Case Summary
| Case ID | 25F-H061-REL |
|---|---|
| Agency | — |
| Tribunal | — |
| Decision Date | 2025-09-01 |
| Administrative Law Judge | KAA |
| Outcome | complete |
| Filing Fees Refunded | — |
| Civil Penalties | — |
Parties & Counsel
| Petitioner | Chad D. Rainey | Counsel | Pro Se |
|---|---|---|---|
| Respondent | The Garden Lakes Community Association | Counsel | Ashley N. Turner, Esq. (CHBD Law) |
Alleged Violations
No violations listed
Video Overview
Audio Overview
Decision Documents
25F-H061-REL Decision – 1327389.pdf
25F-H061-REL Decision – 1332130.pdf
25F-H061-REL Decision – 1334329.pdf
25F-H061-REL Decision – 1345206.pdf
Briefing Document: Rainey v. The Garden Lakes Community Association
Executive Summary
This document synthesizes the proceedings and outcome of case number 25F-H061-REL, a dispute between homeowner Chad D. Rainey (Petitioner) and The Garden Lakes Community Association (Respondent) adjudicated by the Arizona Office of Administrative Hearings. The central issue was the Association’s refusal to provide copies of vendor invoices related to lake maintenance and other expenses, which were requested by the Petitioner on April 18, 2025.
The Association argued that such invoices were not “records of the Association” under Arizona law, but rather “third-party” or “source” documents that it was not obligated to disclose. The Petitioner contended that Arizona statute A.R.S. § 33-1805(A), which mandates that “all financial and other records” be made available, clearly includes these invoices.
Following an evidentiary hearing on August 4, 2025, Administrative Law Judge Kay A. Abramsohn ruled decisively in favor of the Petitioner. The final decision, issued September 1, 2025, concluded that the Association’s characterization of the invoices as “disingenuous” and found that records kept by a management company on behalf of an association are legally considered the association’s records. The judge ordered the Association to provide access to the requested invoices and reimburse the Petitioner’s $500 filing fee, establishing that an association cannot arbitrarily exclude such fundamental financial documents from member examination.
Case Overview
Detail
Description
Case Number
No. 25F-H061-REL
Petitioner
Chad D. Rainey
Respondent
The Garden Lakes Community Association
Adjudicating Body
Arizona Office of Administrative Hearings (OAH)
Presiding Judge
Administrative Law Judge Kay A. Abramsohn
Hearing Date
August 4, 2025
Decision Date
September 1, 2025
Statutes at Issue
A.R.S. § 33-1805(A)
Bylaws at Issue
Article VI, Section 6.13
Procedural History
1. Initial Concern: Beginning March 12, 2025, Mr. Rainey communicated with the community manager regarding concerns about lake quality and fish kills within the community.
2. Formal Records Request: On April 18, 2025, Mr. Rainey sent a formal email request to the Association for specific documents, including vendor invoices for lake maintenance accounts.
3. Association’s Refusal: In a letter dated May 1, 2025, the Association’s legal counsel provided some requested documents (contracts) but explicitly refused to produce any vendor invoices.
4. Petition Filed: On May 8, 2025, Mr. Rainey filed a petition with the Arizona Department of Real Estate, alleging the Association violated state law and its own bylaws.
5. Subpoena Dispute: A subpoena was issued for the Association’s Treasurer, Deborah Taylor. The Association filed a Motion to Quash on July 21, 2025, which was initially granted on July 24. However, upon reconsideration, the OAH reissued the subpoena on July 30, 2025, compelling Ms. Taylor’s virtual appearance.
6. Evidentiary Hearing: A virtual hearing was conducted via Google Meet on August 4, 2025.
7. Final Decision: On September 1, 2025, the Administrative Law Judge (ALJ) issued a final decision granting the Petitioner’s petition.
The Central Dispute: The Records Request
The core of the conflict was Mr. Rainey’s formal request for documents, specifically the Association’s refusal to provide invoices.
