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Yin Macatabas

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Case Summary

Case ID 25F-H089-REL
Agency Arizona Department of Real Estate
Tribunal Arizona Office of Administrative Hearings
Decision Date 2026-04-27
Administrative Law Judge NR
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Yin Macatabas Counsel Pro Se
Respondent Tapestry on Central Condominium Association Counsel Monya Cohen, Allison Preston

Alleged Violations

No violations listed

Video Overview

Audio Overview

Briefing: Macatabas v. Tapestry on Central Condominium Association

Executive Summary

The case of Yin Macatabas v. Tapestry on Central Condominium Association (No. 25F-H089-REL) centers on a dispute over access to association records following a $3.5 million special assessment. The Petitioner, Yin Macatabas, alleged that the Association violated Arizona Revised Statute (A.R.S.) § 33-1258 by failing to provide requested documents—including competitive bids for elevators, lobbies, and HVAC projects—within the mandatory ten-business-day window.

Following evidentiary hearings held on April 2 and April 7, 2026, Administrative Law Judge (ALJ) Nicole Robinson ruled in favor of the Respondent. The decision concluded that the Association had fulfilled its statutory obligations by making the records "reasonably available" through an online owner portal and via physical hand-delivery to the Petitioner's doorstep. Crucially, the tribunal found that certain records requested by the Petitioner, such as lobby and HVAC bids, did not exist at the time of the request and therefore could not be produced. The petition was denied in its entirety on April 27, 2026.

Case Overview and Procedural History

Case Information
Category Details
Case Number 25F-H089-REL
Petitioner Yin Macatabas (Unit A123)
Respondent Tapestry on Central Condominium Association
Management First Service Residential
Governing Statute A.R.S. § 33-1258 (Records Disclosure)
Presiding Judge Nicole Robinson (Administrative Law Judge)
Timeline of Events
  • Summer 2023: Petitioner purchases unit A123 at Tapestry on Central.
  • January – July 2025: The Association holds bi-monthly board meetings and town halls to discuss a $3.5 million special assessment necessitated by depleted reserves and critical infrastructure needs.
  • July 30, 2025: Petitioner submits a formal records request for CC&Rs, bylaws, and all contractor bids/proposals supporting the assessment. A special assessment meeting is held the same evening.
  • August 8, 2025: Association staff prepares a physical packet. After the Petitioner fails to pick it up, the General Manager hand-delivers it to the Petitioner’s unit.
  • September 3, 2025: Petitioner files a formal petition with the Arizona Department of Real Estate (ADRE).
  • April 2 & 7, 2026: Evidentiary hearings conducted via Google Meet and in-person.
  • April 27, 2026: Final Administrative Law Judge Decision issued, denying the petition.

Detailed Analysis of Key Themes

1. The Definition of "Reasonably Available"

The central legal tension was whether the Association was required to ensure the Petitioner received the documents or merely made them available. Under A.R.S. § 33-1258, records must be "reasonably available for examination."

  • The Portal: The Association argued that uploading documents to the homeowner portal constituted availability. Witness testimony established that elevator bids were on the portal, though the Petitioner claimed she could not find them.
  • Physical Delivery: The Association went beyond the statute's requirements by preparing a physical packet and hand-delivering it to the Petitioner's unit on August 8, 2025, when she failed to pick it up.
2. The Scope and Existence of Records

A significant portion of the dispute involved the Petitioner’s request for documents that did not yet exist.

  • The Elevator Bids: Two bids for $477,000 each existed for the elevators and were provided.
  • Non-Existent Records: Board President Candess Hunter testified that because the Association was in the "design phase" for the lobby and hallway projects, no formal competitive bids had been obtained or approved by the board at the time of the July request.
  • HVAC: The HVAC amount in the assessment was based on a reserve study, not a specific contractor bid. The ALJ ruled that the Association cannot be held in violation for failing to produce records that are not in its possession.
3. Financial Instability as Context for Assessment

Testimony from the Board President highlighted the dire financial situation that led to the $3.5 million assessment:

  • The Association's reserves had been depleted to approximately $250,000 against a projected $4.5 million in needs.
  • A "catastrophe" with the fire system cost over $1 million.
  • Insurance providers were threatening cancellation due to the poor condition of the elevators, which would have forced the board to resign and placed the community into receivership.
4. Credibility and Burden of Proof

The Petitioner bore the burden of proving the violation by a "preponderance of the evidence." The ALJ found the Association’s witnesses (the General Manager and Board President) to be credible. Their testimony regarding the preparation and delivery of the documents on August 8, 2025, outweighed the Petitioner’s claim of non-receipt. The Petitioner’s lack of participation in the seven months of preparatory town halls and meetings prior to the vote was also noted as a factor in her misunderstanding of which bids actually existed.

Important Quotes and Context

Regarding the Delivery of Documents

"I did that because um it was going to be a weekend. We were coming up on a deadline. I I felt like it was a courtesy. I felt it would be faster and I went to the door and I delivered the documents." — Kara Tretbar, Former General Manager, explaining the August 8, 2025, delivery to the Petitioner’s condo.

Regarding the Financial State of the Association

"Our reserves were down to almost nothing. We had had a huge catastrophe with our fire system and that it cost depleted our reserves… We were on the brink of receivership." — Candess Hunter, Board President, providing context on why the $3.5 million special assessment was critical.

Regarding the Existence of Requested Bids

"To think that we could possibly even have bids for the C lobby and the A hallways when we didn't have a design for them yet, I it just was beyond me to think that it was possible for anybody to be that confused." — Candess Hunter, Board President, addressing the Petitioner’s request for lobby and hallway bids.

Regarding the Legal Standard

"Description is not proof… Respondent did not establish that the requested records were made available to me in the way they claim." — Yin Macatabas, Petitioner, in her closing argument, emphasizing the lack of an "audit trail" or photo evidence of delivery.

The Tribunal’s Conclusion

"In this case, the credible weight of the evidence established that Respondent made the requested documents reasonably available to Petitioner for examination. Petitioner had access to the owner portal whereby all of the requested documents resided." — Nicole Robinson, Administrative Law Judge, in the Final Decision.

Actionable Insights

For Homeowners’ Associations (HOAs)
  • Utilize Portals for Compliance: Maintaining a robust, searchable online portal for CC&Rs, meeting minutes, and bids is a primary defense against claims of withholding records.
  • Document Pick-ups and Deliveries: While not strictly required by statute, keeping a delivery log or obtaining a signature when providing physical records can prevent "he-said, she-said" disputes in administrative hearings.
  • Clarify Record Non-Existence: When a member requests records that do not exist (e.g., bids for a project still in the design phase), the Association should explicitly state in writing that no such records currently exist.
For Association Members
  • Engage Early: The ALJ noted the Petitioner did not attend town halls where the project details were discussed. Early participation can clarify the timeline for when bids and contracts are actually generated.
  • Request Portal Assistance: If unable to find documents on a portal, members should formally request assistance or a direct link to the specific folder to demonstrate a good-faith effort to access "reasonably available" records.
  • Understand the "Reasonably Available" Standard: Arizona law does not require associations to ensure a member "received" a record, only that the member was given a reasonable opportunity to examine or purchase it.

Contact Information for Related Parties

Entity Role Contact Info
Arizona Dept. of Real Estate Commissioner [email protected]
Carpenter Hazlewood Delgado & Bolen Respondent Counsel [email protected]
Yin Macatabas Petitioner [email protected]
First Service Residential Management [email protected]

Study Guide: Yin Macatabas v. Tapestry on Central Condominium Association

This study guide provides a comprehensive overview of the administrative hearing case Yin Macatabas v. Tapestry on Central Condominium Association (Case No. 25F-H089-REL). It covers the legal framework, the core dispute regarding records access, and the final judicial determination.

Case Overview and Core Themes

The case centers on a dispute between a condominium owner (Petitioner) and her homeowner association (Respondent) regarding the transparency of a $3.5 million special assessment. The primary legal question was whether the Association violated state law by failing to provide requested records within the statutory timeframe.

Key Legal Framework: A.R.S. § 33-1258

The governing authority in this matter is Arizona Revised Statute § 33-1258, which outlines the requirements for condominium associations regarding record keeping and member access:

  • Availability: All financial and other records must be made "reasonably available" for examination by a member or their representative.
  • Timeframe: The association has ten business days to fulfill a request for examination or to provide copies of requested records.
  • Fees: While associations cannot charge for the review of records, they may charge up to fifteen cents per page for physical copies.
  • Exceptions: Certain records may be withheld, such as privileged attorney-client communications, pending litigation, or personal/financial records of specific members or employees.
The Dispute Timeline (2025–2026)
  • July 30, 2025: Petitioner submits a formal records request for documents supporting a $3.5 million special assessment.
  • August 13, 2025: The statutory 10-business-day deadline for providing the records.
  • September 3, 2025: Petitioner files a petition with the Arizona Department of Real Estate (ADRE) alleging a violation.
  • April 2 & April 7, 2026: Evidentiary hearings are conducted by the Office of Administrative Hearings (OAH).
  • April 27, 2026: Administrative Law Judge (ALJ) Nicole Robinson issues the final decision.

Short-Answer Practice Questions

1. What specific documents did the Petitioner request on July 30, 2025? The Petitioner requested the full CC&Rs and Bylaws, the special assessment justification packet, all contractor bids/proposals for elevator, lobby, hallway, and HVAC projects, detailed financial breakdowns for the $3.5 million assessment, and relevant meeting minutes/voting records.

2. What was the Association’s primary defense regarding the availability of records? The Association argued that the records were "reasonably available" through an online owner portal and that a physical packet of documents was hand-delivered to the Petitioner's unit on August 8, 2025.

3. Why were HVAC and lobby bids not provided to the Petitioner? The Association testified that at the time of the request, these bids did not exist. The Board was still in the process of gathering information or determining designs, and therefore no "association records" for these specific projects had been created yet.

4. What is the "Burden of Proof" in this administrative hearing, and who holds it? The Petitioner holds the burden of proof. She was required to prove by a "preponderance of the evidence" (that the claim is more probable than not) that the Association violated A.R.S. § 33-1258.

5. How did the Administrative Law Judge rule on the hand-delivery of documents? The ALJ found the testimony of the Association’s witnesses credible. Even though the Petitioner claimed she never received the packet, the judge determined the Association fulfilled its duty by making the records available on the portal and attempting hand-delivery.

Essay Prompts for Deeper Exploration

1. Defining "Reasonable Availability" in the Digital Age Analyze the Association’s use of an online owner portal to satisfy A.R.S. § 33-1258. Does the existence of a digital repository satisfy the legal requirement for records to be "reasonably available," even if a member experiences technical difficulties or claims they were not properly instructed on how to navigate the system? Use the testimony of Candess Hunter and Kara Tretbar to support your argument.

2. The Conflict Between Petitioner Testimony and Corporate Records The Petitioner argued that Respondent failed to provide an "audit trail" or physical proof (such as a delivery log or photograph) of the August 8th document delivery. Contrast this with the ALJ’s conclusion that "testimony is evidence." Discuss the weight given to witness credibility versus physical documentation in administrative hearings.

3. Statutory Compliance and Non-Existent Records The Petitioner requested bids for several projects that the Association claimed were not yet finalized or bid out. Explore the legal obligations of an HOA when a member requests documents that do not yet exist. Does a "status update" or "reserve study" suffice when specific competitive bids have not been obtained?

Glossary of Important Terms

Term Definition
A.R.S. § 33-1258 The Arizona statute governing the disclosure and availability of condominium association records to its members.
Administrative Law Judge (ALJ) A judicial officer who presides over administrative hearings, such as those conducted by the Office of Administrative Hearings (OAH).
Burden of Proof The obligation of a party (in this case, the Petitioner) to provide enough evidence to support their claim.
CC&Rs Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and operations of the community.
Owner Portal An online digital platform provided by the Association where members can access documents, pay dues, and view community information.
Preponderance of the Evidence The standard of proof used in civil and administrative cases, meaning the evidence shows the fact is more likely true than not.
Reserve Study A financial document used by HOAs to plan for long-term maintenance and replacement of common area components (e.g., HVAC units).
Special Assessment A one-time fee levied on homeowners by an association to fund specific projects or financial shortfalls not covered by regular dues.
Tribunal A body established to settle a certain type of dispute; in this context, the Office of Administrative Hearings.

The $3.5 Million Question: Lessons in Transparency from the Macatabas v. Tapestry Case

1. Introduction: The High Stakes of HOA Assessments

In the summer of 2025, the homeowners of Tapestry on Central—a 292-unit complex in Midtown Phoenix—found themselves standing at a financial precipice. The Association was on the brink of receivership, reeling from a "fire system catastrophe" that had gutted its reserves. With nearly $4.5 million in looming expenses and only $250,000 in the bank, the Board proposed a staggering $3.5 million special assessment to stabilize the community's future.

For residents, a levy of this magnitude is not merely a line item; it is a significant personal financial blow. In such high-stakes environments, the "right to know" becomes the primary battleground. At the heart of Macatabas v. Tapestry on Central Condominium Association was a fundamental question of transparency: Did the Association violate state law by failing to provide the documentation justifying this massive levy? This case serves as a masterclass in the legal nuances of records disclosure and the practical limits of an HOA’s duty to produce information.

2. The Paper Trail: What Was Requested and Why

On July 30, 2025, Petitioner Yin Macatabas submitted a formal records request following a contentious meeting regarding the assessment. Seeking to verify the "evidence" behind the $3.5 million figure, she requested five specific categories of documents:

  • Governing Documents: Full CC&Rs and Bylaws.
  • Special Assessment Justification Packet: The information sent to owners explaining the necessity of the levy.
  • Competitive Bids: Specific vendor proposals for elevators, lobbies, hallways, and HVAC systems.
  • Financial Breakdowns: The data used to calculate the $3.5 million total, specifically distinguishing between "ballparked" provisional estimates based on preliminary reserve studies and actual fixed contracts.
  • Board Records: Meeting minutes and voting records related to the assessment’s approval.

3. The "Reasonable Availability" Debate

When the dispute reached the Arizona Office of Administrative Hearings in April 2026, the testimony revealed a classic "he-said/she-said" scenario, further complicated by internal contradictions within the Association’s own management.

Points of Contention
Point of Contention Petitioner’s Claims Respondent’s Testimony
Document Delivery Macatabas (Unit A123) testified she never received a physical packet, email, or portal upload of the bids. GM Kara Tretbar testified she hand-delivered a packet to the door of Unit A123 in the "A Building" at 4:30 PM on August 8, 2025—five days before the legal deadline.
Conflicting Accounts Petitioner highlighted that Tretbar initially testified bids existed by Aug 8, only for the Board President to "correct" her later. Board President Candess Hunter clarified Tretbar "misspoke"; lobby and HVAC bids did not exist yet as projects were only in the design phase.
Audit & Verification Petitioner argued there was no photo, receipt, or "audit trail" to prove the delivery occurred. President Hunter retorted: "We’re an HOA; we’re not the police department." The Association argued the law requires "reasonable availability," not a forensic chain of custody.
Portal Access Macatabas claimed she checked the portal and found it empty of the requested bids. The Association maintained all existing records, including the $477k elevator bids, were uploaded and available to any owner who looked.

4. Legal Deep Dive: Understanding ARS § 33-1258

The pivot point of this case is ARS § 33-1258, which mandates that association records be made "reasonably available" within 10 business days.

In this instance, Macatabas calculated her deadline as August 13. The Association’s attempted delivery on August 8 was well within that window. However, the more complex legal issue involved the requested HVAC and lobby bids. The Petitioner demanded these records to justify the $3.5 million total, but the Board revealed those figures were "ballparked" from reserve studies—actual vendor bids had not yet been solicited or received.

As a Senior Analyst, I must be clear: The Law does not require the production of ghosts; if a document has not been drafted, it cannot be "reasonably available" for inspection. Administrative Law Judge Nicole Robinson affirmed that provisional estimates or "ballpark" figures used for planning are not corporate records subject to production until a formal, written bid is actually received by the Association.

5. The Verdict: Why the Judge Denied the Petition

On April 27, 2026, Judge Robinson rendered her decision in favor of the Association. The ruling focused on the "Reasonably Available" standard rather than the disputed physical delivery.

The Judge found that the Association met its burden by maintaining the documents on the online owner portal. Even though the hand-delivery to the "A Building" was contested, the portal provided a "secondary layer of compliance" that satisfied the statute. Because the records were accessible digitally, the Association was not in violation of the 10-day rule. Consequently, the petition was denied, and the Association was not required to reimburse the Petitioner’s filing fee.

6. Essential Takeaways for Homeowners and HOA Boards

The Macatabas case provides a roadmap for navigating transparency in a digital age:

  1. Digital Portals as the Gold Standard: For HOA Boards, a well-maintained owner portal is your best legal shield. If a document is uploaded, it is generally considered "reasonably available," mooting disputes over lost mail or unrecorded hand-deliveries.
  2. The Limits of Disclosure: Boards are not required to produce documents that don't exist. Preliminary figures from a reserve study are planning tools, not "corporate records." Until a vendor puts pen to paper, there is no "bid" to disclose.
  3. The "Reasonably Available" Two-Way Street: This standard implies a duty of inquiry for the homeowner. While the Board must provide access, the owner has a responsibility to check the provided resources (like the portal) before alleging a statutory violation.
  4. Communication is Key: The friction in the "A Building" might have been avoided if the Association had sent a simple follow-up email confirming the August 8 delivery. Clear instructions on exactly where to find documents on the portal can prevent costly litigation.

7. Conclusion: The Path Forward

The $3.5 million question at Tapestry on Central highlights the inevitable tension between a Board’s emergency duty to save a community from receivership and a homeowner's right to verify the costs. This case sets a clear precedent: while associations must be transparent, "reasonable availability" is a functional standard, not a requirement for obsessive bookkeeping. When both sides embrace proactive communication over a "police department" mentality, the spirit of the community can survive even the most catastrophic financial challenges.

Case Participants

Petitioner Side

  • Yin Macatabas (Petitioner)
    Tapestry on Central Condominium Association
    Condominium owner

Respondent Side

  • Monya Cohen (Attorney)
    Carpenter Hazlewood Delgado & Bolen LLP
    Counsel for Respondent
  • Allison Preston (Attorney)
    Carpenter Hazlewood Delgado & Bolen LLP
    Co-counsel for Respondent
  • Kara Tretbar (Witness)
    First Service Residential
    Former General Manager at Tapestry on Central
  • Candess Hunter (Witness)
    Tapestry on Central Condominium Association
    President of the Association's Board of Directors

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
    Issued preliminary continuances and orders
  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over the hearings and issued the final decision
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Ann Galpin v. University Shadows Homeowners Association, Inc.

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Case Summary

Case ID 25F-H099-REL
Agency —
Tribunal Office of Administrative Hearings, Arizona
Decision Date 2026-04-15
Administrative Law Judge NR
Outcome Petition Denied
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Ann Galpin Counsel Pro Se
Respondent University Shadows Homeowners Association, Inc. Counsel Mark Lines, Shaw & Lines, LLC

Alleged Violations

No violations listed

Video Overview

Audio Overview

Briefing Document: Galpin v. University Shadows Homeowners Association, Inc.

Executive Summary

This briefing document summarizes the administrative proceedings and final decision in the matter of Ann Galpin v. University Shadows Homeowners Association, Inc. (No. 25F-H099-REL). The case centered on a dispute regarding a homeowner's right to access specific financial records under Arizona Revised Statutes (A.R.S.) § 33-1258.

The Petitioner, Ann Galpin, alleged that the University Shadows Homeowners Association (the Association) failed to comply with her October 14, 2025, records request. While the Association provided over 1,000 pages of documents, Galpin contested the omission of multi-year, vendor-specific ledgers and transactional data requested in Excel or CSV formats. The Association maintained that it had produced all records kept in the ordinary course of business and was not legally obligated to create new reports or convert raw digital data into specific formats to satisfy a member's request.

