Document Fees upon Transfer (SB 1149)

Under current Arizona law, a property owners association is permitted to charge a fee for documents relating to the resale of property as long as the fee is “reasonable.”  Senate Bill 1149 limits the fees that a property owners association or its property management company can charge a property owner for the preparation of required documents (bylaws, declarations, disclosure statements, etc.) to not more than $400, which cannot be collected before the close of escrow.  In addition, if the property owners association fails to provide the documents requested within 10 days, the lien for any unpaid assessments then due will be extinguished.  These changes go into effect December 31, 2011.

“For Rent” and “For Sale” Signs (HB 2609)

The Legislature continued its trend of imposing limitations on the power of property owners associations to restrict certain activities in planned communities.  House Bill 2609 amends current law to prohibit a property owners association from charging a fee for the use or placement of a “For Rent” or “For Sale” sign.  In addition, the new law clarifies that the restrictions placed on property owners associations relating to “For Rent” and “For Sale” signs only apply to commercially produced signs, and property owners associations may prohibit the use of signs that are not commercially produced.  A property owners association that violates any of the “For Rent” or “For Sale” requirements forfeits the lien rights authorized under the statutes against a property for a period of 6 consecutive months following the date of violation.

Political Signs and Activity (HB 2609 and SB 1540)

Arizona law currently limits the ability of a property owners association to restrict flag display, political signs, and political petitions on property located within planned communities.  The House and the Senate each proposed bills that would change the current law, but with certain conflicting provisions.  Governor Brewer signed both bills on April 18, 2011, leaving questions about how the amended law will read once published.

House Bill 2609 amends the law to allow a property owners association to prohibit the display of political signs earlier than 71 days before an election and later than 3 days after an election.  In contrast, Senate Bill 1540 amends the law to allow a property owners association to prohibit the display of political signs earlier than 55 days before an election and later than 15 days after an election.

In addition, House Bill 2609 also makes certain changes relating to the size and number of political signs that can be placed on an owner’s property.  As with “For Rent” and “For Sale” signs, the new law clarifies that the restrictions placed on property owners associations relating to political signs only apply to commercially produced signs.  By contrast, Senate Bill 1540 prohibits a property owners association from requiring that political signs be commercially produced or professionally manufactured.  Senate Bill 1540 also prohibits a property owners association from regulating the number of candidates that can be supported on a political sign.

Finally, Senate Bill 1540 also restricts a property owners association from prohibiting door-to-door political activity and from prohibiting the circulation of political petitions on property “normally open to visitors” in the association.  However, a property owners association is permitted to restrict such activity from sunset to sunrise, and to require anyone engaged in such activity to prominently display an identification tag and an identification of the candidate or ballot issue.

Flags (SB 1326)

Current law prevents a property owners association from prohibiting the display of the flag of the United States, the flags of any branch of the military, the flag of the State of Arizona, the flag of any Native American nation, and the POW-MIA flag.  Senate Bill 1326 expands that list to include the Gadsden flag (i.e., the yellow flag with the drawing of a coiled rattle snake and the phrase “Don’t Tread On Me”).  However, a property owners association may limit a property owner to displaying not more than two flags at any one time.

Senate Bill 1326 also changes the current law so that a property owners association can still limit the location and size of flagpoles, but cannot prohibit the installation of a flagpole in the front yard or backyard of the owner’s property.  A property owners association also may limit the height of a flagpole to not more than the height of the rooftop of the owner’s home.

Open Meetings (HB 2609 and HB 2245)

Significant changes were made to the open meeting law applicable to property owners associations.  House Bill 2609 makes the following changes and clarifications, among others: (1) the open meeting law now applies to regularly scheduled committee meetings, in addition to association and board meetings; (2) a board may go into a closed meeting to discuss an owner’s appeal of a cited violation or penalty, unless the affected owner requests to hold the meeting in open session; (3) a property owners association must send notice of a member meeting not sooner than 10 and not more than 50 days before the meeting regardless of any provision in the declaration, bylaws or other association documents; (4) after the declarant control period ends, the board must provide notice of a board meeting at least 48 hours in advance regardless of any provision in the declaration, bylaws or other association documents; the board may, however, call an emergency meeting to discuss business that cannot be delayed until the next regularly scheduled meeting; and (5) after the declarant control period ends, any quorum of the board that meets, even informally, to discuss association business, must comply with the open meeting law even if the board does not take any formal action, including workshops.

House Bill 2245 amends current law to allow for the tape recording or videotaping of the open portions of an association meeting. The law permits the board to adopt reasonable rules governing the taping of open portions of meetings, but prohibits those rules from precluding tape recording or videotaping by those in attendance.