2026-06-09 — Baoan Andy Gia Le, et al. v. North Shore Condominium Association, et al. ↑ top

Source

le-v-north-shore-condominium-association.pdf

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
BAOAN ANDY GIA LE, et al.,
Plaintiffs/Appellees,
v.
NORTH SHORE CONDOMINIUM ASSOCIATION, et al.,
Defendants/Appellants.
No. 1 CA-CV 25-0476
Appeal from the Superior Court in Maricopa County
No. CV2022-009708
The Honorable Timothy J. Ryan, Judge (Ret.)
REVERSED AND REMANDED WITH INSTRUCTIONS
COUNSEL
McKeddie Cooley, G.P., Scottsdale
By Melanie C. McKeddie, Justin R. Cooley
Counsel for Plaintiffs/Appellees
Quarles & Brady LLP, Phoenix
By Lauren Elliott Stine, Kristin N. Leaptrott
Counsel for Defendants/Appellants
FILED 06-09-2026

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

2

MEMORANDUM DECISION
Presiding Judge Daniel J. Kiley delivered the decision of the Court, in which
Judge D. Steven Williams and Judge Cynthia J. Bailey joined.

K I L E Y, Judge:

¶1
After Baoan Andy Gia Le and Linda Sinat Som (collectively,
the “Owners”) purchased two units in a condominium complex known as
North Shore Condominiums (“North Shore”), the community’s governing
body adopted a rule (the “30-day rule”) prohibiting unit owners from
leasing their units for periods of less than 30 days. The Owners sued the
North Shore Condominium Association and its property manager,
Associated Property Management, Inc., (collectively, the “Association”),
contending that the 30-day rule was invalid under principles established in
Kalway v. Calabria Ranch HOA, LLC, 252 Ariz. 532 (2022). The superior court
agreed, granting summary judgment in favor of the Owners. Because we
hold that the 30-day rule is valid under Kalway, we reverse the grant of
summary judgment to the Owners and remand with instructions to enter
judgment in favor of the Association.
FACTS AND PROCEDURAL HISTORY
¶2
North Shore is a planned condominium community in Tempe
that is subject to Arizona’s Condominium Act, A.R.S. §§ 33-1201 et seq. (the
“Act”). The community is subject to the restrictions set forth in a declaration
(the “Declaration”) that was recorded in 2009.
¶3
The Declaration contains three provisions that give rise to the
present dispute. First, the Declaration provides that “[a]ll [u]nits shall be
used, improved and devoted exclusively to residential use.” Second, the
Declaration provides that although “[n]o trade or business may be
conducted . . . from any [u]nit,” the “leasing of a [u]nit by the
[o]wner . . . shall not be considered a trade or business[.]” Third, the
Declaration provides that “[n]o [u]nit shall be leased by a [u]nit
[o]wner . . . for hotel or transient purposes.” The Declaration does not,
however, define the term “hotel or transient purposes.”
¶4
A prior version of the Declaration that was recorded in 2005
contained additional language barring North Shore owners from leasing

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

3
units “for hotel or transient purposes or for an initial term of less than one (1)
year (emphasis added).” A revised version that was recorded in 2008,
however, removed the italicized language, providing simply that owners
were not permitted to lease units “for hotel or transient purposes.”
¶5
Although the Declaration was amended in 2008 to remove
language barring leases of less than one year, the Association’s board of
directors (the “Board”) later voted to adopt a rule (the “1-year rule”)
requiring that all leases be of a “duration of not less than one (1) year.”
¶6
In 2014, the Arizona legislature enacted A.R.S. § 33-1260.01,
which provides in part that “[a] unit owner may use the unit owner’s unit
as a rental property unless prohibited in the declaration and shall use it in
accordance with the declaration’s rental time period restrictions.” A.R.S.
§ 33-1260.01(A).
¶7
In 2020 and 2021, the Owners purchased two units in North
Shore as investment properties, intending to use them as short-term
rentals.1
¶8
In February 2022, the Board voted to replace the 1-year rule
with a rule that reduced the minimum allowable lease term to 30 days (the
“30-day rule”).
¶9
The Owners filed claims for declaratory and injunctive relief
to bar the Association from enforcing the 30-day rule or from adopting “any
other version that would impose a durational restriction on lease[s.]” The
30-day rule was not authorized by the Declaration, the Owners argued,
because the Declaration contains no specific “rental or lease time period
restrictions.” Further, the Owners asserted, short-term leases are neither
“hotel[s]” nor “transient” uses, and so do not fall within the Declaration’s
prohibition on leases for “hotel or transient purposes.”
¶10
To resolve their dispute over the validity of the 30-day rule,
the parties filed competing motions for summary judgment supported by a
stipulated statement of facts.
¶11
After oral argument, the superior court issued a ruling
granting the Owners’ motion for summary judgment and denying the
Association’s. Noting that Kalway holds that property use restrictions are

