Case Summary
| Case ID | 22F-H2222057-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2022-10-05 |
| Administrative Law Judge | Velva Moses-Thompson |
| Outcome | The petition filed by the homeowner against the HOA was dismissed because the homeowner failed to prove the HOA violated A.R.S. § 33-1243(J) regarding financial reporting. |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Deborah Mesear | Counsel | — |
|---|---|---|---|
| Respondent | Paradise Park Condominiums Phase II Homeowners Association | Counsel | Ashley N. Moscarello, Esq. |
Alleged Violations
A.R.S. § 33-1243(J)
Outcome Summary
The petition filed by the homeowner against the HOA was dismissed because the homeowner failed to prove the HOA violated A.R.S. § 33-1243(J) regarding financial reporting.
Why this result: The Petitioner failed to establish that the Association violated the applicable statute by a preponderance of the evidence, resulting in the dismissal of the petition.
Key Issues & Findings
Violation of HOA statutory duty to provide annual financial reports (audit, review, or compilation)
Petitioner alleged the HOA failed to share an annual audit/compilation for 2017-2021. The ALJ found the HOA provided financial compilations for 2017-2020 after the petition was filed. The claim regarding 2021 was found to be premature because the financial compilation was not yet due when the petition was filed on May 29, 2022.
Orders: The petition is dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
- A.R.S. § 33-1243(J)
- A.R.S. § 33-1810
Analytics Highlights
- A.R.S. § 33-1243(J)
- A.R.S. § 33-1810
- A.R.S. § 32-2199(1)
- A.R.S. § 32-2199.02(B)
- A.R.S. § 41-1092.09
Video Overview
Audio Overview
Decision Documents
22F-H2222057-REL Decision – 1003891.pdf
22F-H2222057-REL Decision – 988206.pdf
22F-H2222057-REL Decision – 989133.pdf
22F-H2222057-REL Decision – 994978.pdf
22F-H2222057-REL Decision – 1003891.pdf
22F-H2222057-REL Decision – 988206.pdf
22F-H2222057-REL Decision – 989133.pdf
22F-H2222057-REL Decision – 994978.pdf
This decision, issued by Administrative Law Judge Velva Moses-Thompson on October 5, 2022, dismissed the petition brought by Deborah Mesear, a condominium unit owner, against the Paradise Park Condominiums Phase II Homeowners Association (the Association).
Key Facts and Legal Issue:
The dispute centered on the Association's compliance with Arizona financial reporting laws for condominiums. The core issue set for determination was whether the Association violated Arizona Revised Statutes (A.R.S.) § 33-1243(J) (the applicable statute for condominiums) by failing to share annual financial reports for the years 2017 through 2021.
Petitioner Deborah Mesear filed her petition on May 29, 2022, alleging the Association failed to provide annual audits despite multiple requests, stating she could find no evidence that audits had been completed.
Legal Framework and Arguments:
- Statutory Requirement: A.R.S. § 33-1243(J) mandates that the board provide for an annual financial audit, review or compilation of the association. This report must be completed no later than 180 days after the fiscal year ends and made available to unit owners within 30 days of completion.
- Association's Defense (Compilations vs. Audits): The Association confirmed through the testimony of its community manager, Carl Westlund, that it did not prepare full audits for the relevant years, but rather financial compilations, which are substantially more limited in scope and less expensive than an audit. The Association argued that choosing a compilation complies fully with A.R.S. § 33-1243(J), as the statute permits any one of the three report types.
- Sharing of Reports (2017–2020): After the petition was filed, the Association provided Mesear with the financial compilations for 2017 through 2020. Mesear received these reports but argued that compilations were incomplete financial reports.
- 2021 Report Issue: Mesear emphasized that the 2021 report had not been provided. The Association testified that a compilation for 2021 had been ordered from a new accountant but was not yet completed as of the September 15, 2022, hearing date. The Association argued that Mesear's petition, filed May 29, 2022, regarding the 2021 compilation was not yet ripe because the 180-day deadline for its completion had likely not yet passed.
Outcome and Legal Decision:
The Administrative Law Judge determined that the Petitioner bore the burden of proving a violation by a preponderance of the evidence.
The ALJ concluded that:
- The Association was not required to prepare annual audits; selecting annual financial compilations satisfies A.R.S. § 33-1243(J).
- The Association shared the compilations for 2017 through 2020 with Mesear.
- The issue concerning the 2021 compilation was not ripe when the May 29, 2022, petition was filed.
Ms. Mesear failed to establish that the Association violated A.R.S. § 33-1243. The petition was ordered dismissed.
Questions
Question
Is my condo HOA legally required to perform a full financial audit every year?
