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State Codes and Statutes

State Codes and Statutes

Statutes > Arizona > Title33 > 33-1243

33-1243. Board of directors and officers;
conflict; powers; limitations; removal; annual audit;
applicability


A. Except as provided in the declaration, the bylaws, subsection B or other
provisions of this chapter, the board of directors may act in all instances on behalf of
the association.


B. The board of directors shall not act on behalf of the association to amend the
declaration, terminate the condominium, elect members of the board of directors or
determine the qualifications, powers and duties or terms of office of board of directors
members. The board of directors may fill vacancies in its membership for the unexpired
portion of any term.


C. If any contract, decision or other action for compensation taken by or on behalf
of the board of directors would benefit any member of the board of directors or any
person who is a parent, grandparent, spouse, child or sibling of a member of the board of
directors or a parent or spouse of any of those persons, that member of the board of
directors shall declare a conflict of interest for that issue. The member shall declare
the conflict in an open meeting of the board before the board discusses or takes action
on that issue and that member may then vote on that issue. Any contract entered into in
violation of this subsection is void and unenforceable.


D. Except as provided in the declaration, within thirty days after adoption of any
proposed budget for the condominium, the board of directors shall provide a summary of
the budget to all the unit owners. Unless the board of directors is expressly authorized
in the declaration to adopt and amend budgets from time to time, any budget or amendment
shall be ratified by the unit owners in accordance with the procedures set forth in this
subsection. If ratification is required, the board of directors shall set a date for a
meeting of the unit owners to consider ratification of the budget not fewer than fourteen
nor more than thirty days after mailing of the summary. Unless at that meeting a majority
of all the unit owners or any larger vote specified in the declaration rejects the
budget, the budget is ratified, whether or not a quorum is present. If the proposed
budget is rejected, the periodic budget last ratified by the unit owners shall be
continued until such time as the unit owners ratify a subsequent budget proposed by the
board of directors.


E. The declaration may provide for a period of declarant control of the
association, during which period a declarant or persons designated by the declarant may
appoint and remove the officers and members of the board of directors. Regardless of the
period provided in the declaration, a period of declarant control terminates no later
than the earlier of:


1. Ninety days after conveyance of seventy-five per cent of the units which may be
created to unit owners other than a declarant.


2. Four years after all declarants have ceased to offer units for sale in the
ordinary course of business.


F. A declarant may voluntarily surrender the right to appoint and remove officers
and members of the board of directors before termination of the period prescribed in
subsection E, but in that event the declarant may require, for the duration of the period
of declarant control, that specified actions of the association or board of directors, as
described in a recorded instrument executed by the declarant, be approved by the
declarant before they become effective.


G. Not later than the termination of any period of declarant control the unit
owners shall elect a board of directors of at least three members, at least a majority of
whom must be unit owners. The board of directors shall elect the officers. The board
members and officers shall take office upon election.


H. Notwithstanding any provision of the declaration or bylaws to the contrary, the
unit owners, by a majority vote of members entitled to vote and voting on the matter at a
meeting of the members called pursuant to this section at which a quorum is present, may
remove any member of the board of directors with or without cause, other than a member
appointed by the declarant. For purposes of calling for removal of a member of the board
of directors, other than a member appointed by the declarant, the following apply:


1. In an association with one thousand or fewer members, on receipt of a petition
that calls for removal of a member of the board of directors and that is signed by the
number of persons who are entitled to cast at least twenty-five per cent of the votes in
the association or one hundred votes in the association, whichever is less, the board
shall call and provide written notice of a special meeting of the association as
prescribed by section 33-1248, subsection B.


2. Notwithstanding section 33-1248, subsection B, in an association with more than
one thousand members, on receipt of a petition that calls for removal of a member of the
board of directors and that is signed by the number of persons who are entitled to cast
at least ten per cent of the votes in the association or one thousand votes in the
association, whichever is less, the board shall call and provide written notice of a
special meeting of the association. The board shall provide written notice of a special
meeting as prescribed by section 33-1248, subsection B.


3. The special meeting shall be called, noticed and held within thirty days after
receipt of the petition.


4. For purposes of a special meeting called pursuant to this subsection, a quorum
is present if the number of owners to whom at least twenty per cent of the votes or one
thousand votes, whichever is less, are allocated is present at the meeting in person or
as otherwise permitted by law.


5. If a civil action is filed regarding the removal of a board member, the
prevailing party in the civil action shall be awarded its reasonable attorney fees and
costs.


6. The board of directors shall retain all documents and other records relating to
the proposed removal of the member of the board of directors for at least one year after
the date of the special meeting and shall permit members to inspect those documents and
records pursuant to section 33-1258.


7. A petition that calls for the removal of the same member of the board of
directors shall not be submitted more than once during each term of office for that
member.


I. For an association in which board members are elected from separately designated
voting districts, a member of the board of directors, other than a member appointed by
the declarant, may be removed only by a vote of the members from that voting district,
and only the members from that voting district are eligible to vote on the matter or be
counted for purposes of determining a quorum.


J. Unless any provision in the condominium documents requires an annual audit by a
certified public accountant, the board of directors shall provide for an annual financial
audit, review or compilation of the association. The audit, review or compilation shall
be completed no later than one hundred eighty days after the end of the association's
fiscal year and shall be made available upon request to the unit owners within thirty
days after its completion.


K. This section does not apply to timeshare plans or associations, or the period of
declarant control under timeshare instruments, that are subject to chapter 20 of this
title.