SB1384 - 561R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 33-1248, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1248. Open meetings; exceptions; notice; directors' elections; policy statement

A. Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the unit owners' association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association or any person designated by a member in writing as the member's representative and all members or designated representatives so desiring shall be permitted allowed to attend and speak at an appropriate time during the deliberations and proceedings. The board may place reasonable time restrictions on those persons speaking during the meeting but shall permit allow a member or a member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item in addition to any other opportunities to speak. The board shall provide for a reasonable number of persons to speak on each side of an issue. Persons attending may audiotape or videotape those portions of the meetings of the board of directors and meetings of the members that are open. The board of directors of the association shall not require advance notice of the audiotaping or videotaping and may adopt reasonable rules governing the audiotaping or videotaping of open portions of the meetings of the board and the membership, but such rules shall not preclude such audiotaping or videotaping by those attending, unless the board audiotapes or videotapes the meeting and makes the unedited audiotapes or videotapes available to members on request without restrictions on its their use as evidence in any dispute resolution process. Any portion of a meeting may be closed only if that portion of the meeting is limited to consideration of one or more of the following:

1. Legal advice from an attorney for the board or the association. On final resolution of any matter for which the board received legal advice or that concerned pending or contemplated litigation, the board may disclose information about that matter in an open meeting except for matters that are required to remain confidential by the terms of a settlement agreement or judgment.

2. Pending or contemplated litigation.

3. Personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association.

4. Matters relating to the job performance of, compensation of, health records of or specific complaints against an individual employee of the association or an individual employee of a contractor of the association who works under the direction of the association.

5. Discussion of a unit owner's appeal of any violation cited or penalty imposed by the association except on request of the affected unit owner that the meeting be held in an open session.

B. Notwithstanding any provision in the condominium documents, all meetings of the unit owners' association and the board shall be held in this state. A meeting of the unit owners' association shall be held at least once each year. Special meetings of the unit owners' association may be called by the president, by a majority of the board of directors or by unit owners having at least twenty-five percent, or any lower percentage specified in the bylaws, of the votes in the association. Not fewer than ten nor or more than fifty days in advance of any meeting of the unit owners, the secretary shall cause written notice to be hand delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit owner to every unit owner by at least one of the following methods:

1. In person.

2. By mail to the physical address of the unit owner's unit or the alternate mailing address designated in writing by the unit owner.

3. By email to the email address designated in writing by the unit owner.

C. The notice of any meeting of the unit owners shall state the date, time and place of the meeting. The notice of any annual, regular or special meeting of the unit owners shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws, any changes in assessments that require approval of the unit owners and any proposal to remove a director or officer. The failure of any unit owner to receive actual notice of a meeting of the unit owners does not affect the validity of any action taken at that meeting.

C. D. Before entering into any closed portion of a meeting of the board of directors, or on notice of a meeting under subsection D E of this section that will be closed, the board shall identify the paragraph under subsection A of this section that authorizes the board to close the meeting.

D. E. Notwithstanding any provision in the declaration, bylaws or other condominium documents, for meetings of the board of directors that are held after the termination of declarant control of the association, notice to unit owners of meetings of the board of directors shall be given at least forty-eight hours in advance of the meeting by newsletter, conspicuous posting or any other reasonable means as determined by the board of directors. An affidavit of notice by an officer of the association is prima facie evidence that notice was given as prescribed by this section. Notice to unit owners of meetings of the board of directors is not required if emergency circumstances require action by the board before notice can be given. Any notice of a board meeting shall state the date, time and place of the meeting. The failure of any unit owner to receive actual notice of a meeting of the board of directors does not affect the validity of any action taken at that meeting.

E. F. Notwithstanding any provision in the declaration, bylaws or other condominium documents, for meetings of the board of directors that are held after the termination of declarant control of the association, all of the following apply:

1. The agenda shall be available to all unit owners attending.

2. An emergency meeting of the board of directors may be called to discuss business or take action that cannot be delayed for the forty-eight hours required for notice. At any emergency meeting called by the board of directors, the board of directors may act only on emergency matters. The minutes of the emergency meeting shall state the reason necessitating the emergency meeting. The minutes of the emergency meeting shall be read and approved at the next regularly scheduled meeting of the board of directors.

3. A quorum of the board of directors may meet by means of a telephone conference if a speakerphone is available in the meeting room that allows board members and unit owners to hear all parties who are speaking during the meeting.

4. Any quorum of the board of directors that meets informally to discuss association business, including workshops, shall comply with the open meeting and notice provisions of this section without regard to whether the board votes or takes any action on any matter at that informal meeting.

