HB 2575 — homeowners' associations; powers

HOUSEHouse FLOOREngrossed AMENDMENThomeowners' EXPLANATIONassociations; Bill Number:

HBpowers State of Arizona House of Representatives Fifty-sixth Legislature Second Regular Session HOUSE BILL 2575 BiasiucciAN FloorACT AmendmentAMENDING 1.TITLE 33, CHAPTER 16, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTION 33-1820;

RemovesRELATING theTO authorityPLANNED ofCOMMUNITIES. an association to institute, defend or intervene in litigation or administrative proceedings in its own name on behalf of the members' interests.

(TEXT OF BILL BEGINS ON NEXT PAGE) - i - H.B.

2575 Be it enacted by the Legislature of the State of Arizona:

Section 1.

Title 33, chapter 16, article 1, Arizona Revised Statutes, is amended by adding section 33-1820, to read:

33-1820.

Powers of the association SUBJECT TO THE PROVISIONS OF THE DECLARATION, THE ASSOCIATION MAY:

1.

ADOPT AND AMEND BYLAWS AND RULES.

SpecifiesADOPT thatAND toAMEND ensureBUDGETS claimsFOR regardingREVENUES, faultyEXPENDITURES constructionAND areRESERVES effectivelyAND made,COLLECT andASSESSMENTS unlessFOR aCOMMON memberEXPENSES assignsFROM aMEMBERS. claim to an association, an association may not institute, defend or intervene in litigation or arbitration in its own name on behalf of itself or a member with respect to a homeowners' association dwelling action unless the action pertains to:

a)3. the planned community's common areas;

b)HIRE anyAND portionDISCHARGE ofMANAGING theAGENTS plannedAND communityOTHER ownedEMPLOYEES, byAGENTS anAND association;INDEPENDENT CONTRACTORS.

or4. c) any portion of the planned community not owned by an association but the association is obligated to maintain, repair, insure or replace because the community documents expressly impose that obligation.

AmendmentINSTITUTE, explanationDEFEND preparedOR byINTERVENE S.JensenIN PhoneLITIGATION NumberOR x63040ADMINISTRATIVE lsPROCEEDINGS 3/4/2024IN Fifty-sixthITS LegislatureOWN BiasiucciNAME SecondON RegularBEHALF SessionOF H.B.ITSELF OR TWO OR MORE MEMBERS ON MATTERS AFFECTING THE ASSOCIATION OR PLANNED COMMUNITY.

2575TO BIASIUCCIENSURE FLOORTHAT AMENDMENTCLAIMS HOUSEREGARDING FAULTY CONSTRUCTION ARE EFFECTIVELY MADE, AND UNLESS A MEMBER ASSIGNS A CLAIM TO THE ASSOCIATION, THE ASSOCIATION MAY NOT INSTITUTE, DEFEND OR INTERVENE IN LITIGATION OR ARBITRATION IN ITS OWN NAME ON BEHALF OF REPRESENTATIVESITSELF AMENDMENTSOR A MEMBER WITH RESPECT TO H.B.A HOMEOWNERS' ASSOCIATION DWELLING ACTION PURSUANT TO CHAPTER 18 OF THIS TITLE UNLESS THE ACTION PERTAINS TO ANY OF THE FOLLOWING:

2575 (Reference to printed bill) Page 1, line 13, strike "OR THE MEMBERS'" Line 14, strike "INTERESTS";

after the period insert "TO ENSURE THAT CLAIMS REGARDING FAULTY CONSTRUCTION ARE EFFECTIVELY MADE, AND UNLESS A MEMBER ASSIGNS A CLAIM TO THE ASSOCIATION, THE ASSOCIATION MAY NOT INSTITUTE, DEFEND OR INTERVENE IN LITIGATION OR ARBITRATION IN ITS OWN NAME ON BEHALF OF ITSELF OR A MEMBER WITH RESPECT TO A HOMEOWNERS' ASSOCIATION DWELLING ACTION PURSUANT TO CHAPTER 18 OF THIS TITLE UNLESS THE ACTION PERTAINS TO ANY OF THE FOLLOWING:

(c) ANY PORTION OF THE PLANNED COMMUNITY THAT THE ASSOCIATION DOES NOT OWN BUT IS OBLIGATED TO MAINTAIN, REPAIR, INSURE OR REPLACE BECAUSE THE COMMUNITY DOCUMENTS EXPRESSLY IMPOSE THAT OBLIGATION ON THE ASSOCIATION."ASSOCIATION. Amend title to conform LEO BIASIUCCI 2575FloorBIASIUCCI.docx 03/04/2024 10:46 AM C:

MR5.

MAKE CONTRACTS AND INCUR LIABILITIES.

6.

REGULATE THE USE, MAINTENANCE, REPAIR, REPLACEMENT AND MODIFICATION OF COMMON AREAS.

7.

GRANT EASEMENTS, LEASES, LICENSES AND CONCESSIONS THROUGH OR OVER THE COMMON AREAS.

8.

IMPOSE AND RECEIVE ANY PAYMENTS, FEES OR CHARGES FOR THE USE, RENTAL OR OPERATION OF THE COMMON AREAS.

9.

IMPOSE REASONABLE CHARGES FOR THE PREPARATION AND RECORDATION OF AMENDMENTS TO THE DECLARATION OR STATEMENTS OF UNPAID ASSESSMENTS.

10.

PROVIDE FOR THE INDEMNIFICATION OF ITS OFFICERS AND EXECUTIVE BOARD OF DIRECTORS AND MAINTAIN DIRECTORS' AND OFFICERS' LIABILITY INSURANCE.

11.

EXERCISE ANY OTHER POWERS CONFERRED BY THE COMMUNITY DOCUMENTS.

12.

EXERCISE ALL OTHER POWERS THAT MAY BE EXERCISED IN THIS STATE BY LEGAL ENTITIES OF THE SAME TYPE AS THE ASSOCIATION.

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