
districts, a member of the board of directors, other than a member appointed by
the declarant, may be removed only by a vote of the members from that voting
district, and only the members from that voting district are eligible to vote
on the matter or be counted for purposes of determining a quorum.

J. Unless any provision in the condominium documents
requires an annual audit by a certified public accountant, the board of
directors shall provide for an annual financial audit, review or compilation of
the association.� The audit, review or compilation shall be completed
no

not
later than one hundred eighty days
after the end of the association's fiscal year and shall be made available on
request to the unit owners within thirty days after its completion.

K. This section does not apply to timeshare plans or
associations, or the period of declarant control under timeshare instruments,
that are subject to chapter 20 of this title.
END_STATUTE

Sec. 3. Section 33-1248, Arizona Revised
Statutes, is amended to read:

START_STATUTE
33-1248.

Open meetings; exceptions; notice; agenda; policy statement

A.
After the period of declarant
control and
notwithstanding any provision in
title 10 or
the

declaration, bylaws or other

condominium
documents
to the contrary, all meetings of the unit owners' association and the board of
directors, and any
regularly scheduled

common
element management or financial advisory
committee meetings,
however denominated,
are open to all
members

unit owners
of the association or any person designated
by a
member

unit owner
in writing as
the
member's

unit owner's
representative
.
and
All
members

unit owners
or designated representatives so desiring shall be
allowed to attend and speak at an appropriate time during the deliberations and
proceedings. The board
of directors, committee or
unit owners
may place reasonable time restrictions on those persons
speaking during the meeting but shall allow a
member

unit owner
or a
member's

unit
owner's
designated representative to speak once after the
board

body
has discussed a specific agenda item but before the
board

body
takes formal action on that
item in addition to any other opportunities to speak. The
board

body
shall provide for a reasonable
number of persons to speak on each side of an issue.
The
following apply to meetings of the board of directors, committee or unit
owners:

1.
Persons attending may
audiotape or videotape

record
those
portions of the meetings of the board of directors
, DESIGNATED
committees
and
meetings of the members

unit owners
that are open.� The board of directors of the
association shall not require advance notice of the
audiotaping
or videotaping

recording
and may adopt reasonable
rules governing the
audiotaping or videotaping

recording
of open portions of the meetings
of the
board and the membership
, but such rules shall not preclude such
audiotaping or videotaping

recording
by
those attending
, unless the board audiotapes or videotapes
the meeting and makes the unedited audiotapes or videotapes available to
members on request without restrictions on their use as evidence in any dispute
resolution process. If a board records a meeting
that is open to the members, the board shall keep a copy of the
recording for at least six months and make the unedited recording available to
any member on request in compliance with section 33-1258, subsection A
.

2. The ASSOCIATION may ESTABLISH
rules that prevent distributing any RECORDING of an association meeting to
anyone who is not a resident or unit owner of the CONDOMINIUM, except for the
use of those recordings as evidence in any DISPUTE RESOLUTION process.

3. Any recording made by the BOARD of
DIRECTORS, a committee appointed by the board of directors or any agents of the
board of directors or such committee is not a record of the association and is
not subject to a records REQUEST pursuant to section 33-1258.

B.
Any portion of a
board of directors or committee
meeting may be closed only if
that portion of the meeting is limited to consideration
without
action
of one or more of the following:

1. Legal advice from an attorney for the board
or the association
of directors or the committee
.

On final resolution of any matter for which the board received
legal advice or that concerned pending or contemplated litigation, the board
may disclose information about that matter in an open meeting except for
matters that are required to remain confidential by the terms of a settlement
agreement or judgment.

2. Pending or contemplated litigation.

3. Personal, health or financial information about
an individual
member of the association

unit owner
, an individual employee of the association or an individual
employee of a contractor for the association, including
the
review of any
records of the association directly related to
the personal, health or financial information about an individual
member of the association, an individual employee of the association or an
individual employee of a contractor for the association

or containing that information
.
CITED OR
CONTEMPLATED citations for VIOLATIONS OF CONDOMINIUM DOCUMENTS, ALONG WITH ANY
SUBSEQUENT FINE OR PENALTY IMPOSED BY THE ASSOCIATION, ARE Not PERSONAL or
FINANCIAL INFORMATION prescribed by this paragraph.

