**Case Title:** *Logan C. Wolf vs. Lakeside Ridge Homeowners Association*
**Case No.:** 14F-H1415006-BFS
**Forum:** Arizona Office of Administrative Hearings

### **Procedural Background**
The Petitioner, Logan C. Wolf, a homeowner and member of the Lakeside Ridge Homeowners Association ("Lakeside"), filed a petition with the Department of Fire, Building and Life Safety. He alleged that Lakeside violated its Covenants, Conditions, and Restrictions (CC&Rs) regarding voting membership rights.

An administrative hearing was held on February 12, 2015. The Petitioner appeared on his own behalf, while the Respondent (Lakeside) **failed to appear**. Additionally, Lakeside failed to file an Answer to the petition despite receiving proper notice, which may be deemed an admission of the allegations under Arizona law.

### **Main Issues and Key Facts**
The central legal issue was whether the Developer improperly retained control of the HOA by failing to convert "Class B" membership (Developer control) to "Class A" membership (Homeowner control) within the timeframe mandated by the CC&Rs.

* **Governing Provision:** Article 2, Section 2.2(B)(2) of the CC&Rs stipulated that Class B membership must cease and convert to Class A membership four years following the conveyance of the first lot to an owner other than the Developer.
* **Timeline of Events:**
* **September 16, 2005:** Original CC&Rs recorded.
* **February 19, 2008:** The first home was conveyed to a homeowner.
* **2012:** Based on the four-year rule, Class B membership should have expired and control should have passed to the homeowners.
* **March 26, 2013:** An amendment was created attempting to extend Class B membership, allowing the Developer (T.J. Bednar & Co.) to maintain control.

### **Arguments**
Mr. Wolf argued that the 2013 amendment was invalid because Class B membership should have already ceased in 2012. He testified that the Developer’s refusal to relinquish control was financially detrimental to homeowners, citing specifically that residents were paying over $7,000 annually to a management company selected without their vote.

Witness Christopher Grant supported Wolf’s testimony, stating that the Developer had repeatedly indicated an intent to turn over control but failed to do so, effectively "pulling the rug from under the homeowners" by attempting to amend the CC&Rs post-facto.

### **Findings and Final Decision**
Administrative Law Judge M. Douglas found the testimony of Wolf and Grant credible. The tribunal concluded that Lakeside violated Article 2, Section 2.2(B)(2) of the CC&Rs because the transition to Class A membership was mandatory four years after the first conveyance.

**Outcome and Orders:**
The Petitioner (Wolf) was deemed the prevailing party. The Judge ordered the following:
1. **Compliance:** Lakeside must fully comply with the CC&Rs (converting membership to Class A) within 30 days.
2. **Restitution:** Lakeside must reimburse the Petitioner’s $550.00 filing fee.
3. **Penalty:** Lakeside must pay a $500.00 civil penalty to the Department.

**Certification:**
The Department of Fire, Building and Life Safety did not reject or modify the decision within the statutory review period. Consequently, the Administrative Law Judge's decision was **certified as final** on April 28, 2015.