HB2397 - 572R

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

Section 1. Section 33-440, Arizona Revised Statutes, is amended to read:

START_STATUTE33-440. Enforceability of private covenants; amendment of declaration; definitions

A. An owner of real property may enter into a private covenant regarding that real property and the private covenant is valid and enforceable according to its terms if all of the following apply:

1. The private covenant is not prohibited by any other existing private covenant or declaration affecting the real property, and does not violate any statute governing the subject matter of the private covenant that is in effect before September 26, 2008 and does not violate public policy. covenants that violate public policy include a covenant that:

(a) Is arbitrary, spiteful or capricious.

(b) unreasonably burdens a fundamental right under the CONSTITUTION.

(d) Imposes an unreasonable restraint on trade or competition.

(e) Is unconscionable.

2. The owner of the real property affected by the private covenant and any person on whom the private covenant imposes any liability or obligation have consented to the private covenant.

3. Any consent requirements contained in the express provisions of any existing private covenant or declaration affecting the real property have been met.

B. NOTWITHSTANDING any provision of a private COVENANT to the contrary, any property owner that is SUBJECT to the private COVENANT may challenge the validity of any PROVISION in that private COVENANT in a court of COMPETENT jurisdiction.

B. c. A private covenant is deemed not to constitute an amendment to any existing private covenant or declaration unless the private covenant expressly violates an express provision of the existing private covenant or declaration.

C. d. 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. 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.

2. 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.

(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. Within thirty days after the adoption of any amendment pursuant to this subsection, the association or, if there is no association or board, a property 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. 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 instrument in the county in which the property is located.

D. e. Subsection C d of this section does not apply to a condominium as defined in section 33-1202 or a timeshare plan or association as defined in section 33-2202.

E. f. For the purposes of this section:

1. "Declaration" means any instrument, however denominated, that establishes restrictive covenants on the development or use of real property.

2. "Private covenant" means any uniform or nonuniform covenant, restriction or condition regarding real property that is contained in any deed, contract, agreement or other recorded instrument affecting real property.

3. "Spiteful" means that the purpose of the covenant was to cause harm to another rather than to secure a benefit to the creating party.

4. "Unreasonable restraint on alienation" means any restraint on alienation to which either of the following applies:

(a) The injurious consequences of the restraint outweigh the utility of the restraint.

(b) The restraint has no rational justification or is unconscionable. END_STATUTE

Sec. 2. Section 33-1260, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1260. Sale of units; information required; fees; civil penalty; applicability; definition

A. except as prescribed by subsection i of this section, for condominiums with fewer than fifty units, a unit owner shall mail electronically transmit or deliver to a purchaser or a purchaser's authorized agent the information required by this subsection within ten calendar days after receipt of a written notice of a pending sale of the unit, and acceptance of the purchaser's offer to purchase. The unit owner may request the association to provide the unit OWNER with the information required by this subsection on listing the unit for sale. For condominiums with fifty or more units, the association shall mail electronically transmit or deliver to a purchaser or a purchaser's authorized agent within ten calendar days after receipt of a written notice of a pending sale that contains the name, email address and mailing address of the purchaser all of the following in either paper or electronic format:

1. A copy of the current bylaws and the current rules of the association.

2. A copy of the current recorded declaration and plat.

3. A dated statement containing or identifying:

(a) The telephone number and address of a principal contact for the association, which may be an association manager, an association management company, an officer of the association or any other person designated by the board of directors.

(b) The amount of the annual common expense assessment for the unit, and the required installments and payment schedules on any approved special assessment and any remaining INSTALLMENTS on the special assessment, if any.

(c) the estimated dollar amount and purpose of any contemplated and either approved and ratified or anticipated to be approved and ratified special assessment or financing being developed by the association for assessment within the subsequent six months, if any.

(d) any known material deficiency or condition of the limited common elements associated with the unit or common elements for which the purchaser will be liable for the directly assessed repair costs within six months of the purchase, if any.

(e) the current amount of any unpaid common expense assessment, special assessment or other assessment, fee or charge currently due and payable from the selling unit owner. If the request is made by a lienholder, escrow agent, unit owner or person designated by a unit owner pursuant to section 33-1256, failure to provide the information pursuant to this subdivision within the time provided for in this subsection shall extinguish any lien for any unpaid assessment then due against that unit lien or judgment lien on the unit due to the association pursuant to section 33-1256 and any lis pendens recorded by the association against the unit.

