Section: Arizona Condominium Act

1. Portions of the common elements may be conveyed or subjected to a mortgage, deed of trust or security interest by the association if persons entitled to cast at least eighty per cent of the votes in the association, or any larger percentage the declaration specifies, agree to that action in the manner prescribed in subsection B, except that all the owners of units to which any limited common element is allocated must agree in order to convey that limited common element or subject it to a mortgage, deed of trust or security interest. The declaration may specify a smaller percentage only if all of the units in the condominium are restricted exclusively to nonresidential uses. Proceeds of the sale or encumbrance of the common elements are an asset of the association.
2. An agreement to convey common elements or subject them to a mortgage, deed of trust or security interest shall be evidenced by the execution of an agreement, or ratifications of the agreement, in the same manner as a deed, by the requisite number of unit owners. The agreement shall specify a date after which the agreement will be void unless previously recorded. The agreement and all ratifications of the agreement shall be recorded in each county in which a portion of the condominium is situated and are effective only on recordation.
3. The association, on behalf of the unit owners, may contract to convey common elements or subject them to a mortgage, deed of trust or security interest, but the contract is not enforceable against the association until approved pursuant to subsections A and B. Thereafter, the association has all powers necessary and appropriate to effect the conveyance or encumbrance, including the power to execute deeds or other instruments.
4. Except as permitted in this chapter, any purported conveyance, encumbrance, judicial sale or other voluntary transfer of common elements is void.
5. A conveyance or encumbrance of common elements pursuant to this section does not deprive any unit of its rights of access and support.
6. A conveyance or encumbrance of common elements pursuant to this section does not affect the priority or validity of preexisting encumbrances.

1. Real property that is held as an asset of the association and that is not held as a common element of the condominium may be conveyed by the association if persons entitled to cast at least eighty per cent of the votes in the association, or any larger percentage the declaration specifies, agree to the conveyance in the manner prescribed in subsection B.
2. An agreement to convey real property that is held as an asset of the association and that is not held as a common element of the condominium shall be evidenced by the execution of an agreement, or ratifications of the agreement, in the same manner as a deed and by the requisite number of unit owners.  The agreement shall specify a date after which the agreement will be void unless previously recorded.  The agreement and all ratifications of the agreement shall be recorded in each county in which a portion of the condominium is situated and are effective only on recordation.
3. The association, on behalf of the unit owners, may contract to convey the real property but the contract is not enforceable against the association until approved pursuant to subsections A and B. Thereafter, the association has all powers necessary and appropriate to effect the conveyance, including the power to execute deeds or other instruments.
4. Except as permitted in this chapter, any purported conveyance or other voluntary transfer of real property is void.
5. A conveyance of real property pursuant to this section does not affect the priority or validity of preexisting encumbrances.
6. Property an association acquires in an assessment lien foreclosure action shall not be considered real property held as an asset of the association for the purpose of this section.

1. The declaration shall contain:
   1. The name of the condominium, which shall include the word “condominium” or be followed by the words “a condominium”, and the name of the association.
   2. The name of every county in which any portion of the condominium is located.
   3. A legal description of the real estate included in the condominium.
   4. A description of the boundaries of each unit created by the declaration, including each unit’s identifying number.
   5. A description of any limited common elements, other than those specified in section 33-1212, paragraphs 2 and 4, but the declaration shall contain a description of any porches, balconies, patios and entryways, if any, as provided in section 33-1219, subsection B, paragraph 11.
   6. A description of any development rights and other special declarant rights, together with a legal description of the real estate to which each of those rights applies, any time limit within which each of those rights must be exercised and any other conditions or limitations under which the rights described in this paragraph may be exercised or will lapse.
   7. An allocation to each unit of the allocated interests in the manner described in section 33-1217.
   8. Any restrictions on use, occupancy and alienation of the units.
   9. All matters required by sections 33-1216, 33-1217, 33-1218, 33-1219 and 33-1226 and section 33-1243, subsection E.
   10. A statement that the assessment obligation of the unit owner under section 33-1255 is secured by a lien on the owner’s unit in favor of the association pursuant to section 33-1256.
   11. If the condominium is a conversion from multifamily rental to condominiums, a statement containing all of the following:
       1. A statement that the property is a conversion from multifamily rental to condominiums.
       2. The date original construction was completed.
       3. The name and address of the original owner, builder, developer and general contractor as shown on the applicable city, town or county building permit.
       4. The name and address of each subsequent owner as determined by a search of the county recorder’s records in the county in which the property is located.
       5. The subdivider’s agreement to provide the following information on request:
          1. The name and address of any builder, developer, general contractor, subcontractor, architect and engineer who designed or made improvements to the property immediately before the first condominium was sold.
          2. A specific description of all improvements made.
2. If a city, town or county is unable to produce a building permit as required in subsection A, paragraph 11, subdivision (c) of this section, the subdivider shall submit a letter from the applicable city, town or county stating that the information required by subsection A, paragraph 11, subdivision (c) of this section is not available.
3. The declaration may contain any other matters the declarant deems appropriate.