4. Matters relating to the job performance of,
compensation of, health records of or specific complaints against an individual
employee of the association or an individual employee of a contractor of the
association who works under the direction of the association.

5.
On the specific REQUEST of the
unit owner,
discussion
and DIRECT DISPOSITION
of a
unit owner's appeal of any violation cited or penalty imposed by the
association
except on request of the affected unit owner that the
meeting be held in an open session
with the unit owner
present
.

6. THE REVIEW, NEGOTIATION AND
CONSIDERATION OF PROPRIETARY BID PROPOSALS FROM POTENTIAL CONTRACTORS OR
FINANCING OPTIONS FROM ANY FINANCIAL INSTITUTION BEFORE AWARDING A CONTRACT FOR
THE DESIRED GOODS OR SERVICES.� Any fINAL CONTRACT SHALL BE APPROVED IN OPEN
SESSION.

B.

C.
Notwithstanding
any provision in the condominium documents, all meetings of the unit owners'
association and the board
of directors
shall be held in
this state.� A
formal
meeting of the unit owners'
association shall be held at least once each year
to elect board
of directors members to fill expired terms or newly created POSITIONS and to
CONDUCT any other business of the association
. Special
meetings of the unit owners' association may be called by the president, by a
majority of the board of directors or by unit owners having at least twenty-five
percent, or any lower percentage specified in the bylaws, of the votes in the
association.� Not fewer than ten or more than fifty days in advance of any
meeting of the unit owners, the
secretary

association

shall cause
written
notice to be hand delivered or
sent
prepaid
by United States mail to the mailing address
of record
of each unit or
to any other mailing

to be sent to an email
address
if
authorized and
designated in writing by the unit owner. The
notice of any meeting of the unit owners shall state the date, time
, method
and place of the meeting. The notice of any
annual
, regular
or special meeting of the unit owners
shall also state the purpose for which the meeting is called, including the
general nature of any proposed amendment to the declaration or bylaws, any
changes in assessments that require approval of the unit owners and any
proposal to remove a director or officer. The
secretary

ASSOCIATION
shall also provide an agenda for any meeting
of the unit owners' association by hand delivery, mail, website posting, email
or other electronic means or posting at a community center or other similar
location. The failure of any unit owner to receive actual notice of
a meeting of the unit owners or the meeting agenda does not affect the validity
of any action taken at that meeting.
� wITH RESPECT TO ANY ANNUAL
OR SPECIAL MEETING OF THE association, THE FOLLOWING APPLY:

1. the unit owners of the association
present or participating at the meeting shall control and conduct the annual or
special meeting of the association.� The board of directors shall facilitate
the meeting and provide for minutes to be taken.

2. the quorum for any annual or
special meeting of the association shall be determined pursuant to section 33-1249.

3. if any annual or special meeting
of the association is called to elect board of directors members and the
meeting fails to satisfy the required quorum, the association shall reconvene
that meeting within fourteen days until a quorum is satisfied and the meeting
and election are held.

4. All decisions REGARDING THE
conduct of the meeting SHALL be made by unit owner motionS and decided by voice
vote or show of hands by those unit owners present at the meeting.

5. All ballot actions at the meeting
SHALL be conducted pursuant to section 33-1250. aLL Unit
owners present shall be provided the opportunity to speak AS PRESCRIBED BY
subsection a of this section BEFORE the vote.

6. If A meeting is being conducted BY
remote meeting technology, the association shall identify any eligible unit
owner present in the virtual meeting who has not submitted an absentee ballot
and wishes to vote on the issues BEING CONSIDERED BY the unit ownerS and
provide those unit owners the opportunity to vote in person by roll call, show
of hands or any other APPROPRIATE means OF VOTING.� fOR ANY BALLOT ACTION TAKEN
AT THE VIRTUAL MEETING, The association shall create a true written record of
the votes cast WITHOUT NAMES ATTACHED.

7. For the annual meeting of the
association, the board of directors shall provide a report on the status of the
association's finances, the budget for the upcoming fiscal year and the
significant achievements and challenges Of the association from the last year.�
The board of directors shall then open the floor for any questions or concerns
raised by the unit owners who are present.

8. For any special meeting of the
association that is called by a petition signed by the required number of unit
owners, the agenda for that meeting SHALL be as specified in the petition.

