THE FUTURE OF GOING SOLAR?

Arizona law favors the use of solar energy devices by homeowners within community associations. In fact, pursuant to A.R.S. Section 33-439(A), “[a]ny covenant, restriction or condition contained in any deed, contract, security agreement or other instrument affecting the transfer or sale of, or any interest in, real property which effectively prohibits the installation or use of a solar energy device as defined in section 44-1761 is void and unenforceable.”

A common issue in Planned Communities is the location of solar roof panels.  Although Planned Communities are permitted to adopt certain rules and regulations regarding the placement of solar roof panels, those rules shall not effectively prohibit installation or adversely impact the functioning, cost or efficiency of the device. Oftentimes the Board’s desire to limit the aesthetic impact of the solar roof panels is at odds with the homeowners’ statutory right to place the solar panels in a location where they will function properly.  Has Tesla created the perfect compromise?

The Tesla solar roof utilizes solar panels that also act as, and mimic the aesthetic appearance, of roof tiles.  In other words, the roof tiles are the solar energy device.  For more information and details, please visit https://www.tesla.com/solarroof.

Although these types of roofs may not become common immediately, we can certainly expect homeowners who are interested in solar energy to consider it as an option moving forward.  Furthermore, an Association interested in a solar initiative may consider the Tesla solar roof on common areas.

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Monsoon Season Madness – Be Prepared!

“We can’t do anything to prevent the monsoon, but we can prepare.”  Weldon B. Johnson, The Republic | azcentral.com With summertime comes monsoon season, you never know when a big dust storm or heavy torrential downpour may hit! Is your Association prepared? Today is a good time to put a plan in place for your Association if you don’t have one, or to review your plan if you haven’t done so in a while.

The importance of an emergency plan…

How can YOUR community association plan for a natural event?

The board of directors, with the assistance of a committee, may want to look at the possibilities of a disaster and what it might do to the community.

What should your association emergency plan look like? The Red Cross is a valuable resource and can help with an assessment to determine the risks the association might face, how to prepare for them and what to do following a natural disaster. Find information at: http://www.redcross.org/find-help. Additionally, the federal government has information on how to plan for emergencies at https://www.ready.gov/southwest.

If it is determined that a disaster plan is necessary, the next step is to fully develop the plan and put it in writing. Include association members, local police and ask for information from first responders in the processes to develop the plan. With community buy-in the plan is more likely to be viable and succeed, should it become necessary to implement.

When the plan is developed and in writing, it is important to communicate with the members of the association. Use the association’s website, newsletters and bulletin boards to post the plan, and be sure that all association members receive a copy. The association may want to draw attention to the plan each year at the annual meeting.

With luck, your association will not need to implement a disaster plan. However, being prepared should something happen gives the board of directors and association members direction and a sense of peace.

Emergency meetings…

If an emergency strikes (such as flooding or monsoon/microburst damage) that requires immediate board action, the association has the right to notice a meeting. In these circumstances, the board can suspend the 48 hours notice of meeting to the membership required by Arizona law and conduct an emergency board meeting. Under Arizona law (A.R.S.33-1804 and condo A.R.S. 33-1248), an emergency meeting of the board of directors may be called to discuss business or take action that cannot be delayed until the next regularly scheduled board meeting. The minutes of the emergency meeting shall state the reason necessitating the emergency meeting. The minutes of the emergency meeting shall be read and approved at the next regularly scheduled meeting of the board of directors.

Under the new law that becomes effective on August 9, 2017, at an emergency meeting called by the board of directors, the board of directors may act only on emergency matters.

Lastly…

In the event that there is an emergency in the association caused by a natural disaster, the board should immediately reach out to their legal counsel, insurance agency and management company to get advice on how to proceed.

Although we at Mulcahy Law Firm, P.C. hope for a calm monsoon season and a mild summer, should you need us – we’ll be here for your board.

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Summer Board Meetings Made Easy!

During the summer months, many board members travel outside of Arizona to escape the heat. Due to travel schedules during June, July and August, sometimes it is difficult for the board to obtain a quorum to have a board meeting.

Under Arizona law, all meetings of the association must be conducted in the State of Arizona. However, A. R. S. Section 33-1804(D)(3) and 33-1248(D)(3) permits any or all board members to participate in a regular or special board meeting through the use of any means of communication by which all directors and owners participating in the meeting may simultaneously hear each other during the meeting. As such, board members can appear at board meetings via a conference call, SKYPE, FaceTime, or the website “GoToMeeting.com” and still be in compliance with the law so long as the actual meeting takes place in Arizona and the directors and owners participating in the meeting may simultaneously hear each other during the meeting.

