SB 1440

Overview

SB 1440 proposes to significantly enhance due process rights for owners in Arizona’s condominium and planned community associations by mandating robust procedural protections before enforcement actions or penalties may be imposed. It standardizes requirements for notice, response, appeal, and fair hearings, including new limits on certain penalties and fees. The bill makes any penalty unenforceable if these due process procedures are not followed.

Key Changes

• Amending A.R.S. 33-1242 and A.R.S. 33-1803 as follows:
  • Upon receipt by an owner of written notice that the condition of the owner’s property violates the governing documents, the owner may either take the actions necessary to comply with the governing documents, eliminate any identified imminent personal safety threat, or request to appeal the notice within 10 calendar days of receiving the notice of violation;
  • If a notice of violation is sent by the United States Postal Service, it is considered received 2 calendar days after its postmarked date;
  • On expiration of the 10 day opportunity to appeal period, if the notice of violation imposed penalties and the violation was not cured or appealed, the association may take the authorized action necessary to enforce the governing documents until the violation is cured;
  • Requests to appeal may be sent by mail, email, through an online portal, or by other available means identified in the notice of violation;
  • Owners may request their violation appeals to be heard in either an open or closed portion of a board of directors meeting;
  • If an owner submits a request to appeal, the association must:
    • Schedule an appeal hearing before the board of directors;
    • Provide, at least 48 hours before the hearing, by email, text, or other documented means, notice to the owner of the location, date, and time of the hearing;
    • Provide the owner or the owner’s designated representative a reasonable allotment of time necessary to present the appeal;
  • Granting boards of directors discretion in its enforcement power, provided that the boards of directors treat all owners fairly, reasonably, and consistently;
  • Providing that if an owner or an owner’s designated representative fails to appear at the scheduled hearing, the opportunity to be heard is satisfied, and the association may continue enforcement action until the violation is cured;
  • Providing that if a board of directors rejects an appeal, the association may continue enforcement action until the violation is cured;
  • With respect to the information an association must include on a notice of violation:
    • Removing the obligation to include the first and last name of the person or persons who observed the violation;
    • Including the actions necessary to correct the alleged violation, the provisions of the published enforcement policy, and the monetary penalty schedule that may be applied;
    • Including the right to appeal the violation and participate in a hearing;
  • Providing that associations, after notice and an opportunity to be heard, may impose reasonable monetary or other penalties based on the published enforcement policy and schedule of monetary penalties commensurate with the significance of the violation until the violation is cured;
  • Prohibiting associations from imposing a charge or monetary or other penalty that does any of the following:
    • Restricts the right to vote, sign a petition or run for office other than for failure to pay common expense assessments;
    • Based on any unrelated violation, restrict access to a community security gate, buildings (for condominiums only), parking structures (for condominiums only), utilities, or other vital services;
    • Except for imminent personal safety issues, repeat monetary penalties more frequently than every 15 days, or escalate the penalty more frequently than every 2 months for owners who fail to cure their violations;
    • Apply interest to any unpaid monetary penalty that compounds at an annual rate greater than 20%;
    • Except for the cost of billing statements, apply any collection costs on monetary penalties other than as authorized by applicable law;
    • Apply a fee to the owner for the execution of the due process of this section, including any notice of violation;
  • Providing that an association’s failure to comply with this section invalidates and makes unenforceable any penalty that is imposed on the owner for the violation;
  • Requiring associations to include, in their published enforcement policies, that owners have the right to file a petition with the Arizona Department of Real Estate for an administrative hearing on any alleged violation.

Legislative Timeline

• January 29, 2026 – Senate Second Reading
• January 28, 2026 – Introduced; Senate First Reading; Assigned to Senate Government and Rules Committees

Impact

Overall, SB 1440 increases the administrative responsibilities of boards of directors and managers, requiring them to implement more detailed procedures for enforcement, appeals, and communication. Boards of directors will need to review and update their enforcement policies and practices to comply with these new requirements.