1 The two units were initially purchased by limited liability companies of
which the Owners were the managing members. Title to the units was later
transferred to the Owners themselves.

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

4
invalid if they were not within “the reasonable expectations of the affected
homeowners[,]” the court determined that the 30-day rule failed this test.
The court found that because the Declaration contains “no specific
durational rental restrictions[,]” its prohibition on leasing units “for hotel
or transient purposes” did not “provide sufficient notice” to the Owners
that a rule might be adopted barring them from using their units as short-
term rentals. Unless the North Shore unit owners vote to amend the
Declaration, the court concluded, the Association cannot properly enforce
the 30-day rule or “[a]ny” other rule “restricting leases or rentals to any
specific length or minimum duration[.]”
¶12
After awarding the Owners attorney fees and costs, the court
entered final judgment. The Association timely appealed. We have
jurisdiction pursuant to A.R.S. § 12-2101(A)(1).
DISCUSSION
¶13
The Association challenges the grant of summary judgment
to the Owners, asking us to grant summary judgment in its favor instead.
The 30-day rule is valid and enforceable, the Association contends, because
the rule is consistent with other provisions of the Declaration requiring that
units be used only for residential, non-transient purposes. The Owners, by
contrast, assert that the superior court correctly held that the 30-day rule
was invalid because it purported to amend the Declaration in a manner that
could be effected only by the unanimous consent of North Shore unit
owners.
¶14
Summary judgment is appropriate when there is “no genuine
dispute as to any material fact and the moving party is entitled to judgment
as a matter of law.” Ariz. R. Civ. P. 56(a). We review a grant of summary
judgment de novo, viewing all facts and reasonable inferences in the light
most favorable to the non-moving party. See Hourani v. Benson Hosp., 211
Ariz. 427, 432, ¶ 13 (App. 2005). We likewise review de novo the superior
court’s interpretation of statutes and contracts, including restrictive
covenants. See Dreamland Villa Cmty. Club, Inc. v. Raimey, 224 Ariz. 42, 46, ¶
17 (App. 2010) (“Statutory interpretation is a question of law that we review
de novo.”); Swain v. Bixby Village Golf Course Inc, 247 Ariz. 405, 410, ¶ 19
(App. 2019) (noting that appellate courts “review the interpretation of
restrictive covenants and other contracts de novo”).
¶15
In support of their position that the Board lacked authority to
adopt a rule establishing minimum durational limits on leases, the Owners
cite the absence of express durational limits in the Declaration. “[B]ecause

