Arizona Court of Appeals — Condominium Assessments
Division Two holds that assessment liability in a condominium flows from ownership of the unit and its inseparable common-element interest, not from whether a structure has been built, and reverses summary judgment for the non-building owners.
Last updated July 1, 2026. Case: Mountain View Condominiums Homeowners Ass’n v. Scott; No. 2 CA-CV 93-0288; 180 Ariz. 216, 883 P.2d 453 (App. 1994).
Scope note: This educational case page summarizes a court ruling for Arizona HOA homeowners, boards, and counsel. It is not legal advice.
The rule in one sentence
A condominium unit owner’s obligation to pay association assessments arises from unit ownership itself, which carries a vested, undivided interest in the common elements, and does not depend on whether improvements or structures have been constructed on the unit. Because the Declaration, the former Horizontal Property Regime Act, and the Arizona Uniform Condominium Act draw no distinction between completed and uncompleted units, the trial court’s summary judgment for the non-building defendants, including its attorneys’ fee award, is reversed and the case is remanded.
Case Participants
Neutral Parties
- Mountain View Condominiums Homeowners Association, Inc. (dba Arbor Point Condominiums) (Party)
Arizona nonprofit corporation and condominium association; plaintiff/appellant that sued to collect common-area assessments. Prevailed on appeal. - Clifford J. Scott and Valerie Scott (Party)
Husband and wife; acquired the project’s beneficial interest after Security Savings’ foreclosure and later deeded units to the other defendants; defendants/appellees who argued no assessments were owed on unbuilt units. - Lawyers Title of Arizona, as Trustee under Trust No. 7518-T (Party)
The Declarant and record titleholder of the condominium property under the Declaration; defendant/appellee. - Douglas R. Knoles (Party)
A married man holding as his sole and separate property; contract purchaser of Units 69-71; defendant/appellee. - Superstition Homes (Party)
Arizona corporation; contract purchaser of Units 72-76; defendant/appellee. - Inca Investment, Inc. (Party)
Arizona corporation; contract purchaser of Units 22-68; defendant/appellee. - Tanis A. Duncan (Counsel)
Counsel for plaintiff/appellant, the Association (Tucson). No law firm was listed in the reporter. - Dan L. Dudley (Counsel)
Counsel for defendants/appellees (Tucson). No law firm was listed in the reporter. - Judge Lacagnina (Judge)
Arizona Court of Appeals, Division 2, Department A
Authored the opinion of the court. - Presiding Judge Livermore (Judge)
Arizona Court of Appeals, Division 2, Department A
Concurred in the decision. - Judge Fernandez (Judge)
Arizona Court of Appeals, Division 2, Department A
Concurred in the decision.
What happened and why it matters
Mountain View Condominiums Homeowners Association, doing business as Arbor Point Condominiums, sued Clifford and Valerie Scott, Lawyers Title of Arizona (as trustee and Declarant), Douglas Knoles, Superstition Homes, and Inca Investment to collect common-area assessments on condominium units on which no buildings had been constructed. The complex was created in 1984 under the Horizontal Property Regime Act, when a Declaration of CC&Rs was recorded and a plat divided the land into 76 units plus common areas. After a foreclosure and a series of deeds, the defendants held Units 22 through 76. They argued they owed no assessments because their units were still vacant land with no improvements, and the trial court agreed, granting them summary judgment and attorneys’ fees on the theory that the Declaration contemplated an erected structure before assessment liability arose. The Arizona Court of Appeals, Division Two, reversed. Reading the statute, the Declaration, and the bylaws together, the court held that a condominium unit is defined as airspace carrying a vested, undivided interest in the common elements, and that ownership of that interest, not the completion of a building, triggers the duty to pay assessments. Nothing in the Declaration, the former Horizontal Property Regime Act, or the Arizona Uniform Condominium Act distinguished completed from uncompleted units for assessment purposes. The court reversed the judgment and the fee award, remanded for entry of judgment for the Association and a determination of the amounts owed, and awarded the Association its appellate attorneys’ fees.
