First Regular Session S.B. 1531
COMMITTEE ON GOVERNMENT
SENATE AMENDMENTS TO S.B. 1531
(Reference to printed bill)
Strike everything after the enacting clause and insert:
"Section 1. Section 33-1256, Arizona Revised Statutes, is amended to read:
33-1256. Lien for assessments; priority; mechanics' and materialmen's liens; notice; applicability
A. The association has a lien on a unit for any assessment levied against that unit from the time the assessment becomes due. The association's lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the owner has been delinquent in the payment of monies secured by the lien, excluding reasonable collection fees, reasonable attorney fees and charges for late payment of and costs incurred with respect to those assessments, for a period of one year or in the amount of one thousand two hundred dollars $1,200 or more, whichever occurs first, as determined on the date the action is filed. Fees, charges, late charges, monetary penalties and interest charged pursuant to section 33‑1242, subsection A, paragraphs 10, 11 and 12, other than charges for late payment of assessments, are not enforceable as assessments under this section. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due. The association has a lien for fees, charges, late charges, other than charges for late payment of assessments, monetary penalties or interest charged pursuant to section 33‑1242, subsection A, paragraphs 10, 11 and 12 after the entry of a judgment in a civil suit for those fees, charges, late charges, monetary penalties or interest from a court of competent jurisdiction and the recording of that judgment in the office of the county recorder as otherwise provided by law. The association's lien for monies other than for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may not be foreclosed and is effective only on conveyance of any interest in the real property.
B. A lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments under this section is prior to all other liens, interests and encumbrances on a unit except:
1. Liens and encumbrances recorded before the recordation of the declaration.
2. A recorded first mortgage on the unit, a seller's interest in a first contract for sale pursuant to chapter 6, article 3 of this title on the unit recorded prior to the lien arising pursuant to subsection A of this section or a recorded first deed of trust on the unit.
3. Liens for real estate taxes and other governmental assessments or charges against the unit.
C. Subsection B of this section does not affect the priority of mechanics' or materialmen's liens or the priority of liens for other assessments made by the association. The lien under this section is not subject to chapter 8 of this title.
D. Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same real estate, those liens have equal priority.
E. Recording of the declaration constitutes record notice and perfection of the lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments. Further recordation of any claim of lien for assessments under this section is not required.
F. A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within three six years after the full amount of the assessments becomes due.
G. This section does not prohibit:
1. Actions to recover sums for which subsection A of this section creates a lien. or does not prohibit
2. An association from taking a deed in lieu of foreclosure.
H. A judgment or decree in any action brought under this section shall include costs and reasonable attorney fees for the prevailing party.
I. The association on written request shall furnish to a lienholder, escrow agent, unit owner or person designated by a unit owner a statement setting forth the amount of unpaid assessments against the unit. The statement shall be furnished within ten days after receipt of the request and the statement is binding on the association, the board of directors and every unit owner if the statement is requested by an escrow agency that is licensed pursuant to title 6, chapter 7. Failure to provide the statement to the escrow agent within the time provided for in this subsection shall extinguish extinguishes any lien for any unpaid assessment then due.
J. Notwithstanding any provision in the condominium documents or in any contract between the association and a management company, unless the member unit owner directs otherwise, all payments received on a member's unit owner's account shall be applied first, in the order the debt was accrued, to any unpaid assessments, for unpaid charges for late payment of those assessments, for unpaid reasonable collection fees and for unpaid attorney fees and costs incurred with respect to those assessments and unpaid interest on any of those amounts. , in that order, with Any remaining amounts shall be applied, next in the order the debt was accrued, to other unpaid fees, charges and monetary penalties or interest and late charges on any of those amounts.
K. For a delinquent account for unpaid assessments or for charges related to unpaid assessments, the association shall provide the following written notice to the unit owner at the unit owner's last known address at least fifteen days before authorizing an attorney for the association to begin a collection action:
your account is delinquent. If you do not bring your account current or make arrangements that are approved by the association to bring your account current within fifteen days after the date of this notice, your account will be turned over to the association's attorney for further collection proceedings. Such collection proceedings could include bringing a foreclosure action against your property.
