HOA Law - Legislative updates

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When you purchase a home in a community that's subject to management by a community association, there are recorded documents that serve as the agreement between you, your neighbors, and your association.  The main document is usually called "Declaration of Covenants, Conditions and Restrictions," or "CC&Rs" or the "Declaration" for brevity.  The CC&Rs establish the community association and its purpose in the community.  The CC&Rs describe the duties of the association, as well as the duties, rules, and limitations (often referred to as use restrictions) applicable to owners in the community.  The CC&Rs provide the association with authority to collect assessments and explain how the association can utilize the funds it collects.  Criteria and procedures for special assessments are often found in the CC&RS.

In addition to the CC&Rs, associations are governed by Bylaws and Articles of Incorporation.  These documents describe the way that the association can operate.  The Bylaws provide the rules applicable to the association's board of directors, such as each officer's authority and duties, and limitations like the duration of their term.  The Bylaws are often the source of procedural requirements for how board of director elections must occur.

Finally, most communities have sets of rules and/or architectural guidelines that apply to every owner in the community. These rules can be extensive, covering everything from parking to what color your house can be to the type of plants you can install on your property.  With respect to architectural guidelines, that document is where owners can find any building requirements, including the process for obtaining HOA approval on proposed construction, whether a new home or remodeling an existing home.  There is often an architectural committee appointed by the board of directors to oversee all building and remodeling in the community.  

CC&Rs are typically long, dense documents filled with legalese.  Disputes often arise out of what the parties think certain terms in the document mean.  At McKeddie Cooley, we can help you understand what your rights and obligations are pursuant to your community's governing documents.  Knowing your rights and obligations is critical, especially if you're facing a dispute with your association.

Disputes about governing documents are the most common issues we deal with at McKeddie Cooley.  Some of the typical types of disputes we see concern maintenance of common elements, like shared roofs or plumbing lines.  Far too often, we deal with HOAs that failed to properly maintain common elements, leading to severe damage to the owner's home.  We can help owners enforce the governing documents when their association has dropped the ball.  

Architectural guidelines are another source for significant disputes.  If you're hoping to build a new home or remodel your existing home, it's imperative that you understand your rights and obligations pursuant to your community's governing documents.  Your association has the power to stop you from doing any work if you haven't followed the process required by your governing documents, or if your association believes your proposed project doesn't comply with the community's governing documents.  In most communities, architectural guidelines allow for the association to exercise subjective judgment in this respect, such as whether the proposed project is "aesthetically pleasing" or "in harmony with the character of the community." The potential for disputes about subjective opinions is substantial. While it's always best to try to avoid any problems before the fact by consulting with experienced professionals such as our attorneys, we know that even the most careful owner can find themselves in the unfortunate position of being unable to build their home or complete a remodeling project because of a dispute with their association. At McKeddie Cooley, we have been helping owners get their homes built and remodeled for the past 20 years in Arizona.  

When you purchase your home in a community with an association, you should receive a full copy of governing documents for the community. At a minimum, this includes the CC&Rs, the association Bylaws, and the association's Articles of Incorporation.  In many communities, there are additional documents such as Rules and Regulations, and Architectural Guidelines. Unfortunately, it's often the case that new owners receive an incomplete copy of the governing documents, usually limited to the CC&Rs only.  Sometimes, owners don't receive anything.  Without a complete copy of the governing documents, owners do not know what's required in their community, which easily leads to disputes with their associations. This is why McKeddie Cooley strongly recommends that all owners and/or residents of a planned community ensure they have a complete copy of the community's governing documents as soon as possible, ideally before they complete their home purchase.  We can help you obtain these documents if your association does not cooperate in providing copies voluntarily.  

As owners in the community, you have the right to access all association documents that are not subject to confidentiality exceptions, such as attorney-client privileged communications or personnel records for association employees.  The governing documents do not fall under any possibile exception and therefore you should have no problem obtaining a full copy.  

There are two ways to obtain copies of these records if you did not receive them in conjunction with the purchase of your home or if you've lost the copies that were provided at that time.  First, as an owner you have the right to request copies of all association documents pursuant to A.R.S. 33-1805 or 33-1258.  There are procedural requirements both you and your association must follow when acting pursuant to these statutes.  While it's certainly possible to obtain records pursuant to these statutes on your own, we are very experienced in handling records requests for our clients and are happy to help if you prefer or are encountering difficulties from your association.  

The second way to obtain copies of your community's governing documents is by searching public records. The CC&Rs are recorded documents that are available on your county recorder's website (there may be some counties that are not completely online yet, in which case you would need to find out how to obtain copies of recorded documents by contacting the recorder's office).  Sometimes the Rules and Regulations and/or Architectural Guidelines are recorded as well, but not always.  In the event your community has additional documents that are not recorded, you will need to go directly to your association to request copies pursuant to statute as described above.  For documents such as Bylaws and Articles of Incorporation, these are corporate records on file with the Arizona Corporation Commission.  All of these documents are accessible online.

Sometimes HOAs just don't do their job.  For whatever reason, owners find themselves in the unfortunate situation of paying assessments for services that are not being provided.  The lack of action can be anything from failing to enforce community rules or failing to collect assessments, to failing to maintain common areas like swimming pools or common elements like shared roofs.  Your HOA isn't doing its job so why should you keep paying?  We understand that withholding payment seems like a fair option for owners when their associans aren't living up to their end of the bargain.  However, Arizona law does not expressly grant owners authority to stop paying assessments.   

Assessment obligations arise out of your community's governing documents, which are recorded documents that every owner agrees to be bound by when purchasing a home in the community.  The obligation to pay assessments is secured by a lien in favor of your association, and that lien can almost always be foreclosed upon.  In most if not all communities, the CC&Rs provide that the association is entitled to recover attorney's fees and collection costs in the event it has to take action to collect assessments from an owner.  What started as a small bill can end up being a judgment for a substantial sum that can be foreclosed upon, among other things.  While community associations are required by law to honor their duties and obligations, Arizona law does not expressly allow for owners to withhold assessment payments for any reason.

No matter what your HOA is doing or failing to do, we strongly recommend that you continue paying your assessments at all times.  If something is wrong, we can help.  Your remedy, as owners, is to seek legal assistance in forcing your HOA to comply with its obligations.  Whether this happens voluntarily through an informal process such as correspondence from an attorney, or by force through formal action in the court system, there are options for owners that are dealing with an association that's not doing its job.  McKeddie Cooley can help you ensure your association is meeting its obligations under the community's governing documents and Arizona law.