Bill Text: AZ HB2570 | 2014 | Fifty-first Legislature 2nd Regular | Introduced
Bill Title: Condominiums; substantial change; maintenance; assessments
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2014-02-13 - Referred to House GOV Committee [HB2570 Detail]
Download: Arizona-2014-HB2570-Introduced.html
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REFERENCE TITLE: condominiums; substantial change; maintenance; assessments |
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State of Arizona House of Representatives Fifty-first Legislature Second Regular Session 2014
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HB 2570 |
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Introduced by Representatives Larkin, Alston, Hernández, Mendez: Borrelli, Coleman, Contreras, Kavanagh, Mitchell, Montenegro, Quezada, Seel
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AN ACT
amending title 33, chapter 9, article 3, Arizona Revised Statutes, by adding section 33-1243.01; amending sections 33-1255 and 33-1256, Arizona Revised Statutes; relating to condominiums.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 33, chapter 9, article 3, Arizona Revised Statutes, is amended by adding section 33-1243.01, to read:
33-1243.01. Substantial change; membership vote required
Notwithstanding any provision in the condominium documents, for any substantial change in the common elements of the condominium involving security or the outside appearance of the condominium, the board of directors shall submit the proposed change to a vote of the membership, and the vote of the membership is binding on the condominium and the board of directors.
Sec. 2. Section 33-1255, Arizona Revised Statutes, is amended to read:
33-1255. Assessments for common expenses; applicability
A. Until the association makes a common expense assessment, the declarant shall pay all common expenses. After any assessment has been made by the association, assessments shall be made at least annually, based on a budget adopted at least annually by the association. Unless limitations in the condominium documents would result in a lower limit for the assessment, the association shall not impose a regular assessment that is more than twenty per cent greater than the immediately preceding fiscal year's assessment without the approval of a majority of the unit owners in the association.
B. Except for assessments under subsections C, D, E and F of this section, all common expenses shall be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to section 33‑1217, subsection A. Any past due common expense assessment or installment bears interest at the rate established by the board subject to the condominium documents.
C. Unless otherwise provided for in the declaration all of the following apply:
1. Any common expense associated with the maintenance, repair or replacement of a limited common element shall be equally assessed against the units to which the limited common element is assigned.
2. Any common expense or portion of a common expense benefitting fewer than all of the units shall be assessed exclusively against the units benefitted.
D. Assessments to pay a judgment against the association may be made only against the units in the condominium at the time the judgment was entered, in proportion to their common expense liabilities.
E. If any common expense is caused by the misconduct of any unit owner, the association may assess that expense exclusively against that unit.
F. If the declaration so provides, the common expense assessment for any unit on which construction has not been substantially completed may be an amount which that is not less than twenty‑five per cent of the common expense assessment for units which that have been substantially completed. However, this reduced common expense assessment shall not be permitted, unless the declarant is obligated under the declaration to pay to the association any deficiency in monies due to the declarant having paid a reduced common assessment and necessary for the association to be able to timely pay all common expenses.
G. If common expense liabilities are reallocated, common expense assessments and any installment on the assessments not yet due shall be recalculated in accordance with the reallocated common expense liabilities.
H. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.
Sec. 3. Section 33-1256, Arizona Revised Statutes, is amended to read:
33-1256. Lien for assessments; priority; mechanics' and materialmen's liens; maintenance failure; applicability
A. The association has a lien on a unit for any assessment levied against that unit from the time the assessment becomes due. The association's lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the owner has been delinquent in the payment of monies secured by the lien, excluding reasonable collection fees, reasonable attorney fees and charges for late payment of and costs incurred with respect to those assessments, for a period of one year or in the amount of one thousand two hundred dollars or more, whichever occurs first. Fees, charges, late charges, monetary penalties and interest charged pursuant to section 33‑1242, subsection A, paragraphs 10, 11 and 12, other than charges for late payment of assessments, are not enforceable as assessments under this section. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due. The association has a lien for fees, charges, late charges, other than charges for late payment of assessments, monetary penalties or interest charged pursuant to section 33‑1242, subsection A, paragraphs 10, 11 and 12 after the entry of a judgment in a civil suit for those fees, charges, late charges, monetary penalties or interest from a court of competent jurisdiction and the recording of that judgment in the office of the county recorder as otherwise provided by law. The association's lien for monies other than for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may not be foreclosed and is effective only on conveyance of any interest in the real property.
B. A lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments under this section is prior to all other liens, interests and encumbrances on a unit except:
1. Liens and encumbrances recorded before the recordation of the declaration.
2. A recorded first mortgage on the unit, a seller's interest in a first contract for sale pursuant to chapter 6, article 3 of this title on the unit recorded prior to the lien arising pursuant to subsection A of this section or a recorded first deed of trust on the unit.
3. Liens for real estate taxes and other governmental assessments or charges against the unit.
C. Subsection B of this section does not affect the priority of mechanics' or materialmen's liens or the priority of liens for other assessments made by the association. The lien under this section is not subject to chapter 8 of this title.
D. Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same real estate, those liens have equal priority.
E. Recording of the declaration constitutes record notice and perfection of the lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments. Further recordation of any claim of lien for assessments under this section is not required.
F. A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within three years after the full amount of the assessments becomes due.
G. This section does not prohibit actions to recover sums for which subsection A of this section creates a lien or does not prohibit an association from taking a deed in lieu of foreclosure.
H. A judgment or decree in any action brought under this section shall include costs and reasonable attorney fees for the prevailing party.
I. The association on written request shall furnish to a lienholder, escrow agent, unit owner or person designated by a unit owner a statement setting forth the amount of unpaid assessments against the unit. The statement shall be furnished within ten days after receipt of the request and the statement is binding on the association, the board of directors and every unit owner if the statement is requested by an escrow agency that is licensed pursuant to title 6, chapter 7. Failure to provide the statement to the escrow agent within the time provided for in this subsection shall extinguish any lien for any unpaid assessment then due.
J. The association shall record in the office of the county recorder in the county in which the condominium is located a notice stating the name of the association or designated agent or management company for the association, the address for the association and the telephone number of the association or its designated agent or management company. The notice shall include the name of the condominium community, the date of the recording and the recorded instrument number or book and page for the main document that constitutes the declaration. If an association's address, designated agent or management company changes, the association shall amend its notice or record a new notice within ninety days after the change.
K. Notwithstanding any provision in the condominium documents or in any contract between the association and a management company, unless the member directs otherwise, all payments received on a member's account shall be applied first to any unpaid assessments, for unpaid charges for late payment of those assessments, for reasonable collection fees and for unpaid attorney fees and costs incurred with respect to those assessments, in that order, with any remaining amounts applied next to other unpaid fees, charges and monetary penalties or interest and late charges on any of those amounts.
L. If an association fails to maintain the common elements of the condominium in a manner that affects the health or safety of the unit owners or the structural integrity of the unit, a unit owner may mail written notice of the maintenance failure to the board of directors. If the failure is not corrected or repaired within sixty days after the postmarked date of the written notice, the unit owner may lawfully withhold one or more assessment payments until the failure is corrected or repaired. On correction or repair of the maintenance failure and written notice to the unit owner, the unit owner is obligated to pay subsequent assessments but is not liable for any unpaid assessments accrued during the period of maintenance failure.
L. M. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.
