**Case Summary: *Michael J. Jones v. Westwind Homeowners Association***
**Case No. 12F-H1213001-BFS**
**Forum:** Arizona Office of Administrative Hearings
**Date of Final Action:** January 2, 2013

**Procedural Overview**
This administrative hearing addressed a dispute between Petitioner Michael J. Jones, a homeowner, and Respondent Westwind Homeowners Association regarding the validity of rental rules adopted by the Association’s Board of Directors. The hearing was held on November 6, 2012, before Administrative Law Judge Sondra J. Vanella. The decision was certified as final on January 2, 2013, after the Department of Fire, Building and Life Safety took no action to modify it.

**Key Facts**
Effective August 2011, the Westwind Board adopted "Rental Rules" and a "Crime Free Lease Addendum" (CFLA). These new rules required owners to utilize specific lease addenda and mandated that all leases have a minimum term of 12 months, subjecting shorter terms to case-by-case review. The CFLA also stipulated that a single violation of community documents by a tenant would be deemed "irreparable" and grounds for immediate termination of the lease.

Jones, who leased his home to tenants, filed a petition alleging these rules violated the community's Declaration of Covenants, Conditions, and Restrictions (CC&Rs).

**Main Arguments**
* **Petitioner’s Position:** Jones argued the Board unilaterally amended the CC&Rs without obtaining the required affirmative vote of 75% of the membership, a violation of Article 11.7. He pointed to Article 8.13 of the CC&Rs, which permits leasing "from time to time," arguing the new rules restricted this right. Jones also contended the CFLA imposed unreasonable penalties and lacked due process by treating minor violations (e.g., landscaping) as grounds for eviction.
* **Respondent’s Position:** The Association argued the Board possessed the authority to interpret vague terms in the governing documents and that the rules were necessary to deter criminal activity and protect property values. They asserted the CFLA established the Association as a third-party beneficiary to address non-responsive owners.

**Legal Findings and Decision**
The Administrative Law Judge ruled in favor of the Petitioner, finding that Westwind violated its governing documents.

1. **Violation of CC&Rs (Amendment Procedure):** The Judge determined the Rental Rules and CFLA effectively amended the CC&Rs by restricting the right to lease "from time to time". Because the Board did not obtain the required 75% member vote, the adoption of these restrictions violated Article 11.7 of the CC&Rs.
2. **Inconsistency with Declaration:** Citing Article 6.5 of the CC&Rs, the Judge noted that Association Rules "will not be interpreted in a manner inconsistent with this Declaration". The Judge held that the 12-month minimum term and the authority to disapprove or terminate leases were inconsistent with the broad leasing rights granted in the CC&Rs.
3. **Unenforceability:** The specific provisions of the Rental Rules and CFLA found to conflict with the CC&Rs were declared to have no legal effect and to be unenforceable.

**Outcome**
The Administrative Law Judge ordered Westwind to:
* Cease enforcing the conflicting provisions of the Rental Rules and CFLA against members;
* Reimburse the Petitioner $2,000.00 for the filing fee; and
* Pay a civil penalty of $400.00 to the Department ($200 per violation).