C. Before entering into any closed
portion of a meeting of the board of directors, or on notice of a meeting under
subsection D of this section that will be closed, the board shall identify the
paragraph under subsection A of this section that authorizes the board to close
the meeting.

D. Notwithstanding any provision in the
declaration, bylaws or other
condominium documents, for meetings
of the board of directors
OR DESIGNATED COMMITTEES
that
are held after the termination of declarant control of the association, notice
to unit owners of
OPEN
meetings of the board of directors

OR DESIGNATED COMMITTEE
and meeting agendas shall be
given at least forty-eight hours in advance of the meeting by newsletter,
conspicuous posting or any other reasonable means as determined by the board of
directors. An affidavit of notice by an officer of the association
is prima facie evidence that notice was given as prescribed by this section.�
Notice to unit owners of meetings of the board of directors is not required if
emergency circumstances require action by the board before notice can be
given. Any notice of a board
Of directors oR
DESIGNATED COMMITTEE
meeting shall state the date, time
,
method
and place of the meeting. The failure of any unit
owner to receive actual notice of a meeting of the board of directors
OR DESIGNATED COMMITTEE
or a meeting agenda does not affect the
validity of any action taken at that meeting.

E. Notwithstanding any provision in the
declaration, bylaws or other
condominium documents, for
OPEN
meetings of the board of directors
,
DESIGNATED COMMITTEES OR UNIT OWNERS
that are held after the termination
of declarant control of the association, all of the following apply:

1. The agenda shall be available
in
advance
for all unit owners attending.

2. An emergency meeting of the board of directors
may be called to discuss business or take action that cannot be delayed for the
forty-eight hours required for notice. At any emergency
meeting called by the board of directors, the board of directors may act only
on emergency matters.� The minutes of the emergency meeting shall state the
reason necessitating the emergency meeting.� The minutes of the emergency
meeting shall be read and approved at the next regularly scheduled meeting of
the board of directors.
� eMERGENCY MEETINGS MAY BE CONDUCTED IN
ANY FORMAT DEtermined BY THE BOARD OF DIRECTORS.

3. A quorum of the board of directors
,
A DESIGNATED COMMITTEE OR THE UNIT OWNERS
may meet
IN
PERSON OR
by
means of a telephone conference

VOICE, VIDEO OR REMOTE MEETING TECHNOLOGY OR ANY COMBINATION OF THESE,

if a
speakerphone

SPEAKER
is
available in the
ACTUAL OR VIRTUAL
meeting room that
allows board
Of directors oR COMMITTEE
members and unit
owners to hear all parties who are speaking during the meeting.
�
iF REMOTE MEETING TECHNOLOGY IS UsED, ALL OF THE FOLLOWING APPLY:

(
a
) the
association shall provide to all unit owners the access link to the meeting in
the meeting notice that is posted on a website or emailed to each unit owner or
shall provide the link on request and shall allow any unit owner or a unit owner's
designated representative the opportunity to speak at the meeting, as
prescribed by subsection a of this section.

(
b
) The
association shall allow individual unit owners to control the unit owner's
microphone but may ask that all microphones be muted until the participant
requests to speak. Participants may speak on an issue when recognized by the
presiding officer.

(
c
) The meeting
host shall enable the individual recording capability of the virtual meeting
program for participants, if available.

4. Any motion brought forward for
action related to any closed session matters authorized in subsection B of this
section is not required to be identified on the published agenda and shall be
made in a manner that does not disclose any privileged or confidential
information. Any unit owners present shall be provided an
opportunity to speak to the issue AS PRESCRIBED BY subsection a of this
section.

4.

5.
Any
quorum of the board of directors that meets informally to discuss association
business, including workshops, shall comply with the open meeting and notice
provisions of this section without regard to whether the board
of
directors
votes or takes any action on any matter at that informal
meeting.
This paragraph does not apply to any casual
discussion of association issues in social or personal gatherings, training
sessions, condominium walkdowns, informal meetings of unit owners acting simply
as unit owners or communications to establish meeting agendas even if a quorum
of the board of directors participates.

6. The minutes of any open or
emergency meeting of the board of directors at a minimum shall represent a true
and accurate record of all actions taken by the board of directors and the vote
tally on those actions.

7. Draft minutes of any open or
emergency meeting of the board of directors, a designated committee or the unit
owners shall be either posted or made available to any unit owner on request
within ten business days after the day of the meeting.

