REFERENCE TITLE: homeowners' associations; hearings; attorney fees





State of Arizona


Fifty-third Legislature

First Regular Session




SB 1289


Introduced by

Senators Farnsworth D: Allen S, Burges, Meza, Miranda, Smith; Representative Clodfelter





amending sections 12-341.01 and 32-2199.01, Arizona Revised Statutes; relating to condominiums and planned communities.





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

Section 1.  Section 12-341.01, Arizona Revised Statutes, is amended to read:

START_STATUTE12-341.01.  Recovery of attorney fees

A.  In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney fees.  If a written settlement offer is rejected and the judgment finally obtained is equal to or more favorable to the offeror than an offer made in writing to settle any contested action arising out of a contract, the offeror is deemed to be the successful party from the date of the offer and the court may award the successful party reasonable attorney fees.  This section shall not be construed as altering, prohibiting or restricting present or future contracts or statutes that may provide for attorney fees.

B.  The award of reasonable attorney fees pursuant to this section should be made to mitigate the burden of the expense of litigation to establish a just claim or a just defense.  It need not equal or relate to the attorney fees actually paid or contracted, but the award may not exceed the amount paid or agreed to be paid.

C.  The court and not a jury shall award reasonable attorney fees under this section.

D.  This section does not apply to administrative hearings held pursuant to section 32‑2199.01 regardless of which party is the successful party. END_STATUTE

Sec. 2.  Section 32-2199.01, Arizona Revised Statutes, is amended to read:

START_STATUTE32-2199.01.  Hearing; rights and procedures

A.  For a dispute between an owner and a condominium association or planned community association that is regulated pursuant to title 33, chapter 9 or 16, the owner or association may petition the department for a hearing concerning violations of condominium documents or planned community documents or violations of the statutes that regulate condominiums or planned communities.  The petitioner shall file a petition with the department and pay a filing fee in an amount to be established by the commissioner.  The filing fee shall be deposited in the condominium and planned community hearing office fund established by section 32‑2199.05.  On dismissal of a petition at the request of the petitioner before a hearing is scheduled or by stipulation of the parties before a hearing is scheduled, the filing fee shall be refunded to the petitioner.  The department does not have jurisdiction to hear:

1.  Any dispute among or between owners to which the association is not a party.

2.  Any dispute between an owner and any person, firm, partnership, corporation, association or other organization that is engaged in the business of designing, constructing or selling a condominium as defined in section 33‑1202 or any property or improvements within a planned community as defined in section 33‑1802, including any person, firm, partnership, corporation, association or other organization licensed pursuant to this chapter, arising out of or related to the design, construction, condition or sale of the condominium or any property or improvements within a planned community.

B.  The petition shall be in writing on a form approved by the department, shall list the complaints and shall be signed by or on behalf of the persons filing and include their addresses, stating that a hearing is desired, and shall be filed with the department.

C.  On receipt of the petition and the filing fee the department shall mail by certified mail a copy of the petition along with notice to the named respondent that a response is required within twenty days after mailing of the petition showing cause, if any, why the petition should be dismissed.

D.  After receiving the response, the commissioner or the commissioner's designee shall promptly review the petition for hearing and, if justified, refer the petition to the office of administrative hearings.  The commissioner may dismiss a petition for hearing if it appears to the commissioner's satisfaction that the disputed issue or issues have been resolved by the parties.

E.  Failure of the respondent to answer is deemed an admission of the allegations made in the petition, and the commissioner shall issue a default decision.

F.  Informal disposition may be made of any contested case.

G.  Either party or the party's authorized agent may inspect any file of the department that pertains to the hearing, if the authorization is filed in writing with the department.

H.  At a hearing conducted pursuant to this section, a corporation may be represented by a corporate officer, employee or contractor of the corporation who is not a member of the state bar if:

1.  The corporation has specifically authorized the officer, employee or contractor of the corporation to represent it.

2.  The representation is not the officer's, employee's or contractor of the corporation's primary duty to the corporation but is secondary or incidental to the officer's, employee's or contractor of the corporation's, limited liability company's, limited liability partnership's, sole proprietor's or other lawfully formed and operating entity's duties relating to the management or operation of the corporation.

I.  Notwithstanding any provision in the condominium documents as defined in section 33-1202 or the planned community documents as defined in section 33-1802, the administrative law judge and the commissioner may not make an award of attorney fees to the association in any matter filed pursuant to subsection A of this section. END_STATUTE