Case Summary
| Case ID | 24F-H006-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2023-10-26 |
| Administrative Law Judge | Velva Moses-Thompson |
| Outcome | The Administrative Law Judge dismissed the petition, ruling that the statutes cited by the petitioner regarding conveyance of common elements (A.R.S. §§ 33-1252 and 33-1217) do not apply to the leasing of common elements, which was the action taken by the Respondent HOA. |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Susannah Sabnekar | Counsel | — |
|---|---|---|---|
| Respondent | Four Peaks Vista Owners Association | Counsel | Maria McKee |
Alleged Violations
A.R.S. §§ 33-1252 and 33-1217
Outcome Summary
The Administrative Law Judge dismissed the petition, ruling that the statutes cited by the petitioner regarding conveyance of common elements (A.R.S. §§ 33-1252 and 33-1217) do not apply to the leasing of common elements, which was the action taken by the Respondent HOA.
Why this result: The statutes cited by the Petitioner apply to conveyances, but the disputed action was determined to be a lease, which is treated separately under Arizona's Condominium Act.
Key Issues & Findings
Whether the Board violated statute by conveying a portion of common elements without a vote from all homeowners.
Petitioner alleged the HOA violated A.R.S. §§ 33-1252 and 33-1217 by approving a lease agreement granting the Declarant (Four Peaks) the right to use a portion of the clubhouse as a management office, arguing this action constituted a conveyance requiring an 80% homeowner vote. The ALJ ruled that the statutes apply only to conveyances, not leases, and found no violation.
Orders: The petition is dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
- 33-1252
- 33-1217
- 33-1242
- 33-1225
Analytics Highlights
- 33-1252
- 33-1217
- 33-1242
- 33-1225
- 33-1226
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Video Overview
Audio Overview
Decision Documents
24F-H006-REL Decision – 1097274.pdf
24F-H006-REL Decision – 1099296.pdf
24F-H006-REL Decision – 1099320.pdf
24F-H006-REL Decision – 1106232.pdf
24F-H006-REL Decision – 1097274.pdf
24F-H006-REL Decision – 1099296.pdf
24F-H006-REL Decision – 1099320.pdf
24F-H006-REL Decision – 1106232.pdf
This summary details the hearing proceedings, key arguments, and final decision in the administrative law matter of *Susannah Sabnekar v. Four Peaks Vista Owners Association*, Case No. 24F-H006-REL.
Summary of Administrative Hearing
Key Facts and Background
The Petitioner, Susannah Sabnekar (a condominium unit owner and member of the Association), challenged the Respondent, Four Peaks Vista Owners Association. The dispute centered on a March 21, 2022, decision by the Association’s Board to approve a lease agreement. This Lease granted the Declarant (Four Peaks Investment Partners I LLC and II LLC) the right to maintain a leasing and property management office within a portion of the community’s clubhouse, which constitutes a common element. Petitioner alleged that four Rockwell employees serving on the board voted to approve this motion on July 13, 2023.
Main Legal Issue
The core dispute, heard by Administrative Law Judge Velva Moses-Thompson on October 6, 2023, was whether the Board violated Arizona Revised Statutes (A.R.S.) §§ 33-1252 and 33-1217 by effectively "conveying" a portion of the common elements without securing the statutory vote from all homeowners.
Petitioner's Arguments
Petitioner Susannah Sabnekar, supported by witness Amy Watier, argued that the Board's action was a conveyance or encumbrance of a common element. Petitioner asserted that A.R.S. § 33-1252(A) requires that common elements may only be conveyed if 80% of the persons entitled to vote agree. Furthermore, A.R.S. § 33-1217(E) states that common elements are not subject to partition, and any purported conveyance or encumbrance made without the unit to which the interest is allocated is void.
Respondent's Arguments
The Association maintained that the material facts were not in dispute and that the Petitioner could not establish a statutory violation. The Respondent's primary legal position was that the Petitioner conflated "conveyance" with "leasing," which are separate legal concepts under the Arizona Condominium Act.
Key points raised by the Respondent included:
- Statutory Distinction: A.R.S. § 33-1242(A)(9) expressly grants the Association the right to "Grant easements, leases, licenses and concessions through or over the common elements," without referencing the 80% vote requirement of A.R.S. § 33-1252.
- Definition of Conveyance: A conveyance, requiring compliance with A.R.S. § 33-1252, signifies a total transfer of fee title and must be evidenced and recorded in the same manner as a deed (A.R.S. § 33-1252(B)). A lease, which expires after a set period, does not meet the formal requirements of a conveyance.
- Declarant Rights: The Lease was permitted under A.R.S. § 33-1225, which allows a declarant to maintain sales or management offices on common elements unless prohibited by the declaration or law.
Final Decision and Outcome
The Administrative Law Judge (ALJ) denied the Respondent's pre-hearing Motion to Dismiss, allowing the hearing to proceed. However, after considering the arguments and evidence, the ALJ issued a decision on October 26, 2023, concluding that A.R.S. §§ 33-1252 and 33-1217 do not apply to leases, but rather to conveyances.