The court framed the sole question as whether a condominium unit owner must pay assessments when no improvements have been built on the unit, and answered yes. It began with the settled rule that the rights and obligations of condominium owners regarding the common elements come from three sources, the statute, the declaration, and the bylaws, which must be read together and harmonized where possible (citing American Savings Service Corp. v. Selby, Sun-Air Estates v. Manzari, and A.R.S. section 33-1201(B)). Because the property had been submitted to a horizontal property regime under former A.R.S. sections 33-551 to 33-561, the court explained that Arizona condominium ownership consists of individual ownership of a horizontal layer of cubic airspace subject to exclusive control, together with a fractional interest held in common in the common elements (Makeever v. Lyle). The defendants’ undivided Common Area interest was appurtenant to each unit, could not be severed, and was vested as a separate parcel of real property.
Turning to the documents, the court found nothing in the Declaration distinguishing owners of completed units from owners of uncompleted ones. Because an Arizona condominium owner owns only airspace and not the underlying land, the Declaration necessarily describes a unit by physical boundaries to mark the line between the owner’s exclusive area and the common area; that boundary description does not require a structure to exist before someone becomes a unit owner obligated to pay. The bylaws and Articles of Incorporation reinforced this by defining an owner as one holding fee simple to any unit (including contract purchasers) and a member as any unit owner, all obligated to pay assessments without reference to construction.
The court then rejected the argument that the Arizona Uniform Condominium Act applied only to condominiums created after January 1, 1986, holding that section 33-1201(B) extends the Act to earlier condominiums where not in conflict. Both the former Horizontal Property Regime Act, which defined a building as the principal structure “erected or to be erected,” and the Uniform Condominium Act assess against units by percentage interest in the common elements and draw no line between finished and unfinished units. The court found persuasive Bradley v. Mullenix, which reasoned that common expenses like landscaping, snow removal, and exterior upkeep accrue regardless of whether a unit is completed. It also noted that section 33-1255(F) permits only a limited reduction (to not less than twenty-five percent) of a declarant’s assessment on units not substantially completed, and only if the declaration so provides; absent such an amendment, the defendants owed the full assessment. Concluding that the defendants took the benefits and burdens of prior ownership, including the continuing duty to pay assessments, and that treating them otherwise would produce the absurd result of membership benefits without obligations, the court reversed the summary judgment and fee award and remanded.
This published Division Two decision establishes a foundational Arizona rule that assessment liability in a condominium flows from ownership of the unit and its inseparable undivided interest in the common elements, not from whether a building has been constructed. For associations and boards, it confirms that owners of vacant or unbuilt condominium lots cannot escape common-area assessments by pointing to the absence of improvements; the grass still grows, the roads and shared systems still deteriorate, and every unit owner shares those costs in proportion to the interest fixed by the recorded documents. The opinion reads the declaration, bylaws, articles, and the governing statutes as a harmonized whole, a method that continues to guide Arizona courts interpreting community documents.
For developers, contract purchasers, and investors who acquire undeveloped condominium units, the case is a caution that taking title carries the previous owner’s continuing assessment obligations, without interruption, from the moment assessments commence. It also clarifies that the Arizona Uniform Condominium Act reaches condominiums created before its 1986 effective date where it does not conflict with the older Horizontal Property Regime Act or the recorded documents, and that the only relief for unbuilt units is the narrow statutory reduction under A.R.S. section 33-1255(F), which applies solely to declarants and only if the declaration provides for it. The reversal of the fee award further signals that a party who prevails at trial on an erroneous reading of the documents can lose both the judgment and its fees on appeal.
Step-by-step litigation record
FAQ
What was Mountain View Condominiums v. Scott about?
A condominium homeowners association, doing business as Arbor Point Condominiums, sued the owners of several units on which no buildings had been constructed to collect common-area assessments. The owners argued they owed nothing because their units were still vacant land. The Arizona Court of Appeals had to decide whether a unit owner must pay assessments when no improvements have been built on the unit.
Do you have to pay HOA or condominium assessments on a lot with no building on it?
Yes, under this decision. The court held that a condominium unit is defined as airspace carrying a vested, undivided interest in the common elements, and that the obligation to pay assessments arises from owning the unit and that interest, not from completing a structure. Because nothing in the declaration or the governing statutes distinguished built from unbuilt units, the owners of the vacant units still owed the full assessments.
