On June 20, 2013 Governor Brewer signed into law Senate Bill S.B. 1454 effective September 13, 2013 codified as A.R.S. § 33-1260.1. This new law makes major changes in the way that HOA’s must deal with condominium owners and is a step in establishing a condo owner’s bill of rights. This article is Part One analyzing the rental rights of condominium owners. If there are no restrictions regarding rental rights in the Declaration of Covenants, Conditions and Restrictions (“Declaration”), the following is applicable:

I. Owner’s Rights.

  1. An owner may rent his/her condominium Unit unless prohibited by the Declaration.
  2. An owner may authorize a third party to act as an agent for all matter dealing with the rental Unit and the HOA.

II. Prohibitions – HOA’s Can’t Do This.

  1.  HOA’s are prohibited from charging more than a $25.00 administrative fee relating to the Lease and may not charge any fee for renewal of the Lease.
  2. Obtain a copy of the rental application, credit report, lease agreement or rental contract of the tenant.
  3. Have the tenant sign a waiver eliminating the tenant’s due process rights as a condition of tenant’s occupancy of the rental unit.
  4. Placing any restrictions on the Unit owner serving on the Board of Directors based on the fact that the owner is not an occupant of the Unit.
  5. Imposing more than a $15.00 fee for an incomplete or late application. If the HOA attempts to impose a fee, penalty or other charge not authorized by statute that voids the $25.00 fee requirement and voids the requirement that the Unit owner or tenant provide any information to the HOA.

III. HOA is Permitted in the event of a Lease.

  1. To obtain name and contact information for any adults occupying the Unit.
  2. To obtain beginning and ending dates of the Lease.
  3. To obtain description and license number of the Tenant’s vehicle(s).
  4. To obtain from Tenant a government issued identification with a photograph to confirm that the tenant meets the condominium’s age restriction requirements.
  5. Acquire a credit report on the person in an attempt to collect a valid debt.

With this new law, Arizona established the beginnings of a condominium owner’s Bill of Rights and has made the rental of condominium units easier and the HOA”S intrusion in the rental process has been substantially limited. Part Two of this Article will address three other major provisions of the new HOA Condominium Owners Bill of Rights.

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If you have any legal questions related to this subject matter or other real estate law related inquiries, please email me directly at lcelmins@mclawfirm.com and I’ll be happy to furnish a prompt answer.