F. It is the policy of this state as reflected in
this section that
after the period of declarant control,
all

formal
meetings of a condominium, whether meetings of the
unit owners' association or meetings of the board of directors of the
association
or designated committees
, be conducted openly
and that notices and agendas be provided in advance for those meetings that
contain the information that is reasonably necessary to inform the unit owners
of the matters to be discussed or decided and to ensure that unit owners have
the ability to speak after discussion of agenda items, but before a vote of the
board of directors
, the designated committee
or
members

the unit owners
is taken.� Toward
this end, any person or entity that is charged with the interpretation of these
provisions, including members of the board of directors and any community
manager, shall take into account this declaration of policy and shall construe
any provision of this section in favor of open meetings.
� ANY
ACTION TAKEN BY THE BOARD OF DIRECTORS IN VIOLATION OF THIS POLICY IS vOID AS A
MATTER OF LAW.

G. This section does not apply to timeshare plans or
associations that are subject to chapter 20 of this title.
END_STATUTE

Sec. 4. Section 33-1249, Arizona Revised
Statutes, is amended to read:

START_STATUTE
33-1249.

Quorums; applicability

A. Unless the
bylaws provide otherwise
condominium documents SPECIFY a lower percentage
, a quorum is
present throughout any meeting of the association if persons entitled to cast
at least twenty-five
per cent

percent

of the votes in the association are present in person or
by proxy

as otherwise allowed by law
at the beginning of the
meeting.

B. Unless the bylaws specify a larger percentage, a
quorum is deemed present throughout any meeting of the board of directors
or a committee
if persons entitled to cast at least fifty
per cent

percent
of the votes on that
board
or committee
are present
in person,
remotely or by written proxy held by another board or committee member who is
present
at the beginning of the meeting.
�A vacancy on
the board of directors or a committee does not alter quorum requirements.

C. This section does not apply to timeshare plans or
associations that are subject to chapter 20 of this title.
END_STATUTE

Sec. 5. Section 33-1802, Arizona Revised
Statutes, is amended to read:

START_STATUTE
33-1802.

Definitions

In this chapter and in the community documents, unless the
context otherwise requires:

1. "Association":

(a) Means a nonprofit corporation or unincorporated
association of owners that is created pursuant to a declaration to own and
operate portions of a planned community and that has the power under the
declaration to assess association members to pay the costs and expenses
incurred in the performance of the association's obligations under the
declaration.�

(b) Does not include a nonprofit corporation or
unincorporated association of owners that is created or incorporated before
January 1, 1974 and that does not have authority to enforce covenants,
conditions or restrictions related to the use, occupancy or appearance of the
separately owned lots, parcels or units in a real estate development, unless
the nonprofit corporation or unincorporated association of owners elects to be
subject to this chapter pursuant to section 33-1801, subsection D.

2. "Common expense lien" means the lien
for assessments, charges for late payment of assessments if authorized in the
declaration, reasonable collection fees and costs
that are

incurred or applied by the association and reasonable attorney fees and costs
that are incurred with respect to those assessments, if the attorney fees and
costs are awarded by a court.

3. "Community documents" means the
declaration, bylaws, articles of incorporation, if any, and rules, if any.

4. "Declaration" means any instruments,
however denominated, that establish a planned community and any amendment to
those instruments.

5. "Meeting" means any
gathering or interaction, in person or through technological means of a quorum
of the board of directors, a designated committee or the association members at
which they propose, discuss, deliberate or take legal action on association
business.

5.

6.
"Member expenses":

(a) Means fees,
charges, late charges and monetary penalties or interest.

(b) Does not include
any amount that is included in a common expense lien.

6.

7.
"Planned
community":

(a) Means a real estate development that includes
real estate owned and operated by or real estate on which an easement to
maintain roadways or a covenant to maintain roadways is held by a nonprofit
corporation or unincorporated association of owners, that is created for the
purpose of managing, maintaining or improving the property and in which the
declaration expressly states both that the owners of separately owned lots,
parcels or units are mandatory members and that the owners are required to pay
assessments to the association for these purposes.�

(b) Does not include any of the following:

(i) A timeshare plan or a timeshare association that
is governed by chapter 20 of this title.

(ii) A condominium that is governed by chapter 9 of
this title.

