Rep. Ken Clark’s bill, HB2321, which would bar homeowner association members from combining their voting rights to choose a single board member, won bipartisan support, passing in both the House and Senate unanimously.
On Friday, Governor Doug Ducey dissed Clark and HOA residents by vetoing the much needed legislation.
In his veto letter, Ducey claimed that it isn’t the government’s role to regulate how homeowner associations vote.
An HOA is a common interest organization to which all the owners of lots in a planned community must belong. Similarly, a UOA is a common interest organization to which all owners of a unit in a condominium must belong. The four defining characteristics of all HOAs and UOAs are: 1) all owners are automatically members; 2) governing documents create mutual obligations; 3) mandatory fees or assessments are generally levied against owners and used for the operation of the association; and 4) owners share a property interest in the community (A.R.S. §§ 33-1202, 33-1802).
According to the Arizona Constitution, corporations include all associations and joint stock companies. In elections for directors or managers of any corporation, each shareholder has the right to cast as many votes in aggregate as he or she is entitled to vote under the charter of the company, multiplied by the number of directors or managers to be elected. Each shareholder may cast the whole number of votes, either in person or by proxy, for one candidate, or distribute such votes among two or more such candidates (Article 14 §§ Section 1, Section 10).
Nonprofit corporations’ statutes stipulate cumulative voting for directors may be used if outlined in the articles of incorporation or bylaws and require the meeting notice or a statement accompanying the notice to clearly state that cumulative voting is authorized (A.R.S. § 10-3725).
The period of declarant control terminates no later than the earlier of either 90 days after the conveyance of 75 percent of the units or four years after all declarants have ceased to offer units for sale in the ordinary course of business (A.R.S.§ 33-1243). A declarant is any person or group of persons designated by the declaration of a planned community with certain rights, including the right to construct improvements or exercise development rights (A.R.S. § 33-1202).
For the purpose of electing the Board the 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 pursuant to the condominium documents or virtue of voting power (A.R.S. §§ 33-1250, 33-1812).