The Arizona Legislature opened the Fifty-fifth Second Regular Session on Monday, January 10, 2022. Our firm anticipates that there will be numerous community association bills introduced this legislative session. Every week during the legislative session, Mulcahy Law Firm P.C. will provide this summary of proposed bills impacting community associations.

If you would like to be involved in the legislative process, please go to the Arizona Legislature website, www.azleg.gov, to find lists of legislators, phone numbers, and calendars regarding committee work. Or, please feel free to contact Beth Mulcahy, Esq. any time with questions regarding the status of bills or the legislative process.

Please stay tuned for legislative developments!


HB2010|HOMEOWNERS’ ASSOCIATIONS; FIRST RESPONDER FLAGS

Regardless of what a planned community and condominium association documents state, a planned community or condominium cannot prohibit the outdoor display of a first responder flag (this flag, however, may incorporate the design of one or two other first responder flags to form a combined flag) a blue star service flag or a gold star service flag.

The bill defines First Responder Flag as a flag that recognizes and honors the services of any of the following:

(a) Law enforcement and that is limited to the colors blue, black and white, the words “law enforcement”, “police”, “officers”, “first responder”, “honor our”, “support our” and “department” and the symbol of a generic police shield in a crest or star shape.

(b) Fire department and that is limited to the colors red, gold, black and white, the words “fire”, “fighters”, “F”, “D”, “FD”, “first responder”, “department”, “honor our” and “support our” and the symbol of a generic Maltese cross.

(c) Paramedics or emergency medical technicians and that is limited to the colors blue, black and white, the words “first responder”, “paramedic”, “emergency medical”, “service”, “technician”, “honor our” and “support our” and the symbol of a generic star of life.

Status: Signed by Governor (6/6/2022) Effective date is 90 days after the Legislative session ends.


HB2069|VACATION RENTALS; SHORT-TERM RENTALS; REPEAL

This bill would add a civil penalty for an online lodging operator that fails to comply with the tax subsection shall pay a civil penalty of $250.00 for a first offense and $1,000.00 for a second and any subsequent offense.


HB2131|ARTIFICIAL GRASS BAN PROHIBITED;HOAS

  1. If a Planned Community’s documents allow natural grass on a member’s property, after the time of developer control, the association may not prohibit installing or using artificial turf on any member’s property.
  1. A planned community can adopt reasonable rules regarding  (1) the installation and appearance of the artificial turf (if those rules do not prevent installing artificial turf in the same manner that natural grass would be allowed by the community documents) and (2) the location on the property and percentage of the property that may be covered with artificial turf to the same extent as natural grass and may regulate artificial turf quality.
  1. A planned community can require (a) the removal of a member’s artificial turf if the artificial turf creates a health or safety issue that the member does not correct; and (b) replacement or removal of the artificial turf if is not maintained in accordance with the association’s standards for maintenance.
  1. A planned community can prohibit the installation of artificial turf in these situations:  (a) if it is installed in an area the association maintains or irrigates (for example, on common areas or front yard areas that an association under the CCRs maintains);  and (b) if a planned community prohibits the new installation of natural grass on a member’s property, the association can also prohibit the new installation of artificial turf on a member’s property (except that, in that instance, an association may not prohibit a member from converting natural grass to artificial turf on the member’s property.
  1. If a court finds a  planned community violates this law, a court shall award reasonable attorneys’ fees and costs.
  1. This law doesn’t apply to a planned community that has unique vegetation and geologic characteristics that require preservation by the Association and in which the viability of those characteristics is protected, supported or enhanced as a result of the continued existence of natural landscaping materials.

Status: Signed by Governor (3/30/2022) Effective date is 90 days after the Legislative session ends.


HB2149|HOMEOWNERS’ ASSOCIATIONS; MILITARY FLAGS
This bill is a technical correction regarding military flags and cautionary signs regarding children.


HB2158|HOMEOWNERS’ ASSOCIATIONS; POLITICAL; COMMUNITY ACTIVITY
This bill would prevent the association from prohibiting or unreasonably restricting a unit owner’s ability to peacefully assemble and use private or common elements of the association if done in compliance with reasonable restrictions for the use of that property adopted by the board of directors.