(iii) A real estate development that is not managed
or maintained by an association.
END_STATUTE

Sec. 6. Section 33-1804, Arizona Revised
Statutes, is amended to read:

START_STATUTE
33-1804.

Open meetings; exceptions; notice; agenda; policy statement

A.
AFter the period of declarant
CONTROL and
notwithstanding any provision in
title 10 or
the

declaration, bylaws or other

community
documents
to the contrary, all meetings of the members' association and the board of
directors, and any
regularly scheduled

DESIGN
CONTROL or financial advisory
committee meetings,
however
denominated,
are open to all members of the association or any person
designated by a member in writing as the member's representative and all
members or designated representatives so desiring shall be allowed to attend
and speak at an appropriate time during the deliberations and
proceedings. The board
, a committee or the members'
association
may place reasonable time restrictions on those persons
speaking during the meeting but shall allow a member or member's designated
representative to speak once after the board
, committee or
members' association
has discussed a specific agenda item but before the
board
, committee or members' association
takes formal
action on that item in addition to any other opportunities to
speak. The board
, committee or members' association

shall provide for a reasonable number of persons to speak on each side of an
issue.
The following apply to meetings of the board,
a committee or the members' association:

1.
Persons attending may
audiotape or videotape

record
those
portions of the meetings of the board of directors
, designated
committees
and meetings of the members that are open. The
board of directors of the association shall not require advance notice of the
audiotaping or videotaping

recording
and
may adopt reasonable rules governing the
audiotaping and
videotaping

recording
of open portions of the
meetings
of the board and the membership
, but such
rules shall not preclude such
audiotaping or videotaping

RECORDING
by those attending
, unless the board
audiotapes or videotapes the meeting and makes the unedited audiotapes or
videotapes available to members on request without restrictions on their use as
evidence in any dispute resolution process. If a board records a
meeting
that is open to the members, the board shall keep
a copy of the recording for at least six months and make the unedited recording
available to any member on request in compliance with section 33-1805,
subsection A
.

2. The ASSOCIATION may ESTABLISH
rules that prevent distributing any RECORDING of an association meeting to
anyone who is not a resident or member of the association, except for the use
of those recordings as evidence in any DISPUTE RESOLUTION process.

3. Any recording made by the BOARD of
DIRECTORS, a committee appointed by the board or any agents of the board or
such committee is not a record of the association and is not subject to a
records REQUEST pursuant to section 33-1805.

B.
Any portion of a
board or committee
meeting may be closed only if that closed
portion of the meeting is limited to consideration
without
action
of one or more of the following:

1. Legal advice from an attorney for the board
of directors
or
the association
a committee
.�
On final resolution of any matter
for which the board received legal advice or that concerned pending or
contemplated litigation, the board may disclose information about that matter
in an open meeting except for matters that are required to remain confidential
by the terms of a settlement agreement or judgment.

2. Pending or contemplated litigation.

3. Personal, health or financial information about
an individual member of the association, an individual employee of the
association or an individual employee of a contractor for the association,
including
the REVIEW of
records of the association
directly related to
the personal, health or financial information
about an individual member of the association, an individual employee of the
association or an individual employee of a contractor for the association
or containing that information
.
CITED
OR CONTEMPLATED citations for VIOLATIONS OF the community DOCUMENTS, ALONG WITH
ANY SUBSEQUENT FINE OR PENALTY IMPOSED BY THE ASSOCIATION, ARE Not PERSONAL or
FINANCIAL INFORMATION prescribed by this paragraph.

4. Matters relating to the job performance of,
compensation of, health records of or specific complaints against an individual
employee of the association or an individual employee of a contractor of the
association who works under the direction of the association.

5.
On the specific request of the
member,
discussion of a member's appeal of any violation cited or
penalty imposed by the association
except on request of the
affected member that the meeting be held in an open session
with the member present
.

6. THE REVIEW, NEGOTIATION AND
CONSIDERATION OF PROPRIETARY BID PROPOSALS FROM POTENTIAL CONTRACTORS OR
FINANCING OPTIONS FROM ANY FINANCIAL INSTITUTION BEFORE AWARDING A CONTRACT FOR
THE DESIRED GOODS OR SERVICES.� Any fINAL CONTRACT SHALL BE APPROVED IN OPEN
SESSION.

B.

