George E Lord vs. The Boulders at La Reserve Condominium Association

Posted on December 17, 2018 by [email protected]

Case Summary

Case ID	19F-H1918013-REL
Agency	ADRE
Tribunal	OAH
Decision Date	2018-12-17
Administrative Law Judge	Tammy L. Eigenheer
Outcome	The Administrative Law Judge dismissed the Petition in its entirety, concluding that the Petitioner failed to establish by a preponderance of the evidence that the Respondent Condominium Association violated A.R.S. § 33-1242, A.R.S. § 33-1260.01, or the association's CC&Rs.
Filing Fees Refunded	$0.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	George E Lord	Counsel	—
Respondent	The Boulders at La Reserve Condominium Association	Counsel	Maria Kupillas

Alleged Violations

A.R.S. § 33-1242, A.R.S. § 33-1260.01, and CC&Rs

Outcome Summary

The Administrative Law Judge dismissed the Petition in its entirety, concluding that the Petitioner failed to establish by a preponderance of the evidence that the Respondent Condominium Association violated A.R.S. § 33-1242, A.R.S. § 33-1260.01, or the association's CC&Rs.

Why this result: Petitioner failed to establish a violation of any statute or covenant alleged. The core findings supported the HOA's position that the lessee was engaging in prohibited business activity and subletting, and that the charged attorney fees were permissible.

Key Issues & Findings

Alleged violations concerning notice procedures, leasing restrictions, prohibited business use, and excessive fees.

Petitioner alleged Respondent violated A.R.S. § 33-1242 by failing to include proper citations in violation notices, violated A.R.S. § 33-1260.01 and CC&Rs by imposing illegal restrictions on occupancy dates and prohibiting tenant guests, and violated fee limits under A.R.S. § 33-1260.01(E) by charging $250 in attorney fees.

Orders: The Petition was dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

A.R.S. § 33-1242
A.R.S. § 33-1260.01
A.R.S. § 33-1258
A.A.C. R2-19-119
CC&Rs Section 7.21
CC&Rs Section 7.3

Analytics Highlights

Topics: condominium, HOA dispute, leasing restrictions, short-term rental, business use, notice procedure, attorney fees

Additional Citations:

A.R.S. § 33-1242
A.R.S. § 33-1260.01
A.R.S. § 33-1258
A.A.C. R2-19-119
CC&Rs Section 7.21
CC&Rs Section 7.3

Video Overview

Audio Overview

Decision Documents

19F-H1918013-REL Decision – 677039.pdf

Uploaded 2026-04-26T09:47:51 (115.9 KB)

19F-H1918013-REL Decision – 677040.pdf

Uploaded 2026-04-26T09:47:54 (47.9 KB)

19F-H1918013-REL Decision – 677039.pdf

Uploaded 2026-01-23T17:26:46 (115.9 KB)

19F-H1918013-REL Decision – 677040.pdf

Uploaded 2026-01-23T17:26:49 (47.9 KB)

Briefing Document: Lord v. The Boulders at La Reserve Condominium Association

Executive Summary

This document synthesizes the findings and conclusions from the Administrative Law Judge Decision in case number 19F-H1918013-REL, involving Petitioner George E. Lord and Respondent The Boulders at La Reserve Condominium Association. The judge ultimately dismissed all claims brought by the Petitioner, ruling that the Association acted within the bounds of Arizona statutes and its governing documents.

The core of the dispute centered on Mr. Lord’s leasing of three condominium units to an individual, Barrie Shepley, who used the properties to house participants for his commercial fitness training camps. The Association contended this arrangement constituted a prohibited short-term sublease and an improper business use of the units, leading them to suspend amenity access for the occupants.

The judge’s decision affirmed the Association’s position on all counts. Key takeaways include:

• Substance Over Form: The judge concluded that despite the absence of a formal sublease agreement, the nature of the arrangement—specifically a camp pricing structure that varied based on the number of occupants per condo—was effectively a sublet designed to house an “itinerant population,” contrary to the “spirit and purpose” of the community’s rules.

• Business Use Violation: The operation was found to be a business activity that violated the CC&Rs by requiring persons (camp participants) to come to the residential units.

• Procedural Compliance: The Association’s violation notices were deemed compliant with Arizona law. The judge noted that the statute only requires a detailed citation of the violated rule after the owner responds to the initial notice, which the Petitioner failed to do.

• Legality of Fees: A $250 charge levied by the Association’s counsel was determined to be a permissible charge for attorney’s fees related to potential collection, not an illegal penalty for leasing information as the Petitioner alleged.

As a result of these findings, the Petitioner’s request for relief was denied, and the petition was dismissed in its entirety.

I. Case Overview

• Parties:

◦ Petitioner: George E. Lord (unit owner)

◦ Respondent: The Boulders at La Reserve Condominium Association

• Case Number: 19F-H1918013-REL

• Venue: Arizona Office of Administrative Hearings

• Presiding Judge: Tammy L. Eigenheer, Administrative Law Judge

• Hearing Date: November 26, 2018

• Decision Date: December 17, 2018

• Final Disposition: The petition filed by George E. Lord was dismissed.

II. Factual Background and Timeline of Events

1. Lease Agreements: On or about December 4, 2017, Petitioner George Lord, through his management company, leased two units at The Boulders to Barrie Shepley for a term from March 7, 2018, to April 30, 2018. A third unit was subsequently leased to Mr. Shepley on or about January 15, 2018.

2. Commercial Use: Mr. Shepley operated a Canadian fitness business, “Personal Best,” which offered training camps in Tucson. Accommodations at The Boulders were included in the camp packages. The price for a camp varied based on occupancy:

◦ $950.00 each for four campers in a condo

◦ $1075.00 each for three campers in a condo

◦ $1299.00 each for two campers in a condo

3. Occupancy Begins: On March 7, 2018, guests of Mr. Shepley (camp participants) began arriving to occupy the three leased units.

