Arizona Capitiol Times
comprehensive new law governing homeowners associations goes
into effect Aug. 12 and provides property owners more protection
from — and recourse when dealing with — unscrupulous HOA board
members, the sponsor of the legislation says.
Rep. Chuck Gray, R-19, said H2154 (Laws 2005 Chapter 269)
attempts to address the minority of devious HOA board members
that are creating the majority of the problems.
“Eighty percent of the HOAs are fine, but there are 20 percent
out there…that are having problems,” he said. “But, they are
having 80 percent of the problems.”
Among other things, the law — it was a strike-everything omnibus
bill that combined the elements of four pieces of legislation —
eliminates the use of proxy votes in association elections,
reduces the threshold for removing a board member and requires
HOAs to provide voting by absentee ballot.
“The reason we wanted to eliminate proxies is because of the
misuse and abuse of a few members of boards and HOAs,” Mr. Gray
He explained that there were several instances in which board
members would gather proxy votes from their neighbors — in other
words, permission to cast a vote for them at the next board
meeting — explaining there would be a vote on an innocuous
issue. The board member, however, would neglect to tell the
neighbors that there was also a vote on a controversial issue.
In other situations, Mr. Gray said some members would gather
proxy votes for a meeting knowing a contentious issue would be
added to the agenda at the last minute, thereby securing the
outcome they sought.
The solution, he said, was to prohibit the practice of voting by
proxy. In order to ensure all association members still have a
say in elections, the new law requires HOAs to allow absentee
voting and permits associations to count absentee ballots toward
Paul Monaghan, a former board member of the 1,000-member-plus
Arrowhead Lakes Homeowners Association in Glendale, says he
wishes a law could have been drafted to only impact those
associations that misuse proxies.
“This [law] still affects us,” he said, even though there has
never been a problem in his neighborhood.
Most problems with HOAs are not caused by the entire board, but
by individual elected board members, Mr. Gray said.
“Many of the problems we had coming to us…were because of rogue
board members doing something unethical,” he said. “People are
people — there’s a percentage that are good and honest… and
there’s a percentage that’s devious.
When the new law goes into effect, 12, association members will
have a considerably easier time removing an unethical board
member from his or her post. Currently, statute provides that
two-thirds of the total number of association members must vote
for removal before the action is accepted, regardless of whether
all eligible votes are cast.
“Two-thirds of [voters as] a threshold for a recall election was
just insurmountable and almost never done,” Mr. Gray said.
The new law provides for a petitioning process to bring up a
board member’s removal at a special board meeting. In HOAs with
fewer than 1,000 members, the petition must be signed by 100
members or 25 percent of the members, whichever is less. If the
HOA has more than 1,000 members, the petition must be signed by
the lesser of 1,000 members or 10 percent of the members.
If enough signatures are gathered, a special meeting is to be
held within 30 days. The quorum regulation for the meeting is
the lesser of 20 percent of the members or 1,000 members,
significantly lower than the 50-percent-plus-one requirement for
The board member will be removed from his or her seat if a
majority of those voting in the recall election vote to do so.
Rep. Gray: Goal Is Local Control
The goal, Mr. Gray said, was to use the recall standards other
elected officials are held to as a general pattern in order to
give HOA members local control.
“We have to allow for local control,” he said. “Under the
current system, local control was available, but not attainable,
because you could not remove your board members like you could
city or county elected officials.”
Mr. Monaghan said the prohibition of proxy votes would have made
recalls extremely difficult under the current system, but the
standards in the new law give association members a reasonable
ability to remove someone from the board.
“Twenty percent is doable,” he said. “If I can’t get 200 [people
to attend the meeting], there’s no necessity to do anything.”
Law Addresses Some Problems, Observer Says
Although the law does address some of the problems people were
having with HOAs, George Staropoli, a homeowners’ rights
advocate and author on the subject, says the effort does not get
to the core of the issue.
“Overall, it is one more attempt by the Legislature to
micromanage homeowners associations instead of dealing with the
real issues of homeowners associations,” he said. “You haven’t
Mr. Staropoli says HOAs are, essentially, principalities and
ought to be treated as such.
“Homeowners associations need to be subjected to the same rules
and regulations as a public entity,” he said. “I’d like to see
them brought under as municipal corporations.”
Mr. Gray doesn’t see that happening. He believes this law will
solve most of the major problems people have been having with
HOAs in recent years. The only legislation he thinks will be
necessary in the future is penalties for associations that fail
to follow statute and a loosening of the process by which HOAs
can change their codes, covenants and restrictions.
“You kind of have to put some rules and regs in place to allow
proper self-government,” he said. “From my perspective, the
state should not be meddling too much more.”
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