HOAs; condominiums; enforcement; due process

SB1440 - 572R - I Ver

CORRECTED�� Jan 26 2026

REFERENCE TITLE:
HOAs; condominiums; enforcement; due process

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1440

Introduced by

Senators
Kavanagh: Rogers

AN
ACT

amending sections 33-1242 and 33-1803,
Arizona Revised Statutes; relating to condominiums and planned communities.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 33-1242, Arizona Revised
Statutes, is amended to read:

START_STATUTE
33-1242.

Powers of unit owners' association; notice to unit owner of
violation

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

either take the actions necessary to comply with the condominium
documents, eliminate any identified imminent personal safety threat or request
to appeal the notice of violation
within
twenty-one

ten
calendar days after
the date
of
receiving
the notice.�
If the notice of
violation was sent by the united states postal service, the notice of violation
is considered received two calendar days after the notice of violation is
postmarked.� On expiration of the opportunity to appeal, if the notice of
violation imposed penalties and was not cured or appealed, the association may
take the authorized action necessary to enforce the condominium documents until
cured.�
The
response
request to appeal
the alleged violation
shall be sent to the address
, email
address or online portal or by any other available means
identified in
the notice
of violation
.�
The unit owner
may request that the hearing be held in either an open or closed session of the
board of directors pursuant to section 33-1248.

C. If the alleged violation is
appealed, the association shall:

1. Schedule a hearing before the
board of directors.

2. at least forty-eight hours before
the hearing, Provide directly to the unit owner by email, text or other
documented means notice of the location, date and time of the hearing.

3. Provide the unit owner or the unit
owner's designated representative with a reasonable allotment of time necessary
to present the appeal.

D. The board of directors may apply
discretion in its enforcement power but shall treat all unit owners fairly,
reasonably and consistently in the enforcement actions.� If the unit owner or
the unit owner's designated representative fails to appear at the scheduled
hearing, the opportunity to be heard is satisfied and the association may act
to enforce the action until the violation is cured.� If a violation appeal is
rejected by the board of directors, the association may act to enforce the action
until the violation is cured.

C.

E.
Within ten business days after receipt of the certified mail containing
the response from the unit owner, the association shall respond to the unit
owner with a written explanation regarding the notice that shall provide at
least the following information unless previously provided in
The notice
of violation
shall identify the following information
:

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.

3. The actions necessary to correct
the alleged violation, the provisions of the published enforcement policy and the
monetary penalty schedule that may be applied.

4. The process the unit owner must follow to
contest
appeal
the notice
pursuant
to subsections b and C of this section, including the hearing options
.

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.

F. After notice and an opportunity to
be heard pursuant to this section, the board of directors may impose reasonable
monetary or other penalties based on the published enforcement policy and
schedule of monetary penalties commensurate with the significance of the
violation until the violation is cured. Notwithstanding any
provision of the condominium documents to the contrary, the association or the
association's agent may not impose a charge or monetary or other penalty that
does any of the following:

1. Restricts the right to vote, sign
a petition or run for office other than for failure to pay common expense
assessments.

2. based on any unrelated violation,
restricts access to the community security gate, residential buildings, parking
structures, utilities or other vital services.

3. except for imminent personal
safety issues, repeats the monetary penalty more frequently than every fifteen
days or escalates the penalty more frequently than every two months for the
unit owner failing to cure the violation.

4. Applies interest to any unpaid
monetary penalty that compounds at an annual rate greater than twenty percent.

5. except for costs of billing
statements, applies any collection costs on monetary penalties other than as
authorized under section 33-1256.

6. Applies a fee to the unit owner
for the execution of the due process of this section, including any notice of
violation.

G. The association's failure to
comply with this section invalidates and makes unenforceable any penalty that
is imposed on a unit owner for a violation of a requirement in the condominium
documents.

H. The association shall provide
notice in the published enforcement policy that the unit owner has the right to
file a petition with the state real estate department for an administrative
hearing pursuant to section 32-2199.01 on any alleged violation of this
section, this chapter or the condominium documents.
END_STATUTE

Sec. 2. Section 33-1803, Arizona Revised
Statutes, is amended to read:

START_STATUTE
33-1803.

Assessment limitation; penalties; notice to member of violation

A. Unless limitations in the community documents
would result in a lower limit for the assessment, the association shall not
impose a regular assessment that is more than twenty percent greater than the
immediately preceding fiscal year's assessment without the approval of the
majority of the members of the association. Unless reserved to the
members of the association, the board of directors may impose reasonable
charges for the late payment of assessments.� A payment by a member is deemed
late if it is unpaid fifteen or more days after its due date, unless the
community documents provide for a longer period. Charges for the
late payment of assessments are limited to the greater of
fifteen
dollars
$15
or ten percent of the amount of the
unpaid assessment and may be imposed only after the association has provided
notice that the assessment is overdue or provided notice that the assessment is
considered overdue after a certain date.� Any monies paid by the member for an
unpaid assessment shall be applied
first to the principal amount
unpaid and then to the interest accrued
pursuant to
section 33-1807
.