C.
Notwithstanding
any provision in the community documents, all meetings of the members'
association and the board shall be held in this state.� A
formal

meeting of the members' association shall be held at least once each
year
to elect board members to fill expired terms or for newly
created POSITIONS and to conduct any other business of the association
. Special
meetings of the members' association may be called by the president, by a
majority of the board of directors or by members having at least twenty-five
percent, or any lower percentage specified in the bylaws, of the votes in the
association.� Not fewer than ten or more than fifty days in advance of any
meeting of the members the
secretary

association

shall cause
written
notice to be hand delivered or
sent
prepaid
by United States mail to the mailing address
of record
for each lot, parcel or
unit owner

member
or
to any other mailing

to be sent to an email
address
if authorized and

designated in writing by a member. The notice shall state the
date, time
, method
and place of the meeting. A
notice of any annual
, regular
or special meeting of the
members shall also state the purpose for which the meeting is called, including
the general nature of any proposed amendment to the declaration or bylaws,
changes in assessments that require approval of the members and any proposal to
remove a director or an officer. The
secretary

association
shall also provide an agenda for any meeting of the
members' association by hand delivery, mail, website posting, email or other
electronic means or posting at a community center or other similar
location. The failure of any member to receive actual notice of a
meeting of the members or the meeting agenda does not affect the validity of
any action taken at that meeting.
wITH RESPECT TO ANY
ANNUAL OR SPECIAL MEETING OF THE association, THE FOLLOWING APPLY:

1. the members of the association
present or participating at the meeting shall control and conduct of the annual
or special meeting of the members.� The board of directors shall facilitate the
meeting and provide for minutes to be taken.

2. the quorum for any annual or
special meeting of the members shall be determined pursuant to section 33-1804.01.

3. if any annual or special meeting
of the unit owners is called to elect board members and the meeting fails to
satisfy the required quorum, the association shall reconvene that meeting
within fourteen days until a quorum is satisfied and the meeting and election
are held.

4. All decisions REGARDING THE
conduct of the meeting SHALL be made by member motionS and decided by voice
vote or show of hands by those members present at the meeting.

5. All ballot actions at the meeting
SHALL be conducted pursuant to section 33-1812.� aLL members present
shall be provided the opportunity to speak AS PRESCRIBED BY subsection a of
this section BEFORE the vote.

6. If A meeting is being conducted BY
remote meeting technology, the association shall identify any member present in
the virtual meeting who has not submitted an absentee ballot and wishes to vote
on the issues BEING CONSIDERED BY the members and provide those members the
opportunity to vote in person by roll call, show of hands or any other
APPROPRIATE means OF VOTING.� fOR ANY BALLOT ACTION TAKEN AT THE VIRTUAL
MEETING, The association shall create a true written record of the votes cast WITHOUT
NAMES ATTACHED.

7. For the annual meeting of the
members, the association's board of directors shall provide a report on the
status of the association's finances, the budget for the upcoming fiscal year
and the significant achievements and challenges Of the association from the
last year.� The board shall then open the floor for any questions or concerns
raised by the members who are present.

8. For any special meeting of the
members that is called by a petition signed by the required number of members,
the agenda for that meeting SHALL be as specified in the petition.

C. Before entering into any closed
portion of a meeting of the board of directors, or on notice of a meeting under
subsection D of this section that will be closed, the board shall identify the
paragraph under subsection A of this section that authorizes the board to close
the meeting.

D. Notwithstanding any provision in the
declaration, bylaws or other
community documents, for meetings
of the board of directors
or designated committees
that
are held after the termination of declarant control of the association, notice
to members of
open
meetings of the board of directors
or a designated committee
and meeting agendas shall be given at
least forty-eight hours in advance of the meeting by newsletter,
conspicuous posting or any other reasonable means as determined by the board of
directors. An affidavit of notice by an officer of the corporation
is prima facie evidence that notice was given as prescribed by this section.�
Notice to members of meetings of the board of directors is not required if
emergency circumstances require action by the board before notice can be
given. Any notice of a board meeting
or designated
committee
shall state the date, time
, method
and
place of the meeting.� The failure of any member to receive actual notice of a
meeting of the board of directors
or a designated committee
or
a meeting agenda does not affect the validity of any action taken at that
meeting.

E. Notwithstanding any provision in the
declaration, bylaws or other
community documents, for
open
meetings of the board of directors
,
designated committees or members
that are held after the termination of
declarant control of the association, all of the following apply:

1. The quorum for any board of
directors' and designated committees' meetings shall be determined pursuant to
section 33-1804.01.