If it is impossible or difficult for the board to meet in person or telephonically during the summer months, don’t forget that decisions by the board outside of a board meeting can be made by the board via unanimous written consent. Pursuant to Section 10-3821 of the Arizona Non-Profit Corporation Act, the board may also conduct business through action by unanimous written consent in lieu of a meeting. The board may use email to obtain unanimous consent in writing. However, if discussion and deliberation among the board is necessary to make a decision, a regular board meeting must be conducted. Any discussions without noticing a meeting would be in violation of the Arizona Open Meeting Law, as the membership would not have the opportunity to hear the conversation and participate before a decision is made. Because the membership has a right to attend and participate in meetings of the board, our firm recommends that actions by unanimous written consent be limited.

We hope that these suggestions help your board have effective board meetings during the summer months!

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With Memorial Day, Flag Day and 4th of July right around the corner… let’s talk flags!

Neighbors are bringing our their Red, White and Blue in preparation for the upcoming patriotic holiday. Now is great time to review Arizona’s laws regarding flags in HOAs!

Arizona law is quite clear on this issue. Pursuant to Arizona law (A.R.S. Section 33-1808 (A) and (B) for planned communities and 33-1261 for condominiums), an association cannot prohibit the outdoor front yard or back yard display of the American Flag, or an official flag (or a replica) of the United States Army, Navy, Air Force, Marine Corps, Coast Guard by a unit/lot owner on that unit/lot owner’s property if the American flag or military flag is displayed in a manner consistent with the Federal Flag Code. Associations also cannot prohibit the outdoor display of the following: 1. POW/MIA flag; 2. Arizona State flag; 3. The Arizona Indian Nations flag and 4. Gadsden flag (“Don’t Tread on Me”). Further, the association shall adopt reasonable rules and regulations regarding the placement and manner of display of the American flag, the military flag, the POW/MIA flag, the Arizona state flag or the flag of the Arizona Indian nations.

In a condominium, the association rules may regulate the location and size of flagpoles but shall not prohibit the installation of a flagpole.

In a planned community, the association rules may regulate the location and size of flagpoles, may limit the member to displaying no more than two flags at once and may limit the height of the flagpole to no more than the height of the rooftop of the member’s home but shall not prohibit the installation of a flagpole in the front yard or backyard of the member’s property.

Checkout Mulcahy Law Firm, P.C.’s YouTube video on this topic: https://www.youtube.com/watch?v=WHuQDQA3-tw

Please contact us with any questions.

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I just received notification that an owner has filed bankruptcy. What should our HOA know about bankruptcy?

 

First off, flag the account – “BANKRUPTCY FILE”!

If you have received notice of the bankruptcy this more than likely means that the association has been included in the debtor’s (owner or former owner) bankruptcy as a creditor.

The bankruptcy filing initiates an automatic stay in place, which means the association cannot proceed with collection against a debtor. It is really important that the association is aware of the automatic stay and abides by the law. The association could potentially face strict and costly penalties if the automatic stay is violated. Play it safe!

The two most common types of bankruptcies we see in our office are Chapter 7 and Chapter 13 bankruptcies.

Chapter 7 Bankruptcy

Most Chapter 7 bankruptcies are “no asset”. This means the debtor likely has no available assets. Unfortunately, it is unlikely for the association to get paid pre-petition (any amounts owed prior to the date the debtor/owner filed for bankruptcy)  amounts owed in Chapter 7 bankruptcies. If the debtor owes delinquent assessments, the association should file a Notice of Appearance to assure that the association receives all notices from the Court regarding the bankruptcy. If the debtor receives a DISCHARGE of their Chapter 7 Bankruptcy, the debtor is no longer personally liable to the association for any pre-petition amounts owed to the association. However, if the debtor is still an owner within the association, the association is still a secured creditor of the debtor; therefore, the association still has a valid lien against the debtor’s lot/unit (note: lien is only valid for 3 years from the date the debt became due and owing).

