Case Summary
| Case ID | 20F-H2019020-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2020-02-14 |
| Administrative Law Judge | Diane Mihalsky |
| Outcome | loss |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Rick and Lisa Holly | Counsel | Kevin P. Nelson, Esq. |
|---|---|---|---|
| Respondent | La Barranca II Homeowners Association | Counsel | Edward D. O’Brien, Esq. |
Alleged Violations
A.R.S. § 33-1817(B); CC&R Article 11.2.5
A.R.S. § 33-1811; CC&R Article 4.7
A.R.S. § 33-1803; CC&Rs Articles 11.3 and 12
Outcome Summary
The Administrative Law Judge dismissed the petition, finding that the Petitioners failed to establish by a preponderance of the evidence that the Respondent Homeowners Association violated A.R.S. §§ 33-1803, 33-1811, or 33-1817, or any of the cited CC&R provisions concerning intentional construction delay, conflict of interest, or retaliatory fines.
Why this result: Petitioners failed to meet the burden of proof (preponderance of the evidence) on all three issues alleged in the petition.
Key Issues & Findings
Intentional delay of construction
Petitioners alleged that Respondent intentionally delayed the approval and construction of their new home for over eleven months.
Orders: Petition dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
- A.R.S. § 33-1817(B)
- CC&R Article 11.2.5
Conflict of interest
Petitioners alleged that a Board Vice President and Secretary (who owned lots adjacent to Petitioners') were blocking approval of the home due to a conflict of interest.
Orders: Petition dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
- A.R.S. § 33-1811
- CC&R Article 4.7
Retaliatory fines
Petitioners alleged fear of prospective retaliatory imposition of fines.
Orders: Petition dismissed.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
- A.R.S. § 33-1803(B)
- CC&R Article 11.3
- CC&R Article 12
Analytics Highlights
- A.R.S. § 33-1803
- A.R.S. § 33-1803(B)
- A.R.S. § 33-1811
- A.R.S. § 33-1817
- A.R.S. § 33-1817(B)
- A.R.S. § 32-2199(B)
- A.R.S. § 41-1092.07(G)(2)
- A.A.C. R2-19-119(A)
- A.A.C. R2-19-119(B)(1)
- A.A.C. R2-19-119(B)(2)
- CC&R Article 4.7
- CC&R Article 11.2.5
- CC&R Article 11.3
- CC&R Article 12
Video Overview
Audio Overview
Decision Documents
20F-H2019020-REL Decision – 769746.pdf
Questions
Question
Does a board member have a conflict of interest just because they own a lot next to mine?
Short Answer
No. Owning a neighboring lot does not automatically create a conflict of interest or imply bias.
Detailed Answer
The ALJ reasoned that in planned communities, especially smaller ones, board and committee members will inevitably have to regulate their neighbors. Without evidence of actual animus or discriminatory intent, simply owning a contiguous lot is not a conflict of interest that prevents a member from voting on architectural plans.
Alj Quote
In any homeowners’ association, but especially In a small development having only 71 lots, the persons who volunteer to serve on homeowners’ associations’ boards and ARCs will necessarily be regulating their neighbors.
Legal Basis
A.R.S. § 33-1811
Topic Tags
- Conflict of Interest
- Board of Directors
- Neighbors
Question
Is the Architectural Review Committee (ARC) required to help me design my home to meet the guidelines?
Short Answer
No. The ARC's role is to review submitted plans for compliance, not to assist in the design process.
Detailed Answer
While an ARC might offer guidance, the decision clarifies that their official duty is strictly to review plans against the governing documents. They are not obligated to help owners or builders design compliant structures.
Alj Quote
It is not ARC’s job to help an owner design a home that complies with Respondent’s Guidelines, only to review plans that are submitted for compliance.
Legal Basis
CC&Rs Article 11
Topic Tags
- Architectural Review
- Design Guidelines
- HOA Obligations
Question
Can I file a complaint against my HOA because I am afraid they might fine me in the future?
Short Answer
No. You cannot base a legal complaint on the speculation of future retaliatory fines.
Detailed Answer
The Administrative Law Judge ruled that a petition cannot rely on fear of potential future actions. Unless the HOA has actually assessed a fine or penalty, a claim regarding retaliatory fines is considered speculative and will be dismissed.
Alj Quote
Any prospective prohibition on fines would be based on nothing but speculation. . . . Petitioners have not established that Respondent violated A.R.S. § 33-1803(B) or Articles 11.3 or 12 by assessing retaliatory fines or penalties against Petitioners.
Legal Basis
A.R.S. § 33-1803(B)
Topic Tags
- Fines
- Retaliation
- Dispute Resolution
Question
Who has to prove that the HOA violated the rules in a hearing?