4. Association Intervention: On March 9, 2018, Community Manager Danielle Morris emailed Mr. Lord, stating the Association’s belief that he was in violation of the CC&Rs by allowing subleasing for periods less than the 30-day minimum. Ms. Morris informed him that amenity access cards for the three units were deactivated.

5. Dispute Escalation: Mr. Lord contended that the occupants were merely “guests” of Mr. Shepley, not subletters. Ms. Morris countered that the Association required the names of all occupants and the duration of their stays, and that each occupant must stay for a minimum of 30 days.

6. Information Provided: On March 13, 2018, Mr. Lord provided the names of the occupants and their dates of occupancy, requesting that amenities be restored.

7. Violation Reiterated: On March 16, 2018, Ms. Morris stated the violation was ongoing, as occupants staying from March 7 to March 31 did not meet the 30-day minimum stay requirement.

8. Formal Notice of Violation: On March 18, 2018, Mr. Lord received formal Notices of Violations for the three units. The notices stated that amenity access was suspended because the HOA was not provided with the names of adult occupants and their timeframes. The notice warned that a $300 fine could be applied. Mr. Lord did not respond to these notices.

9. Attorney Involvement: On March 22, 2018, Mr. Lord received a letter from the Association’s legal counsel outlining its legal position and noting an amount due of $250 for attorney’s fees already incurred.

10. Lease Cancellation & Financial Loss: On April 2, 2018, Mr. Shepley cancelled the remainder of the leases due to the lack of amenities for his guests. Mr. Lord asserted a resulting financial loss of $6,900 in rental fees for April 2018.

11. Petition Filing: On August 31, 2018, Mr. Lord filed a petition with the Arizona Department of Real Estate, alleging the Association violated state statutes and its own CC&Rs.

III. Petitioner’s Allegations and Arguments

Mr. Lord’s petition was based on three primary allegations against the Association:

• Allegation 1: Defective Violation Notice (A.R.S. § 33-1242): The Petitioner argued that the Notices of Violations were legally deficient because they failed to cite the specific statute or CC&R provision that had allegedly been violated.

• Allegation 2: Unlawful Occupancy Requirements (A.R.S. § 33-1260.01 & CC&Rs): The Petitioner asserted that the Association overstepped its authority by demanding that each occupant, whom he characterized as a “guest” of the primary lessee, must stay for a minimum of 30 days. He argued the 30-day minimum lease term applied only to the primary lease with Mr. Shepley, not to the occupants.

• Allegation 3: Improper Fees (A.R.S. § 33-1260.01(E)): The Petitioner claimed that the $250 charge from the Association’s attorney constituted an illegal fee, penalty, or charge related to providing leasing information, which he argued was prohibited by statute.

IV. Administrative Law Judge’s Findings and Conclusions

The Administrative Law Judge found that the Petitioner failed to meet the burden of proof for any of his allegations and dismissed the petition. The judge’s reasoning is detailed below.

Finding 1: No Violation of A.R.S. § 33-1242 (Violation Notice)

The judge determined that the Association’s initial Notices of Violations were legally sufficient.

• Legal Reasoning: A.R.S. § 33-1242(C) requires an association to cite the specific provision of the condominium documents that has been violated. However, this obligation is only triggered after the unit owner sends a written response to the initial notice by certified mail.

• Factual Basis: The Petitioner admitted that he did not respond to the formal Notices of Violations he received.

• Conclusion: Because the Petitioner did not take the legally required step to trigger the Association’s duty to provide a specific citation, the Association did not violate the statute.

Finding 2: No Violation of A.R.S. § 33-1260.01 or CC&Rs (Leasing Rules)

The judge concluded that the Association was justified in its actions regarding the occupancy of the units.

• The Arrangement was a “Form” of Subletting: The judge ruled against the Petitioner’s argument that the occupants were merely “guests.” The fact that the price of the fitness camp changed based on how many people shared a unit was seen as evidence that Mr. Shepley was, in effect, subletting the units for his business.

• Prohibited Business Activity: The judge found that Mr. Shepley was operating a business from the units in a manner prohibited by Section 7.3 of the CC&Rs, which disallows business activity that “involve[s] persons coming to the Unit.”

• Spirit of the Law: The decision acknowledged that the specific facts of the case “falls between the cracks of the specific language of the statutes and the regulations.” However, the judge emphasized that the Association’s actions were consistent with the broader intent of its rules, stating, “given the totality of the circumstances, the spirit and purpose of the applicable rules is to allow an association to know who is in the community and to prevent an itinerant population.”

• Conclusion: The Petitioner failed to establish that the Association violated leasing statutes or its own CC&Rs.

Finding 3: No Violation of A.R.S. § 33-1260.01(E) (Fees)

The judge found that the $250 charge was not an illegal penalty.

• Nature of the Charge: The evidence showed that no fines for the lease policy violation had actually been assessed. The $250 charge was explicitly for attorney’s fees related to the potential collection of assessments.

• Legal Reasoning: The judge stated, “Nothing in the cited statute or the CC&Rs prohibits such a charge being implemented.” The fee was not a penalty for “incomplete or late information” as covered by the statute, but a charge for legal costs incurred by the Association.

• Conclusion: The Petitioner failed to establish a violation regarding the assessed fees.

V. Referenced Statutes and Governing Documents

Reference

Provision Summary

Relevance to Case

A.R.S. § 33-1242(B)&(C)

Outlines the process for a unit owner to respond to a violation notice and the association’s subsequent duty to provide specific details of the violation.

The judge found no violation because the Petitioner did not follow the procedure to trigger the association’s duty.

A.R.S. § 33-1260.01(C)

Limits the information an association can require about a tenant to names, contact info for adults, lease period, and vehicle information.

The Petitioner’s case rested on interpreting this statute; the judge found the Association’s inquiries justified by the unique circumstances.

A.R.S. § 33-1260.01(E)

Prohibits an association from imposing fees greater than $15 for incomplete or late leasing information.

