ARIZONA Condo Act

Hello HOA enthusiasts! Have a question about the process of approving a proposed annual budget. Currently, the BOD drafts the annual budgets, sends it out to owners and that is the end of it. NO DISCUSSION...NO VOTE....NO NOTHING! I am told that the AZ Condo Act 33-1243D & 33-1255A references that a special meeting or at the annual meeting the membership shall vote on the budget. I believe that this may differ from some language in the governing documents. I am not good at legal interpretation..so can someone smarter than I please tell me if an HOA condo membership has voting rights on this item? Always appreciate good input.

Thanks

ADD ON

In some cases (like ours), that meeting must be held within 30 days of receiving the new budget/dues increase thus making it more difficult.

Joanne,

I do think 33-1255(A) will help you as this only requires the developer to pay all common expenses until the first time assessments are levied against owners.

ARS 33-1243(D) may offer some help. It reads:
"Except as provided in the declaration, within thirty days after adoption of any proposed budget for the condominium, the board of directors shall provide a summary of the budget to all the unit owners. Unless the board of directors is expressly authorized in the declaration to adopt and amend budgets from time to time, any budget or amendment shall be ratified by the unit owners in accordance with the procedures set forth in this subsection. If ratification is required, the board of directors shall set a date for a meeting of the unit owners to consider ratification of the budget not fewer than fourteen nor more than thirty days after mailing of the summary. Unless at that meeting a majority of all the unit owners or any larger vote specified in the declaration rejects the budget, the budget is ratified, whether or not a quorum is present. If the proposed budget is rejected, the periodic budget last ratified by the unit owners shall be continued until such time as the unit owners ratify a subsequent budget proposed by the board of directors."

So what does that mean?

First, the board has to send out a proposed budget unless the declaration says otherwise. You will have to carefully read your declaration and see if this matter is addressed within that document. If it is addressed, then the terms of the declaration will govern if and when a proposed budget is sent out, otherwise this statute prevails.

Next, you will need to read your declaration to see if the board is expressly authorized to adopt and ratify a budget without member approval. If that is the case, then the rest of this section is inapplicable. If the declaration does not grant that authority to the board, then they must hold a meeting at which the owners may approve or reject the proposed budget. This is where it gets nasty because only a majority of owners may vote to reject the budget. That is not a majority of a quorum; it means at least 50% + 1 must vote to reject the budget. The budget is deemed to be approved if it is not rejected by a majority of owners.

Whether your association is acting within the law will depend on what you declaration states regarding budget approval by the board. There is not sufficient information given to arrive at a conclusion. Note, however, that the language must be in the declaration and not in the bylaws, rules & regs, or some other document.

Thanks to all for your thoughtful and sincere replies. I have read the By-Laws of my HOA and it states that the BOD prepares or causes to be prepared and estimated annual budget. The CC&R's state, in part, under Assessments: "Determination By Board". The total amount of the regular assessment and each residence owner's share , thereof, as set forth herein, shall be determined and established by the Board at reasonable intervals not less often than annually, and in accordance with the terms of the Articles and By-Laws. The Articles of Incorporation of the HOA do not specifically address my question.

THANKS AGAIN AND Happy Holidays to all.
Joanne

Pita, From time to time....laws are passed that override the governing documents. Since I am not an attorney and there are folks on TALK who are pretty updated, I was wondering if there was anything that would override what i view to be an undesirable dictate in my governing document. That was all I was asking. I have been involved in HOA for 20 years and still continue to learn.

Have a lovely Holiday.

No I am not seeking a "loophole"....I was seeking a change in HOA law that might have been passed that would override something in the documents. I have my information so there is no need for you to waste anymore time on this discussion.
Thanks.

Richard....I concur and PITA's use of capitols is just as offensive. She need not respond to any of my postings in the future.

And the reply to the simple question would be: {still waiting}

spel chek dos not work on capitalllized words

.... yet, you responded, with additional Torric Ka -Ka