Jason West vs. Desert Sage Two Homeowners Association

Posted on October 1, 2019 by [email protected]

Case Summary

Case ID	19F-H1919065-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2019-10-01
Administrative Law Judge	Diane Mihalsky
Outcome	The Petitioner's request for a hearing was denied and the petition was dismissed because the Petitioner failed to prove the Homeowners Association violated A.R.S. § 33-1804(B) or its Bylaw 1.5 by refusing to place a proposed bylaw amendment on the meeting agenda or ballot.
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Jason West	Counsel	—
Respondent	Desert Sage Two Homeowners Association	Counsel	Bradley R. Jardine

Alleged Violations

A.R.S. § 33-1804(B) and Bylaw 1.5

Outcome Summary

The Petitioner's request for a hearing was denied and the petition was dismissed because the Petitioner failed to prove the Homeowners Association violated A.R.S. § 33-1804(B) or its Bylaw 1.5 by refusing to place a proposed bylaw amendment on the meeting agenda or ballot.

Why this result: The relevant statute and HOA bylaws do not mandate that the Board add a member-proposed amendment to the agenda; the member has the independent recourse of gathering member support (25% or 1/4 of votes) to call a special meeting, a route the Petitioner was aware of but did not pursue.

Key Issues & Findings

Failure to place a proposed bylaw amendment on the agenda of the annual meeting

Petitioner alleged Respondent HOA violated A.R.S. § 33-1804(B) and Bylaw 1.5 by refusing to place his proposed bylaw amendment (Bylaw 3.13, concerning banning directors whose actions resulted in a paid claim) on the agenda or ballot for the annual meeting.

Orders: Petition denied because Petitioner did not establish that Respondent violated the cited statute or bylaw by declining to add the proposed amendment to the agenda or ballot.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

A.R.S. § 33-1804(B)
Bylaw 1.5
Bylaw 2.2

Analytics Highlights

Topics: HOA, Bylaw Amendment, Meeting Agenda, Director liability, Statute interpretation

Additional Citations:

A.R.S. § 33-1804(B)
A.R.S. § 32-2199(B)
A.R.S. § 41-1092.07(G)(2)
A.R.S. § 41-1092.09
Respondent’s Bylaw 1.5
Respondent’s Bylaw 2.2

Related election workflow tool

Many HOA election disputes start with preventable workflow problems: unclear ballot language, separate-vote issues, quorum tracking, paper/online reconciliation, proxy handling, or incomplete records. HOABallot is a separate platform built to document the voting workflow from notice through certification.

Preview HOABallot election workflows

Video Overview

Audio Overview

Decision Documents

19F-H1919065-REL Decision – 742075.pdf

Uploaded 2026-04-24T11:21:02 (159.4 KB)

19F-H1919065-REL Decision – 742075.pdf

Uploaded 2026-01-23T17:29:36 (159.4 KB)

Briefing Document: West v. Desert Sage Two Homeowners Association (Case No. 19F-H1919065-REL)

Executive Summary

This document provides a comprehensive analysis of the Administrative Law Judge (ALJ) Decision in the matter of Jason West (Petitioner) versus the Desert Sage Two Homeowners Association (Respondent), Case No. 19F-H1919065-REL. The petition, filed on May 20, 2019, was ultimately denied in a decision issued on October 1, 2019.

The central issue was the Petitioner’s allegation that the Respondent’s Board of Directors violated Arizona statute A.R.S. § 33-1804(B) and its own Bylaw 1.5 by refusing to add his proposed bylaw amendment to the agenda for the annual members’ meeting. The proposed amendment sought to ban directors from serving for five years if their actions resulted in a paid claim against the Association.

The ALJ’s ruling was decisive: the Petitioner failed to meet the burden of proof. The decision rested on a strict interpretation of the relevant statute and bylaws. The ALJ concluded that neither A.R.S. § 33-1804(B) nor the Association’s bylaws compel the Board to place a member-initiated proposal on the agenda of a Board-scheduled meeting. Critically, the bylaws provide a distinct and available remedy for members: Bylaw 2.2 allows members to force a special meeting for any purpose, including bylaw amendments, by gathering the support of 25% of the voting membership. The record showed the Petitioner was aware of this option but did not attempt to use it. Consequently, the petition was dismissed. The Respondent’s request for attorney’s fees was also denied, as the presiding body (the Office of Administrative Hearings) lacks the statutory authority to award them in such proceedings.

1. Case Overview

Case Name

Jason West v. Desert Sage Two Homeowners Association

Case Number

19F-H1919065-REL

Jurisdiction

Office of Administrative Hearings (OAH), Arizona

Presiding Judge

Administrative Law Judge Diane Mihalsky

Hearing Date

September 26, 2019

Decision Date

October 1, 2019

Petitioner

Jason West, appearing on his own behalf

Respondent

Desert Sage Two Homeowners Association, represented by Bradley R. Jardine, Esq.

Core Allegation: The Petitioner alleged that the Respondent’s Board violated state law and its governing documents by refusing to include his proposed bylaw amendment on the agenda and ballot for the annual meeting held in June 2019.

2. The Proposed Bylaw Amendment (Bylaw 3.13)

The Petitioner submitted a proposal to add a new Bylaw 3.13 to the Association’s governing documents. The full text of the proposed amendment is as follows:

Directors whose actions result in a paid claim

In an effort to reduce liability to the Association, any current or former director whose actions have resulted in a paid claim by the Association or its insurance carrier, is banned from serving as a director for a period of five years from the date of the final payment. This five year directorship ban also applies to any other individual co-owning an Association lot with the director. This Amendment is retroactive.

The stated purpose of the amendment was to reduce the Association’s liability. The decision notes that some of the current Board members may have been serving when the Association’s insurance carrier paid legal fees and other costs associated with a previous petition filed by the Petitioner.

3. Chronology of the Dispute

• December 23, 2018: The Petitioner first sent his proposed Bylaw 3.13 amendment to Joanelize Morales, the Association’s property manager.

• January 3 & 4, 2019: The Petitioner emailed Mickey Latz, owner of the management company, demanding the proposal be added to the next meeting’s agenda and ballot. In this correspondence, the Petitioner explicitly stated his awareness of the alternative process, writing, “I can also force the Board to call a Special Meeting of the Members at any time with 10 signatures from members of our Association. This is Article 2.2 of our Bylaws.”

• January – June 2019: Mr. Latz repeatedly informed the Petitioner that the Board, based on legal advice, had decided not to add the proposal to the agenda of a Board-scheduled meeting.

• April 17, 2019: Notice was sent to members for the annual meeting scheduled for June 4, 2019. The agenda was limited to (1) Election of Directors and (2) Approval of 2018 Annual Meeting Minutes. On the same day, the Petitioner re-sent his proposed amendment.

• May 14, 2019: The Petitioner attended a Board meeting and threatened to file a petition with the Department of Real Estate if his amendment was not placed on the agenda.

• May 20, 2019: The Petitioner filed the formal petition that led to this hearing.

• June 3, 2019: A notice was sent rescheduling the meeting to June 20, 2019, with the agenda unchanged.

• June 20, 2019: At the annual meeting, the Petitioner, whose name was on the ballot, was not elected to the Board of Directors.

4. Governing Authorities and Bylaws

The ALJ’s decision centered on the interpretation of one state statute and two specific Association bylaws.

• A.R.S. § 33-1804(B): This Arizona statute governs homeowners’ association meetings. It requires annual meetings and specifies notice requirements. It explicitly provides a mechanism for members to call special meetings: “Special meetings of the members’ association may be called by the president, by a majority of the board of directors or by members having at least twenty-five percent, or any lower percentage specified in the bylaws, of the votes in the association.”

• Bylaw 1.5 (Amendment Process): This bylaw states that amendments can be made “at a regular or special meeting of the Members, by a vote of the Members having a majority (more than 50%) of the votes.” The ALJ found that this bylaw is permissive, allowing for votes on amendments, but does not obligate the Board to place any specific proposal on an agenda.

• Bylaw 2.2 (Special Meetings): This bylaw mirrors the state statute, allowing members to compel a meeting. It states: “Special meetings of the Members may be called at any time … upon written request signed by Members having at least one-fourth (1/4) of the authorized votes… which request shall be delivered to the President or Secretary.”