Chapter 13 Bankruptcy

This is typically called a “wage earners” bankruptcy due to the fact the debtor typically has an income when a Chapter 13 bankruptcy is filed. In fact, there’s actually a “means test” in which an owner must pass to qualify for a Chapter 13 filing. In a Chapter 13 bankruptcy, it is possible the association may get paid for the pre-petition amounts owed through the debtor’s Chapter 13 plan. If a debtor files Chapter 13, the association should file a Notice of Appearance and a Proof of Claim in the case. The Proof of Claim should include the pre-petition debt and attorney fees incurred and anticipated in the bankruptcy.

For more information on bankruptcies, check out our Cheat Sheet: http://mulcahylawfirm.com/news/Trustee%20Sales%20%26%20Bankruptcy.pdf

Contact our firm if you’re a recipient of a bankruptcy notice and you need help interpreting it all… we know it can be complicated and we are here to help!

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Pokémon GO(ers) in your HOA?

Pokemon Go is a location-based, augmented reality game where users on mobile devices attempt to locate virtual Pokemon, which appear on the screen of the mobile device, in real-world locations.  The game’s increasing popularity and associated controversy has (or should) catch the attention of community associations.  Due to the nature of the game, users are led to a variety of locations, which can include association common areas and even private yards.  In addition to the obvious issue of a possible trespass, users who are immersed in the game are also less likely to be paying attention to their surroundings.

So how can your community association address Pokemon users who are entering common areas and private yards?  If the number and frequency of Pokemon related issues is limited, community outreach and awareness may be sufficient.  Circulating a newsletter and/or discussing the issue at a board meeting will raise awareness in dealing with this issue.  The Board can also consider adopting rules and regulations for Pokemon users on common areas.  If the problem becomes more serious, a community association can submit a request to the game’s developer, Niantic, to remove all coordinates located within the community.  Finally, if homeowners are concerned about any suspicious activity, feel endangered and/or witness any type of personal or property damage, we recommend contacting the local authorities.

 

 

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“A Breath of Fresh Air”

Dear Cyber Followers:

April 18, 2017 was the 100th day that the Arizona Legislature has been in session. Our firm is closely monitoring 14 community association-related bills at this time. For a copy of our weekly legislative update summary, please click here:

This week’s Legislative Update 

It has been a slow year for community associations so far in the Arizona legislature. One technical correction bill was passed with minimal impact to community associations (SB1060). Governor Ducey vetoed a bill that would prohibit cumulative voting in community associations (HB2321) and his veto letter indicated that he didn’t think that the government’s role was to regulate how homeowners associations vote. After years of regulation of community associations by the Arizona Legislature, this was a breath of fresh air! For a copy of the Governor’s Veto letter, please click here:

https://apps.azleg.gov/BillStatus/GetDocumentPdf/452277

Our firm is closely monitoring HB2411 (further regulating open meetings in a community association) which will likely move to the Governor in the next week or so. A copy of the fact sheet on this bill (updated on 4/181/7) is below:

http://www.azleg.gov/legtext/53leg/1R/summary/H.HB2411_04-13-17_SENATEENGROSSED.DOCX.htm

We will continue to update you on any developments in the coming weeks. Not only is it getting hot outside – it is also starting to heat up in the Arizona Legislature! Stay tuned!

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Quiet Legislative Year for HOAs

Happy Easter and Passover to everyone!

As you may know, our firm posts an update to any bills pending in the Arizona legislature every  week while in session.  I haven’t been blogging too much about what is going on at the Arizona Legislature since it has been a quiet legislative year for community associations (thank goodness).  Right now, the legislature is “knee-deep” in budget negotiations and until the budget is resolved things will be quiet for community associations.  Here is a quick recap of what is going on to date in the Arizona Legislature:

The Arizona Legislature opened the Fifty-Fourth First Regular Session on Monday, January 9, 2017.  As of April 10, 2017, 2,550 bills have been introduced in the House and 1,550 bills in the Senate.   Our firm is closely monitoring 14 community association bills as outlined below:

Check out this week’s summary by clicking this link!

As you can see from our summary, one community association technical correction bill has already signed by the Governor:

SB1060 HOA/Condo Dispute Process

This is a technical correction bill that formally moves the administrative hearings dispute process for members of a condominium or a planned community from the dissolved Department of Fire, Building and Life Safety (DFBLS) to the Arizona Department of Real Estate Department (ADRE).   Note:  Effective last Summer, hearings were being held at the ADRE, this is just to formalize this change.

Applies to Planned Communities and Condominiums.

