Bill Text: AZ SB1452 | 2015 | Fifty-second Legislature 1st Regular | Engrossed
Bill Title: Homeowners' associations; condominiums; director removal
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2015-03-30 - House third reading FAILED voting: (18-42-0-0) [SB1452 Detail]
Download: Arizona-2015-SB1452-Engrossed.html
Senate Engrossed |
State of Arizona Senate Fifty-second Legislature First Regular Session 2015
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SENATE BILL 1452 |
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AN ACT
amending sections 33-1243 and 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 33-1243, Arizona Revised Statutes, is amended to read:
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 before the board discusses or takes action on that issue and that member may then vote on that issue. The board shall note the declaration of conflict in the records of the meeting. 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 nor 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 no later than the earlier of:
1. Ninety days after conveyance of seventy‑five per cent percent of the units which 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 members and officers shall take office upon on election.
H. Notwithstanding any provision of the declaration or bylaws to the contrary, the unit owners, by a majority vote of members entitled to vote and voting on the matter at a meeting of the members called pursuant to this section at which a quorum is present, may remove any member of the board of directors with or without cause, other than a member appointed by the declarant. 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:
1. 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 entitled to cast at least twenty-five per cent percent of the votes in the association or 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 33‑1248, subsection B.
2. Notwithstanding section 33‑1248, subsection B, 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 entitled to cast at least ten per cent percent of the votes in the association or 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 33-1248, subsection B.
3. The special meeting shall be called, noticed and held within thirty days after receipt of the petition.
4. For purposes of a special meeting called pursuant to this subsection, a quorum is present if the number of owners to whom at least twenty per cent percent of the votes or one thousand votes, whichever is less, are allocated is present at the meeting in person or as otherwise permitted by law.
5. 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.
6. 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 for any election or other action for that director's replacement for at least one year after the date of the special meeting and shall permit members to inspect those documents and records pursuant to section 33‑1258.
7. A petition that calls for the removal of the same member of the board of directors shall not be submitted more than once during each term of office for that member.
8. On removal of a member of the board of directors at a meeting of the membership, the board shall hold an election for the replacement of the removed director at a separate meeting of the membership. The separate meeting for electing a replacement director shall be held no later than thirty days after the day of the meeting at which the director was removed. The director who was removed may not be appointed or elected to the board for two years after the date of removal unless the condominium documents specifically provide for a greater period of time.
I. 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.
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 later than one hundred eighty days after the end of the association's fiscal year and shall be made available upon 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.
Sec. 2. Section 33-1813, Arizona Revised Statutes, is amended to read:
33-1813. Removal of board member; special meeting
A. Notwithstanding any provision of the declaration or bylaws to the contrary, the members, by a majority vote of members entitled to vote and voting on the matter at a meeting of the members called pursuant to this section at which a quorum is present, may remove any member of the board of directors with or without cause, other than a member appointed by the declarant. 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:
1. 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 entitled to cast at least twenty-five per cent of the votes in the association or 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.
2. Notwithstanding section 33‑1804, subsection B, 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 entitled to cast at least ten per cent percent of the votes in the association or 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.
3. The special meeting shall be called, noticed and held within thirty days after receipt of the petition.
4. For purposes of a special meeting called pursuant to this subsection, a quorum is present if the number of owners to whom at least twenty per cent percent of the votes or one thousand votes, whichever is less, are allocated is present at the meeting in person or as otherwise permitted by law.
5. 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.
6. 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 for any election for that director's replacement for at least one year after the date of the special meeting and shall permit members to inspect those documents and records pursuant to section 33‑1805.
7. A petition that calls for the removal of the same member of the board of directors shall not be submitted more than once during each term of office for that member.
8. On removal of a member of the board of directors at a meeting of the membership, the board shall hold an election for the replacement of the removed director at a separate meeting of the membership. The separate meeting for electing a replacement director shall be held no later than thirty days after the day of the meeting at which the director was removed. The director who was removed may not be appointed or elected to the board for two years after the date of removal unless the community documents specifically provide for a greater period of time.
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.