Assigned to GOV FOR
COMMITTEE
Assigned to GOV FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
condominium; termination; appraisal dispute
Purpose
Allows a unit owner to select an independent appraiser, separate from the association, and outlines procedures for dispute resolution.
Background
A condominium refers to a real estate development in which certain portions are designated for separate ownership and the remainder is designated for common ownership by the unit owners.
Except in the case of eminent domain, a condominium may be terminated only by an agreement of unit owners to which at least 80 percent of the votes in the association are allocated, or any larger percentage as specified. The termination agreement may establish that all common elements and condominium units must be sold following termination. Any condominium real estate may also be sold as outlined in the minimum terms of sale (A.R.S. § 33-1228).
Upon approval of the unit owners, an association may contract to sell real estate in the condominium. Proceeds from the sale will be distributed to unit owners and lienholders in proportion to the respective interests of unit owners as outlined (A.R.S. § 33-1228).
Statute specifies the respective interests of unit owners include the fair market values of their units, limited common elements and common element interests immediately before the termination that is determined by an independent appraiser selected by the association. The determination of an independent appraiser is final unless disapproved, within 30 days after distribution, by unit owners to which 50 percent of the association votes are allocated. The proportion of a unit owner's interest to that of all unit owners is determined by dividing the fair market value of that unit owner's unit and common element interest by the total fair market values of all the units and common elements (A.R.S. § 33-1228).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Reduces the current threshold for a unit owner to disapprove of an independent appraiser selected by the association.
2. Extends the deadline to 60 days, instead of 30 days, for the unit owner to disapprove of the
independent appraiser.
3. Requires an independent appraiser, selected by the association, to evaluate the fair market value of a particular unit.
4. Permits a unit owner to select a separate, independent appraiser to submit the owner's independent appraisal to the association within 90 days after the association's appraisal.
5. Specifies if the difference between the unit owner's independent appraisal and the association's independent appraisal amount is:
a) two percent or less, the unit owner's appraisal is final; or
b) greater than two percent, the unit owner and the association must jointly select an arbitrator or mediator, paid by the association, to make a final determination of the fair market value.
6. Removes exemptions, for a declaration or an amendment to the original declaration, from statutory requirements.
7. Applies requirements to all condominiums in the state, regardless of when the condominium was created.
8. Becomes effective on the general effective date.
Prepared by Senate Research
January 29, 2018
JO/lat