Case Summary
| Case ID | 24F-H021-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2024-02-12 |
| Administrative Law Judge | Adam D. Stone |
| Outcome | Petitioner's petition alleging violations of ARIZ. REV. STAT. § 33-1803 regarding assessment increase and fine imposition was denied in its entirety. The Administrative Law Judge found Petitioner failed to meet the burden of proof, concluding the HOA did not violate the statute. |
| Filing Fees Refunded | $1,000.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | George Holub | Counsel | — |
|---|---|---|---|
| Respondent | 3 Canyons Ranch Master Homeowners’ Association | Counsel | Marcus Martinez, Esq. |
Alleged Violations
ARIZ. REV. STAT. § 33-1803(A)
ARIZ. REV. STAT. § 33-1803(B), (C), (D), (E)
Outcome Summary
Petitioner's petition alleging violations of ARIZ. REV. STAT. § 33-1803 regarding assessment increase and fine imposition was denied in its entirety. The Administrative Law Judge found Petitioner failed to meet the burden of proof, concluding the HOA did not violate the statute.
Why this result: Petitioner did not meet the burden of proving by a preponderance of the evidence that the Association violated ARIZ. REV. STAT. § 33-1803, as the assessment error was corrected and the notice requirements for the fine were met.
Key Issues & Findings
Assessment Increase
Petitioner alleged the yearly assessment increased from $525.00 to $1,010.00, violating ARS § 33-1803(A). The HOA claimed this was a clerical error that was promptly corrected to $525.00.
Orders: Petitioner failed to meet the burden of proof, as the evidence showed the assessment error was immediately corrected, resulting in no statutory violation.
Filing fee: $1,000.00, Fee refunded: No
Disposition: petitioner_loss
- ARIZ. REV. STAT. § 33-1803(A)
- ARIZ. REV. STAT. § 33-1803
Imposition of fine without proper notice
Petitioner challenged a $500 fine for commencing construction of a courtyard wall without prior approval. Petitioner claimed insufficient notice, while the HOA asserted notice was provided via email, satisfying statutory requirements.
Orders: Petitioner failed to meet the burden of proof. The email notice complied with statutory requirements. The Association was ordered not to reimburse the filing fee.
Filing fee: $1,000.00, Fee refunded: No
Disposition: petitioner_loss
- ARIZ. REV. STAT. § 33-1803(B)
- ARIZ. REV. STAT. § 33-1803(C)
- ARIZ. REV. STAT. § 33-1803(D)
- ARIZ. REV. STAT. § 33-1803(E)
- ARIZ. REV. STAT. § 33-1803
Video Overview
Audio Overview
Decision Documents
24F-H021-REL Decision – 1114406.pdf
24F-H021-REL Decision – 1114407.pdf
24F-H021-REL Decision – 1135788.pdf
24F-H021-REL Decision – 1143255.pdf
The hearing summary for *George Holub v. 3 Canyons Ranch Master Homeowners’ Association* (No. 24F-H021-REL) addresses allegations that the Homeowners’ Association (HOA) violated the Arizona Planned Communities Act regarding assessments and fines.
Case Overview and Key Issues
The case was heard by Administrative Law Judge (ALJ) Adam D. Stone at the Office of Administrative Hearings (OAH) on January 26, 2024. Petitioner George Holub filed a two-issue petition, alleging the Respondent HOA violated ARIZ. REV. STAT. § 33-1803.
The main issues were:
- Assessment Increase: The HOA allegedly "nearly doubled the assessment amount from previous year," violating the statutory limit that prevents increases over twenty percent without a majority member vote (ARS 33-1803(A)).
- Improper Fine: The HOA allegedly "imposed violation fee without first discussing the violation with [Petitioner] in front of the board members". This concerned a $500 fine levied for unapproved construction.
Key Arguments and Proceedings
Petitioner's Argument (George Holub):
Petitioner testified that in July 2023, he received a statement showing his annual assessment increased from $525.00 (or $540.00) to $1,010.00 (or $1,495.00 in one statement). He argued this substantial increase was illegal. Regarding the violation, Holub admitted commencing construction of a courtyard and a 5.5-foot wall without prior HOA approval. He asserted he never received the initial Notice of Violation (NOV) via certified mail. He confirmed the certified mail NOV was returned as undeliverable. Holub also argued the subsequent fine letter (January 2023) was sent to a wrong, outdated address for his property-owning entity, Jolly Acres LLC.
