1.62 Political Petitions

• Jurisdiction: Arizona

A.R.S. Sec. 33-1261(D) prohibits condominium associations, despite what may be in the condominium governing documents, from prohibiting the circulation of political petitions, including candidate nomination petitions or petitions in support or opposition to any initiative, referendum or recall or other political issue on property dedicated to the public within the condominium. Despite the statutory limitation on "prohibiting" the circulation of petitions, the condominium association may "reasonably regulate" the circulation of the petitions. If a condominium restricts vehicular or pedestrian access to the condominium, the association is not required to comply with the statutory prohibition. Finally, nothing in A.R.S. Sec. 33-1261(D) requires the condominium to make its common elements available for the circulation of petitions to anyone who is not an owner or resident of the community. It is rare for property "dedicated to the public" to appear on a condominium plat other than at the edges of the condominium development. Therefore, it will be rare when this statute applies to condominiums.

2 PLANNED COMMUNITIES

Sec. 2.0 Introduction

With the rapid population growth in Arizona in the 1970s and 1980s, developers were increasingly faced with a choice of either developing real estate as a condominium, and being bound by the Horizontal Property Regime Act, and in 1986 by the successor Arizona Condominium Act, or avoid the condominium statutes entirely by developing real estate without meeting the definition of a "Condominium" and thereby escape all statutory regulation. In 1994, the Arizona legislature enacted statutes that govern "noncondominiums." The noncondominium statutes govern "planned communities." The planned community statutes are found at A.R.S. Sec. 33-1801 et seq.

The "planned community" form of real estate development is often preferred by developers because they are bound by fewer statutory regulations than a condominium, there is an ability to be creative in the restrictions, and there is discretion for the developer to retain development rights throughout the development process. There are few disadvantages for the developer in choosing a "planned community" form of development other than continued regulation by statutory enactments by the Arizona Legislature.

For owners of lots in a "planned community," the "planned community" structure provides the homeowner with the potential disadvantages that a (1) developer may attempt to retain control of the association for an extended period of time, (2) the developer may retain broad rights, and (3) the possibility that the governing documents of the association would be drafted in a manner that would make the documents very difficult to change or amend.

Sec. 2.1 "Planned Community" Defined

A "planned community" under Arizona law is defined as a "real estate development which includes real estate owned and operated by a nonprofit corporation or unincorporated association of owners, created for the purpose of managing, maintaining or improving property, and in which the owners of separately owned lots, parcels or units are mandatory members and are required to pay assessments to the association for these purposes."^[187] Before 1994, when the first planned community statutes were enacted at A.R.S. Sec. 33-1801 et seq., "non-condominium" mandatory membership homeowner associations were not regulated by any statutes, other than nonprofit corporation statutes if the noncondominium mandatory membership association was incorporated as a nonprofit corporation.

There is a significant gap between condominiums and planned communities. Any mandatory membership association of property owners created by deed restrictions or equitable servitudes that does not fit the definition of "condominium" in A.R.S. Sec. 33-1202(10) or the definition of "planned community" in A.R.S. Sec. 33-1804(2) is not governed by statute. The only source of law for mandatory membership "community associations" that does not fit the statutory definition of a "condominium" or a "planned community" is the common law, addressed herein at chapter 4 and, if incorporated as a nonprofit corporation, the nonprofit corporation statutes addressed in chapter 3.

Sec. 2.2 Statutory Regulation

If a real estate development is a "planned community," it is governed by A.R.S. Sec. 33-1801 to 33-1816. For purposes of this book, the statutes are referred to as the "planned community statutes" because the statutes are not self-titled. A.R.S. Sec. 33-1801 states specifically that A.R.S. Sec. 33-1801 to 33-1808 apply to all "planned communities."

