Scottsdale HOAs and Master-Planned Communities: What to Know

If you buy in one of Scottsdale's master-planned communities, you will almost certainly join at least one homeowners association, and sometimes two or three. Each one can set assessments, maintain shared spaces and approve what your home looks like from the street. Arizona law requires a disclosure package before closing, and reading it closely is the best way to know what you are agreeing to.

What an HOA is

A homeowners association is an organization of owners that manages a community under recorded documents. In Arizona, planned communities are governed by the Planned Communities Act (Title 33, Chapter 16 of the Arizona Revised Statutes), and condominiums by the Condominium Act (Title 33, Chapter 9).

The core documents are usually:

• The declaration, often called the CC&Rs (covenants, conditions and restrictions), recorded against the property and binding on every owner.
• The bylaws, which set how the board is elected and how meetings and votes work.
• Rules and design guidelines, which the board or a design committee adopts to carry out the CC&Rs.

Master associations and sub-associations

Large communities often stack associations. A master association covers the whole community: entry features, major landscaping, community centers, trails and community-wide standards. A sub-association covers one neighborhood within it and may handle a gate, private streets, front-yard landscaping or a shared pool. Owners in a sub-association typically belong to, and pay, both.

DC Ranch shows how layered this can get, with three main entities:

• The Community Council runs recreational, educational, cultural and volunteer programs and operates community amenities.
• The Ranch Association manages shared assets, including landscape, maintenance and security.
• The Covenant Commission sets architectural and landscape standards and reviews design submissions.

On top of those, ten DC Ranch neighborhoods are managed by their own sub-associations.

McCormick Ranch, one of Scottsdale's earlier master-planned communities, is governed by the McCormick Ranch Property Owners' Association, incorporated in 1972. The association lists about 184 acres of common areas and about 120 acres of lakes, and it maintains more than 2,500 mature trees in common areas and in city medians under long-standing agreements with the City of Scottsdale. It publishes separate governing documents for residential properties west of Pima Road and the Loop 101 and for the commercial McCormick Ranch Center to the east.

What HOAs commonly cover

Coverage depends on each association's documents, but you will often see:

• Landscaping of common areas, entries, medians and streetscapes
• Gates, guard staffing and patrols, where a community has them
• Community centers, pools, fitness rooms and courts
• Parks, paths and trail connections
• Lakes and water features
• Private streets and common-area lighting
• Design review and covenant enforcement

What is inside your lot line is usually your responsibility in a single-family home. Condominiums and some townhome communities work differently, with the association maintaining roofs, exteriors or more. The declaration spells out who maintains what.

CC&Rs and design review

CC&Rs often regulate the parts of a home people can see: exterior paint, roofing, walls, gates, landscaping, lighting, parking and signage. Many also address leasing, pets and home businesses. Design review is how the association applies those rules to specific projects.

In DC Ranch, for example, new custom homes go through a multi-step review with the Covenant Commission, including preliminary and final design review. Exterior colors are approved in the field after they are painted on large sample panels. A Certificate of Covenant Compliance is required before an owner applies for a City of Scottsdale building permit, and changes to existing homes also require Commission forms.

Keep in mind that association approval and city approval are separate. In north Scottsdale, the city's Environmentally Sensitive Lands rules also limit how much of a lot can be disturbed, whatever the CC&Rs say.

What Arizona says you receive

For planned communities, A.R.S. 33-1806 sets out the information that must be provided when a home is resold, and A.R.S. 33-1260 covers condominiums. In general terms, current law works like this:

• Timing. In smaller associations (fewer than 50 properties), the seller provides the information within ten days after accepting an offer. In larger ones, the seller notifies the association of the accepted offer and the buyer's contact details, and the association provides the information within ten days of that notice.
• What the package includes. Current bylaws and rules; the declaration and plat; recent board meeting minutes; a dated statement covering regular and special assessments, transfer fees, the most recent income and expense statement and any unresolved violations on the property; the operating budget; the most recent annual audit, review or compilation; the most recent reserve study, if there is one; a summary of pending lawsuits naming the association; and whether the developer still controls the association.
• Summaries. Long reports can be summarized, and you have the right to request the full version.
• More than one association. If several associations govern the property, the package must identify each one.
• Your acknowledgment. You sign a statement at closing confirming that you will be bound by the recorded covenants and must pay assessments.

These statutes have been amended over time, so read the current text on the Arizona Legislature's website. Your purchase contract may also set its own deadline for reviewing association documents, so check its terms. This is general information, not legal advice. If something in the package concerns you, ask the association directly or consult a qualified Arizona attorney before your review period ends.

If a dispute arises after you buy, the Arizona Department of Real Estate accepts HOA dispute petitions and forwards them to the Office of Administrative Hearings, though the department does not regulate or investigate associations.

Questions to ask before you buy

• How many associations govern this property, and what does each one assess and how often?
• Are any special assessments planned or under discussion?
• When was the last reserve study, and what did it recommend?
• Are there pending lawsuits, and what do they involve?
• Are there open violations on this specific home?
• What are the leasing rules, including minimum terms?
• What exterior changes need design approval, and how long does review take?
• What does the association maintain, and what is the owner's responsibility?
• Is the developer still in control, and when does that end?

Read it like an owner

The disclosure package tells you how a community actually runs: what it spends, what it is saving for and what it expects from you. Read it as the place you will live, and ask your questions while you still have time to act on them.