Gallery Comunity Ass'n v. K. Hovnanian at Gallery, LLC, No. 1 CA-CV 23-0375 (App. Div. I, August 6, 2024) (J. Jacobs) https://www.azcourts.gov/Portals/0/OpinionFiles/Div1/2024/1%20CA-CV%2023-0375%20Gallery%20v.%20K.%20Hovnanian.pdf

A.R.S. § 33-2002(A) AUTHORIZES HOA TO BRING LAWSUIT FOR STRUCTURAL DEFECTS ON COMMON AREAS OWNED BY HOA FOR BREACH OF IMPLIED WARRANTY OF WORKMANSHIP AND HABITABILITY

The Gallery Community is a group of townhomes designed and built by defendant and managed by a Homeowner's Association [HOA] governed by Declaration of Covenants, Conditions, Restrictions, and Easements [Declaration]. Common areas in the development were conveyed to the HOA and the Declaration gives the HOA control and the obligation to maintain them as well as the exterior walls on the townhomes.  The HOA sued the defendant for construction defects in the structures in the common areas and the exterior walls alleging breach of the implied warranty of workmanship and habitability. The trial court granted defendant's motion for summary judgement because the HOA is not a homeowner and the common areas are not homes. The Arizona Court of Appeals vacated and remanded.

 Arizona Revised Statute § 33-2002(A) provides that, after performing certain conditions no one disputes were performed here, “a homeowners' association may file a homeowners' association dwelling action . . .”

  A homeowners' association dwelling action” is any action involving a

construction defect as defined in section 12-1361 filed by a homeowners'

association arising out of or related to the design, construction, condition or

sale of the dwelling.” A.R.S. § 33-2001(5). Significantly, the legislature

defined “dwelling” broadly, to include not only “a newly constructed

single family or multifamily unit designed for residential use,” but also

“property and improvements that are either owned by a homeowners'

association or jointly by all of the members of a homeowners' association.”

A.R.S. § 33-2001(2).

A.R.S. § 12-1361(4) brings implied warranty claims of poor workmanship into the statute.  Clearly Arizona statutes allow the HOA to sue for construction defects, and the breach of the implied warranty of workmanship and habitability.