Finding that no evidence of a conveyance of common elements was presented, the ALJ determined that Petitioner failed to meet the burden of proof to establish the merits of the petition.
The petition was ordered dismissed.
Questions
Question
Does leasing a common area count as 'conveying' it, requiring a supermajority vote?
Short Answer
No. Leasing and conveying are separate legal concepts in Arizona, and leasing does not trigger the voting requirements of a conveyance.
Detailed Answer
The ALJ determined that Arizona law distinguishes between leasing real property and conveying it. While a conveyance (transfer of title) of common elements often requires an 80% vote under A.R.S. § 33-1252, granting a lease does not. The Association has the specific statutory right to grant leases over common elements without meeting the stricter requirements for a conveyance.
Alj Quote
Plainly, Arizona law distinguishes between leasing real property and conveying it. These are two separate legal concepts. … The Administrative Law Judge concludes that A.R.S. §§ 33-1252 and A.R.S. 33-1217 do not apply to leases, but rather conveyances.
Legal Basis
A.R.S. § 33-1242(A)(9); A.R.S. § 33-1252
Topic Tags
- common elements
- leasing
- voting requirements
Question
Can the HOA board authorize a lease of common elements without a vote of all homeowners?
Short Answer
Yes. The Board generally has the authority to grant leases, whereas conveying the property would require a homeowner vote.
Detailed Answer
The decision highlights that A.R.S. § 33-1242(A)(9) expressly gives the Association the right to lease common elements. This section does not reference the voting requirements found in A.R.S. § 33-1252, which applies only when the Association conveys or encumbers the property (like a mortgage).
Alj Quote
Notably, subsection (A)(9) expressly provides the Association the right to enter into the Lease, without any mention of A.R.S. § 33-1252, while the right to 'convey' Common Elements is subject to the requirements imposed in A.R.S. § 33-1252.
Legal Basis
A.R.S. § 33-1242(A)(9)
Topic Tags
- board authority
- leasing
- common elements
Question
Is a Declarant allowed to use common elements for management offices?
Short Answer
Yes, a Declarant may maintain offices on common elements unless the Declaration specifically prohibits it.
Detailed Answer
The ALJ cited A.R.S. § 33-1225, which explicitly permits a declarant to maintain sales and management offices on common elements unless the community's declaration says otherwise or another law prohibits it.
Alj Quote
A declarant may maintain sales offices, management offices and models in units or on common elements in the condominium unless: 1. The declaration provides otherwise. 2. Such use is prohibited by another provision of law or local ordinances.
Legal Basis
A.R.S. § 33-1225
Topic Tags
- declarant rights
- common elements
- offices
Question
What is the burden of proof for a homeowner filing a petition against their HOA?
Short Answer
The homeowner must prove their case by a 'preponderance of the evidence'.
Detailed Answer
The homeowner (Petitioner) is responsible for proving that the HOA violated the statute. The standard is 'preponderance of the evidence,' meaning they must show it is more probable than not that the violation occurred.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated the A.R.S. §§ 33-1252 and A.R.S. 33-1217 by a preponderance of the evidence.
Legal Basis
A.A.C. R2-19-119
Topic Tags
- legal procedure
- burden of proof
Question
What qualifies as a 'conveyance' of HOA property?
Short Answer
A conveyance is generally interpreted as a total transfer of fee title, usually evidenced by a recorded deed.
Detailed Answer
The decision clarifies that a conveyance involves a permanent transfer of interest, such as through a deed, and must be recorded. A lease, which is for a set period and does not transfer title, does not qualify as a conveyance.
Alj Quote
The Legislature… made clear its intent that a conveyance is a total transfer of fee title. … Furthermore, once any such 'conveyance' occurs, it must be evidenced by the execution and recording of the document in the same manner as a deed.
Legal Basis
A.R.S. § 33-1252(A); A.R.S. § 33-1252(B)
Topic Tags
- definitions
- conveyance
- property rights
Question
How are ambiguous restrictive covenants in CC&Rs interpreted?
Short Answer
If they are unambiguous, they are enforced according to the intent of the parties.
Detailed Answer
The ALJ noted that restrictive covenants must be viewed as a whole and interpreted based on their underlying purpose. If the text is clear (unambiguous), it is enforced to uphold the parties' intent.
Alj Quote
In Arizona, if a restrictive covenant is unambiguous, it is enforced to give effect to the intent of the parties. 'Restrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein.'
Legal Basis
Case Law (Powell v. Washburn)
Topic Tags
- CC&Rs
- interpretation
- legal standards
Case
- Docket No
- 24F-H006-REL
- Case Title
- Susannah Sabnekar vs. Four Peaks Vista Owners Association
- Decision Date
- 2023-10-26
- Alj Name
- Velva Moses-Thompson
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
Does leasing a common area count as 'conveying' it, requiring a supermajority vote?
Short Answer
No. Leasing and conveying are separate legal concepts in Arizona, and leasing does not trigger the voting requirements of a conveyance.
Detailed Answer
The ALJ determined that Arizona law distinguishes between leasing real property and conveying it. While a conveyance (transfer of title) of common elements often requires an 80% vote under A.R.S. § 33-1252, granting a lease does not. The Association has the specific statutory right to grant leases over common elements without meeting the stricter requirements for a conveyance.
