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Villa de Jardines Association (VJA), an Arizona nonprofit planned community association, filed a judicial foreclosure action in Pinal County Superior Court seeking to enforce its assessment liens against nineteen parcels, contending those liens had priority over the lenders’ deeds of trust. Flagstar Bank, FSB and Federal National Mortgage Association (referred to in the opinion as also known as Freddie Mac), together the Banks, moved for summary judgment. The trial court granted the motion, imposed Rule 11 sanctions on VJA, denied VJA’s own request for attorney fees, and denied VJA’s motion for a new trial. VJA appealed. Division Two of the Arizona Court of Appeals affirmed. The court held that A.R.S. section 33-1807(B)(2) unambiguously grants a recorded first deed of trust priority over an association assessment lien regardless of which was recorded first, because VJA’s contrary first-in-time reading would render the statutory exception superfluous. It upheld the Rule 11 sanctions because VJA had no objectively reasonable basis for its lien-priority position and could not rely on a title company litigation guarantee to avoid Rule 11’s reasonable-inquiry duty. It affirmed the fee award to the Banks as prevailing parties under section 33-1807(H) and rejected VJA’s procedural challenges to the judgment and to the denial of its new-trial motion. Concluding the appeal was frivolous, the court awarded the Banks their attorney fees and costs on appeal under section 33-1807(H) and, as sanctions, under Rule 25, Ariz. R. Civ. App. P., against both VJA and its counsel.

Reviewing summary judgment de novo, the court accepted that the material facts were undisputed, so the outcome turned on statutory interpretation. Under A.R.S. section 33-1807(B), an association’s assessment lien is prior to all other liens and encumbrances except three categories, including ‘[a] recorded first mortgage’ and ‘a recorded first deed of trust on the unit.’ Applying settled canons, the court gave the statute its plain meaning and presumed the legislature does not enact redundant, superfluous, or contradictory provisions. VJA argued that a deed of trust qualifies as a ‘first deed of trust’ only if it is recorded first in time, ahead of the assessment lien. The court rejected that reading because subsection (B)(1) already grants priority to any encumbrance recorded before the assessment lien; if first deeds of trust also had to be recorded first to gain priority, subsection (B)(2) would serve no purpose. The statute therefore unambiguously protects a recorded first deed of trust regardless of recording order.

The court also rejected VJA’s contention that the judgment was ‘overly broad’ by referring to all nineteen parcels and all defendants. The summary judgment ran only in favor of the Banks and gave them no interest in parcels held by other defendants, so it was not a windfall; the Banks never sought relief on behalf of others, making VJA’s standing argument (citing Fernandez v. Takata Seat Belts) inapposite. Nor did the court err by referencing parcels for which default had been entered against Desert Hills Bank and Countrywide, because VJA had obtained no default judgment and was not entitled to one as a matter of law.

On the Rule 11 sanctions, reviewed for abuse of discretion (with the propriety of the legal basis reviewed de novo), the court applied the objective standard of what a competent attorney would do. Because section 33-1807 is clear, no reasonable attorney could argue an assessment lien outranks a first deed of trust, and VJA never argued for an extension or modification of the law. A title company litigation guarantee did not change this: it insures only against loss from incorrect assurances and may guide which parties to name, but it does not trump state law or excuse the duty of reasonable inquiry, and counsel must re-evaluate the client’s position as the case develops. The court further held the trial court properly denied a new trial: Rule 59(c)(1) requires the motion to be in writing, so oral amendment was impermissible and would invite gamesmanship, and no harm arose because the trial court reviewed the entire file sua sponte and found no error. Finally, under section 33-1807(H) the Banks were the prevailing parties, making a fee award mandatory, and because VJA presented no colorable argument the appeal was frivolous, warranting appellate fees and Rule 25 sanctions.

This published, precedential decision resolves a recurring Arizona HOA-collections question: where an association’s assessment lien stands relative to a lender’s first deed of trust. It confirms that A.R.S. section 33-1807(B)(2) protects a recorded first deed of trust regardless of recording order, so an association ordinarily cannot use judicial foreclosure of an assessment lien to eliminate or leapfrog a first mortgage. Boards, community managers, and collection counsel should understand that pursuing foreclosure on the theory that the assessment lien is senior to a first deed of trust is not supported by the statute and can expose both the association and its attorneys to sanctions and fee-shifting.