Why did the trial court rule for the owners, and why was it reversed?
The trial court read the recorded declarations as defining a “unit” and the duty to pay assessments in a way that assumed an erected structure, so it concluded that owners who had not built owed nothing. The Court of Appeals reversed, explaining that a condominium owner in Arizona owns only airspace, so the declaration necessarily describes a unit by boundaries rather than by an existing building, and that duty to pay assessments does not depend on construction.
Does the Arizona Uniform Condominium Act apply to condominiums created before 1986?
Yes, in part. The court rejected the argument that the Act applies only to condominiums created after its January 1, 1986 effective date. Under A.R.S. section 33-1201(B), the Act also applies to condominiums created earlier, to the extent its provisions do not conflict with the former Horizontal Property Regime Act or with the declarations, bylaws, or plats adopted under the older law.
Is there any reduction in assessments for units that are not yet built?
Only a narrow one. A.R.S. section 33-1255(F) allows a reduction of a declarant’s assessment obligation, if the declaration so provides, for any unit on which construction has not been substantially completed, but not below twenty-five percent of the assessment for substantially completed units. Because the declaration here contained no such provision and the defendants were treated as ordinary unit owners, they owed the full amount.
Is this decision binding precedent in Arizona?
Yes. This is a published opinion of the Arizona Court of Appeals, Division Two, reported at 180 Ariz. 216, 883 P.2d 453 (App. 1994). As a published appellate decision it is binding precedent on the question it decides, unlike an unpublished memorandum decision, which does not create precedent.
Case Dossier
This generated dossier mirrors the structured data surfaced on the OAH/ADRE case pages. It is added from the curated court-case record and the custom page source package, while the hand-authored analysis below remains intact.
Case Summary
| Case ID / citation | No. 2 CA-CV 93-0288; 180 Ariz. 216, 883 P.2d 453 (App. 1994) |
|---|---|
| Court / tribunal | Court of Appeals |
| Decision / key date | August 25, 1994 |
| Judge / panel | Lacagnina, J. (author), Livermore, P.J., Fernandez, J. |
| Parties | A condominium homeowners association (Mountain View Condominiums Homeowners Association, dba Arbor Point Condominiums) sued the owners of undeveloped units (Clifford and Valerie Scott, Lawyers Title of Arizona as trustee, Douglas Knoles, Superstition Homes, and Inca Investment) to collect common-area assessments; the owners argued they owed nothing because no buildings had been constructed on their units. |
| Governing law |
|
| Topics | assessmentscc-and-rscovenantsattorneys-feesprocedure |
| Outcome / holding | A condominium unit owner’s obligation to pay association assessments arises from unit ownership itself, which carries a vested, undivided interest in the common elements, and does not depend on whether improvements or structures have been constructed on the unit. Because the Declaration, the former Horizontal Property Regime Act, and the Arizona Uniform Condominium Act draw no distinction between completed and uncompleted units, the trial court’s summary judgment for the non-building defendants, including its attorneys’ fee award, is reversed and the case is remanded. |
| Primary public source | View source opinion/order |
Parties, Court, and Research Coverage
| Uploaded source package | No raw source-folder files found for this slug |
|---|---|
| Step-by-step docket roadmap | 5 roadmap entries |
| Video overview | No video embed currently configured |
| Study / briefing material | 1 section |
| FAQ / homeowner questions | 6 questions |
| Curated download aliases | 0 download links |
Key Issues & Findings
Mountain View Condominiums Homeowners Association, doing business as Arbor Point Condominiums, sued Clifford and Valerie Scott, Lawyers Title of Arizona (as trustee and Declarant), Douglas Knoles, Superstition Homes, and Inca Investment to collect common-area assessments on condominium units on which no buildings had been constructed. The complex was created in 1984 under the Horizontal Property Regime Act, when a Declaration of CC&Rs was recorded and a plat divided the land into 76 units plus common areas. After a foreclosure and a series of deeds, the defendants held Units 22 through 76. They argued they owed no assessments because their units were still vacant land with no improvements, and the trial court agreed, granting them summary judgment and attorneys’ fees on the theory that the Declaration contemplated an erected structure before assessment liability arose. The Arizona Court of Appeals, Division Two, reversed. Reading the statute, the Declaration, and the bylaws together, the court held that a condominium unit is defined as airspace carrying a vested, undivided interest in the common elements, and that ownership of that interest, not the completion of a building, triggers the duty to pay assessments. Nothing in the Declaration, the former Horizontal Property Regime Act, or the Arizona Uniform Condominium Act distinguished completed from uncompleted units for assessment purposes. The court reversed the judgment and the fee award, remanded for entry of judgment for the Association and a determination of the amounts owed, and awarded the Association its appellate attorneys’ fees.