(d) The total amount of money held by the association as reserves.

(e) If the statement is being furnished by the association, a statement as to whether the records of the association reflect any alterations or improvements to the unit that violate the declaration. The association is not obligated to provide information regarding alterations or improvements that occurred more than six years before the proposed sale. Nothing in this subdivision relieves the seller of a unit from the obligation to disclose alterations or improvements to the unit that violate the declaration, nor precludes the association from taking action against the purchaser of a unit for violations that are apparent at the time of purchase and that are not reflected in the association's records.

(f) If the statement is being furnished by the unit owner, a statement as to whether the unit owner has any knowledge of any alterations or improvements to the unit that violate the declaration.

(g) A statement of case names and case numbers for pending litigation with respect to the unit filed by the association against the unit owner or filed by the unit owner against the association. The unit owner or the association shall not be required to disclose information concerning the pending litigation that would violate any applicable rule of attorney-client privilege under Arizona law.

(h) A statement that provides "I hereby acknowledge that the declaration, bylaws and rules of the association constitute a contract between the association and me (the purchaser). By signing this statement, I acknowledge that I have read and understand the association's contract with me (the purchaser). I also understand that as a matter of Arizona law, if I fail to pay my association assessments, the association may foreclose on my property." The statement shall also include a signature line for the purchaser and shall be returned to the association within fourteen calendar days.

(f) the amount and purpose of any title transfer fee or other similar fee, however denominated, that is authorized in the declaration and ESTABLISHED by the ASSOCIATION PURSUANT to section 33-442.

(g) A copy of the association's most recent income and expenses financial statement for all operating and reserve accounts, as applicable.

(h) ANY OUTSTANDING AND UNRESOLVED VIOLATION OF THE ASSOCIATION'S CONDOMINIUM DOCUMENTS that was CITED AGAINST THE UNIT, IF ANY, and that tHE SELLER IS RESPONSIBLE FOR APPEALING, RESOLVING OR ARRANGING FOR THE RESOLUTION OF ALL CITED VIOLATIONS.

4. A copy of the current operating budget of the association.

5. A copy of the most recent annual financial audit, review or compilation report of the association prescribed by section 33-1243, subsection J. If the report is more than ten pages, the association may provide a summary of the report in lieu of the entire report.

6. A copy of the most recent reserve study or long-range plan and the associated funding strategy of the association, if any. If the report is more than ten pages, the association may provide a summary of the report in lieu of the entire report.

7. A statement summarizing any pending lawsuits, except those relating to the collection of assessments owed by unit owners other than the selling unit owner, in which the association is a named party, including the amount of any money claimed.

8. A statement as to whether a portion of the unit is covered by insurance maintained by the association and a copy of all insurance certificates identifying the coverage limits and deductibles maintained by the association pursuant to section 33-1253.

9. A statement as to whether the condominium is under declarant control and the percentage of units identified on the recorded plat that are currently owned by the declarant.

10. A statement identifying whether any owner or entity other than the declarant owns twenty-five percent or more of the units.

11. a statement that, For any report provided in summary format pursuant to this subsection, the purchaser may request to view the entire report from the association directly, and the association shall provide access to that report within three business days after a written request.

12. A statement to be signed by the purchaser at the close of escrow that provides "I hereby acknowledge that with the purchase of this home or property, I will be contractually bound to the valid covenants, conditions and restrictions of the recorded declaration, and will be bound to pay all common expense assessments applied to my home or property as authorized in the declaration and title 33, chapter 9 or 16, Arizona Revised Statutes, as applicable. If I fail to pay common expense assessments, I may be subject to collection activity by the association up to and including foreclosure action, without the equity protection of the homestead act pursuant to title 33, chapter 8, Arizona Revised Statutes."

B. Within five calendar days after the RECEIPT of the DISCLOSURE report prescribed by SUBSECTION A of this section, the PURCHASER MAY ACCEPT THE INFORMATION, PROPOSE A CURE TO ADDRESS ANY CONCERNS IDENTIFIED in the report OR WITHDRAW THE OFFER WITHOUT PENALTY OR LOSS OF EARNEST MONEY. IF a CONTRACT IS CANCELED FOR ANY REASON, THE COMPLETE DISCLOSURE REPORT SHALL BE RETURNED TO THE SELLER.

