The Starpass Standthrough: Homeowners vs. Perpetual Developer Control

1. Introduction: A Community at a Crossroads

In the administrative matter of Case No. 25F-H044-REL, the Starpass community sits at a legal precipice. What began as a dispute over board representation has evolved into a high-stakes battle over Declarant Control—the statutory and contractual mechanism that allows a developer to maintain unilateral power over a Homeowners Association (HOA).

For the residents of Starpass, this power has been wielded by Chris Ansley (Respondent) for decades, allowing the developer to outvote homeowners and appoint the Board of Directors at will. Homeowner Michael J. Schmidt (Petitioner) has launched a mission to dismantle this regime, navigating a year-long procedural labyrinth marked by judicial reassignments, office floods, and complex statutory shifts. Schmidt’s argument is clear: under modern Arizona law—specifically A.R.S. § 33-1820—the developer’s era of perpetual control must come to a definitive end.

2. The Numbers Game: How 6,000 Votes Materialize

The developer’s dominance rests on "Type B" memberships, which grant three votes for every lot or "planned lot" owned. To the casual observer, Starpass is largely built-out, yet the Respondent continues to exercise thousands of votes.

The legal engine for this voting power is found in the community’s governing documents:

Article 1, Section 22: "Planned Lot" means a private residential lot or units planned in areas not yet subdivided… a forecast which Declarant in its sole discretion may adjust in accordance with future development plans with particular attention given to the recorded subdivision plat of the properties.

Mathematical Phantoms vs. Foreclosure Reality

The dispute centers on a "Calculation of Power" that the Petitioner argues is built on fiction:

• Respondent’s View: Mr. Ansley claims the developer retains 2,231 planned lots, totaling roughly 6,693 votes. This specific figure was not a recent calculation but was pulled from a 2014 "Notice of Designation" recorded by the Security Agency of Arizona. Ansley maintains a density claim of 2.3 lots per acre across remaining holdings.
• Petitioner’s View: Mr. Schmidt contends these thousands of votes are mathematical phantoms. He points to a staggering "Math Gap" created by the developer’s financial history, noting that the vast majority of the developer’s land was lost to CRE3 and Rodoc LLC via foreclosure and receivership following a $192 million judgment. Schmidt argues that if the developer no longer owns the land, the votes associated with that land must vanish.

3. The Reservoir Conflict: Developable Land or Infrastructure?

A focal point of the 2025 testimony was Block D, or the Coyote Pass reservoir. While the developer views this as a "planned lot" goldmine, hydrologist Bruce Prior presented a starkly different reality regarding the infrastructure.

This distinction of ownership is vital: the reservoir is held by a specific entity, Starrpass Resort Developments LLC, which Ansley uses to maintain declarant status despite the loss of other developable acreage.

4. Legal Battleground: A.R.S. § 33-1820

The Petitioner’s primary weapon is A.R.S. § 33-1820, an Arizona statute effective as of September 2024. This law provides two distinct triggers for the termination of developer control:

1. Section 1: Requires community documents to provide a specific date or a clear method for calculating the termination of control.
2. Section 2: Mandates that control must terminate no later than the conveyance of the second-to-last lot to a buyer.

The Retroactivity Debate

The Respondent’s primary defense is "Issue Preclusion," arguing that a 2024 ruling (Case No. 24F-H030-REL) already settled his right to appoint the board. However, the Petitioner argues the new statute changes the landscape:

• The Developer’s Defense: Citing Calabria Ranch, Ansley argues the CC&Rs are a contract. He contends the law cannot be applied "retroactively" to the 8th Amendment (recorded in 2020) without violating the sanctity of vested contract rights.
• The Petitioner’s Argument: Citing Craig v. Boulder City, Schmidt argues that applying the statute is a prospective application to current conduct. Because the HOA continues to operate and hold elections today, it must comply with the laws currently on the books, regardless of when the original documents were signed.

5. The Paper Trail: The "Affiliate" Loophole

The evolution of the Starpass Declaration through its 7th and 8th Amendments reveals a strategic shift in how power is retained. Originally, control was tied to "vote parity"—the point where homeowner votes caught up to developer votes.

The 8th Amendment replaced this with the "Last Lot Sold" rule. Under this rule, Type B membership only terminates when the declarant sells the final lot to a third party. However, the advocate’s "red flag" is found in the fine print: termination only occurs upon a sale to a party "other than an affiliate." This phrasing potentially allows the developer to transfer lots between his own LLCs indefinitely, creating a cycle of perpetual control that never triggers the "last lot" requirement.

6. The Procedural Odyssey: A Year in Administrative Court

Homeowners have navigated a grueling procedural labyrinth to reach this point. Since June 2025, the case has faced:

• Judicial Turnover: The case moved from ALJ Samuel Fox to ALJ Jenna Clark.
• Starting Over: ALJ Clark reviewed Fox’s tapes for Issue 1 (vote calculations) but required the parties to resume the presentation of evidence for Issues 2 and 3 (statutory violations) to ensure a clean record.
• Logistical Hurdles: A flood at the Office of Administrative Hearings (OAH) forced the proceedings into a virtual format, further extending a timeline that included multiple continuances for document production.

7. Conclusion & Key Takeaways for Homeowners

In the final hearing on April 30, 2026, the Petitioner rested his case on the reality of the community's land ownership: the developer’s "Type B" votes are tied to land he no longer owns due to foreclosure. The Respondent stood firm on "Issue Preclusion," maintaining that his rights as Declarant remained intact despite the loss of property.

Lessons for HOA Members

1. The "Affiliate" Trap: Always scrutinize termination triggers. Wording like "other than an affiliate" can allow a developer to move property between internal companies to avoid relinquishing board control.
2. Statutory Supremacy: A.R.S. § 33-1820 represents a significant shift in Arizona law. Even if your CC&Rs allow for perpetual control, Section 2 of this statute creates a "second-to-last lot" ceiling that may override your community’s legacy documents.
3. The Foreclosure Trap: A developer may lose their land in foreclosure to entities like CRE3 but still attempt to claim "Declarant" status through the community’s governing documents. Monitoring the "Calculation of Power" is the only way to ensure votes remain tied to actual ownership.
4. The Weight of Past Rulings: "Issue Preclusion" is a favorite defense of developers. If a homeowner loses a challenge once, the developer will use that decision as a shield in all future disputes, making the first legal challenge the most critical.

A final decision from Administrative Law Judge Jenna Clark is anticipated by June 12, 2026. This ruling will finally determine if the "planned lots" of the past can continue to silence the homeowners of the present.