On April 15, 2026, Administrative Law Judge (ALJ) Nicole Robinson issued a final decision denying the petition. The ruling affirmed that state law requires the disclosure of existing records but does not compel an association to generate new documents or reformat data into a requester's preferred digital medium.

Analysis of Key Themes

1. Statutory Interpretation: "Production" vs. "Creation"

A central conflict in the case was the distinction between producing an existing record and creating a new one. The Association, represented by attorney Mark Lines and witness Austin Haywood, argued that the requested multi-year ledgers (specifically items #3 and #5 of the request) did not exist as standalone documents in their management software, Caliber.

  • Petitioner’s View: Galpin argued that because the data exists within the software, "converting" that data into a readable Excel or CSV format is a statutory requirement of making records "available." She cited A.R.S. § 10-11601(D), asserting that corporations must convert digital records into written form upon request.
  • Respondent’s View: The Association contended that generating a multi-year report requires "extracting and converting" data in a way that creates a new record not maintained in the ordinary course of business.
  • Legal Conclusion: The ALJ ruled that A.R.S. § 33-1258 does not require an association to create new documents or generate data into a particular format.
2. The Scope of "All Financial Records"

The Petitioner relied on the broad language of A.R.S. § 33-1258(A), which states that "all financial and other records of the association shall be made reasonably available." Galpin interpreted this to include the "bits and bytes" or "ones and zeros" inside the computer, arguing that a summary monthly statement is "non-transparent" and hides potential errors or mis-postings.

The Association countered by providing:

  • Monthly financial statements (P&L, Balance Sheets).
  • Bank statements and reconciliation reports.
  • Check registers.
  • Specific invoices for vendors (when they existed).

The court found the Association's production of these materials—totaling over 1,000 pages across two requests—to be sufficient under the law.

3. Management Software and Technical Constraints

The testimony of Austin Haywood provided insight into the technical operations of HOA management:

  • Software: The Association uses Caliber for accounting and Strongroom for third-party accounts payable.
  • Workflow: Invoices are received as PDFs, approved by various personnel (up to 15 people involved in the process), and stored electronically.
  • Data Integrity: Haywood testified that while transactional data exists, the "records" maintained for the Association are the compiled monthly reports provided to the Board, not the raw data exports Galpin requested.
4. Record Retention Policies

A secondary dispute involved the duration of record-keeping. The Association's "HOA Records Retention Policy" (revised January 1, 2019) stipulates a 3-year retention period for most financial documents, including bank statements, budgets, and monthly financial statements. Galpin argued for a 7-to-10-year period based on tax and legal standards, but the ALJ noted that the Association is governed by its own policy and the specific requirements of Title 33.

Important Quotes

Regarding the Obligation to Create Records

"The statutory framework governing condominium records requests draws a clear line between an association’s obligation to disclose the records it maintains and the impermissible burden of requiring the creation of new ones." — Respondent’s Answer, December 8, 2025

Regarding Digital Records

"The digital records that reside inside the computer are the other half… If a person can't use the records, the state would not even create this [transparency act] and say you can look at everything." — Ann Galpin, Petitioner, Closing Statement

Regarding the Final Ruling

"Respondent successfully argued that Ariz. Rev. Stat. § 33-1258, does not require an Association to create new documents or generate data into a particular format." — ALJ Nicole Robinson, Final Decision

Summary of the October 14, 2025, Records Request

The following table outlines the five categories of records requested by Galpin and the eventual status of those requests according to the hearing evidence:

Item # Description Status / Resolution
1 October 2025 Board Election records (ballots, tally sheets). Provided by the Association.
2 Detailed Monthly Financials (April–Sept 2025). Provided by the Association.
3 Multi-year General Ledger (2018–2025) in Excel/CSV. Denied (Required creation of new reports).
4 Specific invoices for Splashaway, AZ Red Mountain, and G. Quintana. Provided by the Association.
5 Detailed Vendor Ledgers (2018–2025) for 11 specific vendors. Denied (Required creation of new reports).

Actionable Insights

  • Establish Clear Record Boundaries: Homeowners associations are not required to act as data analysts for members. While "all financial records" must be available, this is limited to records that actually exist in the format they are kept by the association.
  • Format Flexibility: Requesters may "prefer" Excel or CSV formats, but an association satisfies its legal burden by providing records in the format they are maintained (e.g., PDF or hard copy).
  • Custodian Credibility: The ALJ relied heavily on the "credible testimony" of the management company's Vice President. HOAs should ensure their custodians of records are intimately familiar with their software capabilities and retention policies.
  • Retention Policy Defense: Having a written, board-approved Records Retention Policy provides a legal defense against expansive requests for ancient data. In this case, the Association's 3-year policy was a significant factor in limiting the scope of required production.
  • Mootness of Resolved Items: By providing items #1, #2, and #4 quickly, the Association successfully narrowed the legal battle to the technical "creation" issue, which was ultimately easier to defend.

Study Guide: Galpin v. University Shadows Homeowners Association, Inc.

This study guide provides a comprehensive overview of the administrative hearing case Ann Galpin v. University Shadows Homeowners Association, Inc. (Case No. 25F-H099-REL). It covers the legal dispute regarding records requests under Arizona law, the arguments presented by both parties, and the final judicial determination.

Case Overview

The case involves a dispute between Ann Galpin (Petitioner), a member of the University Shadows Homeowners Association, and the Association (Respondent) regarding the disclosure of financial and vendor records. The central conflict involves whether a homeowners association (HOA) is required to generate new reports or convert digital data into specific formats (such as Excel or CSV) to satisfy a member’s records request under Arizona Revised Statutes (A.R.S.) § 33-1258.

Key Entities and Figures
Entity/Figure Role
Ann Galpin Petitioner; a 29-year member and resident of University Shadows.
University Shadows HOA Respondent; a condominium association located in Tempe, Arizona.
Nicole Robinson Administrative Law Judge (ALJ) at the Office of Administrative Hearings (OAH).
Heywood Community Management The management company and custodian of records for the Association.
Austin Heywood Vice President of Heywood Community Management; witness for the Respondent.
Mark Lines Attorney representing the University Shadows Homeowners Association.
Trevan Nuttle Managing agent for the Association; observer at the hearing.

Core Concepts and Legal Framework

1. Statutory Authority: A.R.S. § 33-1258

This is the primary statute governing the disclosure of records for condominium associations in Arizona.

  • General Rule: All financial and other records of the association must be made reasonably available for examination by any member or their designated representative.
  • Timeline: The association has ten business days to fulfill a request for examination or provide copies.
  • Exceptions (Subsection B): Records may be withheld if they relate to privileged attorney-client communication, pending litigation, certain closed-session meeting minutes, or personal/financial records of individual members or employees.
2. Records Retention Policy

The Association operates under a specific Records Retention Policy (revised January 1, 2019):

  • Permanent Records: Articles of Incorporation, Bylaws, CC&Rs, Meeting Minutes (Annual and Board), and Plat Maps.
  • Three-Year Retention: Assessment information, bank statements, budgets, contracts, general correspondence, financial reporting/documents, and tax returns.
3. The "Creation vs. Conversion" Debate
  • Petitioner's View: Argued that digital data (binary "ones and zeros") inside accounting software constitutes a record and must be converted into a written, usable form (like Excel) per A.R.S. § 10-11601(D).
  • Respondent's View: Argued that the law requires the disclosure of existing records kept in the ordinary course of business. Generating a new report (e.g., a seven-year vendor history) constitutes the creation of a new record, which is not required by statute.

Chronology of the Dispute

Date Event
April 22, 2025 Petitioner makes an initial request for various records.
May 31, 2025 Association provides approximately 1,000 pages of documents but limits financial history to three years.
October 14, 2025 Petitioner submits a new written request for five categories of records (#1 through #5).
October 31, 2025 Association provides 25 attachments covering categories #1, #2, and #4.
November 11, 2025 Petitioner files a petition with the Arizona Department of Real Estate alleging non-compliance regarding items #3 and #5.
February 13, 2026 Prehearing conference held to define the scope of the hearing.
March 26, 2026 Formal evidentiary hearing conducted at the Office of Administrative Hearings.
April 15, 2026 ALJ Nicole Robinson issues a decision denying the petition.

Summary of the Contested Records (Items #3 and #5)

The hearing focused specifically on two items from the October 14, 2025, request that the Petitioner claimed were unfulfilled:

Item #3: Multi-Year Ledgers (2018–2025)

Petitioner requested the following in Excel or CSV format for a seven-year period:

  • Detailed General Ledger.
  • Detailed Accounts Payable Ledger.
  • Detailed Accounts Receivable Ledger.
  • Check Registers for all accounts (open or closed).
Item #5: Vendor-Specific Records

Petitioner requested a "Detailed Vendor Ledger" (2018–2025) and all supporting documentation (agreements, change orders, invoices, walkthroughs) for 11 specific vendors, including Heywood Community Management, ASAP Restoration, and Atlas Companies.

Short-Answer Practice Questions

  1. What was the Respondent’s primary justification for not providing the records in Category #3?
  • Answer: The Respondent argued that the requested multi-year ledgers in Excel/CSV format did not exist as standalone records in the ordinary course of business and would require the creation of new reports by extracting and reorganizing data.
  1. **Which Arizona statute did the ALJ determine was not applicable to this condominium association dispute?**
  • Answer: A.R.S. § 10-11601 (which the Petitioner cited regarding the conversion of records).
  1. According to the Association's witness, what accounting software is used to manage University Shadows?
  • Answer: Caliber.
  1. What was the total number of documents provided to the Petitioner in response to her April 2025 request?
  • Answer: Approximately 1,000 pages (provided on two flash drives).
  1. How many business days does an association have to fulfill a records request under A.R.S. § 33-1258?
  • Answer: Ten business days.
  1. Why did the Association refuse to provide "Aged Owner Balance Reports"?
  • Answer: Because those reports contain personal financial information of individual members, which is protected from disclosure under A.R.S. § 33-1258(B)(4).
  1. What specific period of time did the Petitioner’s October request cover for the financial ledgers?
  • Answer: July 1, 2018, through September 30, 2025.

Essay Prompts for Deeper Exploration

  1. Transparency vs. Administrative Burden: Evaluate the balance between a member’s right to "transparency" and an association’s right to be free from "impermissible burdens." Use the arguments from both Ann Galpin and the Association's counsel to support your analysis.
  2. The Definition of a "Record": In the digital age, does "data" residing in a database constitute a "record" before it is printed or exported? Discuss how the ALJ’s decision in this case defines the boundaries of what constitutes an "existing record" under Arizona HOA law.
  3. Statutory Interpretation: Ann Galpin argued that the "intent" of A.R.S. § 33-1258 is disclosure and transparency, while the Association argued for a literal "letter of the law" approach. Discuss the implications of these two different styles of statutory interpretation on the final outcome of the case.

Glossary of Important Terms

  • A.R.S. § 33-1258: The Arizona Revised Statute governing the inspection of records for condominium associations.
  • Caliber: The specific accounting and management software utilized by Heywood Community Management to maintain Association data.
  • Cash Basis Accounting: An accounting method where receipts are recorded during the period they are received and expenses are recorded in the period they are actually paid.
  • CSV (Comma-Separated Values): A plain-text file format used to store tabular data, often used for exchanging data between different applications like Excel.
  • Detailed General Ledger: A comprehensive record of all financial transactions of a business or organization over its entire life or a specific period.
  • OAH (Office of Administrative Hearings): An independent Arizona state agency that conducts hearings for various state regulatory matters.
  • Preponderance of the Evidence: The burden of proof in civil and administrative cases, meaning that the existence of a fact is more probable than its nonexistence.
  • Strongroom: A third-party accounts payable (AP) software system used by the management company to store and process electronic invoices.
  • Subledger: A detailed subset of accounts (like Accounts Payable or Accounts Receivable) that rolls up into the General Ledger.

The Limits of Transparency: Lessons from Galpin v. University Shadows HOA

1. Introduction: The Battle for the Books

In the world of community associations, few issues ignite as much friction as the "battle for the books." When a homeowner suspects financial mismanagement—or simply demands total visibility—the tension between a member's right to inspect records and a Board’s operational reality often results in litigation. The case of Ann Galpin v. University Shadows Homeowners Association, Inc. (No. 25F-H099-REL) serves as a definitive case study for Arizona HOAs. It addresses a fundamental question of modern governance: Does an Association’s duty to provide access to records include an obligation to "data mine" its software to create new, customized reports or convert digital data into a specific format to satisfy a member’s request?

2. Case Background: Ownership History and the Scope of the Dispute

The petitioner, Ann Galpin, a 29-year owner in the Tempe-based University Shadows condominium, initiated a series of aggressive record requests starting in April 2025. In response to her initial inquiries, the Association was remarkably transparent, producing over 1,000 pages of documentation and two separate flash drives. Despite this, Galpin filed a subsequent request on October 14, 2025, which ultimately led to an administrative hearing.

The dispute centered on two specific categories (Categories #3 and #5) spanning from 2018 to 2025. Galpin’s demand was not for existing documents, but for the generation of specific, multi-year compilations including:

  • Detailed General Ledgers in Excel or CSV format.
  • Accounts Payable and Receivable Ledgers in Excel or CSV format.
  • Vendor-Specific Ledgers (spanning seven years) for 11 specific contractors: ASAP Restoration, Asphalt Restoration Services, Atlas Companies, 5 Guys, LG Painting, Great Western Landscaping, Great Western Tree, Great Western Pest, Green Keeper Landscaping, Green Keeper Tree, Swain Asphalt, and Heywood Community Management.
  • Supporting Materials: Change orders, communications, and "standing walkthrough notes" related to these vendors.

Crucially, the Association’s formal Records Retention Policy (Exhibit 10) mandates that "Financial Reporting and Documents" and "Bank Statements" are only maintained for 3 years. Galpin was demanding data four years beyond the Association's legal retention window.

3. The "Creation vs. Production" Conflict

During the hearing on March 26, 2026, the legal arguments hinged on the definition of a "record."

The Petitioner’s Stance: Galpin argued that the Association was withholding "digital records." She contended that because the Association uses accounting software, the data exists as "bits and binary data" that must be "converted" into a readable written form (like Excel) per ARS § 10-11601(D). She distinguished between "source documents" (invoices) and the underlying "digital records" stored within the software.

The Respondent’s Stance: Led by attorney Mark Lines and witness Austin Haywood, the HOA argued that they had already complied with the law. They maintained that the multi-year, vendor-specific reports Galpin sought did not exist in the ordinary course of business. To provide them, the HOA would have to generate a new report rather than simply produce an existing one.

The Disconnect: Petitioner Requests vs. Association Records

Petitioner Requested (Excel/CSV Ledgers) Association Maintained (Ordinary Course)
7-year continuous General Ledger in Excel Monthly reconciled financial reports (3-year retention)
Multi-year Vendor-Specific Ledgers Individual invoices and monthly check registers
Data "converted" into CSV format Reconciled bank statements (PDF or Paper)
"Standing Walkthrough Notes" Do Not Exist / Not Maintained as Official Records
4. Technical Insights: The HOA’s Accounting Workflow

The testimony of Austin Haywood provided a sophisticated look at the technical reality of HOA management. The Association utilizes Caliber for core accounting and Strongroom for managing third-party payables.

As a matter of internal control and financial integrity, the Association maintains a strict separation of duties:

  1. Entry: One individual enters bills and invoices into the system.
  2. Payment: A separate individual processes the payments.
  3. Reconciliation: A General Ledger (GL) accountant reconciles these disparate actions against bank statements to produce the monthly reports used by the Board.

Because of this workflow, the "General Ledger" is a compiled result of these separate duties. The HOA argued effectively that while the raw data exists within the software, a "Vendor Ledger" is a report that must be specifically generated. If the Board does not use or maintain such a report for its monthly business, it is not an "existing record."

5. The Legal Verdict: Interpreting ARS § 33-1258

On April 15, 2026, Administrative Law Judge Nicole Robinson issued her decision, denying Galpin’s petition. The ruling was a significant win for Associations on two fronts:

First, the Judge clarified the statutory authority. While Galpin relied on ARS § 10-11601 (Nonprofit Corporations), the Judge ruled that this statute does not govern condominiums in this context. Instead, the dispute was decided strictly under ARS § 33-1258.

Second, the Judge established a clear boundary regarding format and creation. The verdict explicitly stated: "The statute does not require an Association to create new documents or generate data into a particular format." The law compels the disclosure of existing records, not the performance of customized accounting services or data conversion for a member's convenience.

6. Key Takeaways for Homeowners and Boards

This ruling serves as a vital precedent for community associations and legal analysts:

  1. Format is Not a Mandate: While owners often prefer Excel or CSV files for their own analysis, an HOA is not legally required to "convert" its records if they are maintained as PDFs or paper files.
  2. Creation vs. Access: There is a sharp legal distinction between inspecting records and demanding the generation of custom reports. Transparency laws apply to what is in the file cabinet—physical or digital—not what could be produced via software.
  3. The Supremacy of Retention Policies: Boards must adhere to their retention schedules. As shown in Exhibit 10, because the HOA only retained financial records for 3 years, Galpin’s request for 2018 data was legally unenforceable.
  4. The Burden of Proof: In an administrative hearing, the burden lies with the petitioner. As the Judge noted, Petitioner had no proof that the Association actually possessed the requested records and refused to provide them; "presuming" a record exists is legally insufficient.
7. Conclusion: Moving Toward Clarity

The Galpin v. University Shadows decision reinforces that "transparency" is grounded in the production of existing business records, not the provision of customized "data mining." For boards, the lesson is to maintain a clear records retention policy and a consistent accounting workflow. For homeowners, the lesson is that while the right to inspect is broad, it is limited to the records the Association actually uses to conduct its business. Understanding this distinction is the only way for both parties to avoid the significant costs of administrative hearings.

Case Participants

Petitioner Side

  • Ann Galpin (Petitioner)
    University Shadows Homeowners Association, Inc.

Respondent Side

  • Mark Lines (Attorney)
    Shaw & Lines, LLC
  • Austin Haywood (Vice President / Managing Agent / Witness)
    Heywood Community Management
    Also spelled Austin Heywood in the final decision.
  • Trevan Nuttle (Manager / Client Representative)
    Heywood Community Management
    Also spelled Treven Nuttall in the final decision.
  • Carly (Assistant)
    Heywood Community Management
  • Larry Haywood (Manager)
    Heywood Community Management

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • John Sullivan (Observer)
  • Gabrielle Quintana (Homeowner)
    Referenced in relation to an insurance claim/water loss analysis records request.

Aracelys M Morel

Posted on by

Case Summary

Case ID 25F-H116-REL
Agency —
Tribunal —
Decision Date 2026-03-26
Administrative Law Judge NR
Outcome Petition DENIED
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Aracelys M Morel Counsel —
Respondent Northwood Park Homeowners Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H116-REL Decision – 1398198.pdf

Uploaded 2026-04-24T12:56:14 (44.6 KB)

25F-H116-REL Decision – 1408877.pdf

Uploaded 2026-04-24T12:56:20 (144.5 KB)

Legal Briefing: Morel v. Northwood Park Homeowners Association

Executive Summary

The case of Aracelys M. Morel v. Northwood Park Homeowners Association (No. 25F-H116-REL) centered on a dispute regarding the classification of short-term rental guests under Arizona law. The Petitioner, a homeowner within the Northwood Park community, challenged the Association’s practice of charging a $25 administrative fee for every Airbnb stay, arguing that short-term guests do not constitute "tenants" as defined by state statutes or the Association's Covenants, Conditions, and Restrictions (CC&Rs).

Following an evidentiary hearing held on February 20, 2026, Administrative Law Judge (ALJ) Nicole Robinson issued a decision on March 26, 2026, denying the petition. The ruling established that under Arizona law—specifically A.R.S. § 33-1806.01—short-term rental guests meet the legal definition of "tenants" because the statute lacks a durational requirement. Consequently, the Association is legally authorized to charge a $25 fee for each new tenancy, regardless of the stay's length.

