HB2442

Establishes certain procedures and requirements for a condominium association or homeowners association relating to the approval of an annual operating budget and additional unanticipated expenses.

For homeowners: Strongly pro-homeowner budget discipline: proposed budgets must be available at least 48 hours before the approving meeting, reserves cannot be spent outside their authorized purpose without owner approval, special assessments and borrowing require a member ratification vote, and a regular assessment cannot rise more than 10% over the prior year without member approval. It adds teeth by making non-compliant assessments invalid and unenforceable. It passed the House only.

What the bill actually does, point by point — from the Arizona Legislature’s official fact sheet.

1.   Specifies the board of directors of a condominium association or homeowners association has a duty to develop an annual operating budget for the fiscal year that is based on a reasonably prudent and good faith estimate of the common expenses necessary to satisfy their obligations to the unit owners or members. (Sec. 3, 6)
2.   Requires a copy of a proposed budget to be made reasonably available for unit owner or member review at least 48 hours before the board meeting at which the approval of the budget will be considered. (Sec. 3, 6)
3.   Allows an association to establish and fund reserve accounts to address anticipated long-term or major maintenance and upgrade of common elements, or for other purposes, provided that doing so is authorized in the declaration or community documents. (Sec. 3, 6)
4.   Prohibits the board or its managing agent from spending or transferring any monies from the association's reserve accounts for any purpose that is not included in the declaration or community documents' authorized use of that account without prior authorization from the unit owners or members. (Sec. 3, 6)
5.   Instructs the Board of Directors, prior to the implementation and assessment of an approved budget, to notice and call an informational special meeting to answer and address questions of unit owners or members. (Sec. 3, 6)
6.   Outlines a procedure for circumstances involving unanticipated and unbudgeted operating expenses. (Sec. 3, 6)
7.   Requires the unit owners or members to ratify, by a majority vote of all allocated votes in the association, or a larger percentage if required by the declaration or community documents, a special assessment or to secure financing for any reason, if approved by the board. (Sec. 3, 6)
8.   Asserts that a board of director's failure to adhere to the provisions of this act involving budgets results in any action or assessment deemed invalid and unenforceable. (Sec. 3, 6)
9.   Prohibits a homeowner's association from imposing a regular assessment that is more than 10% greater than the immediately preceding fiscal year's assessment without the prior approval of a majority of the members voting on that issue. (Sec. 6) 10.  Modifies the definition of unit owner expenses and member expenses. (Sec. 1, 5) 11.  Defines assessment, common expense liability and common expenses. 12.  Makes technic

The A.R.S. sections this bill amends, adds, or repeals — taken from the bill text. Click one to read the current law.

Official bill page (azleg.gov) → Full bill text → Fact sheet / summary → Bill history (LegiScan) →

Organizations and industry insiders who registered a position on this bill through the Legislature’s public Request to Speak system — simply where each stood: For, Against, or Neutral. Individual homeowners are not listed. Whether this bill helps or hurts homeowners is our own read, shown by its label above — a group’s position doesn’t set our call. Each row links to that entity’s report card and to the source at azleg.gov.