SB1644 - 551R

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

Section 1. Section 33-1227, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1227. Amendment of declaration; amendment of bylaws

A. 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, and except to the extent permitted allowed or required by other provisions of this section and this chapter, the declaration, including the plat, may be amended at any time only by a vote of the unit owners to which at least sixty-seven per cent of the votes in the association are allocated, or any larger majority the declaration specifies if a majority of the units approves the amendment. The declaration may specify a smaller percentage lesser approval requirement only if all of the units are restricted exclusively to nonresidential use. The following apply to an amendment to the declaration:

1. For an amendment that does any of the following, The amendment provision prescribed in the declaration applies, or if none exists, approval of owners of seventy-five percent of all lots applies:

(a) Requires the exclusive use of one or more builders, developers or contractors for the condominium as identified in the declaration.

(b) Regulates the transition from declarant control to nondeclarant owner control, including any transition-related documents or requirements.

(c) Changes the use of and access to the common elements or other areas over which the the association controls use or access for the guests and invitees of the declarant, its affiliates, successors or assigns or of the members as provided in the declaration, including use and access for business or marketing purposes, use of and access to easements and common elements by the declarant, its affiliates, successors and assigns and use of and access to any areas over which the association controls use or access.

(d) Changes the use of and access to easements or any maintenance obligations of the association for those easements.

(e) Changes the use, operation, maintenance or disposition of common elements.

(f) Adds a new restriction on the use or occupancy of the interior of a lot that did not previously exist in the declaration in any form.

(g) Changes the amount or level of assessments on lots owned by the declarant.

(h) Prescribes, modifies or deletes a minimum age for ownership or occupancy of the condominium in compliance with federal and state law.

(i) Changes any procedures or practices that are reasonably required for compliance with federal, state or local laws or regulatory requirements.

(j) Requires membership in a separate master association in addition to requiring membership in the condominium association.

(k) Applies nonuniformly to similar lots.

(l) Changes the basis for allocating voting rights or assessments among lot owners.

(m) Amends the plat or amends the requirements of the plat.

(n) Amends provisions of the declaration that provide for waivers of liability or indemnification in the event of personal injuries occurring on the common areas.

2. The vote to approve any amendment may take place at a meeting or without a meeting. If the vote to approve an amendment will take place at a meeting, the Association shall deliver to the members at least thirty but not more than fifty days before the meeting written notice of a meeting called for the purpose of amending the declaration and the text of the proposed amendment. If the vote to approve an amendment will take place without a meeting, the Association may deliver to the members a written ballot in accordance with section 10-3708 and the text of the proposed amendment at least thirty days before the deadline set for return of the written ballots. This paragraph does not prohibit using electronic voting methods in accordance with section 10-3708. As an alternative method, a vote to approve an amendment under this section may occur by written consent of the lot owners sufficient to satisfy the necessary approvals required for the amendment.

3. The declaration may also provide that the consent of the declarant is required to an amendment amend the declaration during any period of declarant control pursuant to section 33-1243.

4. Within thirty days after the adoption of any amendment pursuant to this subsection section, the association shall prepare, execute and record a written instrument setting forth the amendment.

5. NOTWITHSTANDING ANY PROVISION IN THE DECLARATION, THE SIGNATURES OF ANY OF THE APPROVING MEMBERS, WHETHER ACKNOWLEDGED OR NOT, SHALL NOT BE REQUIRED ON THE INSTRUMENT SETTING FORTH THE AMENDMENT.

B. An action to challenge the validity of an amendment adopted by the association pursuant to this section shall not be brought more than one year after the amendment is recorded.

C. An amendment to the declaration shall be recorded in each county in which any portion of the condominium is located and is effective only on recordation in the same manner as required for the declaration under section 33-1211.

D. Except to the extent expressly permitted allowed or required by other provisions of this chapter, an amendment shall not create or increase special declarant rights, increase the number of units or change the boundaries of any unit, or the allocated interests of a unit or the uses to which any unit is restricted, in the absence of unanimous consent of the unit owners.

E. An amendment shall not terminate or decrease any unexpired development right, special declarant right or period of declarant control unless the declarant approves.

F. Notwithstanding any provision in the declaration, amendments to the declaration required by this chapter to be executed by the association shall be executed on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association CERTIFYING that the amendment was APPROVED by the requisite unit owners and if applicable, any other person WHOSE consent is otherwise required.

