Case Summary
| Case ID | 25F-H037-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2025-07-13 |
| Administrative Law Judge | Kay A. Abramsohn |
| Outcome | loss |
| Filing Fees Refunded | $1,000.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Nicholas Thomas | Counsel | — |
|---|---|---|---|
| Respondent | Tanglewood Association | Counsel | — |
Alleged Violations
CC&Rs Page 2, Section A; and Management Agreement, Pages 33-34, Clause Four, subsection a., b., and f.
Outcome Summary
The Administrative Law Judge denied the two-issue Petition, concluding that the Petitioner failed to meet the burden of proving by a preponderance of the evidence that the Tanglewood Association violated its Covenants, Conditions, and Restrictions (CC&Rs) or Management Agreement. The HOA was declared the prevailing party.
Why this result: Petitioner failed to meet the burden of proof. Regarding the plumbing maintenance (Issue #1), the HOA demonstrated they took action but were legally constrained by contract limitations requiring Board approval/owner vote for costly repairs ($5,000 threshold). Regarding the failure to hire a property manager (Issue #2), the governing documents were vague, and the violation was not proven.
Key Issues & Findings
Failure to maintain Association standards of acceptable living standards and make proper repairs to plumbing in the properties.
Petitioner filed a two-issue petition alleging HOA failed to timely fix a major plumbing issue (Issue #1) that caused flooding/sink backup, making his unit uninhabitable and resulting in lost rent. The second issue (Issue #2) alleged the HOA failed to hire a property management company, which Petitioner claimed led to the untimely handling of Issue #1. The HOA responded that repairs were delayed due to financial constraints requiring a successful special assessment vote.
Orders: The Petition was denied, and the HOA was determined to be the prevailing party. Petitioner was ordered to bear his filing fees. OAH cannot award damages, such as lost rent reimbursement.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
- CC&Rs Page 2, Section A
- Management Agreement, Pages 33-34, Clause Four, subsection a., b., and f.
- ARIZ. REV. STAT. 32-2199.02
- ARIZ. ADMIN. CODE R2-19-119
Analytics Highlights
- ARIZ. REV. STAT. 32-2102
- ARIZ. REV. STAT. 32-2199
- ARIZ. REV. STAT. 32-2199.01(D)
- ARIZ. REV. STAT. 32-2199.02
- ARIZ. REV. STAT. 32-2199.05
- ARIZ. REV. STAT. 41-1092
- ARIZ. REV. STAT. 41-1092.09
- ARIZ. ADMIN. CODE R2-19-119
Audio Overview
Decision Documents
25F-H037-REL Decision – 1300705.pdf
25F-H037-REL Decision – 1327762.pdf
Briefing Document: Nicholas Thomas v. Tanglewood Association (Case No. 25F-H037-REL)
Executive Summary
This briefing document synthesizes the proceedings and outcome of Case No. 25F-H037-REL, a dispute between property owner Nicholas Thomas (Petitioner) and the Tanglewood Association (HOA/Respondent). The case was adjudicated by the Arizona Office of Administrative Hearings, with a final decision issued on July 13, 2025.
The Petitioner filed a two-issue petition alleging that the HOA (1) failed in its duty to perform timely plumbing repairs, rendering his unit uninhabitable, and (2) failed to hire a professional property management company, leading to systemic financial and operational issues.
The HOA countered that the repair delays were not due to inaction but to severe financial constraints and the procedural necessity of securing a majority vote from homeowners for a special assessment. This funding was required for the extensive and costly repairs needed for the property’s aging infrastructure. The HOA highlighted that the Petitioner had never participated in these critical votes.
The Administrative Law Judge ultimately denied the petition in its entirety, finding that the Petitioner had not met his burden of proof. The decision concluded that the HOA’s actions were constrained by its financial reality and governing documents, not a breach of duty. The delays were attributed to the failed attempts to secure owner-approved funding via special assessment votes in prior years. The HOA was determined to be the prevailing party, and the Petitioner was ordered to bear his own filing fees.
