In general, the purpose of a homeowners’ association (HOA) is to protect the community in order to maintain property values. HOA’s arise out of the Covenants, Conditions and Restrictions (CC&R’s) which are placed on the property by the developer to maintain community standards and property values. When a neighbor is doing something outside of her home contrary to the CC&R’s, the HOA is in place to prevent violations and prevent community blight. At times, however, the property rights of individual unit owners clash with the interests of the HOA to maintain uniformity throughout the community.
- How far can an HOA go to protect the neighborhood if the owner wants to rent the condominium unit?
- Should the HOA be able to control the rental and the number of rental units in a community?
- How far can an HOA go to obtain information regarding the prospective tenant?
In 2013, the Arizona legislature answered some of these questions and enacted legislation which restricts the type of information which the HOA and its management company can obtain from the condominium unit owner and the prospective tenant (A.R.S. 33-1260.1).
I. Owner’s Rights
- An owner may rent his/her condominium Unit unless prohibited by the Declaration.
- An owner may authorize a third party to act as an agent for all matters dealing with the rental Unit and the HOA.
II. Prohibitions – HOA’s Can’t Do This
- 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
- Obtain a copy of the rental application, credit report, lease agreement or rental contract of the tenant
- Have the tenant sign a waiver eliminating the tenant’s due process rights as a condition of tenant’s occupancy of the rental unit
- 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.
- 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
- To obtain name and contact information for any adults occupying the Unit.
- To obtain beginning and ending dates of the Lease.
- To obtain description and license number of the Tenant’s vehicle(s).
- To obtain from Tenant a government issued identification with a photograph to confirm that the tenant meets the condominium’s age restriction requirements.
- Acquire a credit report on the person in an attempt to collect a valid debt.
With this new law, Arizona has 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.
Lat J. Celmins