Overview
A proposal to amend A.R.S. § 33-1255 by adding subsection H to require that in mixed-use condominiums that meet the criteria established by the new language, common expense assessments benefitting only commercial units, or only residential units, as applicable, are only assessed against those units.
Key Changes
Current Law
Common expenses in condominiums are allocated according to the percentage interests specified in the declaration, regardless of whether expenses benefit all units equally.
Proposed Amendment (Passed Into Law)
- Separate Assessment of Unit-Type Specific Expenses: In mixed-use condominiums meeting specified criteria, common expense assessments benefiting only commercial units are assessed only against commercial units, and expenses benefiting only residential units are assessed only against residential units.
- Unanimous Vote for Alternative Allocation: After any period of declarant control ends, unit owners may approve a different allocation of a common expense or portion of a common expense than what is prescribed by this subsection only by unanimous vote.
- Conforming Changes: The law includes conforming changes relating to the allocation of common expense liabilities in A.R.S. § 33-1255.
Legislative Timeline
- April 7, 2025 – Signed by Governor
- April 1, 2025 – Senate Third Read, Approved by Senate 18-11-1; Transmitted to Governor
- March 24, 2025 – Deemed Proper for Consideration by Senate Committee on Rules; On Senate consent calendar
- March 21, 2025 – On the March 24, 2025 agenda for the Senate Committee on Rules
- March 19, 2025 – Passed out of Senate Committee on Government with a “Do Pass” recommendation
- March 4, 2025 – Senate Second Read
- March 3, 2025 – Senate First Read; Assigned to Senate Committee on Government and Senate Committee on Rules
- February 25, 2025 – House Third Reading; Approved by House 60-0-0 and transmitted to Senate
- February 20, 2025 – Floor amendment proposed by Rep. Jeff Weninger.
- The amendments proposed are conforming changes relating to the allocation of common expense liabilities (i.e., they reference A.R.S. § 33-1255).
- Passed out of the additional Committee of the Whole with a “Do Pass as Amended” recommendation.
- February 20, 2025 – Motion by Rep. Carbone that the bill be calendared for an additional Committee of the Whole for further amendments; Motion passed
- February 17, 2025 – Passed out of COW with a “Do Pass as Amended” recommendation (floor amendment adopted)
- February 17, 2025 – Floor amendment proposed by Rep. Jeff Weninger.
- The amendments proposed add that after any period of declarant control ends, the unit owners may approve only by a unanimous vote a different allocation of a common expense or portion of a common expense than what is prescribed by this subsection.
- February 10, 2025 – Deemed constitutional and in proper form by House Committee on Rules; On consent calendar for Committee of the Whole
- February 4, 2025 – Passed out of House Committee on Commerce with a “Do Pass as Amended” recommendation
- February 4, 2025 – Amendment proposed by Rep. Jeff Weninger
- January 22, 2025 – House Second Read
- January 21, 2025 – House First Read; Assigned to House Committee on Commerce and House Committee on Rules
Impact
The law addresses a longstanding fairness issue in mixed-use condominiums where residential and commercial units share common expenses unequally. Expenses that benefit only one unit type—such as residential amenities or commercial-specific maintenance—are now assessed only to the units that benefit. This prevents cross-subsidization between commercial and residential owners. The unanimous vote requirement for alternative allocation methods ensures all owners consent to any deviation from the statutory formula, protecting minority interests. Mixed-use condominiums must review their assessment structures to ensure compliance with the new allocation requirements. The law applies only to condominium associations, not planned communities.