The opinion also carries broader lessons about litigation conduct and cost exposure. It illustrates that Rule 11 is measured by an objective standard — what a competent attorney would do — and that relying on a title company’s litigation guarantee is no substitute for a reasonable legal inquiry. It underscores that section 33-1807(H) makes a fee award to the prevailing party mandatory in lien-priority actions, and that a party who presses a position contrary to unambiguous statutory text risks not only losing but paying the other side’s attorney fees at trial and on appeal, plus sanctions for a frivolous appeal. For homeowners, lenders, and associations alike, it is a cautionary example of the financial consequences of over-reading assessment-lien priority.

Video overview of the ruling

An AI-generated video overview of Villa De Jardines Association v. Flagstar Bank, FSB (227 Ariz. 91, 253 P.3d 288 (App. 2011)). Recorded first deeds of trust have priority over planned-community assessment liens. This plain-language summary was generated from the court’s filings; the court’s own ruling controls.

Listen: audio deep dive on the ruling

An AI-generated audio deep dive walking through the court’s reasoning and disposition in Villa De Jardines Association v. Flagstar Bank, FSB. Generated from the case filings; verify against the linked ruling below.

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The rule in one sentence

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This memorandum decision from the Arizona Court of Appeals, Division Two, arose from a homeowners association’s judicial foreclosure. In 2018, Trails at Amber Ridge Homeowners Association obtained a default judgment against homeowner Gerardo Macias and foreclosed on his home. Maricopoly, LLC purchased the property at the sheriff’s sale, and after the Association’s judgment was satisfied, $59,819.17 in excess proceeds was deposited with the clerk of court. Maricopoly intervened and claimed the surplus on the theory that it had acquired an “equitable assignment” of the senior lien, but in an earlier appeal Division Two rejected that theory, vacated the order paying Maricopoly, and remanded with directions to have Maricopoly return the funds. On remand, Arizona Home Foreclosure Prevention Funding Corporation (“AZ Home”), a junior lienholder, moved for release of $21,902.81 of the proceeds. The trial court granted that motion on September 1, 2021 — before Maricopoly’s response deadline under Rule 7.1. Maricopoly appealed, arguing the premature ruling denied it procedural due process and that the court wrongly refused to set the order aside under Rule 60. The Court of Appeals agreed the ruling was premature but held the error was harmless: under the appellate mandate and the law-of-the-case doctrine, Maricopoly could only re-assert its already-rejected equitable-assignment claim and could not raise new priority theories. Finding no prejudice, the court affirmed.

The court first agreed with Maricopoly that the trial court had acted prematurely. Under Rule 7.1(a)(3), Ariz. R. Civ. P., an opposing party must file any responsive memorandum within 10 days after service; because AZ Home served its August 19, 2021 motion by U.S. mail under Rule 5(c)(2)(C), five calendar days were added under Rule 6(c), and the weekend/holiday exclusion of Rule 6(a)(2) applied, making Maricopoly’s response due September 7, 2021. The court had signed and filed AZ Home’s order on September 1 — before that deadline. The panel explained that although Rule 7.1(b) permits a court to summarily grant a motion in three situations (noncompliance with Rule 7.1(a), the opposing party’s failure to file a response, or counsel’s failure to appear for oral argument), none applied here, so summary treatment was inappropriate and the trial court erred.

Nevertheless, the court held Maricopoly was not prejudiced and its due process rights were not violated. Procedural due process requires only the opportunity to be heard at a meaningful time and in a meaningful manner (citing Sycamore Hills Estates Homeowners Ass’n v. Zablotny). Maricopoly had already fully presented its sole basis for the surplus — equitable assignment — and the first appeal had rejected it. Under the mandate rule (Raimey v. Ditsworth) and the law-of-the-case doctrine (State v. Bocharski), that prior decision bound the trial court and the parties throughout the remaining proceedings, so Maricopoly could not re-assert equitable assignment or introduce new evidence to support it (United Dairymen of Ariz. v. Schugg; Crouch v. Truman).

The court further held that Maricopoly could not raise “other grounds for priority,” such as equitable subrogation, for the first time on remand, and that its attempt to advance that theory for the first time in its appellate reply brief was untimely and waived (United Bank v. Mesa N. O. Nelson Co.; BMO Harris Bank N.A. v. Espiau). The proper time to raise such theories had been the initial trial-court proceedings before the first appeal. The record also belied Maricopoly’s claim that it would have argued differently if given a chance to respond, because on remand it had told the trial court the case was remanded only to address equitable assignment. And even assuming an argument that surplus proceeds automatically flow up to an unextinguished senior lien, the court noted it would have been unavailing under Tortosa Homeowners Ass’n v. Garcia. Finding no prejudice and thus no reversible error (Volk v. Brame; Creach v. Angulo), the court affirmed and denied Maricopoly’s request for costs because it was not the successful party under A.R.S. § 12-341.