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

5
of the lack of an actual temporal number [sic] limiting rental durations[,]”
they contend, the Declaration “cannot be amended to add one without the
unanimous consent of the owners[.]” Noting that North Shore unit owners
voted to amend the Declaration in 2008 to remove the language barring
leases “for an initial term of less than one (1) year,” see supra ¶ 4, the Owners
assert that the 2008 amendment reflected the unit owners’ intent to
eliminate any temporal restriction on lease terms. According to the Owners,
the Association improperly “ignor[ed]” the amendment procedures set
forth in the Declaration by “unilaterally” adopting a rule that nullifies the
will of the majority.
¶16
Nothing in the 2008 amendment evinces an intent to eliminate
restrictions on short-term rentals. Although the 2008 amendment removed
the “less than one (1) year” language, it made no change to the provisions
of the Declaration that permit only residential, non-transient property uses.
And the Owners’ assertion that the Association lacked authority to ban
short-term rentals except by amending the Declaration is contrary to statute
and the Declaration. The Act authorizes a condominium association to
adopt rules as long as they do not conflict with the governing declaration.
A.R.S. § 33-1242(A)(1) (“Subject to the provisions of the declaration, the
association may . . . [a]dopt and amend bylaws and rules.”). The
Declaration here expressly authorizes the Board to “adopt, amend, and
repeal rules” that “restrict and govern the use of the Units[.]” The 30-day
rule restricts the use of North Shore units in a manner that does not conflict
with any provision of the Declaration. On the contrary, the rule is consistent
with provisions of the Declaration requiring that units be used for
residential, non-transient purposes. Because the 30-day rule does not
conflict with the Declaration, the Board did not violate the Act or the
Declaration by adopting it.2
¶17
In the alternative, the Owners argue that the superior court
correctly held the 30-day rule invalid because the rule cannot be reconciled
with principles established in Kalway. In response, the Association argues,
first, that Kalway doesn’t even apply here. The superior court erred by
evaluating the validity of the 30-day rule under the framework established
in Kalway, the Association contends, because that case “did not involve a
challenge to the validity of a rule[.]”

2 The Owners fault the Association for adopting the 1-year rule after the
2008 amendment eliminated similar language from the Declaration.
Because the 1-year rule is no longer in effect, the validity of that rule is not
before us.

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

6
¶18
In Kalway, a majority of the property owners in a subdivision
voted to adopt amendments to the governing restrictive covenants
(“CC&Rs”) that, among other things, defined the term “garage” as used in
the CC&Rs and imposed size restrictions on “non-dwelling structures.”
Kalway, a disaffected property owner in the subdivision, filed suit to
challenge the enforceability of the amendments.
¶19
The Kalway court rejected Kalway’s argument that the
amendments were invalid in their entirety because they were not
unanimously adopted, recognizing instead that “Arizona law permits the
amendment of CC&Rs by a majority vote if such voting scheme is specified
in the original declaration.” 252 Ariz. at 537, ¶ 10 (citing A.R.S. § 33-
1817(A)). The Kalway court also held, however, that amendments are not
valid, “even if passed by a majority vote[,]” if they were not “reasonable
and foreseeable” under the terms of the original CC&Rs. Id. Amendments
to the original CC&Rs are permissible, the Kalway court explained, “to
refine” the original CC&Rs, “correct an error,” or “fill in a gap[.]” Id. at 539,
¶ 17. But a non-unanimous amendment may not “infringe on property
owners’ expectations of the scope of” the original CC&Rs, however, and so
may not “be entirely new and different in character.” Id. (citation omitted).
¶20
Applying those principles, the Kalway court determined that
the amendment defining “garage” was valid because the term appeared in
the original CC&Rs, and so “a later amendment defining the term was
reasonably foreseeable.” Id. at 540, ¶ 24. By contrast, the Kalway court held
that the amendment restricting the size of non-dwelling units was invalid.
The original CC&Rs “placed no limitation on the location, placement or size
of ‘non-dwelling structures’[,]” the Kalway court observed, and “[n]othing
in the original [CC&Rs] put a reasonable homeowner on notice that his or
her neighbors might impose such restrictions.” Id. at 541, ¶ 35. To allow an
amendment “untethered to an original” restriction in the CC&Rs would,
the Kalway court held, impermissibly “infringe on property owners’
expectations of the scope of the covenants.” Id. at 539, ¶ 17.
¶21
Kalway makes clear that a person who acquires property that
is subject to restrictive covenants cannot be prevented from using that
property as he or she sees fit as a result of an amendment to the restrictive
covenants that was not reasonably foreseeable when the owner acquired
the property. See id. In this way, Kalway protects the property owner’s
reasonable expectations at the time of purchase. Preston v. Las Sendas
Community Association, No. 1 CA-CV 22-0761, 2023 WL 7139326 at *3, ¶ 12
(Ariz. App. Oct. 31, 2023) (mem. decision) (applying Kalway’s “reasonable-
expectations standard” to determine whether amendment to original

