New Bill Could Protect Renters From Risky Foreclosure Properties


Our legislature has been busy this session enacting new statutes that pertain to real estate.

In a previous session, the legislature passed legislation (ARS 33-441) which prohibited Home Owner Associations (HOA’s) from disallowing real estate “for sale” signs in their communities as long as they were in compliance with the statute.

In the latest session, House Bill 2345 (HB 2345 effective July 29) was passed and signed by the governor. It prohibits HOA’s from forbidding temporary open house signs except in common areas. The law also reinforces the previous law and states HOA’s are “also prohibited from regulating a property owner’s “for sale” signs that conforms to the industry standards and are owned or used by the seller or seller’s agent, nor can they require a particular sign.” One exemption to the law is if the property has a deed restriction against signage. There are still HOA’s in Arizona trying to restrict “For Sale” signage. It is rumored that the Arizona Association of Realtors may institute a legal test case to assure that all Arizona HOA’s comply with the law.

Other bills passed by the legislature that will go into effect on July 29 are:

HB2371: This bill adds swimming pools and spas that are included in the list of items that a certified home inspector is to examine during a home inspection process. HB2768: This bill prohibits private transfer fees to be paid to developers or third-party companies on the sale of real property. Note that government-imposed transfer fees are already prohibited by the 2008 constitutional amendment passed by the voters.

One important bill awaiting the governor’s signature is HB2766. The bill states that if a landlord of a residential property of not more than four connected units that is under foreclosure leases a unit, the landlord must provide each tenant with written notice of possible foreclosure. Form of the notice is prescribed and includes, if known, the date, time and place of the foreclosure sale. If a landlord fails to comply with the notice requirement, the tenant may deliver a notice of breach of agreement and recover damages and obtain injunctive relief. This is an important bill for renters.

Some unscrupulous landlords have allowed renters to move in knowing of a pending foreclosure. After the foreclosure proceeding, the unsuspecting renter may be forced to relocate and pay moving expenses.

Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.


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