Respondent's Argument (Marcus Martinez, Esq. and Mike Needham, Board President):
Respondent argued that there was no assessment increase. Board President Mike Needham testified that the high assessment amount was a clerical error made by the managing agent. This error was immediately corrected after Petitioner inquired, and a new ledger reflecting the correct $525.00 annual assessment was generated on July 7, 2023.
Concerning the fine, Respondent acknowledged the initial certified NOV (September 15, 2022) was returned undeliverable. However, the Board re-sent the NOV via e-mail on October 24, 2022, which Petitioner acknowledged receiving. The $500 fine was subsequently approved at the January 2023 board meeting for failure to seek approval for the construction. Respondent maintained that its procedures strictly adhered to Arizona law.
Final Decision and Legal Points
The ALJ issued a decision on February 12, 2024, denying the petition. The ALJ found that Petitioner failed to meet the burden of proof.
Assessment Ruling:
The ALJ concluded that the assessment issue was merely a clerical error that was promptly corrected. The evidence showed the annual assessment remained $525.00, meaning the Respondent did not violate ARS § 33-1803(A) by illegally increasing dues.
Fine Ruling:
The ALJ held that nothing in the relevant statute requires the association to send the Notice of Violation via certified mail. Although the mail was returned, Petitioner did receive the NOV via email on October 24, 2022. Since the fine was not imposed until the January 2023 board meeting (two and a half months later), Petitioner was given ample time to respond. Furthermore, the ALJ found Petitioner’s claim regarding failure to receive the fine letter to be "disingenuous," as Petitioner had failed to update a corrected address for the property-owning LLC with the Association after being notified of the requirement.
The Petitioner’s petition was denied in its entirety, and the HOA was not required to reimburse the filing fee.
Questions
Question
Is an HOA required to send a Notice of Violation via certified mail?
Short Answer
No, Arizona statute does not require the initial Notice of Violation to be sent via certified mail.
Detailed Answer
The ALJ determined that while homeowners often expect certified mail, the relevant statute (A.R.S. § 33-1803) does not mandate it for the initial notice. As long as the homeowner actually receives the notice (even via email) and it contains the required statutory information, it is considered valid.
Alj Quote
As to the fine, nothing in the statute requires the Association to send the notice via certified mail.
Legal Basis
A.R.S. § 33-1803
Topic Tags
- violations
- notices
- procedural requirements
Question
Does a clerical error on a ledger count as an illegal assessment increase?
Short Answer
No, if the error is corrected and the homeowner is not actually forced to pay the incorrect amount, it is not a violation.
Detailed Answer
In this case, the HOA's management company sent a ledger showing an incorrect assessment amount that appeared to double the fees. However, because the HOA acknowledged the mistake, corrected the ledger to the proper amount, and communicated the correction to the homeowner, the ALJ ruled that the HOA did not violate the statute regarding assessment increases.
Alj Quote
The testimony provided, demonstrated that there was an error in the ledger Petitioner received initially, but that was corrected as evidenced by the July 7, 2023 ledger… Petitioner has not met its burden to prove that the Association violated the statute.
Legal Basis
A.R.S. § 33-1803(A)
Topic Tags
- assessments
- billing errors
- fees
Question
Whose responsibility is it to ensure the HOA has the correct mailing address?
Short Answer
It is the homeowner's responsibility to update their address with the HOA.
Detailed Answer
The ALJ ruled that a homeowner cannot claim they didn't receive notice if they failed to provide the HOA with their current address. Even if the homeowner informs a board member verbally or via email of a change in ownership entity, they must explicitly provide the correct mailing address to the Association.
Alj Quote
While Petitioner informed Mr. Needham that Jolly Acres was now the owner and to mail all community documents to them, he did not provide an address nor update a corrected address with the Association. Thus, this was not the Association’s fault that he did not receive notice of the fine.
Legal Basis
N/A
Topic Tags
- homeowner obligations
- notices
- mailing address
Question
Can an HOA send a Notice of Violation via email?
Short Answer
Yes, if the homeowner receives it.
Detailed Answer
The decision validated a Notice of Violation sent via email because the homeowner acknowledged receiving it. Since the homeowner received actual notice and the content of the email met statutory requirements, the notice was deemed valid despite not being mailed initially.
Alj Quote
Therefore, although Petitioner never received the Notice of Violation via mail, he did receive the same on October 24, 2022. From the evidence provided, the Notice complied with all of the statutory requirements
Legal Basis
A.R.S. § 33-1803
Topic Tags
- violations
- notices
Question
Who has the burden of proof in an administrative hearing against an HOA?
Short Answer
The homeowner (Petitioner) bears the burden of proof.
