Arizona HOA Late Fees and Assessment Increases: ARS 33-1803

Quick answer: Under A.R.S. 33-1803, an Arizona planned community can't raise its regular assessment more than 20 percent over the prior fiscal year without approval from a majority of the members, unless the documents set a lower limit. A payment is late if it is unpaid 15 or more days after its due date (or a longer period in the documents), and the late charge is capped at the greater of $15 or 10 percent of the unpaid assessment. The association can impose it only after giving notice that the assessment is overdue. Payments go to principal first, then interest. Fines for violations require notice and an opportunity to be heard, and late charges on unpaid fines are capped the same way.

These rules shape every Arizona HOA's budget and collection policy. Here is what the statute says and how to put it into practice.

The 20 percent cap on assessment increases

A. Unless limitations in the community documents would result in a lower limit for the assessment, the association shall not impose a regular assessment that is more than twenty percent greater than the immediately preceding fiscal year's assessment without the approval of the majority of the members of the association.

Three practical notes:

• It applies to the regular assessment. Compare next year's regular assessment with the immediately preceding fiscal year's.
• Your documents may be stricter. If the declaration caps increases at, say, 10 percent, that lower limit controls.
• Above the cap needs member approval. Plan the vote early in the budget season. For how Arizona owners vote, see Arizona absentee ballot rules under ARS 33-1812.

If reserves are underfunded, it is usually better to raise assessments steadily under the cap than to face a large increase that needs a vote.

Late payments and late charges

The cap language, verbatim:

Charges for the late payment of assessments are limited to the greater of fifteen dollars or ten percent of the amount of the unpaid assessment and may be imposed only after the association has provided notice that the assessment is overdue or provided notice that the assessment is considered overdue after a certain date.

Example: on a $120 monthly assessment, 10 percent is $12, so the maximum late charge is $15. On a $400 quarterly assessment, 10 percent is $40, so up to $40.

The simplest way to satisfy the notice requirement is to state on every annual assessment notice and statement that payments are considered overdue after a specific day of the month.

Fines for violations

B. After notice and an opportunity to be heard, the board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association.

Late charges on unpaid fines follow the same greater-of-$15-or-10-percent cap, the same 15-day late rule, and the same principal-first application. The notice must also explain how the penalty will be enforced.

When an owner responds to a violation notice

Subsections C through E add a process:

1. An owner who receives a written violation notice about the condition of their property may respond by certified mail within 21 calendar days.
2. Within 10 business days after receiving that response, the association must send a written explanation with the provision allegedly violated, the date of the violation or observation, the first and last name of the person who observed it, and the process to contest the notice (unless the original notice already included these).
3. Unless the contest process was in the original notice, the association can't proceed with enforcement, including collecting attorney fees, during that exchange, and must tell the owner they can petition for an administrative hearing with the state real estate department under A.R.S. 32-2199.01.

Including all four items in the original violation notice avoids most of the delay.

A collection policy checklist for Arizona boards

1. Confirm the due date and the overdue date, and put both on every statement.
2. Set the late charge at no more than the greater of $15 or 10 percent of the unpaid assessment.
3. Apply payments to principal first, then interest.
4. Check next year's regular assessment against the 20 percent cap and any lower limit in your documents.
5. Use a violation notice template with the four items required by subsection D.

Delinquent balances also show up in resale packets; see our guide to Arizona HOA resale disclosure under ARS 33-1806. For the annual financial report, see ARS 33-1810 audit requirements, and for this year's changes, Arizona HOA Laws in 2026.

How Dynamite helps

Dynamite Management handles owner billing, statements and collections for associations in any state, including late charge setup that stays inside Arizona's limits. HOA Fiscal's budget template helps you check the 20 percent cap while you build next year's numbers.

FAQ

How much can an Arizona HOA raise dues? No more than 20 percent over the prior fiscal year's regular assessment without approval of a majority of the members, unless the community documents set a lower limit.

What is the maximum late fee an Arizona HOA can charge? The greater of $15 or 10 percent of the unpaid assessment, and only after notice that the assessment is overdue.

When is an Arizona HOA payment considered late? When it is unpaid 15 or more days after the due date, unless the community documents provide a longer period.

Can an Arizona HOA fine owners? Yes, after notice and an opportunity to be heard. Late charges on unpaid fines are capped at the greater of $15 or 10 percent of the unpaid penalty.

How must an Arizona HOA apply partial payments? To the unpaid principal first, then to accrued interest.

This is not legal advice. Confirm with the current text of A.R.S. 33-1803 and your association's attorney. Condominiums are governed by a separate statute.

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