The Petitioner argued the $250 attorney fee violated this, but the judge found it was a permissible charge for legal costs, not a penalty.

CC&R Section 7.21

Requires leases to be in writing, for a term of not less than 30 days, and requires owners to provide lessee names and lease dates.

The Association argued the arrangement violated the 30-day minimum stay rule for occupants, which the judge upheld in spirit.

CC&R Section 7.3

Prohibits business activities within a unit that involve persons coming to the unit.

The judge found Mr. Shepley’s fitness camp, which housed participants in the units, was a clear violation of this provision.

Leasing Policy

States a $300 fine may be imposed for violations of the 30-day minimum lease policy.

The Notice of Violation referenced this potential fine, though it was never actually assessed.

VI. Final Order and Procedural Notes

• Order: Based on the above findings, the Administrative Law Judge ordered that the Petition be dismissed.

• Binding Nature: The decision is binding on the parties unless a rehearing is granted. A request for rehearing must be filed with the Commissioner of the Department of Real Estate within 30 days of the service of the Order.

• Related Filings: On the same day the decision was issued, December 17, 2018, the court also issued a separate “Order Vacating Hearing,” likely a procedural filing to cancel a future hearing that was rendered unnecessary by the dismissal of the case.

Study Guide: Lord v. The Boulders at La Reserve Condominium Association

This study guide provides a detailed review of the administrative case No. 19F-H1918013-REL, heard by the Arizona Office of Administrative Hearings. The case involves a dispute between a condominium unit owner, George E. Lord, and his condominium association, The Boulders at La Reserve, concerning leasing policies, occupant regulations, and alleged statutory violations.

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, based on the information provided in the source documents.

1. Who were the primary parties involved in this administrative hearing, and what were their respective roles?

2. Describe the business arrangement that Barrie Shepley, the petitioner’s lessee, was operating from the leased condominium units.

3. What was the first official action the Condominium Association’s management took in response to the arrival of Barrie Shepley’s guests, and what was their stated reason?

4. According to the Association, what two specific provisions of the governing documents were being violated by the petitioner and his lessee?

5. What was the petitioner’s central argument for why the occupants of the units were not in violation of the Association’s 30-day minimum stay requirement?

6. On what procedural grounds did the petitioner, George Lord, claim that the Association’s “Notice of Violations” was itself a violation of Arizona law (A.R.S. § 33-1242)?

7. Why did the Administrative Law Judge ultimately rule that the Association did not violate A.R.S. § 33-1242?

8. How did the judge interpret the fact that the price for Barrie Shepley’s fitness camps varied based on the number of people sharing a condo?

9. What financial loss did the petitioner claim to have suffered, and what was the direct cause of this loss?

10. What was the final ruling, or “Order,” issued by the Administrative Law Judge in this case?

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Answer Key

1. The primary parties were George E. Lord, the petitioner and owner of multiple condominium units, and The Boulders at La Reserve Condominium Association, the respondent and governing body for the community. The case was adjudicated by Administrative Law Judge Tammy L. Eigenheer.

2. Barrie Shepley operated a fitness business called “Personal Best” that offered training camps in the Tucson area. The price for these camps included accommodations at The Boulders, with the cost per person varying based on how many campers shared a condominium unit.

3. The Association’s first action was to deactivate the amenity access cards for the three units leased by Shepley. Danielle Morris, the Community Manager, stated this was due to a belief that the petitioner’s lessee was subleasing the units for periods of less than the 30-day minimum in violation of the CC&Rs.

4. The Association alleged violations of the CC&Rs related to subleasing for less than the 30-day minimum timeframe. The formal Notices of Violations also cited the failure to provide the names of all adult occupants and the timeframes of their stays to the HOA.

5. The petitioner argued that because his lessee, Mr. Shepley, was not charging a specific rental fee to the occupants, they were merely “guests” and not sub-lessees. Therefore, the 30-day minimum stay requirement applicable to leases did not apply to them.

6. The petitioner alleged that the Association’s failure to include a citation to the specific statute or CC&R provision that had allegedly been violated in the initial Notice of Violations was a violation of A.R.S. § 33-1242.

7. The judge ruled against the petitioner because A.R.S. § 33-1242 only requires an association to provide the specific provision violated after the unit owner sends a written response to the initial notice by certified mail. The petitioner admitted that he did not respond to the Notices of Violations.

8. The judge found that the tiered pricing structure supported the conclusion that Mr. Shepley was, “in a form, subletting the units.” The fact that the camp price decreased as more people shared a unit indicated that the occupants were paying for their accommodations, not simply staying as guests.

9. The petitioner asserted a financial loss of $6,900 in rental fees for April 2018. This loss was directly caused by Barrie Shepley canceling the remainder of his leases due to the lack of amenities for his occupants.

10. The Administrative Law Judge’s final order was that the Petition filed by George E. Lord be dismissed. This decision was binding unless a rehearing was granted.

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Essay Questions

Instructions: The following questions are designed to test a deeper, more analytical understanding of the case. Formulate a comprehensive response to each prompt, citing specific facts, arguments, and legal interpretations from the case file.

1. Analyze the Administrative Law Judge’s reasoning for concluding that Barrie Shepley was “in a form, subletting” the units. Discuss the evidence cited and the concept of the “spirit and purpose” of the rules versus their literal interpretation.

2. Examine the procedural misstep made by the petitioner, George Lord, after receiving the Notices of Violations. How did this action directly impact the judge’s ruling on his claim regarding A.R.S. § 33-1242?

3. Discuss the conflict between a unit owner’s right to lease their property and a condominium association’s right to enforce its governing documents, using the specific provisions of the CC&Rs (Sections 7.21 and 7.3) and state law (A.R.S. § 33-1260.01) as examples from the case.

4. Explain the distinction the judge made between the $300 potential fine mentioned in the Notice of Violations and the $250 attorney’s fee charged to the petitioner. How did this distinction relate to A.R.S. § 33-1260.01(E), and why was the Association’s action deemed permissible?

