As you may already know, on July 16, 2013, a lawsuit was filed seeking a declaratory judgment regarding whether Senate Bill 1454 enacted by the 2013 Arizona Legislature is unconstitutional.

The portions of SB1454 that apply to associations are the following: a municipality or planning agency cannot require a planned community as part of a zoning ordinance or subdivision regulation, ability of homeowners to now vote by email and fax on association issues, regulation of rental properties in an association, political signs in a condominium, return of the filing fee for disputes brought in front of the Department Fire, Building, and Life Safety, and the ability of a management company to prepare and record liens and appear in small claims court on behalf of an association.

It appears the provision of SB1454 that is most concerning to our Clients is the provision regarding the regulation of rental properties.  Does your Association currently have rental restrictions? If so, SB1454, as well as the lawsuit may be of particular concern for your Association. SB 1454 only allows for the Association to ask for the following information regarding a tenant/rental property: the name and contact information for adults occupying the property, time period of the lease including beginning and end dates of the tenancy, and the description and license plate of the tenant’s vehicle. Another main provision of the Bill sets forth the Association or its managing agent shall not assess, levy or charge a fee or fine or otherwise impose a requirement on a Unit Owner’s rental Unit any differently than an Owner occupied Unit.  The Association may charge a fee of not more than twenty‑five dollars which shall be paid within fifteen days after the postmarked request. 

SB1454 goes into effect on September 13, 2013.  Once the law goes into effect, Associations will need to make sure to be in compliance with the law. However, some individuals are trying to prevent SB1454 from becoming law and have filed a lawsuit alleging SB1454 is unconstitutional.

The provisions of SB1454 were added to this bill the final moments of the Legislative Session. This was the last bill that was considered by the Legislature.  The remaining portions of SB1454 are not related to community associations and deal with election laws. The Plaintiffs in this lawsuit allege that adding provisions pertaining to community associations that are completely unrelated to election laws violation the single subject requirement and are unconstitutional. Further, the title of SB1454 did not include any references to planned communities or condominiums. It is interesting to note that substantially similar provisions pertaining to community associations were brought up previously in the Legislative Session in different Bills, but those bills did not become law

Given that SB1454 is scheduled to become law on September 13, 2013, I anticipate the Court will make a ruling prior to September 13, 2013.  If SB1454 does become law, your Association may need to make some changes regarding the Association’s rental provisions.  The Mulcahy Law Firm, P.C. would be happy to assist your Association with this process. We will also keep you updated as this lawsuit unfolds.