G. Unless the articles of incorporation or the bylaws allow the board of directors to amend the bylaws without a vote of the members of the association, the bylaws may be amended at any time by the approval of two-thirds of the members present in person or participating in the vote as otherwise allowed by law, or a majority of the total eligible votes in the association, whichever is less. The vote to approve an amendment may take place at a meeting or without a meeting. If the vote to approve an amendment will take place at a meeting, the association shall deliver to the members at least thirty but not more than fifty days before the meeting written notice of a meeting called for the purpose of amending the bylaws and the text of the proposed amendment. If the vote to approve an amendment will take place without a meeting, the association may deliver to the members a written ballot in accordance with section 10-3708 and the text of the proposed amendment at least thirty days before the deadline set for return of the written ballots. This subsection does not prohibit using electronic voting methods in accordance with section 10-3708 or written consent as prescribed by section 10-3704.

H. this section does not affect a court's ability to determine that a specific provision of the community documents is invalid, unenforceable or in violation of the law. END_STATUTE

Sec. 2. Section 33-1817, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1817. Declaration, bylaws amendment; design, architectural committees; review

A. Except during the period of declarant control, or if during the period of declarant control with the written consent of the declarant in each instance, the following apply to an amendment to a declaration:

1. unless the declaration SPECIFIES a lower approval requirement and except as OTHERWISE prescribed in this section, the declaration may be amended by the association, if any, or, if there is no association or board, the owners of the property that is subject to the declaration, by an affirmative vote or written consent of the number of owners or eligible voters specified in the declaration, including the assent of any individuals or entities that are specified in the declaration only if the owners of a majority of all of the lots approve the amendment.

2. For an amendment that does any of the following, The amendment provision prescribed in the declaration applies, or if none exists, approval of owners of seventy-five percent of all lots applies:

(a) Requires the exclusive use of one or more builders, developers or contractors for the planned community as identified in the declaration.

(b) Regulates the transition from declarant control to nondeclarant owner control, including any transition-related documents or requirements.

(c) Changes the use of and access to the common areas or other areas over which the declarant controls use or access for the guests and invitees of the declarant, its affiliates, successors or assigns or of the members as provided in the declaration, including use and access for business or marketing purposes, use of and access to easements and common areas by the declarant, its affiliates, successors and assigns and use of and access to any areas over which the association controls use or access.

(d) Changes the use of and access to easements or any maintenance obligations of the association for those easements.

(e) Changes the use, operation, maintenance or disposition of common areas.

(f) Adds a new restriction on the use or occupancy of the interior of a lot that did not previously exist in the declaration in any form.

(g) Changes the amount or level of assessments on lots owned by the declarant.

(h) Prescribes, modifies or deletes a minimum age for ownership or occupancy of the planned community in compliance with federal and state law.

(i) Changes any procedures or practices that are reasonably required for compliance with federal, state or local laws or regulatory requirements.

(j) Requires membership in a separate master association in addition to requiring membership in the association.

(k) Applies nonuniformly to similar lots.

(l) Changes the basis for allocating voting rights or assessments among lot owners.

(m) Amends the plat or amends the requirements of the plat.

(n) Amends provisions of the declaration that provide for waivers of liability or indemnification in the event of personal injuries occurring on the common areas.

3. The vote to approve any amendment may take place at a meeting or without a meeting. If the vote to approve an amendment will take place at a meeting, the Association shall deliver to the members at least thirty but not more than fifty days before the meeting written notice of a meeting called for the purpose of amending the declaration and the text of the proposed amendment. If the vote to approve an amendment will take place without a meeting, the Association may deliver to the members a written ballot in accordance with section 10-3708 and the text of the proposed amendment at least thirty days before the deadline set for return of the written ballot. This paragraph does not prohibit using electronic voting methods in accordance with section 10-3708. As an alternative method, a vote to approve an amendment under this section may occur by written consent of the lot owners sufficient to satisfy the necessary approvals required for the amendment.

2. 4. An amendment to a declaration may apply to fewer than all of the lots or less than all of the property that is bound by the declaration and an amendment is deemed to conform to the general design and plan of the community, if both of the following apply:

(a) The amendment receives the affirmative vote or written consent of the number of owners or eligible voters specified in the declaration, including the assent of any individuals or entities that are specified in the declaration.

(a) The amendment is approved as prescribed by this section.

(b) The amendment receives the affirmative vote or written consent of all of the owners of the lots or property to which the amendment applies.

3. 5. Within thirty days after the adoption of any amendment pursuant to this section, the association or, if there is no association or board, an owner that is authorized by the affirmative vote on or the written consent to the amendment shall prepare, execute and record a written instrument setting forth the amendment.