1. All provisions of the condominium documents are severable.
2. The rule against perpetuities shall not be applied to defeat any provision of the condominium documents.
3. Except to the extent inconsistent with this chapter:
   1. If a conflict exists between the provisions of the declaration and the other condominium documents, the declaration prevails.
   2. If a conflict exists between the provisions of the articles of incorporation and the bylaws or rules, the articles of incorporation prevail.
   3. If a conflict exists between the provisions of the bylaws and the rules, the bylaws prevail.
4. Title to a unit and common elements is not rendered unmarketable or otherwise affected by reason of an insubstantial failure of any condominium documents to comply with this chapter.

1. The association has a common expense lien on a unit for any assessment levied against that unit from the time the assessment becomes due. The association’s common expense lien may be foreclosed in the same manner as a mortgage on real estate but may be foreclosed only if the unit owner has been and remains delinquent in the payment of assessments, for a period of one year or in the amount of $1,200 or more, whichever occurs first, as determined on the date the action is filed. The association board of directors shall exercise reasonable efforts to communicate with the unit owner and offer a reasonable payment plan before filing a foreclosure action.  If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due.
2. Notwithstanding any provision in the condominium documents, unit owner expenses are not enforceable as common expense liens under this section. The association has a lien for unit owner expenses after the entry of a judgment in a civil suit for those unit owner expenses from a court of competent jurisdiction and the recording of that judgment in the office of the county recorder as otherwise provided by law. The association’s judgment lien for unit owner expenses may not be foreclosed and is effective only on conveyance of any interest in the real property.
3. A common expense lien under this section is prior to all other liens, interests and encumbrances on a unit except:

1. Liens and encumbrances recorded before the recordation of the declaration.
2. A recorded first mortgage on the unit, a seller’s interest in a first contract for sale pursuant to chapter 6, article 3 of this title on the unit recorded before the lien arising pursuant to subsection A of this section or a recorded first deed of trust on the unit.
3. Liens for real estate taxes and other governmental assessments or charges against the unit.

4. Subsection C of this section does not affect the priority of mechanics’ or materialmen’s liens.  The common expense lien under this section is not subject to chapter 8 of this title.
5. Unless the declaration otherwise provides, if two or more associations have common expense liens created at any time on the same real estate, those liens have equal priority.
6. Recording the declaration constitutes record notice and perfection of the common expense lien.  Further recordation of any claim of common expense lien under this section is not required.
7. A common expense lien is extinguished unless proceedings to enforce the lien are instituted within six years after the full amount of the assessments becomes due.
8. This section does not prohibit:

1. Actions to recover sums for which subsection A or B of this section creates a lien.
2. An association from taking a deed in lieu of foreclosure.

