HB 2095

CC&R Amendment Thresholds

Proposes to change CC&R amendment approval requirements based on whether communities are "branded" and whether amendments add or remove restrictions.

Overview

A proposal to amend A.R.S. §§ 33-1227(A) and 33-1817 to change the approval requirement for CC&Rs amendments from sixty-seven percent of unit owners for condominiums, and from the amount specified in the CC&Rs for planned communities, to three-fourths of the number of owners or eligible voters in attendance at a meeting of the membership at which a quorum is present. Note that this is not three-fourths of all owners or votes, but three-fourths of those owners participating in the vote, assuming quorum is met.

Key Changes

Current Law

Condominium CC&R amendments require approval by 67% of unit owners. Planned community CC&R amendments require approval by the percentage specified in the CC&Rs.

Proposed Amendment (Inactive)

  • Branded Community Definition: A “branded” community is defined as a project that enters into a declaration agreement with an architectural firm, contractor firm, developer, builder, builder’s vendor, or residential home builder corporation and uses that firm’s or corporation’s name or reputation in its promotional materials.
  • Nonbranded Condominium Amendments: CC&R amendments that remove or reduce restrictions require approval by three-fourths of owners voting at a meeting where quorum is met. CC&R amendments that add or increase restrictions require approval by 67% of all owners (or such larger amount as the CC&Rs specify).
  • Branded Condominium Amendments – First 20 Years: During the 20-year period after the end of declarant control, all CC&R amendments require approval by 67% of all owners (or such larger amount as the CC&Rs specify).
  • Branded Condominium Amendments – Year 21 and Beyond: After year 20 following the end of declarant control, CC&R amendments that remove or reduce restrictions require approval by three-fourths of owners voting at a meeting where quorum is met. CC&R amendments that add or increase restrictions require approval by 67% of all owners (or such larger amount as the CC&Rs specify).
  • Planned Community Amendments: The same structure applies to planned communities, except where 67% approval is required for condominiums, planned communities must instead meet the approval requirement set forth in their CC&Rs.

Legislative Timeline

  • February 18, 2025 – Held in committee
  • February 14, 2025 – On the February 18, 2025 agenda for the House Committee on Commerce
  • February 13, 2025 – Strike everything amendment proposed by Rep. Michael Way.
    • The strike everything amendment proposes to distinguish between “branded” and “nonbranded” communities with “branded” meaning a project, “that enters into a declaration agreement with an architectural firm or a contractor firm or a developer, builder, builder’s vendor or residential home builder corporation and that uses that firm’s or corporation’s name or reputation in its promotional materials.” 
    • For nonbranded condominiums, CC&Rs amendments that would remove or reduce restrictions must be approved by three-fourths of the owners voting on the matter at a meeting, assuming quorum is met. CC&Rs amendments that would add or increase restrictions must be approved by 67% of the owners (or such larger amount as the CC&Rs specify).
    • For branded condominiums, CC&Rs amendments during the 20 year period after the end of declarant control must be approved by 67% of the owners (or such larger amount as the CC&Rs specify). For year 21 and onwards after the end of declarant control, CC&Rs amendments that would remove or reduce restrictions must be approved by three-fourths of the owners voting on the matter at a meeting, assuming quorum is met, and CC&Rs amendments that would add or increase restrictions must be approved by 67% of the owners (or such larger amount as the CC&Rs specify).
    • The foregoing is the same for planned communities, with the exception that where 67% approval is required for condominiums, planned communities must instead meet the approval requirement set forth in their CC&Rs.
  • January 29, 2025 – House Second Read
  • January 28, 2025 – House First Read; Assigned to the House Committee on Commerce and the House Committee on Rules

Impact

The measure would create a complex dual-track system for CC&R amendments based on branded status, time since declarant control, and the nature of the proposed changes.

For nonbranded communities and older branded communities (21+ years after declarant control), amendments removing restrictions would become easier to pass by requiring only three-fourths of participating voters rather than a percentage of all owners. This change would make it easier to eliminate outdated restrictions in communities with low participation rates, as quorum requirements are typically lower than 67% of all owners. The 20-year protection period for branded communities would preserve developer-established character and standards during the period when the original vision is most relevant.

The distinction between adding and removing restrictions recognizes that loosening standards may require less consensus than imposing new restrictions. The “branded community” definition could create disputes over what constitutes use of a firm’s name or reputation in promotional materials.

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