Petitioner’s Request (April 18, 2025)
Mr. Rainey requested access to copies of the following:
• Invoices for the past 24 months for bookkeeping accounts related to lake maintenance, including:
◦ 618 Water Feature Maintenance
◦ 66702 Lake Repairs
◦ 664 Water Feature Repairs/Maint
◦ 70705 Chemicals
◦ 72308 Lake Chemicals/Dye
◦ 724 Fish Stock
• Invoices for the past 12 months for account 56701 Annual Meeting Expense.
• Copy of the current contract with CCMC (the management company).
• Copy of the current contract for the landscape contractor.
Respondent’s Refusal (May 1, 2025)
The Association’s law firm, CHBD Law, responded by providing the CCMC and landscape contracts but refused to supply the requested invoices. The letter stated:
“[T]he Association declines to produce any documents related to your requests for invoices from various vendors or other contractors. Such third-party invoices are not ‘records of the Association’ and the Association has no obligation under Arizona law to produce or disclose thirty-party invoices. See A.R.S. § 10-11601. For this reason, the Association declines to produce any of the invoices you requested for the past 12 or 24 months.”
Key Arguments Presented at Hearing
Petitioner’s Position (Chad D. Rainey)
• Plain Language of the Law: A.R.S. § 33-1805(A) is unambiguous, stating “all financial and other records of the association shall be made reasonably available.” The term “all” is inclusive and does not permit the Association to selectively withhold records like invoices.
• Insufficiency of Available Records: The summary financial documents on the homeowner portal are inadequate for transparency, as they only list line-item totals without identifying vendors or detailing specific services performed.
• Refutation of Association’s Legal Defense:
◦ The Association’s reliance on A.R.S. § 10-11601 (corporate records) is misplaced. Paragraph F of that statute explicitly states that in a conflict, Title 33 (which governs planned communities) prevails.
◦ None of the specific exemptions listed in A.R.S. § 33-1805(B) (e.g., privileged communications, pending litigation) apply to vendor invoices.
• Governing Documents: The Association’s own bylaws (Section 6.13) require it to keep “detailed and accurate records… of the receipts and expenditures affecting the Common Areas,” which logically includes invoices.
• Motivation for Request: The request was made in good faith to understand how the Association was maintaining community lakes amid declining water quality. As Mr. Rainey stated, “I requested these specific and pointed invoices to learn about how the association maintained the lakes.”
Respondent’s Position (The Garden Lakes Community Association)
• Invoices are Not “Association Records”: The core of the defense was the assertion that invoices created by third-party vendors are not financial records of the Association. They were characterized as “source documents” that inform the financials but are not the financials themselves.
• Demonstrated Transparency: The Association argued it complies with the law by making its official financial records—such as balance sheets, statements of revenue, and budget summaries—available to all homeowners on the online portal.
• Operational Structure: The defense emphasized that invoices are not part of the Association’s ordinary records. They are handled exclusively by the management company’s accounting department, processed through a separate system called “IPS,” and are not included in the monthly financial packets reviewed by the Board of Directors.
• Statutory Interpretation: The Association contended that the statute does not specifically mention the word “invoice” and therefore does not compel their disclosure.
Key Witness Testimony
Deborah Taylor (Association Treasurer)
• Role and Responsibilities: Ms. Taylor testified that her role as Treasurer involves reviewing financial statements prepared by the management company, primarily to check for variances from the budget.
• Invoice Handling: She confirmed that neither she nor any other board member reviews, processes, or approves individual vendor invoices. This function is entirely delegated to the management company. She stated, “They [the Board] do not” review invoices and approve them for payment. When asked who does, she said, “As far as I’m I know, the management company. That’s what they’re contracted for.”
• Financial Packet: She testified that the monthly financial packet provided to the Board is over 100 pages long but does not contain copies of vendor invoices.