9. A judgment or decree in any action brought under this section may include costs and reasonable attorney fees for the prevailing party.
10. The association on written request shall furnish to a lienholder, escrow agent, unit owner or person designated by a unit owner a statement setting forth the amount of any unpaid liens prescribed by subsection A or B of this section against the unit. The statement shall be furnished within ten days after receipt of the request.  The statement is binding on the association if the statement is requested by an escrow agency that is licensed pursuant to title 6, chapter 7. Failure to provide the statement to the escrow agent within the time provided for in this subsection extinguishes any lien for any unpaid assessment then due.
11. Notwithstanding any provision in the condominium documents or in any contract between the association and a management company or any other agent of the association, including any agreement or contract with any attorney, unless the unit owner directs otherwise, all payments received on a unit owner’s account shall be applied first to any unpaid assessments, due but not delinquent assessments, unpaid charges for late payment of those assessments if authorized in the declaration, unpaid reasonable collection fees and costs incurred or applied by the association and unpaid attorney fees and costs incurred with respect to those assessments if awarded by a court, in that order, with any remaining amounts applied next to other unpaid fees, charges and monetary penalties or interest and late charges on any of those amounts.
12. For a delinquent account for unpaid common expense liens, the association shall provide the following written notice to the unit owner at the unit owner’s address as provided to the association at least thirty days before authorizing an attorney, or a collection agency that is not acting as the association’s managing agent, to begin collection activity on behalf of the association:
    • Your account is delinquent. If you do not bring your account current or make arrangements that are approved by the association to bring your account current within thirty days after the date of this notice, your account will be turned over for further collection proceedings. Such collection proceedings could include bringing a foreclosure action against your property.
    • The notice shall be in boldfaced type or all capital letters and shall include the contact information for the person that the unit owner may contact to discuss payment. The notice shall be sent by certified mail, return receipt requested, and may be included within other correspondence sent to the unit owner regarding the unit owner’s delinquent account.
13. Except for condominiums that have fewer than fifty units and that do not contract with a third party to perform management services on behalf of the association, the association shall provide a statement of account in lieu of a periodic payment book to the unit owner with the same frequency that assessments are provided for in the declaration. The statement of account shall include the current account balance due and the immediately preceding ledger history. If the association offers the statement of account by electronic means, a unit owner may opt to receive the statement electronically.  The association may stop providing any further statements of account to a unit owner if collection activity begins by an attorney, or a collection agency that is not acting as the association’s managing agent, regarding that unit owner’s unpaid account. After collection activity begins, a unit owner may request statements of account by written request to the attorney or collection agency. Any request by a unit owner for a statement of account after collection activity begins by an attorney or a collection agency that is not acting as the association’s managing agent must be fulfilled by the attorney or the collection agency responsible for the collection.  The statement of account provided by the attorney or collection agency responsible for the collection shall include all amounts claimed to be owing to resolve the delinquency through the date set forth in the statement, including attorney fees and costs, regardless of whether such amounts have been reduced to judgment.
14. An agent for the association may collect on behalf of the association directly from a unit owner the assessments and other amounts owed by cash or check, by mailed or hand-delivered bank drafts, checks, cashier’s checks or money orders, by credit, charge or debit card or by other electronic means.  For any form of payment other than for cash or for mailed or hand-delivered bank drafts, checks, cashier’s checks or money orders, the agent may charge a convenience fee to the unit owner that is approximately the amount charged to the agent by a third-party service provider. The association may not transfer ownership or control of debt for common expense liens or unit owner expenses.
15. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

1. At the time the unit owners’ association is organized, the association shall adopt bylaws which provide for each of the following:
   1. The number of members of the board of directors and the titles of the officers of the association.
   2. Election by the board of directors of a president, treasurer, secretary and any other officers of the association which the bylaws specify.
   3. The qualifications, powers and duties, terms of office and manner of electing and removing board members and officers and filling vacancies.
   4. Which, if any, of its powers the board of directors or officers may delegate to other persons or to a managing agent.
   5. Which of its officers may execute, certify and record amendments to the declaration on behalf of the association.
   6. The method of amending the bylaws.
2. Subject to the provisions of the declaration, the bylaws may provide for any other matters the association deems necessary and appropriate.