For homeowners, purchasers, and lienholders navigating Arizona HOA assessment-lien foreclosures, this decision illustrates how “excess” or surplus sale proceeds are contested after the association is paid, and how an appellate mandate constrains what can be argued later. When an HOA forecloses and the property sells for more than the association’s judgment, the surplus does not automatically belong to the sheriff’s-sale purchaser; competing junior lienholders (here a state-affiliated foreclosure-prevention corporation) and the former owner may also claim it, and entitlement turns on lien-priority principles rather than on who bought the home.

The case is also a practical lesson in civil procedure. A trial court’s ruling on a motion before the response deadline is error, but Arizona appellate courts will not reverse unless the error actually prejudiced the complaining party. Because the law-of-the-case doctrine and the mandate from the first appeal had already foreclosed Maricopoly’s only viable theory, the premature ruling changed nothing and the panel affirmed. The decision underscores that a party must raise all of its legal theories — such as equitable subrogation — in the trial court before the first appeal, not for the first time on remand or in a reply brief, or it risks waiver. As an unpublished memorandum decision it creates no binding precedent, but it offers a concrete window into surplus-proceeds and remand practice in Arizona HOA foreclosures.

Video overview of the ruling

An AI-generated video overview of TRAILS AT AMBER RIDGE HOMEOWNERS ASSOCIATION, an Arizona nonprofit corporation, Plaintiff, v. GERARDO MACIAS, a married man, as his sole and separate property; COMMUNITY HOUSING RESOURCES OF ARIZONA; ARIZONA HOME FORECLOSURE PREVENTION FUNDING CORPORATION, Defendants/Appellees, MARICOPOLY, LLC, a limited liability company, Intervenor/Appellant. (2 CA-CV 2022-0096). Although the trial court erred by granting the junior lienholder’s motion to release excess foreclosure proceeds… This plain-language summary was generated from the court’s filings; the court’s own ruling controls.

Listen: audio deep dive on the ruling

An AI-generated audio deep dive walking through the court’s reasoning and disposition in TRAILS AT AMBER RIDGE HOMEOWNERS ASSOCIATION, an Arizona nonprofit corporation, Plaintiff, v. GERARDO MACIAS, a married man, as his sole and separate property; COMMUNITY HOUSING RESOURCES OF ARIZONA; ARIZONA HOME FORECLOSURE PREVENTION FUNDING CORPORATION, Defendants/Appellees, MARICOPOLY, LLC, a limited liability company, Intervenor/Appellant.. Generated from the case filings; verify against the linked ruling below.

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This dossier combines the case metadata, linked court sources, and the explanatory sections below. It distinguishes court rulings from party filings, allegations, and requested relief.

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The rule in one sentence

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What happened and why it matters

Scott McLaren bought Tract 174 in the Sierra Verde Ranch subdivision in Seligman (Yavapai County) in April 2020, taking title by a warranty deed that expressly made the parcel subject to recorded CC&Rs. Those CC&Rs created the Sierra Verde Ranch Property Owners Association, made every parcel owner an automatic member, and obligated each owner to pay annual assessments secured by a lien enforceable through foreclosure. After McLaren paid the 2021 and 2022 assessments late and then refused to pay the 2023 and 2024 assessments, the POA sued for breach of contract and to foreclose its assessment lien. The superior court granted the POA summary judgment on the contract claim and, on reconsideration, on the foreclosure claim, entering a judgment awarding roughly $848 in unpaid assessments and fees, $1,022 in collection costs, and $12,545 in attorneys’ fees. McLaren appealed, arguing lack of mutual assent to the CC&Rs, the POA’s prior material breach for failing to maintain access roads and a water well, denial of his right to a jury trial, and various procedural and evidentiary errors. The Arizona Court of Appeals, Division One, affirmed. It held that a deed taken subject to recorded CC&Rs binds the owner as a contract, and that the obligation to pay assessments is independent of the association’s maintenance duties, so alleged non-maintenance neither excused payment nor raised a triable issue. The court also rejected McLaren’s jury-trial, affirmative-defense, and additional-evidence arguments and awarded the POA its reasonable appellate fees and costs.

Reviewing the grant of summary judgment de novo and viewing the evidence in the light most favorable to McLaren, the court asked whether the POA showed there was no genuine dispute of material fact and that it was entitled to judgment as a matter of law under Ariz. R. Civ. P. 56(a), noting it would affirm if the ruling was correct for any reason.

