A.R.S. 33-1806: HOA Resale Disclosure Rules in Arizona

When a unit in a planned community is being sold, the HOA has 10 days from notice of the pending sale to hand the buyer a disclosure packet, telling them exactly what they are walking into. That deadline, and everything it requires, comes from A.R.S. 33-1806, the statute that protects the buyer of a home inside an HOA. The statute also caps what the HOA can charge for that paperwork: no more than $400 total, collected once, and only at close of escrow. This is the section that stops a surprise after you move in.

The 10-day disclosure packet

The HOA has a short clock and a long list. Within 10 days after receiving written notice of a pending sale, it must deliver the disclosures, on paper or electronically. The statute sets the trigger:

within ten days after receipt of a written notice of a pending sale... the association or its agent shall provide to the purchaser of the property the information required by this section.

The packet has to include the recorded declaration, the bylaws, and the rules; a dated statement of any assessments currently owed on the property; the amount of common assessments and how often they are charged; details on the HOA's insurance; the reserve fund amount and the most recent reserve study; the current operating budget and the most recent annual financial report; any unmet alterations or violations the HOA has noticed on the property; and whether the HOA is in any pending litigation. In short, the buyer learns the dues, the rules, the money behind the HOA, and any problems already flagged on that specific home.

The fee cap

The HOA cannot turn a sale into a profit center. The total of its transfer-related fees, the resale disclosure fee plus any lien-estoppel or statement-of-account fee, is capped:

The association may charge the member a fee of not more than an aggregate of four hundred dollars to compensate the association for the costs incurred in the preparation of a statement or other documents furnished by the association pursuant to this section for purposes of resale disclosure.

On top of that $400 cap, the HOA may charge up to $100 for rush service if the documents are needed within 72 hours, and up to $50 for an update if 30 or more days have passed since the first statement. The fees can be collected no earlier than close of escrow and may be charged only once per transaction. If an HOA ignores these limits, it can face a civil penalty of up to $1,200. Some transactions are exempt, including sales covered by a public report, certain tax-related conveyances, and trustee (foreclosure) sales.

For example, if you buy a Carefree home in an HOA, the seller's HOA can charge you (through escrow) a transfer/disclosure fee of at most $400, plus up to $100 if you need the packet rushed within three days. A $750 "transfer fee" line item would violate the statute.

How it connects to the rest of the law

This buyer-facing disclosure pulls together documents defined elsewhere in the chapter. The "community documents" in the packet are defined in A.R.S. 33-1802 , the disclosed assessments are limited by A.R.S. 33-1803 , and any unpaid balance disclosed here can become the lien described in A.R.S. 33-1807 . As a member, you can independently verify the packet's numbers using your records-inspection right under A.R.S. 33-1805 . The whole point is to know the recorded CC&Rs before you close. If you plan to build or remodel after buying, 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. 33-1806 on azleg.gov .

How the disclosure rules apply to a specific sale depends on the facts, so confirm your situation with a qualified attorney before relying on it.