Detailed Answer
The homeowner filing the petition must prove that the HOA violated the law by a 'preponderance of the evidence,' which means showing that their claims are more likely true than not.
Alj Quote
In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated ARIZ. REV. STAT. § 33-1803.
Legal Basis
A.R.S. § 41-1092
Topic Tags
- hearings
- legal standards
- burden of proof
Question
Can a homeowner respond to a violation notice to contest it?
Short Answer
Yes, a homeowner has 21 days to respond via certified mail.
Detailed Answer
Statute allows a member to provide a written response to a violation notice. This response must be sent by certified mail within 21 calendar days of the notice date.
Alj Quote
A member who receives a written notice that the condition of the property owned by the member is in violation of the community documents… may provide the association with a written response by sending the response by certified mail within twenty-one calendar days after the date of the notice.
Legal Basis
A.R.S. § 33-1803(C)
Topic Tags
- violations
- due process
- homeowner rights
Question
If a homeowner makes a partial payment on a debt, how must the HOA apply the money?
Short Answer
Payments must be applied to the principal debt first, then to accrued interest.
Detailed Answer
Arizona law mandates that any monies paid by a member for an unpaid penalty or assessment must be applied first to the principal amount unpaid and then to the interest accrued.
Alj Quote
Any monies paid by a member for an unpaid penalty shall be applied first to the principal amount unpaid and then to the interest accrued.
Legal Basis
A.R.S. § 33-1803(B)
Topic Tags
- payments
- accounting
- penalties
Question
Will the filing fee for the hearing be refunded if the homeowner loses?
Short Answer
No, the filing fee is not reimbursed if the petition is denied.
Detailed Answer
The ALJ ordered that because the petition was denied, the Respondent (HOA) was not required to reimburse the Petitioner's filing fee.
Alj Quote
IT IS FURTHER ORDERED pursuant to ARIZ. REV. STAT. § 32-2199.02(A), Respondent shall not reimburse Petitioner’s filing fee as required by ARIZ. REV. STAT. § 32-2199.01.
Legal Basis
A.R.S. § 32-2199.02(A)
Topic Tags
- hearings
- fees
- costs
Case
- Docket No
- 24F-H021-REL
- Case Title
- George Holub v 3 Canyons Ranch Master Homeowners’ Association
- Decision Date
- 2024-02-12
- Alj Name
- Adam D. Stone
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
Is an HOA required to send a Notice of Violation via certified mail?
Short Answer
No, Arizona statute does not require the initial Notice of Violation to be sent via certified mail.
Detailed Answer
The ALJ determined that while homeowners often expect certified mail, the relevant statute (A.R.S. § 33-1803) does not mandate it for the initial notice. As long as the homeowner actually receives the notice (even via email) and it contains the required statutory information, it is considered valid.
Alj Quote
As to the fine, nothing in the statute requires the Association to send the notice via certified mail.
Legal Basis
A.R.S. § 33-1803
Topic Tags
- violations
- notices
- procedural requirements
Question
Does a clerical error on a ledger count as an illegal assessment increase?
Short Answer
No, if the error is corrected and the homeowner is not actually forced to pay the incorrect amount, it is not a violation.
Detailed Answer
In this case, the HOA's management company sent a ledger showing an incorrect assessment amount that appeared to double the fees. However, because the HOA acknowledged the mistake, corrected the ledger to the proper amount, and communicated the correction to the homeowner, the ALJ ruled that the HOA did not violate the statute regarding assessment increases.
Alj Quote
The testimony provided, demonstrated that there was an error in the ledger Petitioner received initially, but that was corrected as evidenced by the July 7, 2023 ledger… Petitioner has not met its burden to prove that the Association violated the statute.
Legal Basis
A.R.S. § 33-1803(A)
Topic Tags
- assessments
- billing errors
- fees
Question
Whose responsibility is it to ensure the HOA has the correct mailing address?
Short Answer
It is the homeowner's responsibility to update their address with the HOA.
Detailed Answer
The ALJ ruled that a homeowner cannot claim they didn't receive notice if they failed to provide the HOA with their current address. Even if the homeowner informs a board member verbally or via email of a change in ownership entity, they must explicitly provide the correct mailing address to the Association.
Alj Quote
While Petitioner informed Mr. Needham that Jolly Acres was now the owner and to mail all community documents to them, he did not provide an address nor update a corrected address with the Association. Thus, this was not the Association’s fault that he did not receive notice of the fine.
Legal Basis
N/A
Topic Tags
- homeowner obligations
- notices
- mailing address
Question
Can an HOA send a Notice of Violation via email?