Stephanie Via (Community Manager, CCMC)
• Invoice Process: Ms. Via detailed the “life cycle” of an invoice. Vendors typically send invoices to CCMC’s invoicing department, which are then uploaded into a third-party system called IPS. She or others in the management company then process the payments.
• Board Approval: She testified that the Board approves expenditures based on contracts agreed upon in open meetings, not by reviewing individual invoices. For non-contractual repairs, she has a spending limit of $2,500 for emergencies.
• Online Financials: Ms. Via confirmed that the financial statements posted on the homeowner portal are summaries of about 14-15 pages and do not contain vendor names, only line-item categories. When asked if a homeowner could see who was paid, she responded, “It doesn’t have vendor names, but it has line items that pertain to lake maintenance or landscape.”
Administrative Law Judge’s Decision and Order
The ALJ’s final decision sided entirely with the Petitioner, rejecting the Association’s arguments and interpretation of the law.
Findings and Conclusions
• Records Held by Agent are Association Records: The decision established that “Garden’s financial documents are prepared by, and kept in the custody of, Garden’s property management company and, thus, are considered to be Garden’s documents.” An association cannot evade its disclosure obligations by delegating record-keeping to a third party.
• Rejection of “Source Document” Argument: The ALJ found the Association’s attempt to reclassify the invoices to be without merit, stating, “Garden’s portrayal of requested documents as ‘executive,’ ‘third-party,’ or ‘source’ is disingenuous.”
• Plain Meaning of Statute and Bylaws: The decision affirmed that A.R.S. § 33-1805’s use of “all financial and other records” is comprehensive. Furthermore, the Association’s own bylaws require “detailed and accurate records” of expenditures, which invoices represent.
• Violation Confirmed: The judge concluded that the Petitioner had sustained his burden of proof and that the Association violated both A.R.S. § 33-1805(A) and its own Bylaws (Article VI, Section 6.13) by failing to provide the requested records.
Final Order
1. The Petitioner, Chad D. Rainey, is declared the prevailing party and his Petition is GRANTED.
2. The Garden Lakes Community Association is ordered to comply with the law and reasonably provide examination access to the requested documents.
3. The Association is ordered to reimburse the Petitioner’s filing fee of $500.00.
4. No civil penalty was found to be appropriate in the matter.
# Study Guide: Rainey v. Garden Lakes Community Association (Case No. 25F-H061-REL)
This study guide provides a comprehensive overview of the administrative hearing and legal dispute regarding a homeowner's right to access financial records within a planned community association in Arizona.
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## I. Case Overview and Key Concepts
### Central Dispute
The case centers on whether **The Garden Lakes Community Association** (Respondent) violated state law and its own bylaws by refusing to provide **Chad D. Rainey** (Petitioner) with specific vendor invoices. The Petitioner sought these documents to investigate the maintenance and water quality of the community’s lakes following concerns about fish kills.
### Legal Framework
* **A.R.S. § 33-1805(A):** The primary Arizona statute governing records access. It mandates that "all financial and other records of the association" be made reasonably available for examination by members.
* **A.R.S. § 33-1805(B):** Lists specific exemptions where records may be withheld (e.g., privileged legal communication, pending litigation, personal health/financial records of employees or members).
* **Bylaws Article VI, Section 6.13:** The association’s internal rule requiring the Treasurer to keep detailed, itemized records of receipts and expenditures affecting common areas and property.
* **A.R.S. § 10-11601:** A statute regarding nonprofit corporate records, which the Respondent unsuccessfully argued exempted third-party invoices from being classified as association records.