An individual unit owner or group of unit owners may organize to discuss or address condominium business, including board of director elections or recalls, potential or actual ballot issues or revisions to the condominium documents, property maintenance or safety issues or any other condominium business or actions. a unit owner may invite one political candidate or one non-unit owner guest to speak to an assembly of unit owners that has gathered to discuss condominium business. the association shall not restrict posting notices of these informal unit owner meetings on physical or electronic bulletin boards used by the association for posting notices for the association’s or board of director’s official meetings.

The bill adds the definition of political sign as a sign regarding any activity to elect or remove a condominium director or in support of or opposition to a measure that requires a vote of the association membership.

Status: Signed by Governor (4/13/2022) Effective date is 90 days after the Legislative session ends.


HB2207|ONLINE HOME SHARING; REPEAL

This bill would repeal the statutes prohibiting municipalities and counties from prohibiting vacation rentals or short-term rentals and limiting the restrictions that may be placed on rentals.

It would also Repeal the online lodging marketplace tax classification and requirement.


HB2234|VACATION RENTALS; SHORT-TERM RENTALS; ENFORCEMENT
This bill would allow a city or town may impose a civil penalty against the owner for every thirty days the owner fails to provide contact information. A city or town shall provide thirty days’ notice to the owner before imposing the initial civil penalty.

A city or town may require the owner of a vacation rental or short-term rental to maintain liability insurance appropriate to cover the vacation rental or short-term rental.

A city or town may impose a civil penalty against the owner of a vacation rental or short-term rental of $500.00 or up to an amount equal to one night’s rent for the lodging accommodation as advertised on an online lodging marketplace for the first verified violation, an amount of $1,000.00 or an amount equal to two nights’ rent for the lodging accommodation as advertised on an online lodging marketplace for the second verified violation and $3,500.00 or an amount equal to three nights’ rent for the lodging accommodation as advertised on an online lodging marketplace for the third and any subsequent verified violation received by the same vacation rental or short-term rental property within the same twelve-month period.

If multiple verified violations arise out of the same response to an incident at a vacation rental or short-term rental, those verified violations are considered one verified violation for the purpose of assessing civil penalties pursuant to this section and suspending the owner’s transaction privilege tax license.

Applies to Planned Communities and Condominiums.

Status: Second Read (1/25/2022)


HB2275|CONDOMINIUM TERMINATION; UNIT OWNERS;
This bill would change the number of votes required to terminate the condominium from eighty percent to ninety five percent for new condominiums and eighty percent for all other condominiums. It also adds the exemption of eminent domain.

Status: Signed by Governor (7/6/2022) Effective date is 90 days after the Legislative session ends.


HB2297|JUDGMENTS; LIENS; HOMESTEAD EXEMPTION
This bill would change the law so a recorded judgment is no longer a lien on any homestead property.


HB2321 | SHORT-TERM RENTALS; PROPERTY CLASSIFICATION

This bill changes property classification of rental property. It changes the definition of a rental property from being “solely” used as a rental to being “primarily” used as a rental.  The owner will have to inform the county assessor if the owner resides at the property for at least 60 days and how many days of the year the property is rented for periods of less than thirty days at a time for a total of more than one hundred twenty days in a calendar year. The amount of time a property is rented will change the class of the property for tax purposes.

Status: Second Read (1/24/2022)


HB2351|HOMESTEAD EXEMPTIONS; AMOUNT

This bill would increase the homestead exemption from $250,000 to $450,000.

Status:  Final Passage (4/25/2022)


HB2625|VACATION RENTALS; SHORT-TERM RENTALS; REGULATIONS

This bill expands the reasons a city or town would be able regulate short term rentals.

This would require the owner to provide the name and telephone number of the owner or owner’s designee to all property owners within three hundred feet of the vacation rental or short-term rental property.

It would also require the owner of a vacation rental or short-term rental to obtain and maintain a local regulatory permit or license issued by the county before offering a vacation rental or short-term rental for rent. A county may require the owner of a vacation rental or short-term rental to provide the county proof of a valid transaction privilege tax license.

Status: Second Read (2/1/2022)


HB2663|SHORT-TERM RENTALS; VACATION RENTALS; LICENSING

This bill would allow the county, city or town to limit the percentage of vacation rentals or short-term rentals based on the total housing stock in county, city or town.

They may also require the owner of a vacation rental or short-term rental to obtain and maintain a local regulatory permit or license issued by the county, city or town before offering a vacation rental or short-term rental for rent. A county, city or town may require the owner of a vacation rental or short-term rental to provide the county, city or town proof of a valid transaction privilege tax license.