G. NOTWITHSTANDING ANY OTHER LAW OR any PROVISION IN THE CONDOMINIUM DOCUMENTS, THE FOLLOWING APPLY TO ALL DIRECTORS' ELECTIONS:

1. CUMULATIVE VOTING IS PROHIBITED.

2. NOMINATIONS FROM THE FLOOR ARE PROHIBITED.

3. THE NAMES OF ALL ELIGIBLE CANDIDATES NOMINATED FOR THE BOARD OF DIRECTORS SHALL APPEAR ON THE BALLOT. THE BALLOT MAY INCLUDE ONE OR MORE WRITE-IN LINES EQUAL TO THE NUMBER OF DIRECTORS TO BE ELECTED.

4. For any meeting at which the election of directors occurs, the quorum requirement is ONE-TENTH OF THE TOTAL number of VOTES ENTITLED TO BE CAST UNLESS THE CONDOMINIUM DOCUMENTS SPECIFY A LESSer AMOUNT.

F. H. It is the policy of this state as reflected in this section that all meetings of a condominium, whether meetings of the unit owners' association or meetings of the board of directors of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the unit owners of the matters to be discussed or decided and to ensure that unit owners have the ability to speak after discussion of agenda items, but before a vote of the board of directors or members is taken. Toward this end, any person or entity that is charged with the interpretation of these provisions, including members of the board or of directors and any community manager, shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings.

G. i. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title. END_STATUTE

Sec. 2. Section 33-1250, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1250. Voting; proxies; ballot requirements; applicability; definition

A. If only one of the multiple owners of a unit is present at a meeting of the association, the owner is entitled to cast all the votes allocated to that unit. If more than one of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the multiple owners unless the declaration expressly provides otherwise. There is majority agreement if any one of the multiple owners casts the votes allocated to that unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.

B. During the period of declarant control, votes allocated to a unit may be cast pursuant to a proxy duly executed by a unit owner. If a unit is owned by more than one person, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy. A unit owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association. A proxy is void if it is not dated or purports to be revocable without notice. The proxy is revoked on presentation of a later dated proxy executed by the same unit owner. A proxy terminates one year after its date, unless it specifies a shorter term or unless it states that it is coupled with an interest and is irrevocable.

C. Notwithstanding any provision in the condominium documents, after termination of the period of declarant control, votes allocated to a unit may not be cast pursuant to a proxy. The association shall provide for votes to be cast in person and by absentee ballot and, in addition, the association may provide for voting by some other form of delivery, including the use of e-mail and fax delivery. Notwithstanding section 10-3708 or the provisions of the condominium documents, any action taken at an annual, regular or special meeting of the members shall comply with all of the following if absentee ballots or ballots provided by some other form of delivery are used:

1. The ballot shall set forth each proposed action.

2. The ballot shall provide an opportunity to vote for or against each proposed action.

3. The ballot is valid for only one specified election or meeting of the members and expires automatically after the completion of the election or meeting.

4. The ballot specifies the time and date by which the ballot must be delivered to the board of directors in order to be counted, which shall be at least seven days after the date that the board delivers the unvoted ballot to the member.

5. The ballot does not authorize another person to cast votes on behalf of the member.

6. The completed ballot shall contain the name, the address and either the actual or electronic signature of the person voting, except that if the condominium documents permit secret ballots, only the envelope shall contain the name, the address and either the actual or electronic signature of the voter.

7. Ballots, envelopes and related materials, including sign-in sheets if used, shall be retained in electronic or paper format and made available for unit owner inspection for at least one year after completion of the election.

D. Votes cast by absentee ballot or other form of delivery, including the use of e-mail and fax delivery, are valid for the purpose of establishing a quorum.

c. Notwithstanding any provision in the condominium documents, after the termination of the period of declarant control, votes allocated to a unit may not be cast pursuant to a proxy. The association shall provide for votes to be cast in compliance with all of the following:

1. Votes shall be cast iN PERSON AND BY ABSENTEE BALLOT IF VOTING WILL OCCUR AT A MEETING OF THE unit owners, OR BY WRITTEN BALLOT WITHOUT A MEETING OF THE unit owners.

2. THE FORM OF THE ABSENTEE BALLOTS OR WRITTEN BALLOTS SHALL COMPLY WITH ALL OF THE FOLLOWING:

(a) The ballot shall set forth each proposed action.

(b) The ballot shall provide an opportunity to vote for or against each proposed action EXCEPT IN THE CASE OF THE ELECTION OF DIRECTORS.

