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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
condominium termination; unit owners; percentage
Purpose
Increases, from 80 percent to 100 percent, the percentage of association votes required for terminating a condominium.
Background
Except in the case of a taking of all the units by eminent domain, a condominium may be terminated only by agreement of unit owners to which 80 percent of the votes in the association are allocated. If any real estate condominium is to be sold following termination, title to that real estate on termination vests in the association as trustee for the holders of all interest in the units. Proceeds of the sale must be distributed to the unit owners and lienholders as their interests appear, in proportion to the respective interests of unit owners.
The respective
interests of unit owners are the fair market values of their units, limited
common elements and common element interests immediately before the
termination, their pro rata share of monies in the association's reserve fund
and the operating account and an additional five percent of the total amount
for relocating costs. An independent appraiser selected by the association must
determine the total fair market values. The determination of the independent
appraiser must be distributed to the unit owners and becomes final unless
disapproved within 60 days after distribution to the unit owner. Any unit owner
may obtain a second independent appraisal at the unit owner's expense and, if
the unit owner's independent appraisal amount differs from the association's
appraisal amount by five percent or less, the higher appraisal is final. If the
appraisals differ by more than five percent, the unit owner must submit to
arbitration at the association's expense. The arbitration amount is deemed the
final sale amount (A.R.S.
§ 33-1228).
Statute defines condominium as real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of the separate portions (A.R.S. § 33-1202).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Increases, from 80 percent to 100 percent, the percentage of association votes required for terminating a condominium.
2. Makes technical and conforming changes.
3. Becomes effective on the general effective date.
House Action
COM 2/1/22 DP 7-3-0-0
3rd Read 2/17/22 45-14-1
Prepared by Senate Research
February 28, 2022
JT/sr