On contract formation, the court rejected McLaren’s claim that he never assented because he misunderstood whether the POA was an “association” or a “corporation.” His warranty deed expressly stated that he took the parcel subject to recorded CC&Rs, and those CC&Rs, recorded before he bought, provide that every owner “in accepting a deed . . . automatically becomes a member of the Association” and agrees to be bound. Citing ACEMA v. Turner and Powell v. Washburn, the court reiterated that a covenant running with the land is a contract between the association and the owners, and that the CC&R obligations, including annual assessments, are enforceable as a contract against owners like McLaren; the POA’s precise legal status did not affect the validity or applicability of the CC&Rs.

The core of the decision addressed McLaren’s prior-material-breach theory — that the POA’s alleged failure to maintain roads and its closure of a well excused his duty to pay. The court observed that McLaren had neither sued nor counterclaimed to enforce the CC&Rs, and had not shown a material breach that would suspend his own performance under Zancanaro v. Cross. More fundamentally, the court applied the independent-covenant doctrine: the obligation to pay assessments arises from ownership of property subject to the CC&Rs and does not depend on the association’s performance of maintenance. Quoting Mountain View Condos. Homeowners Ass’n v. Scott (“the obligation to pay assessments arises from unit ownership and is not dependent upon completion of improvements”) and Casita de Castilian, Inc. v. Kamrath, the court explained that the duty to pay and the association’s maintenance duties are distinct. It distinguished the out-of-state Rivers Edge decision as non-binding, and held that even though these CC&Rs were silent on the point, the payment obligation was independent of the POA’s responsibility to maintain common areas. McLaren’s failure to allege he could not use his parcel, or to identify any CC&R duty to maintain a specific road or well, left no triable issue.

The court then dispatched McLaren’s remaining arguments. Under National Bank of Arizona v. Thruston, the POA as movant was not required to negate McLaren’s affirmative defenses; the proponent of an affirmative defense bears the burden of proving it. Summary judgment did not deprive McLaren of a jury trial because there were no genuine fact issues to try (Cagle v. Carlson). The denial of his motion to submit additional evidence was reviewed only for abuse of discretion, and McLaren showed none; a party opposing summary judgment may not rest on the allegations of its pleadings but must set forth specific facts. Finally, arguments not asserted below — including his point that he declined to seek damages that would fall on his neighbors — were not a valid defense to summary judgment. The court affirmed and awarded the POA its reasonable appellate attorneys’ fees and costs under the CC&Rs and A.R.S. §§ 12-341 and 12-341.01, contingent on ARCAP 21 compliance.

This decision restates a durable principle of Arizona community-association law: when a deed takes property subject to recorded CC&Rs, those covenants operate as a contract, and an owner’s duty to pay assessments is generally treated as independent of whatever the association does or fails to do with common areas. Owners who are dissatisfied with maintenance — here, roads and a well — cannot ordinarily self-help by withholding assessments; the court pointed out that the proper route is to enforce the CC&Rs affirmatively (by suit or counterclaim), not to raise non-maintenance as a defense to a collection action. The opinion also shows how the planned-community statutes, A.R.S. §§ 33-1256(A) and 33-1807(A), gate lien foreclosure: the trial court initially denied foreclosure until the POA demonstrated the owner owed at least $1,200 or was delinquent for more than a year.

The case is also a cautionary illustration of fee exposure. Because the CC&Rs and A.R.S. §§ 12-341 and 12-341.01 authorize a fee award to the prevailing party, a relatively small assessment dispute — a few hundred dollars in unpaid dues — grew into a judgment that included more than $12,500 in trial attorneys’ fees plus collection costs, with additional fees awarded on appeal. As an unpublished memorandum decision under Arizona Supreme Court Rule 111(c), it is not precedential and may be cited only as the rule allows, but it usefully synthesizes the settled authorities (Scott and Casita de Castilian) that owners and boards alike rely on when disputes over assessments and maintenance arise.

Video overview of the ruling

An AI-generated video overview of Sierra Verde Ranch Property Owners Association, Plaintiff/Appellee, v. Scott B. McLaren, Defendant/Appellant (1 CA-CV 25-0384). An owner who accepts a deed subject to recorded CC&Rs is contractually bound to pay HOA assessments, and that… This plain-language summary was generated from the court’s filings; the court’s own ruling controls.

Listen: audio deep dive on the ruling

An AI-generated audio deep dive walking through the court’s reasoning and disposition in Sierra Verde Ranch Property Owners Association, Plaintiff/Appellee, v. Scott B. McLaren, Defendant/Appellant. Generated from the case filings; verify against the linked ruling below.