Sec. 2.2.1 School Exception

A.R.S. Sec. 33-1801(B)states in part as follows:

Notwithstanding any provisions in the community documents, this chapter [the planned community statutes] does not apply to any school that receives monies from this state, including a charter school, and a school is exempt from regulation or any enforcement action by any homeowners' association that is subject to this chapter with the exception of home schools as defined in section 15-802, schools shall not be established within the living units of a homeowners' association. The homeowners' association may enter into a contractual agreement with a school district or charter school to allow use of the homeowners' association's common areas by the school district or charter school.

The first sentence of A.R.S. Sec. 33-1801(B) "exempts" public and charter schools from "regulation"^[188] by a planned community association. If the contractual obligation to pay periodic assessments amounts to "regulation," then schools that receive public money have an argument that they are not obligated to pay periodic assessments. In addition, "regulation" likely would include a requirement to obtain architectural committee approval for changes in the buildings, noise restrictions, etc.

A.R.S. Sec. 33-1801(B) allows the planned community association to enter into a contractual agreement with a school district or charter school to allow use of common areas.

The exemption in A.R.S. Sec. 33-1801(B) is only applicable to "planned community associations" as defined in the planned community statutes. The school exemption does not apply to condominium associations or to real estate developments that are not condominiums or planned communities.

The second sentence of A.R.S. Sec. 33-1801(B) helps planned community associations by prohibiting schools in homes, unless the school meets the statutory definition of a "home school." A.R.S. Sec. 15-802 defines a "home school" as "a school conducted primarily by the parent, guardian or other person who has custody of the child or instruction provided in the child's home."

Sec. 2.3 Defined Terms in the Planned Community Statutes

There are only four defined terms in the planned community statutes: "Association"; "Community Documents"; "Declaration"; and "Planned Community." The definitions are intended to include those real estate developments that do not fit the definition of a condominium in A.R.S. Sec. 33-1202(10). A "Planned Community" is defined as:

A real estate development which includes real estate owned and operated by a nonprofit corporation or unincorporated association of owners, created for the purpose of managing, maintaining or improving property, and in which the owners of separately owned lots, parcels or units are mandatory members and are required to pay assessments to the association for these purposes. Planned community does not include a timeshare plan or timeshare association that is governed by chapter 20 of this title ^[189]

"Declaration" is defined as:

any instruments, however denominated, that establishes a planned community and any amendment to those instruments. ^[190]

"Community Documents" is defined as:

The Declaration, bylaws, articles of incorporation, if any, and rules, if any. ^[191]

"Association" is defined as:

A nonprofit corporation or unincorporated association of owners created pursuant to a declaration to own and operate portions of a planned community and which has the power under the declaration to assess association members to pay the costs and expenses incurred in the performance of the association's obligations under the declaration.^[192]

Notably, there are real estate developments that currently escape any statutory "association" regulation such as a mandatory membership real estate development with mandatory assessments and use restrictions in "CC&Rs" with mandatory membership associations or corporations that do not own any property. Such a development is neither a condominium nor a planned community and would be regulated by statute at all only if it is organized as a corporation. If it is unincorporated, there is no statutory regulation whatsoever of that real estate development.

Sec. 2.4 Assessments and Penalties

The planned community statutes regulate the power of planned communities to increase assessments, impose late charges on delinquent assessments, and impose monetary penalties (fines) for violations of the planned community's governing documents.

Sec. 2.4.1 Limitations on Raising Assessments

The planned community statutes limit a planned community's power to increase assessments and impose penalties on its members. Specifically, A.R.S. Sec. 33-1803 states that, no matter what broad power may be given to the association in its community documents, the association cannot impose a "regular assessment"^[193] that is more than 20% greater than the immediately preceding fiscal year's assessment without the approval of a majority of the members of the association. However, if the community documents in some way limit the power of the association to raise the assessment at a lower limit, the lower limit also applies. For example, a planned community declaration may state that the association board of directors can raise assessments, but an increase greater than 5% would require a two-thirds vote of those members voting at a...