5. Evaluate the concept of an “itinerant population” as mentioned by the judge. How did Barrie Shepley’s business model contribute to this concern for the Association, and how did it ultimately weigh into the judge’s decision to dismiss the petition?

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Glossary of Key Terms

Term / Name

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings, weighs evidence, and makes legal rulings on disputes involving government agencies. In this case, Tammy L. Eigenheer.

A.R.S. (Arizona Revised Statutes)

The codified body of laws for the state of Arizona. The petitioner alleged violations of specific statutes within this code, namely A.R.S. § 33-1242 and § 33-1260.01.

A.R.S. § 33-1242

A state law governing the process for notifying a unit owner of a violation of condominium documents and the procedures for the owner to respond and contest the notice.

A.R.S. § 33-1260.01

A state law that places limitations on what information an association can require from a unit owner regarding a tenant and caps certain fees or penalties for incomplete information at $15.

Amenity

A feature or facility of a property that provides comfort, convenience, or pleasure. In this case, access to amenities was controlled by key cards, which the Association deactivated.

Barrie Shepley

The individual who leased three condominium units from the petitioner. He operated a fitness business, “Personal Best,” and used the units to house clients attending his training camps.

Covenants, Conditions, and Restrictions. These are the governing legal documents that set out the rules for a planned community or condominium. The Association alleged Shepley’s use of the units violated Sections 7.21 (leasing limitations) and 7.3 (business use limitations).

George E. Lord

The Petitioner in the case. He was the owner of multiple condominium units at The Boulders at La Reserve and filed the petition against the Association.

Itinerant population

A term used by the judge to describe a population of short-term, transient occupants. The judge concluded that the purpose of the Association’s rules was, in part, to prevent this type of occupancy.

Notice of Violations

A formal written document sent by the Association to the petitioner informing him of alleged violations of the governing documents and outlining potential consequences, such as fines.

Petitioner

The party who files a petition initiating a legal or administrative action. In this case, George E. Lord.

Preponderance of the evidence

The standard of proof required in this administrative hearing. It means that the petitioner had the burden of showing that the facts they sought to prove were “more probable than not.”

Respondent

The party against whom a petition is filed. In this case, The Boulders at La Reserve Condominium Association.

Subletting

The practice of a tenant leasing a rented property to a third party. The Association contended Shepley was subletting the units to his campers, while the petitioner argued they were merely guests.

The Boulders at La Reserve Condominium Association

The Respondent in the case. The homeowners’ association (HOA) responsible for governing the condominium community in Oro Valley, Arizona.

The $6,900 ‘Guest’ Mistake: 3 Hard Lessons from an HOA Lawsuit

A $6,900 loss in rental income and a losing legal battle with his HOA—all because of a dispute over the definition of a “guest.” This case between owner George Lord and The Boulders at La Reserve Condominium Association is a masterclass in how quickly and completely an owner can lose when they misinterpret the rules and underestimate an association’s power.

For any homeowner or landlord, this dispute provides three crucial lessons distilled from the administrative court’s decision. Understanding these precedents is essential before you ever find yourself at odds with your own HOA.

Lesson 1: The “Spirit of the Rule” Can Outweigh Your Clever Workaround

The dispute began when the property owner, Mr. Lord, leased three condos to Barrie Shepley, who ran fitness training camps. Mr. Shepley then used the condos to house his camp attendees, often for periods shorter than the HOA’s 30-day minimum lease term.

The owner argued his arrangement complied with the rules. He claimed his tenant, Mr. Shepley, was not subleasing the units; the attendees were merely “guests,” and therefore not subject to the 30-day minimum. It was a clever workaround, but it fell apart under scrutiny for two distinct reasons.

First, the judge looked past the “guest” label to the financial substance of the arrangement. A key piece of evidence was the camp’s pricing: the cost changed based on how many campers shared a condo ($950 each for four campers vs. $1299 each for two). The judge saw this as clear proof that housing was being paid for, making it a form of subletting.

Second, the judge found that the arrangement constituted a prohibited business activity. The association’s CC&Rs (Section 7.3) explicitly forbade any business activity that “involve[s] persons coming to the Unit.” Since the fitness camp required attendees to come to the condos for lodging, it was a direct violation. The judge’s decision was therefore not just based on a subjective interpretation, but was also grounded in a concrete rule violation.

The court looked at the “totality of the circumstances” to make its ruling, a point powerfully summarized in the final decision:

However, given the totality of the circumstances, the spirit and purpose of the applicable rules is to allow an association to know who is in the community and to prevent an itinerant population.

Pro Tip: Before implementing a workaround, ask yourself: “Does this honor the community’s stated goal?” If the answer is no, you’re on thin ice, even if you think you’ve found a loophole.

Lesson 2: You Must Follow Procedure to the Letter, Or You Forfeit Your Rights

Confident in his “guest” interpretation, the homeowner made his next critical error by underestimating the importance of legal procedure. He argued that the HOA’s initial “Notice of Violations” was invalid because it failed to cite the specific CC&R provision that had allegedly been violated.

This argument was swiftly dismissed due to a simple but fatal mistake: the owner never sent a formal written response to the notice by certified mail.

Under Arizona law (A.R.S. § 33-1242), an owner’s formal written response via certified mail triggers the HOA’s obligation to provide the specific provision that was violated. Without that trigger, the HOA’s duty to explain further is never activated. The homeowner failed to pull the trigger. Because he did not follow this exact procedure, his claim was thrown out, and the HOA had no further legal obligation to detail its case.

Analyst’s Takeaway: In a legal dispute, communication that isn’t sent via the officially mandated channel (like certified mail) is legally equivalent to communication that never happened.