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This dossier combines the case metadata, linked court sources, and the explanatory sections below. It distinguishes court rulings from party filings, allegations, and requested relief.

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The rule in one sentence

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This consolidated appeal grew out of a decades-long dispute over ground rent for 29 casitas built on land subleased from a Scottsdale resort. In 1970 the resort’s predecessor leased twenty acres, later dividing it into a twelve-acre resort and an eight-acre condominium complex of 29 casitas. A 1972 sublease set the casita owners’ ground rent, and a 1999 amendment fixed the rent at $323 per month while authorizing the homeowners association (the HOA) to represent the owners in future rent negotiations and to use an appraiser if the HOA and the resort owner, Procaccianti AZ II, L.P. (the Hotel), could not agree. After a 2005 arbitration between the Hotel and the landowner, the Hotel and the HOA agreed the owners would pay 40% of the total ground rent, or $708.50 per unit per month, and 24 of 29 owners approved that allocation at a January 2006 special meeting and again through a mailed written amendment. A 2011 stipulated judgment (the Willett Judgment) had voided the 2006 special meeting for lack of a quorum. Various owner groups then sued the Hotel and the HOA, contesting the HOA’s authority, the validity of the 2006 amendment, the identity of the incorporated HOA, the denial of a receiver, a stricken damages claim, and joint-and-several liability for a roughly $459,000 fee award. In an unpublished memorandum decision, Division One of the Arizona Court of Appeals affirmed the superior court across all three consolidated appeals and awarded the Hotel and the HOA their fees and costs on appeal.

The court addressed each argument in turn. On issue preclusion, it reviewed de novo and applied the five-element test, holding that Appellants failed the first element because the status of the incorporated HOA and the validity of the 2006 Amendment were never “actually litigated and determined by a valid and final judgment.” The 2011 Willett Judgment was a stipulated judgment that addressed only the narrow question whether the January 12, 2006 special meeting and vote were valid; stipulated judgments generally lack preclusive effect, and its narrow findings did not bar the later courts from deciding the HOA’s status and authority or the validity of the 2006 Amendment. Interpreting the Willett Judgment de novo as a contract, the court found its plain terms voided only the actions taken at the January 2006 meeting for lack of a quorum; it made no findings about the validity of future amendments and did not extinguish the owners’ ground-rent obligations. On the HOA’s status, the court noted the question—whether the post-1994 incorporated entity succeeded the pre-1994 unincorporated association—had already been decided against Appellants, including in London v. Karatz, and declined to revisit it. On the “vote by pen,” the court held A.R.S. § 10-3704(A) permits nonprofit-corporation members to approve action by signed written consent absent contrary governing documents, that nothing showed the HOA’s documents forbade it, and that a jury on sufficient evidence implicitly found the owners validly approved the 2006 Amendment. It found no abuse of discretion in striking the Elis’ undisclosed damages under Arizona Rule of Civil Procedure 26.1, and affirmed summary judgment for the Hotel because the owners’ 2011 settlement—barring the HOA from negotiating their ground rent—breached the 1999 Amendment’s grant of exclusive negotiating authority to the HOA. The court upheld the denial of a receiver because the HOA had a properly elected board and valid bylaws and was not incapacitated, and, alternatively, the declaration’s remedy was for the Hotel to assume control. It held DRL waived its challenge to joint-and-several fee liability by not raising it below, and awarded the Hotel and the HOA their fees and costs on appeal as prevailing parties under A.R.S. § 12-341.01.

For Arizona associations and owners, this decision illustrates how governing-document amendment and voting rules interact with the Arizona Nonprofit Corporation Act. The court confirmed that a nonprofit HOA may obtain member approval through a written “vote by pen” under A.R.S. § 10-3704(A) when the governing documents do not prohibit it, and that whether owners actually approved an amendment can be a fact question for a jury. It also shows that an association’s authority, once conferred in the governing documents, can bind owners: because the 1999 Amendment gave the HOA exclusive authority to negotiate ground rent, individual owners who sidestepped that authority through a private settlement were found to have breached the sublease.

The opinion is also a caution about the limits of a favorable earlier ruling and about preserving arguments. A 2011 stipulated judgment that voided a defective 2006 meeting did not, by its narrow terms, permanently free the owners from ground rent or bar the association from later re-approving the amendment. And DRL’s challenge to being held jointly and severally liable for a roughly $459,000 fee award was waived because it was not raised in the trial court. Because the decision is an unpublished memorandum decision under Arizona Rule of the Supreme Court 111(c), it is not precedential and may be cited only as authorized by rule.

