dispute resolution process; real estate

SB1158 - 572R - I Ver

REFERENCE TITLE:
dispute resolution process; real estate

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1158

Introduced by

Senators
Rogers: Finchem

AN
ACT

amending sections 32-2199.01, 32-2199.02,
32-2199.04 and 33-1270, Arizona Revised Statutes; amending title 33, chapter
16, Arizona Revised Statutes, by adding article 2; relating to property.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 32-2199.01, Arizona Revised
Statutes, is amended to read:

START_STATUTE
32-2199.01.

Hearing; rights and procedures

A. For a dispute between an owner and a condominium
association or planned community association that is regulated pursuant to
title 33, chapter 9 or 16, the owner or association may petition the department
for a hearing concerning violations of condominium documents or planned
community documents or violations of the statutes that regulate condominiums or
planned communities. The petitioner shall file a petition with the
department and pay a filing fee in an amount
to be established by
the commissioner
not to

exceed the
superior court application fees pursuant to section 12-284 per petition.� Each
petition may consist of not more than four distinct and separate complaints of
alleged statutory or governing document violations
.� The filing fee
shall be deposited in the condominium and planned community hearing office fund
established by section 32-2199.05. On dismissal of a petition
at the request of the petitioner before a hearing is scheduled or by
stipulation of the parties before a hearing is scheduled, the filing fee shall
be refunded to the petitioner.� The department does not have jurisdiction to
hear:

1. Any dispute among or between owners to which the
association is not a party.

2. Any dispute between an owner and any person,
firm, partnership, corporation, association or other organization that is
engaged in the business of designing, constructing or selling a condominium as
defined in section 33-1202 or any property or improvements within a
planned community as defined in section 33-1802, including any person,
firm, partnership, corporation, association or other organization licensed
pursuant to this chapter, arising out of or related to the design,
construction, condition or sale of the condominium or any property or
improvements within a planned community.

B. The petition shall be in writing on a form
approved by the department, shall list the complaints and shall be signed by or
on behalf of the persons filing and include their addresses, stating that a
hearing is desired, and shall be filed with the department.

C. On receipt of the petition and the filing fee
,
the department shall mail by certified mail a copy of the
petition along with notice to the named respondent that a response is required
within twenty days after mailing of the petition showing cause, if any, why the
petition should be dismissed.

D. After receiving the response, the commissioner or
the� commissioner's designee shall promptly review the petition for hearing
and, if justified, refer the petition to the office of administrative
hearings. The commissioner may dismiss a petition for hearing if it
appears to the commissioner's satisfaction that the disputed issue or issues
have been resolved by the parties.

E. Failure of the respondent to answer is deemed an
admission of the allegations made in the petition, and the commissioner shall
issue a default decision.

F. Informal disposition may be made of any contested
case.

G. Either party or the party's authorized agent may
inspect any file of the department that pertains to the hearing, if the
authorization is filed in writing with the department.

H. At a hearing conducted pursuant to this section,
a corporation may be represented by a corporate officer, employee or contractor
of the corporation who is not a member of the state bar if:

1. The corporation has specifically authorized the
officer, employee or contractor of the corporation to represent it.

2. The representation is not the officer's,
employee's or contractor of the corporation's primary duty to the corporation
but is secondary or incidental to the officer's, employee's or contractor of
the corporation's, limited liability company's, limited liability
partnership's, sole proprietor's or other lawfully formed and operating
entity's duties relating to the management or operation of the corporation.
END_STATUTE

Sec. 2. Section 32-2199.02, Arizona Revised
Statutes, is amended to read:

START_STATUTE
32-2199.02.

Orders; penalties; disposition

A. The administrative law judge may order any party
to abide by the statute, condominium documents, community documents or contract
provision at issue and may levy a civil penalty
not to exceed
$500
on the basis of each
violation

complaint or any other monetary or nonmonetary penalty prescribed by statute
. All
monies collected pursuant to this article shall be deposited in the condominium
and planned community hearing office fund established by section 32-2199.05
to be used to offset the cost of administering the administrative law judge
function. If the petitioner prevails, the administrative law judge
shall order the respondent to pay to the petitioner the filing fee required by
section 32-2199.01.

B. The order issued by the administrative law judge
is binding on the parties unless a rehearing is granted pursuant to section 32-2199.04
based on a petition setting forth the reasons for the request for rehearing, in
which case the order issued at the conclusion of the rehearing is binding on
the parties. The order issued by the administrative law judge is
enforceable through contempt of court proceedings and is subject to judicial
review as prescribed by section 41-1092.08.
END_STATUTE

Sec. 3. Section 32-2199.04, Arizona Revised Statutes, is amended to read:

START_STATUTE
32-2199.04.

Rehearing; appeal

A. A person aggrieved
by a decision of the administrative law judge may apply for a rehearing by
filing with the commissioner a petition in writing pursuant to section 41-1092.09
and submitting a filing fee as prescribed in section 32-2199.01
. Within
ten days after filing such
a
petition, the commissioner
shall serve notice of the request on the other party by mailing a copy of the
petition in the manner prescribed in section 32-2199.01 for notice of
hearing.

B. The filing of a petition for rehearing
temporarily suspends the operation of the administrative law judge's
action. If the petition is granted, the administrative law judge's
action is suspended pending the decision on the rehearing.

C. In the order granting or denying a rehearing, the
commissioner shall include a statement of the particular grounds and reasons
for the commissioner's action on the petition and shall promptly mail a copy of
the order to the parties who have appeared in support of or in opposition to
the petition for rehearing.
�If the request for rehearing is
denied, the filing fee shall be returned to the requesting party.

D. In a rehearing conducted pursuant to this
section, a corporation may be represented by a corporate officer or employee
who is not a member of the state bar if:

1. The corporation has specifically authorized such
officer or employee to represent it.

2. Such representation is not the officer's or
employee's primary duty to the corporation but is secondary or incidental to
such officer's or employee's duties relating to the management or operation of
the corporation.
END_STATUTE

Sec. 4. Section 33-1270, Arizona Revised
Statutes, is amended to read:

START_STATUTE
33-1270.

Department of real estate; enforcement

A.
Nothing in
This chapter
shall be construed to
does not
increase or
decrease or otherwise affect any rights or powers granted to the commissioner
of the department of real estate under title 32, chapter 20 with respect to the
issuance of public reports.

B. The commissioner of the department of real estate
shall require compliance with
section

sections
33-1215 and
section
33-1219 in
connection with the administration of the subdivision laws of this state under
title 32, chapter 20, article 4. The commissioner
shall
is
not
be
required to administer or
enforce any other provisions of this chapter
but shall
administer the dispute resolution process authorized under section 32-2199.01
.

END_STATUTE

Sec. 5. Title
33, chapter 16, Arizona Revised Statutes, is amended by adding article 2, to
read:

ARTICLE
2. ADMINISTRATION

START_STATUTE
33-1831.

State real estate department; enforcement

A. This chapter does not increase or
decrease or otherwise affect any rights or powers granted to the state real
estate commissioner under title 32, chapter 20 with respect to the issuance of
public reports.

B. The
state real estate commissioner shall require compliance with the relevant
portions of sections 33-1215 and 33-1219 for planned communities in connection
with the administration of the subdivision laws of this state under title 32,
chapter 20, article 4.� The state real estate commissioner is not required to
enforce any other provisions of this CHAPTER but shall administer the dispute
resolution process authorized under section 32-2199.01.

END_STATUTE