In January of 1998, the new nonprofit corporation code passed by the Arizona State Legislature became effective. While the new code clarified many issues, a number of its provisions were ambiguous with respect to condominium associations and planned communities, and several provisions were in direct contradiction to the normal operation of condominium associations and planned communities.

Through the efforts of the Arizona Legislative Action Committee of the Community Associations Institute, several of the most troublesome of the new code provisions were amended during the most recent regular legislative session.

Section 10-3613 of the new code was amended to provide that the express or implied consent to the imposition of dues, assessments and fees now required is provided for a member of a condominium association or planned community association by the association's declaration.

Section 10-3620 was amended to exclude condominium associations and planned communities from the provision granting members of general nonprofit corporations the right to resign from the association.

Section 10-11602, which deals with the examination of the books and records of the association, was amended in several ways.

The Nonprofit Corporation Code, the Condominium Act and the Planned Communities Act have each had provisions relating to the examination of books and records of associations which were organized as nonprofit corporations. The relationship of the various provisions to each other has been unclear.

This amendment resolves the conflicts by deleting the provisions regarding books and records from the Condominium Act and the Planned Communities Act, and including the provisions specific to condominium and planned community associations in the Nonprofit Code.

Certain books and records are required to be maintained by the association and are to be made available for inspection by a member on five business days written notice. These include such items as general corporate documents and minutes of open board and members' meetings. Other records, including accounting and membership information, may only be obtained when requested in good faith with a proper purpose and only when the member requests particular records directly connected to the stated purpose.

In addition, unless the board of directors provides express permission to a member, condominium and planned community associations may keep the following records confidential and are not required to provide them to members as with other records:

2. Association attorney-client communications.

3. Records relating to pending or contemplated litigation.

4. Pending or contemplated matters relating to enforcement of the association's documents or rules.

5. Records of executive sessions of board of members' meetings.

These amendments eliminated some major potential problems with the new code for associations and removed some existing ambiguities between the Nonprofit Code end the Condominium Act and the Planned Communities Act.

Dyekman, Curtis,

Cohen & Karow, P.L.C.

6750 East Camelback Road, Suite 104

Scottsdale, Arizona 85251 (602) 481-0202 (602) 481-0555 (Fax)