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Choosing Where to Live

Homeowner Associations (HOAs)

What is an HOA?

An HOA is a private association established to govern the marketing, management, maintenance, selling, and leasing of homes within a particular building or subdivision.

An HOA’s governing documents have two distinct purposes. Its Articles of Incorporation and its Bylaws are intended to govern the HOA itself, while its Covenants, Conditions, and Restrictions (or “CC&Rs”) are intended to govern how individual homeowners may occupy and use the property.

An HOA’s governing documents generally “run with the land,” which means that every present and future owner of a property within the HOA’s jurisdiction is legally bound by and to the terms of those governing documents whether they like it or not.

Most HOAs require that all owners of property within the HOA’s jurisdiction belong to the HOA as members and pay regular assessments to the HOA in order to participate in governance decisions and make use of common amenities – such as parks and recreation facilities – provided and maintained by the HOA.

Under Arizona law, there are two kinds of HOAs: those which govern condominiums and those which govern planned communities.

A.R.S. 33-1202 defines a “condominium” as follows: “real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of the separate portions. Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners.”

A.R.S. 33-1802 defines a “planned community” as follows: “a real estate development that includes real estate owned and operated by or real estate on which an easement to maintain roadways or a covenant to maintain roadways is held by a nonprofit corporation or unincorporated association of owners, that is created for the purpose of managing, maintaining or improving the property and in which the owners of separately owned lots, parcels or units are mandatory members and are required to pay assessments to the association for these purposes.”

May an HOA’s CC&Rs govern anything?

Yes, for the most part, so long as they are not unlawful. Under A.R.S. 33-1808 (which applies to planned communities) and A.R.S. 33-1261 (which applies to condominiums), HOAs may not prohibit any of the following (but may adopt reasonable rules and regulations regarding their placement and manner):

  1. the American flag or an official or replica of a flag of the United States army, navy, air force, marine corps or coast guard by a homeowner on their own property
  2. the POW/MIA flag
  3. the Arizona state flag
  4. the flag of an Arizona Indian nation
  5. the Gadsden flag
  6. political signs
  7. for-sale, for-lease, and for-rent signs

How are HOAs organized?

Ordinarily, an HOA is established by the developer of the community whose appointees serve as directors. Over time, as ownership in the community shifts from the developer to actual homeowners, the board of directors becomes comprised exclusively of homeowners. The HOA’s Articles of Incorporation and Bylaws govern the election of directors and the operation of the board as a whole (such as who can vote and when and how). The board of directors administers the HOA by managing its finances and assets and by enforcing its governing documents. The board also often establishes committees – such as design review or architectural committees – to interpret and apply the CC&Rs in particular contexts.

How must HOA boards conduct meetings?

HOA board meetings are generally required by Arizona law to be open to all HOA members. A.R.S. 33-1804 (which applies to planned communities) and A.R.S. 33-1248 (which applies to condominiums) both state that “It is the policy of this state ... that all meetings of a planned community [or condominium], whether meetings of the members’ association or meetings of the board of directors of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the members of the matters to be discussed or decided and to ensure that members have the ability to speak after discussion of agenda items, but before a vote of the board of directors or members is taken.”

Any portion of a meeting may be closed if the closed portion of the meeting is limited to consideration of any of the following:

  1. legal advice from an attorney for the HOA and/or the board of directors
  2. pending or contemplated litigation
  3. personal, health, or financial information about an individual homeowner or an individual employee of the HOA or one of its contractors
  4. matters relating to the job performance of, compensation of, health records of, or specific complaints against an individual employee of the HOA or one of its contractors
  5. discussion of a homeowner’s appeal of any violation cited or penalty imposed by the HOA except on request of the homeowner that the meeting be held in an open session

All of an HOA’s financial and other records must be made available for examination by any homeowner subject to the same exceptions.

Why do HOAs charge dues or fees?

Because an HOA is responsible for ensuring that the HOA-governed community and its amenities remain well-maintained and that its governing documents – including the CC&Rs which regulate what individuals homeowners may and may not do – are adhered to, HOAs charge assessments (or dues or fees) which each homeowner must pay on a regular basis (usually monthly or yearly).

What are some of the major advantages of HOA membership? 

  • HOAs provide residents with services and amenities that many cities and towns cannot afford
  • HOAs enforce rules and regulations designed to preserve and raise property values
  • HOAs handle disputes between neighbors which might otherwise result in a lawsuit
  • HOAs make it easier for disruptive residents to be fined for inappropriate conduct

 What are some of the major disadvantages of HOA membership?

  • HOA assessments are expensive
  • HOA board members are not required to have any specific training or certification
  • HOAs act like private (and constitutionally unaccountable) local governments
  • HOA committee members without any related training have the right to decide how and how often each individual homeowner paints their house or mows their lawn

Sources and further reading

Arizona Department of Real Estate – “HOA Dispute Process”: http://www.azre.gov/HOA/HOA.aspx

Arizona Department of Real Estate – “HOA Dispute Process Brochure”: http://www.azre.gov/hoa/documents/HOA_Dispute_Process_Bro_9_2016.pdf

Arizona Revised Statutes Title 32 – Chapter 20 (“Real Estate”) – Article 11 (“Administrative Hearings”): http://www.azre.gov/hoa/documents/Title32_Chapter20_Article11.pdf 

Arizona Revised Statutes Title 33 – Chapter 9 “Condominiums”): http://www.azre.gov/hoa/documents/Condominium_Act.pdf

Arizona Revised Statutes Title 33 – Chapter 16 (“Planned Communities”): http://www.azre.gov/hoa/documents/Planned_Communities_Act.pdf

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This website has been prepared for general information purposes only. The information on this website is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. Also, the law may vary from state-to-state or county-to-county, so that some information in this website may not be correct for your situation. Finally, the information contained on this website is not guaranteed to be up to date. Therefore, the information contained in this website cannot replace the advice of competent legal counsel licensed in your jurisdiction.

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