Arizona’s HB-2648 will Kill the Predatory Practices of Arizona HOA Attorneys

Some Background and History

If you ever move to Arizona around Phoenix and maybe even further out, you are probably going to end up in a development which has a Home Owner’s Association (HOA). My experience with HOAs is mostly positive as the Pres. and the Board Members lived in the same subdivision as we did in Michigan. In Arizona, Homeowner’s Associations are far different. They can be corporate and run by a commercial enterprise as hired by Builders and Declarants. In which case, calling the Organization a HOA is a misnomer. In reality, it is a Builder’s Homeowner Association or BHOA.

BHOAs are a completely different beast. The builders and declarant choose the HOA Inc. to run the development. The declarant will choose the Development HOA Board members, usually from their staff, and tell the HOA Inc what they wish. There is little or no homeowner input. Ours is supposed to be five members, the Declarant cut it to three members. In reviewing HOA Board membership, none live in the development. It appears all have worked for builders in the past. And there, we have a conflict of interest.

Finally, the development homeowners have no access to them. In turn, the Corporate HOA makes all decisions concerning the development and inform the homeowners of their decisions. Homeowners can complain all they wish, to no avail.

There is little or no input from homeowners. Some homeowners have purposely withheld paying monthly HOA fees which pays for the HOA Corporation. This is a big mistake. HOAs can place a lien on the property, add the attorney charges ~$800 to process the lien, the county adds some fees, and then the monthly fees are added into the lien plus interest. Get the picture?

This gets me to the topic of this commentary (more particular detail on AZ HOAs to come).

Who Backs Homeowner Associations and Homeowners?

The Arizona Homeowners Coalition organization advocates for homeowners living in the developments having Homeowner Associations. The organization which advocates for Homeowner Associations is “The Community Associations Institute.” They align with Homeowner Associations. The big players within this group are the commercial entities such as builders and declarants. Builders and declarants can be separate entities.

The group from which I receive information from is the Arizona Homeowners Association. This organization represents homeowners. Keep in mind, this is not a battle to eliminate associations. There is an uneven playing ground between corporate interests and homeowners. Dennis, the lead for the Arizona Homeowners Association is attempting to balance the interplay between HOAs and homeowners. He advocates with the Arizona House and Senate in an attempt to get more exposure to Builder and Declarant paid BHOAs. As Dennis says, HOAs are not going away. HOAs are here to stay. Homeowners must seek a balance between the power HOAs have and homeowners.

What is on Arizona Governor Katie Hobbs’ Desk

Arizona Homeowners Coalition Legislative Update #13 “Dennis”

The most significant of all these pieces of legislation is HB-2648 relative to assessment liens. This bill won the unanimous approval of every legislator from both houses despite the extensive efforts from CAI to kill this bill. This bill is written to stop the predatory collection practices of HOA attorney and could have significant impact on a major revenue stream for those law firms. With the potential side benefit of many of these law firms choosing to shift their practice to chasing ambulances instead of harassing homeowners.

CAI is most dangerous when they can focus all their propaganda and misinformation on one or two individuals, and they have pulled out all the stops to do that with the Governor. This link is to the CAI Legislative Action Committee’s call to action on this bill. CAI Propaganda Call to action.  The story line in this communication is absolutely untrue and meant to protect the financial interest of the lawyers and not the community in any way. I’ve already contacted the Governor and requested a face-to-face meeting with the Governor and/or her staff to discuss this bill and the three others that will be on her desk next week. The Governor has 5 days to either sign or veto this bill, so time is of the essence.

The Bill is be HB-2648 at the bottom portion of Dennis’s article.

I intend to bring more of the BHOA issues to bare. Emphasizing what I am seeing in our BHOA. And highlighting the decisions they are making on amajor issue. An issue going on for over a decade and left to homeowners alone. The BHOA, declarants, and builders are scrambling for cover. The solution will be given to homeowners in what I believe will be a take it or leave it proposition.

How Do HOA Attorneys Fit into This?

There is some extradentary fees being charged to register a lien in Pinal County of which most of it are Attorney fees. It is definitely a profit-maker for attorneys (10 times the collection cost over the actual delinquency) who work with builders and declarants. ~$800 per register with the county much of which is a short paragraph written up by the BHOA Board Clerk. County fee is $30. The rest is all in charges from the BHOA Attorney for a signature and a stamp. Go figure . . .