Lesson 3: The HOA’s Legal Fees Can Hit Your Wallet Sooner Than You Think

Early in the dispute, the owner received a letter from the HOA’s legal counsel. The letter outlined the association’s position and included a charge for $250.00. This was not a fine for the violation. It was a fee for the lawyer’s time, as explained in the letter:

“As you know, the Association is entitled to recover its costs and attorneys’ fees from you, including $250.00 already incurred for the preparation of this letter.”

Many governing documents contain clauses that allow an HOA to recover its “costs of enforcement.” This letter was an enforcement action, and the legal fee was the cost. The judge found that nothing in the law or CC&Rs prohibited the HOA from immediately passing this expense to the owner.

This initial charge was a precursor to a much larger financial blow. As an enforcement tool for the violations discussed in Lesson 1, the HOA suspended the tenants’ access to community amenities. This pressure tactic worked perfectly. The tenant, Mr. Shepley, cancelled his leases due to the lack of amenity access, leading to the owner’s stated loss of $6,900 in rental fees.

Pro Tip: Assume your HOA’s first legal letter starts a running tab. Budget for legal costs from day one of a formal dispute, not just for potential fines.

Conclusion: Knowledge is Your Best Defense

The case of Lord vs. The Boulders at La Reserve establishes three clear precedents for owners: a rule’s intent can supersede its literal interpretation, procedural shortcuts void your rights, and the financial clock starts ticking the moment an HOA retains counsel.

This case is a firm reminder of an HOA’s power to enforce its rules, but it also highlights the owner’s responsibility to understand them. It begs the question: In our own communities, are we fully aware of the rules we’ve agreed to live by?

Case Participants

Petitioner Side

George E. Lord (petitioner)

Respondent Side

Maria Kupillas (respondent attorney)
Law offices of Farley, Choate & Bergin
Danielle Morris (community manager)
The Boulders at La Reserve Condominium Association

Neutral Parties

Tammy L. Eigenheer (ALJ)
Judy Lowe (ADRE Commissioner)
Arizona Department of Real Estate
LDettorre (ADRE staff)
Arizona Department of Real Estate
AHansen (ADRE staff)
Arizona Department of Real Estate
djones (ADRE staff)
Arizona Department of Real Estate
DGardner (ADRE staff)
Arizona Department of Real Estate
ncano (ADRE staff)
Arizona Department of Real Estate

Other Participants

Barrie Shepley (renter/key individual)

Michael and Nancy Berent vs, Bell West Ranch Homeowners Association

Posted on September 11, 2018 by [email protected]

Case Summary

Case ID	18F-H1818047-REL
Agency	—
Tribunal	—
Decision Date	2018-09-11
Administrative Law Judge	TE
Outcome	—
Filing Fees Refunded	—
Civil Penalties	—

Parties & Counsel

Petitioner	Michael Berent	Counsel	Pro Se
Respondent	Bell West Ranch Homeowners Association	Counsel	Maria Kupillas

Alleged Violations

No violations listed

Video Overview

Audio Overview

Decision Documents

18F-H1818047-REL Decision – 659285.pdf

Uploaded 2026-04-24T11:12:59 (142.7 KB)

18F-H1818047-REL Decision – 659287.pdf

Uploaded 2026-04-24T11:13:05 (193.9 KB)

18F-H1818047-REL Decision – 679550.pdf

Uploaded 2026-04-24T11:13:14 (133.6 KB)

18F-H1818047-REL Decision – 952813.pdf

Uploaded 2026-04-24T11:13:23 (42.6 KB)

18F-H1818047-REL Decision – 952828.pdf

Uploaded 2026-04-24T11:13:27 (30.5 KB)

18F-H1818047-REL Decision – 659285.pdf

Uploaded 2026-01-23T17:24:27 (142.7 KB)

18F-H1818047-REL Decision – 659287.pdf

Uploaded 2026-01-23T17:24:32 (193.9 KB)

18F-H1818047-REL Decision – 679550.pdf

Uploaded 2026-01-23T17:24:35 (133.6 KB)

18F-H1818047-REL Decision – 952813.pdf

Uploaded 2026-01-23T17:24:39 (42.6 KB)

18F-H1818047-REL Decision – 952828.pdf

Uploaded 2026-01-23T17:24:41 (30.5 KB)

Briefing on Administrative Law Judge Decision: Berent v. Bell West Ranch Homeowners Association

Executive Summary

This briefing document analyzes the administrative legal dispute between Michael and Nancy Berent (Petitioners) and the Bell West Ranch Homeowners Association (Respondent), docketed as No. 18F-H1818047-REL. The case centered on the Petitioners' challenge to a driveway extension installed by their neighbors, which the Petitioners alleged violated the Association's Covenants, Conditions, and Restrictions (CC&Rs) and Arizona Revised Statutes.

The hearing was held in August 2018 before Administrative Law Judge (ALJ) Tammy L. Eigenheer. The Petitioners sought to prove that the Association failed to enforce municipal codes, allowed obstructions in a public utility easement, maintained an improperly staffed Architectural Review Committee (ARC), and failed to impose mandatory penalties.

On September 11, 2018, the ALJ issued a decision dismissing the Petition in its entirety. The ruling concluded that the Petitioners failed to meet the burden of proof required to establish any of the alleged violations. A subsequent attempt by the Petitioners to file additional documents in early 2022 was rejected by the Office of Administrative Hearings (OAH) due to a lack of jurisdiction following the final 2018 decision.

Analysis of Key Themes

1. Responsibility for Regulatory Compliance

A central theme of the dispute was whether the HOA is responsible for enforcing municipal zoning and building codes. The Petitioners argued that because the City of Surprise issued a "Notice of Ordinance Violation" regarding the neighbor's driveway extension, the HOA was obligated to take enforcement action under CC&R Section 8.02.

However, the analysis of the evidence showed:

Homeowner Liability: The HOA’s approval notice explicitly stated that homeowners must follow all local building codes and setback requirements.
Limited HOA Scope: The HOA maintained that its ARC does not check municipal codes prior to approving applications; that responsibility remains with the individual homeowner.
Definition of Structure: The ALJ found that the Petitioners failed to prove a driveway qualified as a "structure" under the specific wording of Section 8.02, which governs construction compliance.