Video overview of the ruling

An AI-generated video overview of Diana R. Shaffer, et al. v. Procaccianti AZ II, L.P., et al. (Hilton Casitas Council of Homeowners) (consolidated with Whitmer and London) (1 CA-CV 16-0628 (consolidated with 1 CA-CV 16-0629 and 1 CA-CV 16-0654)). Prior judgment did not preclude later litigation over the HOA status, authority, and assessment claims. This plain-language summary was generated from the court’s filings; the court’s own ruling controls.

Listen: audio deep dive on the ruling

An AI-generated audio deep dive walking through the court’s reasoning and disposition in Diana R. Shaffer, et al. v. Procaccianti AZ II, L.P., et al. (Hilton Casitas Council of Homeowners) (consolidated with Whitmer and London). Generated from the case filings; verify against the linked ruling below.

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Parties, Court, and Research Coverage

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The rule in one sentence

Case Participants

What happened and why it matters

Homeowners across the unincorporated retirement community of Green Valley sued Green Valley Recreation, Inc. (GVR), a nonprofit recreational association formed in 1978, seeking to quiet title, obtain declaratory relief, and recover damages. They contended that recorded Master Deed Restrictions (MDR), private membership agreements, and CC&Rs compelling them to maintain GVR membership and pay its dues and assessments—including a 2000 ‘new member capital fee’—were unenforceable. The homeowners argued the covenants did not touch and concern the land, were unconscionable, and lacked mutuality of obligation. The Pima County Superior Court granted summary judgment to GVR and denied both the homeowners’ post-judgment motions and GVR’s request for attorney fees. The homeowners appealed and GVR cross-appealed the fee denial. Addressing what it described as a novel Arizona issue, the Court of Appeals, Division Two, held that covenants requiring membership in a recreational association touch and concern the burdened land and are enforceable as real covenants running with the land. The court rejected the homeowners’ unconscionability and mutuality arguments and declined to apply A.R.S. §§ 33-440 and 33-442 retroactively to covenants created before those statutes took effect. It affirmed summary judgment for GVR and, reviewing for abuse of discretion, affirmed the discretionary denial of GVR’s trial-court attorney fees, while awarding GVR its reasonable attorney fees on appeal under A.R.S. § 12-341.01.

The court first addressed the trial court’s use of its preliminary-injunction findings as ‘law of the case.’ Citing Powell-Cerkoney v. TCR-Montana Ranch, the court reaffirmed that legal conclusions reached at the preliminary-injunction stage do not constitute law of the case and do not bind the court at summary judgment. It held, however, that the homeowners had waived the point by not objecting until their motion for new trial, and that any error was harmless because the servitudes were valid on other grounds, so the trial court reached the correct result.

Turning to the central issue, the court applied the traditional four elements of a real covenant from Choisser v. Eyman and Federoff v. Pioneer Title & Trust: a writing satisfying the Statute of Frauds, intent that the covenant run with the land, a covenant that touches and concerns the land, and privity of estate. GVR urged that the touch-and-concern element had been superseded by the Restatement (Third) of Property (Servitudes) and by A.R.S. §§ 33-440 and 33-442. The court declined to resolve that question, holding those statutes could not be applied retroactively under A.R.S. § 1-244 because eliminating touch-and-concern would affect substantive rights established when the covenants were created (§ 33-440 effective September 2008; § 33-442 enacted 2010).

Applying the traditional test, the court concluded the GVR covenants do touch and concern the land: each burdened owner is entitled to the benefit of recreational facilities and services, and the homeowners offered no evidence any of them was denied those benefits. The court rejected the argument that ‘benefit’ and ‘value’ should be measured subjectively, analogized GVR membership to a community pool, and relied on out-of-state authority (Lowry, Streams Sports Club, Regency Homes, Four Seasons, Homsey) holding that mandatory recreational-association membership satisfies touch-and-concern. Because GVR offers full membership and access to owners throughout its vicinity, the absence of a single common subdivision scheme was inconsequential so long as access is not unreasonably impeded by distance. The recorded agreements and CC&Rs also showed clear intent to bind the land permanently, and the writing and privity elements were undisputed; even homeowner Guldan, whose restriction was unrecorded, was bound because he had actual notice under Federoff and A.R.S. § 33-412(B).