B. After notice and an opportunity to be heard
pursuant to this section
, the board of directors may impose
reasonable monetary
penalties on members for violations of the
declaration, bylaws and rules of the association
or other
penalties based on the published enforcement policy and schedule of monetary
penalties commensurate with the significance of the violation until the
violation is cured
. Notwithstanding any provision in the
community documents, the board of directors
or the board's agent

shall not impose a charge
for a late payment of a penalty that
exceeds the greater of fifteen dollars or ten percent of the amount of the
unpaid penalty. A payment is deemed late if it is unpaid fifteen or
more days after its due date, unless the declaration, bylaws or rules of the
association provide for a longer period.� Any monies paid by a member for an
unpaid penalty shall be applied first to the principal amount unpaid and then
to the interest accrued.� Notice pursuant to this subsection shall include
information pertaining to the manner in which the penalty shall be enforced.
or monetary or other penalty that does any of the following:

1. restricts the right to vote, sign
a petition or run for office other than for failure to pay common expense
assessments.

2. based on any unrelated violation,
restricts access to the community security gate, utilities or other vital
services.

3. except for imminent personal
safety issues, repeats the monetary penalty more frequently than every fifteen
days or escalates the penalty more frequently than every two months for the
member failing to cure the violation.

4. applies interest to any monetary
penalty that compounds at an annual rate greater than twenty percent.

5. except for costs of billing
statements, applies any collection costs on monetary penalties other than as
authorized under section 33-1807.

6. Applies a fee to the member for
the execution of due process pursuant to this section, including any notice of
violation.

C. A member who receives a written notice that the
condition of the property owned by the member is in violation of the community
documents without regard to whether a monetary penalty is imposed by the notice
may
provide the association with a written response by sending
the response by certified mail
either take the actions
necessary to comply with the community documents, eliminate any identified
imminent personal safety threat or request to appeal the notice of violation

within
twenty-one
ten
calendar
days after
the date of
receiving
the
notice.
� If the notice of violation was sent by the United
States postal service, the notice of violation is deemed received two calendar
days after the notice of violation was postmarked.
The
response
request appeal the alleged violation

shall be sent to the address
, email address or online portal or
by any other available means
identified in the notice
of
violation
.

D. If the alleged violation is
appealed, the association shall:

1. Schedule a hearing before the
board of directors.

2. at least forty-eight hours before
the hearing, Provide directly to the member by email, text or other documented
means notice of the location, date and time of the hearing.

3. Provide the member or the member's
designated representative with a reasonable allotment of time necessary to
present the appeal.

E. The board of directors may apply
discretion in its enforcement power but shall treat all members fairly,
reasonably and consistently in the enforcement actions. If the
member or the member's designated representative fails to appear at the
scheduled hearing, the opportunity to be heard is satisfied and the association
may act to enforce the action until the violation is cured.� If a violation
appeal is rejected by the board of directors, the association may act to
enforce the action until the violation is cured.

D.

F.
Within
ten business days after receipt of the certified mail containing the response
from the member, the association shall respond to the member with a written
explanation regarding the notice that shall provide at least the following
information unless previously provided in the notice of violation:

1. The provision of the community documents that has
allegedly been violated.

2. The date of the violation or the date the
violation was observed.

3. The first and last name of the
person or persons who observed the violation.

3. THe actions necessary to correct
the alleged violation, the provisions of the published enforcement policy and the
penalty schedule that may be applied.

4. The process the member must follow to
contest
appeal
the notice
described
in subsections C and D of this section, including hearing options
.

E. Unless the information required in
subsection D, paragraph 4 of this section is provided in the notice of
violation, the association shall not proceed with any action to enforce the
community documents, including the collection of attorney fees, before or
during the time prescribed by subsection D of this section regarding the
exchange of information between the association and the member and shall give
the member written notice of the member's option to petition for an
administrative hearing on the matter in the state real estate department
pursuant to section 32-2199.01. At any time before or after
completion of the exchange of information pursuant to this section, the member
may petition for a hearing pursuant to section 32-2199.01 if the dispute
is within the jurisdiction of the state real estate department as prescribed in
section 32-2199.01.

G. The association's failure to
comply with this section invalidates and makes unenforceable any penalty that
is imposed on a member for a VIOLATION of community documents.

H. The association shall provide
notice in the published enforcement policy that the member has the right to
file a petition with the state real estate department for an administrative
hearing pursuant to section 32-2199.01 on any alleged violation of this
section, this chapter or the community documents.

END_STATUTE