(d) THE BALLOT SHALL STATE THE PERCENTAGE OF APPROVAL NECESSARY FOR EACH PROPOSED ACTION OTHER THAN THE ELECTION OF DIRECTORS.

(e) The ballot SHALL STATE the time and date by which the ballot must be delivered to the ASSOCIATION in order to be counted, which shall be at least seven days after the date that the unvoted ballot IS DELIVERED to the unit owner.

(f) The ballot may not authorize another person to cast votes on behalf of the UNIT OWNER.

(g) The completed ballot shall contain the name, the address and either the actual or electronic signature of the person voting, except that if the condominium documents allow secret ballots, the name, the address and either the actual or electronic signature of the MEMBER SHALL APPEAR ON the ENVELOPE OR AS PART OF THE ELECTRONIC MEANS OF SUBMISSION.

3. THE ASSOCIATION SHALL DELIVER AN ABSENTEE BALLOT OR WRITTEN BALLOT TO EVERY unit owner who is ELIGIBLE TO VOTE NOt LATER THAN ten DAYS BEFORE THE DATE THAT THE COMPLETED BALLOT MUST BE DELIVERED TO THE ASSOCIATION. DELIVERY OF AN ABSENTEE BALLOT OR WRITTEN BALLOT TO THE unit owner MAY BE ACCOMPLISHED IN PERSON or BY MAIL OR SOME FORM OF ELECTRONIC DELIVERY AS DETERMINED BY THE BOARD.

4. THE METHOD OF DELIVERY OF ABSENTEE BALLOTS OR WRITTEN BALLOTS from the unit owner TO THE ASSOCIATION MAY INCLUDE MAIL OR IN-PERSON DELIVERY TO A PERSON OR LOCATION DESIGNATED BY THE BOARD OR SOME FORM of ELECTRONIC DELIVERY, INCLUDING THE USE OF EMAIL, FAX OR AN ONLINE VOTING SYSTEM THAT COMPLIES WITH SECTION 10-3708.

5. ABSENTEE BALLOTS OR WRITTEN BALLOTS TIMELY DELIVERED TO THE ASSOCIATION SHALL COUNT TOWARD THE REQUIRED QUORUM FOR THE MEETING OR ELECTION, AS APPLICABLE.

6. THE ABSENTEE BALLOT OR WRITTEN BALLOT IS VALID FOR ONLY ONE SPECIFIED ELECTION OR MEETING OF THE MEMBERS, AS APPLICABLE, AND EXPIRES AUTOMATICALLY AFTER THE COMPLETION OF THE ELECTION OR MEETING.

7. BALLOTS, ENVELOPES AND RELATED MATERIALS, INCLUDING SIGN-IN SHEETS IF USED, SHALL BE RETAINED IN ELECTRONIC OR PAPER FORMAT AND MADE AVAILABLE FOR UNIT OWNER INSPECTION FOR AT LEAST ONE YEAR AFTER COMPLETION OF THE ELECTION OR MEETING.

8. ThIS SECTION does not PROHIBIT THE USE OF WRITTEN CONSENT IN ACCORDANCE WITH SECTION 10-3704.

D. NOTWITHSTANDING the CONDOMINIUM documents, the quorum requirement for the annual meeting is ONE-TENTH OF THE TOTAL number of VOTES ENTITLED TO BE CAST UNLESS THE CONDOMINIUM DOCUMENTS SPECIFY A LESSer AMOUNT.

E. Notwithstanding subsection C of this section, an association for a timeshare plan as defined in section 32-2197 may permit allow votes by a proxy that is duly executed by a unit owner.

F. If the declaration requires that votes on specified matters affecting the condominium be cast by lessees rather than unit owners of leased units all of the following apply:

1. The provisions of Subsections A and B of this section apply to lessees as if they were unit owners.

2. Unit owners who have leased their units to other persons shall not cast votes on those specified matters.

3. Lessees are entitled to notice of meetings, access to records and other rights respecting those matters as if they were unit owners. Unit owners shall also be given notice, in the manner prescribed in section 33-1248, of all meetings at which lessees may be entitled to vote.