Detailed Analysis of Key Themes

1. Statutory Interpretation of "Tenant"

The core of the dispute was the definition of a "tenant." The Petitioner contended that Airbnb guests function more like hotel guests and lack the long-term residency rights typically associated with a "tenant." Conversely, the Association argued that the term should be interpreted through the lens of the Arizona Residential Landlord and Tenant Act.

The ALJ adopted the definition found in A.R.S. § 33-1310(17), which defines a tenant as "a person entitled under a rental agreement to occupy a dwelling unit to the exclusion of others." Because an Airbnb reservation constitutes an agreement for exclusive occupancy, the court ruled that these guests are legally tenants.

2. Lack of Durational Requirement

A significant theme in the hearing was whether the length of a stay impacts the classification of tenancy. The Petitioner argued that one- or two-night stays should not be subjected to the same administrative fees as long-term leases. However, the Association successfully argued, and the ALJ confirmed, that Arizona law does not specify a minimum duration for a tenancy to exist. This interpretation allows HOAs to apply "per-stay" fees even for very short durations.

3. Conflict Between HOA Authority and Platform Privacy

The Petitioner highlighted a practical conflict: the Association requires specific guest information (names, vehicle descriptions, and license plate numbers), while the Airbnb platform restricts the amount of personal data shared with hosts for privacy reasons. The Petitioner testified that she only receives the guest's name and the duration of the stay. Despite this, the ALJ ruled that the Association’s demand for this information was consistent with the requirements of A.R.S. § 33-1806.01(C).

4. Evidentiary and Procedural Challenges

The Petitioner challenged the validity of five "Courtesy Notices" and violation letters issued by the Association, alleging they were based on "suppositions" rather than verified inspections. She claimed some notices were sent for dates when the unit was unoccupied. However, the ALJ found that the Petitioner failed to meet the burden of proof required to show that the Association had violated the law or its governing documents.

Important Quotes with Context

On the Nature of Airbnb Guests

"Because the PD [guests] of Airbnb are not tenants, there is no contract, there is no lease, they do not acquire rights like a long-term civil [tenant]… they function as a hotel." — Aracelys M. Morel, Petitioner

Context: During her testimony, the Petitioner argued that the lack of a traditional lease agreement meant her guests should be exempt from the $25 fee.

On the Definition of Tenancy

"If there was meant to be a durational requirement to determine tenancy for the purposes of the statute, then it would be included in the statute." — Respondent Counsel (Jeffrey McLerran/Neil Berglund)

Context: The Association’s legal team argued that the absence of a time limit in the law means a "new tenancy" occurs every time a new guest checks in, regardless of how long they stay.

On the Association's Right to Information

"In accordance with ARIZ. REV. STAT. § 33-1806.01(c), please provide the names and contact information for all adult tenants occupying the property, the time period of the lease… and a description of and the license plate number for all tenant’s vehicles." — September 8, 2025, Courtesy Notice

Context: This quote from the original violation notice outlines the specific data the HOA is legally permitted to collect from homeowners who rent their units.

The Final Ruling

"Hence, the definitions of 'rental agreement' and 'tenant' provided in ARIZ. REV. STAT. § 33-1310, clearly define the Airbnb guests, especially, because the Arizona law speaks to no durational requirement." — Judge Nicole Robinson, ALJ Decision

Context: This was the critical legal conclusion that led to the denial of the petition and the affirmation of the Association's fee structure.

Summary of Statutory Authority (A.R.S. § 33-1806.01)

The following table outlines the key provisions of the statute used to decide the case:

Provision Description
Subsection A Members may use property as a rental unless prohibited by the declaration.
Subsection C HOAs may only require: Name/contact of adult occupants, lease time period, and vehicle descriptions/license plates.
Subsection D HOAs may charge a fee of not more than $25.00 for each new tenancy. Renewals cannot be charged.
Subsection E(4) HOAs may not charge more than $15.00 as a penalty for late or incomplete information.

Actionable Insights

  • Fee Cumulative Impact: Homeowners operating short-term rentals in Arizona HOAs should be prepared for significant administrative costs. Since the $25 fee applies to each new tenancy, a host with ten bookings in a month could owe the Association $250 in administrative fees in addition to regular assessments.
  • Mandatory Data Collection: To avoid fines (which are capped at $15 for incomplete information), hosts must find a way to collect guest vehicle information and license plate numbers, even if the booking platform does not automatically provide them.
  • CC&R Limitations: While many homeowners believe the Association must have specific language in their CC&Rs to regulate short-term rentals, this case demonstrates that state law (A.R.S. § 33-1806.01) provides a default authority that the Association can exercise even if the CC&Rs are silent.
  • Appeals Process: Homeowners who receive violation notices have the right to appeal to the Board of Directors within the timeframe specified in the notice (often 21 days). However, challenging the state's definition of "tenant" in a short-term context is unlikely to succeed given this precedent.

Case Analysis Study Guide: Aracelys M. Morel v. Northwood Park Homeowners Association

This study guide provides a comprehensive overview of the legal proceedings and final decision in the matter of Aracelys M. Morel v. Northwood Park Homeowners Association (Case No. 25F-H116-REL). It synthesizes the core legal arguments, statutory interpretations, and factual findings regarding the regulation of short-term rentals within planned communities in Arizona.

Core Case Overview

The dispute centered on whether a Homeowners Association (HOA) could legally charge a recurring $25 administrative fee for every short-term rental stay (Airbnb) under Arizona law.

Key Parties
  • Petitioner: Aracelys M. Morel, a homeowner in the Northwood Park community.
  • Respondent: Northwood Park Homeowners Association, represented by Freeman Mathis & Gary, LLP.
  • Adjudicator: Administrative Law Judge (ALJ) Nicole Robinson of the Office of Administrative Hearings (OAH).
Primary Legal Issue

The Petitioner challenged the Respondent’s interpretation of A.R.S. § 33-1806.01. The central question was whether short-term Airbnb guests qualify as "tenants," thereby allowing the HOA to charge a $25 fee for "each new tenancy."

Statutory Framework and Legal Arguments

Relevant Statutes
Statute Description
A.R.S. § 33-1806.01(C) Limits the information an HOA can require regarding a tenant to: names/contact info of adults, lease time period, and vehicle descriptions/license plates.
A.R.S. § 33-1806.01(D) Authorizes an HOA to charge a fee of no more than $25 for each "new tenancy" to process the disclosures required in subsection C.
A.R.S. § 33-1310(17) Defines "Tenant" as a person entitled under a rental agreement to occupy a dwelling unit to the exclusion of others.
A.R.S. § 33-1310(13) Defines "Rental Agreement" as all agreements (written, oral, or implied) concerning the use and occupancy of a dwelling unit.
Arguments of the Petitioner
  • Definition of Tenancy: Argued that Airbnb guests are "guests" or "short-term guests" rather than "tenants."
  • Lack of Contract: Asserted that no formal lease or landlord-tenant contract exists in Airbnb transactions.
  • Fee Application: Contended that the $25 fee should be a one-time administrative charge rather than a repetitive fee for every weekend stay.
  • Privacy and Feasibility: Claimed that Airbnb's privacy standards prevent hosts from obtaining all the information (such as license plate numbers) required by the HOA.
Arguments of the Respondent
  • Exclusive Possession: Argued that because Airbnb guests have the right to occupy the unit to the exclusion of others during their stay, they meet the legal definition of a tenant.
  • No Durational Requirement: Asserted that Arizona law does not specify a minimum length of stay to establish a "tenancy."
  • Statutory Authority: Maintained that A.R.S. § 33-1806.01(D) explicitly allows for the $25 fee for "each new tenancy."

Factual Findings and Final Decision

Judge Nicole Robinson issued the final decision on March 26, 2026. The petition was denied based on the following findings:

  1. Burden of Proof: The Petitioner failed to prove by a preponderance of the evidence that the HOA violated the law.
  2. Broad Definition of Tenant: The ALJ applied the definitions found in the Arizona Residential Landlord and Tenant Act. Because Airbnb guests occupy the unit to the exclusion of others under an agreement, they are legally considered "tenants."
  3. Durational Absence: The ALJ noted that Arizona law contains no "durational requirement" to distinguish between a short-term guest and a tenant.
  4. HOA Authority: In the absence of specific community CC&R provisions regarding short-term rental fees, the Arizona state statute serves as the guiding authority. Consequently, the Association is permitted to charge $25 for each new Airbnb guest stay.

Short-Answer Practice Questions

  1. What is the maximum fee an HOA can charge for processing tenant information under A.R.S. § 33-1806.01(D)?
  • Answer: Twenty-five dollars ($25.00).
  1. According to the ALJ, what is the primary factor that classifies an Airbnb guest as a "tenant"?
  • Answer: The guest's entitlement under an agreement to occupy a dwelling unit to the exclusion of others.
  1. Does Arizona law require a minimum length of stay (e.g., 30 days) to define a "tenancy"?
  • Answer: No; the ALJ determined there is no durational requirement in the statute.
  1. What information is an HOA permitted to request regarding a tenant under A.R.S. § 33-1806.01(C)?
  • Answer: Name and contact info for all adults, the time period of the lease (start and end dates), and a description and license plate numbers of the tenants' vehicles.
  1. What was the final outcome of Case No. 25F-H116-REL?
  • Answer: The petition was denied, and the ALJ ruled that the HOA was permitted to charge the $25 fee for each new guest stay.

Essay Prompts for Deeper Exploration

  1. The Intersection of Privacy and Regulation: Analyze the Petitioner’s argument regarding Airbnb's privacy standards versus the HOA's statutory right to information. How should a property owner balance third-party platform privacy policies with state-mandated disclosure requirements?
  2. Statutory Interpretation and Duration: Discuss the implications of the ALJ’s ruling that "tenancy" has no durational requirement in Arizona. How does this interpretation affect the distinction between residential rentals and lodging/hospitality (hotels)?
  3. The Role of Governing Documents: The ALJ noted that Northwood Park’s CC&Rs did not specifically address short-term rental fees, leading to the reliance on state statutes. Evaluate the importance of specific HOA governing documents in preempting or clarifying state-level statutory authorities.

Glossary of Important Terms

  • Administrative Law Judge (ALJ): A judge who over-sees evidentiary hearings and issues decisions for state agencies, such as the Office of Administrative Hearings.
  • A.R.S. (Arizona Revised Statutes): The codified laws of the state of Arizona.
  • CC&Rs (Covenants, Conditions, and Restrictions): The governing documents that dictate the rules and limitations of a planned community or HOA.
  • Courtesy Notice: An initial warning sent to a homeowner regarding a potential violation before formal fines are levied.
  • Exclusion of Others: A legal standard indicating that a tenant has sole possession and control of a property during the term of their agreement.
  • Petitioner: The party who initiates a legal action or petition (in this case, Aracelys Morel).
  • Preponderance of the Evidence: The legal standard of proof in civil cases, meaning a fact is "more probable than not."
  • Respondent: The party against whom a legal action or petition is filed (in this case, Northwood Park HOA).
  • Tenancy: The possession or occupancy of lands or buildings by lease or agreement.

The $25 Stay: Are Your Airbnb Guests "Tenants" Under Arizona Law?

1. Introduction: The Clash Between Short-Term Rentals and HOA Fees

The meteoric rise of the short-term rental (STR) economy has forced a legal collision between the property rights of individual hosts and the regulatory reach of Homeowners Associations (HOAs). While hosts often categorize their clients as "guests" or "transient visitors," HOAs are increasingly turning to state statutes to reclassify these occupants and monetize the administrative oversight they require.

The recent case of Morel v. Northwood Park Homeowners Association (Case No. 25F-H116-REL) serves as a definitive case study in this conflict. The dispute centers on a critical question of statutory interpretation: Does a short-term booking constitute a "new tenancy" under Arizona law, thereby authorizing an HOA to levy an administrative fee for every single stay?

2. The Case Study: Morel vs. Northwood Park HOA

Aracelys M. Morel, the Petitioner, has owned a 1,125-square-foot, two-bedroom townhouse (Unit 101) within the Northwood Park community in Mesa for approximately six years. In November 2024, Morel transitioned the property from her primary residence to a short-term rental.

The "trigger event" for the HOA’s investigation was a matter of residency logistics. Although Morel owned Unit 101, she moved into Unit 82 within the same community. This "offsite address" alerted the Association that Unit 101 was no longer owner-occupied. In September 2025, the HOA issued a "Courtesy Notice" citing A.R.S. § 33-1806.01(C), demanding specific tenant disclosures—names of all adults, stay dates, and vehicle license plate numbers—accompanied by a $25 administrative fee per stay.

Morel filed a preemptive legal challenge, seeking a determination that her Airbnb guests were not "tenants" and that the HOA had no authority to charge repetitive fees. Notably, at the time of the hearing, Morel had not yet been charged nor paid the fees; the case was a strategic attempt to block the HOA's interpretation of the law before the administrative levies accumulated.

3. The "Tenant vs. Guest" Debate: Two Sides of the Argument
Petitioner's Position (Morel) Respondent's Position (HOA)
Occupancy Status: Airbnb users are "short-term visitors" or "guests," not traditional tenants with long-term rights. Cross-Statutory Definition: Under the Arizona Residential Landlord and Tenant Act (§ 33-1310), a tenant is defined by the right to exclusive occupancy.
Lack of Formal Lease: No traditional lease agreement exists; the booking is a platform-based transaction. Possessory Interest: Arizona law contains no "durational requirement" to qualify as a tenancy; a 24-hour stay meets the legal threshold.
Monetization Limit: Fees should be a one-time administrative cost for the property, not a recurring levy for every booking. Statutory Authority: A.R.S. § 33-1806.01(D) explicitly authorizes a $25 fee for "each new tenancy" regardless of duration.
Governing Documents: The community's CC&Rs do not explicitly authorize or regulate fees for short-term rentals. Statutory Supremacy: The HOA relies on state law, which applies "notwithstanding any provision in the community documents."
4. Decoding the Law: A.R.S. § 33-1806.01

The dispute hinges on the "statutory silence" within the HOA-specific statutes regarding the definition of a tenant. However, the authority to charge is explicitly granted in A.R.S. § 33-1806.01(D):

"Notwithstanding any provision in the community documents… the association may charge a fee of not more than twenty-five dollars… The fee may be charged for each new tenancy for that property but may not be charged for a renewal of a lease."

The statute empowers HOAs to require the following disclosures for each tenancy:

  • Names and contact information for all adult occupants.
  • The specific time period of the lease (start and end dates).
  • Descriptions and license plate numbers of the tenants' vehicles.

Furthermore, the law provides a two-tiered monetization strategy. Beyond the $25 administrative fee, the HOA can impose a penalty of up to $15 for "incomplete or late information" regarding these disclosures.

5. The Judge’s Verdict: Why the HOA Won

Administrative Law Judge (ALJ) Nicole Robinson denied Morel’s petition, confirming the HOA’s right to treat short-term stays as tenancies. The ruling rested on a critical "legal bridge": because the HOA statute (§ 33-1806.01) does not define "tenant," the court performed a cross-statutory interpretation using the Arizona Residential Landlord and Tenant Act.

The ALJ’s reasoning centered on three factors:

  • Exclusive Occupancy (Possessory Interest): Under A.R.S. § 33-1310, a tenant is one entitled to occupy a dwelling "to the exclusion of others." The ALJ ruled that Airbnb guests hold this right during their stay, making them legal tenants.
  • Lack of Durational Requirement: The court explicitly noted that Arizona law does not specify a minimum length of stay. A "tenancy" can legally exist for a single night.
  • Failure of the "Privacy Defense": Morel argued she could not provide guest data because of Airbnb’s privacy policies. The ALJ dismissed this, noting that Morel provided no persuasive policy from Airbnb that overrode state statutory disclosure requirements.
6. Practical Takeaways for Arizona Homeowners and Hosts

The Morel decision creates a significant compliance burden for STR hosts within Arizona HOAs.

  1. "Tenant" is a Functional Definition: In Arizona, "Tenant" is defined by the right to occupy, not the length of time. If a guest can lock the door and exclude the owner, they are a tenant under this ruling.
  2. The Compliance Burden: Hosts are legally responsible for collecting data points—specifically vehicle license plates—that Airbnb may not traditionally provide. The "Airbnb Privacy Defense" is not a valid legal shield against an HOA’s statutory request.
  3. Monetization is Cumulative: HOAs can effectively tax high-turnover rentals. A property with ten weekend bookings in a month could face $250 in administrative fees, plus potential $15 "late fees" if disclosures are not provided within the 15-day window prescribed by the HOA.
  4. Statutory Supremacy Over CC&Rs: The phrase "Notwithstanding any provision in the community documents" means HOAs do not need to amend their CC&Rs or seek a community vote to begin charging these fees. They can rely directly on state law.
7. Conclusion: The Future of Short-Term Rental Governance

The denial of the petition in Morel v. Northwood Park HOA establishes a powerful precedent for HOA boards across Arizona. It confirms that the administrative burden of tracking transient occupants can be passed directly to the homeowner as a recurring cost. For the STR market, this ruling effectively bypasses the need for community-wide votes to regulate rentals, allowing HOAs to utilize state statutes to monetize and manage the impact of short-term stays within their communities.

8. Document Reference Section
  • Petitioner: Aracelys M. Morel
  • Respondent: Northwood Park Homeowners Association
  • Administrative Law Judge: Nicole Robinson
  • Case Number: 25F-H116-REL
  • Statutes Cited: A.R.S. § 33-1806.01; A.R.S. § 33-1310

Case Participants

Petitioner Side

  • Aracelys M Morel (Petitioner)
    Appeared on her own behalf

Respondent Side

  • Neil Berglund (Attorney)
    Freeman Mathis & Gary, LLP
    Represented Northwood Park Homeowners Association
  • Jeffrey McLerran (Attorney)
    Freeman Mathis & Gary, LLP
    Represented Northwood Park Homeowners Association

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Assigned judge for the hearing
  • Luigui Melenciano (Spanish Interpreter)
    Language Connect
    Interpreted for the hearing
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
    Served as ADRE Commissioner

Other Participants

  • Lynn Sharp (Observer)
    Listed as an observer

VINMAR LLC v. Third Avenue Lofts Unit Owner Association

Posted on by

Case Summary

Case ID 25F-H013-REL
Agency —
Tribunal —
Decision Date 2026-02-25
Administrative Law Judge NR
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner VINMAR LLC Counsel —
Respondent Third Avenue Lofts Unit Owner Association Counsel —

Alleged Violations

No violations listed

Video Overview

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25F-H013-REL Decision – 1250284.pdf

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25F-H013-REL Decision – 1250290.pdf

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25F-H013-REL Decision – 1265960.pdf

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25F-H013-REL Decision – 1266557.pdf

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25F-H013-REL Decision – 1266723.pdf

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25F-H013-REL Decision – 1278245.pdf

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25F-H013-REL Decision – 1295474.pdf

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25F-H013-REL Decision – 1309080.pdf

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25F-H013-REL Decision – 1318083.pdf

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25F-H013-REL Decision – 1336544.pdf

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25F-H013-REL Decision – 1338777.pdf

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25F-H013-REL Decision – 1347711.pdf

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25F-H013-REL Decision – 1352774.pdf

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25F-H013-REL Decision – 1357231.pdf

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25F-H013-REL Decision – 1379062.pdf

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25F-H013-REL Decision – 1380516.pdf

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25F-H013-REL Decision – 1380874.pdf

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Briefing Document: Vinmar LLC v. Third Avenue Lofts Unit Owner Association

Executive Summary

This document provides a comprehensive analysis of the administrative hearing Case No. 25F-H013-REL between Vinmar LLC (Petitioner) and Third Avenue Lofts Unit Owner Association (Respondent). The dispute centered on whether the Association's move-in and move-out fees were permissible under Arizona law and the community's governing documents.

