With approximately 2,249,000 Arizonans living in 892,800 homes in more than 10,100 community associations, as reported by the Community Associations Institute, community associations and their governing documents are top of mind. Some recent decisions in both the Arizona Supreme Court and the Arizona Court of Appeals are forcing homeowners’ association (HOA) board members to look beyond the four corners of their governing documents and either self-educate or turn to their hired counsel for legal opinions and training.
Over the last few years, there has also been a concerted effort in Arizona to introduce numerous bills making substantive changes to established statutes limiting or altering the rights of community associations that are outlined below. During this time, many of these bills have been signed by Governor Katie Hobbs, and it is evident that this trend is likely to continue.
This article highlights some important changes in the laws governing community associations and what board members need to know. Please note that the laws signed by the governor in 2025 will not be effective until September 26, 2025.
Community Associations and Their Ability to Foreclose on an Assessment Lien
There has been a push over the last couple of years to limit the ability of community associations to foreclose on their statutory liens. In 2024, with HB2648, substantial changes to both condominium associations (A.R.S. § 33-1256) and planned communities (A.R.S. § 33-1807) were signed into law, including the introduction of the “Common Expense Lien,” “Unit Owner” and “Member Expense,” as well as a change to what is included as part of the association’s statutory lien.
In this year’s legislative session, SB1494 was introduced and signed by the governor. Currently, Arizona law states that a community association can legally foreclose on its statutory lien when an owner is delinquent in paying assessments for a period of 12 months or in an amount of $1,200, whichever occurs first.
As of the effective date of this bill, the statutory requirements for a planned community to file a foreclosure lawsuit will be changed. Planned communities will be authorized to foreclose their lien rights if an owner is delinquent in the payment of an assessment or any portion of an assessment for a period of 18 months or in an amount of $10,000, whichever occurs first.
Meeting a threshold of $10,000 in unpaid assessments in a six-year period is unlikely to occur in many planned communities in the state. Planned communities, however, will be able to exercise their foreclosure rights once an owner has failed to pay the assessment balance for at least 18 months. So, while on its face, SB1494 appears to have made a drastic change to the foreclosure landscape of planned communities, the right to foreclosure the statutory lien still exists. Board members need to be aware of this important statutory change when considering how to collect on an outstanding balance and should take note that it is very likely that legislators will continue to try and limit an association’s ability to foreclose on unpaid assessments and related charges.
It is also important that board members in planned communities remember that an association’s recorded Declaration of Covenants, Conditions, and Restrictions likely contains a provision establishing a contractual lien consisting of unpaid assessments and other related charges and affording the association the ability to foreclose on said lien. This lien is different from the statutory lien mentioned above and may include different amounts.
Lastly, the governing documents of a community association should include a collection policy. With the recent changes in the laws impacting an association’s statutory lien rights, it may be necessary for the board to review and revise, with the assistance and advice of its legal counsel, the association’s collection policy to ensure it complies with established law.
Political Signs
In recent years and election cycles, community associations and their regulatory powers have been tested with the placement of political signs and other signs that owners believe to be political signs on yards and properties throughout the community. These have ranged from the standard form of a political sign to signs with vulgar messages for certain candidates.
The laws governing political signs have changed over the past 10 years, and this year was no exception. If provided for in the governing documents, associations have the authority to dictate and regulate the placement of political signs in a community. However, the law protects the placement of political signs during certain periods of time. Political signs include signs that “attempt to influence the outcome of an election, including supporting or opposing the recall of a public officer or supporting or opposing the circulation of a petition for a ballot measure, question or proposition or the recall of a public officer.”
With the introduction and signing of SB1378, this definition of a political sign has been expanded to include flags containing the same information that would otherwise be found on a sign. So long as the flag meets the definition of a political sign and meets all other statutory requirements, community associations must allow its placement during the period of 71 days before and 15 days after an election or primary.
This should not be confused with “Association-specific political signs” defined in the same statute to include signs that support or oppose a candidate for the board of directors, the recall of a board member, or a planned community ballot measure that requires a vote of the association members. Flags containing this information can still be regulated at any time by a community association in accordance with its governing documents.
Association Meetings – Agendas and Recordings
In a similar fashion to the political signs, there are attempts each year to revise the laws governing community association board and member meetings. In 2024, HB2662 was passed and signed into law, making it a requirement that boards provide an agenda for their meeting at least 48 hours prior to the meeting in the same manner that notice of the meeting is provided to the members of the association.