Short Answer
Yes, if the homeowner receives it.
Detailed Answer
The decision validated a Notice of Violation sent via email because the homeowner acknowledged receiving it. Since the homeowner received actual notice and the content of the email met statutory requirements, the notice was deemed valid despite not being mailed initially.
Alj Quote
Therefore, although Petitioner never received the Notice of Violation via mail, he did receive the same on October 24, 2022. From the evidence provided, the Notice complied with all of the statutory requirements
Legal Basis
A.R.S. § 33-1803
Topic Tags
- violations
- notices
Question
Who has the burden of proof in an administrative hearing against an HOA?
Short Answer
The homeowner (Petitioner) bears the burden of proof.
Detailed Answer
The homeowner filing the petition must prove that the HOA violated the law by a 'preponderance of the evidence,' which means showing that their claims are more likely true than not.
Alj Quote
In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated ARIZ. REV. STAT. § 33-1803.
Legal Basis
A.R.S. § 41-1092
Topic Tags
- hearings
- legal standards
- burden of proof
Question
Can a homeowner respond to a violation notice to contest it?
Short Answer
Yes, a homeowner has 21 days to respond via certified mail.
Detailed Answer
Statute allows a member to provide a written response to a violation notice. This response must be sent by certified mail within 21 calendar days of the notice date.
Alj Quote
A member who receives a written notice that the condition of the property owned by the member is in violation of the community documents… may provide the association with a written response by sending the response by certified mail within twenty-one calendar days after the date of the notice.
Legal Basis
A.R.S. § 33-1803(C)
Topic Tags
- violations
- due process
- homeowner rights
Question
If a homeowner makes a partial payment on a debt, how must the HOA apply the money?
Short Answer
Payments must be applied to the principal debt first, then to accrued interest.
Detailed Answer
Arizona law mandates that any monies paid by a member for an unpaid penalty or assessment must be applied first to the principal amount unpaid and then to the interest accrued.
Alj Quote
Any monies paid by a member for an unpaid penalty shall be applied first to the principal amount unpaid and then to the interest accrued.
Legal Basis
A.R.S. § 33-1803(B)
Topic Tags
- payments
- accounting
- penalties
Question
Will the filing fee for the hearing be refunded if the homeowner loses?
Short Answer
No, the filing fee is not reimbursed if the petition is denied.
Detailed Answer
The ALJ ordered that because the petition was denied, the Respondent (HOA) was not required to reimburse the Petitioner's filing fee.
Alj Quote
IT IS FURTHER ORDERED pursuant to ARIZ. REV. STAT. § 32-2199.02(A), Respondent shall not reimburse Petitioner’s filing fee as required by ARIZ. REV. STAT. § 32-2199.01.
Legal Basis
A.R.S. § 32-2199.02(A)
Topic Tags
- hearings
- fees
- costs
Case
- Docket No
- 24F-H021-REL
- Case Title
- George Holub v 3 Canyons Ranch Master Homeowners’ Association
- Decision Date
- 2024-02-12
- Alj Name
- Adam D. Stone
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- George Holub (petitioner)
Jolly Acres LLC (Owner Entity)
Appeared on his own behalf - Emily Holub (Petitioner's Wife)
Involved in communications with the HOA regarding assessment
Respondent Side
- Marcus Martinez (HOA attorney)
3 Canyons Ranch Master Homeowners’ Association
Represented Respondent - Mike Needham (Board President)
3 Canyons Ranch Master Homeowners’ Association
President of the Board of Directors, testified as a witness - Nicholas Nogami (Attorney)
Carpenter Hazlewood
Listed in service transmission - Sarah Malovich (HOA Agent)
- David Roberts (HOA Agent)
Provided statement - Mrs. Turka (HOA contact)
Gate person contact - Mr. Plat (MDC Chairman)
3 Canyons Ranch Master Homeowners’ Association
Chairman of the Master Design Committee - Donna (HOA Agent)
Platinum Management
HOA/Accounting contact - Stacy Smith (board member)
3 Canyons Ranch Master Homeowners’ Association
Board member who made a motion regarding the fine
Neutral Parties
- Adam D. Stone (ALJ)
OAH - Susan Nicolson (Commissioner)
ADRE - AHansen (ADRE Staff)
ADRE
Listed in service transmission email list - vnunez (ADRE Staff)
ADRE
Listed in service transmission email list - djones (ADRE Staff)
ADRE
Listed in service transmission email list - labril (ADRE Staff)
ADRE
Listed in service transmission email list
Other Participants
- Dimitry Wilker (Neighbor)