The court framed the sole question as whether a condominium unit owner must pay assessments when no improvements have been built on the unit, and answered yes. It began with the settled rule that the rights and obligations of condominium owners regarding the common elements come from three sources, the statute, the declaration, and the bylaws, which must be read together and harmonized where possible (citing American Savings Service Corp. v. Selby, Sun-Air Estates v. Manzari, and A.R.S. section 33-1201(B)). Because the property had been submitted to a horizontal property regime under former A.R.S. sections 33-551 to 33-561, the court explained that Arizona condominium ownership consists of individual ownership of a horizontal layer of cubic airspace subject to exclusive control, together with a fractional interest held in common in the common elements (Makeever v. Lyle). The defendants’ undivided Common Area interest was appurtenant to each unit, could not be severed, and was vested as a separate parcel of real property.
Turning to the documents, the court found nothing in the Declaration distinguishing owners of completed units from owners of uncompleted ones. Because an Arizona condominium owner owns only airspace and not the underlying land, the Declaration necessarily describes a unit by physical boundaries to mark the line between the owner’s exclusive area and the common area; that boundary description does not require a structure to exist before someone becomes a unit owner obligated to pay. The bylaws and Articles of Incorporation reinforced this by defining an owner as one holding fee simple to any unit (including contract purchasers) and a member as any unit owner, all obligated to pay assessments without reference to construction.
The court then rejected the argument that the Arizona Uniform Condominium Act applied only to condominiums created after January 1, 1986, holding that section 33-1201(B) extends the Act to earlier condominiums where not in conflict. Both the former Horizontal Property Regime Act, which defined a building as the principal structure “erected or to be erected,” and the Uniform Condominium Act assess against units by percentage interest in the common elements and draw no line between finished and unfinished units. The court found persuasive Bradley v. Mullenix, which reasoned that common expenses like landscaping, snow removal, and exterior upkeep accrue regardless of whether a unit is completed. It also noted that section 33-1255(F) permits only a limited reduction (to not less than twenty-five percent) of a declarant’s assessment on units not substantially completed, and only if the declaration so provides; absent such an amendment, the defendants owed the full assessment. Concluding that the defendants took the benefits and burdens of prior ownership, including the continuing duty to pay assessments, and that treating them otherwise would produce the absurd result of membership benefits without obligations, the court reversed the summary judgment and fee award and remanded.
This published Division Two decision establishes a foundational Arizona rule that assessment liability in a condominium flows from ownership of the unit and its inseparable undivided interest in the common elements, not from whether a building has been constructed. For associations and boards, it confirms that owners of vacant or unbuilt condominium lots cannot escape common-area assessments by pointing to the absence of improvements; the grass still grows, the roads and shared systems still deteriorate, and every unit owner shares those costs in proportion to the interest fixed by the recorded documents. The opinion reads the declaration, bylaws, articles, and the governing statutes as a harmonized whole, a method that continues to guide Arizona courts interpreting community documents.
For developers, contract purchasers, and investors who acquire undeveloped condominium units, the case is a caution that taking title carries the previous owner’s continuing assessment obligations, without interruption, from the moment assessments commence. It also clarifies that the Arizona Uniform Condominium Act reaches condominiums created before its 1986 effective date where it does not conflict with the older Horizontal Property Regime Act or the recorded documents, and that the only relief for unbuilt units is the narrow statutory reduction under A.R.S. section 33-1255(F), which applies solely to declarants and only if the declaration provides for it. The reversal of the fee award further signals that a party who prevails at trial on an erroneous reading of the documents can lose both the judgment and its fees on appeal.