Short Answer
Not necessarily; a review or compilation is often sufficient unless the governing documents specifically require an audit.
Detailed Answer
Under Arizona law for condominiums, an association is not required to perform a full audit unless the specific condominium documents demand it. The law allows for an audit, a review, or a compilation.
Alj Quote
Unless any provision in the condominium documents requires an annual audit by a certified public accountant, the board of directors shall provide for an annual financial audit, review or compilation of the association.
Legal Basis
A.R.S. § 33-1243(J)
Topic Tags
- Financial Reports
- Audits
- HOA Obligations
Question
What is the deadline for the HOA to complete the annual financial report?
Short Answer
The report must be completed no later than 180 days after the end of the fiscal year.
Detailed Answer
The association has a statutory window of 180 days following the close of the fiscal year to complete the required financial audit, review, or compilation.
Alj Quote
The audit, review or compilation shall be completed no later than one hundred eighty days after the end of the association's fiscal year
Legal Basis
A.R.S. § 33-1243(J)
Topic Tags
- Deadlines
- Financial Reports
- Procedural Requirements
Question
Once the financial report is finished, how soon must the HOA provide it to me?
Short Answer
The HOA must make it available within 30 days of its completion upon request.
Detailed Answer
After the financial document (audit, review, or compilation) is completed, the association is legally obligated to make it available to unit owners who request it within a 30-day window.
Alj Quote
and shall be made available on request to the unit owners within thirty days after its completion.
Legal Basis
A.R.S. § 33-1243(J)
Topic Tags
- Homeowner Rights
- Transparency
- Financial Reports
Question
Can I file a complaint against my HOA for failing to provide a financial report before the 180-day deadline has passed?
Short Answer
No, a complaint filed before the deadline is considered premature (not ripe).
Detailed Answer
If a homeowner files a petition regarding a missing financial report before the statutory 180-day period has elapsed, the issue is not yet ripe for adjudication because the obligation is not yet due.
Alj Quote
Moreover, the issue of whether the Association complied with A.R.S. section 33-1243 for year 2021 was not yet ripe at the time that Ms. Mesear filed her May 29, 2022 petition, because a financial compilation was not yet due.
Legal Basis
Ripeness Doctrine
Topic Tags
- Legal Procedures
- Filing Disputes
- Deadlines
Question
Who is responsible for proving that the HOA violated the law in a hearing?
Short Answer
The homeowner (Petitioner) bears the burden of proof.
Detailed Answer
In an administrative hearing regarding HOA disputes, the petitioner must prove their case by a preponderance of the evidence.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated the A.R.S. section 33-1243(J) by a preponderance of the evidence.
Legal Basis
Burden of Proof
Topic Tags
- Legal Standards
- Hearing Procedures
Question
What standard of proof is used in these administrative hearings?
Short Answer
Preponderance of the evidence.
Detailed Answer
This standard requires evidence that is sufficient to incline a fair and impartial mind to one side rather than the other, making the contention more probably true than not.
Alj Quote
A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.
Legal Basis
Evidentiary Standard
Topic Tags
- Legal Standards
- Evidence
Question
If I live in a condominium, can I cite the Planned Communities statutes (A.R.S. § 33-1810) in my complaint?
Short Answer
No, condominiums are governed by the Condominium Act, specifically A.R.S. § 33-1243(J) for financials.
Detailed Answer
While the requirements may be similar, the specific statute for planned communities does not apply to condominiums. Condominium owners must cite the applicable Condominium Act statutes.
Alj Quote
A.R.S. section 33-1810 applies to planned communities and does not apply to the Association. However, A.R.S. section 33-1243(J) applies to condominiums
Legal Basis
A.R.S. § 33-1243(J)
Topic Tags
- Jurisdiction
- Statutes
- Condominiums
Case
- Docket No
- 22F-H2222057-REL
- Case Title
- Deborah Mesear vs Paradise Park Condominiums Phase II Homeowners Association
- Decision Date
- 2022-10-05
- Alj Name
- Velva Moses-Thompson
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
Is my condo HOA legally required to perform a full financial audit every year?
Short Answer
Not necessarily; a review or compilation is often sufficient unless the governing documents specifically require an audit.
Detailed Answer
Under Arizona law for condominiums, an association is not required to perform a full audit unless the specific condominium documents demand it. The law allows for an audit, a review, or a compilation.
Alj Quote
Unless any provision in the condominium documents requires an annual audit by a certified public accountant, the board of directors shall provide for an annual financial audit, review or compilation of the association.
Legal Basis
A.R.S. § 33-1243(J)
Topic Tags
- Financial Reports
- Audits
- HOA Obligations
Question
What is the deadline for the HOA to complete the annual financial report?