The notice shall be in boldfaced type or all capital letters and shall include the contact information FOR the person that the unit owner may contact to discuss payment. The notice may be included within other correspondence sent to the unit owner regarding the unit owner's delinquent account.
L. Except for condominiums that have fewer than fifty units and that do not contract with a third party to perform management services on behalf of the association, the association shall provide a statement of account in lieu of a periodic payment book to the unit owner with the same frequency that assessments are provided for in the declaration. The statement of account shall include the current account balance due and the immediately preceding ledger history. The association may not provide any further statements of account to a unit owner if a civil action is filed regarding that unit owner's unpaid account.
M. An agent for the association may collect on behalf of the association directly from a unit owner the assessments and other amounts owed by cash or check, or credit, charge or debit card or by other electronic means. The agent may charge a convenience fee to the unit owner that is approximately the amount charged to the agent by a third-party service provider.
K. N. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.
Sec. 2. Section 33-1803, Arizona Revised Statutes, is amended to read:
33-1803. Assessment limitation; penalties; notice to member of violation
A. Unless limitations in the community documents would result in a lower limit for the assessment, the association shall not impose a regular assessment that is more than twenty percent greater than the immediately preceding fiscal year's assessment without the approval of the majority of the members of the association. Unless reserved to the members of the association, the board of directors may impose reasonable charges for the late payment of assessments. A payment by a member is deemed late if it is unpaid fifteen or more days after its due date, unless the community documents provide for a longer period. Charges for the late payment of assessments are limited to the greater of fifteen dollars $15 or ten percent of the amount of the unpaid assessment and may be imposed only after the association has provided notice that the assessment is overdue or provided notice that the assessment is considered overdue after a certain date. Any monies paid by the member for an unpaid assessment shall be applied first to the principal amount unpaid and then to the interest accrued.
B. After notice and an opportunity to be heard, the board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association. Notwithstanding any provision in the community documents, the board of directors shall not impose a charge for a late payment of a penalty that exceeds the greater of fifteen dollars $15 or ten percent of the amount of the unpaid penalty. A payment is deemed late if it is unpaid fifteen or more days after its due date, unless the declaration, bylaws or rules of the association provide for a longer period. Any monies paid by a member for an unpaid penalty shall be applied first to the principal amount unpaid and then to the interest accrued. Notice pursuant to this subsection shall include includes information pertaining to the manner in which the penalty shall be enforced.
C. A member who receives a written notice that the condition of the property owned by the member is in violation of the community documents without regard to whether a monetary penalty is imposed by the notice may provide the association with a written response by sending the response by certified mail within twenty‑one calendar days after the date of the notice. The response shall be sent to the address identified in the notice.
D. Within ten business days after receipt of the certified mail containing the response from the member, the association shall respond to the member with a written explanation regarding the notice that shall provide provides at least the following information unless previously provided in the notice of violation:
1. The provision of the community documents that has allegedly been violated.
2. The date of the violation or the date the violation was observed.
3. The first and last name of the person or persons who observed the violation.
4. The process the member must follow to contest the notice.
E. Unless the information required in subsection D, paragraph 4 of this section is provided in the notice of violation, the association shall not proceed with any action to enforce the community documents, including the collection of attorney fees, before or during the time prescribed by subsection D of this section regarding the exchange of information between the association and the member and shall give the member written notice of the member's option to petition for an administrative hearing on the matter in the state real estate department pursuant to section 32‑2199.01. At any time before or after completion of the exchange of information pursuant to this section, the member may petition for a hearing pursuant to section 32‑2199.01 if the dispute is within the jurisdiction of the state real estate department as prescribed in section 32‑2199.01.
Sec. 3. Section 33-1807, Arizona Revised Statutes, is amended to read:
33-1807. Lien for assessments; priority; mechanics' and materialmen's liens; notice
A. The association has a lien on a unit for any assessment levied against that unit from the time the assessment becomes due. The association's lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the owner has been delinquent in the payment of monies secured by the lien, excluding reasonable collection fees, reasonable attorney fees and charges for late payment of and costs incurred with respect to those assessments, for a period of one year or in the amount of one thousand two hundred dollars $1,200 or more, whichever occurs first, as determined on the date the action is filed. Fees, charges, late charges, monetary penalties and interest charged pursuant to section 33‑1803, other than charges for late payment of assessments are not enforceable as assessments under this section. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due. The association has a lien for fees, charges, late charges, other than charges for late payment of assessments, monetary penalties or interest charged pursuant to section 33‑1803 after the entry of a judgment in a civil suit for those fees, charges, late charges, monetary penalties or interest from a court of competent jurisdiction and the recording of that judgment in the office of the county recorder as otherwise provided by law. The association's lien for monies other than for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments may not be foreclosed and is effective only on conveyance of any interest in the real property.
