Bill Text: AZ HB2753 | 2010 | Forty-ninth Legislature 2nd Regular | Introduced
Bill Title: Homeowner's associations; management companies
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-02-11 - Referred to House GOV Committee [HB2753 Detail]
Download: Arizona-2010-HB2753-Introduced.html
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REFERENCE TITLE: homeowner's associations; management companies |
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State of Arizona House of Representatives Forty-ninth Legislature Second Regular Session 2010
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HB 2753 |
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Introduced by Representative McGuire
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AN ACT
amending title 32, chapter 20, Arizona Revised Statutes, by adding article 11; amending sections 33-1243 and 33-1811, 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. Title 32, chapter 20, Arizona Revised Statutes, is amended by adding article 11, to read:
ARTICLE 11. ASSOCIATION PROPERTY MANAGERS
32-2199. Definitions
In this article, unless the context otherwise requires:
1. "Association" means a condominium association as defined in section 33‑1202 or a planned community association as defined in section 33-1802.
2. "Association property manager" means a person who, for compensation, provides for an association property management services that may include purchasing, contracting, bookkeeping, maintenance or administrative functions on behalf of the board of directors of the association.
32-2199.01. Registration; renewal; fees; fund
A. A person who wishes to act as an association property manager for an association shall apply for registration by submitting to the department a completed application form prescribed by the department with the initial registration fee. The applicant shall also file with the department an affidavit stating whether the applicant has been convicted of a felony or any misdemeanor involving dishonesty or moral turpitude in this or any other state within the last ten years. The department may review the affidavit and issue or deny the registration based on its findings.
B. Registration is valid for two years. A person may renew a registration by submitting to the department a renewal form prescribed by the department with the renewal fee on or before the date the registration expires.
C. A broker or agent who is licensed pursuant to this chapter may register and renew registration as an association property manager without paying the fee prescribed by this section.
D. The department shall issue a certificate of registration to a person who complies with this section.
E. A person shall not act as an association property manager if the person is not registered pursuant to this section.
F. The department shall collect from each person a fee for an initial registration, for a renewal and for a duplicate registration certificate as determined by the department by rule.
G. The department shall deposit monies collected pursuant to subsection F in the association property management fund established by subsection H.
H. The association property management fund is established consisting of monies received pursuant to this section. Monies in the association property management fund shall be used for the purposes of implementing and enforcing this article.
32-2199.02. Association property manager conduct; rules
An association property manager:
1. Shall not knowingly misrepresent any information or knowingly act in a fraudulent manner.
2. Shall properly account for and maintain all monies received and paid on behalf of an association.
3. Shall maintain appropriate books and records to demonstrate that monies have been properly received and paid on behalf of an association.
4. Shall maintain a performance bond, financial reserves or another form of financial assurance as determined by the department by rule. The department may adopt rules that consider the size of the community or amount of money being managed, or both, the level of authority exercised by the association property manager and any other factors the department deems appropriate.
32-2199.03. Disciplinary actions
A. On the complaint of any person or on its own motion, the department shall investigate any suspected violation of this article by an association property manager. If the department finds a violation it may issue a letter of concern.
B. The department shall revoke or suspend an association property manager's registration if the department finds that the association property manager has committed any of the following:
1. Secured registration by fraud or deceit.
2. Committed an act or is responsible for an omission involving fraud or knowing misrepresentation with the intent to obtain a benefit.
3. Knowingly violated section 32‑2199.02.
C. The department shall:
1. Suspend the association property manager's registration for at least six months on the finding of a first violation pursuant to subsection B of this section.
2. Suspend the association property manager's registration for at least twelve months on the finding of a second violation pursuant to subsection B of this section.
3. Revoke the association property manager's registration on the finding of a third or subsequent violation pursuant to subsection B of this section.
D. The department shall not impose discipline until the association property manager has been provided an opportunity for a hearing before the department pursuant to title 41, chapter 6, article 10. The department shall notify the association property manager of the charges and the date and time of the hearing. The notice may be personally served or sent by certified mail to the association property manager's last known address. Except as provided in section 41‑1092.08, subsection H, the final decision of the department is subject to judicial review pursuant to title 12, chapter 7, article 6.
E. The department shall not renew an association property manager's registration during the time the registration is suspended or revoked.
32-2199.04. Rules
The department shall adopt rules for the purpose of administering this article.
32-2199.05. Confidential records
Except as otherwise provided by law, all documents associated with a complaint pursuant to this article are confidential until the complaint is resolved.
Sec. 2. 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. 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. 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 of the units which that 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 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 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 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 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 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.
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 request to the unit owners within thirty days after its completion.
K. The association shall not employ or otherwise provide compensation to a person for providing association property management services unless that person is registered as required by title 32, chapter 20, article 11.
K. L. 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. 3. Section 33-1811, Arizona Revised Statutes, is amended to read:
33-1811. Board of directors; contracts; conflict
A. The association shall not employ or otherwise provide compensation to a person for providing association property management services unless that person is registered as required by title 32, chapter 20, article 11.
b. 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. Any contract entered into in violation of this section is void and unenforceable.
Sec. 4. Effective date
This act is effective from and after December 31, 2010.