The proceedings, which spanned from late 2024 to early 2026, culminated in a decision by the Office of Administrative Hearings (OAH). The Petitioner alleged that the Association imposed exploitative fees and rental rules that specifically targeted and discriminated against owners who rented their units. The Respondent maintained that the fees were reasonable "user fee assessments" authorized by the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) to offset administrative costs and wear and tear on common elements.

The Administrative Law Judge (ALJ) ultimately determined that while the Association's new fee structure was permissible, the previous application of a $150.00 move-out fee violated the CC&Rs in instances where no specific facility was used. Petitioner was deemed the prevailing party regarding those specific fees, and Respondent was ordered to refund the $500.00 filing fee.

Detailed Analysis of Key Themes

1. Statutory Compliance and A.R.S. § 33-1260.01

A central theme of the dispute was the interpretation of Arizona Revised Statute § 33-1260.01, which governs rental fees in condominiums.

  • Petitioner’s Argument: Petitioner argued that the statute caps tenant-related fees at $25.00 for processing disclosures and prohibits any other fees that treat rental units differently than owner-occupied units.
  • Respondent’s Argument: Respondent contended that move-in/move-out fees are not "rental fees" but rather universal association fees applied to any resident—owner or tenant—changing occupancy.
  • Legal Conclusion: The ALJ found that the statute does not prohibit move-in/move-out fees as long as they are applied equally to all units. The evidence showed Respondent charged the same fees to owner-occupants and tenants, thus meeting the "equal treatment" requirement.
2. Contractual Authority and "Facilities"

The legality of the fees also hinged on the Association's authority under its CC&Rs.

  • Facility Definitions: CC&Rs § 7.4 allows the Association to charge for the use of "certain recreational or other facilities." The ALJ identified "facilities" as items such as elevators, front-desk staffing, and security applications (e.g., Butterfly or Symmetry apps).
  • The Move-Out Violation: The ALJ ruled that charging a $150.00 move-out fee was impermissible if the departing resident did not use a facility. In the case of Petitioner’s pre-furnished units, tenants often moved out with only personal luggage, requiring no elevator padding or staff assistance. Charging a facility fee when no facility was used exceeded the Board’s authority.
3. Administrative Burden vs. Wear and Tear

The Respondent justified the fees through the testimony of General Manager Michelle Collins, who outlined the administrative and physical costs of occupancy changes:

  • Administrative Tasks: Staff time is required to set up new residents in the "Butterfly" building access system, the "Symmetry" garage app, and emergency communication databases.
  • Physical Logistics: Moves involve the use of service elevators and loading docks. The Association provides elevator padding and performs pre- and post-move inspections of hallways to mitigate damage.
  • Evolution of Fees: Over the course of the dispute, the Association adjusted its fees to be more equitable, eventually settling on a structure that distinguished between residents moving furniture and those in furnished units.
4. Allegations of Retaliation and Pattern of Conduct

The Petitioner attempted to broaden the scope of the hearing to include a "pattern of misconduct," alleging:

  • Discrimination: Claims that the Board intentionally discouraged rentals.
  • Amenity Access: Allegations that Respondent restricted Petitioner’s access to the pool and gym as a pressure tactic to force payment of contested fees.
  • Rule Changes: Claims that a 90-day rental minimum was illegally implemented via Board vote rather than a membership vote.
  • Procedural Ruling: The Tribunal limited the hearing to the single issue of move-in/move-out fees, noting that additional issues would require separate filing fees and petitions.

Important Quotes with Context

From the Petitioner (Jonathan Blangiardo)

"Essentially, a furnished property is the equivalent of someone walking in with a briefcase… It’s the equivalent of someone coming in with their groceries or a guest coming to stay for the weekend. That’s why this is different."

Context: During the September 19, 2025 hearing, Blangiardo used this analogy to argue that high move-in/out fees are unreasonable for furnished rentals, as they do not involve the heavy moving equipment or furniture that typical "moves" require.

From the Respondent's Witness (Michelle Collins)

"The $75 move-in, move-out fee if you’re utilizing the service elevator and are bringing in any type of furniture or large item. The $25 resident occupant fee is an administrative fee… It strictly covers the time to set up all of the access systems."

Context: Collins testified to the rationale behind the Association's revised fee structure, explaining the distinction between physical labor/wear-and-tear costs and administrative digital setup costs.

From the Administrative Law Judge (Samuel Fox/Nicole Robinson)

"Equal treatment is applying one rule for everyone, which is what Respondent had done. Petitioner sought equitable treatment, which would take other circumstances into account… and treat different units differently to promote fairness."

Context: Found in the final Decision (Findings of Fact 13), the ALJ clarifies the legal distinction between "equal" and "equitable," noting that while the law requires equality (treating everyone the same), it does not strictly mandate the specific fairness Petitioner requested regarding pre-furnished units.

"Specifically, it is more likely than not that one or more of the $150.00 move-out fees were charged when the individual moving out did not use any facility."

Context: This was the primary legal failure of the Association, leading to the ruling that the move-out fees were improperly applied in certain instances.

Fee Structure Summary

The following table outlines the evolution of the fees at Third Avenue Lofts as discussed in the testimony:

Fee Type Original Amount Revised Amount (2025) Application
Move-In Fee $150.00 $75.00 Residents moving furniture/using elevators
Move-Out Fee $150.00 $75.00 Residents moving furniture/using elevators
Check-In Fee N/A $25.00 Administrative setup (Furnished units)
Registration Fee $25.00 $25.00 Statutory tenant disclosure fee

Actionable Insights

  • Necessity of Facility Usage Linkage: For "User Fee Assessments" to remain valid under typical condominium CC&Rs, the Association must demonstrate that a facility was actually used. Associations cannot charge a flat "move-out" fee for residents who do not utilize physical facilities like elevators or loading docks.
  • Distinguishing Administrative vs. Statutory Fees: The $25.00 statutory cap under A.R.S. § 33-1260.01 specifically applies to disclosures. Associations may charge separate, additional administrative fees (like a "Check-In" fee) provided they are applied equally to both owners and renters and are authorized by the CC&Rs as a fee for service/facility.
  • Documentation of Intent: The Petitioner utilized internal Association communications where fees were labeled "rental fees" to argue discriminatory intent. Associations should use precise language in meeting minutes and ledgers to ensure fees are categorized by their function (e.g., "Elevator Usage Fee" or "Administrative Occupancy Setup") rather than by the resident's status.
  • Filing Procedures for OAH: Petitioners must ensure that every distinct factual issue is supported by a separate filing fee. Attempting to argue "patterns of conduct" or "multiple violations" under a single $500.00 filing fee may result in the Tribunal narrowing the case to only one issue, as seen in this matter.

Case Study: Vinmar LLC v. Third Avenue Lofts Unit Owner Association

This study guide analyzes the administrative hearing and subsequent legal decision regarding a dispute between a unit owner (Vinmar LLC) and a homeowners association (Third Avenue Lofts). The case primarily focuses on the legality of specific fees charged by the association and the interpretation of Arizona condominium statutes and community governing documents.

I. Case Overview and Procedural History

  • Parties:
  • Petitioner: Vinmar LLC (represented by manager Jonathan Blangiardo).
  • Respondent: Third Avenue Lofts Unit Owner Association (represented by legal counsel from CHDB Law LLP).
  • Case Number: 25F-H013-REL.
  • Venue: Arizona Office of Administrative Hearings (OAH).
  • Timeline:
  • October 3, 2024: Original petition filed with the Arizona Department of Real Estate.
  • December 10, 2024: Order issued denying the Motion to Dismiss and clarifying that only one issue would be addressed unless additional fees were paid.
  • September 19, 2025: Primary hearing session held.
  • February 17, 2026: Supplemental hearing and closing arguments.
  • February 25, 2026: Final Administrative Law Judge (ALJ) decision issued.

II. The Central Issue for Hearing

The hearing was restricted to a single factual issue due to the Petitioner only paying for one filing fee: Whether the Association’s move-in and move-out fees were permissible, and whether they violated A.R.S. § 33-1260.01.

Secondary Considerations (Limited by the Tribunal)

While the Petitioner attempted to introduce a "pattern of misconduct" (including amenity restriction, voting rights suspension, and 90-day rental rules), the Tribunal ruled these were outside the scope of the specific issue for hearing, though they were sometimes discussed to provide context for "intent."

III. Statutory and Governing Document Framework

The case centers on the interpretation of the following legal authorities:

Authority Reference Key Provision/Interpretation
A.R.S. § 33-1260.01(C) Tenant Disclosures Restricts the info an HOA can require regarding tenants to: names, contact info for adults, lease dates, and vehicle descriptions.
A.R.S. § 33-1260.01(D) Rental Fees Caps the fee for tenant disclosures at $25.00. Prohibits charging rental units differently than owner-occupied units, except for this fee and recreational facility fees.
CC&Rs § 3.3.1(a) Rule Making Grants the Association the right to adopt reasonable rules and regulations governing the use of Common Elements.
CC&Rs § 7.4 User Fees Authorizes the Association to establish and charge fees for the use of "certain recreational or other facilities."
CC&Rs § 4.14 Rental Restrictions (Cited by Petitioner) Concerns the equal treatment of units and restrictions on rules targeting rentals.

IV. Summary of Arguments

Petitioner’s Position (Vinmar LLC)
  • Discrimination: The HOA targeted rental owners by calling move-in/out fees "rental fees" in internal communications.
  • Statutory Violation: The $150 move-in/out fees were a "disguised" way to charge more than the $25 statutory cap for rentals.
  • Lack of Impact: Because the units were fully furnished, tenants moved in with minimal luggage (no furniture), meaning no wear and tear occurred on elevators or common elements to justify high fees.
  • Voidance: Argued that because the fees exceeded the statutory cap, the entire fee was void under A.R.S. § 33-1260.01.
Respondent’s Position (Third Avenue Lofts)
  • Uniform Application: The fees applied to everyone—owners moving in, owners moving out, and tenants. Therefore, it was not a "rental fee."
  • Cost Recovery: Fees cover administrative staff time (setting up fobs, apps, and registration) and physical wear and tear on "facilities" like elevators and hallways.
  • Contractual Authority: The CC&Rs allow for "User Fee Assessments" for facilities.
  • Reasonableness: The HOA eventually lowered the fees ($25 check-in, $75 for elevator furniture moves) to be responsive to owner concerns.

V. The Administrative Law Judge’s Findings

The final decision reached the following conclusions:

  1. Move-in Fees: Generally permissible as administrative "check-in" fees because every new resident (owner or tenant) uses "facilities" such as the security system, the phone apps for access, or the front desk attendant.
  2. Move-out Fees ($150): The Association violated its CC&Rs by charging move-out fees when a resident did not use any specific "facility." The ALJ noted that while moving in requires setting up fobs and apps, moving out (especially for a furnished unit) might involve no facility usage at all.
  3. The "Facility" Definition: A facility is something built or established for a purpose (elevators, security apps). Staff time alone is not a facility.
  4. Equal Treatment: Applying the same rule to everyone (even if it impacts short-term rentals more frequently) constitutes "Equal Treatment." Petitioner’s request to be charged less because their tenants were "low impact" was a request for "Equitable Treatment," which is not required by statute.
  5. Prevailing Party: Petitioner was deemed the prevailing party regarding the improper $150 move-out fees. The Respondent was ordered to refund the $500.00 filing fee to the Petitioner.

VI. Short-Answer Practice Questions

  1. What is the maximum fee an Arizona Condominium Association can charge for processing a new tenancy disclosure?
  • Answer: $25.00 (A.R.S. § 33-1260.01).*
  1. Under the Association's CC&Rs, what must a fee be tied to in order to be considered a "User Fee Assessment"?
  • Answer: The use of "certain recreational or other facilities" in the condominium.*
  1. Why did the ALJ rule that some of the $150 move-out fees were a violation of the CC&Rs?
  • Answer: Because the Association was only empowered to charge for the use of facilities. If a resident moved out of a furnished unit without using an elevator or needing administrative setup, no facility was used to justify the fee.*
  1. What was the Respondent’s primary defense against the claim of rental discrimination?
  • Answer: The fees were applied uniformly to all residents (owners and tenants) upon moving in or out, not just to renters.*
  1. How did the ALJ define "Equal Treatment" vs. "Equitable Treatment" in this case?
  • Answer: Equal treatment is applying the same rule to everyone. Equitable treatment would involve adjusting the rule based on specific circumstances (like a unit being furnished), which the HOA was not legally required to do.*

VII. Essay Prompts for Deeper Exploration

  1. Statutory Interpretation: Discuss how the term "facility" was used to determine the legality of HOA fees in this case. How did the ALJ distinguish between "staff time" and "facilities," and why was this distinction critical to the final order?
  2. The Conflict of Governing Documents and State Law: Analyze the interplay between A.R.S. § 33-1260.01 and the Association’s CC&Rs. If an HOA names a fee a "move-in fee" but uses it to process tenant paperwork, at what point does it violate the $25 statutory cap on rental registration?
  3. The Burden of Proof in Administrative Hearings: Using the testimony of Michelle Collins and Jonathan Blangiardo, evaluate the "preponderance of the evidence" standard. Why did the Petitioner succeed on the move-out fee claim but fail to prove that the move-in fees were also unauthorized?

VIII. Glossary of Important Terms

  • Administrative Law Judge (ALJ): A judge who over-sees hearings and issues recommendations or decisions for state agencies (in this case, the OAH for the Dept. of Real Estate).
  • Common Elements: All portions of the condominium other than the individual units (e.g., hallways, elevators, pool, lobby).
  • Condominium Documents (CC&Rs): Covenants, Conditions, and Restrictions; the legal "contract" that binds unit owners to the association's rules.
  • Facility: Something built, installed, or established to serve a particular purpose (e.g., a service elevator or a mobile entry app).
  • Petitioner: The party who files the complaint (Vinmar LLC).
  • Respondent: The party responding to the complaint (Third Avenue Lofts).
  • User Fee Assessment: A fee charged specifically to owners for the use of certain amenities or facilities, separate from general assessments.
  • Voidance: The legal principle established in A.R.S. § 33-1260.01 stating that if an association attempts to charge a fee exceeding the statutory limit, the entire fee is considered void.

The High Cost of "Checking In": Lessons from an Arizona HOA Fee Battle

In the world of luxury high-rises, the difference between a "move" and a "check-in" can cost hundreds of dollars. Imagine a tenant arriving at a pre-furnished unit at the Third Avenue Lofts in Scottsdale. They aren't hauling heavy armoires or scratching hallway paint; they are simply walking through the front door carrying a single briefcase.

Yet, for years, the Third Avenue Lofts Unit Owner Association treated this briefcase-toting tenant the same as a full-scale moving crew, imposing a $150 "move-in" fee and a $150 "move-out" fee. This practice sparked a protracted legal battle—Vinmar LLC v. Third Avenue Lofts Unit Owner Association—that serves as a critical case study on the boundaries of HOA power, the definition of "facilities," and the statutory protections afforded to rental property owners under Arizona law.

The Case Profile: Vinmar LLC v. Third Avenue Lofts

Detail Information
Parties Petitioner: Vinmar LLC (represented by Jonathan Blangiardo) / Respondent: Third Avenue Lofts Unit Owner Association
The Venue Arizona Office of Administrative Hearings (OAH)
The Timeline Late 2024 (initial filing) through a series of continuances and status updates to the final decision on February 25, 2026.
Core Issue Whether $150 move-in/move-out fees are permissible under Arizona law (A.R.S. § 33-1260.01) and the community's CC&Rs.

The Homeowner’s Challenge: Discrimination or Uniformity?

Jonathan Blangiardo, managing member of Vinmar LLC, brought the challenge after his ledger was hit with thousands of dollars in fees. A real estate broker himself, Blangiardo argued that the Association’s fee structure was specifically designed to exploit owners who utilized their units for rentals.

Key arguments raised during the hearings included:

  • The "Briefcase" Argument: For pre-furnished units, tenants do not use service elevators or moving pads. Blangiardo argued that charging these units for "wear and tear" that never occurred was arbitrary and violated A.R.S. § 33-1227, which requires equal treatment of units.
  • Statutory Caps: Blangiardo cited A.R.S. § 33-1260.01, which caps tenant registration fees at $25. He argued the $150 charge was an illegal end-run around this limit.
  • Retaliatory Impact: The battle was deeply personal. While battling COVID-19 and traveling abroad, Blangiardo saw his amenity access and voting rights suspended for nearly a year due to the unpaid fees. He testified that the loss of pool and gym access for a unit overlooking the pool area created a significant bottleneck for his rental business.

The Association’s Defense: Protecting the Common Elements

The Association’s defense relied on the testimony of General Manager Michelle Collins, who had been on the job for just 11 days when she was cross-examined in September 2025.

Defense Strategy

  • Administrative Burden: The Association argued that every new occupant, regardless of luggage size, requires staff time to set up the "Butterfly" entry app, garage stickers, and emergency contact profiles.
  • Wear and Tear: The fees were positioned as a way to offset the inevitable damage to elevators and hallways caused by the constant turnover of occupants in a high-density building.
  • Uniformity: The Association's primary legal shield was the claim of equality. Because the fees were applied to everyone—owner-occupants and tenants alike—they argued the charge did not "treat rentals differently" under the law.

The "Facilities" Turning Point: CC&R Analysis

The outcome hinged on the specific language of the community’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs). Administrative Law Judge (ALJ) Samuel Fox presided over the evidence, but the final verdict was authored and signed by ALJ Nicole Robinson. The court performed a deep dive into two specific sections:

CC&Rs § 3.3.1(a): Grants the Association the right to "adopt reasonable rules and regulations governing the use of the Common Elements." CC&Rs § 7.4: States that the Association "may establish and charge fees for the use of certain recreational or other facilities in the Condominium."

The Judge made a distinction that should serve as a warning to every HOA board in Arizona: Staff time is not a facility. While a moving elevator or a parking app is a "facility" (something built or installed for a purpose), the administrative labor of a manager is not.

Under the Third Avenue Lofts CC&Rs, the board had the power to charge for facilities, but they lacked the specific authorization to charge for administrative labor. Therefore, if a resident moves out without using a tangible facility—like a tenant in a furnished unit simply walking out the front door with a suitcase—the Association has no legal ground to assess a fee.

The Verdict: Who Won?

Verdict Summary

  • The $150 Move-Out Fee: Ruled a violation of the CC&Rs. The Judge found it "plausible" that move-outs from furnished units involve zero use of facilities (no service elevator, no loading dock).
  • The Move-In Fee: While the Judge noted a violation was plausible here too, the evidence did not sufficiently prove that no facilities (like the entry app) were used during the move-in process.
  • The New Fee Regime: During the litigation, the Association updated its fees to a more granular structure: a $25 registration fee, a $25 check-in fee, and a $75 Elevator Fee specifically for moving furniture. The Judge found no violation in this updated structure.
  • The Penalty: Because Vinmar LLC was the "prevailing party" on the move-out fee issue, the Association was ordered to reimburse the $500 filing fee.

Actionable Takeaways for Homeowners and Boards

The Vinmar case provides a clear roadmap for the "High Cost of Checking In" in Arizona:

  1. Statutory Caps Carry Teeth: Per A.R.S. § 33-1260.01, the cap for "tenant registration" is $25. Crucially, the law states that any attempt to exceed this cap voids the fee entirely. Boards cannot simply "overcharge" and hope to keep the first $25; if they overreach, they may lose the right to collect anything.
  2. Labor is Not a Facility: Unless your CC&Rs explicitly authorize "Administrative Fees" or "Service Charges," you cannot use "Staff Time" as a proxy for a facility fee. Fees must be tied to the use of tangible improvements (elevators, gyms, apps).
  3. Equity vs. Equality: The Association’s downfall was trying to treat a briefcase (low impact) the same as a moving truck (high impact). Moving toward an "Elevator Fee" for furniture versus a "Check-in Fee" for furnished units was the key to a legally defensible policy.
  4. Pay Under Protest: This case dragged on for over a year, during which the petitioner lost pool and gym access because he refused to pay the disputed fees. For homeowners, the lesson is visceral: It is often better to pay "under protest" to preserve your rights of enjoyment while the legal process slowly grinds toward a conclusion.

