Arizona HOA Laws Change September 12

What boards need to know now about meetings, decisions, disclosures, BOI and more

On Thursday mornings during the Arizona legislative session, John Bouchie is often in a Legislative Action Committee meeting reviewing proposed bills, discussing how they could affect Arizona communities, and helping shape Community Associations Institute’s (CAI) response.

The conversation doesn't stop at whether a bill sounds good on paper. John and the other LAC members look at what it could mean when a board actually has to conduct a meeting, make a decision, enforce its governing documents, complete a resale disclosure or explain a change to homeowners.

When John recently reviewed a summary of this year's legislation, he joked that it gave him flashbacks to talking about some of these bills “ad nauseam” during those Thursday meetings.

I’m proud to have that perspective on the GUD team.

Arizona lawmakers considered a long list of proposals affecting community associations in 2026. Some became law. Some changed substantially along the way. Others died. And one of the most important lessons from John is that even a one-page summary can only go so far. The real impact often depends on the details: how the final language was written, what changed during the legislative process, and how the new law applies to a particular community.

September 12 Brings Several HOA Changes

The Arizona Legislature adjourned June 13, and most of the HOA-related laws enacted this session take effect September 12, 2026.

Boards shouldn't wait until then to start paying attention. Some of these changes affect meeting procedures, board decisions, resale disclosures, architectural standards and collection practices. Planning may need to happen before the effective date.

Here are several of the changes Arizona HOA and condominium boards should know about.

Board Action and Executive Sessions — SB 1290

For planned communities, Arizona law will expressly state that a closed portion of a board meeting is for consideration “without action.”

Boards may continue to discuss subjects that legally qualify for a closed session, but voting and formal action must take place in an open meeting.

The change follows an April Arizona Court of Appeals decision involving Sunland Springs Village that also concluded formal board action could not occur during executive session. A petition for review of that decision is pending before the Arizona Supreme Court.

For boards, the practical issue extends beyond where the vote takes place. If action must occur during an open meeting, the meeting and agenda have to be planned accordingly, including Arizona's notice requirements.

Reasonable and Fair Board Decisions — HB 4011

Arizona is also putting a clearer standard around the discretionary authority exercised by condominium and planned-community associations.

Beginning September 12, associations have a statutory duty to exercise discretionary powers reasonably. The legislation defines that duty to include acting neutrally, fairly, without favoritism and in a nonarbitrary manner.

That reaches into many of the decisions boards make routinely: architectural requests, enforcement decisions, use of common areas, contracts and other matters where the board has discretion.

Consistency has always mattered. Now the expectation is expressly stated in Arizona law.

Expanded Resale Disclosures — HB 2397

Resale disclosure requirements are becoming more extensive.

Depending on the type of association, disclosure packages will require additional information that can include recent board-approved open-meeting minutes, financial information, pending special assessments, unresolved violations and other association records. Condominium disclosures also include additional information involving insurance and common elements.

This is one of the changes Community Managers and boards are likely to feel operationally. Accurate records and an organized disclosure process will become even more important when a home enters escrow.

Condominium Foreclosure Thresholds — SB 1246

Arizona is changing when a condominium association may foreclose its common-expense lien.

The general threshold will become a delinquency of at least 18 months or $10,000 in unpaid assessments, whichever occurs first. This brings condominium requirements more closely in line with those already applicable to planned communities.

For a special assessment initially valued at $10,000 or more, the 18-month delinquency threshold applies.

Boards should make sure their collection practices reflect the new requirements.

Backyard Shade Structures — HB 2342

Planned communities generally will no longer be able to prohibit qualifying backyard shade structures.

Associations may still establish reasonable rules governing size, placement and appearance, but those rules cannot effectively prevent installation or be more restrictive than applicable municipal zoning requirements for height and setbacks.

In Arizona, where shade is less a luxury than a practical requirement for enjoying the backyard several months of the year, this is one architectural-policy change worth reviewing.