5. Summary of Key Testimony

The hearing included testimony from the Petitioner and six witnesses he subpoenaed, including property managers and the three current Board members.

• Board Members (Bryan Selna, David Epstein, Linda Seidler): All testified that they consulted with the Association’s attorneys and property management company. Based on the advice received, they collectively decided not to add the Petitioner’s proposal to the agenda.

• Mickey Latz (Property Management Co. Owner): Testified that the Board as a whole, not the secretary, determines the meeting agenda. He affirmed that counsel had advised the Board it was not obligated to add member-requested items. Mr. Latz testified that he explicitly pointed the Petitioner to the process outlined in Bylaw 2.2, which allows members to call their own meetings directly.

• Joanelize Morales (Property Manager): Confirmed that she prepares meeting agendas based on the Board’s instructions. She also testified that the Petitioner never attempted to use the Bylaw 2.2 process to gather the support of his neighbors to schedule a meeting to consider his proposed amendment.

6. Historical Context and Prior Litigation

The decision provides context regarding the Petitioner’s previous interactions with the Association.

• Prior Petition (OAH Case No. 17F-H1716031-REL): In April 2017, the Petitioner filed a petition concerning the Board’s failure to fill vacant positions. On June 28, 2017, an ALJ dismissed that petition, concluding that the Board had done all it could and that vacancies were due in part to the Petitioner’s “obstructionist tactics.”

• Successful Amendment (Bylaw 3.12): In April 2017, the Petitioner proposed a different amendment regarding director resignations. The Board at that time agreed to submit it to a vote, and it was passed by the membership in May 2017.

7. Administrative Law Judge’s Decision and Rationale

The ALJ’s conclusions of law methodically dismantled the Petitioner’s claims, leading to the dismissal of the petition.

• Burden of Proof: The decision established that the Petitioner bore the burden of proving, by a preponderance of the evidence, that the Respondent had violated the statute and bylaw.

• Statutory and Bylaw Interpretation: The ALJ applied a plain-language reading to the governing authorities.

◦ The court found that nothing in the language of A.R.S. § 33-1804(B) requires an HOA board to add an item to an agenda at a member’s request. Instead, it provides the remedy for members to call a meeting themselves.

◦ Similarly, the court concluded that Bylaw 1.5 allows for bylaw amendments to be considered at meetings but does not compel the Board to include such proposals on the agenda of a meeting it has noticed.

◦ The ALJ found that Bylaw 2.2 provides the explicit and proper procedure for a member to bring an issue to a vote when the Board declines to do so: gather support from 25% of the members to call a special meeting.

• Final Ruling: Because the Petitioner failed to establish a violation of any cited statute or bylaw, the petition was ordered to be denied.

• Attorney’s Fees: The Respondent’s request for attorney’s fees was denied. The decision cited legal precedent establishing that administrative bodies like the Department of Real Estate and the OAH are not empowered by the legislature to award attorney’s fees in these types of disputes.

Study Guide: West v. Desert Sage Two Homeowners Association

Short-Answer Quiz

Answer the following questions in 2-3 complete sentences, based on the provided administrative law judge decision.

1. Who are the Petitioner and the Respondent in this case, and what is their relationship?

2. What specific action did the Petitioner, Jason West, allege the Respondent took that violated Arizona statute and the association’s bylaws?

3. Describe the substance of the proposed Bylaw 3.13 that the Petitioner wanted to add to the agenda.

4. What was the Respondent’s primary defense for not adding the proposed bylaw amendment to the annual meeting’s agenda or ballot?

5. According to Bylaw 2.2, what procedural option did the Petitioner have to bring his proposed amendment to a vote without the Board’s approval?

6. What was the outcome of the Petitioner’s previous case against the Respondent in 2017 (OAH Case No. 17F-H1716031-REL)?

7. What two specific authorities did the Petitioner claim the Respondent’s Board violated?

8. According to the Administrative Law Judge’s interpretation, does A.R.S. § 33-1804(B) require an HOA board to add an item to an agenda at a single member’s request?

9. What was the final order of the Administrative Law Judge in this case (No. 19F-H1919065-REL)?

10. What was the judge’s ruling regarding the Respondent’s request for attorney’s fees, and what was the reason for this ruling?

——————————————————————————–

Answer Key

1. The Petitioner is Jason West, who owns a house in the Desert Sage Two development. The Respondent is the Desert Sage Two Homeowners Association, of which the Petitioner is a member.

2. The Petitioner alleged that the Respondent violated A.R.S. § 33-1804(B) and its own Bylaw 1.5. The specific violation was the Board’s failure to place a bylaw amendment proposed by the Petitioner on the agenda of the association’s annual meeting.

3. The proposed Bylaw 3.13 sought to ban any current or former director from serving on the board for five years if their actions resulted in a paid claim by the association or its insurance carrier. This ban would be retroactive and also apply to any individual co-owning a lot with the director.

4. The Respondent’s Board, after consulting with its attorneys and property management company, argued that neither state law nor its bylaws obliged them to add items to an agenda at a single member’s request. They contended that the Petitioner had the option to call a special meeting himself by gathering support from other members.

5. Bylaw 2.2 allows for a special meeting of the members to be called upon a written request signed by members who hold at least one-fourth (25%) of the authorized votes. The Petitioner was aware of this option but had not attempted to use it.

6. In the previous case, the Administrative Law Judge dismissed the Petitioner’s petition. The judge concluded that the Board had done all it could to fill vacant positions and that the Petitioner’s own “obstructionist tactics” were part of the reason no eligible members were willing to serve.

7. The Petitioner claimed the Respondent’s Board violated Arizona Revised Statute § 33-1804(B) and the association’s Bylaw 1.5.

8. No, the judge concluded that nothing in the language of A.R.S. § 33-1804(B) requires a homeowners’ association board to add an item to an agenda or ballot at the request of a single member. The statute only provides that members with at least 25% of the votes can independently call a meeting.

9. The Administrative Law Judge ordered that the Petitioner’s petition be denied. The judge found that the Petitioner had not established that the Respondent’s Board violated either A.R.S. § 33-1804(B) or Bylaw 1.5.

10. The judge ruled that attorney’s fees could not be awarded to the Respondent. The reason given is that the legislature has not empowered the Department of Real Estate or the Office of Administrative Hearings to award attorney’s fees in this type of administrative proceeding.

——————————————————————————–

Essay Questions

Construct a detailed essay response for each of the following prompts, using only evidence and reasoning found within the case document.

1. Analyze the Administrative Law Judge’s method of statutory construction and interpretation of restrictive covenants. How did the judge apply these principles to A.R.S. § 33-1804(B) and Bylaw 1.5 to reach a conclusion?

2. Discuss the balance of power between an individual HOA member and the Board of Directors as illustrated in this case. What rights and recourses are available to a member who disagrees with a Board decision, according to the Respondent’s Bylaws?

3. Explain the concept of “burden of proof” as it applies to this case. Who held the burden of proof, what was the standard required, and why was the Petitioner unable to meet this standard?

4. Examine the history between the Petitioner and the Respondent as detailed in the “Findings of Fact.” How might this prior history, including the 2017 legal case and a previously successful bylaw amendment, have influenced the actions of both parties in the current dispute?

5. Based on the testimony of Michael David (“Mickey”) Latz and the text of the bylaws, contrast the process for placing an item on the agenda of a Board-scheduled meeting versus the process for calling a member-initiated special meeting. What are the key differences in initiative, requirements, and control?

——————————————————————————–

Glossary of Key Terms

Definition from Source Context

Administrative Law Judge (ALJ)

An independent official (Diane Mihalsky) from the Office of Administrative Hearings who presides over evidentiary hearings and issues decisions on petitions filed with the Arizona Department of Real Estate.

A.R.S. § 33-1804(B)

An Arizona statute cited by the Petitioner. It stipulates that an HOA members’ meeting must be held at least annually and that special meetings can be called by the president, a board majority, or members with at least 25% of the votes.

Bylaw 1.5

A bylaw of the Desert Sage Two HOA that states the Bylaws may be amended at a regular or special meeting by a majority vote of members present in person or by proxy.