### Key Entities and Roles
| Entity/Individual | Role in Case |
| :--- | :--- |
| **Chad D. Rainey** | Petitioner; homeowner and trustee of the HN and PR Living Trust. |
| **The Garden Lakes Community Association** | Respondent; a planned community with 2,216 lots. |
| **CCMC** | The third-party property management company for the association. |
| **Kay A. Abramsohn** | Administrative Law Judge (ALJ) presiding over the Tribunal. |
| **Deborah Taylor** | Board Member and Treasurer of the Association. |
| **Stephanie Via** | Community Manager (CCMC) responsible for daily operations and paying invoices. |
---
## II. Short-Answer Practice Questions
1. **What specific documents did the Petitioner request on April 18, 2025?**
* *Answer:* Invoices for the past 24 months for accounts related to water feature maintenance, lake repairs, chemicals, and fish stock (Accounts 618, 66702, 664, 70705, 72308, 724); invoices for the past 12 months for the annual meeting expense (Account 56701); and copies of current management and landscape contracts.
2. **On what grounds did the Association initially refuse to provide the vendor invoices?**
* *Answer:* They argued that third-party vendor invoices are not "records of the association" under A.R.S. § 10-11601 and that the statute does not require the disclosure of "source documents."
3. **What was the Respondent’s argument regarding the Petitioner’s "standing" to bring the case?**
* *Answer:* The Respondent questioned whether Chad Rainey was the legal owner of the property, noting the warranty deed listed Heather Rainey as the trustee of the living trust.
4. **How did the Association make its standard financial information available to homeowners?**
* *Answer:* Through a homeowner portal where PDFs of approved meeting minutes and summary financial statements (balance sheets, income statements, operating statements) are posted.
5. **Who bears the burden of proof in this administrative proceeding, and what is the standard?**
* *Answer:* The Petitioner bears the burden of proof by a "preponderance of the evidence."
6. **What was the Judge's final ruling regarding the invoices?**
* *Answer:* The Judge ruled that the invoices are association records. The Association violated A.R.S. § 33-1805(A) and Bylaw 6.13 by failing to provide access.
7. **What was the "IPS" mentioned during Stephanie Via's testimony?**
* *Answer:* IPS is the third-party system used by the management company to process and pay vendor invoices.
8. **What financial penalty was assessed against the Association?**
* *Answer:* No civil penalty was assessed, but the Association was ordered to reimburse the Petitioner’s $500.00 filing fee.
---
## III. Essay Questions for Deeper Exploration
1. **The Distinction Between Summary Financials and Source Documents:**
Analyze the Association's argument that summary financial statements fulfill their legal obligations, whereas "source documents" like invoices do not. Why did the Tribunal find this distinction "disingenuous"? In your answer, reference the specific requirements found in the Association's Bylaws (Section 6.13) regarding "itemized" records.
2. **Delegation of Duties vs. Statutory Responsibility:**
The Association Treasurer testified that she does not manage or even see the invoices, as those duties were delegated to the management company (CCMC). Discuss the legal implications of a Board delegating its functions to a third party. Does delegation absolve the Association of its statutory duty to provide records under A.R.S. § 33-1805?
3. **Transparency in Planned Communities:**
Evaluate the Petitioner’s argument that transparency is "not optional" and that summary documents are insufficient for a homeowner to perform a "reconciliation" or "audit" of how funds are spent. Contrast this with the Association’s concern regarding the volume of records (the "100+ page" financial packet). How does the law balance the administrative burden on the association with the member’s right to oversight?
---
## IV. Glossary of Important Terms
* **A.R.S. (Arizona Revised Statutes):** The codified laws of the state of Arizona.
* **Administrative Law Judge (ALJ):** A judge who moves over trials and adjudicates disputes involving administrative agencies.
* **Common Areas:** Property owned or controlled by the Association for the use and benefit of all members (e.g., the lakes in Garden Lakes).
* **Ex-Parte:** A legal action or communication taken by one party without notice to or the presence of the other party. (The Petitioner's subpoena request was noted *not* to be an ex-parte filing).
* **Motion to Quash:** A legal request to a court or tribunal to render a previous order or subpoena null or invalid. The Respondent moved to quash the subpoena for Deborah Taylor.