Additional Flag Protections — SB 1184 and SB 1808

Arizona expanded the categories of flags that planned communities and condominium associations may not prohibit.

SB 1184 adds officially authorized division-level flags of the U.S. Army, Navy, Marine Corps, Air Force, Space Force and Coast Guard.

SB 1808 adds protection for the national flag of Israel under the statutory definition used in the bill.

Associations may still adopt reasonable rules governing the placement and manner of display.

Assisted-Living Homes — SB 1473

Another law worth watching affects small assisted-living homes.

Beginning September 12, cities and counties generally cannot prohibit a licensed assisted-living home with 10 or fewer residents from operating on residentially zoned property solely because of its assisted-living use or number of residents.

The law does not expressly override private HOA covenants. However, associations should be cautious about relying on residential-use or business restrictions to prohibit one of these homes because federal Fair Housing requirements may also apply.

If the issue arises in a community, the specific governing documents and circumstances should be reviewed with association counsel before enforcement action is taken.

Some HOA Proposals Did Not Become Law

Knowing what failed can be useful too, particularly when a proposal received enough attention that board members may reasonably wonder whether the rules changed.

Pet Legislation Did Not Pass

Proposed legislation addressing HOA pet restrictions was considered during the 2026 session but did not become law.

There is no new statewide HOA pet-rule change taking effect as a result of that proposal. Associations should continue to follow their existing governing documents and applicable law.

Other HOA-related proposals also failed during the session and could return in a future Legislature. That's one reason following legislation from introduction through final disposition matters. A bill being discussed in Phoenix doesn't necessarily mean a new requirement is coming.

One Federal HOA Requirement Just Went Away

While Arizona added several new requirements, the federal government removed one that had caused considerable uncertainty for community associations.

On August 11, the U.S. Department of the Treasury's Financial Crimes Enforcement Network, or FinCEN, issued its final rule changing Beneficial Ownership Information reporting under the Corporate Transparency Act. The rule became effective August 14.

U.S.-created companies are now exempt from BOI reporting requirements. U.S. persons are also exempt from providing BOI, and U.S. persons who previously obtained a FinCEN ID are no longer required to update or correct that information.

For U.S.-created homeowners and condominium associations, the practical takeaway is simple:

The federal BOI filing and updating requirement is gone.

The Summary Isn't the Whole Story

John emphasized something worth repeating as boards work through these changes: there is much more behind each of these laws than can fit into an article or one-page legislative update.

Knowing that resale requirements changed is useful. Knowing exactly what a particular association has to provide is another matter.

Knowing that formal action doesn't belong in executive session is important. Figuring out how a board should structure the agenda for a specific upcoming meeting may require a closer look.

And a new requirement that boards exercise discretion reasonably and fairly will inevitably raise questions when it meets the facts of a real architectural request, violation or owner dispute.

For anyone who wants to go deeper, CAI's 2026 Arizona End of Legislative Session Report provides additional information about the bills considered during the session, including those that passed and those that didn't.

Community Managers can also help boards identify which operational practices may need attention, while association counsel should be consulted when legal interpretation is needed for a particular community.

Boards Have Time to Prepare — But Not Much

September 12 is close enough that boards should already be looking ahead.

Are upcoming meeting agendas structured appropriately for decisions the board expects to make? Do existing policies reflect the new statutory requirements? Is the resale-disclosure process ready? Do architectural standards need to be reviewed? Are collection procedures current?

Those practical questions are why John's involvement with the Legislative Action Committee is valuable to us. Legislation isn't just something that happens at the Capitol. Eventually it reaches a board meeting, a Community Manager's desk and the day-to-day operation of an association.

Our job is to help communities be ready when it does.

—Jonathan BrownGUD Community Management

This article provides general information and is not legal advice. Association boards should consult qualified legal counsel regarding the application of new statutes, court decisions and federal regulations to their specific community.