And, interestingly, one bill which would have banned cumulative voting once and for all was vetoed by the Governor on March 31, 2017 (so this bill is dead):

HB2321 Homeowners’ Associations; Cumulative Voting; Prohibition

This bill prohibits cumulative voting.

Applies to Planned Communities and Condominiums.

Our firm is closely watching one bill that had movement last week:

HB2411 Homeowners’ Associations; Open Meetings

This bill changes some of the requirements of the open meeting law.  Boards can no longer require advance notice of audio or video-taping open board meetings.  If the board audio or video-tapes an open board meeting, and makes it available to owners on request, the board can prohibit audio or video-taping of open board meetings. The notice of any annual, special or regular meeting of owners must state the purpose for which the meeting is called. Before entering executive session, the board shall identify the section that authorized the board to close the meeting.  At any emergency meeting called by the Board, the Board may only act on emergency matters.

Applies to both condominiums and planned communities.

 

Passed House; Transmitted to Senate, 1st and 2nd read completed, in Committee; Passed Government Committee 2/28/17

Not active since 3/1/17; Majority and Minority Caucuses voted yes on 4/4/17

 

If you would like to be involved in the legislative process, please go to the Arizona Legislature website, www.azleg.gov, to find lists of legislators, phone numbers and calendars regarding Committee work. Or, please feel free to contact me at any time with questions regarding the status of bills or the legislative process (office:  602.241.1093).

Please stay tuned for legislative developments over the next few months!

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What are an Association’s Responsibilities Regarding Record Requests by Owners?

By Beth Mulcahy Esq.

Question: Our association has an owner who requests to review records on a monthly basis. This is starting to become a pain and it requires a lot of time. What are our responsibilities under Arizona law to provide these records to this owner?

Pursuant to A.R.S. 33-1805 (Planned Community)/ A.R.S. 33-1258 (Condo), all financial and other records of the association shall be made reasonably available for examination by any member or any person designated by the member in writing as the member’s representative.
Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following:
1. Privileged communication between an attorney for the association and the association;
2. Pending litigation;
3. Meeting minutes or other records of a session of an executive session board meeting;
4. Personal, health or financial records of an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association; and
5. Records relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association. Legislation enacted in 2006 entitles owners to see association books and records pertaining to “contemplated” litigation.

It is important to note that an association cannot charge a member for making books and records available for review. However, the association can charge 15 cents per page for copies of records. An association has ten (10) business days from submittal of a written request by an owner or an owner’s designated agent to make records or copies of the requested records available.

Inspection limitations could include: 1. Inspection and copying of records is limited to regular business hours at the association’s principal office; 2. Membership lists or any part may not be used for any purpose other than a member’s interest as a member; and 3. Membership lists cannot be used for solicitation or sold.

If you are unsure what records can and cannot be released to association members please contact Beth Mulcahy, Esq.

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Is your Association Prepared?

By: Beth Mulcahy, Esq.

We are lucky to live in a place where we don’t have to worry about extreme weather due to winter storms like other places in the country are experiencing.  But, come summertime, you never know when a big dust storm or heavy monsoon may hit! Is your Association prepared? Now is a good time to put a plan in place for your Association if you don’t have one, or to review your plan if you haven’t done so in a while.

How can YOUR community association plan for a natural event?

The board of directors, with the assistance of a committee, may want to look at the possibilities of a disaster and what it might do to the community.

What should your association emergency plan look like? The Red Cross is a valuable resource and can help with an assessment to determine the risks the association might face, how to prepare for them and what to do following a natural disaster. Find information at: http://www.redcross.org/find-help. Additionally, the federal government has information on how to plan for emergencies at Ready.gov.

If it is determined that a disaster plan is necessary, the next step is to fully develop the plan and put it in writing. Include association members, local police and ask for information from first responders in the processes to develop the plan. With community buy-in the plan is more likely to be viable and succeed, should it become necessary to implement.

When the plan is developed and in writing, it is important to communicate with the members of the association. Use the association’s website, newsletters and bulletin boards to post the plan, and be sure that all association members receive a copy. The association may want to draw attention to the plan each year at the annual meeting.

With luck, your association will not need to implement a disaster plan. However, being prepared should something happen gives the board of directors and association members direction and a sense of peace.

If you require assistance regarding emergencies in community associations, please contact Mulcahy Law Firm, P.C.

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