Arizona HOA Fine Notice, Hearing and Appeal Rights

Under subsection B, the board of directors may impose a reasonable monetary penalty for violating the declaration, bylaws or rules only after notice and an opportunity to be heard. That notice itself must explain how the association will enforce the penalty if it goes unpaid. A payment toward a penalty counts as late once it is unpaid for 15 or more days after its due date, unless the community's own documents give members longer. Once a penalty is late, the board may add a charge, but that charge cannot exceed the greater of $15 or 10 percent of the unpaid penalty, and any money the member does pay is applied first to the principal penalty and only afterward to accrued interest (subsec. B).

The same section separately caps regular assessments: absent a lower cap in the community documents, the association cannot raise a regular assessment more than 20 percent above the prior fiscal year's assessment without majority member approval, and late-assessment charges are capped the same way, greater of $15 or 10 percent, once payment is 15 or more days overdue (subsec. A).

Members get a formal chance to push back. A member who receives a written violation notice, whether or not it carries a monetary penalty, may mail a certified response within 21 calendar days of the notice date (subsec. C). The association then has 10 business days to reply in writing with the violated provision, the date of the violation or when it was observed, the first and last name of whoever observed it, and the process for contesting the notice (subsec. D). If the association's original notice never described that contest process, subsection E bars it from taking any enforcement action, including collecting attorney fees, until that information is exchanged, and the association must tell the member in writing that they may petition the Arizona Department of Real Estate for an administrative hearing under A.R.S. § 32-2199.01. A member may file that petition at any point before or after the information exchange, provided the dispute falls within the department's jurisdiction.

An association that skips the notice-and-hearing step, or that omits the required contest process from its violation notice, loses its right to enforce that notice, including collecting attorney fees, until it corrects the omission under subsection D. Members who let a penalty or assessment go 15 or more days unpaid face a late charge capped at the greater of $15 or 10 percent; nothing in the statute allows a steeper penalty regardless of what the CC&Rs say.