Highlights

Condominium groups or associations are governed by a legal process that dictates who is responsible to oversee the combined interests of their organization. The Arizona Revised Statutes (A.R.S.) 33-1243 grants the Board of Directors the broad power to act in all instances on behalf of the association to manage the community and enforce its rules.

Furthermore, under A.R.S. § 32-2199.01, Arizona law officially establishes that condominium governing documents—including CC&Rs, By-Laws, and Rules and Regulations—are legally binding contracts. This statute provides a formal dispute process through the Arizona Department of Real Estate where administrative law judges have the explicit authority to compel both homeowners and boards to comply with the applicable law and COA governing documents.

Fiduciary Responsibility

The value of our properties comes first in any discussion for COAs. Values are controlled in part by maintenance and visual appeal. So, the values are directly related to what the Board of Directors is allowed to do, contract, and spend. That means we need written policies, budgets and meetings to have funds for the upkeep of the property, limits as to what the Board of Directors can do, and meetings so all the community can be kept informed as to what is being accomplished in their community.

This means that the Board of Directors is under a strict legal and ethical obligation to put the communities' financial and legal interests ahead of the Board members' personal interests.

Budgets

Budgets are the backbone of the community. Without sound financial direction, the community will eventually face severe issues such as not able to pay bills, not able to make emergency repairs, or not able to plan for the future. 

Communities under-budgeted attempt to keep homeowners happy with a lower monthly assessment but face using emergency assessments that can put the community in financial hardship as not all homeowners can budget an addition expense on short notice.

Budgets include expected income from assessments, expected monthly expenditures such as utilities and landscaping, and long term reserve accounts to save for large expenses in the future such as painting or roofing.

A zero-balanced budget provides the Board of Trustees a financial pathway with less stress to cover the monthly expenses and know funds should be available in the future for those large projects that cannot be paid for in short notice.

Documents

The COA community is governed by multiple laws such as Federal Law, State Law, County Regulations including the Articles of Incorporation, as well as COA specific CC&Rs, By-Laws, and Rules or Policies. The first three are general guidelines that are used to create our documents and protect against discrimination, provide guidance for managing expectations, and property use. We will focus on the last three that affect us after the rules are created or if we need to modify our rules.

Condominium CC&Rs stand for the Declaration of Covenants, Conditions, and Restrictions. It is a legally binding document officially recorded with the county clerk or recorder's office that establishes the foundational rules, property rights, and maintenance obligations for everyone living within that specific condominium community.

The CC&Rs are often referred to as the "Constitution of the COA." These give an overview of expectations and can only be changed by a minimal vote of 67% of all the voters in the community. 

The By-Laws give direction to the Board of Trustees as to becoming a Board member, expectations for monetary control,