B. c. A purchaser or seller who is damaged by the failure of the unit owner or the association failing to disclose the information required by subsection A of this section or providing materially false or misleading STATEMENTS in the DISCLOSURE may pursue all remedies at law or in equity against the unit owner, the managing agent for the association or the association, whichever failed to comply with subsection A of this section or provided false or misleading statements in the disclosure, including the recovery of reasonable attorney fees as awarded by the court.

D. THE ASSOCIATION SHALL PROVIDE TO an ESCROW AGENT that is licensed pursuant to title 6, chapter 7 and that is designated for the transaction ANY REQUESTED INFORMATION that is RELEVANT TO THE CLOSE OF ESCROW, SUBJECT TO AND PURSUANT TO SECTION 33-1256 AT NO COST TO THE ESCROW AGENT OR ADDITIONAL COST TO THE SELLER OR BUYER.

C. e. If the association provided the disclosure report requested by the unit owner, the association may charge the unit owner a fee of not more than an aggregate of four hundred dollars $400 to compensate the association for the costs incurred in the preparation and delivery of a statement report or other documents furnished by the association pursuant to this section for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of the property. In addition, the association may charge a rush fee of not more than one hundred dollars $100 if the rush services are required to be performed within seventy-two hours after the request for rush services. , and The unit owner may REQUEST the ASSOCIATION to update the report if thirty days or more have passed since the date of the original disclosure report. The association may charge a statement or other documents document update fee of not more than fifty dollars if thirty days or more have passed since the date of the original disclosure statement or the date the documents were delivered $50. The association shall make available to any interested party the amount of any fee established from time to time by the association. If the aggregate fee for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of a property is less than four hundred dollars on January 1, 2010, the fee may increase at a rate of not more than twenty percent per year based on the immediately preceding fiscal year's amount not to exceed the four hundred dollar aggregate fee. The association may charge the same fee without regard to whether the association is furnishing the statement or other documents in paper or electronic format.

F. If the association was not requested to provide the disclosure report prescribed by subsection a of this section, the association may charge a nominal fee to the purchaser to compensate the association for the cost of updating the new owner information in the association records, commensurate with the direct cost incurred.

D. g. The fees prescribed by this section shall be collected no not earlier than at the close of escrow and may only be charged once to a unit owner or purchaser for that transaction between the parties specified in the notice required pursuant to subsection A of this section. Any payment shall be made directly and only to the association. An association shall not charge or collect a fee relating to services for resale disclosure, lien estoppel and any other services related to the transfer or use of a property except as specifically authorized in this section. An association that charges or collects a fee in violation of this section is subject to a civil penalty of not more than one thousand two hundred dollars $1,200.

E. h. This section applies to a managing agent for an association that is acting on behalf of the association.

I. FOR THE INITIAL SALE OF A CONDOMINIUM UNIT from the declarant, THE DECLARANT SHALL PROVIDE TO ANY PURCHASER WITHIN THE TIME prescribed by subsection A of this section THE DOCUMENTS prescribed in subsection A, PARAGRAPHS 1, 2 and 12 of THIS SECTION.

F. j. The following are exempt from this section:

1. A sale in which a public report is issued pursuant to section 32-2183 or 32-2197.02.

2. A sale pursuant to section 32-2181.02.

3. A conveyance by recorded deed that bears an exemption listed in section 11-1134, subsection B, paragraph 3 or 7. On recordation of the deed and for no additional charge, the unit owner purchaser shall provide the association with the changes in ownership, including the unit owner's name, billing address and phone number. Failure to provide the information shall not prevent the unit owner from qualifying for the exemption pursuant to this section.

G. k. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

H. l. For the purposes of this section, unless the context otherwise requires, "unit owner":

1. Means the seller of the condominium unit title. and excludes

2. does not include:

(a) Any real estate salesperson or real estate broker who is licensed under title 32, chapter 20 and who is acting as a salesperson or broker. ,

(b) Any escrow agent who is licensed under title 6, chapter 7 and who is acting as an escrow agent. and also excludes

(c) A trustee of a deed of trust who is selling the property in a trustee's sale pursuant to chapter 6.1 of this title. END_STATUTE

Sec. 3. Section 33-1802, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1802. Definitions

In this chapter and in the community documents, unless the context otherwise requires:

1. "Association":

(a) Means a nonprofit corporation or unincorporated association of owners that is created pursuant to a declaration to own and operate portions of a planned community and that has the power under the declaration to assess association members to pay the costs and expenses incurred in the performance of the association's obligations under the declaration.