I. Case Overview
• Case Number: 25F-H037-REL
• Parties:
◦ Petitioner: Nicholas Thomas, owner of Unit 141, Building 4
◦ Respondent: Tanglewood Association (HOA), represented by Co-President Hector Saavedra
• Adjudicating Body: Arizona Office of Administrative Hearings (OAH)
• Presiding Judge: Administrative Law Judge Kay A. Abramsohn
• Timeline:
◦ Petition Filed: February 7, 2025
◦ Hearing Date: May 16, 2025
◦ Decision Issued: July 13, 2025
The Petitioner filed a petition with the Arizona Department of Real Estate alleging the HOA violated its CC&Rs by failing to maintain the property and by not hiring professional management. The matter was referred to the OAH for an evidentiary hearing.
II. Complaint #1: Failure to Repair Plumbing Issue
Petitioner’s Position
The central claim was that the HOA failed to address a severe plumbing issue in a timely manner, which stemmed from common lines outside the Petitioner’s unit.
• Timeline of Events:
◦ October 2024: The Petitioner first became aware of a plumbing issue causing the kitchen sink to back up. A private plumber determined the issue was external to the unit.
◦ November 18, 2024: The HOA was formally notified of the problem.
◦ January/February 2025: Communication from the HOA ceased, prompting the Petitioner to file his complaint.
◦ February 18, 2025: The Petitioner canceled the lease with his tenants as the unit was deemed “uninhabitable” due to flooding and a non-functional sink.
• Consequences: The Petitioner cited damage to the kitchen floor and walls, the loss of rental income, and the ongoing uninhabitable state of the unit. The water line to the sink was eventually capped in February 2025 to stop the flooding, but this did not resolve the underlying issue.
• Key Quote: “The plumbing issue has been in place for 7 months. It has not been addressed. The house is currently unlivable, uninhabitable, still has damage in it. Um, and I do believe the HOA has failed in its required responsibilities to address this issue.” – Nicholas Thomas
• Requested Relief:
1. An order for the HOA to fix the plumbing with a specific timeline.
2. Reimbursement of the $500 portion of the filing fee for this complaint.
3. Reimbursement for lost rent.
Respondent’s Position (Tanglewood HOA)
The HOA argued that the delay was a direct result of financial insolvency and procedural requirements stipulated in its governing documents, not negligence.
• Systemic Problem: The plumbing issues were not isolated to the Petitioner’s unit but were part of a larger problem with the property’s aging infrastructure, dating back to 1965. A similar issue in another building cost $15,000 to repair two years prior.
• Financial & Procedural Hurdles: The estimated cost for the current repairs was initially $15,000 but rose to $50,000. The HOA stated it was “flat broke” with minimal reserves. The CC&Rs mandate a majority vote of over 50% (50.1%) of owners to approve a special assessment for such funding.
• Key Quote: “It should be noted that the board cannot increase the dues of the HOA or or ask for an special assessment unless we have a 50.01% vote from the owners. Mr. Thomas hasn’t voted in two three years and the things that he’s been asking for need their vote to make them happen.” – Hector Saavedra
• Voting History: Attempts to pass a special assessment failed in 2022 and 2023 due to a lack of owner participation. The Petitioner acknowledged he had never voted.
• Eventual Success: In 2025, after significant effort, the HOA secured a 50.35% vote to approve a $70,000 special assessment. This was structured in three phases to ease the financial burden on owners.
• Current Action Plan: At the time of the hearing, the HOA had collected approximately $40,000, made a $15,000 down payment to a plumbing contractor, and was scheduling the work. The repairs were set to begin with Building 4, which includes the Petitioner’s unit and was identified as having the most severe damage.
III. Complaint #2: Lack of Professional Management
Petitioner’s Position
This complaint asserted that the root cause of the HOA’s problems was its self-managed, volunteer-run structure, which was incapable of handling the property’s complex needs.
• Core Argument: A volunteer board lacks the time, expertise, and resources for effective financial management, enforcement of dues collection (including foreclosure on delinquent owners), and timely handling of maintenance. The Petitioner’s brother, Lucas Thomas, testified that in his 15 years as a property manager, he has consistently seen self-managed HOAs fail to operate correctly.
• Alleged Financial Mismanagement: The Petitioner argued the HOA should have been proactively increasing dues up to the 20% annual limit allowed by Arizona Revised Statutes (A.R.S. § 33-1803) without an owner vote, which would have built necessary reserves.