2. Discretionary vs. Mandatory Enforcement

The Petitioners contended that the HOA was required to impose sanctions for violations, citing "common sense" and their own history of receiving notices for minor infractions like weeds.

The legal analysis centered on A.R.S. § 33-1803(B), which states that a board of directors may impose reasonable monetary penalties. The ALJ ruled that the language is permissive, not mandatory. The Respondent successfully argued that its decision not to pursue enforcement was reasonable because the City of Surprise had also declined to take further action after the initial notice of violation.

3. Evidentiary Standards and Burden of Proof

The case highlights the "Preponderance of the Evidence" standard. As the Petitioners, the Berents bore the burden of proving that the HOA committed the alleged violations. The ALJ found their evidence—primarily based on meeting minutes and personal observations—insufficient to overcome the testimony and documentation provided by the Respondent.

4. Interpretation of Easements and Obstructions

The Petitioners argued that the driveway extension interfered with a "public utility easement" due to the proximity of a fire hydrant. The ALJ rejected this theme based on two findings:

Lack of Proof: No evidence was provided to establish that the fire hydrant location was a recorded public utility easement.
Functional Use: Evidence showed the hydrant remained fully accessible. During a fire two houses away, the fire department successfully used the hydrant, running a hose across the Neighbors’ driveway without interference.

Key Parties and Entities

Entity	Role	Key Personnel/Details
Michael and Nancy Berent	Petitioners	Homeowners in Bell West Ranch; filed the dispute.
Bell West Ranch HOA	Respondent	Managed by VISION Community Management.
Tammy L. Eigenheer	ALJ	Presiding Administrative Law Judge.
Regis Salazar	Witness	Represented VISION Community Management.
City of Surprise	Municipal Body	Issued a notice of violation but took no further action.
ARC	Committee	Architectural Review Committee; approved the driveway.

Important Quotes with Context

Quote	Context
"All structures… must be constructed on the Property in compliance with any county or municipal zoning regulations… and must comply with the provisions of this Declaration."	CC&R Section 8.02: The primary regulation cited by Petitioners to argue the HOA must ensure city code compliance.
"The board of directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws and rules of the association."	A.R.S. § 33-1803(B): The statutory basis for the ruling that HOA enforcement is discretionary rather than mandatory.
"A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not."	Legal Standard: Used by the ALJ to explain why the Petitioners' arguments failed despite their extensive testimony.
"Ms. Salazar denied that the ARC checked municipal codes prior to approving an application."	Hearing Testimony: Establishing the HOA's stance that code compliance is the homeowner's burden, not the committee's.
"The Office of Administrative Hearings has had no jurisdiction in this matter since [September 11, 2018]."	March 8, 2022 Minute Entry: Explaining the rejection of late-filed documents by Nancy Berent.

Timeline of Significant Events

July 7, 2015: Neighbors submit a design review application for a 10' x 35' driveway extension.
July 15, 2015: The ARC approves the application with conditions regarding setbacks.
August 2015: Neighbors begin construction; Petitioners begin complaints to the Board.
May 16, 2016: City of Surprise issues a Notice of Ordinance Violation for "Nonconforming Uses and Structures."
April 26, 2018: Petitioners file their HOA Dispute Process Petition with the Arizona Department of Real Estate, paying a $2,000 filing fee.
August 15 & 22, 2018: Hearing dates at the OAH Phoenix office.
September 11, 2018: Final Decision issued dismissing all charges.
March 8, 2022: ALJ issues a "Document Reject" entry regarding recent submissions from Petitioner Nancy Berent.

Actionable Insights from the Ruling

Homeowner Due Diligence: HOA approval for a project does not supersede municipal requirements. Homeowners remain independently liable for city or county zoning compliance even if the HOA approves their design application.
Board Discretion: Association boards have broad discretion in enforcement. A violation of a CC&R does not automatically trigger a legal requirement for the board to penalize a member, especially if municipal authorities have declined to pursue the matter.
Record-Keeping Clarity: The dispute over the ARC's size (three members vs. one) was exacerbated by vague meeting minutes. The ALJ accepted testimony that the minutes merely listed the "reporter" rather than the full committee, but clearer documentation might have prevented this specific allegation.
Finality of OAH Decisions: Once a decision is issued by the OAH and the 30-day window for a rehearing request to the Commissioner of the Department of Real Estate passes, the OAH loses jurisdiction. Parties cannot continue to file evidence or documents with the ALJ after the case is closed.

Study Guide: Berent v. Bell West Ranch Homeowners Association

This study guide provides a comprehensive overview of the administrative hearing between Michael and Nancy Berent (Petitioners) and the Bell West Ranch Homeowners Association (Respondent). It explores the legal issues, factual findings, and statutory interpretations surrounding a dispute over property modifications and HOA enforcement responsibilities.

Key Legal Concepts and Case Background

1. Dispute Origins

The case originated from a 2015 application by the Petitioners' neighbors to install a 10-foot by 35-foot concrete driveway extension. The Architectural Review Committee (ARC) approved the project with conditions requiring compliance with city requirements and building codes. The Petitioners challenged this approval and the subsequent lack of enforcement by the HOA.

2. The Burden of Proof

In administrative hearings of this nature, the Petitioner bears the burden of proof. They must establish that the Respondent committed the alleged violations by a preponderance of the evidence. This standard means the evidence must convince the trier of fact that the contention is "more probably true than not" or carries the "most convincing force."

3. ARC Composition and Reporting

A central point of contention was whether the ARC was properly constituted according to Section 6.02 of the CC&Rs, which requires three individuals. The Petitioners used Board of Director meeting minutes—which often listed only one individual presenting the ARC report—to argue the committee was understaffed. The Respondent successfully argued that the minutes only reflected the person presenting the report, not the total membership of the committee.