1. Except as provided in the declaration, the bylaws, subsection B of this section or other provisions of this chapter, the board of directors may act in all instances on behalf of the association.
2. The board of directors shall not act on behalf of the association to amend the declaration, terminate the condominium, elect members of the board of directors or determine the qualifications, powers and duties or terms of office of board of directors members.  Except as provided in subsection H of this section, the board of directors may fill vacancies in its membership for the unexpired portion of any term.
3. If any contract, decision or other action for compensation taken by or on behalf of the board of directors would benefit any member of the board of directors or any person who is a parent, grandparent, spouse, child or sibling of a member of the board of directors or a parent or spouse of any of those persons, that member of the board of directors shall declare a conflict of interest for that issue.  The member shall declare the conflict in an open meeting of the board before the board discusses or takes action on that issue and that member may then vote on that issue.  Any contract entered into in violation of this subsection is void and unenforceable.
4. Except as provided in the declaration, within thirty days after adoption of any proposed budget for the condominium, the board of directors shall provide a summary of the budget to all the unit owners.  Unless the board of directors is expressly authorized in the declaration to adopt and amend budgets from time to time, any budget or amendment shall be ratified by the unit owners in accordance with the procedures set forth in this subsection. If ratification is required, the board of directors shall set a date for a meeting of the unit owners to consider ratification of the budget not fewer than fourteen or more than thirty days after mailing of the summary.  Unless at that meeting a majority of all the unit owners or any larger vote specified in the declaration rejects the budget, the budget is ratified, whether or not a quorum is present.  If the proposed budget is rejected, the periodic budget last ratified by the unit owners shall be continued until such time as the unit owners ratify a subsequent budget proposed by the board of directors.
5. The declaration may provide for a period of declarant control of the association, during which period a declarant or persons designated by the declarant may appoint and remove the officers and members of the board of directors. Regardless of the period provided in the declaration, a period of declarant control terminates not later than the earlier of:
   1. Ninety days after conveyance of seventy-five percent of the units that may be created to unit owners other than a declarant.
   2. Four years after all declarants have ceased to offer units for sale in the ordinary course of business.
6. A declarant may voluntarily surrender the right to appoint and remove officers and members of the board of directors before termination of the period prescribed in subsection E of this section, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or board of directors, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective.
7. Not later than the termination of any period of declarant control the unit owners shall elect a board of directors of at least three members, at least a majority of whom must be unit owners.  The board of directors shall elect the officers.  The board members and officers shall take office on election.
8. Notwithstanding any provision of the declaration or bylaws to the contrary, all of the following apply to a meeting at which a member of the board of directors, other than a member appointed by the declarant, is proposed to be removed from the board of directors:
   1. The unit owners who are eligible to vote at the time of the meeting may remove any member of the board of directors, other than a member appointed by the declarant, by a majority vote of those voting on the matter at a meeting of the unit owners.
   2. The meeting of the unit owners shall be called pursuant to this section and action may be taken only if a quorum is present.
   3. The unit owners may remove any member of the board of directors with or without cause, other than a member appointed by the declarant. 
   4. For purposes of calling for removal of a member of the board of directors, other than a member appointed by the declarant, the following apply:
      1. In an association with one thousand or fewer members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least twenty-five percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one hundred votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association as prescribed by section 33-1248, subsection B.
      2. Notwithstanding section 33-1248, subsection B, in an association with more than one thousand members, on receipt of a petition that calls for removal of a member of the board of directors and that is signed by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least ten percent of the votes in the association or by the number of persons who are eligible to vote in the association at the time the person signs the petition equal to at least one thousand votes in the association, whichever is less, the board shall call and provide written notice of a special meeting of the association. The board shall provide written notice of a special meeting as prescribed by section 33-1248, subsection B.
      3. The special meeting shall be called, noticed and held within thirty days after receipt of the petition.
      4. If all of the requirements of this subsection for calling a special meeting are met and the board of directors fails to call, notice and hold a special meeting within thirty days after receipt of the petition, the members of the board of directors are deemed removed from office effective at midnight of the thirty-first day.
      5. For purposes of a special meeting called pursuant to this subsection, a quorum is present if the number of owners who are eligible to vote in the association at the time the person attends the meeting equal to at least twenty percent of the votes of the association or the number of persons who are eligible to vote in the association at the time the person attends the meeting equal to at least one thousand votes, whichever is less, is present at the meeting in person or as otherwise allowed by law.
      6. If a civil action is filed regarding the removal of a board member, the prevailing party in the civil action shall be awarded its reasonable attorney fees and costs.
      7. The board of directors shall retain all documents and other records relating to the proposed removal of the member of the board of directors and any election or other action taken for that director’s replacement for at least one year after the date of the special meeting and shall allow members to inspect those documents and records pursuant to section 33-1258.
      8. A petition that calls for the removal of the same member of the board of directors shall not be submitted more than once during each term of office for that member.
   5. On removal of at least one but fewer than a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, the vacancies shall be filled as provided in the condominium documents.
   6. On removal of a majority of the members of the board of directors at a special meeting of the membership called pursuant to this subsection, or if the condominium documents do not provide a method for filling board vacancies, the association shall hold an election for the replacement of the removed directors at a separate meeting of the members of the association that is held not later than thirty days after the meeting at which the members of the board of directors were removed.
   7. A member of the board of directors who is removed pursuant to this subsection is not eligible to serve on the board of directors again until after the expiration of the removed board member’s term of office, unless the condominium documents specifically provide for a longer period of ineligibility.
9. For an association in which board members are elected from separately designated voting districts, a member of the board of directors, other than a member appointed by the declarant, may be removed only by a vote of the members from that voting district, and only the members from that voting district are eligible to vote on the matter or be counted for purposes of determining a quorum.
10. Unless any provision in the condominium documents requires an annual audit by a certified public accountant, the board of directors shall provide for an annual financial audit, review or compilation of the association.  The audit, review or compilation shall be completed no later than one hundred eighty days after the end of the association’s fiscal year and shall be made available on request to the unit owners within thirty days after its completion.
11. This section does not apply to timeshare plans or associations, or the period of declarant control under timeshare instruments, that are subject to chapter 20 of this title.