• Key Quote: “Every time that there is a self-managed HOA, the volunteers just don’t have the knowledge or the knowhow or the connections to locals that they need to properly facilitate a giant management especially for 42 units.” – Lucas Thomas
• Requested Relief:
1. An order for the HOA to hire a professional property management company.
2. Reimbursement of the $500 portion of the filing fee for this complaint.
Respondent’s Position (Tanglewood HOA)
The HOA acknowledged the challenges of a volunteer board but maintained that its primary obstacle was financial, not a lack of willingness to act.
• Affordability: The board had discussed hiring a professional management company but concluded it could not afford the expense. They feared that passing the cost to owners would result in even greater delinquency in dues payments.
• Volunteer Effort and Investment: The board is comprised of unpaid owner volunteers who live on the property and are personally impacted by the issues. Mr. Saavedra noted the immense personal time and stress involved, stating, “We are working we understand there’s around seven units right now that are vacant just like Mr. Thomas’s. We understand the pain of not being able to collect money from that from rent.”
• Invitation to Participate: The HOA extended an invitation to Mr. Thomas to join the board and contribute to finding solutions.
IV. Administrative Law Judge’s Decision & Rationale
The Administrative Law Judge (ALJ) denied the Petitioner’s petition on all counts, finding the evidence did not support a conclusion that the HOA had violated its duties.
• Final Order:
◦ The Petitioner’s Petition is denied.
◦ The HOA is the prevailing party.
◦ The Petitioner shall bear his own filing fees ($1,000.00).
◦ The OAH does not have the authority to award damages, such as lost rent.
• Rationale for Denying Complaint #1 (Plumbing Repair):
◦ The Petitioner failed to meet the burden of proving the HOA was not performing its duties.
◦ The evidence demonstrated that upon receiving complaints, the HOA hired a vendor and investigated the issue. The subsequent delay was a direct result of the high cost of repair and the HOA’s lack of funds.
◦ The HOA’s governing documents prevent a property manager or agent from spending more than $5,000, even in an emergency, without Board approval. Therefore, an immediate, large-scale repair was contractually and financially impossible without the owner-approved special assessment. The delay was thus a consequence of procedural and financial constraints, not a failure of duty.
• Rationale for Denying Complaint #2 (Professional Management):
◦ The ALJ found the hearing record to be “simply vague” on this issue.
◦ It could not be determined whether the HOA ever had a property manager in the past or to whom the “Management Agreement” clauses in the CC&Rs currently apply. Without a clearer record, a violation could not be established.
V. Key Participants & Testimony
Participant
Key Testimony & Contributions
Nicholas Thomas
Petitioner, Owner of Unit 141
Outlined the 7-month timeline of the plumbing failure, the resulting uninhabitability of his unit, and the financial losses incurred. Argued for professional management and acknowledged he had never voted in HOA elections or assessments.
Hector Saavedra
Respondent, Co-President of Tanglewood HOA
Explained the HOA’s financial insolvency, the procedural requirement for a majority owner vote to pass special assessments, and the history of failed votes. Detailed the successful 2025 vote and the current plan to begin repairs. Invited the Petitioner to join the board.
Carl Kesler
Petitioner’s Property Manager
Corroborated the timeline of events and communications with the HOA. Confirmed the plumbing issue was localized to the kitchen and stemmed from a mainline sewer problem. Stated he had never been to the unit in person and did not forward all HOA correspondence to the Petitioner.
Lucas Thomas
Petitioner’s Brother, Former Property Manager
Testified from his 15 years of experience that self-managed HOAs are typically ineffective. Argued that a professional firm is necessary for proper financial management and maintenance, citing a past lawsuit where he forced another HOA to hire a management company, which turned the property around.