(b) Does not include a nonprofit corporation or unincorporated association of owners that is created or incorporated before January 1, 1974 and that does not have authority to enforce covenants, conditions or restrictions related to the use, occupancy or appearance of the separately owned lots, parcels or units in a real estate development, unless the nonprofit corporation or unincorporated association of owners elects to be subject to this chapter pursuant to section 33-1801, subsection D.

2. "Common expense lien" means the lien for assessments, charges for late payment of assessments if authorized in the declaration, reasonable collection fees and costs that are incurred or applied by the association and reasonable attorney fees and costs that are incurred with respect to those assessments, if the attorney fees and costs are awarded by a court.

3. "Community documents" means the declaration, bylaws, articles of incorporation, if any, and rules, if any.

4. "Declaration" means any instruments, however denominated, that establish a planned community and any amendment to those instruments.

5. "MEMBER" MEANS THE OWNER OF RECORD OF ANY INDIVIDUALLY OWNED PROPERTY that is SUBJECT TO THE DECLARATION IN A PLANNED COMMUNITY.

5. 6. "Member expenses":

(a) Means fees, charges, late charges and monetary penalties or interest.

(b) Does not include any amount that is included in a common expense lien.

6. 7. "Planned community":

(a) Means a real estate development that includes real estate that is subject to a declaration and that is 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 declaration expressly states both that the owners of separately owned lots, parcels or units are mandatory members and that the owners are required to pay mandatory assessments to the association for these purposes.

(b) Does not include any of the following:

(i) A timeshare plan or a timeshare association that is governed by chapter 20 of this title.

(ii) A condominium that is governed by chapter 9 of this title.

(iii) A real estate development that is not managed or maintained by an association. END_STATUTE

Sec. 4. Section 33-1803, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1803. Third-party property; voluntary assessments; assessment limitation; penalties; notice to member of violation

A. ANY PROVISION OF A DECLARATION THAT WOULD IMPOSE MANDATORY ASSESSMENTS FOR MEMBERSHIP IN A PRIVATE RECREATIONAL CLUB OR for THE MAINTENANCE OR USE OF SEPARATE PUBLIC OR PRIVATE PROPERTY THAT IS NOT OWNED BY THE ASSOCIATION IS INVALID AND UNENFORCEABLE AS A MATTER OF LAW. Any provision prescribed by this subsection creates BOTH AN UNREASONABLE RESTRAINT ON ALIENATION AND AN UNREASONABLE RESTRAINT ON TRADE OR COMPETITION and the following apply:

1. ON THE EFFECTIVE DATE OF THIS amendment to this section, THE BOARD OF DIRECTORS OF any ASSOCIATION that has a declaration that contains SUCH a PROVISION SHALL remove that provision by amendment to THE DECLARATION.

2. NOTWITHSTANDING ANY PROVISION OF THE COMMUNITY DOCUMENTS, THE ASSOCIATION MAY NOT USE common expense assessments FOR THE MAINTENANCE, USE OR SUBSIDY OF THIRD-PARTY PUBLIC OR PRIVATE PROPERTY THAT IS NOT DIRECTLY OWNED BY THE ASSOCIATION.

B. IF EMERGENCY MEASURES MUST BE TAKEN with respect to third-party public or private property TO MAINTAIN ACCESS TO THE ASSOCIATION'S PROPERTY, THE ASSOCIATION MAY AUTHORIZE THE USE OF ASSOCIATION RESOURCES OR monies TO effect THE EMERGENCY REPAIRS, BUT SHALL BILL THE PUBLIC OR PRIVATE ENTITY THAT OWNS THE SEPARATE PROPERTY FOR THE COSTS OF THE REPAIRS.

C. THE ASSOCIATION MAY PROVIDE FOR VOLUNTARY ASSESSMENTS ON INDIVIDUAL PROPERTY FOR THE USE OF THIRD-PARTY PROPERTY, RECREATIONAL FACILITIES OR OTHER FACILITIES.

A. d. 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. e. 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 information pertaining to the manner in which the penalty shall be enforced.

C. f. 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. g. 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 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. h. Unless the information required in subsection D g, 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 g 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. END_STATUTE

Sec. 5. Section 33-1806, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1806. Sale of properties; information required; fees; civil penalty; definition

A. except as prescribed by subsection i of this section, for planned communities with fewer than fifty units properties, a member shall mail electronically transmit or deliver to a purchaser or a purchaser's authorized agent the information required by this subsection within ten calendar days after receipt of a written notice of a pending sale of the unit, and acceptance of the purchaser's offer to purchase. The member may request the association to provide the member with the information required by this subsection on listing the member's property for sale. For planned communities with fifty or more units properties, the association shall mail electronically transmit or deliver to a purchaser or a purchaser's authorized agent within ten calendar days after receipt of a written notice of a pending sale that contains the name, email address and mailing address of the purchaser all of the following in either paper or electronic format:

1. A copy of the current bylaws and the current rules of the association.

2. A copy of the current declaration and plat.

3. A dated statement containing or identifying:

(b) The amount of the annual common regular assessment and the required installments and payment schedules on any approved special assessment and any remaining INSTALLMENTS on the special assessment, if any.

(c) the estimated dollar amount and purpose of any contemplated, and either approved and ratified or anticipated to be approved and ratified special assessment or financing being developed by the association for assessment within the subsequent six months, if any.

(d) the current amount of any unpaid common regular assessment, special assessment or other assessment, fee or charge currently due and payable from the selling member. If the request is made by a lienholder, escrow agent, member or person designated by a member pursuant to section 33-1807, failure to provide the information pursuant to this subdivision within the time provided for in this subsection shall extinguish any lien for any unpaid assessment then due against that property lien or judgment lien on the property due to the association pursuant to section 33-1807 and any lis pendens recorded by the association against the property.

(d) The total amount of money held by the association as reserves.

(f) If the statement is being furnished by the member, a statement as to whether the member has any knowledge of any alterations or improvements to the unit that violate the declaration.

(g) A statement of case names and case numbers for pending litigation with respect to the unit filed by the association against the member or filed by the member against the association. The member shall not be required to disclose information concerning such pending litigation that would violate any applicable rule of attorney-client privilege under Arizona law.

(e) the amount and purpose of any title transfer fee or other similar fee, however denominated, that is authorized in the declaration and ESTABLISHED by the ASSOCIATION PURSUANT to section 33-442.

(f) A copy of the association's most recent income and expenses financial statement for all operating and reserve accounts, as applicable.

(g) ANY OUTSTANDING AND UNRESOLVED VIOLATION OF THE ASSOCIATION'S COmmunity DOCUMENTS that was CITED AGAINST THE property, IF ANY, and that THE SELLER IS RESPONSIBLE FOR APPEALING, RESOLVING OR ARRANGING FOR THE RESOLUTION OF ALL CITED VIOLATIONS.

4. A copy of the current operating budget of the association.

5. A copy of the most recent annual financial audit, review or coimpilation report of the association pursuant to section 33-1810. If the report is more than ten pages, the association may provide a summary of the report in lieu may be provided in place of the entire report.

6. A copy of the most recent reserve study or long-range plan and associated funding strategy of the association, if any. If the report is more than ten pages, the association may provide a summary of the report in place of the entire report.

7. A statement summarizing any pending lawsuits, except those relating to the collection of assessments owed by members other than the selling member, in which the association is a named party, including the amount of any money claimed.

8. A statement as to whether the planned community is under declarant control and the percentage of lots identified on the recorded plat that are currently owned by the declarant.

9. a statement that, For any report provided in summary format pursuant to this subsection, the purchaser may request to view the entire report from the association directly, and the association shall provide access to that report within three business days after a written request.

10. A statement to be signed by the purchaser at the close of escrow that provides "I hereby acknowledge that with the purchase of this home or property, I will be contractually bound to the valid covenants, conditions and restrictions of the recorded declaration, and will be bound to pay all common expense assessments applied to my home or property as authorized in the declaration and title 33, chapter 9 or 16, Arizona Revised Statutes, as applicable. If I fail to pay common expense assessments, I may be subject to collection activity by the association up to and including foreclosure action, without the equity protection of the homestead act pursuant to title 33, chapter 8, Arizona Revised Statutes."