B. A lien for assessments, for charges for late payment of those assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments under this section is prior to all other liens, interests and encumbrances on a unit except:
1. Liens and encumbrances recorded before the recordation of the declaration.
2. A recorded first mortgage on the unit, a seller's interest in a first contract for sale pursuant to chapter 6, article 3 of this title on the unit recorded prior to the lien arising pursuant to subsection A of this section or a recorded first deed of trust on the unit.
3. Liens for real estate taxes and other governmental assessments or charges against the unit.
C. Subsection B of this section does not affect the priority of mechanics' or materialmen's liens or the priority of liens for other assessments made by the association. The lien under this section is not subject to chapter 8 of this title.
D. Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same real estate those liens have equal priority.
E. Recording of the declaration constitutes record notice and perfection of the lien for assessments, for charges for late payment of assessments, for reasonable collection fees and for reasonable attorney fees and costs incurred with respect to those assessments. Further recordation of any claim of lien for assessments under this section is not required.
F. A lien for an unpaid assessment is extinguished unless proceedings to enforce the lien are instituted within three six years after the full amount of the assessment becomes due.
G. This section does not prohibit:
1. Actions to recover amounts for which subsection A of this section creates a lien.
2. An association from taking a deed in lieu of foreclosure.
H. A judgment or decree in any action brought under this section shall include costs and reasonable attorney fees for the prevailing party.
I. On written request, the association shall furnish to a lienholder, escrow agent, unit owner or person designated by a unit owner a statement setting forth the amount of any unpaid assessment against the unit. The association shall furnish the statement within ten days after receipt of the request, and the statement is binding on the association, the board of directors and every unit owner if the statement is requested by an escrow agency that is licensed pursuant to title 6, chapter 7. Failure to provide the statement to the escrow agent within the time provided for in this subsection shall extinguish extinguishes any lien for any unpaid assessment then due.
J. Notwithstanding any provision in the community documents or in any contract between the association and a management company, unless the member directs otherwise, all payments received on a member's account shall be applied first, in the order the debt was accrued, to any unpaid assessments, for unpaid charges for late payment of those assessments, for unpaid reasonable collection fees and for unpaid attorney fees and costs incurred with respect to those assessments and unpaid interest on any of those amounts. , in that order, with Any remaining amounts shall be applied, next in the order the debt was accrued, to other unpaid fees, charges and monetary penalties or interest and late charges on any of those amounts.
K. For a delinquent account for unpaid assessments or for charges related to unpaid assessments, the association shall provide the following written notice to the member at the member's last known address at least fifteen days before authorizing an attorney for the association to begin a collection action:
your account is delinquent. If you do not bring your account current or make arrangements that are approved by the association to bring your account current within fifteen days after the date of this notice, your account will be turned over to the association's attorney for further collection proceedings. Such collection proceedings could include bringing a foreclosure action against your property.
The notice shall be in boldfaced type or all capital letters and shall include the contact information for the person that the member may contact to discuss payment. The notice may be included within other correspondence sent to the member regarding the member's delinquent account.
L. Except for planned communities that have fewer than fifty lots and that do not contract with a third party to perform management services on behalf of the association, the association shall provide a statement of account in lieu of a periodic payment book to the member with the same frequency that assessments are provided for in the declaration. The statement of account shall include the current account balance due and the immediately preceding ledger history. The association may not provide any further statements of account to a member if a civil action is filed regarding that member's unpaid account.
M. An agent for the association may collect on behalf of the association directly from a member the assessments and other amounts owed by cash or check, or credit, charge or debit card or by other electronic means. The agent may charge a convenience fee to the member THAT is approximately the amount charged to the agent by a third-party service provider."
Amend title to conform