Bylaw 2.2

A bylaw of the Desert Sage Two HOA that allows for special meetings of the members to be called by the president, the Board, or upon written request from members holding at least one-fourth (25%) of the votes.

Department

The Arizona Department of Real Estate, the state body authorized to receive and decide petitions for hearings from members of homeowners’ associations.

Homeowners’ Association

An organization whose members own property and/or residences in a specific development (in this case, Desert Sage Two in Scottsdale, Arizona).

Office of Administrative Hearings (OAH)

An independent state agency to which the Department refers petitions for an evidentiary hearing.

Petitioner

Jason West, the member of the homeowners’ association who filed the petition alleging a violation by the association’s Board.

Petition

A formal complaint filed with the Department of Real Estate by an HOA member or the HOA itself concerning alleged violations.

Preponderance of the evidence

The burden of proof standard required in the hearing. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not” and as evidence with “the most convincing force.”

Respondent

The Desert Sage Two Homeowners Association, the entity against which the petition was filed.

Restrictive Covenant

A rule or provision within community documents, like bylaws, that is enforced to give effect to the intent of the parties if it is unambiguous.

Select all sources

742075.pdf

No emoji found

19F-H1919065-REL

1 source

This text is an Administrative Law Judge Decision from the Arizona Office of Administrative Hearings (OAH) concerning a dispute between a homeowner, Jason West (Petitioner), and his association, the Desert Sage Two Homeowners Association (Respondent). The Petitioner alleged that the Respondent violated Arizona statute (A.R.S. § 33-1804(B)) and an association bylaw by refusing to place his proposed bylaw amendment on the agenda of the annual meeting. The proposed amendment sought to ban directors whose actions resulted in a paid insurance claim from serving for five years, but the Administrative Law Judge (ALJ) found that neither the statute nor the association’s bylaws required the Board to add a member-proposed item to a scheduled agenda or ballot. Therefore, the ALJ concluded that the Petitioner failed to prove a violation and denied the petition.

What was the specific legal and procedural context of this homeowners association dispute?

How did the Petitioner’s proposed bylaw amendment attempt to alter Board member liability?

What statutory and bylaw provisions guided the final Administrative Law Judge decision?

Case Participants

Petitioner Side

Jason West (petitioner)

Respondent Side

Bradley R. Jardine (HOA attorney)
Jardine, Baker, Hickman, & Houston, PLLC
Represented Respondent
Edward A. Padilla (property manager)
Desert Sage Two Homeowners Association
Property manager in May 2017; testified for Petitioner; also referred to as 'Eddie'
Joanelize Morales (property manager)
Desert Sage Two Homeowners Association
Property manager since August 2018; testified for Petitioner
Bryan Robert Selna (board member)
Desert Sage Two Homeowners Association
Current Vice President of Respondent's Board; testified for Petitioner
David Epstein (board member)
Desert Sage Two Homeowners Association
Current President of Respondent's Board; testified for Petitioner
Linda Maria Seidler (board member)
Desert Sage Two Homeowners Association
Current Secretary of Respondent's Board; testified for Petitioner
Michael David Latz (property manager)
Golden Valley Property Management
Owner of Golden Valley Property Management; testified for Petitioner; also referred to as 'Mickey'

Neutral Parties

Diane Mihalsky (ALJ)
Office of Administrative Hearings
Judy Lowe (ADRE Commissioner)
Arizona Department of Real Estate

Peter de Scheel vs. Sandpiper Scottsdale Association, Inc.

Posted on June 19, 2019 by [email protected]

Case Summary

Case ID	19F-H1919048-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2019-06-19
Administrative Law Judge	Velva Moses-Thompson
Outcome	The ALJ granted the petition, finding that the HOA violated the CC&Rs. The evidence established that architectural beams are part of the 'exterior' which the Association must maintain, rather than the 'roof' which is excluded from Association maintenance. The HOA failed to prove by a preponderance of the evidence that beams were part of the roof.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Peter de Scheel	Counsel	—
Respondent	Sandpiper Scottsdale Association, Inc.	Counsel	Bradley R. Jardine

Alleged Violations

Article V Section 1; Article VI Section 1(c)

Outcome Summary

The ALJ granted the petition, finding that the HOA violated the CC&Rs. The evidence established that architectural beams are part of the 'exterior' which the Association must maintain, rather than the 'roof' which is excluded from Association maintenance. The HOA failed to prove by a preponderance of the evidence that beams were part of the roof.

Key Issues & Findings

Exterior Maintenance Responsibility (Architectural Beams)

Petitioner alleged the HOA violated CC&Rs by requiring him to repair architectural beams. The dispute centered on whether beams were part of the 'roof' (owner responsibility) or 'exterior' (HOA responsibility).

Orders: Respondent shall reimburse Petitioner the $500.00 filing fee. Respondent is responsible for the repair and maintenance of architectural beams.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

Article V Section 1
Article VI Section 1(c)

Video Overview

Audio Overview

Decision Documents

19F-H1919048-REL Decision – 716710.pdf

Uploaded 2026-04-24T11:19:18 (103.6 KB)

19F-H1919048-REL Decision – 716710.pdf

Uploaded 2026-01-27T21:16:30 (103.6 KB)

Administrative Law Judge Decision: de Scheel v. Sandpiper Scottsdale Association, Inc.

Executive Summary

This briefing document analyzes the administrative decision in the matter of Peter de Scheel vs. Sandpiper Scottsdale Association, Inc. (No. 19F-H1919048-REL). The dispute centered on whether the Sandpiper Scottsdale Association (the Respondent) or the homeowner, Peter de Scheel (the Petitioner), was responsible for the repair and maintenance of architectural wood beams on the Petitioner’s property.

The Administrative Law Judge (ALJ), Velva Moses-Thompson, ruled in favor of the Petitioner. The decision determined that under the Association's Covenants, Conditions, and Restrictions (CC&Rs), architectural wood beams are classified as part of the "exterior building surfaces," which the Association is obligated to maintain. The Association's argument that the beams were part of the roof—an item specifically excluded from Association maintenance—was rejected. As a result, the Association was ordered to cease requiring the Petitioner to perform these repairs and to reimburse his $500 filing fee.

Analysis of Key Themes

1. Interpretation of Maintenance Obligations under CC&Rs

The core of the legal dispute rested on the interpretation of Article V, Section 1 and Article VI, Section 1(c) of the Respondent’s CC&Rs.

Association Obligations: The CC&Rs mandate that the Association provide exterior maintenance for each "Improved Lot." This includes painting, repairing, replacing, and caring for "exterior building surfaces and other such exterior improvements."
Specific Exclusions: The CC&Rs list specific items for which the Association is not responsible. These include:
Roofs (except for Condominium Lots).
Glass surfaces, air conditioning units, and landscaping (trees, shrubs, grass).
Walks, driveways, and parking areas.
Improvements within a patio or enclosed yard.

The Petitioner successfully argued that because architectural wood beams were not specifically listed in these exclusions, they fell under the general category of "exterior building surfaces" maintained by the Association.

2. The Distinction Between "Roof" and "Architectural Beams"

The Respondent attempted to classify the architectural beams as part of the "roof" to trigger the maintenance exclusion. However, the ALJ found this argument inconsistent with the Association's own communications. Both the community manager and the Board President had issued communications (newsletters and emails) that listed "roofs" and "architectural beams" as separate items.

The Judge concluded that the Respondent failed to prove by a preponderance of the evidence that architectural beams are legally or functionally part of the roof. Instead, the evidence supported the conclusion that they are exterior building surfaces.

3. Burden of Proof and Evidentiary Standards

The case was decided based on the preponderance of the evidence—meaning the proof showed the Petitioner’s contention was "more probably true than not."

Petitioner’s Burden: To establish that the Association violated the CC&Rs by shifting maintenance responsibility to the homeowner.
Respondent’s Burden: To establish affirmative defenses (e.g., that the beams were part of the roof and thus excluded from Association maintenance).

The court found the Petitioner met his burden, while the Respondent did not provide sufficient evidence to support its reclassification of the beams.

