New Law Limits HOA Power to Restrict Renting
Recent changes in Arizona law give landlords more freedoms when renting out homes or units that are subject to a homeowner or condo association.
Arizona legislation that went into effect in July 2014 places a number of restrictions on homeowner associations in regulating the owners of rental properties. Following are some of SB 1482’s more important changes to A.R.S. § 33-1260.01.
Right to Rent. Under the new law, any owner may use their unit as a rental property unless it is expressly prohibited in the declaration of covenants, conditions and restrictions (CC&Rs). A unit owner must comply with any rental time period restrictions contained in the CC&Rs.
Rental Agent. A unit owner can authorize a third party to act as the owner’s agent for matters involving the rental unit, by providing the homeowner association (HOA) with a written and signed designation. This includes all matters involving the rental unit except for voting in HOA elections and serving on the board of directors. If a unit owner has designated a third party as his agent, any notice to the third party regarding the rental unit will constitute notice to the unit owner.
Tenant Information. If an HOA requests information about a tenant, the owner is required to disclose only certain information:
- the name and contact information for any adults occupying the unit,
- the time period of the lease (including the beginning and end dates of the tenancy), and
- a description of the license plate numbers of the tenants’ vehicles.
An owner is not required to provide any other information regarding the tenant, even if provisions in the CC&Rs or the HOA’s governing documents state otherwise. The only exception is if the unit is subject to age restrictions. In that case, either the unit owner, the unit owner’s agent, or the tenant must show a government-issued photo ID to prove the tenant meets the age restrictions or requirements.
Tenant Fee. An HOA may charge a fee of no more than $25 for each new tenancy in a rental unit. This fee may not be charged for lease renewal. The fee, if charged, must be paid in full within 15 days after the request was postmarked. An HOA is not permitted to charge a unit owner or tenant any other extra or special fees. Any fees, fines or requirements imposed must be related to the use of recreational facilities or be in conformity with every other owner-occupied unit in the HOA. A fee or penalty charged by an HOA will be considered void if it is in violation of this law.
Prohibitions. An HOA is prohibited from doing the following, even if the governing documents state otherwise:
- Requiring a unit owner to provide the association with a copy of the tenant’s rental application, credit report, lease agreement, rental contract, or other personal information (unless that information is separately required by law). An HOA may still acquire a tenant’s credit report through other means in order to collect a debt.
- Requiring a tenant to sign a waiver or other document limiting the tenant’s due process rights as a condition of the tenant occupancy in the rental unit.
- Prohibiting or restricting a unit owner from serving on the board of directors because the owner is not an occupant of the unit.
- Charging the unit owner or managing agent a fee, fine, assessment or penalty greater than $15 for failing to provide the information regarding the tenant discussed above. A fee or penalty charged by an HOA will be considered void if it is in violation of this law.
 In this article, all references to “homeowner association” or “HOA” generally include homeowner associations, condo associations and other forms of community associations.