Arizona’s Legislature passed, and the Governor signed, House Bill 2141 into law on March 29, 2024. With the legislative session ending on June 15, 2024, HB2141 goes into effect on September 14, 2024. HB2141 amends A.R.S. § 33-1221 and addresses the rights of condominium unit owners to improve, alter and decorate their units.
Prior to HB2141 (and unchanged by HB2141), A.R.S. § 33-1221 provides that unit owners may make any improvements or alterations to their units “that do not impair the structural integrity or mechanical systems or lessen the support of any portion of the condominium,” subject to any provisions set forth in the condominium’s CC&Rs or other applicable law. Applicable CC&Rs provisions oftentimes require owners who are planning improvements to the mechanical systems or structural components of a building to obtain the condominium association’s prior written approval. This makes sense because the mechanical systems and structural components are generally a part of the common elements for which the association is responsible. The association has an interest in knowing (and a right to know) what improvements are being made to the common elements.
This statute also provides that unit owners “shall not change the appearance of the common elements, or the exterior appearance of a unit or other portion of the condominium, without written permission of the association.” Again, this makes sense because the association is responsible for the common elements and the exteriors of the units are generally part of the common elements.[1]
HB2141 adds a new subsection B to A.R.S. § 33-1221. This new subsection provides:
In addition to the allowed modifications as prescribed by subsection A of this section and notwithstanding the condominium documents, the association shall not prohibit a unit owner from improving or altering the interior of the unit in a manner that may disturb adjacent unit occupants if the unit owner purchases and installs at the unit owner’s own expense any reasonably necessary improved materials, accessories or other adjustments that eliminate or minimize the potential disturbance. The association shall not prohibit a unit owner from using any manner of decoration on the interior of the unit.
Two anecdotes led to the creation of HB2141. First, for condominium projects with stacked units (e.g., first floor unit, second floor unit, etc.), it is not uncommon for the CC&Rs to prohibit hard surface flooring (e.g., wood, tile, stone, laminate, etc.) in all but the first floor units. This prohibition generally stems from a lack of, or inadequate sound proofing of the subfloor between stacked units, and concerns with noise transference/nuisance from the upstairs unit to the downstairs unit. We have encountered many situations where an upstairs unit owner installed hard surface flooring, in violation of the CC&Rs, and without the association’s knowledge, only to learn about the violation when the downstairs neighbor began complaining of noise.
HB2141 stems, in part, from complaints by owners of units that are not on the first floor who are not allowed to install hard surface flooring all throughout their units based on a prohibition in the CC&Rs rendered unnecessary by the development of noise reducing underlayments. Indeed, underlayments for hard surface flooring have evolved over the years to mitigate noise transference between upstairs and downstairs units. Many municipalities now mandate a minimum underlayment for flooring for multi-family development, which has had the effect of allowing developers to install hard surface flooring in stacked multi-family developments without fear of noise or nuisance complaints from downstairs owners. HB2141 protects against such fears by requiring unit owners to install, “any reasonably necessary improved materials, accessories or other adjustments that eliminate or minimize the potential disturbance.” HB2141 also protects against upstairs owners installing carpet or other non-hard surface materials without appropriate padding, which may result in similar noise or nuisance complaints from the downstairs owner.
Although HB2141 effectively invalidates any CC&Rs provisions that prohibit hard surface flooring in other than first floor units, HB2141 leaves open the possibility that an association may adopt reasonable rules and regulations with respect to the, “reasonably necessary improved materials, accessories or other adjustments that eliminate or minimize the potential disturbance.” Similar to municipalities, associations may specify certain underlayment requirements that owners must install to ensure compliance with A.R.S. § 33-1221(B). Associations may also require inspections as part of its architectural approval process to confirm that an owner has installed an appropriate underlayment. As a potential additional benefit, HB2141 may have the effect of reducing litigation stemming from a downstairs neighbor’s noise or nuisance complaints about an upstairs neighbor.
The second anecdote dealt with an owner decorating the interior of a unit with a flag that was visible from outside the unit. Many condominium CC&Rs control the outward appearance of the units to ensure uniformity of appearance. This may include requiring window coverings, and even requiring a specific color for window coverings. HB2141 makes it clear that an association has no say in or control over how an owner decorates the interior of a unit. If an owner chooses to hang a flag or other decoration within the unit and the flag or other decoration happens to be visible through a window outside the unit, it is likely that the association will not be able to require the owner to remove the flag or other interior decoration, even if another owner finds the flag or other decoration to be offensive.
That being said, A.R.S. § 33-1221 still prohibits owners from changing the exterior appearance of a unit. If the CC&Rs require owners to install and maintain beige window coverings, is this now an interior unit decoration over which the association has no control, or a rule governing the appearance of unit exteriors? Arguments could be made for either interpretation. In relation to the previous example, installing a flag as a window covering changes the exterior appearance of the unit. As such, there is an argument to be made that an association can still enforce a requirement or restriction on window coverings and other improvements that impact the exterior appearance of the unit. We expect the courts to flush out the extent of HB2141 once it becomes effective and is tested by litigation.
In light of HB2141, we recommend reviewing your condominium association’s CC&Rs, rules and regulations, design guidelines and other potentially applicable rules or policies to determine whether there are any prohibitions or restrictions that may be impacted by HB2141. In addition, we recommend considering whether any new rules or policies need to be adopted in connection with HB2141. The attorneys at CHDB Law are available to help you and your community association ensure compliance with HB2141. Please feel free to email moc.w1758848938albdh1758848938c@nez1758848938ir.ae1758848938rdna1758848938 for assistance.
[1] A.R.S. § 33-1221 also addresses combining adjoining units, which is not impacted by HB2141 or addressed in this article.
The information contained in this article is not intended to be legal advice and is provided for educational purposes only.