1.

2.
The
agenda shall be available
in advance
for all members
attending.

2.

3.
An
emergency meeting of the board of directors may be called to discuss business
or take action that cannot be delayed for the forty-eight hours required
for notice. At any emergency meeting called by the board of
directors, the board of directors may act only on emergency matters. The
minutes of the emergency meeting shall state the reason necessitating the
emergency meeting.� The minutes of the emergency meeting shall be read and
approved at the next regularly scheduled meeting of the board of directors.
� Emergency meetings may be conducted in any format determined by the
board of directors.

3.

4.
A
quorum of the board of directors
, a designated committee or the
members
may meet by
means of a telephone conference

voice, video or remote MEETING TECHNOLOGY or an combination of
these,
if a
speakerphone

speaker
is
available in the
actual or virtual
meeting room that
allows board
or committee
members and association members
to hear all parties who are speaking during the meeting.
iF
REMOTE MEETING TECHNOLOGY IS UsED, ALL OF THE FOLLOWING APPLY:

(
a
) the
association shall provide to all members owners the access link to the meeting
in the meeting notice that is posted on a website or emailed to each member or
shall provide the link on request and shall allow any member or a member's designated
representative the opportunity to speak at the meeting, as prescribed by
subsection a of this section.

(
b
) The
association shall allow individual members to control the member's microphone
but may ask that all microphones be muted until the participant requests to
speak. Participants may speak on an issue when recognized by the
presiding officer.

(
c
) The meeting
host shall enable the individual recording capability of the virtual meeting
program for participants, if available.

5. Any motion brought forward for
action related to any closed session matters authorized in subsection B of this
section is not required to be identified on the published agenda and shall be
made in a manner that does not disclose any privileged or confidential
information. Any members present shall be provided an opportunity to
speak to the issue AS PRESCRIBED BY subsection a of this section.

4.

6.
Any
quorum of the board of directors that meets informally to discuss association
business, including workshops, shall comply with the open meeting and notice
provisions of this section without regard to whether the board votes or takes
any action on any matter at that informal meeting.
This
paragraph does not apply to any casual discussion of association issues in
social or personal gatherings, training sessions, community walkdowns, informal
meetings of members acting simply as members or communications to establish
meeting agendas even if a quorum of the board participates.

7. The minutes of any open or
emergency meeting of the board of directors at a minimum shall represent a true
and accurate record of all actions taken by the board of directors and the vote
tally on those actions.

8. Draft minutes of any open or
emergency meeting of the board of directors, a designated committee or the
members shall be either posted or made available to any member on request
within ten business days after the day of the meeting.

F. It is the policy of this state as reflected in
this section that
after the period of declarant control,
all

formal
meetings of a planned community, whether meetings
of the members' association or meetings of the board of directors of the
association
or designated committees
, be conducted openly
and that notices and agendas be provided in advance for those meetings that
contain the information that is reasonably necessary to inform the members of
the matters to be discussed or decided and to ensure that members have the
ability to speak after discussion of agenda items, but before a vote of the
board of directors
, the designated committee
or members
is taken. Toward this end, any person or entity that is charged with
the interpretation of these provisions, including members of the board of
directors and any community manager, shall take into account this declaration
of policy and shall construe any provision of this section in favor of open
meetings.
ANY ACTION TAKEN BY THE BOARD OF DIRECTORS
IN VIOLATION OF THIS POLICY IS VOID AS A MATTER OF LAW.

END_STATUTE

Sec. 7. Title 33, chapter 16, article 1,
Arizona Revised Statutes, is amended by adding section 33-1804.01, to read:

START_STATUTE
33-1804.01.

Quorums; applicability

A. Unless the community documents
SPECIFY a lower percentage, a quorum is present throughout any meeting of the
association if persons entitled to cast at least twenty-five percent of
the votes in the association are present in person or as otherwise allowed by
law at the beginning of the meeting.

B. Unless the bylaws specify a larger
percentage, a quorum is deemed present throughout any meeting of the board of
directors or a committee if persons entitled to cast at least fifty percent of
the votes on that board or committee are present in person, remotely or by
written proxy held by another board or committee member who is present at the
beginning of the meeting.� A vacancy on the board of directors or a committee
does not alter quorum requirements.
END_STATUTE

Sec. 8. Section 33-1813, Arizona Revised Statutes, is amended to read:

START_STATUTE
33-1813.

