|
|
|
|
|
|
Legislation
|
|
Arizona Governor veteos construction defect bill, HB2034 for homeowner associations
It would have required majority vote of homeowners before boards and lawyers filed suits using homeowners money and equity
May 07, 2003
By
Marcus Aurelius
|
| Phoenix, Arizona -
Introduction by AHRC:
As in many parts of the country, Arizona has been flooded with many class action construction defect lawsuits from homeowner associations. While some of these lawsuits had merit, many were little more than cash registers for greedy and unscrupulous lawyers.
The builders argued that 51% of homeowners in an association should first vote in favor of such a suit, before it could be filed. HB 2034 proposed this to the state legislature. Many homeowners supported the bill, because their homes were being stigmatized by the lawsuits filed by homeowner associations without their permission. Trial lawyers vehemently opposed it.
The Arizona legislature , now under Republican control, passed the bill with overwhelming majorities. The governor, Janet Napolitano, a trial lawyer and a Democrat, vetoed it.
Why?
She claimed that she was being pro-homeowner by preserving a homeowner's right to sue. That explanation simply does not pass muster. HB 2034 only dealt with class action suits, not suits by individual homeowners. In the class action suits, homeowners had no say in their filing. Homeowner association boards of directors, often swayed by the glib, golden tongues of CAI lawyers, were taking homeowner monies to file the suits without the consent of homeowners. They also put homeowner assets at risk and stigmatized their homes in the process.
A more likely explanation of Napolitano's veto is the following.
Before becoming governor, she was attorney general. Prior to that she was a trial lawyer. And so was the leading lobbyist against the bill, Curtis Ekmark.
Ekmark is the lawyer who secured a 5 year injunction against Mr. Glassell, the homeowner who has recently been convicted of killing 3 homeowners at a board meeting. Just 4 days before the shooting, Ekmark announced that he had won $12 millon by settling 2 construction defect lawsuits.. $4 million of that went into his own pocket. He is the lawyer who had 77 year old Marie Brown turfed out of her home by constables for his legal fees for trimming her own tree in her own backyard. he is the lawyer who stripped homestead proctection from homes in homeowner associations.
It is no wonder then that many Arizona homeowners are wondering about the connection betwen Napolitano and Ekmark, and why she would even consult with him on homeowner association bills.. Why does she listen to him when he is so well known as being a leading filer of construction defect and foreclosure lawsuits? See the attached letters and comments by Arizona advocates.
Instead of investigating the violations of constitutional and civil rights, the governor will be judged by Arizona homeowners as being another example of a public official driving citizens into desperation - and in some cases - violence. Her veto is very disturbing to Arizona residents.
-----------------------------
HOUSE BILL 2034
-----------------------------
AN ACT
AMENDING TITLE 33, CHAPTER 16, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTION 33-1809; AMENDING SECTION 33-2002, ARIZONA REVISED STATUTES; RELATING TO HOMEOWNERS' ASSOCIATIONS.
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 33, chapter 16, article 1, Arizona Revised Statutes, is amended by adding section 33-1809, to read:
33-1809. Apartment complexes; proportionate representation; definitions
A. NOTWITHSTANDING ANY PROVISIONS IN THE COMMUNITY DOCUMENTS, FOR A PLANNED COMMUNITY THAT CONTAINS MORE THAN FIVE HUNDRED DWELLING UNITS, PERSONS RESIDING IN AN APARTMENT COMPLEX LOCATED IN THE PLANNED COMMUNITY SHALL BE REPRESENTED ON THE BOARD OF DIRECTORS IN A PROPORTION NOT GREATER THAN THE PROPORTION THAT THE DWELLING UNITS LOCATED WITHIN THE APARTMENT COMPLEX BEAR TO THE ENTIRE NUMBER OF DWELLING UNITS LOCATED IN THE PLANNED COMMUNITY. IF THE RATIO OF DWELLING UNITS LOCATED WITHIN THE APARTMENT COMPLEX TO THE TOTAL NUMBER OF DWELLING UNITS IN THE PLANNED COMMUNITY IS LESS THAN THE RATIO NECESSARY TO PERMIT THE ELECTION OF ANY DIRECTORS REPRESENTING RESIDENTS OF THE APARTMENT COMPLEX, PERSONS RESIDING IN THE APARTMENT COMPLEX ARE ELIGIBLE TO BE REPRESENTED BY NOT MORE THAN ONE BOARD MEMBER.
B. IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE REQUIRES:
1. "APARTMENT COMPLEX" MEANS A MULTI-FAMILY RESIDENTIAL FACILITY OF DWELLING UNITS THAT ARE OCCUPIED BY PERSONS RENTING THOSE DWELLING UNITS WITH THE EXCEPTION OF ON-SITE PROPERTY MANAGERS OR OWNERS OF THE APARTMENT COMPLEX.