On unconscionability—a question of law under Maxwell v. Fidelity Financial Services—the court found neither procedural nor substantive unconscionability. There was no evidence of unfair surprise or bargaining defects; the recorded documents provided notice, and the homeowners’ claims of unequal bargaining power lacked factual support. Substantively, there was no evidence of a significant cost-price disparity, and GVR’s amendment power was tempered by its articles and bylaws, members’ voting rights, and the rule that an association may not unreasonably alter the nature of its covenants (Dreamland Villa; Shamrock). The court also rejected the illusory/mutuality argument under Gates and Carroll v. Lee, holding GVR provided consideration by being obligated to perform for its members. Finally, reviewing the fee ruling for abuse of discretion, the court upheld the trial court’s denial of GVR’s fees because it had a reasonable basis—the novel, close nature of the claims and the risk of chilling future servitude litigation—while awarding GVR its fees on appeal under A.R.S. § 12-341.01.

Nickerson is a published, precedential Division Two decision that answered what the court called a novel Arizona question: whether a recorded covenant requiring membership in, and payment of dues to, a recreational association ‘touches and concerns’ the land so that it runs with the land and binds successive owners. The court held that it does, aligning Arizona with courts in several other states and confirming that mandatory recreational-association membership can be a valid, enforceable real covenant even where the burdened homes are not all within a single subdivision and the facilities are dispersed throughout the community. The key consideration is reasonable access to the facilities from the burdened property, not a common platted scheme.

The decision also matters for how associations structure and defend their governing documents and assessments. It reinforces that unconscionability is a legal question examined at contract formation, that recorded CC&Rs and deed restrictions provide the notice needed to defeat an ‘unfair surprise’ claim, and that an association’s power to amend is not ‘unfettered’ because it is checked by its articles, bylaws, members’ voting rights, and the limit against unreasonably altering the nature of the covenants. At the same time, the court’s affirmance of the trial court’s discretionary refusal to award the prevailing association its trial-court fees—because the homeowners raised novel, close questions and fee-shifting could chill legitimate servitude litigation—illustrates that prevailing on the merits does not guarantee a fee award under A.R.S. § 12-341.01.

Video overview of the ruling

An AI-generated video overview of Nickerson v. Green Valley Recreation, Inc. (228 Ariz. 528, 269 P.3d 1179 (App. 2011) (2 CA-CV 2010-0197)). Covenants requiring homeowners to maintain membership in, and pay dues and assessments to, a recreational… This plain-language summary was generated from the court’s filings; the court’s own ruling controls.

Listen: audio deep dive on the ruling

An AI-generated audio deep dive walking through the court’s reasoning and disposition in Nickerson v. Green Valley Recreation, Inc.. Generated from the case filings; verify against the linked ruling below.

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The rule in one sentence

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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.

Video overview of the case record

An AI-generated video overview of Mountain View Condominiums Homeowners Ass’n v. Scott (No. 2 CA-CV 93-0288; 180 Ariz. 216, 883 P.2d 453 (App. 1994)). A condominium unit owner’s obligation to pay association assessments arises from unit ownership itself, which… This plain-language summary was generated from the court’s filings; the court’s own ruling controls.

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An AI-generated audio deep dive walking through the court record and procedural posture in Mountain View Condominiums Homeowners Ass’n v. Scott. Generated from the case filings; verify against the linked case records below.

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What happened and why it matters

Viewpoint Lake sits in Sun City, Arizona, ringed by eighty-one single-family lots, the El Dorado of Sun City Condominiums, a recreation center, and a medical facility. A 1969 recorded Declaration of Restrictions made lake maintenance the responsibility of the surrounding lakefront owners but never specified how those costs should be split. After Recreation Centers of Sun City, Inc. took title to the lake and nearby golf courses in 1975 and agreed to pay half of maintenance, disputes arose over the rest. In 1979, Del Webb, Recreation Centers, and the Viewpoint Lake Homeowners Association signed an unrecorded agreement setting a $95 per-lot fee adjusted annually by the Consumer Price Index, and the parties followed that formula for nearly thirty years. In late 2008, Recreation Centers announced it would reduce its funding and proposed a lakeshore-frontage formula that more than tripled homeowner assessments. Six owners filed a certified class action, and El Dorado intervened, arguing the 1969 Declaration did not burden its condominium tract. The superior court granted summary judgment for the class and for Recreation Centers against El Dorado. On appeal, Division One of the Arizona Court of Appeals affirmed. It held that Recreation Centers had waived any challenge to the 1979 Agreement through decades of acquiescence, that A.R.S. section 33-440 did not invalidate the agreement, that the agreement lasted as long as the 1969 Declaration, and that the recorded 1969 Declaration burdened El Dorado’s contiguous land. The court awarded the class its appellate attorneys’ fees. This is an unpublished memorandum decision and is not precedent.