4. Discretionary Enforcement

Under A.R.S. § 33-1803(B), a board of directors may impose monetary penalties for violations of the declaration and bylaws. The Administrative Law Judge (ALJ) interpreted this language as permissive rather than mandatory, meaning an HOA is not legally required by this statute to pursue enforcement action against a member.

5. Legal Definitions of "Structure"

The case hinged on whether a driveway constitutes a "structure." Using Black’s Law Dictionary, a structure is defined as "any construction, production, or piece of work artificially built up or composed of parts purposefully joined together." The ALJ determined the Petitioners failed to prove the driveway fell under the purview of CC&R sections governing structures.

Short-Answer Practice Questions

1. What was the filing fee paid by the Petitioners to initiate the HOA Dispute Process? Answer: $2,000.00.

2. According to Section 6.02 of the CC&Rs, how many individuals must compose the Architectural Committee? Answer: Three individuals (who do not necessarily need to be members of the association).

3. Why did the HOA choose not to pursue enforcement action against the neighbors regarding the driveway extension? Answer: The Respondent decided not to pursue action because the City of Surprise had declined to take further enforcement action after issuing an initial Notice of Ordinance Violation.

4. What evidence did the Petitioners provide to suggest the fire hydrant was a public utility easement? Answer: The Petitioners did not provide specific evidence to establish the hydrant as a public utility easement; however, they noted its use by the fire department during a nearby residential fire.

5. What is the time limit for filing a request for a rehearing after an ALJ decision is served? Answer: 30 days.

6. Why did the Office of Administrative Hearings (OAH) reject documents sent by Nancy Berent in March 2022? Answer: The OAH no longer had jurisdiction over the matter, as the final decision had been issued years earlier on September 11, 2018.

Essay Prompts for Deeper Exploration

I. The Interpretation of Mandatory vs. Permissive Language

Analyze the ALJ's conclusion regarding A.R.S. § 33-1803(B). Discuss how the word "may" influences the level of accountability an HOA has toward its members. In your essay, consider whether the Petitioners' "common sense" argument for mandatory enforcement has any legal standing against the plain language of the statute.

II. Evidentiary Weight in Administrative Hearings

Compare the evidentiary value of the Board of Director meeting minutes provided by the Petitioners against the testimony of Regis Salazar from VISION Community Management. Discuss why the ALJ found the witness testimony more convincing regarding the composition of the ARC than the written meeting minutes.

III. The Scope of CC&R Restrictions

Evaluate the Petitioners' claims under Section 8.02 and 8.06. Specifically, address the legal challenge of defining a driveway as a "structure" and an "obstruction." How did the fact that the fire department successfully used the fire hydrant during a fire impact the ALJ’s ruling on the alleged obstruction of an easement?

Glossary of Important Terms

Term	Definition
A.R.S. § 33-1803(B)	The Arizona statute granting HOA boards the power to impose reasonable monetary penalties for violations.
Architectural Review Committee (ARC)	The body responsible for reviewing and approving or denying home modification applications within the HOA.
CC&Rs	Covenants, Conditions, and Restrictions; the governing documents that outline the rules and limitations for property use within a community.
Continuance	A postponement of a hearing or legal proceeding to a later date.
Jurisdiction	The legal authority of a court or administrative body to hear and decide a case.
Nonconforming Use	A land use or structure that was legal when established but does not conform to current zoning or code requirements.
Preponderance of the Evidence	The standard of proof in civil and administrative cases, requiring that a claim be more likely true than not.
Public Utility Easement	A designated area of land reserved for the installation and maintenance of public services (e.g., water, electricity, fire hydrants).
Respondent	The party against whom a petition is filed (in this case, the Bell West Ranch HOA).
Structure	Artificially built-up construction or work composed of purposefully joined parts.

Summary of Findings

Issue	ALJ Ruling	Reasoning
Section 8.02 (Zoning)	No Violation	Petitioners did not establish the driveway as a "structure" under this section.
Section 8.06 (Easements)	No Violation	No evidence that the hydrant was a public utility easement or that the driveway obstructed its use.
A.R.S. § 33-1803(B)	No Violation	The statute is permissive; the HOA is not required to take enforcement action.
Section 6.02 (ARC Size)	No Violation	Witness testimony confirmed three members; minutes only showed the reporter.

The Driveway Dilemma: Lessons from a Real-Life HOA Legal Battle

1. When Homeowner Dreams Clash with Association Rules

Homeownership in a planned community is governed by a delicate balance of individual liberty and collective regulation. However, when those interests collide, the resulting friction often leads to what we in the field call "litigious exhaustion." The case of Michael and Nancy Berent vs. Bell West Ranch Homeowners Association (No. 18F-H1818047-REL) is a quintessential example. What began as a simple neighborly improvement—a driveway extension—devolved into a multi-year administrative battle involving municipal code interpretations, fire safety allegations, and challenges to the Association’s procedural integrity. This case serves as a vital blueprint for understanding the limits of homeowner petitions and the broad scope of Board authority.

2. Chronology of a Conflict: From Concrete to Courtroom

The timeline of this dispute highlights the slow escalation from a standard architectural request to a formal administrative hearing:

July 7, 2015: The Petitioners’ neighbors submitted an Application for Design Review to install a 10×35-foot concrete driveway extension.
July 15–17, 2015: The Architectural Review Committee (ARC) approved the application with a critical "13-inch setback" condition to ensure compliance with city requirements.
August 2015: Construction commenced. The Berents immediately challenged the project, providing photographic evidence to the Board and alleging fire hydrant obstructions.
May 16, 2016: The City of Surprise issued a Notice of Ordinance Violation, labeling the extension a "nonconforming use." Crucially, however, the City ultimately declined to pursue further enforcement.
April 26, 2018: The Berents escalated the matter by filing a formal HOA Dispute Process Petition, incurring a $2,000 filing fee to bring the matter before the Office of Administrative Hearings (OAH).
August 15 & 22, 2018: Administrative Law Judge (ALJ) Tammy L. Eigenheer conducted formal hearings to adjudicate the Petitioners' claims.