4. 6. Notwithstanding any provision in the declaration that provides for periodic renewal of the declaration, an amendment to the declaration is effective immediately on recordation of the written instrument that sets forth the amendment in the each county in which any portion of the property planned community is located.

7. Notwithstanding any provision in the declaration, the signatures of any of the approving members, whether acknowledged or not, shall not be required on the instrument setting forth the amendment.

8. Notwithstanding any provision in the declaration, amendments to the declaration required by this chapter to be executed by the association shall be executed on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association certifying that the amendment was approved by the requisite lot owners, and, if applicable, any other person whose consent is otherwise required.

9. An action to challenge the validity of an amendment adopted by the association shall not be brought more than one year after the amendment is recorded.

B. Unless the articles of incorporation or the bylaws allow the board of directors to amend the bylaws without a vote of the members of the association, the bylaws may be amended at any time by the approval of two-thirds of the members present in person or participating in the vote as otherwise allowed by law, or a majority of the total eligible votes in the association, whichever is less. The vote to approve an amendment may take place at a meeting or without a meeting. If the vote to approve an amendment will take place at a meeting, the association shall deliver to the members at least thirty but not more than fifty days before the meeting written notice of a meeting called for the purpose of amending the bylaws and the text of the proposed amendment. If the vote to approve an amendment will take place without a meeting, the association may deliver to the members a written ballot in accordance with section 10-3708 and the text of the proposed amendment at least thirty days before the deadline set for return of the written ballots. This subsection does not prohibit using electronic voting methods in accordance with section 10-3708 or written consent as prescribed by section 10-3704.

c. This section does not affect a court's ability to determine that a specific provision of the community documents is invalid, unenforceable or in violation of the law.

B. D. Notwithstanding any provision in the community documents:

1. Membership on a design review committee, an architectural committee or a committee that performs similar functions, however denominated, for the planned community shall include at least one member of the board of directors who shall serve as chairperson of the committee.

2. For new construction of the main residential structure on a lot or for rebuilds of the main residential structure on a lot and only in a planned community that has enacted design guidelines, architectural guidelines or other similar rules, however denominated, and if the association documents permit allow the association to charge the member a security deposit and the association requires the member to pay a security deposit to secure completion of the member's construction project or compliance with approved plans, all of the following apply:

(a) The deposit shall be placed in a trust account with the following instructions:

(i) The cost of the trust account shall be shared equally between the association and the member.

(ii) If the construction project is abandoned, the board of directors may determine the appropriate use of any deposit monies.

(iii) Any interest earned on the refundable security deposit shall become part of the security deposit.

(b) The association or the design review committee must hold a final design approval meeting for the purpose of issuing to issue approval of the plans, and the member or member's agent must have the opportunity to attend the meeting. If the plans are approved, the association's design review representative shall provide written acknowledgement that the approved plans, including any approved amendments, are in compliance with all rules and guidelines in effect at the time of the approval and that the refund of the deposit requires that construction be completed in accordance with those approved plans.

(c) The association must provide for at least two on-site formal reviews during construction for the purpose of determining to determine compliance with the approved plans. The member or member's agent shall be provided the opportunity to attend both formal reviews. Within five business days after the formal reviews, the association shall cause a written report to be provided to the member or member's agent specifying any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association.

(d) Within thirty business days after the second formal review, the association shall provide to the member a copy of the written report specifying any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association. If the written report does not specify any deficiencies, violations or unapproved variations from the approved plans, as amended, that have come to the attention of the association, the association shall promptly release the deposit monies to the member. If the report identifies any deficiencies, violations or unapproved variations from the approved plans, as amended, the association may hold the deposit for one hundred eighty days or until receipt of a subsequent report of construction compliance, whichever is less. If a report of construction compliance is received before the one hundred eightieth day, the association shall promptly release the deposit monies to the member. If a compliance report is not received within one hundred eighty days, the association shall release the deposit monies promptly from the trust account to the association.

(e) Neither the approval of the plans nor the approval of the actual construction by the association or the design review committee shall constitute a representation or warranty that the plans or construction comply with applicable governmental requirements or applicable engineering, design or safety standards. The association in its discretion may release all or any part of the deposit to the member before receiving a compliance report. Release of the deposit to the member does not constitute a representation or warranty from the association that the construction complies with the approved plans.

3. Approval of a construction project's architectural designs, plans and amendments shall not unreasonably be withheld. END_STATUTE