Jie Cao, et al v. PFP Dorsey Investments, LLC

Arizona Supreme Court:    No. CV-22-0228-PR  Filed March 22, 2024

Jie Cao, et al v. PFP Dorsey Investments, LLC

ISSUES:

1. Whether §33-1228 of the Arizona Condominium Act authorizes the taking of private property for private use in violation of the Arizona Constitution.
2. Whether §33-1228(C) required all common elements and units of a condominium to be part of a sale if any are to be sold pursuant to a termination agreement.
3. Whether subsequent statutory amendments are incorporated into a condominium declaration if the declaration incorporates the statute by reference.

DECISION:

1. The court held that §33-1228 does not violate the eminent domain provision of the Arizona Constitution as applied because the Condominium Act was incorporated into the condominium declaration as a contractual matter.
2. The court interpreted §33-1228(C) as requiring the sale of all condominium property if the termination agreement provided for a sale. Thus, the forced sale of an individual unit was impermissible under the statute.
3. The court determined that the 2018 version of §33-1228, which was in effect when the condominium was terminated, applied because the Declaration expressly incorporated the Condominium Act “as amended from time to time.” So, the Declaration was unchanged even though the statute had been changed resulting in an impact the owners.