State of Arizona, et al. v. Foothills Reserve Master Owners Association, Inc.
At a Glance
| Parties | The State and a master-planned-community HOA disputed compensation after condemnation of homeowners’ easement rights in common areas. |
|---|---|
| Panel | Chief Justice Ann A. Scott Timmer, Vice Chief Justice John R. Lopez IV, Justice Clint Bolick, Justice James P. Beene, Justice William G. Montgomery, Justice Kathryn H. King, Justice John Pelander |
| Statutes interpreted |
Summary
Foothills Reserve is a recent Arizona Supreme Court HOA case involving condemnation of community rights in common areas. The homeowners in a master-planned community held appurtenant easements in HOA-owned open-space parcels. When the State condemned those easements for the South Mountain Freeway project, the key dispute became whether the homeowners could recover not just the value of the easements themselves, but also severance or proximity damages for the reduced value of their homes. The Arizona Supreme Court said yes. It held that appurtenant easements are part of the owners’ larger parcel for condemnation purposes and that A.R.S. § 12-1122(A)(2) allows severance damages in those circumstances. The case is not a typical internal-governance dispute, but it is directly useful whenever an HOA represents owners concerning common-area easement rights created by a declaration, plat, or master-plan structure.
Holding
Homeowners may recover severance-type damages when appurtenant easements in HOA common areas are condemned, because those easements are part of the owners’ larger parcel for purposes of A.R.S. § 12-1122(A)(2).
Reasoning
The court treated the owners’ easements as real property interests attached to and running with their homes. Because the homes and the easement rights form one integrated property package, taking the easements can damage the remaining homes even when the State does not physically take the lots themselves.
The court also relied on the declaration and plat structure of the community. The homeowners had both positive and negative easement interests in the common areas, and the HOA was authorized to represent them in condemnation proceedings. That framework supported a damages analysis that looked beyond the common-area parcel alone.
Why This Matters for HOAs
For Arizona HOAs, the case confirms that owner easement rights in common areas are not abstract amenities. They are compensable property interests. That matters in condemnation, utility, roadway, and infrastructure disputes involving common-area burdens.
The decision also reinforces the representative role of an HOA when the declaration authorizes the association to act on behalf of owners whose appurtenant rights are at stake.