{ “case”: { “docket_no”: “25F-H037-REL”, “case_title”: “Nicholas Thomas v. Tanglewood Association”, “decision_date”: “2025-07-13”, “alj_name”: “Kay A. Abramsohn”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Can I get monetary damages (like lost rent) from my HOA through an administrative hearing?”, “short_answer”: “No, the Office of Administrative Hearings (OAH) does not have the legal authority to award damages.”, “detailed_answer”: “While the OAH can order an HOA to follow its governing documents, it cannot award financial compensation for losses such as lost rent or property damage.”, “alj_quote”: “OAH does not have authority to award damages.”, “legal_basis”: “ARIZ. REV. STAT. §§ 32-2199 et seq.”, “topic_tags”: [ “damages”, “jurisdiction”, “compensation” ] }, { “question”: “If my HOA fails to make repairs due to lack of funds, is it considered a violation?”, “short_answer”: “Not necessarily, especially if the HOA is taking steps to secure funding through a special assessment.”, “detailed_answer”: “In this case, the ALJ found that the HOA could not be held in violation for failing to make immediate repairs when it lacked the necessary funds and was actively seeking a special assessment vote from owners to cover the costs.”, “alj_quote”: “Given its financial situation, HOA determined the overall plumbing issues could not be repaired absent a special assessment to cover those specific and projected expenses… Therefore, the hearing record demonstrates that more immediate action to repair either Petitioner’s plumbing issues or the overall plumbing issues could not have been taken.”, “legal_basis”: “Governing Documents / Financial Feasibility”, “topic_tags”: [ “repairs”, “finances”, “special assessment” ] }, { “question”: “Who acts as the ‘burden of proof’ in a hearing against an HOA?”, “short_answer”: “The homeowner (Petitioner) must prove the violation occurred.”, “detailed_answer”: “The homeowner must prove by a ‘preponderance of the evidence’ that the HOA violated its community documents or relevant statutes.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent HOA violated the alleged CC&R provisions.”, “legal_basis”: “ARIZ. ADMIN. CODE R2-19-119”, “topic_tags”: [ “burden of proof”, “legal standard”, “procedure” ] }, { “question”: “Can I force my HOA board to hire a professional property management company?”, “short_answer”: “Likely no, unless you can prove a specific requirement in the governing documents is being violated.”, “detailed_answer”: “The ALJ ruled that the homeowner did not meet the burden of proof to show that the HOA was violating its duties by not hiring a property manager, noting the evidence regarding the requirement was vague.”, “alj_quote”: “The Tribunal concludes that Petitioner has not met his burden to demonstrate by a preponderance of the evidence that HOA was not timely performing ‘their duties outlined’ in CC&Rs Page 2, Section A; and Management Agreement… regarding property management, the hearing record is simply vague.”, “legal_basis”: “CC&Rs / Management Agreement”, “topic_tags”: [ “property management”, “board duties”, “self-management” ] }, { “question”: “Does an HOA manager have unlimited spending power for emergency repairs?”, “short_answer”: “No, governing documents often place specific dollar limits on spending without board/association approval.”, “detailed_answer”: “The decision cites a management agreement that limits emergency repair spending (e.g., to $5,000) without prior approval from the Association.”, “alj_quote”: “Agent shall not incur liabilities (direct or contingent) which will at any time exceed the aggregate of $5,000.00 … without first obtaining the approval of the Association.”, “legal_basis”: “Management Agreement Contracts”, “topic_tags”: [ “spending limits”, “emergency repairs”, “budget” ] }, { “question”: “If I lose my case against the HOA, do I get my filing fee back?”, “short_answer”: “No, if the petition is denied, the petitioner is typically responsible for their own filing fees.”, “detailed_answer”: “The ALJ ordered that the Petitioner bear his own filing fees after Tanglewood Association was determined to be the prevailing party.”, “alj_quote”: “IT IS FURTHER ORDERED that Petitioner shall bear his filing fees.”, “legal_basis”: “Administrative Order”, “topic_tags”: [ “fees”, “costs”, “penalties” ] } ] }