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

7
restrictions fell “within [homeowners’] reasonable expectations at the time
of purchase” (citation modified)). Although, as the Association correctly
observes, Kalway considered the validity of amendments to CC&Rs adopted
under Section 33-1817(A), the interest in protecting property owners’
reasonable expectations that underlies Kalway applies equally to the
enactment of a rule under Section 33-1242(A). Indeed, exempting the 30-
day rule from Kalway on the basis that the rule was adopted by the Board
rather than by a vote of a majority of the affected property owners as in
Kalway would be illogical since the Board is comprised of a minority of
North Shore unit owners. If, as Kalway holds, use restrictions are
unenforceable if they were not foreseeable even if approved by a majority
of the affected homeowners, why shouldn’t the same result apply to
restrictions that were approved by less than a majority? We reject the
Association’s contention that Kalway does not govern the determination of
the validity of the 30-day rule.
¶22
Resolution of the parties’ dispute therefore turns on whether
the 30-day rule passes the Kalway test, i.e., whether it was a “reasonable and
foreseeable” limitation on North Shore owners’ permissible use of their
units that is tethered to the original restrictions.
¶23
As Kalway makes clear, amendments to “refine” or “fill in a
gap” in the governing restrictive covenants are permissible. Kalway, 252
Ariz. at 539, ¶ 17. Here, the Declaration prohibits leases for “transient”
purposes without defining the term. Just as the amendment defining
“garage,” a term used but not defined in the CC&Rs, was “reasonably
foreseeable” and tethered to the original restrictions, Kalway, 252 Ariz. at
540, ¶ 24, a rule defining “transient,” a term used but not defined in the
Declaration, was reasonably foreseeable and tethered to the restrictions in
place when the Owners acquired their units. See Vista Del Corazon
Homeowners Ass’n v. Smith, No. 2 CA-CV 2023-0071, 2024 WL 1007275 at *6,
¶ 26 (Ariz. App. Mar. 8, 2024) (mem. decision) (holding that amendment
defining “lease” and “rent” as used in original restrictive covenants was
“reasonably foreseeable” and “tethered to existing provisions”).
¶24
Nor does the 30-day rule conflict with what a reasonable
homeowner would have understood “transient” to mean. The term is
generally
understood
to
mean
“temporary,”
“impermanent,”
or
“transitory.” See, e.g., Transient, Black’s Law Dictionary (12th ed. 2024)
(“Temporary; impermanent; passing away after a short time.”); Transient,
American
Heritage
Dictionary,
https://ahdictionary.com/word/search.html?q=transient
(last
visited
June 3, 2026) (“Passing with time; transitory”); see also In re Marriage of

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

8
McCulloch and Parker, 257 Ariz. 195, 207, ¶ 41 (App. 2024) (interpreting
contract term by reference to its dictionary definition). The Arizona
legislature has defined a “transient,” for transaction privilege tax purposes,
as a person who pays for lodging space “for less than thirty consecutive
days.” A.R.S. § 42-5070(F). And the city of Tempe, where North Shore is
located, defines “transient” for zoning purposes as “on a daily or weekly
basis, or any other basis for less than thirty (30) consecutive days[.]” City of
Tempe Zoning & Dev. Code § 7-123 (Dec. 12, 2019). A rule defining
“transient” to mean less than thirty days is thus consistent with the term’s
commonly understood, widely used meaning.
¶25
Because the 30-day rule was a reasonable and foreseeable
clarification of the meaning of “transient” as used in the Declaration, the 30-
day rule is valid under Kalway. See Gross v. Shores at Rainbow Lake Cmty.
Ass’n, 258 Ariz. 365, 367, ¶ 1 (App. 2024) (noting that “[t]he dispositive
issue” under a Kalway analysis “is whether” the disputed amendments
“were reasonable and foreseeable” (citation modified)).3
¶26
Our conclusion is consistent with our decision in Preston.
There, a homeowners’ association adopted an amendment to the governing
CC&Rs barring the use of units in the community for “vacation rental” and
prohibiting the leasing of units for terms of less than 31 days. 2023 WL
7139326 at *1, ¶¶ 4-5. Relying on Kalway, this Court upheld the
amendment’s validity, determining that several provisions of the original
CC&Rs, read as a whole, made the amendment “reasonabl[e] and
foreseeab[le.]” Id. at *4-5, ¶¶ 16-19. In reaching this conclusion, the Preston
court cited the provisions of the original CC&Rs requiring that each unit be
used “as a residence,” barring the operation of any “business and trade”
that is detectable from outside the unit, and prohibiting using units from
being used “as a hotel or [on] some other transient basis.” Id. at ¶ 16-17.
“Viewed in their entirety,” the Preston court held, these provisions
“provided sufficient notice of the possibility of the short-term rental
amendment[,]” and so the amendment prohibiting vacation rentals “d[id]
not alter the original CC&Rs in any substantial and unforeseen way.” Id. at
*5, ¶ 19.