1. Except as provided in subsection B of this section, all financial and other records of the association shall be made reasonably available for examination by any member or any person designated by the member in writing as the member’s representative.  The association shall not charge a member or any person designated by the member in writing for making material available for review.  The association shall have ten business days to fulfill a request for examination.  On request for purchase of copies of records by any member or any person designated by the member in writing as the member’s representative, the association shall have ten business days to provide copies of the requested records.  An association may charge a fee for making copies of not more than fifteen cents per page.
2. Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following:
   1. Privileged communication between an attorney for the association and the association.
   2. Pending litigation.
   3. Meeting minutes or other records of a session of a board meeting that is not required to be open to all members pursuant to section 33-1248.
   4. Personal, health or financial records of an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association.
   5. Records relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association.
3. The association shall not be required to disclose financial and other records of the association if disclosure would violate any state or federal law.
4. This section does not apply to an association for a timeshare plan that is subject to chapter 20 of this title.

With respect to a third person dealing with the association in the association’s capacity as a trustee, the existence of trust powers and their proper exercise by the association may be assumed without inquiry. A third person is not bound to inquire whether the association has power to act as trustee or is properly exercising trust powers. A third person, without actual knowledge that the association is exceeding or improperly exercising its powers, is fully protected in dealing with the association as if it possessed and properly exercised the powers it purports to exercise. A third person is not bound to assure the proper application of trust assets paid or delivered to the association in its capacity as trustee.

1. Until the association makes a common expense assessment, the declarant shall pay all common expenses. After any assessment has been made by the association, assessments shall be made at least annually, based on a budget adopted at least annually by the association.
2. Except for assessments under subsections C, D, E and F of this section, all common expenses shall be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to section 33-1217, subsection A.  Any past due common expense assessment or installment bears interest at the rate established by the board subject to the condominium documents.
3. Unless otherwise provided for in the declaration all of the following apply:
   1. Any common expense associated with the maintenance, repair or replacement of a limited common element shall be equally assessed against the units to which the limited common element is assigned.
   2. Any common expense or portion of a common expense benefitting fewer than all of the units shall be assessed exclusively against the units benefitted.
4. Assessments to pay a judgment against the association may be made only against the units in the condominium at the time the judgment was entered, in proportion to their common expense liabilities.
5. If any common expense is caused by the misconduct of any unit owner, the association may assess that expense exclusively against that unit.
6. If the declaration so provides, the common expense assessment for any unit on which construction has not been substantially completed may be an amount which is not less than twenty-five per cent of the common expense assessment for units which have been substantially completed.  However, this reduced common expense assessment shall not be permitted, unless the declarant is obligated under the declaration to pay to the association any deficiency in monies due to the declarant having paid a reduced common assessment and necessary for the association to be able to timely pay all common expenses.
7. If common expense liabilities are reallocated, common expense assessments and any installment on the assessments not yet due shall be recalculated in accordance with the reallocated common expense liabilities.
8. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

1. A zoning, subdivision or building code or other real estate use law, ordinance or rule shall not prohibit a condominium form of ownership or impose any requirement on a condominium which it would not impose on a physically identical development under a different form of ownership.
2. Except as provided in subsection A, this chapter does not invalidate or modify any provision of any zoning, subdivision or building code or other real estate use law, ordinance or rule.

This chapter applies to all condominiums created within this state without regard to the date the condominium was created.