Arizona required condo and HOA boards to act reasonably and banned votes in executive session. New York has neither.

Arizona Governor Katie Hobbs signed two bills in the summer of 2026 that give condominium and homeowners association owners new protections against arbitrary board action. HB 4011, chaptered as Chapter 125 and effective September 12, amended the Arizona Condominium Act and the Planned Communities Act to require that associations exercise discretionary powers reasonably and without favoritism. SB 1290, also effective September 12, amended the Planned Communities Act to prohibit boards from taking formal votes in executive session; the Arizona Court of Appeals had already extended the same prohibition to condominium associations in an April 2026 ruling. New York Real Property Law Article 9-B and the Business Corporation Law governing co-op corporations contain neither requirement.

What the reasonableness standard requires.

Before HB 4011, Arizona's statutes governed what condo and HOA boards could do but said nothing about how. The 2026 amendment to A.R.S. § 33-1242 changes that. An association exercising any discretionary power must now act reasonably and treat similarly situated owners the same way. That phrase, "reasonably and without favoritism," creates a reviewable standard. A board that applied a noise rule to one owner but not to a neighbor whose situation was materially identical now has a documented basis for an owner challenge. A board that waived a fine for a preferred shareholder while pursuing the same violation with a different owner is no longer legally equivalent to a board that simply enforced its rules.

The enforcement section of HB 4011 adds a procedural prerequisite to fine collection. Before an association may proceed with an enforcement action or charge attorney's fees to an owner's account, it must provide the owner with the required information about the alleged violation. If the association skips that step, it cannot collect legal fees even if it prevails on the underlying merits. The provision does not cap fine amounts or require formal administrative review. It imposes one condition on how boards initiate enforcement and makes that condition an enforceable limit on cost recovery.

HB 4011 also added A.R.S. § 33-1821 to the planned communities chapter, extending identical obligations to HOAs. The two additions together cover every common-interest community in Arizona governed by either title.

No votes in executive session.

SB 1290 amended the Planned Communities Act to ban board votes taken in executive session. Boards may still enter executive session to discuss sensitive matters: pending litigation, personnel issues, individual owner debt negotiations, or confidential communications with counsel. The prohibition runs to the vote itself. Once a discussion in executive session ends, the board must reconvene in open session to vote and to record the result. A vote taken in a closed room, even after a lawful discussion in that room, is no longer valid under Arizona law.

The Arizona Court of Appeals had reached the same conclusion before the statute codified it. In AZNH Revocable Trust v. Sunland Springs Village HOA (2026), the court held that a board vote taken in executive session was procedurally invalid because no statute or governing document authorized votes in that setting and because the defect infected the outcome. SB 1290 converts that holding into a statutory prohibition for planned communities; condominium associations remain governed by the court ruling directly. For planned communities, the statutory text is now the floor regardless of what the governing documents say.

New York has no equivalent requirement. Neither Real Property Law Article 9-B nor Business Corporation Law § 702(a) addresses whether board votes may occur in executive session. Most co-op proprietary leases and condo declarations are silent on the question. A New York board that wants to vote on a fee increase, a contract award, or a unit alteration denial in a closed meeting faces no statutory bar against doing so and faces no obligation to disclose what it decided or why.

The dispute pathway.

Arizona's Department of Real Estate has statutory jurisdiction over condo and HOA governance under Title 33. HB 4011 reinforces the owner's route to that forum for disputes involving enforcement actions. An owner who believes a board violated the reasonableness or non-favoritism obligation can bring an administrative hearing at ADRE before pursuing a civil lawsuit.

The practical difference matters. An administrative hearing at ADRE is cheaper than a superior court filing, proceeds on a defined schedule, and produces a written determination the parties can rely on. For a dispute over a $500 fine applied inconsistently to two neighbors, the civil court route in most markets prices the owner out before discovery begins. A lower-threshold forum shifts the cost calculation for the board as well as the owner. A board that knows a reasonableness challenge has an accessible forum is operating under different incentives than a board that knows the only remedy is a civil complaint that will take three years to resolve.

New York has no equivalent forum. The AG's Real Estate Finance Bureau lacks jurisdiction over ongoing governance disputes in existing buildings once the offering plan closes. DHCR handles rent stabilization. DOF handles tax assessments. HPD's enforcement authority runs to housing code. The only available forum for a governance dispute is court, and the scope of what courts will hear is defined by the business judgment rule.

Arizona versus New York: the governance conduct gap.

New York's position on both provisions.

New York's business judgment rule, established in Levandusky v. One Fifth Ave. Apartment Corp., 75 N.Y.2d 530 (1990) and clarified in 40 W. 67th St. Corp. v. Pullman, 100 N.Y.2d 147 (2003), places board decisions beyond owner challenge unless the challenger can show bad faith, self-dealing, or action outside the scope of the governing documents. The rule asks whether the board had authority, not whether the board acted reasonably. A fine applied to one owner and waived for a neighbor in the same situation survives Levandusky if the board had authority to levy fines at all. The inconsistency is not actionable under current New York doctrine.

Real Property Law § 339-j authorizes condo boards to exercise the powers granted by the declaration and bylaws. No provision of Article 9-B adds a reasonableness requirement to that grant. Business Corporation Law § 609 governs co-op board authority with equivalent silence. The legislature has not enacted a conduct standard for co-op or condo boards in any session, and no bill proposing one has been introduced in either chamber.

The open-vote gap follows the same pattern. BCL § 702(a) authorizes boards to set their own meeting procedures. Nothing in BCL, RPL, or standard co-op or condo governing documents requires a vote to occur in open session. When a board votes in executive session on a budget, a vendor contract, or a unit owner's alteration application, no New York statute makes that vote invalid or gives the owner standing to challenge it on procedural grounds alone.

Bottom line.

HB 4011 and SB 1290 are not a licensing regime. They create no state agency, no professional examination, and no ongoing certification requirement. HB 4011 adds a one-sentence conduct standard to statutes that already govern every Arizona condo and HOA. SB 1290 adds a one-sentence prohibition on executive session votes to the same statutes. Neither bill required a new budget line. Arizona enacted both in the same legislative session, on the same effective date.

New York's RPL Article 9-B and BCL are the operative statutes for every one of the 14,062 condo and co-op buildings in the five boroughs. Adding a reasonableness standard to RPL § 339-j and an open-vote requirement to BCL § 702(a) would not require a new agency or a new budget line. Albany adjourned June 18, 2026 without acting on any co-op or condo governance bill. Arizona's September 12 effective date arrived before New York's next legislative session opens.

Primary sources:
Arizona HB 4011: LegiScan bill text (Chapter 125, 57th Legislature)
A.R.S. § 33-1242: Arizona Condominium Act
Mulcahy Law Firm: 2026 Arizona Legislative Update (SB 1290 and HB 4011)
AZFamily: Arizona homeowners get new protections against HOAs (Sept. 16, 2026)
Levandusky v. One Fifth Ave. Apartment Corp., 75 N.Y.2d 530 (1990)
40 W. 67th St. Corp. v. Pullman, 100 N.Y.2d 147 (2003)
New York Real Property Law § 339-j · Business Corporation Law §§ 609, 702(a)

Companion resources: Why the AG cannot help with most condo governance disputes · The business judgment rule and how NY boards avoid accountability · Ten co-op and condo reform bills that did not advance · Florida HB 913 versus New York's structural gap · AG REFB jurisdiction gap: regulatory inventory · Full regulatory gap inventory