**Case Summary: Pecos Ranch Community Association v. Hoyum**
**Case No. 12F-H1212010-BFS**

**Proceedings**
On November 5, 2012, an administrative hearing was held before the Office of Administrative Hearings regarding a dispute between Pecos Ranch Community Association (Petitioner) and homeowners Randy and Sharon Hoyum (Respondents). The issue concerned an unauthorized structure erected on the Respondents' property.

**Key Facts**
* **Unauthorized Construction:** In November 2009, the Respondents began constructing a 10’ x 24’ free-standing accessory structure in their rear yard without obtaining prior approval from the Association’s Design Review Committee (DRC), as required by the Declaration of Covenants, Conditions and Restrictions (CC&Rs).
* **Denial of Approval:** The Respondents submitted a retroactive approval request in December 2009. The Association denied this request because the structure exceeded height and size limitations, lacked necessary City of Chandler building permits, and violated setback requirements.
* **City Violations:** The City of Chandler issued a Stop Work Order and subsequently fined Mr. Hoyum for building without permits. The Respondents were unable to obtain a city variance without Association approval, creating a regulatory deadlock.

**Main Arguments**
* **Petitioner’s Position:** The Association argued that the structure violated the CC&Rs requiring prior approval and the Design Standards regarding visibility from neighboring properties. They maintained the denial was justified due to the structure's failure to meet city codes and community aesthetic standards.
* **Respondents’ Defenses:** The Respondents claimed they were unaware permission was required. They argued the Board acted arbitrarily and capriciously, citing photographs of other homes in the community with alleged violations (e.g., sheds, gazebos) that were permitted or ignored.

**Legal Analysis and Findings**
The Administrative Law Judge (ALJ) found that the Petitioner met its burden of proof by a preponderance of the evidence.
1. **Violation of CC&Rs:** The evidence established that the Respondents constructed the shed without the mandated DRC approval. The CC&Rs grant the DRC "sole and absolute discretion" regarding retroactive approval.
2. **Valid Exercise of Discretion:** The Board’s refusal to grant retroactive approval was supported by objective factors, specifically the lack of municipal permits and non-compliance with city zoning regarding size and setbacks.
3. **Rejection of "Arbitrary" Defense:** The ALJ ruled that the existence of other alleged violations in the community did not constitute a valid legal defense for the Respondents' specific failure to comply with the CC&Rs.

**Outcome and Final Decision**
The ALJ recommended granting the Petition.
* **Remedies:** The Respondents were ordered to reimburse the Association $550.00 in filing fees.
* **Compliance Order:** The Respondents were given 90 days to either obtain DRC approval or alter, move, or remove the structure to comply with governing documents.

**Final Status**
The Department of Fire, Building and Life Safety did not reject or modify the decision within the statutory timeframe. Consequently, the ALJ's decision was certified as the final administrative decision on December 27, 2012.