* **Preponderance of the Evidence:** The standard of proof in most civil cases, meaning the evidence shows that the contention is "more probably true than not."
* **Privileged Communication:** Protected interactions (like those between an attorney and client) that are exempt from disclosure.
* **Record Holder of Legal Title:** The person or entity officially recognized on public deeds as the owner of a property.
* **Subpoena:** A writ ordering a person to attend a court or hearing.
* **Tribunal:** A body of some kind, such as a court or the Office of Administrative Hearings, that has the authority to adjudicate disputes.
* **Variance Report:** A financial document that compares actual expenses against the established budget to identify overages or savings.
# HOA Transparency Win: Why "Source Documents" are Your Right to See In the realm of homeowners associations (HOAs), the line between board oversight and member transparency is a frequent battleground. The case of *Rainey v. The Garden Lakes Community Association* (No. 25F-H061-REL) recently brought this conflict into sharp focus before an Arizona administrative law judge. What began as a homeowner’s simple request to examine vendor invoices ended in a landmark victory for transparency. Despite the HOA’s sophisticated legal maneuvers to classify invoices as "third-party source documents" beyond the reach of members, the court issued a clear mandate: homeowners have a statutory right to see the receipts, not just the summaries. ## The Catalyst: Fish Kills and Financial Curiosities The dispute was sparked by Chad Rainey, a homeowner in the Garden Lakes community, who observed a troubling decline in the quality of the community's lakes. Motivated by recurring "fish kills" and deteriorating aeration systems, Rainey sought to verify how community funds were being utilized for maintenance. To investigate the efficacy of the association’s spending, he requested access to specific invoices from the previous 12 to 24 months for the following accounts: * **Lake Repairs:** Account 66702 * **Fish Stock:** Account 724 * **Water Feature Maintenance & Repairs:** Accounts 618 and 664 * **Chemicals & Lake Dye:** Accounts 70705 and 72308 * **Annual Meeting Expense:** Account 56701 (noted by the Petitioner for appearing unusually high) While the HOA provided copies of basic third-party contracts, they flatly refused to release the actual invoices, sparking a legal showdown over the definition of an "association record." ## The "Gatekeeper" Defense: The HOA’s Argument for Secrecy The Association’s defense relied on a calculated, albeit flawed, interpretation of corporate record-keeping and statutory hierarchy. Their legal team attempted to shield the invoices by arguing they were the property of the management company, not the HOA itself. | HOA Claim | Statutory/Legal Justification Cited | Legal Analyst’s Note | | :--- | :--- | :--- | | **Corporate Records Argument** | Claimed invoices are not "records of the association" under A.R.S. § 10-11601. | Under A.R.S. § 10-11601(F), Title 33 (Planned Communities) explicitly supersedes Title 10 when laws conflict. | | **The "Executive" Nature Claim** | Argued that vendor invoices are private or "executive" in nature. | A.R.S. § 33-1805(B) lists specific exemptions (e.g., litigation, health records); invoices are not among them. | | **Management/Custody Argument** | Claimed that because records were held by CCMC (the management company), the HOA did not "possess" them. | Ownership and custody are distinct; agents hold records on behalf of the principal (the HOA). | The HOA further contended that since their management company utilized a proprietary "IPS" invoicing system, the board itself did not typically review individual documents, thus making them unnecessary for homeowner review. ## Testimony Highlights: The 10:1 Information Gap The hearing testimony revealed a staggering disconnect between the board’s financial oversight and the information provided to the community. * **The "Out-of-the-Loop" Board:** Board Treasurer Deborah Taylor admitted she does not review individual vendor invoices. Instead, she only reviews "Financial Packets" for budget variances. She testified that the board delegates the entire processing and management of invoices to the management company. * **The Manager’s Spending Power:** Community Manager Stephanie Via testified that she possesses