4. Association Classification (Planned Unit Development vs. Condominium)

A secondary theme involved the legal nature of the Association. While the CC&Rs contained language regarding "Condominium Lots," the Board President testified that the development is a Planned Unit Development (PUD) and never met the criteria for a condominium association because a "declaration of horizontal property regime" was never submitted. This distinction influenced the application of Article V, Section 1, which has different roof maintenance rules for Condominium Lots versus standard Improved Lots.

Important Quotes with Context

Quote	Context
"The Association shall provide exterior maintenance upon each Improved Condominium Lot and Improved Lot… as follows: paint, repair, replace and care for exterior building surfaces."	Article V, Section 1 of the CC&Rs. This serves as the primary basis for the Association's duty to maintain the exterior of the homes.
"Such exterior maintenance shall not include roofs, except in the case of Improved Condominium Lots."	Article V, Section 1 of the CC&Rs. This is the specific exclusion the Association attempted to use to avoid responsibility for the beams.
"Please remember that our CC&Rs require each owner to maintain their property including driveways, roofs, architectural beams and posts…"	Newsletter/Email from Respondent. This internal communication was used as evidence against the Association, as it listed roofs and beams as separate entities.
"Respondent did not establish by a preponderance of the evidence that the architectural beams are a part of the roof."	ALJ Conclusion of Law. The Judge's final determination on the Association's primary defense.
"Restrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein."	Legal Standard cited by the ALJ. Explains the methodology used to interpret the Association's governing documents.

Actionable Insights

For Homeowners’ Associations (HOAs)

Consistency in Communication: Associations must ensure that newsletters and informal communications do not contradict or broaden the scope of the CC&Rs. By listing "beams" separately from "roofs" in a newsletter, the Association undermined its own legal argument that beams were part of the roof.
Definition of Exclusions: If an Association intends for specific exterior elements (like beams or posts) to be the owner's responsibility, those items should be explicitly listed in the "Exclusions" section of the CC&Rs.
Historical Practice vs. Written Code: The Association argued that homeowners had "historically" repaired roofs. However, historical practice does not override unambiguous language in the CC&Rs regarding "exterior building surfaces."

For Homeowners

Reviewing Specific CC&R Articles: When faced with a repair notice, homeowners should cross-reference the specific repair requested against the "Exterior Maintenance" sections of their CC&Rs.
Identifying Omissions: If a specific architectural feature is not listed in the "Association shall not maintain" list, there is a strong legal argument that it remains the Association's responsibility as an "exterior surface."

Legal Implications

Reimbursement of Fees: Under A.R.S. § 32-2199.02(B), if an Association is found in violation of its governing documents, it may be ordered to reimburse the Petitioner’s filing fees ($500 in this case).
Binding Nature: The ALJ’s order is binding unless a rehearing is granted by the Commissioner of the Department of Real Estate within 30 days.

Study Guide: de Scheel v. Sandpiper Scottsdale Association, Inc.

This study guide provides a comprehensive overview of the administrative law case Peter de Scheel v. Sandpiper Scottsdale Association, Inc. (No. 19F-H1919048-REL). It covers the legal disputes regarding homeowner association (HOA) maintenance responsibilities, the interpretation of restrictive covenants, and the evidentiary standards used in Arizona administrative hearings.

1. Case Overview and Background

Core Dispute

The primary issue in this case was determining whether the homeowner (Petitioner) or the Homeowners Association (Respondent) was responsible for the repair and maintenance of disintegrating architectural wood beams.

Petitioner: Peter de Scheel, a homeowner in the Sandpiper Scottsdale Association.
Respondent: Sandpiper Scottsdale Association, Inc., a planned unit development.
Initial Action: In August 2018, the HOA notified the Petitioner that he must repair his architectural wood beams by December 25, 2018. The Petitioner argued the HOA was responsible under the community's governing documents.

Legal Context

The case was heard by the Office of Administrative Hearings under the authority of the Arizona Department of Real Estate (ADRE). Per A.R.S. § 32-2199(B), the ADRE is authorized to decide petitions regarding violations of planned community documents.

2. Key Legal Concepts

The Burden of Proof

In this administrative matter, the Petitioner held the burden of proof to establish a violation of the Covenants, Conditions, and Restrictions (CC&Rs) by a preponderance of the evidence.

Definition: A preponderance of the evidence means that the contention is "more probably true than not" or possesses "superior evidentiary weight."
Affirmative Defenses: The Respondent bears the burden to establish any affirmative defenses using the same standard.

Interpretation of CC&Rs

Arizona law requires that unambiguous restrictive covenants be enforced to give effect to the intent of the parties. Covenants must be:

Construed as a whole.
Interpreted in view of their underlying purposes.
Evaluated to give effect to all provisions contained within them.

Governing CC&R Articles

The case centered on the following provisions from the Sandpiper Scottsdale Association CC&Rs:

Provision	Title	Key Language/Requirement
Article V, Section 1	Exterior Maintenance	The Association shall provide exterior maintenance upon each Improved Lot (paint, repair, replace exterior building surfaces).
Article VI, Section 1(c)	Duties and Powers	The Association shall maintain the exterior of Living Units subject to the limitations in Article V.
Article I, Section 9	Definitions	Defines "Lot" and "Improved Lot" (a lot with a completed single-family residence).

3. Evidence and Testimony

Arguments for the Homeowner (Petitioner)

Architectural beams are part of the exterior building surface.
Article V, Section 1 does not list "architectural beams" as an exception to the Association’s maintenance duties.
While roofs are an exception, architectural beams are distinct from the roof.

Arguments for the Association (Respondent)

Historical Practice: The Association has consistently required homeowners to repair beams for years.
Roof Categorization: The Board President argued that architectural beams are functionally part of the roof (which homeowners are responsible for maintaining).
Association Status: Although the CC&Rs mention "condominiums," the Association argued it is a planned unit development because no declaration of horizontal property regime was ever submitted.

Findings of the Administrative Law Judge (ALJ)

The ALJ determined that the Association failed to prove that architectural beams are part of the roof. Because the CC&Rs specifically distinguished roofs from architectural beams in newsletters and failed to list beams as an exception in Article V, the Association was found responsible for their maintenance.

4. Short-Answer Practice Questions

What was the specific deadline given to the Petitioner to repair the wood beams?

Answer: December 25, 2018.

According to Article V, Section 1, what are the specific exceptions to the Association's exterior maintenance responsibility?

Answer: Roofs (except for Improved Condominium Lots), glass surfaces, air conditioning units, trees, shrubs, grass, walks, driveways, parking areas, landscaping, and improvements within patio or enclosed yard spaces.

What amount was the Respondent ordered to reimburse the Petitioner following the decision?

Answer: $500.00 (the filing fee for the petition).

Who served as the Administrative Law Judge for this case?

Answer: Velva Moses-Thompson.

How does Article I, Section 9 define an "Improved Lot"?

Answer: A Lot upon which has been completed a single-family residence.

Under what Arizona Revised Statute is the Order binding on the parties?

Answer: A.R.S. § 32-2199.02(B).

5. Essay Prompts for Deeper Exploration

The Role of Historical Practice vs. Written Contract: Analyze the Association's argument that they had "consistently required" homeowners to repair beams since 1984. Why did the ALJ prioritize the written text of the CC&Rs over the historical testimony of the community managers?
Ambiguity in Restrictive Covenants: The Respondent argued that architectural beams should be considered part of the roof. Discuss how the Association’s own communication (newsletters and emails) undermined this argument and how it impacted the ALJ’s determination that the beams were part of the "exterior."
Condominium vs. Planned Unit Development: The CC&Rs describe a "planned residential area consisting of townhouses, interspersed condominiums and common area." However, testimony suggested the Association never met the criteria for a condominium. Explain how this distinction (or lack thereof) influenced the interpretation of maintenance responsibilities for roofs under Article V.

6. Glossary of Important Terms

A.R.S. § 32-2199: The Arizona statute granting the Department of Real Estate the authority to hear disputes between homeowners and associations.
CC&Rs (Covenants, Conditions, and Restrictions): The governing documents that outline the rules, requirements, and responsibilities of homeowners and the association within a development.
Declarant: The entity (usually the developer) that originally created the CC&Rs and the community.
Horizontal Property Regime: A legal structure required to officially establish a condominium; the Respondent argued this was never submitted.
Improved Lot: A plot of land within the subdivision that has a completed single-family residence.
Living Unit: A term used in the CC&Rs to refer to the individual residential structures within the development.
Preponderance of the Evidence: The evidentiary standard in civil and administrative cases requiring that a claim be more likely true than not.
Restrictive Covenant: A provision in a deed or a set of CC&Rs that limits or dictates the use of the property or the obligations of the owner.