G. Unless the declaration provides otherwise, votes allocated to a unit owned by the association shall not be cast.

H. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

I. For the purposes of this section, "period of declarant control" means the time during which the declarant or persons designated by the declarant may elect or appoint the members of the board of directors pursuant to the condominium documents or by virtue of superior voting power. END_STATUTE

Sec. 3. Section 33-1804, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1804. Open meetings; exceptions; notice; directors' elections; policy statement

A. Notwithstanding any provision in the declaration, bylaws or other documents to the contrary, all meetings of the members' association and the board of directors, and any regularly scheduled committee meetings, are open to all members of the association or any person designated by a member in writing as the member's representative and all members or designated representatives so desiring shall be permitted allowed to attend and speak at an appropriate time during the deliberations and proceedings. The board may place reasonable time restrictions on those persons speaking during the meeting but shall permit allow a member or member's designated representative to speak once after the board has discussed a specific agenda item but before the board takes formal action on that item in addition to any other opportunities to speak. The board shall provide for a reasonable number of persons to speak on each side of an issue. Persons attending may audiotape or videotape those portions of the meetings of the board of directors and meetings of the members that are open. The board of directors of the association shall not require advance notice of the audiotaping or videotaping and may adopt reasonable rules governing the audiotaping and videotaping of open portions of the meetings of the board and the membership, but such rules shall not preclude such audiotaping or videotaping by those attending, unless the board audiotapes or videotapes the meeting and makes the unedited audiotapes or videotapes available to members on request without restrictions on its their use as evidence in any dispute resolution process. Any portion of a meeting may be closed only if that closed portion of the meeting is limited to consideration of one or more of the following:

2. Pending or contemplated litigation.

5. Discussion of a member's appeal of any violation cited or penalty imposed by the association except on request of the affected member that the meeting be held in an open session.

B. Notwithstanding any provision in the community documents, all meetings of the members' association and the board shall be held in this state. A meeting of the members' association shall be held at least once each year. Special meetings of the members' association may be called by the president, by a majority of the board of directors or by members having at least twenty-five percent, or any lower percentage specified in the bylaws, of the votes in the association. Not fewer than ten nor or more than fifty days in advance of any meeting of the members the secretary shall cause written notice to be hand-delivered or sent prepaid by United States mail to the mailing address for each lot, parcel or unit owner or to any other mailing address designated in writing by a member delivered to every member by at least one of the following methods:

1. In person.

2. By mail to the physical address of the member's lot or the alternate mailing address designated in writing by the member.

3. By email to the email address designated in writing by the member.

C. The notice shall state the date, time and place of the meeting. A notice of any annual, regular or special meeting of the members shall also state the purpose for which the meeting is called, including the general nature of any proposed amendment to the declaration or bylaws, changes in assessments that require approval of the members and any proposal to remove a director or an officer. The failure of any member to receive actual notice of a meeting of the members does not affect the validity of any action taken at that meeting.

D. E. Notwithstanding any provision in the declaration, bylaws or other community documents, for meetings of the board of directors that are held after the termination of declarant control of the association, notice to members of meetings of the board of directors shall be given at least forty-eight hours in advance of the meeting by newsletter, conspicuous posting or any other reasonable means as determined by the board of directors. An affidavit of notice by an officer of the corporation is prima facie evidence that notice was given as prescribed by this section. Notice to members of meetings of the board of directors is not required if emergency circumstances require action by the board before notice can be given. Any notice of a board meeting shall state the date, time and place of the meeting. The failure of any member to receive actual notice of a meeting of the board of directors does not affect the validity of any action taken at that meeting.

E. F. Notwithstanding any provision in the declaration, bylaws or other community documents, for meetings of the board of directors that are held after the termination of declarant control of the association, all of the following apply:

1. The agenda shall be available to all members attending.

3. A quorum of the board of directors may meet by means of a telephone conference if a speakerphone is available in the meeting room that allows board members and association members to hear all parties who are speaking during the meeting.

G. NOTWITHSTANDING ANY OTHER LAW OR any PROVISION IN THE community DOCUMENTS, THE FOLLOWING APPLY TO ALL DIRECTORS' ELECTIONS:

1. CUMULATIVE VOTING IS PROHIBITED.

2. NOMINATIONS FROM THE FLOOR ARE PROHIBITED.

4. For any meeting at which the election of directors occurs, the quorum requirement is ONE-TENTH OF THE TOTAL number of VOTES ENTITLED TO BE CAST UNLESS THE community DOCUMENTS SPECIFY A LESSer AMOUNT.