Case Participants

Petitioner Side

  • Jonathan W. Blangiardo (Manager/Representative)
    VINMAR LLC
    Testified on behalf of petitioner
  • Jonathan Dales (Attorney)
    Submitted a demand letter on behalf of community members/petitioner

Respondent Side

  • Tessa Knueppel (Counsel)
    Third Avenue Lofts Unit Owner Association
    Appeared for Respondent during hearings
  • Alexis Firehawk (Counsel)
    CHDB Law LLP
    Attorney for Respondent
  • Emily Cooper (Counsel)
    CHDB Law LLP
    Attorney for Respondent
  • Shane Gillaspie (Representative)
    Third Ave Lofts Unit Owners Association
  • Michelle Collins (General Manager)
    Third Avenue Lofts Unit Owner Association
    Testified as a witness for the respondent
  • Leonard Hack (Board President)
    Third Avenue Lofts Unit Owner Association
    Also referred to as Len Hack
  • Frank Nardini (Board Member)
    Third Avenue Lofts Unit Owner Association
  • Kyle Snowden (Board Member)
    Third Avenue Lofts Unit Owner Association
  • Raj Sons (Community Manager)
    Third Avenue Lofts Unit Owner Association
    Prior community manager present at July 2023 board meeting

Neutral Parties

  • Samuel Fox (Administrative Law Judge)
    Office of Administrative Hearings
    Presiding judge for majority of the proceedings
  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Signed the final Administrative Law Judge Decision
  • Tammy L. Eigenheer (Administrative Law Judge)
    Office of Administrative Hearings
    Issued order granting continuance
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
  • Judge Swan (Mediator)
    Acted as mediator during settlement discussions

Michael D. Ludden vs Mountain Gate Homeowners Association

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Case Summary

Case ID 25F-H051-REL
Agency Arizona Department of Real Estate
Tribunal —
Decision Date 2025-09-23
Administrative Law Judge NR
Outcome —
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Michael D. Ludden Counsel —
Respondent Mountain Gate Homeowners Association Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H051-REL Decision – 1323178.pdf

Uploaded 2026-04-24T12:48:36 (68.2 KB)

25F-H051-REL Decision – 1328240.pdf

Uploaded 2026-04-24T12:48:40 (71.7 KB)

25F-H051-REL Decision – 1353423.pdf

Uploaded 2026-04-24T12:48:45 (167.6 KB)

Briefing Document: Ludden v. Mountain Gate Homeowners Association

Executive Summary

This document synthesizes the proceedings and outcome of the legal dispute between petitioner Michael D. Ludden and the Mountain Gate Homeowners Association (HOA) concerning the responsibility for roof replacement. On September 23, 2025, an Administrative Law Judge (ALJ) for the Arizona Office of Administrative Hearings issued a final decision, ruling conclusively in favor of the petitioner.

The central finding is that the Mountain Gate HOA is financially responsible for the full replacement of homeowner roofs when necessary, in addition to its acknowledged duties of maintenance and repair. The ruling was based on a close interpretation of the community’s Covenants, Conditions, and Restrictions (CC&Rs). The ALJ determined that the CC&Rs’ definition of an “Improvement” (which includes any building or structure) combined with the Association’s explicit obligation to “maintain, repair and replace” such improvements, established the HOA’s liability for roof replacement.

The dispute arose from ambiguous language within the CC&Rs, which was compounded by conflicting verbal and written promises made by both the original and subsequent developers during home sales. The HOA argued that financial impracticality and a 2010 amendment requiring individual homeowner insurance shifted replacement liability to the owners. However, the ALJ’s decision rejected these arguments, finding the language of the governing documents to be controlling. As a direct result of the ruling, the Mountain Gate HOA must reimburse the petitioner’s $500 filing fee and is legally bound to comply with this interpretation of its responsibilities moving forward.

Case Overview

Legal Proceedings

Case Name

In the Matter of: Michael D. Ludden, Petitioner, v. Mountain Gate Homeowners Association, Respondent.

Case Number

25F-H051-REL

Tribunal

Arizona Office of Administrative Hearings (OAH)

Presiding Judge

Nicole Robinson, Administrative Law Judge

Hearing Date

September 3, 2025

Decision Date

September 23, 2025

Parties Involved

Title/Position

Petitioner

Michael D. Ludden

Homeowner and HOA President

Petitioner’s Witness

Brenda Anderson

HOA Secretary Treasurer

Respondent Representative

James “Jim” Pieper

HOA Board Member at Large

Respondent’s Witness

Pablo Martinez

HOA Director at Large

Central Issue

The core of the dispute was the interpretation of the Mountain Gate HOA’s CC&Rs to determine whether the Association is financially responsible for the full replacement of homeowner roofs at the end of their service life, or if its obligation is limited solely to maintenance and repair.

Background and Community History

The dispute is rooted in the development history of the Mountain Gate community, which consists of 42 townhome units in Lakeside, Arizona.

• 2006: The community is established and the association is incorporated as a condominium association.

• 2007: Construction begins on the first 12 units under the original developer.

• 2010: The development is re-platted from condominiums to townhomes, becoming a planned community. The CC&Rs are amended (Article 5.18) to require individual owners to obtain comprehensive insurance for the full replacement cost of their dwelling unit.

• c. 2014: The original developer goes bankrupt. Petitioner Michael Ludden purchases his unit from the developer’s sales agent, Gary Laframboise, who verbally stated that roof maintenance and replacement were the HOA’s responsibility.

• 2016: A new developer, Maebee Mountaingate LLC, purchases the remaining lots and resumes construction.

• 2018: The new developer utilizes sales brochures that explicitly promise roof replacement coverage. One document states, “Roofs last 20 years, replacement can cost $9500. In Mountain Gate part of your homeowner’s dues will be there to replace your roof if it is needed.”

• 2021: The new developer commissions a reserve study which includes line items for roof replacement.

• July 2022: With all 42 units completed, control of the HOA is transitioned from the developer to the homeowners. The Association’s reserve fund has a zero balance at the time of turnover.

• 2024: A homeowner demands the HOA replace his roof, prompting the board to seek a legal opinion and bringing the ambiguity in the CC&Rs to the forefront.

• February 28, 2025: Michael Ludden files a petition with the Arizona Department of Real Estate to seek a formal ruling on the matter.

• September 3, 2025: An evidentiary hearing is conducted by the Office of Administrative Hearings.

Arguments Presented at Hearing

Petitioner’s Position (Michael D. Ludden)

The petitioner argued that the HOA is, and has always been represented as being, responsible for roof replacement.

• Governing Documents (CC&Rs): The primary argument centered on Article 1 of the CC&Rs. It defines “Improvements” as “any building, wall or structure” and states the Association “is obligated to maintain, repair and replace” these improvements. The petitioner asserted that a dwelling unit is an “Improvement,” and therefore its roof is subject to replacement by the HOA.

• Developer Representations: Evidence was presented showing consistent promises from both developers.

◦ A text message from the original developer’s agent, Gary Laframboise, dated October 8, 2024, confirmed, “roof maintenance and replacement is HOA responsibility.”

◦ Sales brochures from the second developer, dated 2018, were used to attract buyers with the explicit promise that HOA dues would cover roof replacement.

• Practical Concerns: It was argued that HOA control over replacement is necessary to maintain aesthetic uniformity and structural standards across the community, preventing homeowners from using substandard materials or unapproved colors (a “purple shingle” scenario was cited).

Respondent’s Position (Mountain Gate HOA)

The respondent, represented by board members, argued that roof replacement is the financial responsibility of the individual homeowner.

• Governing Documents (CC&Rs): The respondent focused on a more specific clause within Article 1 that states the Areas of Association Responsibility “shall include the maintenance and repair of: all exterior walls and the roof of any Dwelling Unit.” They contended that the absence of the word “replace” in this specific clause meant the duty did not exist, superseding the more general language.

• Shift in Liability (2010 Amendment): A key argument was that the 2010 re-platting of the community from condominiums to townhomes fundamentally shifted liability. The accompanying amendment requiring owners to carry their own insurance for the “full replacement cost of the Dwelling Unit” was presented as evidence that the replacement responsibility was transferred to the homeowner and their insurer.

• Financial Impracticality: The board stressed the severe financial burden. With annual dues already at $3,318 with no amenities (e.g., pool, clubhouse), adding the cost of roof replacement would require a further increase estimated at $2,000 to $4,000 per year, which would negatively impact property values and make homes difficult to sell.

• Extraneous Documents: The respondent’s position was that sales brochures and verbal promises are not legally binding and cannot override the language of the recorded CC&Rs.

Final Decision and Legal Rationale

The Administrative Law Judge granted the petitioner’s request, finding that the HOA is responsible for replacing homeowner roofs when necessary.

Outcome: PETITION GRANTED.

Judge’s Rationale

The decision was based primarily on an interpretation of the plain language of the CC&Rs.

1. Controlling Language of the CC&Rs: The judge found the broader definition in Article 1 to be controlling. Because an “Improvement” is defined as a “building,” and the Association is obligated to “maintain, repair and replace” such Improvements, the responsibility for roof replacement was established.

2. Definition of “Repair”: The judge cited the Merriam-Webster dictionary definition of “repair” as “to restore by replacing a part or putting together what is torn or broken.” From this, she concluded that “a repair could come through replacement,” further blurring the distinction the respondent tried to make.

3. The Window Hypothetical: The judge used a hypothetical scenario to illustrate the legal reasoning. The CC&Rs state that owners are solely responsible for the “maintenance and repair” of their windows. If a window needed to be replaced, the responsibility would clearly fall on the owner, even though the word “replace” is absent. The judge reasoned the inverse is true for the roof: since the roof is explicitly listed as an Area of Association Responsibility, that responsibility logically includes replacement when a simple repair is insufficient.

4. Rejection of Respondent’s Arguments: The judge determined that the 2010 amendment requiring individual homeowner insurance “still does not relieve the HOA from repairing and maintaining the roof” and, by extension, replacing it under its CC&R-defined duties. The developer’s promises were noted as supportive but were not the primary basis for the decision.

Direct Orders Issued

Based on the findings, the Administrative Law Judge issued the following orders:

1. IT IS ORDERED that Petitioner’s petition be GRANTED.

2. IT IS FURTHER ORDERED that Respondent reimburse Petitioner’s filing fee of $500.00 in certified funds.

3. IT IS FURTHER ORDERED that Respondent shall henceforth comply with the provisions of the governing documents as interpreted in the decision.

Study Guide: Michael D. Ludden v. Mountain Gate Homeowners Association (No. 25F-H051-REL)

This study guide provides a comprehensive overview of the administrative hearing and subsequent legal decision regarding the responsibilities of the Mountain Gate Homeowners Association. It synthesizes the arguments, evidence, and legal interpretations surrounding the conflict of roof replacement within a planned community.

Key Concepts and Case Overview

The Core Conflict

The central issue of the case was whether the Mountain Gate Homeowners Association (HOA) is legally obligated to replace roofs for individual dwelling units, or if its responsibility is strictly limited to maintenance and repair. The dispute arose from perceived ambiguities in the community’s Covenants, Conditions, and Restrictions (CC&Rs) and conflicting information provided in historical sales marketing materials.

Community Evolution
  • Establishment (2006): Originally incorporated as a condominium association.
  • Re-platting (2010): The community was converted from condominiums to townhomes. This shift changed the ownership structure, as owners were now required to provide their own comprehensive insurance for the full replacement cost of the dwelling unit (Article 5.18).
  • Development Phases: The original 12 units were built between 2005 and 2008. After a market crash, a new developer (Maebee Mountaingate LLC) completed the remaining 30 units between 2016 and 2022.
  • Transition (2022): Control of the HOA was turned over from the developer to the homeowners, at which point the reserve fund was at a zero balance.
Primary Arguments
Perspective Key Arguments
Petitioner (Ludden/Anderson) The CC&Rs include "replacement" in the definition of Association Responsibility for improvements. Marketing brochures explicitly promised roof replacement as a benefit of dues. The HOA must control quality and timing of replacements to maintain community standards.
Respondent (HOA/Pieper/Martinez) The CC&Rs explicitly list "maintenance and repair" for roofs but omit the word "replacement." Individual insurance requirements (Article 5.18) shift the burden of replacement to the owner. Increased dues for roof reserves would lower property values and create financial hardship.
The Legal Interpretation

Administrative Law Judge Nicole Robinson focused on the definitions within Article 1 of the CC&Rs. Crucially, the judge noted that while the document sometimes separates "repair" and "replace," the Merriam-Webster definition of "repair" includes "to restore by replacing a part." Furthermore, the CC&Rs specifically excluded windows and doors from HOA responsibility but did not exclude roofs in the same manner.

Short-Answer Practice Questions

1. Who was the Petitioner in this matter, and what was his dual role during the hearing? Michael D. Ludden was the Petitioner. He was a property owner and also served as the President of the Mountain Gate Homeowners Association.

2. What did the 2018 sales brochure "Mountain Gate offers value and peace of mind" explicitly state regarding roofs? The brochure stated that roofs last 20 years and replacement can cost $9,500, but in Mountain Gate, "part of your homeowner's dues will be there to replace your roof if it is needed."

3. According to Respondent witness Pablo Martinez, how did his personal insurance agent view the responsibility for the roof? Martinez testified that his insurance agent inspected his property and stated that if there were significant damage requiring replacement, it would be covered under his individual homeowner’s policy.

4. What was the financial status of the HOA’s reserve fund when it was turned over to homeowner control in 2022? The HOA was turned over to homeowner control with a zero balance in the reserve fund.

5. How did the Administrative Law Judge (ALJ) use the dictionary to resolve the ambiguity between "repair" and "replace"? The ALJ cited Merriam-Webster’s definition of "repair," which includes the act of "replacing a part." Therefore, the judge concluded that a repair could legally be achieved through replacement, even if the word "replace" was not explicitly used in every section.

6. What was the final order regarding the filing fee? The Judge ordered the Respondent (Mountain Gate HOA) to reimburse the Petitioner’s filing fee of $500.00 in certified funds.

Essay Prompts for Deeper Exploration

  1. The Impact of Marketing on Governing Documents: Analyze the weight given to the developer’s sales brochures versus the formal CC&Rs in this case. To what extent should an HOA be held to "promises" made by a developer in marketing materials that are not explicitly mirrored in the recorded CC&Rs?
  2. The Condo-to-Townhome Transition: Discuss the legal and financial complications that arose from re-platting the community in 2010. How did the shift in insurance requirements (Article 5.18) create a logical conflict with the HOA’s stated responsibility to maintain the "exterior walls and the roof"?
  3. Fiduciary Duty vs. Marketability: Respondent James Pieper argued that increasing dues to fund a roof reserve would "greatly diminish the probability of being able to resell" houses. Contrast this with Brenda Anderson’s argument that failing to fund reserves is "disingenuous to new home buyers" and risks special assessments. Which approach better fulfills the Board's fiduciary responsibility?
  4. Linguistic Ambiguity in Contract Law: The ALJ determined that "repair" can encompass "replacement." Evaluate this interpretation in the context of Article 1, Section (e) of the CC&Rs, which uses both "maintenance and repair" and "maintain, repair and replace" in different paragraphs. Does the presence of both terms imply a deliberate distinction, or is the Judge’s broader interpretation more consistent with the document as a whole?

Glossary of Important Terms

  • ADRE (Arizona Department of Real Estate): The state agency authorized to receive and decide petitions regarding homeowners' association disputes.
  • Areas of Association Responsibility: Defined in the CC&Rs as the land and improvements (including exterior walls and roofs) that the HOA is obligated to maintain and manage.
  • CC&Rs (Covenants, Conditions, and Restrictions): The governing legal documents that outline the rules, requirements, and responsibilities of the HOA and its members.
  • Declarant: The developer or entity that originally established the community and its governing documents (e.g., Maebee Mountaingate LLC).
  • Dwelling Unit: Any building or part thereof situated on a lot intended for residential occupancy.
  • Improvement: Per the CC&Rs, this includes any building, wall, structure, or landscaping that alters the exterior appearance of a lot.
  • OAH (Office of Administrative Hearings): An independent state agency in Arizona that conducts evidentiary hearings for contested matters arising from state regulation.
  • Petitioner: The party who files a petition or appeal (in this case, Michael D. Ludden).
  • Planned Community: A real estate development where owners are mandatory members of an association and are responsible for paying assessments.
  • Preponderance of the Evidence: The legal burden of proof in this hearing, meaning evidence that makes a contested fact more probable than not.
  • Respondent: The party against whom a petition is filed (in this case, Mountain Gate Homeowners Association).

Who Pays for the Roof? Key Takeaways from the Mountain Gate HOA Legal Ruling

1. Introduction: The High-Stakes Shelter Debate

In the world of community governance, the transition from developer control to homeowner management is rarely seamless. In the 42-unit townhome community of Mountain Gate in Lakeside, Arizona, that transition evolved into a legal thriller. At the center of the storm was a fundamental question of linguistic interpretation: Does an HOA’s duty to "maintain and repair" structural elements legally mandate the total "replacement" of a roof?

The dispute serves as a cautionary tale of "Declarer Control" versus the harsh financial reality of "Homeowner Management." The stakes were uniquely high: the Petitioner, Michael D. Ludden of 5422 N Saint Andrews Drive, was not just a concerned resident—he was the sitting President of the Association, suing his own organization to force a definitive ruling on structural liability before the community’s aging infrastructure reached its breaking point.

2. The Core Conflict: "Maintenance" vs. "Replacement"

The legal battleground focused on a perceived linguistic ambiguity within the Mountain Gate Covenants, Conditions, and Restrictions (CC&Rs). The conflict emerged from a tension between broad definitions and specific limiting clauses:

  • The Petitioner’s View: Ludden argued that Article 1(e) of the CC&Rs defines "Areas of Association Responsibility" as "all land, and the improvements thereon, which the Association is obligated to maintain, repair and replace." Because "Improvements" are defined in Article 1 as "any building, wall or structure," the roof is an improvement the HOA must replace.
  • The Respondent’s View: Represented by Board Member James Pieper, the HOA relied on a "notwithstanding" clause at the end of Article 1(e) and the maintenance language in Article 11. They argued these specific sections only mention "maintenance and repair" for roofs, intentionally omitting the word "replacement."

The Board further contended that the community's 2010 shift from a "Condominium" to a "Planned Community" changed the financial landscape. They pointed to Article 5.18, which requires individual owners to carry insurance for the "full replacement cost" of their dwelling units, as evidence that the structural burden had shifted to the homeowners.

3. The Paper Trail: Sales Brochures vs. Governing Documents

A pivotal moment in the hearing involved the "marketing vs. reality" gap. While the Board argued that sales literature was "superfluous" to the CC&Rs, the court examined whether these documents established the intent of the developers and the expectations of the buyers.

2018 Maebee Mountaingate Sales Brochure Claims CC&R Technical Language (Articles 1, 11, & 5.18)
"Value and Peace of Mind": Listed "Roof Replacement" as the #1 Value to buyers. Article 1(e): States the HOA must "maintain, repair and replace" Improvements, but later specifies "maintenance and repair" for roofs.
Direct Promise: "In Mountain Gate, part of your homeowner's dues will be there to replace your roof if it is needed." Article 11: Mandates the Association keep responsibility areas in "good… order and repair," but omits the word "replace."
Financial Incentive: Specifically cited a $9,500 cost savings for owners because the HOA would handle the roof. Article 5.18: Requires owners to carry insurance for the "full replacement cost" of the dwelling unit.