Homeowner vs. HOA: Who Really Pays for Architectural Wood Beams?

1. Introduction: The High Stakes of HOA Maintenance

In the often-contentious world of planned communities, few things trigger a legal battle faster than a high-cost repair bill. For many homeowners, the relationship with their Homeowners’ Association (HOA) is a delicate balance of shared benefits and individual burdens. However, when an Association attempts to shift its maintenance obligations onto individual owners through creative—and often legally flawed—interpretations of governing documents, the stakes escalate from mere disagreement to a pivotal fight for property rights.

The case of Peter de Scheel vs. Sandpiper Scottsdale Association, Inc. serves as a landmark victory for homeowners facing arbitrary assessments. At the center of this dispute was a seemingly simple question: Who is responsible for "disintegrating" architectural wood beams? The outcome provides a masterclass in how to hold a Board accountable to the literal text of the law.

2. The "Beams of Contention": Background of the Dispute

The conflict began on August 21, 2018, when the Sandpiper Scottsdale Association (the Association) issued a formal notification to homeowner Peter de Scheel. The Association alleged that the architectural wood beams on his property were "disintegrating" and demanded their repair by December 25, 2018.

Mr. de Scheel, recognizing the financial implications of this demand, challenged the Board's authority. He argued that under the community’s Covenants, Conditions, and Restrictions (CC&Rs), the maintenance of these structural exterior elements was the Association's responsibility, not his. When the Association refused to yield, de Scheel took the necessary legal step to protect his interests: he filed a single-issue petition with the Arizona Department of Real Estate on February 14, 2019. He alleged a direct violation of Article V and Article VI of the CC&Rs, setting the stage for an evidentiary hearing to determine the boundaries of contractual obligation.

3. Decoding the CC&Rs: What the Rules Actually Say

As any seasoned legal analyst knows, the CC&Rs are the "constitution" of the community. In this case, the Administrative Law Judge (ALJ) focused on Article V, Section 1 and Article VI, Section 1(c) to determine where the Association’s duties ended and the Homeowner’s began.

The Association’s Maintenance Scope Per the CC&Rs, the Association is mandated to provide exterior maintenance upon each Improved Lot, specifically to:

Paint, repair, and replace exterior building surfaces.
Maintain and care for "other such exterior improvements."

The Explicit Exceptions The governing documents also provide a definitive list of items the Association is not responsible for. These exceptions are narrow and must be interpreted strictly:

Roofs (Except in the case of Improved Condominium Lots).
Glass surfaces and air conditioning units.
Landscaping, including trees, shrubs, and grass.
Walks, driveways, and parking areas.
Improvements built by an owner within a patio or enclosed yard space.

The Critical Omission Under the principle of contractual interpretation, what is not listed is often as important as what is. The ALJ noted that "architectural beams" were conspicuously absent from the list of exceptions. Furthermore, the definition of an "Improved Lot" in Article I, Section 13 made a clear distinction between a standard Lot and a Condominium Lot—a distinction that would later prove fatal to the Association’s defense.

4. The HOA’s Defense: A Failure of Legal Consistency

The Association’s defense strategy relied on a blend of witness testimony and a shifting legal identity. Witnesses Mary Lou Pace (Community Manager), Pamela L. Polo (Former Property Manager), and Carol Nesland (Board President) all attempted to argue that architectural beams should be classified as part of the "roof," thereby falling under the maintenance exception.

However, the Association struggled with its own legal standing. In its initial written answer to the petition, the Association claimed to be a condominium association. Yet, during the hearing, Board President Carol Nesland reversed this position, admitting the Association was actually a planned unit development (PUD). She conceded that the developers had never filed a "declaration of horizontal property regime"—the legal instrument required to create a condominium. Without this regime, the Association could not legally enforce the "roof" exception against Mr. de Scheel, as the CC&Rs only applied that exception to "Improved Condominium Lots."

Perhaps most damaging to the Association was its own history of communication. The Homeowner presented a January 2019 email from the Community Manager and a newsletter from the Board President that explicitly listed "roofs" and "architectural beams" as separate maintenance items. In legal terms, this constituted a "party admission." By distinguishing between the two in their own correspondence, the Association undermined their affirmative defense that the beams were merely an extension of the roof.

5. The Verdict: A Victory for Homeowner Clarity

The ALJ applied the "Preponderance of the Evidence" standard, which requires the evidence to show that a contention is "more probably true than not." While the Homeowner bore the initial burden of proving a violation, the Association bore the burden of proving its affirmative defense—that the beams fell under the roof exception.

The judge found the Association’s arguments unconvincing. The evidence demonstrated that the beams were exterior building surfaces, and the Association failed to prove they were legally part of the roof.

The Final Order On June 19, 2019, the ALJ ruled in favor of the Homeowner, Peter de Scheel. The Association was found in violation of the CC&Rs for attempting to force the Homeowner to repair the beams. In a final symbolic and financial victory for de Scheel, the judge ordered the Association to reimburse the Homeowner’s $500.00 filing fee.

6. Key Takeaways for Homeowners and Boards

This case serves as a vital reminder that an HOA's power is not absolute; it is strictly limited by its own governing documents.

Specificity in CC&Rs is Mandatory: If an item is not explicitly listed as an exception to the Association’s maintenance duties, it generally remains the Association’s responsibility under "exterior building surfaces." Courts will not "read in" exceptions that aren't there.
Internal Communications are Evidence: Newsletters and emails are not just community updates; they are legal records. When a Board separates items in a newsletter for "clarity," they may inadvertently create evidence that those items are legally distinct entities.
The Burden of Affirmative Defenses: If an HOA claims a maintenance item is a homeowner’s responsibility based on an exception in the CC&Rs, the HOA bears the burden of proving that exception applies. A failure to maintain legal consistency—such as the "Condo vs. PUD" flip-flop seen here—can destroy the Board's credibility.

Homeowners should never accept a Board's demand for repair at face value. Before opening your wallet, conduct an audit of your CC&Rs. If the documents do not explicitly exempt the Association from maintaining a specific exterior element, the Law may be on your side.

Case Participants

Petitioner Side

Peter de Scheel (Petitioner)
Homeowner
Appeared on behalf of himself

Respondent Side

Bradley R. Jardine (Attorney)
Jardine, Baker, Hickman & Houston, P.L.L.C.
Attorney for Sandpiper Scottsdale Association, Inc.
Mary Lou Pace (Community Manager)
Sandpiper Scottsdale Association, Inc.
Witness; also referred to as Mary Loud Pace
Carol Nesland (Board President)
Sandpiper Scottsdale Association, Inc.
Witness; President of the Board of Directors
Pamela L. Polo (Former Property Manager)
Sandpiper Scottsdale Association, Inc.
Witness; manager from 1984 to 2015

Neutral Parties

Velva Moses-Thompson (Administrative Law Judge)
Office of Administrative Hearings
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Recipient of the transmitted order

Brian Sopatyk vs. The Lakeshore Village Condo. Association, Inc.

Posted on June 26, 2017 by [email protected]

Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID	17F-H1716004-REL-RHG
Agency	ADRE
Tribunal	OAH
Decision Date	2017-08-10
Administrative Law Judge	Thomas Shedden
Outcome	The ALJ decision, certified as the final administrative decision, dismissed the Petitioner's claim after rehearing, finding that the Petitioner failed to prove the Association violated A.R.S. § 33-1260. The challenged $660 fee was determined to be a permissible working capital contribution under the CC&Rs, not a fee restricted by the statutory cap on resale disclosure services.
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Brian Sopatyk	Counsel	Nathan Andrews
Respondent	The Lakeshore Village Condo. Association, Inc.	Counsel	Bradley R. Jardine

Alleged Violations

ARIZ. REV. STAT. section 33-1260

Outcome Summary

The ALJ decision, certified as the final administrative decision, dismissed the Petitioner's claim after rehearing, finding that the Petitioner failed to prove the Association violated A.R.S. § 33-1260. The challenged $660 fee was determined to be a permissible working capital contribution under the CC&Rs, not a fee restricted by the statutory cap on resale disclosure services.

