June 14, 2004
A four-year logjam on reforming the operation of homeowners associations broke in the 2004 legislative session, and just about everyone is predicting that more changes are coming.
About half of two dozen bills related to homeowners associations were passed by the Legislature this year. When the bills go into effect Aug. 25, homeowners will be protected from foreclosure because of unpaid fines for violating association rules. Residents will have the right to post political signs in their yards, to speak at association board meetings and to see final budget reports.
State officials agreed that the new laws won’t be enough for reform advocates who have demanded that the state re i n in the power of associations.
"The big bills really haven’t gotten through, and I think that’s because this is still an evolving relationship," said Gov. Janet Napolitano, who has lived in Valley condominium associations for more than 20 years. "I think we will see homeowner association bills every year for the next few years, because I do think this is kind of an unsettled area."
East Valley lawmakers led the charge this year in sponsoring reforms for homeowners associations.
Rep. Chuck Gray, R-Mesa, said the Legislature appears to have become more receptive to reform as Republicans and Democrats passed measures.
"This gives us a chance to see if some of these reforms start to work," Gray said. "Obviously, it’s going to take (homeowners association boards) a little bit of time to get up to speed. . . . But I think it’s a good start."
The debate over reforming homeowners association laws is usually described as pitting individual activists against association boards, management companies and paid lobbyists. But this year’s session revealed that the picture has grown more complicated.
The Community Associations Institute, the top lobbying and education group for homeowners associations, inspired some reform bills and worked out compromises on others instead of simply trying to block action.
Many association officials are tired of being lumped in with what they say are a small number of out-of-control boards that attract public outrage, said Mitch Menlove, executive director of the Community Associations Institute.
"We’ve been trying to think more globally," he said. "Rather than taking an aspirin here or a Tylenol there, what can we do to fix the cause of the aches and pains."
But there’s lingering frustration for some reform advocates. One bill sponsored by Gray that didn’t pass would have allowed homeowners to challenge association board decisions before a justice of the peace instead of having to sue in Superior Court. Gray said justice courts are less intimidating and less expensive because the parties don’t hire lawyers to make their case.
Scottsdale resident Pat Lamer blames Menlove’s group for blocking another bill that would have forbidden the use of unqualified proxies for voting on association issues. Unqualified proxies assign a person’s vote for up to a year with no restrictions.
Lamer, a former homeowners association vice president, said he has watched small groups of residents gather up proxies to seize control of the board.
A topic that is expected to heat up next year deals with state oversight of homeowners associations. Currently, no state agency has the power to intervene when association boards fail to operate properly or treat residents fairly. The only remedy is to go to court.
Menlove said the Community Associations Institute plans to host a series of meetings this year to discuss oversight options and other possible reforms. But Menlove said he hopes the outcome will focus on educating association board members and improving internal rules for homeowners to oust unacceptable boards, instead of heavier state regulation.
"I guarantee you that if homeowners and board members had better education, most of these problems would go away," Menlove said.
On the other hand, Haruff and other grass-roots advocates want the Arizona Attorney General’s Office to have the authority to force association boards into legal training and to remove individual board members when they violate state law.
"The state has got to step up," Haruff said. "They are the ones who created this monster."