4. The Board’s Dilemma: Fiduciary Duty and Financial Strain

The Association's defense was rooted in a grim financial reality. When the homeowners took control from the developer in 2022, the reserve fund had a zero balance. Testimony from board members James Pieper and Pablo Martinez painted a picture of an association under extreme pressure:

  • The Assessment Spike: To fund the replacement of 16 roofs at 20-year intervals, the Board estimated that annual dues—already at $3,318—would need to increase by $2,000 to $2,300 per unit.
  • Market Stagnation: Pablo Martinez testified to the real-world impact of this liability. His home has been on the market since March 2025 with only nine viewers in that time. He attributed this stagnation directly to the high dues and the "black cloud" of the roof replacement debate.
  • The "Zero Balance" Trap: Without the $9,500 savings promised in the brochure, the Board feared the Association would be unable to maintain the community's marketability or structural integrity.

5. The Verdict: How the Judge Decided

On September 23, 2025, Administrative Law Judge Nicole Robinson issued a final decision in favor of Ludden. Her reasoning dismantled the Board’s narrow interpretation through three "Legal Logic" points:

  1. The Improvement Clause: The Judge ruled that because Article 1 defines an "Improvement" as any building or structure, and the Association is mandated to "maintain, repair and replace" improvements, the roof is squarely an HOA responsibility.
  2. The Window Analogy: The ALJ found the Board's argument "absurd." She noted that Article 1 explicitly excludes windows and doors, making owners "solely responsible" for them. She reasoned that if the simple omission of the word "replace" relieved the HOA of responsibility for the roof, then a homeowner wouldn't be responsible for replacing their own windows either—a logical fallacy.
  3. Dictionary Definition: Citing Merriam-Webster, the Judge noted that "repair" is defined as "to restore by replacing a part." Therefore, the duty to repair inherently includes the duty to replace when a patch is no longer sufficient.

Final Order: The Association must comply with its duty to replace roofs and was ordered to reimburse Ludden's $500 filing fee.

6. Conclusion: Three Lessons for HOA Members

The Mountain Gate ruling serves as a vital precedent for how governing documents are interpreted under Arizona law.

  • Definitions Matter: Broad definitions in the early sections of a document (like Article 1) can override the omission of specific words in later sections. If a roof is an "Improvement," the duty to "replace" improvements applies.
  • Marketing is Evidence: While boards often dismiss sales brochures as "sales puffery," the court used the Maebee Mountaingate brochure to establish "Buyer Expectation." Marketing materials are powerful evidence of the original intent of the community's creators.
  • Insurance Does Not Equal Immunity: The requirement for an owner to carry "full replacement cost" insurance (Article 5.18) does not relieve the HOA of its structural maintenance obligations. Insurance is a protective measure, not a transfer of the Association's core duties.

Ultimately, this case underscores the need for absolute clarity. For Mountain Gate, the "peace of mind" promised in 2018 was only secured through a high-stakes legal battle in 2025.

Case Participants

Petitioner Side

  • Michael D. Ludden (Petitioner / President)
    Mountain Gate Homeowners Association
    Homeowner and President of the Association filing the petition
  • Brenda Anderson (Witness / Secretary-Treasurer)
    Mountain Gate Homeowners Association
    Testified on behalf of the petitioner

Respondent Side

  • James Pieper (Representative / Board Member at Large)
    Mountain Gate Homeowners Association
    Appeared on behalf of Respondent
  • Pablo Martinez (Witness / Director at Large)
    Mountain Gate Homeowners Association
    Testified on behalf of Respondent
  • Mr. Fzen (Board Member)
    Mountain Gate Homeowners Association
    Newest member of the board present at the hearing

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Assigned to conduct the matter and author of the decision
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
    Received transmission of the orders and decision

Other Participants

  • Gary Laframboise (Sales Representative / Partner)
    Original Developer
    Original developer's managing partner and sales rep mentioned in testimony
  • Randy Duncan (Developer)
    Maebee Mountaingate LLC
    New developer mentioned in testimony
  • Brad E. Walt (Developer)
    Maebee Mountaingate LLC
    New developer mentioned in testimony
  • Karen Johnson (Sales Agent)
    HomeSmart / Maebee Mountaingate LLC
    Agent representing the declarant mentioned in testimony

Marilyn J Fogelsong vs Park Townhouses Homeowners Association, INC

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Case Summary

Case ID 25F-H050-REL
Agency —
Tribunal —
Decision Date 8/5/2025
Administrative Law Judge NR
Outcome complete
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Marilyn J. Fogelsong Counsel Pro se
Respondent Park Townhouses Homeowners Association, Inc. Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H050-REL Decision – 1380164.pdf

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25F-H050-REL Decision – 1384549.pdf

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25F-H050-REL Decision – 1384804.pdf

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25F-H050-REL Decision – 1393862.pdf

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25F-H050-REL Decision – 1401266.pdf

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25F-H050-REL Decision – 1336348.pdf

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25F-H050-REL Decision – 1348020.pdf

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Litigation Briefing: Fogelsong v. Park Townhouses Homeowners Association (Case No. 25F-H050-REL)

Executive Summary

This briefing document analyzes the legal dispute between Marilyn J. Fogelsong ("Petitioner") and the Park Townhouses Homeowners Association, Inc. ("Respondent" or "Association"), a small eight-unit planned community in Tucson, Arizona. The litigation, spanning from March 2025 through March 2026, centered on Petitioner’s allegations of statutory and governing document violations by the Association’s Board of Directors.

The dispute followed a transition in 2024 from self-management to the hiring of Tucson Realty & Trust Company ("TRT") for professional HOA management. Petitioner, a former Board President and 5% co-owner of a unit, raised four primary issues: conflicts of interest regarding the property manager, unauthorized maintenance of private property, violations of open meeting laws, and breach of fiduciary duties.

Following an initial hearing in July 2025 (where Respondent failed to appear) and a subsequent rehearing in February 2026, the Office of Administrative Hearings (OAH) denied all of Petitioner's claims. The presiding Administrative Law Judges (ALJs) concluded that Petitioner failed to meet the burden of proof required to establish statutory violations and that several claims were either filed under incorrect statutes or fell outside the Department of Real Estate's jurisdiction.

Detailed Analysis of Key Issues

The litigation was structured around four specific claims filed with the Arizona Department of Real Estate (ADRE).

Issue 1: Conflict of Interest (A.R.S. § 33-1811)

Petitioner alleged that the Board failed to disclose conflicts of interest when hiring TRT as the HOA property manager.

  • Petitioner's Argument: TRT manages individual rental units for two Board members (Gerald Schwarzenbach and Mark Schlang). Petitioner claimed TRT showed "preferential treatment" by failing to remit parking fines collected from tenants to the HOA and failing to disclose tenant contact information as required by law.
  • Respondent's Rebuttal: The Association argued that the dual role of a management company handling both the HOA and individual units was a long-standing practice (over 20 years). Mark Schlang testified that parking fines were not remitted because they could not be authenticated (lacking time/date stamps) and were eventually settled under protest to "clean up" the records.
  • Judicial Finding: The ALJ ruled that Petitioner failed to prove that the hiring of TRT constituted a conflict of interest under A.R.S. § 33-1811. The evidence did not establish that the contract provided an impermissible benefit to Board members or their families.
Issue 2: Scope of Management (CC&R Paragraph 19)

Petitioner argued that the HOA exceeded its authority by pursuing a painting project for individual townhouses.

  • Petitioner's Argument: Paragraph 19 of the CC&Rs restricts HOA management to "common areas" (driveways and specific landscaping). Petitioner claimed the Board used HOA resources to solicit bids for private structures, including her own, without consent.
  • Respondent's Rebuttal: The Board clarified that while they solicited a bulk bid to ensure community aesthetic uniformity, they did not use HOA funds for private repairs. Instead, six of the eight owners voluntarily pooled their resources to hire the contractor individually.
  • Judicial Finding: The ALJ found no evidence that HOA funds were actually expended on individual units. Because the work was performed as a collaborative effort among willing owners and not mandated as an HOA expense, no violation of the CC&Rs occurred.
Issue 3: Open Meeting Laws and Records Requests (A.R.S. § 33-1804)

Petitioner alleged that the Board held private meetings without notice and failed to provide requested documents within the statutory 10-day window.

  • Petitioner's Argument: Requests for meeting minutes, financial statements, and management proposals made in early 2025 went ignored. Furthermore, a meeting held on February 17, 2025, was provided with only seven days' notice rather than the ten days required by the Bylaws.
  • Judicial Finding: The ALJ noted that while the Board admitted to delays in providing records (due to confusion during the management transition), Petitioner pled her case under A.R.S. § 33-1804 (Open Meetings) rather than A.R.S. § 33-1805 (Records Requests). To find a violation under an unpled statute would violate the Respondent's due process. Regarding the February meeting, the notice sent via email was deemed sufficient for a Board meeting under the emergency/regular provisions of the Bylaws.
Issue 4: Fiduciary Duty (A.R.S. § 10-830)

Petitioner alleged the Board failed to act in good faith and with the care of an ordinarily prudent person.

  • Outcome: This issue was stricken from both the original and rehearing proceedings. The ADRE and OAH do not have jurisdiction to adjudicate claims under Title 10 (Corporations and Associations); their authority is limited to Title 33 (Planned Communities) and condominium documents.

Key Entities and Roles

Entity/Individual Role in Dispute Key Facts
Marilyn J. Fogelsong Petitioner Co-owner (5%) of Lot 8; former Board President (2021–2024).
Park Townhouses HOA Respondent 8-unit planned community in Tucson, AZ.
Tucson Realty & Trust (TRT) Property Manager Hired for HOA management Feb 2025; also manages private units for Board members.
Mark Schlang Board Treasurer Long-time owner (since 1984); witness for Respondent.
Gerald Schwarzenbach Board Secretary Designated representative for Respondent; owner since 1997.
Nicole Robinson ALJ Presided over the initial July 2025 hearing.
Jenna Clark ALJ Presided over the February 2026 rehearing.

Important Quotes with Context

"It’s all new to me, but I don’t have a specific question." — Marilyn J. Fogelsong (Initial Hearing, 1:21 p.m.) Context: Petitioner's admission at the start of the first hearing, highlighting her status as a self-represented (pro se) litigant navigating administrative law for the first time.

"The association chose to find a professional management company to look after our interests because we are owners spread far and wide." — Gerald Schwarzenbach (Rehearing Testimony) Context: Explaining the rationale for returning to professional management through TRT after a period of self-management under Petitioner's tenure.

"Notice was given on February 10th, which was improper notice because our CCNRs require 10 days notice… and Arizona law does too." — Marilyn J. Fogelsong (Rehearing Testimony) Context: Petitioner’s central argument regarding the lack of transparency and statutory compliance in the Board’s decision-making process.

"Character is not at issue in an HOA dispute. Neither party shall be permitted to offer character evidence regarding a party or witness." — ALJ Jenna Clark (Minute Entry, Feb 9, 2026) Context: A legal ruling issued to prevent the hearing from devolving into personal attacks regarding Petitioner's alleged "systematic attempt to devalue the property."

Actionable Insights

Based on the findings of the Administrative Law Judges and the evidence presented in the case, the following insights are derived for future HOA governance or legal disputes:

  1. Statutory Precision in Filing: The denial of Issue 3 (Records Requests) underscores the necessity of citing the correct statute. Filing a records request grievance under A.R.S. § 33-1804 (Open Meetings) rather than § 33-1805 (Records) is a fatal procedural error that an ALJ cannot correct without violating due process.
  2. Clarifying Management Scope: To avoid disputes regarding "unsanctioned projects" on private property, Associations should clearly distinguish between HOA-funded maintenance and owner-funded maintenance facilitated by the HOA. In this case, the Board avoided liability because they did not mandate the project or spend Association funds on private units.
  3. Conflict of Interest Disclosure: While the court did not find a violation, the friction caused by TRT's dual role suggests that HOAs should formally disclose any business relationships between the management firm and individual board members during open meetings to ensure compliance with A.R.S. § 33-1811.
  4. Jurisdictional Limits: Petitioners must recognize that the ADRE only handles matters related to Title 33. Any claims regarding corporate "good faith" or general standards of conduct for directors (Title 10) must be pursued in Superior Court, as they fall outside administrative jurisdiction.
  5. Documentation of Violations: For enforcement of fines (e.g., parking), documentation must be robust. The Board’s inability to collect or remit fines in this case stemmed from a lack of "independent verification" (time/date stamps), making the violations legally vulnerable.

Study Guide: Marilyn J. Fogelsong v. Park Townhouses Homeowners Association

This study guide provides a comprehensive overview of the administrative legal proceedings regarding the dispute between Marilyn J. Fogelsong and the Park Townhouses Homeowners Association (HOA). It covers the core legal issues, the procedural history of the case before the Arizona Office of Administrative Hearings (OAH), and the specific statutes and governing documents at the center of the conflict.

Part 1: Key Concepts and Case Summary

Case Overview

The matter of Marilyn J. Fogelsong v. Park Townhouses Homeowners Association, Inc. (No. 25F-H050-REL) involved a homeowner (Petitioner) alleging multiple violations of state statutes and community governing documents by the HOA Board (Respondent). The case underwent an initial hearing in July 2025 and a subsequent rehearing in February 2026.

The Four Primary Issues

The petition filed with the Arizona Department of Real Estate (ADRE) identified four central legal claims:

  1. Conflict of Interest (A.R.S. § 33-1811): Allegations that the Board failed to disclose conflicts of interest when hiring Tucson Realty & Trust (TRT) as the HOA property manager, specifically because TRT also managed individual rental units for Board members.
  2. Unauthorized Maintenance Projects (CC&R Paragraph 19): Allegations that the HOA overstepped its authority by directing the property manager to pursue painting and repair projects for individual townhouses, which the Petitioner argued was beyond the scope of common area management.
  3. Open Meeting Law Violations (A.R.S. § 33-1804 A & F): Allegations that the Board held private meetings without notice and failed to provide requested material information, such as minutes, financial statements, and budgets.
  4. Breach of Fiduciary Duty (A.R.S. § 10-830A): Allegations that the Board failed to act in good faith or with the care of an ordinarily prudent person. Note: This issue was eventually stricken because the ADRE and OAH lack jurisdiction over Title 10 corporate statutes.
Legal Standards and Burdens
  • Burden of Proof: In these administrative proceedings, the Petitioner (Fogelsong) maintains the burden of proof.
  • Preponderance of the Evidence: The evidentiary standard required. This means the Petitioner must prove that the existence of a contested fact is more probable than its nonexistence (i.e., more likely than not).
  • Standing: The right of a party to bring a legal claim. The Respondent challenged Fogelsong’s standing because she held only a 5% ownership interest in the property, while her son held the remainder. The Tribunal ultimately recognized her standing based on the recorded deed and authorization from her co-owner.

Part 2: Short-Answer Practice Questions

1. Why was the Petitioner’s claim regarding A.R.S. § 10-830(A) (Issue 4) dismissed without being adjudicated on its merits? Answer: The Office of Administrative Hearings (OAH) and the Department of Real Estate do not have jurisdiction to enforce Title 10 statutes, which pertain to corporate standards of conduct. Their jurisdiction is limited to Title 33 (Planned Communities/Condominiums) and the community’s governing documents.

2. What specific evidence did the Petitioner provide to support the "Conflict of Interest" claim regarding TRT Property Management? Answer: The Petitioner argued that TRT managed individual units for Board members Mark Schlang and Gerald Schwarzenbach. She alleged TRT gave these members "preferential treatment," such as failing to remit parking fines collected from tenants to the HOA and failing to disclose tenant contact information.

3. What was the HOA Board's defense regarding the failure to provide tenant contact information to the Petitioner? Answer: The Board (via Mark Schlang) testified that tenant information was withheld because the Petitioner had previously used such information to conduct unauthorized background checks on tenants without the knowledge of the landlords or the tenants.

4. How did the Tribunal rule on the issue of the HOA painting individual townhouses? Answer: The claim was denied. The Tribunal found that while the HOA manages common areas, members can vote to delegate private property maintenance to the Association. Evidence showed that six out of eight members voted to pool resources and hire a contractor for a collective painting project.

5. What procedural error did the Petitioner make when alleging the Board failed to provide records within 10 days? Answer: The Petitioner cited A.R.S. § 33-1804 (Open Meeting Laws). However, the Tribunal noted that records requests are governed by A.R.S. § 33-1805. Because the Petitioner did not specifically plead a violation of § 33-1805, the Tribunal could not find the Respondent in violation without infringing on their Due Process rights.

Part 3: Essay Prompts for Deeper Exploration

  1. The Limits of HOA Authority: Paragraph 19 of the Park Townhouses CC&Rs grants the HOA authority over "common elements" and "common areas." Analyze the tension between individual property rights and collective HOA action as presented in this case. In your response, consider the Board's argument that the community functioned through a "general plan or scheme of improvements" and the Petitioner’s counter-argument using the Callaway v. Calabria Ranch Supreme Court case.
  1. Evaluating the Preponderance of Evidence: The Administrative Law Judge (ALJ) denied all of the Petitioner’s claims primarily based on a failure to meet the burden of proof. Detail the specific "indicia of evidence" the Petitioner lacked for Issue 1 (Conflict of Interest) and Issue 3 (Open Meetings). How might a Petitioner better substantiate claims of "favoritism" or "unauthorized meetings" in an administrative tribunal?
  1. Conflict of Interest in Small Associations: Park Townhouses consists of only eight units. Discuss the practical and legal challenges of managing a very small HOA where board members are often neighbors and may share the same third-party property management services for their individual rentals. Does the dual role of a management company (managing both the HOA and individual units) create an inherent conflict, or must a "benefit" be specifically proven under A.R.S. § 33-1811?

Part 4: Glossary of Important Terms

Term Definition
A.R.S. § 33-1804 The Arizona statute governing open meetings for planned communities, requiring notice, agendas, and the right for members to speak.
A.R.S. § 33-1811 The Arizona statute regarding conflicts of interest; it requires board members to declare a benefit in an open meeting before a vote is taken.
Advisory/Recommended Decision The initial decision issued by an ALJ, which is then sent to the Commissioner of the Department of Real Estate for final approval, rejection, or modification.
CC&Rs Covenants, Conditions, and Restrictions; the primary governing documents that "run with the land" and define the rights and obligations of owners and the HOA.
Common Elements Areas within a development owned by the HOA or by all owners collectively (e.g., driveways, streets, recreational facilities).
Due Process Rights The legal requirement that the state must respect all legal rights owed to a person, including the right to be informed of specific charges (statutes) being held against them.
In Limine A motion made "at the threshold" of a hearing to exclude or include certain evidence or arguments before the proceedings begin.
Preponderance of the Evidence The standard of proof in civil and administrative cases; proof that a claim is "more likely than not" to be true.
Rehearing A second hearing granted on specific grounds, such as an error in law or the discovery of evidence not supported by the initial findings of fact.
Standing The legal capacity of a person to participate in a lawsuit; in this case, established by a 5% interest in a property and co-owner authorization.
Tribunal A body of one or more judges (in this case, an Administrative Law Judge) gathered to adjudicate a dispute.

Behind the Gavel: Lessons from the Park Townhouses HOA Legal Battle

In the world of Arizona property law, justice often comes with a steep price tag. For Marilyn J. Fogelsong, the entrance fee was exactly $2,000. That was the non-refundable "pay-to-play" filing fee required to bring four grievances before the Office of Administrative Hearings on July 16, 2025.

The dispute centered on the Park Townhouses Homeowners Association, a "micro-HOA" in Tucson consisting of just eight units. But don't let the small scale fool you. What began as a disagreement over management choices and transparency spiraled into a multi-year legal saga that serves as a cautionary tale for any homeowner or board member navigating the administrative labyrinth of HOA governance.

