Assigned to GOV AS
PASSED BY COW
Assigned to GOV AS
PASSED BY COW
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
AMENDED
condominium; termination; appraisal dispute
Purpose
Allows a unit owner to select an independent appraiser, separate from the association, and outlines procedures to address appraisal differences.
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. Stipulates a unit owner can disapprove of an independent appraiser selected by the association, reducing the current threshold for disapproval.
2. Extends the deadline to 60 days, instead of 30 days, for the unit owner to disapprove of the
independent appraiser.
3. Specifies a unit owner will receive an additional five percent of total compensation for relocation costs.
4. Requires an independent appraiser, selected by the association, to evaluate the fair market value of a particular unit.
5. Permits any unit owner to obtain a second, independent appraisal at the unit owner's expense.
6. Specifies if the difference between the unit owner's independent appraisal and the association's independent appraisal amount is two percent or less, the higher appraisal is final.
7. Specifies if the unit owner's appraisal is more than two percent above the association's appraisal, the unit owner will receive an average of the amounts plus five percent for relocation costs.
8. Declares prospectively, that any provisions in the declaration conflicting with procedures for
seeking an additional independent appraisal as outlined, are void as a matter of public policy.
9. Applies requirements to all condominiums in the state, regardless of when the condominium was created.
10. Makes technical changes.
11. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Adds relocation compensation for a unit owner.
2. Modifies the process to address differences in appraisal evaluations.
Amendments Adopted by Committee of the Whole
1. Reinstates statutory language addressing terms of existing declarations.
2. Establishes prospectively, that any declaration provisions conflicting with appraisal procedures as outlined, are void as a matter of public policy.
Senate Action
GOV 1/31/18 DPA 7-0-0
Prepared by Senate Research
February 15, 2018
JO/lat