Arizona HOA assessment increase cap

Arizona Revised Statutes 33-1803 puts a number on dues increases in a planned community. The board may not impose a regular assessment that is more than 20 percent greater than the immediately preceding fiscal year's assessment unless a majority of the members approve it. If the community documents set a lower limit, that lower limit applies instead.

Two boundaries matter. This is a planned-community rule; Arizona condominium associations have no statutory percentage cap, so a condo board can set assessments at the level it determines necessary. And the cap is on the regular assessment, not on special assessments, which follow their own rules in the governing documents.

Dues are a monthly cost you take on at closing, and their trend is part of the deal. The 20 percent cap tells you the most a planned-community board can raise regular dues on its own, but it does not stop a bigger increase if the members vote for it. Reading the budget and the recent assessment history tells you whether the association is keeping up with its costs or heading for a jump.

Read these together before you make an offer:

• Whether the community is a planned community (where the cap applies) or a condominium (where there is no statutory cap).
• The recent assessment history, for how fast dues have risen year over year.
• The budget and reserve funding, since underfunded reserves push dues and special assessments up.
• Any member vote on the record approving an increase above 20 percent.

A planned community pressing against the 20 percent cap, or a condo with no cap at all and thin reserves, is a budget risk that follows you after closing.

An HOA Notes brief reads the budget, the reserve study, and the assessment history together, flags the dues trend and any looming increase, and cites the page behind every finding.

Arizona Revised Statutes section 33-1803(A) (Annual assessment increase cap (planned communities only)). For planned community associations only, the annual assessment increase is capped at 20% above the prior fiscal year's assessment without a member vote; any increase above 20% requires approval by a majority of members present at a properly noticed meeting at which a quorum is present; this cap DOES NOT apply to condominium associations, which have no statutory percentage cap. The association may raise assessments up to 20% above the prior year's assessment by board action alone; it may raise above 20% with required member approval; condominium associations may set assessments at any level the board determines necessary.

When you read the disclosure packet, watch for the board may increase assessments in any amount it deems necessary without member vote, and annual assessment increases are at the board's sole discretion with no cap. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.