A.R.S. § 33-1245

Condominiums

Termination of contracts and leases of declarant; applicability

Condominiums · Text verified 2026-07-25

In plain English: Contracts and leases the developer put in place before the owners elected their own board, such as management contracts or deals between the association and the developer, must include a clause letting the association cancel them without penalty once the owner-elected board takes office. The board gives at least thirty days' notice to cancel. If a covered contract lacks the required cancellation clause, the association can void it. This protects owners from being locked into developer-era deals.

33-1245. Termination of contracts and leases of declarant; applicability

A. A contract for any of the following, if entered into before the board of directors elected by the unit owners pursuant to section 33-1243, subsection G takes office, shall contain a provision in the contract that the contract may be terminated without penalty by the association at any time after the board of directors elected by the unit owners takes office:

1. Any management contract or employment contract.

2. Any other contract or lease between the association and a declarant or an affiliate of a declarant.

3. Any contract or lease that is not bona fide or was unconscionable to the unit owners at the time entered into under the circumstances then prevailing.

B. The board of directors shall notify the appropriate contractual party of the termination at least thirty days before termination.

C. This section does not apply to any lease if the termination of the lease would terminate the condominium or reduce its size.

D. If a contract covered by this section fails to contain the provisions required by subsection A of this section, the contract is voidable at the option of the association.

E. This section does not apply to timeshare plans or associations that are subject to chapter 20 of this title.

Source: A.R.S. § 33-1245 — Arizona State Legislature