1. The Standing Standoff: When is an Owner Not an Owner?

Before the merits of the case could even be weighed, Fogelsong faced a significant procedural hurdle: standing. The Board challenged her right to sue, pointing to her limited ownership stake. Fogelsong had paid $12,000 for a 5% interest in a unit owned by her son, Levi Lazarus.

The Board’s challenge carried a sting of irony. For three years, the Association and its management firm, Tucson Realty & Trust (TRT), had accepted Fogelsong as a voting member; she had even served as the Board President. However, as the legal battle intensified in 2025, the Board pivoted, arguing her "limited stake" disqualified her. While Administrative Law Judge (ALJ) Jenna Clark affirmed that standing is "always an issue," the court ultimately applied the preponderance of evidence standard, allowing the co-owner’s voice to be heard.

2. Conflict of Interest: Professional Management vs. Personal Ties

The first major legal pivot involved the hiring of TRT. Fogelsong argued that TRT’s dual role—managing the HOA while simultaneously managing individual rental units for Board members Gerald Schwarzenbach and Mark Schlang—created a conflict of interest under ARS 33-1811.

Fogelsong alleged that this "special relationship" led to unremitted fines and a lack of transparency. The Board’s defense, however, leaned on historical precedent and the practical realities of a small community.

Petitioner's Allegations Respondent's Defense
TRT’s dual role (HOA and unit manager) created an undisclosed conflict under ARS 33-1811. TRT maintained separate divisions; similar arrangements existed for 20 years with previous firms without issue.
TRT failed to remit collected parking fines (approx. $350) to the HOA. Fines lacked date/time stamps and were uncollectible; records were settled under protest during the management transition.
The Board and TRT withheld mandatory tenant contact and vehicle information. Information was withheld as a protective measure because the Petitioner allegedly used prior data to run unauthorized background checks on tenants.

The ALJ ultimately ruled that Fogelsong failed to prove the TRT contract specifically "benefited" board members in an unlawful manner, noting that the existence of separate management divisions mitigated the claim of a statutory violation.

3. The Painting Paradox: Authority vs. Owner Coordination

Issue #2 took the court into the aesthetics of the community. Fogelsong challenged a community-wide painting project, citing Paragraph 19 of the CC&Rs. She argued that while the HOA has authority over "Common Elements" (like the driveway), it had no right to manage or spend HOA funds on individual townhouses.

The 2026 rehearing revealed a crucial distinction for HOA boards: the "pooling of resources." The Board testified that while the HOA could not mandate the work, six out of eight owners had voluntarily contracted with the vendor to improve community aesthetics. Because the project was owner-coordinated and voluntary, the ALJ found no expenditure violation. The Petitioner’s case was further weakened by failing to provide the full text of the CC&Rs during the initial 2025 hearing, illustrating the "failed burden of proof" that haunts many self-represented litigants.

4. The "Paperwork Trap": Why Statutory Precision Matters

Perhaps the most frustrating chapter for the Petitioner was Issue #3. Fogelsong alleged that the Board refused to provide meeting minutes, financial statements, and management proposals. In testimony, the Board actually admitted they had failed to provide these records in a timely fashion.

However, Fogelsong still lost the claim.

Legal Lesson Learned: The Due Process Trap In administrative law, the court is bound by what is explicitly pled in the petition. Fogelsong alleged violations of ARS 33-1804 (Open Meeting Laws). However, the failure to provide documents is governed by ARS 33-1805 (Records Access). Because the wrong statute was cited, the ALJ could not find the HOA in violation, despite the Board’s admission of the delay.

Statutory precision also doomed the notice claim. Fogelsong pointed out that the agenda for the May 5, 2025 meeting was provided only 36 hours in advance, missing the 10-to-50-day requirement. But because the specific subsection (ARS 33-1804(B)) was not properly pled, the court’s hands were tied.

5. Jurisdictional Limits: The Stricken Claim

It is vital to note that a fourth issue—an alleged violation of ARS 10-830 (Corporate Good Faith)—was stricken from the 2026 proceedings entirely. The ALJ ruled that the Department of Real Estate lacks the jurisdiction to enforce corporate "Good Faith" statutes, as its authority is strictly limited to Title 33 (Property) and specific HOA/Condominium governing documents.

6. Conclusion: Navigating the HOA Maze

Despite multiple hearings and a motion for summary judgment, Fogelsong’s petitions were ultimately denied. The 2025 and 2026 rulings reinforce a hard truth: in the administrative arena, being "right" about a grievance is only half the battle.

Key Takeaways for Homeowners:

  1. The Burden is Yours: The Petitioner must prove a fact is "more probable than not." Without time-stamped evidence or full CC&R texts, claims of illegal parking or unauthorized projects often fail.
  2. Cite with Care: Confusing "Open Meetings" (33-1804) with "Records Access" (33-1805) is a fatal error. The court cannot "fix" your petition to cite the correct law.
  3. Understand "Pooling": An HOA might not have the authority to paint your house, but if your neighbors voluntarily pool their resources, they can effectively bypass HOA expenditure restrictions to achieve community-wide goals.

The final decisions in these cases are now binding. For the residents of Park Townhouses, any further challenge would require an appeal to the Superior Court within 35 days—a final exit ramp in a long and costly legal journey.

Case Participants

Petitioner Side

  • Marilyn J. Fogelsong (Petitioner)
    Co-owner of Unit 2467
  • Levi Benjamin Lazarus (Co-owner)
    Son of petitioner
  • Jason Smith (Attorney)
    Retained by Petitioner to evaluate CC&Rs

Respondent Side

  • Gerald Schwarzenbach (Secretary and Respondent Representative)
    Park Townhouses Homeowners Association, Inc.
    Owner of Unit 2463
  • Mark Schlang (Treasurer and Witness)
    Park Townhouses Homeowners Association, Inc.
    Owner of Unit 2455
  • Andrew F. Vizcarra (Associate Manager)
    Tucson Realty & Trust Company, Management Services, LLC
    HOA property manager
  • Ray Flores (President)
    Park Townhouses Homeowners Association, Inc.
  • Sasha Flores (Bank Signer)
    Park Townhouses Homeowners Association, Inc.
    Wife of Ray Flores

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over the initial hearing
  • Jenna Clark (Administrative Law Judge)
    Office of Administrative Hearings
    Presided over the rehearing
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • David Zeinfeld (Observer)
    Homeowner
  • Jodie Schlang (Observer)
  • Deborah Garcia (Broker)
    Tucson Realty & Trust Company

Miera Phx LLC v. Dartmouth Trace Homeowner Associations, Inc

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Case Summary

Case ID 25F-H022-REL
Agency —
Tribunal —
Decision Date 2025-03-27
Administrative Law Judge NR
Outcome Petition denied
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Miera Phx LLC Counsel —
Respondent Dartmouth Trace Homeowner Associations, Inc. Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H022-REL Decision – 1264772.pdf

Uploaded 2026-04-24T12:36:28 (66.0 KB)

25F-H022-REL Decision – 1275713.pdf

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25F-H022-REL Decision – 1275762.pdf

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25F-H022-REL Decision – 1287568.pdf

Uploaded 2026-04-24T12:36:41 (182.8 KB)

25F-H022-REL Decision – 1318865.pdf

Uploaded 2026-04-24T12:36:44 (56.7 KB)

Briefing Document: Miera Phx LLC v. Dartmouth Trace Homeowners Association, Inc.

Executive Summary

This document synthesizes the proceedings and outcome of the administrative case Miera Phx LLC v. Dartmouth Trace Homeowner Associations, Inc. (No. 25F-H022-REL). The core of the dispute was the Petitioner’s allegation that the Homeowners Association (HOA) failed to enforce its governing documents, specifically the prohibition against short-term rentals (STRs) of less than 30 days.

The Petitioner, represented by homeowner Angel Miera, argued that the HOA’s inaction allowed STRs to proliferate, leading to safety concerns, nuisance issues, and a degradation of the community’s residential character. A central claim was that a conflict of interest existed, alleging the HOA Board President himself operated an STR. The Petitioner sought mandated enforcement, board reorganization, and financial compensation for HOA fees.

The Respondent HOA, represented by its management company and a board member, countered that enforcing the STR prohibition was practically impossible without “hard proof,” such as an exterior photo with a unit number, which is difficult to obtain. They cited financial constraints, other pressing maintenance priorities, and limitations imposed by state law on collecting fines as significant hurdles. The board also highlighted its own instability, with only two members remaining—both of whom were in the process of selling their properties—and a severe lack of community volunteers.

The Administrative Law Judge (ALJ) ultimately denied the petition. The decision concluded that the Petitioner had not met the burden of proof. The ALJ reasoned that the underlying issue was a “homeowner versus homeowner argument,” as the HOA itself cannot violate the rental restrictions, only individual owners can. Furthermore, the governing statute is permissive, stating an association may impose penalties, not that it must. The tribunal found it had no jurisdiction to order the reimbursement of HOA dues or to compel board stability.

Case Overview

Case Number

25F-H022-REL

Petitioner

Miera Phx LLC

Petitioner Representatives

Angel Miera (Manager), Bill Miera (Witness)

Respondent

Dartmouth Trace Homeowner Associations, Inc.

Respondent Representatives

Gladis Hernandez (Community Manager, Ogden & Co.), Fernanda Lopez (Board VP)

Administrative Law Judge

Nicole Robinson

Hearing Date

February 19, 2025

ALJ Decision Date

March 27, 2025

Central Dispute: Failure to Enforce Short-Term Rental Prohibitions

The foundational issue of the case was the Petitioner’s allegation that the Dartmouth Trace HOA was in violation of its own governing documents by failing to enforce the prohibition on short-term rentals.

The primary governing rule cited is Section 17 of the community’s Covenants, Conditions, and Restrictions (CC&Rs), which states:

“No Owner shall permit his Unit to be used for transient or hotel purposes or shall enter into any Lease for less than the entire Unit or for a term of less than thirty (30) days.”

The Petitioner alleged that the HOA’s failure to act on violations of this rule undermined the community’s residential character, stability, and property values.

——————————————————————————–

Petitioner’s Position and Evidence (Miera Phx LLC)

The Petitioner, Angel Miera, a resident of 11 years and an owner for three, built her case on several key arguments supported by extensive documentation submitted to the court.

Pervasive and Unenforced STR Activity

• Core Complaint: The community, located near the Chicago Cubs Spring Training facility, has been “overrun” with illegal STRs, transforming it into a “transient hotel.”

• Evidence Provided: Miera submitted numerous online listings from platforms like Airbnb and VRBO, dating from 2022 to the week before the hearing, which she alleged were units within Dartmouth Trace.

• Community Impact: The influx of transient guests has allegedly led to numerous disturbances, including noise complaints, police calls, and overuse of common amenities like the pool and parking. Miera noted her car had been dinged by vehicles in the adjacent STR unit’s parking space and that oversized vehicles often made it difficult for her to exit her own car.

• History of Complaints: Miera documented a three-year history of reporting suspected STRs to the HOA and its management company, Ogden & Company, Inc., which she claimed resulted in no meaningful enforcement action.

Conflict of Interest on the HOA Board

• Central Allegation: The failure to enforce the rules stems from a direct conflict of interest, as key board members have allegedly operated STRs themselves.

• Board President Rod Proce: Miera submitted a listing she claims was for Board President Rod Proce’s unit (Unit 29), which advertised it as a vacation rental. She also submitted his recent MLS listing for the sale of the unit, in which the description states, “This condo has been a great vacation rental.”

• Former Board Member: Allegations were also made against former board member Tiffany Barentine, who reportedly operated STRs and resigned from the board after Miera raised the issue.

Retaliation and Lack of Homeowner Engagement

• Perceived Retaliation: Miera testified that since she began raising the STR issue, her requests for essential landscaping maintenance for her unit have been ignored for three years, while common areas advertised in STR listings (e.g., the pool area) remain “impeccable.”

• Suppressed Engagement: The HOA moved from monthly meetings to a single annual meeting, which Miera argued made it “nearly impossible for homeowners to effectively raise concerns.” She also testified that her attempt to run for a board position was accepted and then blocked without explanation.

Requested Remedies

1. Mandated Enforcement: An order compelling the HOA to take “meaningful corrective action,” including issuing fines, notices, and liens against illegal STR owners.

2. Oversight and Transparency: Creation of a tracking system for STRs, installation of prohibitive signage, and mandatory disclosures to new buyers about STR restrictions.

3. Board Reorganization: The removal of the two current board members (Rod Proce and Fernanda Lopez) due to alleged mismanagement, conflicts of interest, and the fact that both had their units listed for sale.

4. Financial Compensation: Reimbursement for the $500 case filing fee and over $8,000 in HOA fees paid over the last three years, during which her safety and property concerns were allegedly ignored.

——————————————————————————–

Respondent’s Position and Rebuttal (Dartmouth Trace HOA)

The HOA and its representatives acknowledged the existence of STRs as a problem but argued that their ability to act was severely constrained by practical, legal, and financial limitations.

The Challenge of “Hard Proof”

• Enforcement Standard: Community Manager Gladis Hernandez stated that the HOA cannot issue fines without “hard proof” that would withstand a legal challenge. Based on legal advice, this means obtaining an online ad that includes an exterior photo showing the building and a specific unit number.

• Impracticality of Investigation: Hernandez argued it would be an improper use of association funds to book suspected STRs simply to obtain their addresses. She stated, “we don’t hunt them down.” The HOA does not have the resources or software to run license plates to identify owners.

• Action on Confirmed Units: Regarding Miera’s neighboring unit (Unit 26), Hernandez testified that upon confirmation, she contacted the owner. The owner asserted that her rental listing is for a 30-day minimum, which complies with the CC&Rs.

Resource and Legislative Constraints

• Volunteer Board: Board VP Fernanda Lopez emphasized that board members are unpaid volunteers. She herself joined the board as a “disgruntled resident” but was met with the reality of limited budgets and significant responsibilities. The board has only two members, both of whom are selling their units, and no other homeowners are willing to volunteer.

• Financial Priorities: The HOA faces significant expenses for larger projects like roofing ($35,000 for parking lot repairs) and rising water bills, leaving limited funds for other issues like comprehensive landscaping or legal battles over STRs.

• Limited Power of Fines: Hernandez testified that recent changes in state legislation prevent HOAs from pursuing foreclosure based on unpaid fines. This weakens the power of fines as a deterrent, as homeowners can choose to pay their assessments but ignore fines without severe consequence.

Response to Specific Allegations

• Board President’s Actions: Hernandez confirmed that Rod Proce admitted to a past STR listing from around 2022 but stated it was no longer active.

• Retaliation Claim: Lopez countered the landscaping claim by stating that Miera’s unit is in the same section as Rod Proce’s unit, and “he’s looking at bare dirt as well.” She asserted that she gave Miera’s unit “preferential treatment” with the new landscaping company to address her long-standing complaints.

——————————————————————————–

Key Testimonies

Angel Miera, Petitioner: “For the governing documents to have any real meaning, they must be enforced. This court has the authority to require the HOA to fulfill its obligations, and I ask that it does so today.”

Gladis Hernandez, Community Manager: “It is not proper to go spend association money to see if this unit… is being Airbnbed out to go and spend association money just to find out if it’s a unit within that community itself. … I believe that every homeowner that pays their assessments would also agree that it’s not proper use of funds.”

Fernanda Lopez, Board Vice President: “I highly recommend that you change your LLC to your name so that you can be part of that board and have those conversations and figure out solutions because it’s not just easy. You can complain every single day, but to find solutions is the difficult part.”

Bill Miera, Petitioner’s Witness, on the Board President’s attitude: “[He said] ‘well, you know, we don’t want to be the meanies and you know, give out violations.’ That was his response.”

——————————————————————————–

Final Judgment and Rationale

On March 27, 2025, Administrative Law Judge Nicole Robinson issued a decision denying the Petitioner’s petition in its entirety.

Conclusions of Law

The ALJ’s decision was based on the following key legal conclusions:

1. Homeowner vs. Homeowner Dispute: The judge determined that the core issue was a dispute between homeowners, not a direct violation by the HOA itself. The decision states, “Ultimately, Petitioner’s underlying complaint is a homeowner versus homeowner argument and that type of complaint is not addressed in this forum.”

2. HOA Cannot Violate Occupancy Rules: The Association itself cannot violate the Use & Occupancy restrictions or the Bylaws cited by the Petitioner; only a homeowner can.

3. Enforcement is Permissive, Not Mandatory: The judge cited Arizona statute (ARIZ. REV. STAT. § 33-1242(A)(11)), which states that an “Association MAY… impose reasonable monetary penalties.” The use of the word “may” makes the action discretionary, not mandatory. Therefore, the HOA’s failure to issue fines was not a violation of the law or its governing documents.

4. Lack of Jurisdiction for Requested Remedies: The tribunal found it had no jurisdiction to order the reimbursement of HOA dues or to intervene in the internal stability of the HOA board.

Final Order

• The Petitioner’s petition was denied.

• The Respondent HOA was not ordered to reimburse the Petitioner’s $500 filing fee.

• The decision noted that the Petitioner is not barred from seeking further legal recourse outside the administrative jurisdiction of the Department of Real Estate.

Questions

Question

Can I use the administrative hearing process to force my HOA to enforce rules against my neighbor?

Short Answer

Likely no. The tribunal views disputes about rule enforcement against other residents as 'homeowner versus homeowner' arguments, which are outside its forum.

Detailed Answer

The ALJ clarified that while a petitioner may be diligent in reporting neighbors (such as those violating short-term rental or parking rules), the underlying complaint is fundamentally between homeowners. The administrative hearing process is designed for disputes between an owner and the association regarding the association's specific violations, not to compel the association to police other owners in specific ways.

Alj Quote

Ultimately, Petitioner’s underlying complaint is a homeowner versus homeowner argument and that type of complaint is not addressed in this forum.

Legal Basis

Jurisdictional Limitations

Topic Tags

  • enforcement
  • jurisdiction
  • neighbor disputes

Question

Is the HOA legally required to fine homeowners who violate the CC&Rs?

Short Answer

No. State statute provides that an association 'may' impose penalties, implying it is discretionary rather than mandatory.

Detailed Answer

The decision highlights that Arizona Revised Statutes grant the association the power to impose penalties but do not mandate it. Therefore, an HOA failing to issue fines is not necessarily violating the statute.

Alj Quote

Petitioner has not established by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. § 33-1242(A)(11) which states in pertinent part that the 'Association MAY. . . . impose reasonable monetary penalties.'

Legal Basis

A.R.S. § 33-1242(A)(11)

Topic Tags

  • fines
  • penalties
  • statutory interpretation

Question

Can the administrative tribunal order the HOA to reimburse my assessment fees if they fail to manage the property well?

Short Answer

No. The tribunal lacks jurisdiction to mandate the reimbursement of HOA dues.

Detailed Answer

Even if a homeowner feels the HOA has failed in its duties or that services (like landscaping) have declined, the Administrative Law Judge does not have the authority to order the return of assessments paid.

Alj Quote

In addition, the Tribunal has no jurisdiction to mandate that the Association reimburse Petitioner’s HOA dues which is out of the purview per this Order.

Legal Basis

Jurisdictional Limitations

Topic Tags

  • assessments
  • reimbursement
  • dues

Question

What is the burden of proof for a homeowner suing their HOA in an administrative hearing?

Short Answer

The homeowner must prove their case by a 'preponderance of the evidence.'

Detailed Answer

This standard means the homeowner must show that their contention is more probably true than not. It is based on the convincing force of the evidence rather than just the amount of evidence or number of witnesses.

Alj Quote

Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated the aforementioned CC&Rs and the Bylaws.

Legal Basis

A.A.C. R2-19-119

Topic Tags

  • burden of proof
  • legal standards
  • evidence

Question

Can the HOA itself be found guilty of violating use and occupancy restrictions in the CC&Rs?

Short Answer

Generally, no. Use and occupancy restrictions apply to the conduct of homeowners, not the corporate entity of the HOA.