Removal of board member; special meeting

A. Notwithstanding any provision of the declaration
or bylaws to the contrary, all of the following apply to a meeting at which a
member of the board of directors, other than a member appointed by the
declarant, is proposed to be removed from the board of directors:

1. The members of the association who are eligible
to vote at the time of the meeting may remove any member of the board of
directors, other than a member appointed by the declarant, by a majority vote
of those voting on the matter at a meeting of the members.

2. The meeting of the members shall be called
pursuant to this section and action may be taken only if a quorum is present.

3. The members of the association may remove any member
of the board of directors with or without cause, other than a member appointed
by the declarant.

4. For purposes of calling for removal of a member
of the board of directors, other than a member appointed by the declarant, the
following apply:

(a) In an association with one thousand or fewer
members, on receipt of a petition that calls for removal of a member of the
board of directors and that is signed by the number of persons who are eligible
to vote in the association at the time the person signs the petition equal to
at least twenty-five percent of the votes in the association or by the
number of persons who are eligible to vote in the association at the time the
person signs the petition equal to at least one hundred votes in the association,
whichever is less, the board shall call and provide written notice of a special
meeting of the association as prescribed by section 33-1804, subsection
B
C
.

(b) Notwithstanding section 33-1804,
subsection
B
C
, in an
association with more than one thousand members, on receipt of a petition that
calls for removal of a member of the board of directors and that is signed by
the number of persons who are eligible to vote in the association at the time
the person signs the petition equal to at least ten percent of the votes in the
association or by the number of persons who are eligible to vote in the
association at the time the person signs the petition equal to at least one
thousand votes in the association, whichever is less, the board shall call and
provide written notice of a special meeting of the association.� The board
shall provide written notice of a special meeting as prescribed by section 33-1804,
subsection
B
C
.

(c) The special meeting shall be called, noticed and
held within thirty days after receipt of the petition.

(d) If all of the
requirements of this subsection for calling a special meeting are met and the
board of directors fails to call, notice and hold a special meeting within
thirty days after receipt of the petition, the members of the board of directors
are deemed removed from office effective at midnight of the thirty-first
day.

(e) For
purposes of a special meeting called pursuant to this subsection, a quorum is
present if the number of owners who are eligible to vote in the association at
the time the person attends the meeting equal to at least twenty percent of the
votes of the association or the number of persons who are eligible to vote in
the association at the time the person attends the meeting equal to at least
one thousand votes, whichever is less, is present at the meeting in person or
as otherwise allowed by law.

(f)

(
e
)
If a civil action is filed regarding the removal
of a board member, the prevailing party in the civil action shall be awarded
its reasonable attorney fees and costs.

(g)

(
f
)
The board of directors shall retain all documents
and other records relating to the proposed removal of the member of the board
of directors and any election or other action taken for that director's
replacement for at least one year after the date of the special meeting and
shall allow members to inspect those documents and records pursuant to section
33-1805.

(h)

(
g
)
A
petition that calls for the
removal of the same
member of the board of directors shall not be
submitted

subject to a recall vote
more
than once during each term of office for that member.

5. On removal of at least one but fewer than a
majority of the members of the board of directors at a special meeting of the
membership called pursuant to this subsection, the vacancies shall be filled as
provided in the community documents
for the remainder of the
original terms
.

6. On removal of a majority of the members of the
board of directors at a special meeting of the membership called pursuant to
this subsection, or if the community documents do not provide a method for
filling board vacancies, the association shall hold an election for the
replacement of the removed directors
for the remainder of the
directors' original terms
at a separate meeting of the members of the
association that is held not later than thirty days after the meeting at which
the members of the board of directors were removed.

7. A member of the board of directors who is removed
pursuant to this subsection is not eligible to serve on the board of directors
again until after the expiration of the removed board member's term of office,
unless the community documents specifically provide for a longer period of
ineligibility.

B. For an association
in which board members are elected from separately designated voting districts,
a member of the board of directors, other than a member appointed by the
declarant, may be removed only by a vote of the members from that voting
district, and only the members from that voting district are eligible to vote
on the matter or be counted for purposes of determining a quorum.
END_STATUTE