Short Answer
The homeowner (Petitioner) bears the burden of proof.
Detailed Answer
In an administrative hearing, the homeowner filing the petition must prove that the HOA violated the statutes or CC&Rs. The standard of proof is a 'preponderance of the evidence,' meaning the homeowner must show it is more likely than not that the violation occurred.
Alj Quote
Petitioners bear the burden of proof to establish that Respondent violated the Act or Respondent’s CC&Rs by a preponderance of the evidence.
Legal Basis
A.R.S. § 41-1092.07(G)(2)
Topic Tags
- Legal Standards
- Burden of Proof
- Hearings
Question
Is the HOA responsible for delays if my builder doesn't understand the design guidelines?
Short Answer
No. The HOA is not liable for delays caused by a builder's failure to submit compliant plans.
Detailed Answer
If an HOA's architectural committee is reasonably responsive to submissions, they are not at fault for construction delays resulting from a contractor's misunderstanding of the design rules or failure to meet requirements.
Alj Quote
On this record, it appears that Hoamco and the ARC were reasonably responsive . . . and that any delay in construction appears more likely based on Brilar principal’s imperfect understanding of the Guidelines’ requirements.
Legal Basis
A.R.S. § 33-1817(B)
Topic Tags
- Architectural Review
- Construction Delays
- Vendor Issues
Question
Can I rely on my contractor's timeline estimates for when the HOA will approve my plans?
Short Answer
No. You should rely on the timelines specified in the CC&Rs and statutes, not third-party estimates.
Detailed Answer
The ALJ noted that a homeowner's expectations based on their builder's estimates are not binding on the HOA. The official governing documents determine the procedural timeline, and reliance on outside estimates does not constitute a violation by the HOA.
Alj Quote
Mrs. Holly candidly testified that Petiitoners’ expectations about how long it would take to build their house was based on Brilar’s principles’ estimates, not anything in statutes or Respondent’s CC&Rs . . .
Legal Basis
N/A
Topic Tags
- Timelines
- Construction
- Expectations
Question
Can the HOA charge a fee for reviewing architectural plans?
Short Answer
Yes, if the CC&Rs allow for it.
Detailed Answer
The decision affirms that CC&Rs can grant the Architectural Review Committee the power to assess reasonable fees in connection with the review of plans.
Alj Quote
Article 11.3 of Respondent’s CC&Rs concerns general provisions for the ARC, including that it may assess reasonable fees in connection with its review of plans . . .
Legal Basis
CC&Rs Article 11.3
Topic Tags
- Fees
- Architectural Review
- CC&Rs
Case
- Docket No
- 20F-H2019020-REL
- Case Title
- Rick and Lisa Holly vs. La Barranca II Homeowners Association
- Decision Date
- 2020-02-14
- Alj Name
- Diane Mihalsky
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
Does a board member have a conflict of interest just because they own a lot next to mine?
Short Answer
No. Owning a neighboring lot does not automatically create a conflict of interest or imply bias.
Detailed Answer
The ALJ reasoned that in planned communities, especially smaller ones, board and committee members will inevitably have to regulate their neighbors. Without evidence of actual animus or discriminatory intent, simply owning a contiguous lot is not a conflict of interest that prevents a member from voting on architectural plans.
Alj Quote
In any homeowners’ association, but especially In a small development having only 71 lots, the persons who volunteer to serve on homeowners’ associations’ boards and ARCs will necessarily be regulating their neighbors.
Legal Basis
A.R.S. § 33-1811
Topic Tags
- Conflict of Interest
- Board of Directors
- Neighbors
Question
Is the Architectural Review Committee (ARC) required to help me design my home to meet the guidelines?
Short Answer
No. The ARC's role is to review submitted plans for compliance, not to assist in the design process.
Detailed Answer
While an ARC might offer guidance, the decision clarifies that their official duty is strictly to review plans against the governing documents. They are not obligated to help owners or builders design compliant structures.
Alj Quote
It is not ARC’s job to help an owner design a home that complies with Respondent’s Guidelines, only to review plans that are submitted for compliance.
Legal Basis
CC&Rs Article 11
Topic Tags
- Architectural Review
- Design Guidelines
- HOA Obligations
Question
Can I file a complaint against my HOA because I am afraid they might fine me in the future?
Short Answer
No. You cannot base a legal complaint on the speculation of future retaliatory fines.
Detailed Answer
The Administrative Law Judge ruled that a petition cannot rely on fear of potential future actions. Unless the HOA has actually assessed a fine or penalty, a claim regarding retaliatory fines is considered speculative and will be dismissed.