Why this result: Petitioner failed to meet the burden of proof; the fee in question was determined to be a working capital fee/assessment governed by the CC&Rs and ARS § 33-1242(A)(2), and not subject to the limitation set forth in ARS § 33-1260.

Key Issues & Findings

Alleged excessive fee collection for resale disclosure/transfer services

Petitioner alleged the Association violated A.R.S. § 33-1260 by charging a $660 fee, which he argued exceeded the statutory maximum of $400 for resale disclosure/transfer services. The Association argued the $660 fee was a working capital contribution mandated by CC&R section 8.13 and was mislabeled, and therefore not subject to the statutory limitations of § 33-1260.

Orders: Brian D. Sopatyk’s petition is dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

ARIZ. REV. STAT. section 33-1260
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
ARIZ. REV. STAT. § 32-2199.01
ARIZ. REV. STAT. § 32-2199.02
ARIZ. REV. STAT. § 33-1242(A)(2)

Analytics Highlights

Topics: HOA fee dispute, Working capital fee, Transfer fee, Resale disclosure, Statutory interpretation

Additional Citations:

ARIZ. REV. STAT. § 33-1260
ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
ARIZ. ADMIN. CODE § R2-19-119
ARIZ. REV. STAT. § 32-2199.01
ARIZ. REV. STAT. § 32-2199.02
ARIZ. REV. STAT. § 33-1242(A)(2)

Video Overview

Audio Overview

Decision Documents

17F-H1716004-REL-RHG Decision – 571793.pdf

Uploaded 2026-04-24T11:00:00 (96.8 KB)

17F-H1716004-REL-RHG Decision – 580965.pdf

Uploaded 2026-04-24T11:00:09 (61.2 KB)

17F-H1716004-REL-RHG Decision – 593042.pdf

Uploaded 2026-04-24T11:00:20 (100.9 KB)

17F-H1716004-REL-RHG Decision – 593045.pdf

Uploaded 2026-04-24T11:00:26 (59.2 KB)

17F-H1716004-REL-RHG Decision – 531040.pdf

Uploaded 2026-01-23T17:17:41 (67.9 KB)

17F-H1716004-REL-RHG Decision – 540004.pdf

Uploaded 2026-01-23T17:17:44 (154.0 KB)

Briefing: Sopatyk v. Lakeshore Village Condominium Association, Inc.

Executive Summary

This document synthesizes the findings and outcomes of an administrative legal case brought by petitioner Brian Sopatyk against The Lakeshore Village Condominium Association, Inc. The core of the dispute was Mr. Sopatyk’s allegation that the Association charged a “transfer fee” of $660 upon the sale of a condominium unit, in violation of Arizona Revised Statute (A.R.S.) § 33-1260, which caps fees for resale disclosure services at an aggregate of $400.

Following an initial hearing and a subsequent rehearing, the Administrative Law Judge (ALJ) consistently ruled in favor of the Association, dismissing Mr. Sopatyk’s petition on both occasions. The central finding was that the petitioner failed to prove a statutory violation by a preponderance of the evidence. The Association successfully argued that the disputed $660 charge was not a resale disclosure fee governed by A.R.S. § 33-1260, but rather a “working capital fee” authorized by its Covenants, Conditions, and Restrictions (CC&Rs). The Association admitted that this fee had been historically mislabeled as a “transfer fee,” an error it had since identified and corrected. The actual fee charged for resale disclosure documents was a separate, compliant $30 “statement fee.” The ALJ’s decision from the rehearing was certified as the final administrative decision in the matter on August 10, 2017.

Case Overview

Case Number

17F-H1716004-REL (Initial Hearing)
17F-H1716004-REL-RHG (Rehearing)

Jurisdiction

State of Arizona, Office of Administrative Hearings

Petitioner

Brian Sopatyk

Respondent

The Lakeshore Village Condominium Association, Inc.

Core Allegation

Violation of A.R.S. § 33-1260, which limits fees for resale disclosure services to a maximum of $400.

Final Outcome

Petition Dismissed. The Respondent was deemed the prevailing party.

Chronology of Legal Proceedings

March 2, 2015

The Association issues a disclosure statement for Mr. Sopatyk’s purchase, showing a $660 “transfer fee” and a $30 “statement fee.”

May 18, 2016

Prompted by Mr. Sopatyk, the Association’s Board discusses the fee structure. It concludes the $660 fee is a mislabeled “working capital fee” and not a statutory violation.

August 9, 2016

Mr. Sopatyk files a petition with the Arizona Department of Real Estate alleging the violation.

November 14, 2016

The initial administrative hearing is conducted before ALJ Thomas Shedden.

November 29, 2016

ALJ Shedden issues a decision dismissing Mr. Sopatyk’s petition.

December 13, 2016

The Commissioner of the Department of Real Estate adopts the ALJ’s recommendation, issuing a Final Order to dismiss the petition.

Post-Dec. 2016

Mr. Sopatyk requests a rehearing of the matter.

June 9, 2017

The rehearing is conducted, again before ALJ Thomas Shedden.

June 26, 2017

ALJ Shedden issues a new decision, once again dismissing Mr. Sopatyk’s petition.

August 10, 2017

With no modifying action from the Department of Real Estate, the ALJ’s June 26 decision is certified as the final administrative decision.

Core Dispute Analysis

The case centered on the interpretation and classification of two fees charged by the Association during the sale of Mr. Sopatyk’s condominium unit.

Petitioner’s Position (Brian Sopatyk)

• Allegation of Violation: Mr. Sopatyk alleged that the Association charged a “transfer fee” of $660, which directly contravened the $400 statutory maximum established by A.R.S. § 33-1260 for services related to resale disclosure.

• Evidence Presented: The petitioner submitted a March 2, 2015 disclosure form from the Association listing both a “660transferfee”anda”30 statement fee.” A HUD-1 disclosure statement for the purchase was also entered, showing the $660 “Transfer Fee” was split, with $330 paid from the buyer’s (Sopatyk’s) funds and $330 from the seller’s funds.

• Contradictory Testimony: The ALJ noted a discrepancy in the petitioner’s statements. The sworn petition stated the $660 fee was split between him and the seller, while his testimony at the rehearing claimed he “had in fact paid the entire $660 as part of the negotiated price.” The ALJ decision stated, “either Mr. Sopatyk’s sworn statement or his testimony must be false.”

• Requested Remedies: Mr. Sopatyk requested that the Association be ordered to comply with the statute, that refunds be paid to those who paid fees in excess of the statutory maximum, and that a civil penalty be imposed against the Association.

Respondent’s Position (The Lakeshore Village Condo. Assoc.)

• Distinction Between Fees: The Association’s central argument was that two separate and legally distinct fees were assessed:

1. A $30 Resale Statement Fee: This was the charge for preparing documents pursuant to A.R.S. § 33-1260 and was well within the $400 limit.

2. A $660 Working Capital Fee: This fee was authorized under a separate provision, Section 8.13 of the Association’s CC&Rs, which mandates an assessment from each new owner equal to two monthly installments to fund the Association’s working capital (reserve) fund.

• “Mislabeled” Fee: The Association acknowledged that the $660 working capital fee was incorrectly labeled as a “transfer fee.” Association Manager Amy Telnes testified that she received erroneous information from the prior manager and had been using the wrong label.

• Board Action and Corrective Measures: The minutes from the May 18, 2016 Board meeting show that the Board, after reviewing a legal opinion, concluded the issue was one of “labeling, not violating the statute.” The Board directed Ms. Telnes to perform an accounting and transfer all such fees collected into the Reserve Account. To prevent future confusion, the Board also voted to assess a single $400 transfer fee on all future transactions, with no other fees.

• Fund Allocation: Ms. Telnes testified that the $660 fee was deposited into the Association’s reserve fund, consistent with its purpose as a working capital contribution, while the $30 fee was the charge pursuant to A.R.S. § 33-1260(C).

