The latest effort to reform the operation of homeowner associations was blocked Tuesday as a large crowd of opponents defended the power to foreclose on houses and condominiums for lapsed dues and ignored fines.
The Senate Government Committee voted 7-2 against HB2307, which would have stripped all authority to foreclose for lapsed association fines and would have forced associations to wait for seven years when dues aren’t paid.
"If someone has a broken leg, you don’t act to take the arm," said Sen. Jay Tibshraeny, R-Chandler and the committee chairman. "This bill goes way too far."
Tight legislative deadlines will make it difficult for the bill’s sponsor, Rep. Eddie Farnsworth, R-Gilbert, to revive the issue this year.
Farnsworth said associations still would have the authority to seek a court judgment against a delinquent homeowner under HB2307. But associations would be stopped from using property liens that almost immediately opens the door to the foreclosure process, he said.
Association reform advocates and critics have clashed for the past three years on how to deal with stories about out-of-control boards that take homes from owners who do not keep up their landscaping or improperly place their trash cans. HB2307 had invoked strong emotions from both sides as it moved through the legislative process.
But the majority of more than 100 people who attended Tuesday’s committee meeting objected to the bill’s provisions. As individual members of association boards, several speakers said foreclosures are used rarely but the threat discourages homeowners from skipping out on their financial responsibility.
"This bill would put us in an impossible position," said Matthew Korbeck of Tempe. "Without an ability to foreclose for fines, we will be completely handcuffed for noncompliance."
Other opponents said anyone who buys a home covered by an association should know the rules and penalties. HB2307 would excuse their ignorance or a deliberate refusal to comply, said Pat Sure of Sun Lakes.
But supporters said many homeowners didn’t realize the extent of the power that state laws offer to association boards.
"The HOAs have turned the American dream into a nightmare through untrained boards . . . and the uninformed elimination of property rights and civil liberties," said Frederick Fischer Jr. of Tempe.
The committee voted against the bill even after weakening it substantially by changing the delay in foreclosures for unpaid assessments from seven years to only 90 days. Several senators said they feared Farnsworth, as a ranking House Republican, has enough influence to restore the original language.