New Arizona Law Addresses HOA Foreclosure Rights As Well As Other HOA Operations
Signed by Arizona's governor on April 10, SB 1007 provides a good example of the growing trend among states to legislate the governance and operations of the HOAs. This new law prohibits associations from foreclosing against a unit unless the owner has been delinquent in the payment of assessments (not including collection fees) for one year OR in the amount of $1,200 or more, which ever comes first.
In addition, HOAs may not charge more than .15 cents a page when copying association records at the request of an owner. (Colorado law allows associations to charge "actual costs.") The law also provides a detailed procedure associations must follow before taking enforcement action against an owner "regarding the condition of the member's property." (Colorado law also requires that associations give owners notice - and an opportunity to be heard - before imposing fines for violations of the declaration, bylaws, and rules and regulations of the association. Colorado law does not, however, detail how this notice is to be given.)
Opinions will differ if the above provisions in the new law will benefit homeowners and/or homeowner associations. (For example, we generally advise associations not to foreclose on a unit when the sum owed is small or not seriously in arrears.) However, regardless of which opinion boards have in Arizona, the law must be followed. In light of the legislative trends across the nation, boards in Colorado should be sure to govern reasonably to retain the ability to decide such questions in the best interest of their unique associations.