Administrative Law Judge’s Findings and Rulings

ALJ Thomas Shedden presided over both the initial hearing and the rehearing, reaching the same conclusion in both instances.

Key Rulings and Legal Reasoning

• Burden of Proof: The ALJ established that Mr. Sopatyk, as the petitioner, bore the burden of proving the alleged violation by a “preponderance of the evidence.”

• Core Finding: The evidence demonstrated that the Association charged two distinct fees. The $30 fee was for document preparation under A.R.S. § 33-1260, while the $660 fee was a working capital assessment authorized by CC&R Section 8.13. The ALJ concluded that A.R.S. § 33-1260 was not applicable to the $660 fee.

• Conclusion on Violation: Based on the evidence, including the testimony of the Association manager and the board meeting minutes, the ALJ found that the $660 fee was mislabeled but was not collected for services related to resale disclosure. Therefore, Mr. Sopatyk did not meet his burden to show that the Association violated the statute.

• Rejection of Harm-Based Argument: The ALJ did not accept the Association’s argument that the claim should fail because Mr. Sopatyk did not personally pay over $400. The judge clarified that A.R.S. § 33-2199.01 “does not require this type of particularized harm, but rather applies to all statutory violations.”

• Dismissal of Petition: In both the November 29, 2016 decision and the June 26, 2017 decision, the order was to dismiss Mr. Sopatyk’s petition and deem the Association the prevailing party.

Final Disposition and Legal Status

The decision issued by ALJ Shedden on June 26, 2017, was transmitted to the Arizona Department of Real Estate. The Department had until August 1, 2017, to accept, reject, or modify the decision. As no action was taken by the deadline, the Office of Administrative Hearings issued a Certification of Decision of Administrative Law Judge on August 10, 2017. This certification established the ALJ’s decision as the final administrative decision of the Department of Real Estate in the matter.

Key Legal Citations and Definitions

• A.R.S. § 33-1260 (Resale of Units; Information Required): This Arizona statute governs the information a condominium association must provide to a prospective purchaser. It explicitly limits the fees an association can charge for these services:

• CC&R Section 8.13 (Transfer Fee and Working Capital Fund): This section of The Lakeshore Village Condominium Association’s governing documents provides the authority to collect a fee from new owners for a different purpose:

• Preponderance of the Evidence: The standard of proof required for the petitioner to prevail, defined in the legal decisions as:

Study Guide: Sopatyk v. The Lakeshore Village Condo. Association, Inc.

Short Answer Quiz

Instructions: Answer the following questions in 2-3 complete sentences, drawing exclusively from the information provided in the case documents.

1. Identify the petitioner and the respondent in this case, and state the core legal violation the petitioner alleged.

2. What specific fees were charged during the petitioner’s condominium purchase that became the central point of the dispute?

3. According to the Association, what was the true nature of the $660 fee, and how did it explain the “transfer fee” label on the disclosure documents?

4. What role did Amy Telnes, the Association manager, play in explaining the history of the disputed fee?

5. What actions did the Association’s Board take during its meeting on May 18, 2016, to address the petitioner’s concerns and correct its internal procedures?

6. Who held the burden of proof in this matter, and what was the legal standard required to meet that burden?

7. What was the official outcome of the initial administrative hearing held on November 14, 2016?

8. Why was a re-hearing conducted, and what was the final outcome of that hearing on June 9, 2017?

9. According to the re-hearing decision, there was a significant contradiction between the petitioner’s sworn petition and his later testimony. What was this contradiction?

10. What was the legal basis, according to the Association’s CC&Rs, for collecting the $660 working capital fee?

——————————————————————————–

Answer Key

1. The petitioner was Brian Sopatyk, and the respondent was The Lakeshore Village Condominium Association, Inc. Mr. Sopatyk alleged that the Association violated ARIZ. REV. STAT. section 33-1260 by charging a transfer fee in excess of the statutory maximum of $400.

2. The disputed fees were a $660 “transfer fee,” which was split between the buyer (Mr. Sopatyk) and the seller, and a separate $30 “statement fee” or “Resale Statement Fee.” The petitioner’s claim focused on the $660 fee being above the legal limit for resale disclosure services.

3. The Association argued the $660 fee was not a transfer fee for disclosure services but was a “working capital fee” authorized by its CC&Rs. It explained that the fee had been mislabeled as a “transfer fee” due to an error passed down from a previous property manager.

4. Amy Telnes testified that when she became the Association manager, she was incorrectly told the working capital fee was the transfer fee. She further testified that the $660 was deposited into the Association’s reserve fund, and the actual fee charged for disclosure under the statute was the separate $30 statement fee.

5. At the May 18, 2016, meeting, the Board concluded it was not in violation of the law but that its fee labeling was confusing. The Board directed Amy Telnes to perform an accounting and transfer all mislabeled fees into the Reserve Account and voted to assess a single, correctly labeled $400 transfer fee on all future transactions.

6. The petitioner, Brian Sopatyk, bore the burden of proof. The standard of proof required was a “preponderance of the evidence,” defined as evidence with the most convincing force that inclines an impartial mind to one side of an issue over the other.

7. Following the initial hearing, Administrative Law Judge Thomas Shedden found that Mr. Sopatyk had not shown by a preponderance of the evidence that the Association violated the statute. The judge ordered that Mr. Sopatyk’s petition be dismissed.

8. A re-hearing was conducted after Mr. Sopatyk requested one following the initial decision. The final outcome of the June 9, 2017, re-hearing was the same as the first: the Administrative Law Judge found the petitioner did not meet his burden of proof and ordered the petition to be dismissed.

9. In his sworn petition, Mr. Sopatyk stated that the $660 transfer fee was split between him and the seller. However, during his testimony at the re-hearing, he stated that he had in fact paid the entire $660 as part of the negotiated price of the unit.

10. The legal basis was Section 8.13 of the Association’s Declaration of Covenants, Conditions and Restrictions (CC&Rs). This section, titled “Transfer Fee and Working Capital Fund,” called for an assessment from each new owner of two monthly installments of the annual fee to be deposited into the working capital fund.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed to test a deeper, more synthesized understanding of the case. Formulate a comprehensive response to each prompt, incorporating specific facts, legal arguments, and procedural details from the source documents.

1. Trace the complete timeline of the case, beginning with the filing of the petition. Include key dates of filings, hearings, decisions, and final certifications, and describe the significance of each event in the legal process.

2. Analyze the central legal argument of the Respondent, The Lakeshore Village Condominium Association. Explain how the distinction between a “transfer fee” under ARIZ. REV. STAT. section 33-1260 and a “working capital fee” under the Association’s CC&Rs was crucial to the Administrative Law Judge’s final decision.

3. Discuss the concept of “preponderance of the evidence” as it is defined and applied in this case. Explain why the petitioner, Brian Sopatyk, failed to meet this standard of proof in both the initial hearing and the re-hearing, citing specific evidence presented by the Association.

4. Evaluate the importance of the Association’s Board Meeting Minutes from May 18, 2016, as a piece of evidence. Detail the specific findings and resolutions from that meeting and explain how they were used to build the Association’s defense.

5. Examine the roles of the key individuals and entities in this administrative action. Describe the functions and contributions of Brian Sopatyk (Petitioner), Amy Telnes (Association Manager), Michael Cibellis (Association President), Thomas Shedden (Administrative Law Judge), and the Arizona Department of Real Estate.

——————————————————————————–

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official, in this case Thomas Shedden, who presides over hearings at the Office of Administrative Hearings, makes findings of fact and conclusions of law, and issues a decision.

ARIZ. REV. STAT. section 33-1260

The Arizona statute that requires a condominium association to provide certain disclosure documents to a prospective purchaser. It also limits the fee an association can charge for the preparation of these documents to an aggregate of four hundred dollars.

Burden of Proof

The obligation of a party in a legal case to prove their allegations. In this matter, the petitioner, Brian Sopatyk, bore the burden of proof.

An abbreviation for the Declaration of Covenants, Conditions and Restrictions. In this case, section 8.13 of the Association’s CC&Rs authorized the collection of a fee from new owners for a working capital fund.