a **$2,500 spending limit** for emergencies. This allows her to approve repairs and pay invoices without prior board review, effectively creating a stream of expenditure that neither the board nor the homeowners see at the invoice level. * **The Information Gap:** While the Board receives a "Financial Packet" that can exceed **100 pages**, Via admitted that homeowners are only provided a **14–15 page summary** on the community portal. This 10:1 ratio of information proves that the summaries provided to homeowners are insufficient for real oversight. ## The Legal Turning Point: The Judge’s Ruling Administrative Law Judge Kay A. Abramsohn saw through the Association’s attempts to obfuscate. In a scathing Conclusion of Law, the judge dismissed the HOA’s portrayal of invoices as "executive" or "third-party" as **"disingenuous."** The judge specifically integrated the Association's own Bylaws (Article VI, Section 6.13) into the ruling, noting that the Treasurer is required to keep records **"specifying and itemizing the expenses incurred."** This itemization is impossible without the very invoices the HOA sought to hide. Crucially, the ruling sets a standard for all Arizona HOAs that use third-party managers: custody by a manager does not negate the association’s ownership or the members' right to see the records. > **"Garden’s financial documents are prepared by, and kept in the custody of, Garden’s property management company and, thus, are considered to be Garden’s documents and Garden is obligated to provide access to those documents to homeowners pursuant to ARIZ. REV. STAT. § 33-1805."** ## Final Verdict and Member Impact The Tribunal ruled entirely in favor of the Petitioner, affirming that transparency is a statutory mandate, not a board's discretion. The final order required the Association to: 1. **Grant the Petition:** Formally finding the HOA in violation of state law and its own bylaws. 2. **Provide Full Access:** The HOA was ordered to provide examination access to all requested invoices for lake maintenance, fish stock, and annual meeting expenses. 3. **Pay for the Violation:** The HOA was ordered to reimburse the Petitioner’s **$500 filing fee**. ## What This Means for You This case is a major win for homeowner rights and offers three critical lessons: 1. **"Financial Records" Includes "Source Documents":** The court rejected the idea that "records" only mean summary statements. If a document—like an invoice—is the source of a financial entry, it is a record of the association. 2. **Management is Not a Shield:** An HOA cannot outsource its way out of transparency. Whether a management company holds the files or uses a proprietary software system (like IPS), those records belong to the HOA and must be disclosed. 3. **Statutory Exemptions are Narrow:** Unless a document falls under the specific privacy or legal exemptions in A.R.S. § 33-1805(B) (such as pending litigation or personal health information), the HOA has no legal authority to withhold it. ## Closing Thought Homeowner oversight is the only functional check on how community funds are spent. When boards delegate spending authority to managers—sometimes up to $2,500 at a time—the right to inspect the "receipts" becomes even more critical. This ruling reinforces that transparency is not a courtesy; it is a fundamental legal right that cannot be buried in a management company's filing cabinet. In the battle for the receipts, the law clearly sides with the homeowner’s right to know.
Case Participants
Petitioner Side
- Chad D. Rainey (Petitioner)
Represented himself. - Heather Rainey (Co-Trustee)
HNC Living Trust
Wife of the petitioner; co-trustee of the property.
Respondent Side
- Ashley N. Turner (Attorney)
CHBD Law
Represented The Garden Lakes Community Association. - Deborah Taylor (Treasurer)
The Garden Lakes Community Association
Board member who testified regarding financial records and responsibilities. - Stephanie Villa (Community Manager)
CCMC
Testified regarding the association's management, records, and invoices. Spelled 'Via' in the transcript but 'Villa' in the final decision. - Madison Raider (Summer Associate)
CHBD Law
Observer during the hearing. - Sebastian Shuya (Summer Associate)
CHBD Law
Observer during the hearing.
Neutral Parties
- Kay A. Abramsohn (Administrative Law Judge)
Office of Administrative Hearings
Presided over the hearing and issued the decision.
