House Bill 2397 — amending A.R.S. §§ 33-1260 and 33-1806
Applies to both planned communities and condominiums.
Yesterday we covered what House Bill 2397 adds to the resale disclosure package. Today, in the second half of our coverage, we turn to what the bill changes in the existing requirements, the new acknowledgement language purchasers must sign, and how the bill changes liability. House Bill 2397 became effective on September 12, 2026.
Changes to existing disclosure requirements:
- Specifies that included Bylaws and Rules must be current, and that the included Declaration must be the current recorded Declaration;
- If the most recent reserve study is more than 10 pages, allows a summary to be provided in the disclosure package instead of the full report;
- Requires the purchaser to sign a contractual acknowledgement statement (to be included in the disclosure package) at the close of escrow (instead of “within 14 calendar days”) and changes the required statement language to the following:
I HEREBY ACKNOWLEDGE THAT WITH THE PURCHASE OF THIS HOME OR PROPERTY, I WILL BE CONTRACTUALLY BOUND TO THE VALID COVENANTS, CONDITIONS AND RESTRICTIONS OF THE RECORDED DECLARATION, AND WILL BE CONTRACTUALLY BOUND TO PAY ALL COMMON EXPENSE ASSESSMENTS APPLIED TO MY HOME OR PROPERTY AS AUTHORIZED IN THE DECLARATION AND TITLE 33, CHAPTER 9 OR 16, ARIZONA REVISED STATUTES, AS APPLICABLE. IF I FAIL TO PAY COMMON EXPENSE ASSESSMENTS, I MAY BE SUBJECT TO COLLECTION ACTIVITY BY THE ASSOCIATION UP TO AND INCLUDING FORECLOSURE ACTION, WITHOUT THE EQUITY PROTECTION OF THE HOMESTEAD ACT PURSUANT TO TITLE 33, CHAPTER 8, ARIZONA REVISED STATUTES.
The bill removes the lien extinguishment consequence for an Association’s failure to timely provide the required disclosure information. Note that it does not eliminate the lien extinguishment consequences set forth in A.R.S. § 33-1256(J) (Condominiums) and A.R.S. § 33-1807(J) (Planned Communities); it just removes the redundant language in A.R.S. §§ 33-1260 and 33-1806.
The bill adds a good faith reliance provision stating that all disclosures provided under these statutes “shall be based on good faith reliance on Association records or information, without the need for independent investigation or validation.”
It also changes the standard for an owner’s/Association’s liability from a mere “failure to disclose” to “knowingly or recklessly failing” to disclose or “knowingly or recklessly providing materially false or misleading statements” in the disclosure, and adds the phrase “as awarded by the Court” to the provision for recovery of reasonable attorney fees.
Finally, the bill specifies that an Owner may request the Association to update a disclosure report if thirty days or more have passed since the date of the original report, and that the Association may charge a fee of not more than $50 for such an update.
Because these changes affect every resale, Mulcahy Law Firm recommends that associations and managers update their disclosure packages and forms now. We are available to review them.
Information in this article reflects the law as of the publication date. Laws are subject to change, and this post may not be updated to reflect subsequent legal developments. Contact Mulcahy Law Firm, P.C. with questions at info@mulcahylawfirm.com.
