6 laws limit HOAs' power

Arizona homeowners associations are losing a few more of their powers.

They can no longer ban political and real-estate signs, flagpoles or parking on public streets, according to six bills signed into law by Gov. Jan Brewer. And association boards can't restrict political activity in public areas, force residents to buy "approved" signs, ban the "tea party's" Gadsden flags or charge more than $400 in HOA "transfer" fees on a home sale.

But two of those bills put at least one of the new freedoms in question because they contain conflicting limits on how soon before an election HOAs must permit campaign signs on lawns.


House Bill 2609 says HOAs can't prohibit the signs 71 days before an election, but Senate Bill 1326 cites 45 days.

The conflict wasn't caught before the bills became law, and it requires another vote by lawmakers in another session to fix, said Ken Behringer, general counsel for the Legislature. "Somewhere, the ball was dropped," he said.

Some managers are wondering which time limit they should enforce when the laws take effect in July, said Angela Potts, president-elect of the Central Arizona chapter of the Community Associations Institute. "What do we do? Which one applies? We're waiting for some direction," she said.

Behringer said that's uncertain because no state agency regulates HOAs, and the conflict may not be resolved until next session.

Tom Farley, CEO of the Arizona Association of Realtors, said his group has battled with HOAs for years over for-sale and for-rent signs and hopes this year's bills close loopholes in earlier laws.

Some associations have limited or banned real-estate signs. Others required home sellers to pay hundreds of dollars for association-produced placards, he said. Many HOAs refused to allow any rental signs, creating financial hardships for investors in the growing rental market.

"They were negatively impacting property rights and property values with abusive practices," Farley said.

The forced sign purchases and fines for violations were compounded by associations' power to file liens on properties for non-payment that could hold up a sale, he said.

After previous bills signed into law prohibited HOAs from banning all real-estate signs, Farley said some started requiring sellers to buy preapproved HOA-installed signs that didn't meet state Department of Real Estate standards or weren't noticeable enough to attract buyers. That practice is now prohibited.

"I hope we've finally sent enough messages on behalf of homeowners that playing with the value of someone's home isn't something an HOA should be doing," he said.

For Rep. Steve Urie, R-Gilbert, it's more about freedom than property values.

"Some of these HOAs needed a lesson on the First Amendment. They act like since they're an HOA they can do anything they want," he said.

Urie sponsored one of the bills, but a key provision that would have limited HOA attorneys' fees was removed.

He expects a comprehensive HOA bill similar to the Arizona Residential Landlord and Tenant Act will come before the Legislature in the near future that will set clear limits on all aspects of the relationship between HOAs and residents.

by Edythe Jensen The Arizona Republic May. 8, 2011 12:00 AM



6 laws limit HOAs' power