Final Administrative Decision

The ultimate, legally binding decision in the administrative matter. In this case, the Administrative Law Judge’s decision became the final administrative decision after the Department of Real Estate did not act to accept, reject, or modify it within the statutory time limit.

HUD-1 Disclosure Statement

A document used in the petitioner’s property purchase that itemized all charges imposed upon a borrower and seller for a real estate transaction. It was used as evidence to show how the $660 “Transfer Fee” and $30 “Resale Statement Fee” were assessed and paid.

Petitioner

The party who files a petition initiating a legal action. In this case, Brian Sopatyk was the petitioner.

Preponderance of the Evidence

The standard of proof required in this administrative hearing. It is defined as “The greater weight of the evidence… that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Reserve Fund

An account maintained by the Condominium Association. The Association referred to its “working capital fund” as the Reserve Fund, into which the disputed $660 fees were deposited.

Respondent

The party against whom a petition is filed. In this case, The Lakeshore Village Condominium Association, Inc. was the respondent.

Statement Fee / Resale Statement Fee

A $30 fee charged by the Association for the preparation of disclosure documents. The Association argued this was the fee governed by ARIZ. REV. STAT. section 33-1260, which was compliant with the $400 statutory cap.

Transfer Fee

In the context of the petitioner’s allegation, a fee charged for resale disclosure services, limited to $400 by statute. In the context of the Association’s defense, this was the erroneous label applied to the working capital fee.

Working Capital Fee

A fee authorized by section 8.13 of the Association’s CC&Rs, assessed to each new owner to be deposited into the working capital fund (or Reserve Fund). The Association successfully argued that the disputed $660 fee was this type of fee, not one for resale disclosure.

How a $660 Fee Sparked a Legal Showdown: 5 Surprising Lessons from a Homeowner vs. HOA Dispute

We sign, we initial, we pay—assuming every line item on our closing documents is gospel. When buying a home in a condominium association, the stack of paperwork and list of fees can feel overwhelming. But what if one of those “standard” fees wasn’t standard at all?

For homeowner Brian Sopatyk, a single $660 charge from The Lakeshore Village Condominium Association wasn’t just a number; it was a thread he pulled that unraveled a surprising story of HOA governance, legal strategy, and the power of asking “why?” This post breaks down the five most impactful takeaways from a seemingly minor dispute that went all the way through a formal hearing and re-hearing.

1. A Simple Label Can Ignite a Legal Firestorm

A clerical error triggers a full-blown legal dispute.

The entire case hinged on a single, crucial mistake: the HOA mislabeled a “working capital fee” as a “transfer fee” on its disclosure forms.

Why was this one word so important? Because Mr. Sopatyk’s formal petition alleged that by charging a “$660 transfer fee,” the HOA violated Arizona statute 33-1260, which caps fees for resale disclosure services at a maximum of $400. On its face, the $660 charge looked like a clear violation of state law.

The Association’s manager, Amy Telnes, testified that when she took over her position, she was given erroneous information that the working capital fee was the transfer fee. As a result, the charge had been incorrectly labeled ever since. This simple administrative error was enough to trigger a formal petition to the Arizona Department of Real Estate, a full administrative hearing, and eventually, a re-hearing, proving how a small clerical mistake can escalate into a significant legal conflict.

2. In the Eyes of the Law, Substance Can Trump Form

Why the fee’s purpose mattered more than its name.

The Association’s core defense was that while the name of the fee was wrong, its purpose and authority were legitimate. The $660 charge, they argued, wasn’t for resale documents (the service capped by state law), but was a “working capital fee” authorized by an entirely different rule: the Association’s own Covenants, Conditions, and Restrictions (CC&Rs).

Specifically, Section 8.13 of the CC&Rs allowed for this assessment, with the funds designated for the Association’s reserve fund. This working capital fee, in contrast, was an assessment on the new owner as mandated by the CC&Rs to ensure the association’s financial health. The actual fee for the statutory disclosure documents was a separate, compliant $30 “Resale Statement Fee,” which was paid by the seller.

The Administrative Law Judge ultimately agreed. The fee’s underlying purpose and the HOA’s authority to collect it (its substance) were deemed more important than its incorrect name on the form (its form). This is a crucial lesson for any homeowner challenging an HOA: it’s not enough to find a mistake on a form. You must be prepared to argue against the underlying authority and purpose of the action itself.

3. You Can Lose the Battle but Win the War

How a dismissed case led to a major policy victory.

Perhaps the most counter-intuitive outcome is that although Mr. Sopatyk’s petition was dismissed, his actions were the direct catalyst for a significant and positive policy change by the HOA.

In a summary of the Association’s May 18, 2016, Board Meeting, which was entered as evidence, the judge noted that the Board reviewed the very issue Mr. Sopatyk had raised. Under the pressure of his legal challenge, they came to a powerful conclusion about their own system, determining it was “confusing and unfair.”

As a direct result of this internal review prompted by the dispute, the Board voted to simplify its process. It resolved to assess a single, clear transfer fee of $400 on all future transactions, eliminating the other confusing fees. This proves that even an unsuccessful legal challenge can be a powerful tool, forcing an organization to confront and correct its own problematic practices for the benefit of all future members.

4. The ‘Burden of Proof’ Is More Than Just a Phrase

What it really means to have to prove your case.

In both the original decision and the re-hearing, the judge repeatedly stated that Mr. Sopatyk, as the petitioner, bore the “burden of proof.” This legal standard was critical to the outcome. It meant he had to prove his claim by a “preponderance of the evidence,” which the court documents defined as:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

In this case, it meant Mr. Sopatyk’s job was to prove that the $660 fee was, more likely than not, an illegal charge for resale documents. The HOA’s defense—that it was a legally separate “working capital fee” that was simply mislabeled—created enough doubt that he couldn’t clear this hurdle.

5. A Small Contradiction Can Damage Credibility

When every word you say (and write) is on the record.

A fascinating detail appeared in the re-hearing decision, highlighting how every word matters in a legal proceeding.

There was a discrepancy in Mr. Sopatyk’s statements. His sworn petition, filed on August 9, 2016, stated the $660 fee was “split between the seller and the buyer.” However, during the hearing, he testified that he had “in fact paid the entire $660.”

The judge noted this contradiction directly in footnote 3 of the re-hearing decision, stating: “either Mr. Sopatyk’s sworn statement or his testimony must be false.” While not the deciding factor, this kind of inconsistency can subtly erode a petitioner’s standing. Remember the “burden of proof” from Takeaway 4? It requires convincing a judge to “incline a fair and impartial mind” to your side. Contradictions, even small ones, make that inclination much harder to achieve.

Conclusion: The Devil Is in the Details

This case is the perfect microcosm of community association disputes. It began with a clerical error (form), was adjudicated on intent (substance), was lost on a technicality (the burden of proof), yet resulted in a victory for transparency. Mr. Sopatyk may not have won his case, but he won a better system for his neighbors.

The ultimate lesson? In an HOA, the most powerful tool isn’t always a lawsuit—sometimes, it’s a magnifying glass. It leaves us with a thought-provoking question: When is it worth challenging the system for clarity and fairness, even if the outcome isn’t a clear ‘win’ on paper?

Case Participants

Petitioner Side

Brian Sopatyk (petitioner)
Represented himself at the initial hearing; sought rehearing
Nathan Andrews (petitioner attorney)
ASU Alumni Law Group
Jill M. Kennedy (petitioner attorney)
ASU Alumni Law Group
Judy Sopatyk (petitioner's wife)
Co-purchaser of the condominium unit,
Chance Peterson (petitioner attorney)
ASU Alumni Law Group

Respondent Side

Bradley R. Jardine (HOA attorney)
Jardine Baker Hickman & Houston
Amy Telnes (property manager/witness)
The Lakeshore Village Condo. Association, Inc.
Association manager who testified,
Michael Cibellis (Association president/witness)
The Lakeshore Village Condo. Association, Inc.
Testified at the rehearing

Neutral Parties

Thomas Shedden (ALJ)
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Abby Hansen (HOA Coordinator)
Contact for requests for rehearing
Greg Hanchett (Interim Director)
OAH
Signed the Certification of Decision,

Other Participants

Rosella J. Rodriguez (administrative staff)
Administrative staff for transmission/mailing,