If you own a condo in Old Town Scottsdale and spend part of the year somewhere else, here is a question worth sitting with: how far behind on HOA dues could you fall before your association could sue to take your unit? Most owners assume the answer is the same no matter what kind of home they own. For almost a year, in Old Town specifically, it was not.

The reform everyone heard about

In 2025, Arizona lawmakers took a serious look at how easily a homeowners association could move toward foreclosure over unpaid dues. Senate Bill 1494 rewrote the rule for planned communities: an association can no longer file a foreclosure lawsuit until an owner is either 18 months delinquent or owes $10,000 or more in assessments, whichever comes first. The old bar was one year or $1,200. Governor Katie Hobbs signed the bill in April 2025, and it took effect on September 26, 2025. The dollar threshold jumped more than eightfold in a single legislative session, and Arizona now sits among the states with the highest bar an association has to clear before it can take a homeowner to court over dues.

That is the headline most owners caught. What a lot of them missed is the word "planned community."

The building Old Town actually is

Arizona regulates condominiums under a separate law, the Arizona Condominium Act, and the foreclosure rule for condos lives in a different statute entirely: ARS 33-1256. When SB 1494 passed, it amended ARS 33-1807, the planned community statute. It did not touch 33-1256. Condominium associations kept the old threshold: 12 months delinquent or $1,200 owed, whichever came first.

That distinction matters more in Old Town than almost anywhere else in Scottsdale, because Old Town is where the city's condo stock actually lives. Walk through the current inventory and you will find:

• Entry-level studios and one-bedroom units in older mid-rise buildings, trading from the high $290,000s
• Mid-tier two-bedroom condos at buildings like The Mark, Optima Camelview Village, and the Plaza Lofts, generally running $700,000 to $1.4 million
• Trophy penthouses at Scottsdale Waterfront Residences and Optima Sonoran Village, some priced above $4 million

Detached single-family homes exist in the eastern and southern pockets of the submarket too, but the identity of Old Town, and the reason buyers come here in the first place, is walkable, low-maintenance condo living. That means for nearly a year, the part of Scottsdale with the densest concentration of condo ownership was carrying the thinnest foreclosure protection in the city, while single-family HOA neighborhoods a few miles north already had the new safety net.

Two statutes, two timelines

Here is the split as it actually stood through the first half of 2026:

The gap did not go unnoticed. Arizona lawmakers introduced Senate Bill 1246 in the 2026 session specifically to align the two statutes, raising the condominium threshold to the same 18 months or $10,000 that planned communities already had, and adding a rule that once a special assessment reaches $10,000 or more, only the 18-month clock applies rather than the dollar figure. The bill worked its way through the legislature this year and was signed into law, closing the gap. Based on the same rollout pattern used for last year's reform, which took effect roughly 90 days after the legislative session ended, condo owners in Old Town can expect the new threshold to take hold this fall.

Until it does, or if you are reading this before the effective date lands, the old $1,200 and 12-month rule is what actually governs a condo delinquency in a building like Envy or The Mark. That is a five-figure gap in protection sitting a few blocks from single-family neighborhoods that already had the new law.

Why this lands harder here than anywhere else in Scottsdale

Old Town's ownership pattern makes this more than a technical footnote. Cash purchases run around 42 percent of transactions in this submarket, well above the roughly 30 to 35 percent cash share typical citywide, because second-home buyers and out-of-state investors make up such a large share of the high-rise inventory. That cash concentration insulates buyers from rate risk, but it also describes an owner base that is disproportionately part-time. A full-time resident who lives three blocks from their mailbox rarely lets a dues payment slip for a year. An owner who splits the year between Scottsdale and somewhere colder, or who manages the property from out of state, is exactly the kind of owner a 12-month, $1,200 clock could catch off guard, especially if a payment method lapses or a bill goes to an address that only gets checked seasonally.

This is also the reason lenders and buyers should care about a building's delinquency rate, not just its dues amount. Condo warrantability, the standard that determines whether a lender will finance a unit at all, looks at how many owners in a building are behind on assessments. A building carrying a high delinquency percentage is a harder sell to a lender regardless of how the foreclosure statute reads, and it is one more reason the HOA resale packet matters more here than in a typical single-family sale.

What to actually check before you write an offer or list

Whether you are buying into a building like Optima Camelview Village or preparing to sell a unit you have owned for years, the practical list looks the same:

• Two years of HOA financial statements and the most recent reserve study
• Current delinquency percentage among owners in the building
• Any pending or recent special assessments, and whether any single assessment reaches the $10,000 threshold that now triggers the 18-month rule under the new law
• Minimum lease term and short-term rental rules written into that specific building's covenants, since Old Town buildings vary widely here. Some allow short-term rentals with a registered property manager on file, some require 30 or 90-day minimums, and some prohibit short-term rentals entirely regardless of what the city ordinance allows
• Lender condo-warrantability status if financing is part of the plan

Sellers should also know that Arizona tightened the resale disclosure timeline in 2026. Under a new rule amending the disclosure statutes, associations must now deliver required resale information electronically within 10 days of the buyer's offer being accepted, rather than relying on mail. That is a faster clock than sellers may be used to, and it is worth confirming with your building's management company before you go under contract, not after.

A note on timing, not a guarantee

None of this is legal advice, and building-level rules change. The safest move before any offer or listing agreement is to have your HOA's current financials and reserve study in hand, and to have a real estate attorney review anything that looks unusual in a delinquency history or special assessment notice. Statutes shift from one legislative session to the next, and the exact effective date for the 2026 condo reform will be confirmed by the state, not by a market blog post.

FAQ

Does this change affect my monthly HOA dues? No. The foreclosure threshold governs how far behind an owner has to fall before an association can sue to foreclose. It has no bearing on how dues are set or raised, which is a separate rule capped at a 20 percent annual increase without a membership vote.

I own a detached home in 85250 or 85257. Does any of this apply to me? If your home sits in a planned community rather than a condominium association, you already had the 18-month, $10,000 threshold as of September 2025. The gap this piece describes was specific to condominiums.

Does the new foreclosure threshold change my building's short-term rental rules? No. Rental restrictions live in each building's recorded covenants and are separate from the foreclosure statute. A building that prohibits short-term rentals today will keep that rule regardless of how the assessment-lien threshold changes.

When exactly does the new condo threshold take effect? The bill has been signed. Based on last year's rollout, the effective date is expected this fall. Confirm the exact date with your building's management company or an Arizona HOA attorney before relying on it in a transaction.

If you are weighing a purchase or a sale in Old Town Scottsdale and want someone who tracks these building-level details before they show up in a resale packet, Peggy Young has spent nearly three decades working this exact corner of the market. Let's Connect.