A.R.S. 33-1803: HOA Assessment Caps and Late Fees in Arizona

How fast dues can climb and how much you get charged when a payment is late are two of the biggest worries for any HOA owner, and A.R.S. 33-1803 puts hard limits on both. The HOA cannot raise your regular assessment more than 20 percent in one year without a member vote, and it cannot charge a late fee bigger than $15 or 10 percent of the unpaid amount, whichever is greater. The section also forces the HOA to give you notice and a chance to respond before it fines you. Here is how each rule works.

The 20 percent cap on dues increases

An HOA budget can grow, but this statute stops a board from spiking your dues overnight. The regular assessment (your normal monthly or annual HOA dues) cannot jump more than 20 percent above last year's number unless a majority of members approve it. The statute states it plainly:

Unless limited by the declaration, the association shall not impose a regular assessment that is more than twenty percent greater than the immediately preceding fiscal year's assessment without the approval of the majority of the members of the association.

Two things to notice. First, your own declaration (your CC&Rs) can set a tighter limit, and if it does, that lower number wins. Second, the 20 percent figure is the ceiling on a board acting alone. Above it, the board must take the increase to a vote. For example, if your Fountain Hills HOA charges $1,000 a year, the board can raise it to as much as $1,200 the next year on its own. To go to $1,300, it needs a majority vote of the members.

The late-fee limit

If you miss a payment, the penalty is capped. A payment is late once it is 15 or more days past due, and the late charge is limited to the greater of $15 or 10 percent of the unpaid assessment:

A payment by a member is deemed late if it is unpaid fifteen or more days after its due date... A late fee... shall not exceed the greater of fifteen dollars or ten percent of the amount of the unpaid assessment.

So on a $90 missed payment, 10 percent is $9, which is less than $15, so the most the HOA can charge is $15. On a $400 missed payment, 10 percent is $40, so the cap is $40. Interest and reasonable collection costs can be added on top under your documents, but the flat late penalty itself stays inside this limit.

Notice before a fine

The HOA cannot fine you for a rule violation without telling you first and letting you respond. Before it imposes a monetary penalty, the board has to give notice and an opportunity to be heard. After that, a written notice has to name the specific provision you allegedly violated, the date of the violation, and how to contest it. You then have 21 calendar days to send a written response, and during that exchange the HOA is not allowed to push ahead with enforcement.

For example, if your Cave Creek HOA claims your new fence color breaks the design rules, it must send you a notice that quotes the rule and dates the violation, give you 21 days to answer in writing, and hold off on any fine or enforcement action until that window closes.

How it connects to the rest of the law

This section works alongside the lien power in A.R.S. 33-1807 : unpaid assessments and the late fees allowed here can become a lien on your lot, and large, long-running balances can eventually lead to foreclosure. The "notice and opportunity to be heard" idea here mirrors the open process the HOA owes you at meetings under A.R.S. 33-1804 . The dues and fees an HOA can charge all trace back to the recorded CC&Rs defined in A.R.S. 33-1802 . If you are budgeting for a custom-home lot inside an HOA, also read how HOA design review affects building a custom home .

Full text and source

Read the current version, including any amendments, on the legislature's site: View A.R.S. 33-1803 on azleg.gov .

How these limits apply to your HOA depends on your recorded documents, so confirm your situation with a qualified attorney before relying on it.