On Friday June 14, 2013, at 12:59 a.m., on the 152nd day of the regular legislative session, the 51st Arizona Legislature adjourned sine die, or “without assigning a day for a further meeting or hearing.” Generally, except as otherwise noted in the act itself, legislation in Arizona is not effective until 90 days after the regular session adjourns sine die. Accordingly, on Friday, September 13, 2013, the vast majority of legislation enacted by the Arizona Legislature in the 2013 legislative session went into effect.
Although real estate related bills certainly did not dominate the legislative landscape this past session, they still held their own. Of the 256 bills that were signed into law by the Arizona Legislature in 2013, approximately twenty of them touched upon real estate in some way, shape, or form.
Here is a summary of many of the real estate related bills passed in Arizona in 2013 that have now become law. In addition, for your convenience and to assist your understanding, accompanying each real estate related piece of legislation listed below are links both to (a) the operative bill itself and (b) to a legislative summary or fact sheet that further explains the legislation, its purpose, and what it does.
House Bill 2031
(FEDERAL PATENT EASEMENTS; COUNTIES; ABANDONMENT)
This law allows a county, at the request of a property owner, after it notifies and obtains the consent of all affected utilities, to abandon a federal patent easement established by the Small Tract Act of 1938, if the easement is either (a) not being used by the public or (b) is no longer necessary. The county board of supervisors considering such abandonment must give written notice to the property owners of any land that abuts the easement to be abandoned. The majority of the property owners abutting the easement must approve of the action to abandon the patent easement.
House Bill 2033
(FORECLOSURES; DEEDS OF TRUST; AFFIDAVITS)
Under HB 2033, if a beneficiary of a foreclosed trustee’s deed receives payment based on private mortgage insurance covering the sale that is in addition to the proceeds of the sale, the beneficiary, within four months of the trustee’s sale, must fill out and submit a “declaration of additional funds received” to the county recorder where the property is located. This bill also requires the trustee, under such circumstances, to (1) within seven business days after receipt of payment by the trustee, execute and submit the trustee’s deed to the county recorder for recording and, upon request, provide an unrecorded copy of the signed trustee’s deed to the purchaser, and (2) on or before the date of the trustee’s sale, notify the beneficiary of the obligation to submit the declaration of additional funds.
House Bill 2118
(FLOOD PROTECTION DISTRICTS; PROPERTY EXCLUSION)
HB 2118 repeals A.R.S. § 48-2815, the statute that permitted a flood protection district, located in a county that contains four or more flood protection districts, to exclude lands from its jurisdiction under certain circumstances.
House Bill 2138
(MUNICIPALITIES; RIGHT-OF-WAY; TRANSFER)
HB 2138 allows, as an alternative to annexation, a county roadway or right-of-way to be transferred to an adjacent city or town by mutual consent of both the county and the city/town. This bill removes the requirement that the county roadway or right-of-way be adjacent to the city or town “for the entire length of the annexation.” Now, a county roadway or right-of-way simply needs to be adjacent to the town or the city to transfer.
House Bill 2143
(JOINT TENANCY SEVERANCE)
HB 2143 provides for the process of severing the right of survivorship in the case that property is titled as “joint tenancies with right of survivorship.” HB 2143 makes clear that the right of survivorship is extinguished in the case of divorce or annulment, death, or by recording an affidavit titled “Affidavit Terminating Right of Survivorship” (the “Affidavit”) with the office of the county recorder in which the real property is located. HB 2143 states in detail the information necessary to include in the Affidavit. The bill also sets forth the information necessary to record in order to sever the joint tenancy in the event of the death of one of the joint tenants.
House Bill 2178
(FLOOD CONTROL DISTRICTS; ADMINISTRATIVE ACTIONS)
HB 2178 allows a person who violates statutes or rules governing flood control districts to receive a non-monetary penalty that serves the purposes of the flood control district, assuming an agreement can be reached. In addition, this bill requires a party who seeks the board of hearing review to review any decision by the chief engineer of the flood district to identify specifically the section(s) of the chief engineer’s final order that is/are requested to be reviewed. Further, this bill provides a process by which the board of hearing review must review/hold a hearing on the matters requested.
House Bill 2202
(SCHOOL DISTRICTS; LEASES)
This bill increases the maximum number of years (from five to ten) for which school boards are allowed to lease or lease-purchase school buildings and grounds.
House Bill 2242
(ROAD IMPROVEMENT & MAINTENANCE DISTRICT)
This bill permits petitioners who seek the formation of a road improvement and maintenance district to request in a petition that the district allocate its assessments on a per-parcel basis, with each parcel in the district to be assessed an equal amount without regard to the improvements, size, or value of the parcel. The per-parcel assessment is capped at $100 per parcel, and the petition for the formation of the road improvement and maintenance district must include at least seventy-five percent (75%) of the total numbers of parcels contained in the district.
House Bill 2245
(REQUEST TO LEAVE; CRIMINAL TRESPASS)
HB 2245 expands criminal trespass in the third degree to include persons who knowingly enter or remain on real property after receiving a reasonable request by a law enforcement officer to leave or not enter in the first instance.
House Bill 2281
(FORECLOSURE; TENANT NOTIFICATION)
HB 2281 requires property owners to notify tenants of a notice of trustee’s sale or other notice of foreclosure on the property within five business days of receiving the notice. This notice requirement applies only to the first notice of trustee’s sale or the first notice of foreclosure received by the property owner after the tenant has entered into the rental agreement.
