Homeowners across Arizona are opening their mail or logging into HOA portals and seeing something that immediately raises alarms: a sharp increase in assessments. Monthly dues jump. Annual assessments spike. Sometimes the increase is explained vaguely. Sometimes it is not explained at all. And almost inevitably, the same question follows: Can they really do this?
The confusion is understandable. Arizona HOAs are governed by a mix of state statutes and private governing documents, and those two sources of authority do not always line up cleanly. Many homeowners flip straight to their CC&Rs, find language about a “Maximum Annual Assessment,” see that the new number is technically below that ceiling, and assume the analysis ends there. Boards often take the same view.
In reality, that is only half the picture. Arizona law imposes its own limits on assessment increases, and compliance with the CC&Rs alone does not automatically mean the increase is lawful. The phrase “staying under the maximum” sounds reassuring, but it does not answer the most important legal question: how fast did the assessment increase compared to last year?
Why HOA Assessment Increases Cause So Much Confusion
Rising insurance premiums, deferred maintenance, and reserve shortfalls have pushed many Arizona HOAs toward aggressive budget increases in recent years. For homeowners, the shock is not just the dollar amount, but the speed of the change. A modest assessment one year can become significantly higher the next, with little warning.
Part of the confusion comes from the overlap between Arizona statutes and HOA governing documents. CC&Rs often read like the final authority on assessments, but they are not the only source of law. Arizona statutes impose independent requirements that apply even when the governing documents seem to allow an increase.
This disconnect leads to repeated disputes over whether an HOA “followed the rules,” and more importantly, which rules actually matter.
Arizona’s Statutory Rule on Assessment Increases
Arizona Revised Statute § 33-1803(A) places a clear limit on how much a regular assessment may increase without homeowner approval. The statute does not prohibit assessment increases, but it does regulate the pace at which they occur.
Specifically, if a regular assessment increases by more than twenty percent compared to the prior year, the association must obtain approval from the membership. Without that approval, the increase exceeds the board’s authority.
This rule is often misunderstood. The statute does not create a permanent cap on assessments. It does not freeze dues at a particular level. And it does not prevent large increases altogether. With proper member approval, assessments may rise well beyond twenty percent. What the statute requires is owner participation when increases cross that threshold.
Just as important is what the statute does not say. It does not defer to CC&Rs. It does not say that a contractual “maximum assessment” replaces the statutory limit. And it does not provide exceptions simply because an increase feels necessary or urgent.
The Role of “Maximum Annual Assessment” Language in CC&Rs
Most Arizona HOA CC&Rs contain some form of maximum assessment provision. These clauses typically establish an initial assessment amount, permit automatic increases by a fixed percentage or CPI, and allow higher increases only with approval from the membership, often by a supermajority.
From a contractual standpoint, these provisions make sense. They place a ceiling on how high assessments can go without owner consent and provide some predictability over time. Boards rely heavily on this language because it is familiar and embedded directly in the governing documents.
But there is a critical distinction that often gets lost: a ceiling on the amount of an assessment is not the same thing as a limit on the rate of increase. CC&Rs answer how high assessments may eventually go. Arizona statutes regulate how quickly they can get there.
Why CC&R Compliance Alone May Still Violate Arizona Law
Arizona law does not treat statutes and CC&Rs as interchangeable. Associations must comply with both. When a board raises assessments dramatically in a single year but remains below the contractual maximum, that does not end the analysis.
The statutory limit and the CC&R limit operate together. One does not cancel out the other. A board cannot bypass the statutory voting requirement simply because the governing documents allow assessments to reach a certain dollar amount.
This is where many HOAs run into trouble. Staying under the maximum assessment feels safe, but it does not address whether the increase exceeded the twenty-percent statutory cap without homeowner approval.
Sub-Associations, Home Types, and Multiple Assessments
Assessment disputes become even more complicated in communities with sub-associations, attached and detached homes, or different classes of lots. Townhomes, courtyard homes, and condominiums within a larger planned community often pay different assessments and fund different maintenance obligations.
A common HOA argument is that the statutory cap does not apply because the assessment does not affect all lots equally. That argument is appealing, but it is not supported by the statute itself.
Arizona law does not define a regular assessment as one that applies uniformly across every lot. The key question is not who pays it, but how it functions. An assessment can still be “regular” even if it applies only to a subset of owners.
Why Labels Don’t Control: Substance Over Form
Courts and practitioners evaluating HOA assessments focus on substance, not terminology. Calling a charge a “special assessment” or a “sub-association fee” does not determine whether it is legally a regular assessment.
Recurring charges that appear year after year, are included in the operating budget, and fund ordinary expenses like insurance, maintenance, or reserves are strong candidates for treatment as regular assessments. By contrast, one-time charges tied to a specific project or unexpected expense are more likely to fall outside that category.
Renaming a recurring charge does not change its legal character. The analysis turns on how the assessment actually operates.
Practical Questions Homeowners Should Ask About an Increase
When faced with a large assessment increase, homeowners should focus on facts rather than assumptions. Comparing last year’s assessment to the current year’s amount is the starting point. If the increase exceeds twenty percent, the next question is whether the association obtained the required member approval.
It also matters whether the charge is recurring or tied to a specific project, whether the HOA documented its calculations, and whether the increase reflects real cost drivers such as insurance or deferred maintenance. Documentation, transparency, and process matter as much as the final number.
Strategic Considerations Before Challenging an HOA Assessment
Not every questionable assessment increase should immediately lead to litigation. Reviewing budgets, reserve studies, insurance invoices, and meeting minutes often clarifies whether the issue is a legal violation or a communication failure.
In some cases, a corrected vote or revised budget may resolve the problem. In others, particularly where large sums or long-term precedent are involved, a legal challenge may be appropriate. The key is understanding the facts before escalating.
Assessment Disputes Are Fact-Specific
There is no single rule that answers every HOA assessment dispute in Arizona. Staying under a contractual maximum does not automatically make an increase lawful, and exceeding twenty percent does not automatically make it invalid if proper approval was obtained.
What matters is careful document review, an understanding of how statutory limits and CC&Rs interact, and resisting the assumption that any one provision tells the whole story. Homeowners and boards alike benefit from getting informed guidance before assuming an assessment increase is either valid or invalid.
What about Condominiums in Arizona?
Condominium communities in Arizona are governed by a different statute than planned communities, primarily A.R.S. § 33-1256. While the structure is similar — including limits on assessment increases and owner-approval requirements — the statutory language is not identical.
As a result, analysis that applies to planned communities does not automatically transfer to condominiums. Condo declarations often allocate expenses differently, and the statutory thresholds and procedures for owner approval can vary.
The takeaway is not that condominiums are exempt from limits on assessment increases, but that they require a separate, statute-specific analysis. Condo owners should not assume that rules applicable to planned communities apply wholesale to their association.