Reviewing the summary judgments de novo, the court declined to resolve whether the 1979 Agreement was a substantive amendment to the 1969 Declaration that would have required the majority owner vote prescribed for amendments. It instead affirmed on the alternative ground that Recreation Centers had waived any right to challenge the agreement’s validity. Waiver is the intentional relinquishment of a known right, and a party’s persistent failure to object to conduct under a covenant can result in waiver or abandonment of the restriction. Here Recreation Centers had knowingly performed under the 1979 Agreement for nearly thirty years — paying its share and accepting the CPI-based allocation without objection — so no remand for factfinding was necessary. The court reinforced this with the contract principle that a course of performance accepted or acquiesced in without objection is given great weight in interpreting an agreement (Abrams v. Horizon Corp.; Restatement (Second) of Contracts section 202(4)).

The court next rejected Recreation Centers’ argument that A.R.S. section 33-440, governing private covenants, precluded the 1979 Agreement. Because no statute is retroactive unless expressly declared (A.R.S. section 1-244) and section 33-440 took effect on September 26, 2008, the statute did not control a 1979 agreement. Even assuming it applied, the court found no conflict: the 1979 Agreement is a private covenant affecting real property under section 33-440(C)(2) and is expressly validated by section 33-440(A)(1), which recognizes pre-statute covenants and precludes only later covenants inconsistent with them. The court also declined to read section 33-440 as limited to planned communities; although declaration is defined by reference to the Planned Communities Act (section 33-1802), the separate definition of private covenant is not so limited.

Interpreting the 1979 Agreement as a question of law, the court held it was a binding settlement of a bona fide dispute rather than a terminable-at-will, short-term arrangement. The agreement adjusted assessments for any succeeding year, incorporated a Consumer Price Index escalator showing the parties contemplated future increases, and rested on the 1969 Declaration, which itself ran for thirty years with automatic ten-year renewals; the court therefore tied the agreement’s duration to that of the Declaration. The court also rejected the contention that the Viewpoint Lake Homeowners Association lacked legal capacity: a party that deals with an association as an entity and accepts value from it is estopped from later denying its capacity to contract, and nothing in the Declaration gave the Management Board the exclusive power to allocate maintenance costs.

Finally, the court held the recorded 1969 Declaration burdened El Dorado’s Tract C property. It refused to read the Declaration’s reference to future deed language as a condition precedent to imposing the burden absent clear and unequivocal language, and it found the Declaration satisfied the statute of frauds because it identified the burdened estate — Viewpoint Lake (Tract A) and all parcels adjacent to and contiguous with it — with sufficient certainty. Because Del Webb owned both tracts in 1969 and the 1971 amendment confirmed Tract C’s contiguity, anyone tracing title would have constructive notice that the Declaration encumbered Tract C from the moment of its execution.

For Arizona homeowners and associations, this decision illustrates how a long-standing course of conduct can lock in a cost-sharing arrangement even when the original governing documents are silent or arguably require a formal amendment. Recreation Centers could not escape the 1979 assessment formula it had followed for three decades: by knowingly performing under the agreement year after year, it waived any argument that the agreement was an invalid amendment or was terminable at will. The case is a reminder that boards and owners who want to preserve the right to challenge a governing arrangement must object promptly rather than acquiesce, because Arizona courts give great weight to a settled course of performance and may treat decades of acceptance as an intentional relinquishment of the right to complain.

The decision also shows how recorded declarations can bind property that never received a separate, tailored recording. The 1969 Declaration encumbered every parcel adjacent to and contiguous with Viewpoint Lake, and the court held that this description gave constructive notice to anyone tracing title to El Dorado’s condominium tract — so the burden attached from the Declaration’s execution, not from some later filing. For buyers, associations, and title examiners, the case underscores the importance of tracing the full chain of title for recorded lake-, common-area-, or subdivision-wide restrictions, and it confirms that A.R.S. section 33-440 (effective in 2008) does not retroactively unsettle covenants and agreements that predate it. Because the opinion is an unpublished memorandum decision, it is not binding precedent, but it is a useful educational example of assessment, covenant, and waiver principles in the HOA context.

Video overview of the ruling

An AI-generated video overview of Cropley v. Recreation Centers of Sun City, Inc. (1 CA-CV 10-0034). Affirmed. Recreation Centers waived any right to challenge the validity or interpretation of the 1979 Agreement… This plain-language summary was generated from the court’s filings; the court’s own ruling controls.

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An AI-generated audio deep dive walking through the court’s reasoning and disposition in Cropley v. Recreation Centers of Sun City, Inc.. Generated from the case filings; verify against the linked ruling below.

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Case Dossier

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Case Summary

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Key Issues & Findings