Alj Quote
Plainly, Arizona law distinguishes between leasing real property and conveying it. These are two separate legal concepts. … The Administrative Law Judge concludes that A.R.S. §§ 33-1252 and A.R.S. 33-1217 do not apply to leases, but rather conveyances.
Legal Basis
A.R.S. § 33-1242(A)(9); A.R.S. § 33-1252
Topic Tags
- common elements
- leasing
- voting requirements
Question
Can the HOA board authorize a lease of common elements without a vote of all homeowners?
Short Answer
Yes. The Board generally has the authority to grant leases, whereas conveying the property would require a homeowner vote.
Detailed Answer
The decision highlights that A.R.S. § 33-1242(A)(9) expressly gives the Association the right to lease common elements. This section does not reference the voting requirements found in A.R.S. § 33-1252, which applies only when the Association conveys or encumbers the property (like a mortgage).
Alj Quote
Notably, subsection (A)(9) expressly provides the Association the right to enter into the Lease, without any mention of A.R.S. § 33-1252, while the right to 'convey' Common Elements is subject to the requirements imposed in A.R.S. § 33-1252.
Legal Basis
A.R.S. § 33-1242(A)(9)
Topic Tags
- board authority
- leasing
- common elements
Question
Is a Declarant allowed to use common elements for management offices?
Short Answer
Yes, a Declarant may maintain offices on common elements unless the Declaration specifically prohibits it.
Detailed Answer
The ALJ cited A.R.S. § 33-1225, which explicitly permits a declarant to maintain sales and management offices on common elements unless the community's declaration says otherwise or another law prohibits it.
Alj Quote
A declarant may maintain sales offices, management offices and models in units or on common elements in the condominium unless: 1. The declaration provides otherwise. 2. Such use is prohibited by another provision of law or local ordinances.
Legal Basis
A.R.S. § 33-1225
Topic Tags
- declarant rights
- common elements
- offices
Question
What is the burden of proof for a homeowner filing a petition against their HOA?
Short Answer
The homeowner must prove their case by a 'preponderance of the evidence'.
Detailed Answer
The homeowner (Petitioner) is responsible for proving that the HOA violated the statute. The standard is 'preponderance of the evidence,' meaning they must show it is more probable than not that the violation occurred.
Alj Quote
Petitioner bears the burden of proof to establish that Respondent violated the A.R.S. §§ 33-1252 and A.R.S. 33-1217 by a preponderance of the evidence.
Legal Basis
A.A.C. R2-19-119
Topic Tags
- legal procedure
- burden of proof
Question
What qualifies as a 'conveyance' of HOA property?
Short Answer
A conveyance is generally interpreted as a total transfer of fee title, usually evidenced by a recorded deed.
Detailed Answer
The decision clarifies that a conveyance involves a permanent transfer of interest, such as through a deed, and must be recorded. A lease, which is for a set period and does not transfer title, does not qualify as a conveyance.
Alj Quote
The Legislature… made clear its intent that a conveyance is a total transfer of fee title. … Furthermore, once any such 'conveyance' occurs, it must be evidenced by the execution and recording of the document in the same manner as a deed.
Legal Basis
A.R.S. § 33-1252(A); A.R.S. § 33-1252(B)
Topic Tags
- definitions
- conveyance
- property rights
Question
How are ambiguous restrictive covenants in CC&Rs interpreted?
Short Answer
If they are unambiguous, they are enforced according to the intent of the parties.
Detailed Answer
The ALJ noted that restrictive covenants must be viewed as a whole and interpreted based on their underlying purpose. If the text is clear (unambiguous), it is enforced to uphold the parties' intent.
Alj Quote
In Arizona, if a restrictive covenant is unambiguous, it is enforced to give effect to the intent of the parties. 'Restrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein.'
Legal Basis
Case Law (Powell v. Washburn)
Topic Tags
- CC&Rs
- interpretation
- legal standards
Case
- Docket No
- 24F-H006-REL
- Case Title
- Susannah Sabnekar vs. Four Peaks Vista Owners Association
- Decision Date
- 2023-10-26
- Alj Name
- Velva Moses-Thompson
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Susannah Sabnekar (petitioner)
Homeowner - Amy Watier (witness)
Homeowner, current board member, and previous board member
Respondent Side
- Maria McKee (HOA attorney)
Carpenter, Hazelwood, Delgado & Bolen, PLC
Council for Respondent - Chad P. Miesen (HOA attorney)
Carpenter, Hazelwood, Delgado & Bolen, PLC
Council for Respondent - Charlie Markle (HOA attorney)
Council for the Association - Kathy Gower (property manager)
Four Peaks Vista Owners Association
Community manager - Shelley Kobat (board member)
Four Peaks Vista Owners Association
Associate board president
Neutral Parties
- Velva Moses-Thompson (ALJ)
OAH - Susan Nicolson (commissioner)
Arizona Department of Real Estate - AHansen (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission list - vnunez (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission list - djones (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission list - labril (ADRE staff)
Arizona Department of Real Estate
Recipient of transmission list