Case Summary
| Case ID |
25F-H084-REL |
| Agency |
— |
| Tribunal |
— |
| Decision Date |
2026-01-09 |
| Administrative Law Judge |
SJV |
| Outcome |
Petitioner's petition is affirmed. |
| Filing Fees Refunded |
— |
| Civil Penalties |
$0.00 |
Parties & Counsel
| Petitioner |
Virginia Kostman |
Counsel |
— |
| Respondent |
Bella Tierra Community Association |
Counsel |
— |
Alleged Violations
No violations listed
Decision Documents
25F-H084-REL Decision – 1373536.pdf
Uploaded 2026-04-24T12:55:27 (69.4 KB)
25F-H084-REL Decision – 1384451.pdf
Uploaded 2026-04-24T12:55:30 (100.6 KB)
25F-H084-REL Decision – 1392666.pdf
Uploaded 2026-04-24T12:55:33 (45.7 KB)
Administrative Briefing: Kostman v. Bella Tierra Community Association (No. 25F-H084-REL)
Executive Summary
This document provides a comprehensive overview of the administrative hearing and subsequent decision in the matter of Virginia Kostman v. Bella Tierra Community Association. The dispute centered on a $20 delinquency fee assessed against a homeowner following a chaotic transition between property management companies.
The Administrative Law Judge (ALJ) ruled in favor of the Petitioner, Virginia Kostman, finding that the Bella Tierra Community Association (Respondent) violated its own Covenants, Conditions, and Restrictions (CC&Rs) by deeming a payment delinquent when it had been sent to the address provided on the official billing statement. The final order mandated the removal of the delinquency fees and required the Respondent to reimburse the Petitioner’s $500.00 filing fee. Subsequent filings indicate the Respondent has failed to comply with the reimbursement order.
Case Overview
• Petitioner: Virginia Kostman
• Respondent: Bella Tierra Community Association
• Management Entities: Platinum Management, Inc. (former); Agave Management Solutions (current).
• Primary Issue: Violation of CC&R Article 6.9.1 regarding the assessment of delinquency and late fees.
• Docket Number: 25F-H084-REL
• Hearing Date: December 30, 2025
Factual Background and Timeline
The dispute originated from the abrupt closure of the Association’s management firm and subsequent communication failures during the transition.
The Management Transition
• December 2024: Platinum Management, Inc. issued the first quarter 2025 assessment bills, which were due January 1, 2025. The bills directed homeowners to send payments to Platinum’s address.
• December 17, 2024: Platinum Management abruptly ceased operations.
• January 2025: Agave Management Solutions, founded by a former Platinum executive assistant, assumed management duties.
• Early January 2025: Agave mailed notices to homeowners regarding an updated mailing address for payments.
The Payment Conflict
• January 31, 2025: Petitioner initiated a bank bill-pay for the assessment. Because she had already received the December bill directing payment to Platinum, the payment was sent to the old address.
• March 4, 2025: Petitioner received notice from her bank—not the Respondent—that the check had been returned and destroyed due to an incorrect address.
• April 3, 2025: Petitioner attempted to notify the Respondent of the issue via their online portal. The Respondent claimed they did not receive this message because the portal was not yet fully operational.
• June 2025: Respondent assessed two delinquency fees totaling $20.00 to the Petitioner’s account for the “unpaid” January assessment.
• July 2025: Petitioner paid the January assessment a second time to resolve the balance.
Analysis of Arguments
Petitioner’s Position
Virginia Kostman argued that she was never delinquent because she followed the instructions provided on the official billing statement. She characterized the HOA’s actions as a “campaign of harassment” and an “extortion racket,” alleging that the management company knowingly assessed fees on homeowners who were victims of the management company’s own relocation errors.
Key Quotes from Petitioner:
• “I paid that assessment the minute I got the bill on time to the correct address. It’s a misstatement of fact to characterize it as an unpaid bill.”
• “They’ve been doing it knowingly… this was not a mistake. This was done on purpose.”
• “Being delinquent still prevents me from voting for the new HOA board… It is entirely possible they’re just doing this on purpose to keep me from being able to vote.”
Respondent’s Position
The Association, represented by counsel Eric O’Connor and witness Sarah Malovich (CFO of Agave Management), argued that the Petitioner was technically delinquent because the payment was not “received” by the current management by the January 31 deadline. They maintained that the delinquency fees were merely pass-through costs for administrative work (sending letters) and not penalties.
Key Quotes from Respondent Representatives:
• Eric O’Connor: “This case does not involve a refusal to accept the payment, a failure to communicate, or an improper assessment of penalties. It involves a delayed payment made unintentionally… and an association that exercised patience.”
• Sarah Malovich: “A delinquency fee is a fee that is charged to the association when letters have to go out to the homeowners… we add that fee to the homeowner’s account so that when the homeowner pays, the association recoups the money.”
Governing Provisions: CC&R Article 6.9.1
The hearing focused on the interpretation of Article 6.9.1, which states:
• Any assessment not paid within 15 days of the due date is deemed delinquent.
• Delinquent assessments bear interest at 12% per annum.
• The Board may establish a late fee not to exceed $15 or 10% of the unpaid amount.
• Late fees may only be imposed after providing notice to the owner that the assessment is overdue.
Administrative Law Judge’s Findings and Decision
The ALJ, Sondra J. Vanella, concluded that the Petitioner established by a preponderance of the evidence that the Respondent violated the CC&Rs.
Findings of Fact
1. Fault of Respondent: The ALJ found that the lack of receipt was due to the “abrupt change in management companies” and not any error by the Petitioner.
2. Timeliness: Because the Petitioner initiated payment by January 31 (the date the HOA considered payments “past due”), and sent it to the only address she had been officially provided at the time of the bill’s issuance, the payment was considered timely.
3. Communication Failures: The Respondent failed to respond to the Petitioner’s April 2025 email and did not notify her of the missing payment until the April statement. The ALJ noted it was “reasonable for Petitioner to have attempted to communicate via the portal in April 2025.”
Final Order
• Affirmation: The Petition was affirmed.
• Fee Removal: Respondent was ordered to remove the $20.00 in delinquency fees from Petitioner’s account.
• Reimbursement: Respondent was ordered to reimburse Petitioner for the $500.00 filing fee.
• Compliance: Respondent was directed to comply with CC&R Article 6.9.1 moving forward.
Post-Hearing Developments
On February 4, 2026, the Petitioner filed an inquiry with the Office of Administrative Hearings (OAH) stating that the HOA was not responding to her requests for the $500.00 payment ordered by the Judge. The OAH issued a Minute Entry stating it could not provide legal advice or take further action regarding a “writ of execution,” as its jurisdiction ended with the issuance of the final order.
Study Guide: Virginia Kostman v. Bella Tierra Community Association
This study guide provides a comprehensive review of the administrative hearing and subsequent legal decision regarding Case No. 25F-H084-REL. It examines the nuances of community association management, the application of Covenants, Conditions, and Restrictions (CC&Rs), and the procedural mechanics of the Arizona Office of Administrative Hearings.
Part 1: Short-Answer Quiz
Instructions: Answer the following questions in 2-3 sentences based on the provided source context.
1. What specific violation did the Petitioner allege against the Bella Tierra Community Association?
2. How did the timing of Platinum Management’s closure affect the January 2025 assessment payments?
3. What is the legal “burden of proof” in this administrative matter, and who was responsible for meeting it?
4. What was the distinction made by the Respondent’s witness between an “HOA late fee” and a “delinquency fee”?
5. On what date did the Petitioner initiate her bank payment, and why was this date significant to the Respondent’s argument?
6. Why did the Respondent claim they never received the Petitioner’s April 3, 2025, communication?
7. What was the Petitioner’s primary concern regarding her “delinquent” status beyond the $20 fee?
8. What did the Administrative Law Judge (ALJ) determine regarding the responsibility of the management transition?
9. What was the final order regarding the $500 filing fee and the delinquency fees?
10. How did the ALJ respond to the Petitioner’s February 4, 2026, inquiry regarding a “writ of execution”?
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Part 2: Answer Key
1. The Petitioner alleged that the Respondent violated CC&R Article 6.9.1 by failing to deposit her timely assessment payment and subsequently assessing improper delinquency and late fees. She argued that the management company returned her check without notification and refused to communicate for months despite her efforts to resolve the issue.
2. Platinum Management mailed the January 2025 billings in December 2024 but abruptly closed on December 17, 2024, shortly after the invoices were sent. Because the bills contained the old address for Platinum, payments sent by homeowners were returned or destroyed, as the new company, Agave Management, did not have a forwarding system fully in place at that time.
3. The burden of proof was upon the Petitioner, Virginia Kostman, to establish her case by a “preponderance of the evidence.” This standard requires the Petitioner to show that the facts she seeks to prove are more probable than not.
4. Sarah Malovich testified that a late fee is a penalty for delinquent assessments allowed by state statute and CC&Rs, which remains with the association as income. In contrast, a delinquency fee is a “pass-through” cost charged by the management company to the association to cover the expense of sending collection letters.
5. The Petitioner’s bank records showed the payment was initiated on January 31, 2025. The Respondent argued this was untimely because assessments were due January 1, while the ALJ eventually noted that the Association considered payments past due only after January 31, rendering the payment timely.
6. The Respondent claimed the management portal, Vanica, was brand new and not fully operational until April 1, 2025. Sarah Malovich testified that she never received the message and suggested that the transition from using QuickBooks to a formal portal may have caused communication gaps.
7. The Petitioner was concerned that being labeled “delinquent” would strip her of her right to vote during the transition of control from the builder to the homeowners. She argued that the management company was intentionally maintaining her delinquent status to exclude her from participating in the new HOA board elections.
8. The ALJ concluded that it was incumbent upon the Respondent to ensure no interruptions occurred during the management transition. Since the Respondent issued the billing with the Platinum Management address and did not notify residents of the change until January, the failure to receive the payment was not due to any error by the Petitioner.
9. The ALJ affirmed the Petitioner’s petition and ordered the Respondent to reimburse the $500 filing fee. Additionally, the Respondent was ordered to remove the delinquency fees from the Petitioner’s account and comply with CC&R 6.9.1 moving forward.
10. The ALJ issued a Minute Entry stating the office would not consider the inquiry because it was inappropriately sent to the OAH or no further action could be taken. The judge clarified that the Office of Administrative Hearings cannot provide legal advice to litigants.
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Part 3: Essay Questions
Instructions: Use the source materials to develop comprehensive responses to the following prompts. (No answers provided).
1. Systemic Failures in Management Transitions: Analyze how the transition from Platinum Management to Agave Management Solutions created a “perfect storm” of administrative errors. Discuss the responsibilities of a community association to maintain continuity of service and communication during a change in leadership.
2. The Interpretation of CC&R 6.9.1: Examine the language of Article 6.9.1 as provided in the judge’s decision. Evaluate how the specific wording regarding “notice” and “delinquency” applied to the facts of the Kostman case.
3. Good Faith vs. Strict Liability: The Respondent argued they acted in “good faith” and exercised “patience” by waving certain fees, while the Petitioner argued they acted in “bad faith” to prevent her from voting. Compare these two perspectives using evidence from the hearing transcripts.
4. Due Process in Administrative Hearings: Describe the procedural steps of the hearing as outlined by Judge Vanella, including the role of opening statements, witness testimony, cross-examination, and the admission of evidence. How do these procedures ensure a fair outcome for self-represented litigants?
5. Financial and Legal Remediation: Discuss the significance of the ALJ’s final order. Why is the reimbursement of a filing fee sometimes considered a more significant remedy than the removal of the original disputed fees?
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Part 4: Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over federal or state agency hearings, such as Sondra J. Vanella in this matter.
A.R.S. § 32-2199
The Arizona Revised Statute giving the Department of Real Estate jurisdiction to hear disputes between property owners and community associations.
Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and financial obligations of a planned community.
Delinquency Fee
A fee charged to an association by a management company for the administrative cost of sending past-due notices, often passed through to the homeowner.
Department of Real Estate
The state agency responsible for overseeing real estate licenses and homeowner association disputes in Arizona.
Late Fee
A penalty fee (limited to $15 or 10% of the assessment in this case) charged to an owner for failing to pay an assessment on time.
Minute Entry
A brief written record of a court’s or judge’s decision, order, or direction that does not constitute a full formal opinion.
Office of Administrative Hearings (OAH)
An independent agency authorized to conduct hearings for contested matters arising out of state regulation.
Petitioner
The party who files a petition or complaint; in this case, Virginia Kostman.
Preponderance of the Evidence
The standard of proof in civil cases, meaning the evidence shows that a fact is “more probable than not.”
Respondent
The party against whom a petition or complaint is filed; in this case, Bella Tierra Community Association.
Writ of Execution
A court order granted to put in force a judgment of possession obtained by a plaintiff from a court.
The $20 Fee That Cost $500: A Masterclass in Standing Up to HOA Bureaucracy
1. Introduction: The Homeowner’s Nightmare
Imagine doing everything right: you receive a bill, you mail your payment to the address provided, and you assume the matter is settled. Then, months later, you discover you have been labeled “delinquent.” You try to call; no one answers. You use the company’s own online portal to explain the situation, and your message vanishes into a digital black hole. While you are being ghosted, the fees continue to pile up.
This was the reality for Virginia Kostman, a homeowner in Tucson’s Bella Tierra community. What began as a routine quarterly assessment spiraled into a legal battle over a $20 “delinquency fee.” In a display of sheer investigative grit, Kostman paid a $500 filing fee to take her Homeowners Association (HOA) to the Arizona Office of Administrative Hearings. Her story is more than a dispute over pocket change; it is a masterclass in how to dismantle bureaucratic gaslighting and hold faceless management companies accountable.
2. Takeaway 1: You Aren’t Responsible for “Management Ghosting”
The conflict began during a chaotic shell game between management firms. In late 2024, Platinum Management—the company then representing the community—abruptly closed its doors on December 17th. This was a week after bills were sent but before the January 1st due date, effectively setting a trap for every resident who followed the instructions on their statement.
A “new” firm, Agave Management Solutions, took over in January 2025. Investigative scrutiny reveals the players didn’t actually change: Agave was founded by Jaimie Petty, who had been the executive assistant to the owner of the defunct Platinum Management. Despite this “same players, different name” reality, Agave penalized Kostman because her check arrived at Platinum’s shuttered office. Administrative Law Judge Sondra J. Vanella ruled that the burden of business continuity rests on the HOA, not the resident.
3. Takeaway 2: The “Portal” is a Digital Shield for Incompetence
When Kostman realized her payment hadn’t been processed, she attempted to use Agave’s online portal to resolve the issue. On April 3rd, she sent an email through the site. Agave’s Chief Financial Officer, Sarah Malovich, later testified that the company never received the message because the company was “still getting up and running.”
The investigative “smoking gun” lies in the contradiction of Malovich’s own testimony. She claimed the portal went live on April 1st, yet suggested a message sent two days later on April 3rd vanished because of technical infancy. Agave created a digital black hole, then penalized a homeowner for falling into it. This discrepancy highlights a systemic HOA tactic: using “new technology” as a shield for administrative incompetence while continuing to issue automated delinquency notices.
4. Takeaway 3: “Delinquency” is a Political Tool, Not Just a Financial One
The most alarming revelation from the hearing transcripts is that this $20 fee was a gatekeeping mechanism. The Bella Tierra HOA was transitioning from “builder control” (KB Homes) to homeowner control. Under the community’s governing documents (CC&R 6.9.1), any homeowner labeled as “delinquent” can be barred from voting for the new HOA board.
Kostman’s testimony revealed a struggle for democracy. She feared the Petty family—acting as agents for KB Homes—was using the $20 delinquency status to silence dissent and prevent homeowners from voting them out. This elevates the case from a petty fee dispute to a David vs. Goliath battle over community governance. When an HOA labels you delinquent over a disputed $20, they aren’t just taking your money; they are taking your voice.
5. Takeaway 4: The $500 Gamble for a $20 Injustice
To a casual observer, spending $500 to dispute $20 is a mathematical failure. To a consumer advocate, it is a strategic strike. By paying the filing fee for an Administrative Hearing, Kostman forced the HOA to hire expensive legal counsel and defend their “extortion racket” (as she termed it) in a court of record.
The gamble paid off. Judge Vanella didn’t just order the removal of the $20 delinquency fees; she ordered the HOA to reimburse Kostman for the $500 filing fee. By standing her ground, Kostman turned the tables, making the Association’s predatory administrative practices a net financial loss for them.
6. Takeaway 5: The Court’s Cold Shoulder: When a Win is Just a Piece of Paper
Winning in court is only half the battle; collecting the judgment is the other. A “Minute Entry” filed in February 2026—over a month after the final order—revealed that the HOA had still not paid the $500 reimbursement. When Kostman asked the court how to file a “writ of execution” to force payment, the court’s response was a chilling reminder of the limits of the legal system.
The Judge noted that the court could not provide legal advice and that Kostman’s inquiry “will not be considered.” This is the sobering reality of consumer litigation: even with a signed order from an Administrative Law Judge, a recalcitrant board can remain defiant, leaving the homeowner holding a “paper victory” while the HOA ignores the debt.
7. Conclusion: The Power of the Paper Trail
Virginia Kostman’s victory rested on a single, unassailable fact: she kept the receipts. She produced a bank bill-pay record initiated on January 31st, proving her intent to pay the address provided on the only official bill she had received. Without that digital and paper trail, the management company’s ledger would have been the final word.
In an era of shifting management companies and automated portals that “malfunction” at convenient times, are you keeping the records necessary to protect your home? As this case proves, a $20 fee isn’t always about the money—it’s about control. And as of February 2026, with the HOA still refusing to cut the check, the question remains: are you prepared for the long game required to actually get paid?
Case Participants
Petitioner Side
- Virginia Kostman (Petitioner)
Self-represented homeowner
Respondent Side
- Eric P. O'Connor (Counsel)
Gordon Rees Scully Mansukhani, LLP
Attorney representing the Bella Tierra Community Association
- Sarah Malovich (Witness)
Agave Management Solutions
Chief Financial Officer for the respondent's management company
Neutral Parties
- Sondra J. Vanella (Administrative Law Judge)
Office of Administrative Hearings
Presiding judge over the matter