3 In Gross, this Court held invalid a 30-day rule similar to the one at issue
here. 258 Ariz. at 372, ¶¶ 20-22. Gross is distinguishable, however, since,
unlike the Declaration here, the CC&Rs in Gross did not (as far as the
opinion in that case shows) contain a prohibition on using property for
“transient purposes.”

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

9
¶27
Here, the Declaration limits units to “residential use,”
generally bans business or trade uses, and prohibits the use of units for
“hotel or transient purposes.” As was true of analogous CC&R provisions
in Preston, these provisions put purchasers of North Shore units on notice
that short-term rentals may be prohibited. Just as we upheld the
amendment in Preston, we hold that the 30-day rule here did not alter the
Declaration in an unforeseen way, and is valid under Kalway.
¶28
The Owners insist that the Declaration’s prohibition on using
units for “hotel or transient purposes” does not apply to their short-term
rentals because they require their renters to sign written lease agreements.
According to the Owners, transient uses of property are characterized by
“a lack of written lease.” In support of their argument, the Owners cite the
Arizona Residential Landlord and Tenant Act’s definition of “[t]enant” as
“a person entitled under a rental agreement to occupy a dwelling unit to
the exclusion of others.” A.R.S. § 33-1310(17). We fail to see the applicability
of this statutory definition to the issue at hand, nor do we see how the
existence of written lease precludes a finding that a short-term renter’s use
is “transient.” Cf. Nola Bourbon, LLC v. City of New Orleans, 290 So.3d 225,
229 (La. 4th Cir. Ct. 2020) (affirming administrative hearing officer’s
determination that property owner violated municipal ordinance
prohibiting rentals of less than 30 days and noting that the evidence
supporting this determination included the written lease between owner
and renters). We therefore reject the Owners’ contention that the existence
of written lease agreements with their renters somehow establishes that
their use of their units is not “transient.”
¶29
Because the 30-day rule was adopted in accordance with
Section 33-1242(A) and the Declaration and passes the Kalway test, we
vacate the court’s summary judgment ruling holding the 30-day rule
invalid.
¶30
The Association asks us to not only vacate the superior court’s
order granting summary judgment to Owners, but to grant judgment in its
favor.
¶31
Because the parties stipulated to the relevant facts, no genuine
dispute of material fact precludes the entry of judgment. The merits of the
parties’ competing motions for summary judgment turn solely on the legal
question we have resolved here. Because we hold the 30-day rule is valid
under Kalway, we remand with instructions that the superior court enter
judgment in the Association’s favor. See Aaron v. Fromkin, 196 Ariz. 224, 227,
¶ 10 (App. 2000) (“While the denial of summary judgment is generally not

LE, et al. v. NORTH SHORE, et al.
Decision of the Court

10
appealable, when cross-motions are filed, we may enter summary
judgment as a matter of law for a party if the trial court erroneously entered
summary judgment against that party.” (citations omitted)).
CONCLUSION
¶32
We vacate the award of summary judgment to the Owners
and remand to the superior court with instructions to grant summary
judgment to the Association.
¶33
Both parties request an award of attorney fees under A.R.S.
§§ 12-341 and -341.01 as well as § 13.1 of the Declaration, which entitles the
“prevailing party” in a lawsuit between the Association and an owner to
“all attorney fees incurred[.]” As the prevailing party, the Association may
recover reasonable attorney fees and costs upon compliance with ARCAP
21.
MATTHEW J. MARTIN • Clerk of the Court
FILED: JR