Arizona Condo Due Diligence Checklist

Where Arizona due diligence deserves the most attention

Legal Framework

Condominiums: Governed by the Arizona Condominium Act, A.R.S. Title 33, Chapter 9 (§§33-1201 et seq.). Per A.R.S. §33-1201, the chapter applies to all condominiums created within Arizona regardless of the date created (some sections apply only prospectively to newer condos, but the Act broadly governs all condominiums). A “condominium” is real estate with portions designated for separate ownership (units) and the remainder for common ownership (common elements), created by a recorded declaration.

Reserve Studies and Reserve Funding

No reserve study or funding plan: Strong signal of deferred maintenance and likely future special assessments — especially acute given Arizona’s heat/UV-driven roof, paint, stucco, and HVAC wear.; Low reserve balance / low % funded: Even where legal, a thinly funded reserve (e.g., <30% of the industry-recommended range) implies undercollection and assessment risk.; Study omits major components: Heat-exposed roofs, HVAC, re-pipe needs, pools, and parking decks are the costliest Arizona items; omission understates need.; Budget shows no reserve line: A bud…

Structural Inspections and Building Safety

Arizona has no statewide milestone/recertification inspection law for condominiums. There is no Arizona equivalent of Florida’s SB-4D milestone inspections / structural-integrity reserve studies, NYC Local Law 11/FISP, or California SB-326/SB-721 balcony laws. Building safety is handled through ordinary local building/fire codes administered by each city/county (the AHJ), and Arizona has no single statewide building code — jurisdictions adopt and amend model I-Codes (IBC/IRC) independently.

Insurance Requirements and Insurance-Market Risk

Property insurance on the common elements (and on units if the documents require) against all risks of direct physical loss, in an amount not less than 80% of actual cash value at purchase and each renewal (excluding land, foundations, excavation, and normally excluded items).; Liability insurance in an amount set by the board (not less than any amount in the declaration) covering occurrences arising from the common elements.; Each unit owner is an insured with respect to liability arising from their interest in the common elements; the insurer waives su…

Resale Disclosures and Buyer Cancellation Rights

Arizona requires the association to furnish a resale disclosure packet. Under §33-1260 (condominiums) and §33-1806 (planned communities), once the association (50+ units/lots) or the selling unit owner (smaller communities) receives written notice of a pending sale, the disclosure documents must be delivered within 10 days.

Assessments, Special Assessments, and Borrowing

Planned communities (§33-1803): Statute limits regular assessment increases — the association shall not impose a regular assessment more than 20% greater than the prior fiscal year without member approval. This is a real statutory cap for HOAs.; Condominiums (§33-1242): The Condominium Act contains no equivalent statutory 20% cap. (A 20% cap for condos has been proposed in recent sessions — e.g., HB2083 / HB2442 — but is not enacted as of 2026.