Detailed Answer

The ALJ ruled that an Association cannot violate restrictions designed for residents (like short-term rental bans); only the individual homeowners can violate those specific rules.

Alj Quote

The Association cannot violate the Use & Occupancy restrictions or the Bylaws cited by Petitioner in her complaint; a homeowner can but not the HOA.

Legal Basis

CC&R Interpretation

Topic Tags

  • CC&Rs
  • occupancy restrictions
  • liability

Question

Can the judge force the HOA to fill vacant board seats if no one wants to volunteer?

Short Answer

No. The tribunal cannot compel individuals to run for election or remain in board positions.

Detailed Answer

While a lack of participation or board vacancies may cause instability, the administrative law judge has no jurisdiction to force homeowners to serve on the board or to create stability in governance.

Alj Quote

The Tribunal heard testimony regarding the lack of participation of homeowners to become Board Directors, however, individuals cannot be forced into an election or made to remain in their positions.

Legal Basis

Governance

Topic Tags

  • board of directors
  • elections
  • volunteers

Question

Does the Office of Administrative Hearings (OAH) have the authority to interpret the contract between a homeowner and the HOA?

Short Answer

Yes. The OAH has the authority to interpret the contract (CC&Rs and Bylaws) between the parties.

Detailed Answer

The decision affirms that the OAH is an independent agency authorized to decide contested cases and interpret the governing documents (contract) between the association and the owner.

Alj Quote

OAH has the authority to interpret the contract between the parties.

Legal Basis

Tierra Ranchos Homeowners Ass’n v. Kitchukov

Topic Tags

  • contract interpretation
  • OAH authority

Case

Docket No
25F-H022-REL
Case Title
Miera Phx LLC v. Dartmouth Trace Homeowner Associations, Inc
Decision Date
2025-03-27
Alj Name
Nicole Robinson
Tribunal
OAH
Agency
ADRE

Questions

Question

Can I use the administrative hearing process to force my HOA to enforce rules against my neighbor?

Short Answer

Likely no. The tribunal views disputes about rule enforcement against other residents as 'homeowner versus homeowner' arguments, which are outside its forum.

Detailed Answer

The ALJ clarified that while a petitioner may be diligent in reporting neighbors (such as those violating short-term rental or parking rules), the underlying complaint is fundamentally between homeowners. The administrative hearing process is designed for disputes between an owner and the association regarding the association's specific violations, not to compel the association to police other owners in specific ways.

Alj Quote

Ultimately, Petitioner’s underlying complaint is a homeowner versus homeowner argument and that type of complaint is not addressed in this forum.

Legal Basis

Jurisdictional Limitations

Topic Tags

  • enforcement
  • jurisdiction
  • neighbor disputes

Question

Is the HOA legally required to fine homeowners who violate the CC&Rs?

Short Answer

No. State statute provides that an association 'may' impose penalties, implying it is discretionary rather than mandatory.

Detailed Answer

The decision highlights that Arizona Revised Statutes grant the association the power to impose penalties but do not mandate it. Therefore, an HOA failing to issue fines is not necessarily violating the statute.

Alj Quote

Petitioner has not established by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. § 33-1242(A)(11) which states in pertinent part that the 'Association MAY. . . . impose reasonable monetary penalties.'

Legal Basis

A.R.S. § 33-1242(A)(11)

Topic Tags

  • fines
  • penalties
  • statutory interpretation

Question

Can the administrative tribunal order the HOA to reimburse my assessment fees if they fail to manage the property well?

Short Answer

No. The tribunal lacks jurisdiction to mandate the reimbursement of HOA dues.

Detailed Answer

Even if a homeowner feels the HOA has failed in its duties or that services (like landscaping) have declined, the Administrative Law Judge does not have the authority to order the return of assessments paid.

Alj Quote

In addition, the Tribunal has no jurisdiction to mandate that the Association reimburse Petitioner’s HOA dues which is out of the purview per this Order.

Legal Basis

Jurisdictional Limitations

Topic Tags

  • assessments
  • reimbursement
  • dues

Question

What is the burden of proof for a homeowner suing their HOA in an administrative hearing?

Short Answer

The homeowner must prove their case by a 'preponderance of the evidence.'

Detailed Answer

This standard means the homeowner must show that their contention is more probably true than not. It is based on the convincing force of the evidence rather than just the amount of evidence or number of witnesses.

Alj Quote

Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated the aforementioned CC&Rs and the Bylaws.

Legal Basis

A.A.C. R2-19-119

Topic Tags

  • burden of proof
  • legal standards
  • evidence

Question

Can the HOA itself be found guilty of violating use and occupancy restrictions in the CC&Rs?

Short Answer

Generally, no. Use and occupancy restrictions apply to the conduct of homeowners, not the corporate entity of the HOA.

Detailed Answer

The ALJ ruled that an Association cannot violate restrictions designed for residents (like short-term rental bans); only the individual homeowners can violate those specific rules.

Alj Quote

The Association cannot violate the Use & Occupancy restrictions or the Bylaws cited by Petitioner in her complaint; a homeowner can but not the HOA.

Legal Basis

CC&R Interpretation

Topic Tags

  • CC&Rs
  • occupancy restrictions
  • liability

Question

Can the judge force the HOA to fill vacant board seats if no one wants to volunteer?

Short Answer

No. The tribunal cannot compel individuals to run for election or remain in board positions.

Detailed Answer

While a lack of participation or board vacancies may cause instability, the administrative law judge has no jurisdiction to force homeowners to serve on the board or to create stability in governance.

Alj Quote

The Tribunal heard testimony regarding the lack of participation of homeowners to become Board Directors, however, individuals cannot be forced into an election or made to remain in their positions.

Legal Basis

Governance

Topic Tags

  • board of directors
  • elections
  • volunteers

Question

Does the Office of Administrative Hearings (OAH) have the authority to interpret the contract between a homeowner and the HOA?

Short Answer

Yes. The OAH has the authority to interpret the contract (CC&Rs and Bylaws) between the parties.

Detailed Answer

The decision affirms that the OAH is an independent agency authorized to decide contested cases and interpret the governing documents (contract) between the association and the owner.

Alj Quote

OAH has the authority to interpret the contract between the parties.

Legal Basis

Tierra Ranchos Homeowners Ass’n v. Kitchukov

Topic Tags

  • contract interpretation
  • OAH authority

Case

Docket No
25F-H022-REL
Case Title
Miera Phx LLC v. Dartmouth Trace Homeowner Associations, Inc
Decision Date
2025-03-27
Alj Name
Nicole Robinson
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Angel Miera (Petitioner)
    Miera Phx LLC
    Manager of Miera Phx LLC; self-represented
  • Bill Miera (Witness)
    Father of Angel Miera

Respondent Side

  • Gladis Hernandez (Representative)
    Ogden & Company, Incorporated
    Community Manager for Dartmouth Trace HOA
  • Fernanda Lopez (Representative)
    Dartmouth Trace Homeowner Associations, Inc.
    Vice President and Board Member of Dartmouth Trace HOA
  • Lori T. Percival (Representative)
    Ogden & Company, Incorporated
    President of Ogden & Company; included on the transmission/service list

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
    Presiding judge for the hearing
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
    Included on the transmission/service list

Cross Creek Ranch Community Association v. Turquoise Textures, LLC

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Case Summary

Case ID 25F-H005-REL
Agency Arizona Department of Real Estate
Tribunal —
Decision Date 2024-12-16
Administrative Law Judge NR
Outcome Petitioner's petition granted.
Filing Fees Refunded —
Civil Penalties —

Parties & Counsel

Petitioner Cross Creek Ranch Community Association Counsel —
Respondent Turquoise Textures, LLC Counsel —

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

25F-H005-REL Decision – 1246254.pdf

Uploaded 2026-04-24T12:28:17 (51.8 KB)

25F-H005-REL Decision – 1252576.pdf

Uploaded 2026-04-24T12:28:21 (148.6 KB)

25F-H005-REL Decision – 1252586.pdf

Uploaded 2026-04-24T12:28:24 (55.1 KB)

Briefing Document: Cross Creek Ranch Community Association vs. Turquoise Textures, LLC

Executive Summary

This briefing document synthesizes the proceedings and outcome of the case Cross Creek Ranch Community Association vs. Turquoise Textures, LLC (No. 25F-H005-REL), heard by the Arizona Office of Administrative Hearings (OAH). The central dispute involved the unauthorized clear-cutting of approximately 30 old-growth trees and native vegetation from a lot owned by William D. Durham, principal of Turquoise Textures, LLC.

The Administrative Law Judge (ALJ), Nicole Robinson, ultimately ruled in favor of the Petitioner, the Cross Creek Ranch Community Association (HOA). The decision found that Mr. Durham violated the community’s Covenants, Conditions, and Restrictions (CC&Rs) and Design Guidelines. While Mr. Durham’s primary defense was to blame his general contractor, the ALJ’s decision was based on credible testimony from the contractor implicating Mr. Durham, a documented pattern of non-compliance by Mr. Durham, and his own admission that the lot was cleared in violation of his approved plans.

The HOA sought a court order compelling Mr. Durham to plant 30 trees, 10-12 feet in height, by March 15, 2025. The final OAH order granted the HOA’s petition, requiring Mr. Durham to comply with the governing documents and reimburse the association’s $500 filing fee.

Case Overview

Parties Involved

Name / Entity

Key Role/Witness For

Petitioner

Cross Creek Ranch Community Association

Homeowners’ Association alleging violation of governing documents.

Respondent

Turquoise Textures, LLC (William D. Durham)

Property owner accused of violating governing documents.

Adjudicator

Nicole Robinson

Administrative Law Judge, Office of Administrative Hearings.

Witness

Greg Chambers

Petitioner; HOA Board Member.

Witness

Steve Germaine

Petitioner; Member of Architectural Review Committee (ARC), former ARC Chair.

Witness

Daniel Donahghue

Petitioner; Current ARC Chair and Board Member.

Witness

Jeffrey Penchina

Petitioner; Member of the ARC.

Witness

Timothy Smith

Petitioner; General Contractor hired by William Durham.

Core Allegation and Relief Sought

The HOA filed a petition on July 16, 2024, alleging that in September 2023, the Respondent clear-cut his lot of 20-30 old-growth trees (Junipers and Pinions) and native vegetation. This action was in direct violation of his ARC-approved plans, which were contingent on those plantings remaining in place. The HOA contended this violated:

• CC&Rs Article 3, Section 3.1.3: Pertaining to architectural approval and control.

• CC&Rs Article 7, Section 7.5: Pertaining to improper maintenance and use of lots.

The HOA argued that the clear-cutting was done to improve Mr. Durham’s view and detrimentally affected the community’s appearance and value. The specific relief requested was an order compelling Mr. Durham to plant 30 trees (10 to 12 feet in size) and replace additional vegetation by March 15, 2025.

Chronology of Key Events

• April 18, 2021: Prior to purchasing the lot, William Durham meets with ARC member Steve Germaine and is informed via a follow-up email that “The ARC does not approve the removal of trees… solely for the purpose of preserving or improving a view.”

• May 3, 2021: William Durham purchases Lot 62 in Cross Creek Ranch.

• July 7, 2022: Mr. Durham receives permission from the ARC to remove four specific dead trees.

• July 9, 2022: Mr. Germaine observes Mr. Durham removing more than the four approved dead trees and instructs him to stop.

• June 7, 2023: The ARC approves Mr. Durham’s residential and landscape plans, which show the preservation of existing trees and vegetation in the “transitional area.”

• August 29, 2023: A pre-construction meeting is held with Mr. Durham, his General Contractor (GC) Timothy Smith, and ARC members. ARC member Jeffrey Penchina testified that Mr. Durham personally assured him no trees outside the construction envelope would be removed.

• September 2023: Over approximately three days, Mr. Smith’s company clear-cuts the lot of 30+ old-growth trees and shrubs.

• October 2023: Following the discovery of the clearing, the ARC sends a letter to Mr. Durham to cease construction.

• October 6, 2023: Mr. Durham files a complaint with the Arizona Registrar of Contractors (ROC) against Tim Smith, blaming him for the tree removal.

• February 9, 2024: Mr. Durham transfers the property title to Turquoise Textures, LLC.

• July 16, 2024: The HOA files its petition with the Arizona Department of Real Estate.

• October 15, 2024: Mr. Durham submits a revised landscape plan to the HOA.

• November 4, 2024: The HOA responds to the plan, requiring 10-12 foot trees for remediation.

• November 11, 2024: Mr. Durham sends a detailed email responding to the HOA’s requirements.

• November 26, 2024: The OAH hearing is conducted virtually.

• December 16, 2024: The ALJ issues a final decision granting the HOA’s petition. A separate minute entry notes that documents filed by Mr. Durham after the hearing record closed would not be considered.

Key Testimony and Arguments

Petitioner’s Case (Cross Creek Ranch HOA)

The HOA presented a case built on documented warnings, contractual obligations, and direct eyewitness testimony.

• Established Pattern of Non-Compliance: Witness Steve Germaine testified that he warned Mr. Durham about the rules regarding tree removal for views even before the lot was purchased in April 2021. He further testified to the incident on July 9, 2022, where he witnessed Mr. Durham cutting down live trees without authorization, beyond the four dead trees he had permission for.

• Violation of Approved Plans: Daniel Donahghue and Jeffrey Penchina testified that during the pre-construction meeting on August 29, 2023, the rules were clearly explained. Mr. Penchina stated, “he assured me that nothing outside of the construction envelope would be removed.” The approved plans, entered as evidence, explicitly showed the preservation of the natural landscape in the transitional area.

• Direct Culpability via GC Testimony: The general contractor, Timothy Smith, provided critical testimony directly contradicting Mr. Durham’s defense.

◦ Mr. Smith stated that Mr. Durham directed the clear-cutting: “he started to point out at trees that were in disturbing the… surrounding views… I let him know, well, now we’re going outside of the construction envelope. And he said he doesn’t really care.”

◦ He testified that Mr. Durham was on-site during the three-day clearing process and that the business relationship fractured later over non-payment for subsequent work, not over the tree removal.

Respondent’s Defense (William D. Durham)

Mr. Durham admitted the plans were violated but placed all blame on his general contractor and portrayed the HOA as a hostile and unresponsive entity.

• Blame Assigned to General Contractor: Mr. Durham’s central argument was that his GC acted against instructions. He stated, “I was forced to have a GC that I didn’t need, and the GC insisted on doing all the initial work… He ignored all the directives from Mark and from me.” He testified that he “absolutely not” directed Mr. Smith to clear the land and claimed to be out of town for most of the clearing.

• Allegations of HOA Harassment and Inefficiency: Mr. Durham repeatedly described the HOA as slow, uncooperative, and corrupt.

◦ He claimed he was trying to remediate the issue but the HOA was “very very very slow to ever get back to me.”

◦ He accused the HOA of “moving the goalposts” by demanding 10-12 foot trees, a requirement he said was never mentioned until the hearing.

◦ He testified he was facing over “$40,000 in fines” and was being harassed by specific members. He stated, “There’s a degree of corruption and cronyism in this HOA that is deeply disturbing.”

• Proactive Remediation Efforts: Mr. Durham asserted he had been proactive, submitting a new landscape plan with 32 plants. He testified, “all I need is their input back that’s helpful to resolve everything.” He repeatedly requested a single liaison from the ARC to facilitate faster solutions.

Administrative Law Judge’s Decision

The ALJ’s decision, issued December 16, 2024, was a conclusive victory for the Petitioner.

Findings of Fact

The ALJ established a clear factual record that supported the HOA’s position, highlighting:

• The pre-purchase warning to Mr. Durham in April 2021 regarding tree removal.

• The unauthorized removal of viable trees in July 2022.

• The September 2023 clear-cutting incident, which the judge factually concluded occurred at Mr. Durham’s direction. Finding #15 states: “Mr. Smith, the general contractor, cleared Lot 64 of approximately 30 plus trees and shrubs that were not included in the approved plans per Respondent’s instruction.”

Conclusions of Law

Based on the evidence, the ALJ made the following legal conclusions:

• The Petitioner (HOA) successfully met its burden of proving by a preponderance of the evidence that the Respondent violated the governing documents.

• The ALJ identified a clear “pattern” of behavior, noting Mr. Durham began “failing to heed the ARC’s directions in July 2022.”

• Critically, the judge determined that even without the GC’s testimony, Mr. Durham’s own admission was sufficient for a finding of violation: “Respondent admitted what happened to his Lot was not a part of the approved plan and, hence, was a violation of Petitioner’s CC&Rs and Design Guidelines.”

Final Order

The OAH issued the following orders:

1. IT IS ORDERED that Petitioner’s petition be granted.

2. IT IS FURTHER ORDERED that Respondent reimburse Petitioner’s filing fee of $500.00.

3. IT IS FURTHER ORDERED that Respondent shall henceforth comply with the provisions of the governing documents.

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25F-H005-REL

5 sources

These sources document a legal dispute and administrative hearing between the Cross Creek Ranch Community Association and homeowner William Durham, operating as Turquoise Textures LLC. The association alleged that Durham violated community governing documents by clear-cutting approximately 30 protected old-growth trees to improve his property’s view, contradicting his approved landscape plans. While Durham blamed his general contractor for the unauthorized removal, testimony from the contractor and association members suggested Durham directed the clearing personally. The Office of Administrative Hearings ultimately ruled in favor of the association, finding Durham in violation of the CC&Rs and Design Guidelines. Consequently, the court ordered Durham to reimburse filing fees and mandated future compliance with community standards, which included a demand for the replanting of mature trees by March 2025.

What are the specific landscaping violations alleged by the Association?
How did the dispute over clear-cutting trees affect the build?
What final ruling did the Administrative Law Judge issue?

Thursday, February 12

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5 sources

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Select all sources

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25F-H005-REL

5 sources

These sources document a legal dispute and administrative hearing between the Cross Creek Ranch Community Association and homeowner William Durham, operating as Turquoise Textures LLC. The association alleged that Durham violated community governing documents by clear-cutting approximately 30 protected old-growth trees to improve his property’s view, contradicting his approved landscape plans. While Durham blamed his general contractor for the unauthorized removal, testimony from the contractor and association members suggested Durham directed the clearing personally. The Office of Administrative Hearings ultimately ruled in favor of the association, finding Durham in violation of the CC&Rs and Design Guidelines. Consequently, the court ordered Durham to reimburse filing fees and mandated future compliance with community standards, which included a demand for the replanting of mature trees by March 2025.

What are the specific landscaping violations alleged by the Association?
How did the dispute over clear-cutting trees affect the build?
What final ruling did the Administrative Law Judge issue?

Thursday, February 12

Save to note

Today • 5:13 PM

5 sources

Video Overview

Mind Map

Reports

Flashcards

Quiz

Infographic

Slide Deck

Data Table

NotebookLM can be inaccurate; please double check its responses.

Case Participants

Petitioner Side

  • John Kalinich (Representative)
    Cross Creek Ranch Community Association
    Acted as representative for the petitioner
  • Gregory J. Chambers (Board Member / Witness)
    Cross Creek Ranch Community Association
  • Daniel Kevin Donahue (Board Member and ARC Chair / Witness)
    Cross Creek Ranch Community Association
    Also spelled Donahghue in the transcript
  • Steven Matthew Jermaine (ARC Member / Witness)
    Cross Creek Ranch Community Association
    Also spelled Germaine in the transcript
  • Jeffrey Penchina (ARC Member / Witness)
    Cross Creek Ranch Community Association
    Also spelled Panchina in the transcript
  • Timothy Cody Smith (General Contractor / Witness)
    Smith & Sons Construction
    Hired by the respondent, but appeared as a witness for the petitioner

Respondent Side

  • William D. Durham (Principal / Owner)
    Turquoise Textures, LLC
    Respondent who cleared the lot

Neutral Parties

  • Nicole Robinson (Administrative Law Judge)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate