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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
homeowners' associations; property covenants; disclosures
Purpose
Modifies the information that a condominium unit owners' association (COA) or a planned community association (HOA) must include in a disclosure packet. Outlines requirements for an association manager to be on-site for any capital or reserve account project.
Background
For a condominium or planned community with less than 50 units, a unit owner or member must mail or deliver a disclosure packet to a purchaser or a purchaser's authorized agent within 10 days after receipt of a written notice of a pending sale. For a condominium or planned community with 50 units or more, the COA or HOA must mail or deliver a disclosure packet to a purchaser or a purchaser's authorized agent within 10 days after receipt of a written notice of a pending sale that contains the name and address of the purchaser. The contents of a disclosure packet are prescribed by statute and must contain: 1) a copy of the bylaws and the rules of the COA or HOA; 2) a copy of the declaration; 3) a dated statement containing statutorily outlined information; 4) a copy of the current operating budget of the COA or HOA; 5) a copy of the most recent annual financial report of the COA or HOA; 6) a copy of the most recent reserve study of the COA or HOA; and 7) a statement summarizing any pending lawsuits in which the COA or the HOA is a named party, including the amount of any money claimed.
The dated statement in the disclosure packet must contain: 1) the telephone number and address of a principal contact for the COA or HOA; 2) the amount of common expense or common regular assessment for the unit and any unpaid common expense or common regular assessment, special assessment or other assessment, fee or charge currently due and payable from the selling unit owner or member; 3) a statement as to whether a portion of the unit is covered by insurance maintained by the COA or HOA; 4) the total amount of money held by the COA or HOA as reserves; 5) a statement as to whether the records of the COA or HOA reflect any alterations or improvements to the unit that violate the declaration; 6) a statement as to whether that unit owner has any knowledge of any alterations or improvements to the unit that violate the declaration; 7) a statement of case names and case numbers for pending litigation with respect to the unit filed by the COA or HOA against the unit owner or member or filed by the unit owner or member against the COA or the HOA; and 8) a prescribed statement that must be signed by the purchaser and returned to the COA or HOA within 14 calendar days acknowledging the constitution of a contract.
For the portion of the dated statement as to whether the records of the COA or HOA reflect any alterations or improvements to the unit that violate the declaration, a COA or HOA is not obligated to provide information regarding alterations or improvements that occurred more than six years before the proposed sale. The seller of a unit is not relieved from the obligation to disclose alterations or improvements to the unit that violate the declaration, and the COA or HOA is not precluded from taking action against the purchaser of a unit for violations that are apparent at the time of purchase that are not reflected in the COA's or HOA's records. A purchaser or seller who is damaged by the failure of the appropriate party to disclose the information required in a disclosure packet may pursue all remedies at law or in equity, including the recovery of reasonable attorney fees, against the unit owner or member or the COA or HOA, whoever failed to comply with the requirements.
A COA or HOA may charge the unit owner or member a fee of up to $400 to compensate the COA or HOA for the costs incurred in the preparation and delivery of a disclosure packet or other documents furnished by the COA or HOA for the purposes of resale disclosure, lien estoppel and any other services relating to the transfer or use of the property. A COA or HOA may charge the same fee without regard to whether the COA or HOA is furnishing the statement or other documents in paper or electronic format (A.R.S. §§ 33-1260 and 33-1806).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a unit owner or member for a condominium or planned community with less than 50 units to electronically transmit or deliver a disclosure packet as prescribed by statute to a purchaser or a purchaser's designated agent within 10 days after acceptance of the purchaser's offer to purchase.
2. Requires a unit owner or member in a condominium or planned community with 50 units or more to provide a written notice to the COA or HOA of the unit owner's or member's acceptance of a purchaser's offer to purchase.
3. Requires a COA or HOA for a condominium or planned community with 50 units or more to electronically transmit or deliver a disclosure packet as prescribed by statute to a purchaser or a purchaser's designated agent within 10 days after receipt of a written notice of the seller's acceptance of the purchaser's offer to purchase that contains the name, email address and mailing address of a purchaser or a purchaser's designated agent.