2. "DWELLING UNIT" MEANS A SINGLE FAMILY UNIT DESIGNED FOR RESIDENTIAL USE, INCLUDING SINGLE FAMILY HOUSES, CONDOMINIUMS, TOWN HOUSES AND APARTMENTS.
Sec. 2. Section 33-2002, Arizona Revised Statutes, is amended to read:
33-2002. Homeowners' association dwelling actions; conditions
A. Notwithstanding any provision to the contrary in title 10, chapter 39 or chapters CHAPTER 9 and OR 16 of this title and in addition to any requirements prescribed in the community documents of a homeowners' association, a homeowners' association may file a homeowners' association dwelling action only after all of the following have occurred:
1. The board of directors has provided full disclosure in writing to all members of the association of all material information relating to the filing of the action. The material information shall include a statement that describes the manner in which the action will be funded and a statement describing any demands, notices, offers to settle or responses to offers to settle made either by the association or the seller. The material information described by this paragraph shall be distributed to all members before the meeting described in paragraph 2 occurs.
2. The association has held a meeting of its members and board of directors for which reasonable and adequate notice was provided to all members in the manner prescribed in section 33-1248 or 33-1804, as applicable.
3. IF THE COMMUNITY DOCUMENTS DO NOT CONTAIN COMMERCIALLY REASONABLE MEMBER VOTING PROVISIONS RELATING TO THE APPROVAL OF THE FILING OF A HOMEOWNERS' ASSOCIATION DWELLING ACTION, A MAJORITY OF THE VOTES CAST BY MEMBERS OF THE HOMEOWNERS' ASSOCIATION, EXCLUDING VOTES ENTITLED TO BE CAST BY THE SELLER, ARE CAST IN FAVOR OF FILING A HOMEOWNERS' ASSOCIATION DWELLING ACTION. THE VOTES MAY BE CAST IN ANY MANNER AUTHORIZED BY LAW AND BY THE COMMUNITY DOCUMENTS. IF THE NUMBER OF VOTES CAST IN FAVOR OF FILING A HOMEOWNERS' ASSOCIATION DWELLING ACTION DOES NOT EXCEED THE NUMBER OF VOTES OPPOSED, THE ASSOCIATION MAY FILE A HOMEOWNERS' ASSOCIATION DWELLING ACTION IN ITS OWN NAME ON BEHALF OF ONE OR MORE MULTI-FAMILY DWELLING UNIT OWNERS WHO CONSENT IN WRITING TO THE FILING OF THE ACTION FOR EITHER OF THE FOLLOWING:
(a) TO RECOVER DAMAGES TO COMMON AREA PROPERTY, INCLUDING DAMAGES TO COMMON ELEMENTS AND LIMITED COMMON ELEMENTS AS DEFINED IN SECTION 33-1202, PARAGRAPHS 7 AND 17, THAT DIRECTLY AFFECTS THE PHYSICAL STRUCTURES IN WHICH THE UNITS OWNED BY THE CONSENTING MEMBERS ARE LOCATED.
(b) TO RECOVER DAMAGES TO PROPERTY THE ASSOCIATION HAS A LEGAL OBLIGATION TO MAINTAIN AND THAT DIRECTLY AFFECTS THE PHYSICAL STRUCTURES IN WHICH THE UNITS OWNED BY THE CONSENTING MEMBERS ARE LOCATED.
3. 4. The board of directors of the homeowners' association authorizes the filing of the action.
B. If the notice required by subsection A, paragraph 2 of this section is provided to the homeowners' association's members less than sixty days before the expiration of a statute of limitations affecting the right of the association to bring a homeowners' association dwelling action, the statute of limitations is tolled for sixty days. The homeowners' association may meet the remaining requirements of subsection A of this section during the tolling period.
C. Notwithstanding any provision to the contrary in title 10, chapter 39 or in chapters CHAPTER 9 and OR 16 of this title and in addition to any requirements prescribed in the community documents of a homeowners' association, the board of directors of a homeowners' association or its authorized representative shall disclose in writing to the members of the association a plan that describes the manner in which the proceeds of a homeowners' association dwelling action, whether obtained by way of judgment, settlement or other means, have been or will be allocated. The plan shall be disclosed within thirty days after the association receives the proceeds of any homeowners' association dwelling action. The plan is not binding on the homeowners' association, but the board of directors or its authorized representative must disclose any material changes to the plan to the members of the association within thirty days of making the changes.
D. A homeowners' association shall prepare and preserve for a period of five years records that are adequate to demonstrate its compliance with this section.
E. A director who acts in good faith pursuant to this chapter is not liable for any act or failure to act pursuant to this chapter. In any action filed against a director arising out of any act or failure to act pursuant to this chapter, a director is presumed in all cases to have acted in good faith. The burden is on the party challenging a director's conduct to establish by clear and convincing evidence facts that rebut the good faith presumption. |
|
| |
|
View Comments (9) | Post a comment |
| |
|
|
|
|
|
|
|
|
|
