HB 2275 — condominium termination; unit owners; percentage

HouseSenate Engrossed House Bill condominium termination;

percentage State of Arizona House of Representatives Fifty-fifth Legislature Second Regular Session CHAPTER 373 HOUSE BILL 2275 AN ACT AMENDING SECTIONS 33-1227 AND 33-1228, ARIZONA REVISED STATUTES;

Except in cases of amendments that may be executed by a declarant under section 33-1220, by the association under section 33-1206 or section 33-1216, subsection D, or by certain unit owners under section 33-1218, subsection B, section 33-1222, section 33-1223 or section 33-1228, subsection B C,D, and except to the extent permitted ALLOWED or required by other provisions of this chapter, the declaration, including the plat, may be amended only by a vote of the unit owners to which at least sixty-seven per cent PERCENT of the votes in the association are allocated, or any larger majority the declaration specifies.

Except in the case of a taking of all the units by eminent domain, AEXCEPT condominiumAS mayPROVIDED beIN terminatedSUBSECTION onlyB byOF agreementTHIS ofSECTION, unitA ownerscondominium - 1 - H.B.

2275 may be terminated only by agreement of unit owners of units to which at least eighty ONE HUNDRED percent of the votes in the association are allocated, or any larger percentage the declaration specifiesspecifies, EXCEPT:

AtA leastCONDOMINIUM thirtyCREATED daysON beforeOR recordingAFTER aTHE terminationEFFECTIVE agreement,DATE theOF boardTHIS ofAMENDMENT directorsTO ofTHIS theSECTION associationMAY shallBE conveneTERMINATED aONLY regularBY orAGREEMENT specialOF meetingUNIT ofOWNERS theOF boardUNITS ofTO directorsWHICH atNINETY-FIVE whichPERCENT aOF personTHE orVOTES entityIN thatTHE purportsASSOCIATION toARE haveALLOCATED, theOR agreementANY ofLARGER atPERCENTAGE leastTHE eightyDECLARATION ONESPECIFIES, HUNDREDEXCEPT percentAS ofPROVIDED theIN votesSUBSECTION inA, thePARAGRAPH association,1 orOR any2 largerOF percentageTHIS ifSECTION. required, shall produce and make available to the unit owners copies of a signed notarized statement that the owner of a unit has executed a termination agreement.

TheC. person or entity shall produce copies of a statement for each unit owner who has agreed to the termination, or may produce the signed termination agreement that includes a sufficient number of ALL OF THE unit owners.

At least thirty days before recording a termination agreement, the board of directors of the association shall convene a regular or special meeting of the board of directors at which a person or entity that purports to have the agreement of at least eighty percent THE PERCENTAGE of the votes in the association SPECIFIED IN SUBSECTION A OR B OF THIS SECTION, AS APPLICABLE, or any larger percentage if required, shall produce and make available to the unit owners copies of a signed notarized statement that the owner of a unit has executed a termination agreement.

The person or entity shall produce copies of a statement for each unit owner who has agreed to the termination, or may produce the signed termination agreement that includes a sufficient number of unit owners.

C.D.

D.E.

E.F.

The association, on behalf of the unit owners, may contract for the sale of real estate in the condominium, but the contract is not binding on the unit owners until approved pursuant to subsections A, and B- AND2 C- ofH.B. this section.

2275 B, C AND D of this section.

Proceeds of the sale shall be -distributed 2to -unit H.B.owners and lienholders as their interests may appear, in proportion to the respective interests of unit owners as provided in subsection G I of this section.

2275 distributed to unit owners and lienholders as their interests may appear, in proportion to the respective interests of unit owners as provided in subsection G H of this section.

F.G.

If the real estate constituting the condominium is not to be sold following termination, title to all the real estate in the condominium vests in the unit owners on termination as tenants in common in proportion to their respective interests as provided in subsection G HI of this section, and liens on the units shift accordingly.

G.H.

H.I.

The respective interests of unit owners referred to in subsections D, E,E and FF, G AND GH of this section are as follows:

Any unit owner may obtain a second independent appraisal at the unit owner's expense and, if the unit owner's independent appraisal amount differs from the association's- independent3 appraisal- amountH.B. by five percent or less, the higher appraisal is final.

If2275 theassociation's totalindependent appraisal amount of compensation owed as determined by the second appraiser is more than five percent higheror thanless, the amounthigher determinedappraisal by the association's appraiser, the unit owner shall submit to arbitration by an arbitrator affiliated with a national arbitration association and under the rules of that association at the association's expense and the arbitration amount is thefinal. final sale - 3 - H.B.

2275If the total amount of compensation owed as determined by the second appraiser is more than five percent higher than the amount determined by the association's appraiser, the unit owner shall submit to arbitration by an arbitrator affiliated with a national arbitration association and under the rules of that association at the association's expense and the arbitration amount is the final sale amount.

I.J.

Except as provided in subsection I JK of this section, foreclosure or enforcement of a lien or encumbrance against the entire condominium does not of itself terminate the condominium, and foreclosure or enforcement of a lien or encumbrance against a portion of the condominium does not withdraw that portion from the condominium.

J.K.

K.

The provisions of subsections C, D, E, F, G, H and I AND J of this section do not apply if the original declaration, an amendment to the original declaration recorded before the conveyance of any unit to an owner other than the declarant or an agreement by all of the unit owners contains provisions inconsistent with these subsections.

K.

BeginningThe onprovisions Augustof 3,subsections 2018,C, anyD, provisionsE, inF, theH declarationand thatI conflictE, withF, subsectionG, G H, paragraphJ 1AND K of this section aredo voidnot asapply aif matterthe original declaration, an amendment to the original declaration recorded before the conveyance of publicany policy.unit to an owner other than the declarant or an agreement by all of the unit owners contains provisions inconsistent with these subsections.

K.

M.

Beginning on August 3, 2018, any provisions in the declaration that conflict with subsection G I, paragraph 1 of this section are void as a matter of public policy.

APPROVED BY THE GOVERNOR JULY 6, 2022.

FILED IN THE OFFICE OF THE SECRETARY OF STATE JULY 6, 2022.