F. H. It is the policy of this state as reflected in this section that all meetings of a planned community, whether meetings of the members' association or meetings of the board of directors of the association, be conducted openly and that notices and agendas be provided for those meetings that contain the information that is reasonably necessary to inform the members of the matters to be discussed or decided and to ensure that members have the ability to speak after discussion of agenda items, but before a vote of the board of directors or members is taken. Toward this end, any person or entity that is charged with the interpretation of these provisions, including members of the board of directors and any community manager, shall take into account this declaration of policy and shall construe any provision of this section in favor of open meetings.END_STATUTE

Sec. 4. Section 33-1812, Arizona Revised Statutes, is amended to read:

START_STATUTE33-1812. Proxies; ballot requirements; definition

A. Notwithstanding any provision in the community documents, after termination of the period of declarant control, votes allocated to a unit lot may not be cast pursuant to a proxy. The association shall provide for votes to be cast in compliance with all of the following:

1. Votes shall be cast in person and by absentee ballot and, in addition, the association may provide for voting by some other form of delivery, including the use of e-mail and fax delivery. Notwithstanding section 10-3708 or the provisions of the community documents, any action taken at an annual, regular or special meeting of the members shall comply with all of the following if absentee ballots or ballots provided by some other form of delivery are used: if voting will occur at a meeting of the members or by written ballot without a meeting of the members.

2. The form of the absentee ballots or written ballots shall comply with all of the following:

1. (a) The ballot shall set forth each proposed action.

2. (b) The ballot shall provide an opportunity to vote for or against each proposed action, except in the case of an election of directors.

(d) THE BALLOT SHALL STATE THE PERCENTAGE OF APPROVAL NECESSARY FOR EACH PROPOSED ACTION OTHER THAN an ELECTION OF DIRECTORS.

3. (e) The absentee or written ballot is valid for only one specified election or meeting of the members, as applicable, and expires automatically after the completion of the election or meeting.

4. (f) The ballot specifies shall state the time and date by which the ballot must be delivered to the board of directors in order to be counted, which shall be at least seven days after the date that the board delivers the unvoted ballot is delivered to the member.

5. (g) The ballot does may not authorize another person to cast votes on behalf of the member.

6. (h) The completed ballot shall contain the name, address and either the actual or electronic signature of the person voting, except that if the community documents permit allow secret ballots, only the envelope shall contain the name, address and either the actual or electronic signature of the voter shall appear on the envelope or as part of the electronic means of submission.

3. THE ASSOCIATION SHALL DELIVER AN ABSENTEE BALLOT OR WRITTEN BALLOT TO EVERY member who is ELIGIBLE TO VOTE NOt LATER THAN ten DAYS BEFORE THE DATE THAT THE COMPLETED BALLOT MUST BE DELIVERED TO THE ASSOCIATION. DELIVERY OF AN ABSENTEE BALLOT OR WRITTEN BALLOT TO THE member MAY BE ACCOMPLISHED IN PERSON or BY MAIL OR SOME FORM OF ELECTRONIC DELIVERY AS DETERMINED BY THE BOARD.

4. THE METHOD OF DELIVERY OF ABSENTEE BALLOTS OR WRITTEN BALLOTS from the member TO THE ASSOCIATION MAY INCLUDE MAIL OR IN-PERSON DELIVERY TO A PERSON OR LOCATION DESIGNATED BY THE BOARD OR SOME FORM of ELECTRONIC DELIVERY, INCLUDING THE USE OF EMAIL, FAX OR AN ONLINE VOTING SYSTEM THAT COMPLIES WITH SECTION 10-3708.

5. ABSENTEE BALLOTS OR WRITTEN BALLOTS TIMELY DELIVERED TO THE ASSOCIATION SHALL COUNT TOWARD THE REQUIRED QUORUM FOR THE MEETING OR ELECTION, AS APPLICABLE.

7. 6. Ballots, envelopes and related materials, including sign-in sheets if used, shall be retained in electronic or paper format and made available for member inspection for at least one year after completion of the election or meeting.

B. Votes cast by absentee ballot or other form of delivery, including the use of e-mail and fax delivery, are valid for the purpose of establishing a quorum.

B. NOTWITHSTANDING the community documents, the quorum requirement for the annual meeting is ONE-TENTH OF THE TOTAL number of VOTES ENTITLED TO BE CAST UNLESS THE community DOCUMENTS SPECIFY A LESSer AMOUNT.

C. ThIS SECTION does not PROHIBIT THE USE OF WRITTEN CONSENT IN ACCORDANCE WITH SECTION 10-3704.

C. D. Notwithstanding subsection A of this section, an association for a timeshare plan as defined in section 32-2197 may permit allow votes by a proxy that is duly executed by a unit owner member.

D. E. For the purposes of this section, "period of declarant control" means the time during which the declarant or persons designated by the declarant may elect or appoint the members of the board of directors pursuant to the community documents or by virtue of superior voting power. END_STATUTE