Alj Quote
Any prospective prohibition on fines would be based on nothing but speculation. . . . Petitioners have not established that Respondent violated A.R.S. § 33-1803(B) or Articles 11.3 or 12 by assessing retaliatory fines or penalties against Petitioners.
Legal Basis
A.R.S. § 33-1803(B)
Topic Tags
- Fines
- Retaliation
- Dispute Resolution
Question
Who has to prove that the HOA violated the rules in a hearing?
Short Answer
The homeowner (Petitioner) bears the burden of proof.
Detailed Answer
In an administrative hearing, the homeowner filing the petition must prove that the HOA violated the statutes or CC&Rs. The standard of proof is a 'preponderance of the evidence,' meaning the homeowner must show it is more likely than not that the violation occurred.
Alj Quote
Petitioners bear the burden of proof to establish that Respondent violated the Act or Respondent’s CC&Rs by a preponderance of the evidence.
Legal Basis
A.R.S. § 41-1092.07(G)(2)
Topic Tags
- Legal Standards
- Burden of Proof
- Hearings
Question
Is the HOA responsible for delays if my builder doesn't understand the design guidelines?
Short Answer
No. The HOA is not liable for delays caused by a builder's failure to submit compliant plans.
Detailed Answer
If an HOA's architectural committee is reasonably responsive to submissions, they are not at fault for construction delays resulting from a contractor's misunderstanding of the design rules or failure to meet requirements.
Alj Quote
On this record, it appears that Hoamco and the ARC were reasonably responsive . . . and that any delay in construction appears more likely based on Brilar principal’s imperfect understanding of the Guidelines’ requirements.
Legal Basis
A.R.S. § 33-1817(B)
Topic Tags
- Architectural Review
- Construction Delays
- Vendor Issues
Question
Can I rely on my contractor's timeline estimates for when the HOA will approve my plans?
Short Answer
No. You should rely on the timelines specified in the CC&Rs and statutes, not third-party estimates.
Detailed Answer
The ALJ noted that a homeowner's expectations based on their builder's estimates are not binding on the HOA. The official governing documents determine the procedural timeline, and reliance on outside estimates does not constitute a violation by the HOA.
Alj Quote
Mrs. Holly candidly testified that Petiitoners’ expectations about how long it would take to build their house was based on Brilar’s principles’ estimates, not anything in statutes or Respondent’s CC&Rs . . .
Legal Basis
N/A
Topic Tags
- Timelines
- Construction
- Expectations
Question
Can the HOA charge a fee for reviewing architectural plans?
Short Answer
Yes, if the CC&Rs allow for it.
Detailed Answer
The decision affirms that CC&Rs can grant the Architectural Review Committee the power to assess reasonable fees in connection with the review of plans.
Alj Quote
Article 11.3 of Respondent’s CC&Rs concerns general provisions for the ARC, including that it may assess reasonable fees in connection with its review of plans . . .
Legal Basis
CC&Rs Article 11.3
Topic Tags
- Fees
- Architectural Review
- CC&Rs
Case
- Docket No
- 20F-H2019020-REL
- Case Title
- Rick and Lisa Holly vs. La Barranca II Homeowners Association
- Decision Date
- 2020-02-14
- Alj Name
- Diane Mihalsky
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Rick Holly (petitioner)
La Barranca II Homeowners Association Member - Lisa Holly (petitioner)
La Barranca II Homeowners Association Member
Also referred to as Mrs. Holly - Kevin P. Nelson (petitioner attorney)
Tiffany & Bosco - Brian Bracken (witness/contractor's principal)
Brilar Homes, LLC
Petitioners' general contractor - Larry E. Smith (witness/contractor's principal)
Brilar Homes, LLC
Petitioners' general contractor
Respondent Side
- La Barranca II Homeowners Association (respondent)
HOA party - Edward D. O’Brien (HOA attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP - Alexia Firehawk (HOA attorney)
Carpenter, Hazlewood, Delgado & Bolen, LLP - William Bohan (HOA board member/ARC member/witness)
La Barranca II Homeowners Association
Board Vice President - Nancy Williams (HOA board member/ARC member)
La Barranca II Homeowners Association
Board Secretary - Luke Hyde (property manager staff)
Hoamco
Architectural Department Manager - Josh Hall (property manager staff)
Hoamco
Architectural Department Staff - Neil True (architect consultant)
Hoamco/ARC Consultant
Consultant architect reviewing plans
Neutral Parties
- Diane Mihalsky (ALJ)
OAH - John Davis (fire marshall)
Sedona District Fire Marshall
Consulted by HOA regarding dumpster placement - Judy Lowe (ADRE Commissioner)
Arizona Department of Real Estate