{ “case”: { “docket_no”: “25F-H037-REL”, “case_title”: “Nicholas Thomas v. Tanglewood Association”, “decision_date”: “2025-07-13”, “alj_name”: “Kay A. Abramsohn”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Can I get monetary damages (like lost rent) from my HOA through an administrative hearing?”, “short_answer”: “No, the Office of Administrative Hearings (OAH) does not have the legal authority to award damages.”, “detailed_answer”: “While the OAH can order an HOA to follow its governing documents, it cannot award financial compensation for losses such as lost rent or property damage.”, “alj_quote”: “OAH does not have authority to award damages.”, “legal_basis”: “ARIZ. REV. STAT. §§ 32-2199 et seq.”, “topic_tags”: [ “damages”, “jurisdiction”, “compensation” ] }, { “question”: “If my HOA fails to make repairs due to lack of funds, is it considered a violation?”, “short_answer”: “Not necessarily, especially if the HOA is taking steps to secure funding through a special assessment.”, “detailed_answer”: “In this case, the ALJ found that the HOA could not be held in violation for failing to make immediate repairs when it lacked the necessary funds and was actively seeking a special assessment vote from owners to cover the costs.”, “alj_quote”: “Given its financial situation, HOA determined the overall plumbing issues could not be repaired absent a special assessment to cover those specific and projected expenses… Therefore, the hearing record demonstrates that more immediate action to repair either Petitioner’s plumbing issues or the overall plumbing issues could not have been taken.”, “legal_basis”: “Governing Documents / Financial Feasibility”, “topic_tags”: [ “repairs”, “finances”, “special assessment” ] }, { “question”: “Who acts as the ‘burden of proof’ in a hearing against an HOA?”, “short_answer”: “The homeowner (Petitioner) must prove the violation occurred.”, “detailed_answer”: “The homeowner must prove by a ‘preponderance of the evidence’ that the HOA violated its community documents or relevant statutes.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent HOA violated the alleged CC&R provisions.”, “legal_basis”: “ARIZ. ADMIN. CODE R2-19-119”, “topic_tags”: [ “burden of proof”, “legal standard”, “procedure” ] }, { “question”: “Can I force my HOA board to hire a professional property management company?”, “short_answer”: “Likely no, unless you can prove a specific requirement in the governing documents is being violated.”, “detailed_answer”: “The ALJ ruled that the homeowner did not meet the burden of proof to show that the HOA was violating its duties by not hiring a property manager, noting the evidence regarding the requirement was vague.”, “alj_quote”: “The Tribunal concludes that Petitioner has not met his burden to demonstrate by a preponderance of the evidence that HOA was not timely performing ‘their duties outlined’ in CC&Rs Page 2, Section A; and Management Agreement… regarding property management, the hearing record is simply vague.”, “legal_basis”: “CC&Rs / Management Agreement”, “topic_tags”: [ “property management”, “board duties”, “self-management” ] }, { “question”: “Does an HOA manager have unlimited spending power for emergency repairs?”, “short_answer”: “No, governing documents often place specific dollar limits on spending without board/association approval.”, “detailed_answer”: “The decision cites a management agreement that limits emergency repair spending (e.g., to $5,000) without prior approval from the Association.”, “alj_quote”: “Agent shall not incur liabilities (direct or contingent) which will at any time exceed the aggregate of $5,000.00 … without first obtaining the approval of the Association.”, “legal_basis”: “Management Agreement Contracts”, “topic_tags”: [ “spending limits”, “emergency repairs”, “budget” ] }, { “question”: “If I lose my case against the HOA, do I get my filing fee back?”, “short_answer”: “No, if the petition is denied, the petitioner is typically responsible for their own filing fees.”, “detailed_answer”: “The ALJ ordered that the Petitioner bear his own filing fees after Tanglewood Association was determined to be the prevailing party.”, “alj_quote”: “IT IS FURTHER ORDERED that Petitioner shall bear his filing fees.”, “legal_basis”: “Administrative Order”, “topic_tags”: [ “fees”, “costs”, “penalties” ] } ] }
Case Participants
Petitioner Side
- Nicholas Thomas (petitioner)
Represented self; Unit owner - Carl Kesler (property manager)
Managed Petitioner's unit; testified as witness - Lucas Thomas (witness)
Brother of Petitioner; former property manager of the unit
Respondent Side
- Hector Saavedra (board member)
Tanglewood Association
Co-President; represented the Respondent Association
Neutral Parties
- Kay A. Abramsohn (ALJ)
Office of Administrative Hearings
Also referred to as K. Abramson - Susan Nicolson (Commissioner)
Arizona Department of Real Estate
Recipient of the decision