4. Modifies the contents of a disclosure packet to contain:
a) a copy of the current bylaws and the current rules of the COA or HOA;
b) a copy of the current declaration and final plat or an electronic copy of the final plat;
c) a copy of the COA or HOA board-approved minutes from the previous three open meetings;
d) a dated statement containing statutorily outlined information;
e) a copy of the current operating budget of the COA or HOA;
f) a copy of the most recent annual audit, review or compilation report of the COA or HOA;
g) a copy of the most recent reserve study of the COA or HOA;
h) a statement summarizing any pending lawsuits, including the amount of any money claimed;
i) a statement as to whether the condominium or the planned community is under declarant control and the approximate percentage of units or properties identified on the recorded plat that are currently owned by the declarant;
j) a statement that, for any report provided in summary format, the purchaser may request to view the entire report from the COA or HOA directly and the COA or HOA must provide access to the report within 10 days after a written request;
k) a prescribed statement to be signed by the purchaser at the close of escrow that acknowledges that the purchaser will be contractually bound to pay all common assessments and contractually bound to the valid covenants, conditions and restrictions of the recorded declaration; and
l) a statement notifying the purchaser that the unit or property is subject to each COA's or HOA's resale disclosure fee, if the unit or property is governed by multiple COAs or HOAs.
5. Modifies the contents of the dated statement in a disclosure packet to contain:
a) the telephone number and address of a principal contact for the COA or HOA;
b) the amount and payment schedule for the annual common expense assessment or common regular assessment for the unit or property and the remaining installments and payment schedules on any approved and assessed special assessment;
c) the amount and purpose of any special assessment approved by the COA or HOA Board but not yet assessed, or any special assessment submitted by the COA or HOA Board for unit owner or member approval within the previous four months;
d) the current amount of any unpaid common expense assessment, lien or judgement lien on the unit or property due and any lis pendens recorded against the unit or property;
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 COA or HOA;
f) a copy of the COA's or HOA's most recent income and expenses financial statement for all operating and reserve accounts; and
g) any outstanding and unresolved violation of the COA or HOA documents that was cited against the unit or property.
6. Modifies the contents of a condominium disclosure packet to contain:
a) a statement as to whether a portion of the unit is covered by insurance maintained by the COA and a copy of all insurance certificates identifying the coverage limits and deductibles maintained by the COA;
b) a statement identifying whether any corporation or limited liability company owns and leases 35 percent or more of the units; and
c) in the dated statement, any known material deficiency or condition of the limited common elements associated with the unit or common elements known by the COA for which the purchaser will be liable for the directly assessed repair costs within six months of purchase.
7. Specifies that a COA or HOA may provide a summary of the report in place of the entire report if:
a) the most recent annual audit, review or compilation report is more than 10 pages; or
b) the most recent reserve study of the COA or HOA is more than 10 pages.
8. Requires all the information that is provided in a disclosure packet to be based on the good faith reliance on COA or HOA records or information, without the need for independent investigation or validation.
9. Stipulates that, if a purchaser or seller is damaged by the failure of the appropriate party to disclose the information required or if the appropriate party knowingly or recklessly provides materially false or misleading statements in the disclosure packet, then the purchaser or seller may pursue all remedies at law or in equity, including the recovery of reasonable attorney fees as awarded by the court.
10. Allows a unit owner or member to request the COA or HOA to update the report if 30 or more days have passed since the date of the original disclosure report.
11. Allows a COA or HOA to charge a document update fee of up to $50.
12. Allows any fees prescribed pursuant to the disclosure process to be charged to a purchaser, in addition to a unit owner or member.
13. Transfers the responsibility to provide a COA or HOA with information outlining the changes in ownership from the unit owner or member to the purchaser for a specified conveyance between familial, business or trust parties.
14. Requires, for any capital or reserve account project, the association manager assigned to the project by the COA's or HOA's contracted management company to be on-site:
a) for at least 30 minutes before the start of work and remain on-site for at least the initial two hours of work;
b) for at least two hours each day that the project continues;
c) for the time required to complete an on-site job site inspection with the COA's or HOA's contracted vendor for the project; and
d) for at least 25 percent of the total project time.
15. Makes technical and conforming changes.
16. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Requires the disclosure packet to be provided on the unit owner's or member's acceptance of the purchaser's offer to purchase.
2. Prescribes requirements for an assigned manager to be on-site for any capital or reserve account project.
3. Makes technical changes.
House Action Senate Action
COM 2/17/26 DPA 11-0-0-0 GOV 3/25/26 DPA 5-1-1
3rd Read 3/3/26 52-3-4-0-1
Prepared by Senate Research
March 30, 2026
AN/KP/ci