Attempts in 2025 to further revise A.R.S. §§ 33-1248 and 33-1804 were not successful with the one exception of SB1039. This bill was signed by the governor making it a requirement that in the event a board records a meeting that is open to the members, the board is required to keep a copy of that recording for a minimum of six months and for any association member who makes a records request asking for a copy, they must make the unedited recording available.
It is likely that this change confirms what community associations are already doing. Nevertheless, board members need to be cognizant of this requirement if they choose to record their meetings and may need to revise a record retention policy, if one exists, to align it to this change in the law.
CC&R Amendments
For the last three years, the amendment of covenants, conditions and restrictions (CC&Rs) has been a big topic of discussion for community association board members. Many communities are stuck with CC&Rs that are older than 50 years and do not meet the needs of the current community and its members. While community associations have the ability to amend their CC&Rs, the Arizona Supreme Court’s decision on March 22, 2022, in Kalway v. Calabria Ranch HOA, LLC, 506 P.3d 18 (2022) altered the landscape of CC&R amendments.
The court in Kalway looked to the reasonableness, foreseeability and adequate notice of CC&R amendments finding that “even a broad grant of authority to amend an original declaration is insufficient to allow a majority of property owners to adopt and enforce restrictions on the minority without notice” (Id. at 24, ¶13).
The court held that “an HOA cannot create new affirmative obligations where the original declaration did not provide notice to the homeowners that they might be subject to such obligations” and that a restriction “must give notice that a restrictive or affirmative covenant exists and that the covenant may be amended to refine it, correct an error, fill a gap, or change it in a particular way” (Id. at 24-25, ¶¶14 & 17).
Since the decision in Kalway, there have been a string of cases where courts have been asked to interpret and apply the Arizona Supreme Court’s decision. Some of those cases include the following:
Thompson Thrift Development Inc. v. Albertson, No. 1 CA-CV 23-0082 (unpublished Memorandum Decision, October 24, 2023) – the court of appeals was asked to consider whether a 2020 amendment to an original declaration was valid under Kalway. The court, using the analysis from Kalway upheld the trial court’s finding that the amendments were valid reasoning that the amendments complied with the Kalway notice requirements. Changes to the residential-use-only covenant were reasonably foreseeable, and there was reasonable notice that amendments could affect less than all the lots.
Gross v. Shores at Rainbow Lake Community Association, 558 P.3d 216 (App. 2024) – the association amended its CC&Rs adding short-term rental limitations and requiring a lot to be leased only to a single family. The court of appeals was asked to review the trial court’s decision invalidating the short-term rental amendment and upholding the single-family language amendment. The court, using the analysis from Kalway, affirmed the trial court’s decision finding that the short-term rental amendment was not reasonable and foreseeable based on the language in the original declaration. The court also affirmed the single-family language finding that the amendment met the Kalway standards.
Cao v. PFP Dorsey Investments, LLC, 545 P.3d 459 (2024) – the Arizona Supreme Court, in issuing a ruling on the termination of a condominium association and the statutes governing said termination, looked to Kalway to determine which version of A.R.S. § 33-1228 applied to the condominium termination. The association’s declaration incorporated the Condominium Act “as amended from time to time.” The Court of Appeals held that the 2018 amendment to A.R.S §33-1228 was unforeseen and could not apply with the owner’s consent and concluded that the 1986 version of the statute applied. The Arizona Supreme Court reversed this part of the decision holding that the 2018 version of the statute applied to the termination of the condominium association and that Kalway did not apply because the declaration had not been amended.
Preston v. Las Sendas Community Association, No. 1 CA-CV 22-0761 (unpublished Memorandum Decision, October 31, 2023) – the court of appeals was asked to consider whether a 2021 amendment to the association’s declaration prohibiting short-terms rentals and advertising properties as vacation rentals was valid. The court analyzed multiple provisions of the declaration and held that the declaration provided sufficient notice of the possibility of the short-term rental amendment, affirming the trial court’s decision and upholding the 2021 amendment.
It is evident from cases that have followed Kalway that the full extent of its application to community associations remains to be seen. Moreover, Kalway does not provide community associations with a clear delineation of its applicability to CC&R amendments. What is known is that if a board of directors wants to amend the association’s CC&Rs, a careful analysis of the proposed changes must be conducted to try and determine whether the Kalway decision will require the association to acquire the approval of 100% of the association members.
In the coming years, more decisions will be made involving Kalway that will likely impact community associations and their operations. Accordingly, board members must continue to work with their legal counsel to stay apprised of future changes in the law and understand the impact those changes have on associations throughout the state.