The county, city or town require the owner of a vacation rental or short-term rental to offer the vacation rental or short-term rental for a minimum two-night rental period.

Status: Second Read (2/7/2022)


HB2700|CONDOMINIUMS; PLANNED COMMUNITIES; AMENDMENTS

This bill would change the percent of votes needed to amend the Bylaws and Declaration for more than fifty percent of the votes not withstanding any provisions in the documents except as follows:

1. An amendment that changes an age restriction for the condominium or planned community requires the approval of at least sixty-seven percent of the unit owners.

2. An amendment that changes provisions relating to renting a property for periods of less than thirty consecutive days requires the approval of at least sixty-seven percent of the unit owners.

3. An amendment other than an amendment prescribed in paragraph 1 or 2 of this subsection also may be approved by a unanimous vote of the board of directors.

Status: Second Read (2/8/2022)


HB2711|VACATION RENTALS; SHORT-TERM RENTALS; RESTRICTIONS

This bill would allow a city or town with a population of less than seventeen thousand persons may:
1. Require the owner of a vacation rental or short-term rental to obtain and maintain a permit or license issued by the city or town before renting or operating a vacation rental or short-term rental.
2. Limit the number of vacation rentals and short-term rentals based on a percentage of total residentially zoned buildings or structures in that city or town. 3. Regulate vacation rentals or short-term rentals in the same manner as transient lodging activities.

Status: Second Read (2/8/2022)


HB2730|HOMEOWNERS’ ASSOCIATIONS; ASSESSMENT LIENS

This bill has some good parts and some bad parts. The good parts are: ability of an association to lien for interest on unpaid assessments if authorized by the CCRs, elimination of the 30 day waiting period by the Association before sending a file to an attorney/collection agency and the elimination of the requirement for associations with over 50 units that have management company to provide a statement of account to all owners on a monthly basis. The bad parts of this bill are that there are changes to the law regarding ability to lien and the ability to foreclose that are detrimental to associations.

Status: Second Read (2/10/2022)


HB2807|HOMEOWNERS’ ASSOCIATIONS; STATEMENTS OF ACCOUNT

This bill would allow a member may opt out of receiving the statement of account by notifying the association.

Status: Second Read (2/10/2022)


SB1026|VACATION RENTALS; SHORT-TERM RENTALS; REPEAL

This bill would add a civil penalty for an online lodging operator that fails to comply with the tax subsection shall pay a civil penalty of $250.00 for a first offense and $1,000.00 for a second and any subsequent offense.

Status: Second Read (1/11/2022)


SB1102|HOMEOWNERS’ ASSOCIATIONS; SOLAR, WATER DEVICES
This bill would prevent an Association from prohibiting the installation of a solar energy device, water saving device or indoor or outdoor water saving practice.

Status: Second Read (1/11/2022)


SB1108|ONLINE LODGING; REGULATION; PROPERTY CLASSIFICATION

This bill would repeal the statutes prohibiting municipalities and counties from prohibiting vacation rentals or short-term rentals and limiting the restrictions that may be placed on rentals.

Status: Second Read (1/11/2022)


SB1168|VACATION RENTALS; SHORT-TERM RENTALS; ENFORCEMENT

This bill will allow a city or town to issue violations for failure to provide contact information and require the owner to have liability insurance. The bill also expands on fines for verified violations.

Status: Signed by Governor (7/6/2022) Effective date is 90 days after the Legislative session ends.


SB1249|HOMEOWNERS’ ASSOCIATIONS; UNIFORMED FLAGS

This bill would change the allowed flags from specific military flags to all uniformed services flags.

Status: Transmit to House (2/10/2022)


SB1524|ONLINE HOME SHARING; REPEAL

This bill would repeal the statutes prohibiting municipalities and counties from prohibiting vacation rentals or short-term rentals and limiting the restrictions that may be placed on rentals.

Status: Second Read (2/1/2022)


SB1582|HOMESTEAD EXEMPTIONS; AMOUNT

This bill would increase the homestead exemption from $250,000 to $450,000.

Status:  House Second Read (3/3/2022)


The above summary is current as of 7/7/2022. Please stay tuned for legislative developments!

 

2022 Summary of Pending Arizona Legislation regarding Community Associations