B. c. A purchaser or seller who is damaged by the failure of the member or the association failing to disclose the information required by subsection A of this section or providing materially false or misleading STATEMENTS in the DISCLOSURE may pursue all remedies at law or in equity against the member, the managing agent for the association or the association, whichever failed to comply with subsection A of this section or provided materially false or misleading statements in the disclosure, including the recovery of reasonable attorney fees as awarded by the court.

D. THE ASSOCIATION SHALL PROVIDE TO an ESCROW AGENT that is licensed pursuant to title 6, chapter 7 and that is designated for the transaction ANY REQUESTED INFORMATION that is RELEVANT TO THE CLOSE OF ESCROW, SUBJECT TO AND PURSUANT TO SECTION 33-1807 AT NO COST TO THE ESCROW AGENT OR ADDITIONAL COST TO THE SELLER OR BUYER.

C. e. If the association provided the disclosure report requested by the member, the association may charge the member a fee of not more than an aggregate of four hundred dollars $400 to compensate the association for the costs incurred in the preparation and delivery of a statement report or other documents furnished by the association pursuant to this section for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of the property. In addition, the association may charge a rush fee of not more than one hundred dollars $100 if the rush services are required to be performed within seventy-two hours after the request for rush services. , and The member may REQUEST the ASSOCIATION to update the report if thirty days or more have passed since the date of the original disclosure report. The association may charge a statement or other documents document update fee of not more than fifty dollars if thirty days or more have passed since the date of the original disclosure statement or the date the documents were delivered $50. The association shall make available to any interested party the amount of any fee established from time to time by the association. If the aggregate fee for purposes of resale disclosure, lien estoppel and any other services related to the transfer or use of a property is less than four hundred dollars on January 1, 2010, the fee may increase at a rate of not more than twenty percent per year based on the immediately preceding fiscal year's amount not to exceed the four hundred dollar aggregate fee. The association may charge the same fee without regard to whether the association is furnishing the statement or other documents in paper or electronic format.

D. g. The fees prescribed by this section shall be collected no not earlier than at the close of escrow and may only be charged once to a member or purchaser for that transaction between the parties specified in the notice required pursuant to subsection A of this section. Any payment shall be made directly and only to the association. An association shall not charge or collect a fee relating to services for resale disclosure, lien estoppel and any other services related to the transfer or use of a property except as specifically authorized in this section. An association that charges or collects a fee in violation of this section is subject to a civil penalty of not more than one thousand two hundred dollars $1,200.

E. h. This section applies to a managing agent for an association that is acting on behalf of the association.

I. FOR THE INITIAL SALE OF A property from the declarant, THE DECLARANT SHALL PROVIDE TO ANY PURCHASER WITHIN THE TIME prescribed by subsection A of this section THE DOCUMENTS prescribed in subsection A, PARAGRAPHS 1, 2 and 10.

F. j. The following are exempt from this section:

1. A sale in which a public report is issued pursuant to section 32-2183 or 32-2197.02.

2. A sale pursuant to section 32-2181.02.

3. A conveyance by recorded deed that bears an exemption listed in section 11-1134, subsection B, paragraph 3 or 7. On recordation of the deed and for no additional charge, the member purchaser shall provide the association with the changes in ownership, including the member's name, billing address and phone number. Failure to provide the information shall not prevent the member from qualifying for the exemption pursuant to this section.

G. k. For the purposes of this section, unless the context otherwise requires: ,

1. "ASSOCIATION" INCLUDES ANY MASTER AND LOCAL ASSOCIATION WITH RECORDED COVENANTS AFFECTING THE PROPERTY, AS APPLICABLE.

2. "Member":

(a) Means the seller of the unit property title. and excludes

(b) does not include:

(i) Any real estate salesperson or real estate broker who is licensed under title 32, chapter 20 and who is acting as a salesperson or broker. ,

(ii) Any escrow agent who is licensed under title 6, chapter 7 and who is acting as an escrow agent. and also excludes

(iii) A trustee of a deed of trust who is selling the property in a trustee's sale pursuant to chapter 6.1 of this title.END_STATUTE