House Bill 2324
(COMMERCIAL LEASE EXEMPTION)
HB 2324 provides that a municipal transaction privilege, sales, use, or other similar tax may not be levied on the leasing of real property between affiliated companies, businesses, persons, or reciprocal insurers (all terms defined in the bill or statute).
House Bill 2335
(MOBILE HOMES; RECREATIONAL VEHICLES; PARKS)
This law prohibits mobile home and recreational vehicle parks from adopting rules that restrict tenants or tenant associations from meetings in common facilities during normal operating hours and from prohibiting the formation of tenant associations specifically. Moreover, this bill makes it clear that the tenant or tenant association shall be allowed to post notices of such meetings on community-wide bulletin boards and that such posts are not deemed solicitations.
House Bill 2344
(PROPERTY TAX PENALTY WAIVER)
This bill permits a county treasurer, retroactive to June 30, 2012, as long as he or she first consults with the county board of supervisors and determines that good cause exists to do so, to waive a penalty associated with a property owner’s failure to respond to a county assessor’s request for information about a property’s use or classification for tax purposes. This act will be repealed on June 30, 2014.
House Bill 2525
(REAL ESTATE LICENSES; CANCELLATIONS)
This law permits the Arizona Department of Real Estate to cancel an inactive real estate license (not just an active one as previously provided) upon request of the licensee.
Senate Bill 1047
(MORTGAGE INSURANCE; REPEAL COVERAGE LIMITATION)
This bill repeals A.R.S. § 20-1546, the statute that (1) limited a mortgage guaranty insurance company’s coverage, net of reinsurance, to a maximum of twenty-five percent (25%) of the entire indebtedness to the insured and (2) allowed the mortgage guaranty insurance company (in the alternative) to pay the entire debt to the insured and acquire title to the real property.
Senate Bill 1278
(HOMEOWNERS’ ASSOCIATIONS; PUBLIC ROADWAYS)
SB 1278 prohibits all homeowners’ associations and planned communities whose declarations are recorded after December 31, 2014, from regulating any roadway owned or otherwise held by a governmental entity (i.e., a public roadway).
Senate Bill 1302
(PLANNED COMMUNITIES; DESIGN REVIEW PROCESS)
SB 1302 amends A.R.S. § 33-1817 to clarify that, in order to be subject to the statutory guidelines set forth in A.R.S. § 33-1817, (1) the construction must be for new construction or rebuilds of the main building, (2) the construction must be on a lot in a planned community that has enacted design or architectural guidelines, and (3) if the association’s documents permit the association to charge the member a security deposit, the association does, in fact, charge the member a security deposit.
Senate Bill 1316
(STATE BOARD OF APPRAISAL)
SB 1316 sets forth various changes relating to the State Board of Appraisal. For example, the bill establishes the classifications of “registered trainee appraisers” and “supervisory appraisers,” defines each type of appraiser, and establishes requirements related to registration and application. Further, SB 1316 requires the State Board of Appraisal to adopt the national examination approved by the Appraiser Qualifications Board for state certified and licensed appraisers. This bill also allows the State Board of Appraisal to set examination fees, requires that an appraiser be granted reciprocity if the appraiser meets certain conditions, discusses disciplinary action of appraisers, and provides for various other miscellaneous matters relating to appraisers and the State Board of Appraisal.
Senate Bill 1454
(CAMPAIGN FINANCE, IN-KIND CONTRIBUTIONS; DISCLOSURES)
SB 1454 prohibits local government planning agencies and county planning and zoning commissions from requiring, as part of a subdivision regulation or zoning ordinance, the establishment of a planned community. SB 1454, however, does permit municipalities and counties to require a subdivider or developer to establish an association to maintain private, common, or community-owned improvements that are approved and installed as part of a plat or plan. But municipalities and counties cannot require an association to be formed other than for maintenance of common areas or community owned property. In addition, SB 1454 permits management companies to act for or on behalf of a planned community or association. For example, management companies have the authority, under certain circumstances, to (1) record a lien or notice of claim of lien of the planned community against an owner’s property or (2) appear in small claims on behalf of the planned community. Further, SB 1454 permits property owners in planned communities to rent their properties, unless prohibited in the declarations of the planned communities, and designate a third-party to act as the property owner’s agent with respect to all association matters relating to the rental property. Lastly, the bill prohibits the planned community from requiring the property owner to submit to it a copy of the tenant’s rental application, credit report, or other personal information, or to require the tenant to waive or limit his or her due process rights as condition of occupancy of the rental property.
Senate Bill 1466
(CITIES; TOWNS; DILAPIDATED BUILDINGS)
Prior to this bill, A.R.S. § 9-499 required cities and towns to establish ordinances to compel the owner, lessee, or occupant of property to remove “rubbish, trash, weeds, or other accumulation of filth, debris or dilapidated structures which constitute a hazard . . .” SB 1466 modified the phrase “dilapidated structures” to “dilapidated buildings” to reflect previous changes in laws relating to the counties’ authority to compel the removal of dilapidated buildings.
 The campaign finance portions of this bill have been removed, to focus only on the real estate related components dealing with planned communities and homeowners’ associations.