Short Answer
The report must be completed no later than 180 days after the end of the fiscal year.
Detailed Answer
The association has a statutory window of 180 days following the close of the fiscal year to complete the required financial audit, review, or compilation.
Alj Quote
The audit, review or compilation shall be completed no later than one hundred eighty days after the end of the association's fiscal year
Legal Basis
A.R.S. § 33-1243(J)
Topic Tags
- Deadlines
- Financial Reports
- Procedural Requirements
Question
Once the financial report is finished, how soon must the HOA provide it to me?
Short Answer
The HOA must make it available within 30 days of its completion upon request.
Detailed Answer
After the financial document (audit, review, or compilation) is completed, the association is legally obligated to make it available to unit owners who request it within a 30-day window.
Alj Quote
and shall be made available on request to the unit owners within thirty days after its completion.
Legal Basis
A.R.S. § 33-1243(J)
Topic Tags
- Homeowner Rights
- Transparency
- Financial Reports
Question
Can I file a complaint against my HOA for failing to provide a financial report before the 180-day deadline has passed?
Short Answer
No, a complaint filed before the deadline is considered premature (not ripe).
Detailed Answer
If a homeowner files a petition regarding a missing financial report before the statutory 180-day period has elapsed, the issue is not yet ripe for adjudication because the obligation is not yet due.
Alj Quote
Moreover, the issue of whether the Association complied with A.R.S. section 33-1243 for year 2021 was not yet ripe at the time that Ms. Mesear filed her May 29, 2022 petition, because a financial compilation was not yet due.
Legal Basis
Ripeness Doctrine
Topic Tags
- Legal Procedures
- Filing Disputes
- Deadlines
Question
Who is responsible for proving that the HOA violated the law in a hearing?
Short Answer
The homeowner (Petitioner) bears the burden of proof.
Detailed Answer
In an administrative hearing regarding HOA disputes, the petitioner must prove their case by a preponderance of the evidence.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated the A.R.S. section 33-1243(J) by a preponderance of the evidence.
Legal Basis
Burden of Proof
Topic Tags
- Legal Standards
- Hearing Procedures
Question
What standard of proof is used in these administrative hearings?
Short Answer
Preponderance of the evidence.
Detailed Answer
This standard requires evidence that is sufficient to incline a fair and impartial mind to one side rather than the other, making the contention more probably true than not.
Alj Quote
A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.
Legal Basis
Evidentiary Standard
Topic Tags
- Legal Standards
- Evidence
Question
If I live in a condominium, can I cite the Planned Communities statutes (A.R.S. § 33-1810) in my complaint?
Short Answer
No, condominiums are governed by the Condominium Act, specifically A.R.S. § 33-1243(J) for financials.
Detailed Answer
While the requirements may be similar, the specific statute for planned communities does not apply to condominiums. Condominium owners must cite the applicable Condominium Act statutes.
Alj Quote
A.R.S. section 33-1810 applies to planned communities and does not apply to the Association. However, A.R.S. section 33-1243(J) applies to condominiums
Legal Basis
A.R.S. § 33-1243(J)
Topic Tags
- Jurisdiction
- Statutes
- Condominiums
Case
- Docket No
- 22F-H2222057-REL
- Case Title
- Deborah Mesear vs Paradise Park Condominiums Phase II Homeowners Association
- Decision Date
- 2022-10-05
- Alj Name
- Velva Moses-Thompson
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Deborah Mesear (petitioner, witness)
Also appears as Deborah Masear and Deborah Mesier in the sources.
Respondent Side
- Ashley N. Moscarello (HOA attorney)
Goodman Holmgren Law Group
Also appears as Ashley Moscarello, Esq. and Ashley Carillo. - Carl Westlund (property manager, witness)
The Management Trust
Community manager for Paradise Park Condominiums Phase II Homeowners Association. - Mark A. Holmgren (HOA attorney)
Goodman Holmgren Law Group
Neutral Parties
- Velva Moses-Thompson (ALJ)
Office of Administrative Hearings - Louis Dettorre (ADRE Commissioner)
Arizona Department of Real Estate - A. Hansen (ADRE staff)
Arizona Department of Real Estate
Listed as administrative contact (Attn:). - V. Nunez (ADRE staff)
Arizona Department of Real Estate
Listed as administrative contact (Attn:). - D. Jones (ADRE staff)
Arizona Department of Real Estate
Listed as administrative contact (Attn:). - L. Abril (ADRE staff)
Arizona Department of Real Estate
Listed as administrative contact (Attn:).
Other Participants
- Miranda Alvarez (legal secretary)
Signed transmission notice. - c. serrano (legal secretary)
Signed transmission notice.