3. The Four Legal Challenges: Allegations vs. Evidence

To prevail, the Petitioners had to demonstrate specific violations of the community’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs). The ALJ’s analysis of these four issues underscores the importance of precise legal definitions.

Issue 1: CC&R Section 8.02 (Compliance with Zoning) The Berents alleged the driveway violated municipal zoning because its entrance occupied more than 50 percent of the front lot line. However, Section 8.02 specifically applies to "structures." The ALJ ruled that the Petitioners failed to prove a flat concrete slab met the legal definition of a "structure." Utilizing Black’s Law Dictionary, the court defined a structure as: "Any construction, production, or piece of work artificially built up or composed of parts purposefully joined together." Under this standard, the driveway extension did not fall under the purview of Section 8.02, providing the Association an effective affirmative defense.

Issue 2: CC&R Section 8.06 (Utility Easements) The Petitioners claimed the driveway obstructed a fire hydrant, interfering with a public utility easement. The ALJ found this claim lacked foundational evidence, as the Berents failed to prove a recorded easement even existed. Furthermore, the defense noted that a city-authorized sidewalk already existed in front of the hydrant. Most damaging to the Petitioners' case was their own testimony: they admitted that during a recent nearby fire, the fire department successfully utilized the hydrant by running a hose across the neighbors' driveway without hindrance.

Issue 3: A.R.S. § 33-1803(B) (Enforcement Discretion) A central theme of the Berents' argument was that the HOA must penalize the neighbors following the City’s notice of violation. The ALJ corrected this misconception by pointing to the statutory language of A.R.S. § 33-1803(B), which states a board "may impose reasonable monetary penalties." This grants the Board de facto enforcement discretion. Because the City of Surprise had ceased its own enforcement efforts, the HOA’s decision to mirror that inaction was a valid exercise of administrative finality.

Issue 4: CC&R Section 6.02 (Committee Composition) The Petitioners challenged the validity of the ARC’s approval, arguing it was a one-person committee in violation of the three-person requirement in Section 6.02. They relied on meeting minutes that listed only one name—such as Ken Hawkins or Larry Bolton—under the ARC report. However, Regis Salazar of VISION Community Management testified that these minutes merely identified the individual presenting the report to the Board, not the full committee roster. The ALJ found that the Association maintained a three-member committee at all relevant times.

4. The Burden of Proof: Why the Case Was Dismissed

In administrative law, the burden of persuasion rests solely on the Petitioner. To succeed, the Berents had to establish their claims by a Preponderance of the Evidence, meaning the evidence must prove the contention is "more probably true than not."

The ALJ dismissed the petition in its entirety because the Berents relied almost exclusively on subjective testimony and "common sense" inferences. In the eyes of the law, "common sense" is not a substitute for objective documentation. While the Petitioners inferred a lack of committee members from the brevity of meeting minutes, they failed to produce actual ARC appointment logs or internal records to contradict the Association's testimony. Without superior evidentiary weight, their claims could not survive the Association's rebuttal.

5. Post-Decision Reality: The 2022 Jurisdiction Ruling

The finality of an ALJ decision is absolute once the statutory windows for appeal close. Nearly four years after the 2018 dismissal, Nancy Berent attempted to revive the matter by filing additional documents with the OAH.

In a March 8, 2022, "Minute Entry – Document Reject," the court issued a sharp reminder of legal boundaries. Once a final decision is rendered and the 30-day window for a rehearing request expires, the OAH loses all jurisdiction. Consequently, any subsequent filings are a legal nullity. The court noted that while these documents would be retained in the system, they would receive no response, as the matter was irrevocably closed.

6. Key Takeaways for Homeowners and Boards

The Berent decision offers critical insights for community governance:

Understand Discretionary Power: Statutes and CC&Rs using the word "may" grant Boards the authority to choose whether to pursue enforcement. They are not legally bound to fine a homeowner simply because a neighbor demands it.
Evidence is King: To challenge a Board’s procedure, a Petitioner needs more than inferences from meeting minutes. Direct documentation, such as appointment logs or committee rosters, is required to meet the burden of proof.
Narrow Definitions Matter: As seen with the "structure" definition, legal interpretations are often much narrower than a layperson’s "common sense" understanding.
Respect the Window of Finality: Legal remedies have a "point of no return." In Arizona HOA disputes, the 30-day window for a rehearing is the final opportunity to contest a ruling before the agency loses jurisdiction forever.

7. Conclusion: Seeking Resolution Beyond the Courtroom

The Berents' $2,000 filing fee resulted in a total dismissal, proving that HOA litigation is a high-stakes gamble with significant financial and emotional costs. This case highlights that the "Preponderance of the Evidence" standard is a high bar for homeowners who lack direct access to Association records. To avoid the frustration of a case being "dismissed in its entirety," neighbors should prioritize proactive communication and mediation. In the world of community governance, a conversation across a driveway is almost always more cost-effective than a multi-year battle in the Office of Administrative Hearings.

Case Participants

Petitioner Side

Michael Berent (Petitioner)
Filed the HOA Dispute Process Petition
Nancy Berent (Petitioner)
Testified on her own behalf

Respondent Side

Maria Kupillas (Representative)
Farmers Insurance
Represented Bell West Ranch Homeowners Association
Regis Salazar (Witness)
VISION Community Management
Ken Hawkins (Architectural Review Committee Member)
Bell West Ranch Homeowners Association
Larry Bolton (Architectural Review Committee Member)
Bell West Ranch Homeowners Association
Kelsey Dressen (Representative)
Farmers Insurance

Neutral Parties

Tammy L. Eigenheer (Administrative Law Judge)
Office of Administrative Hearings
Lana Collins (Development Service Specialist)
City of Surprise
Judy Lowe (Commissioner)
Arizona Department of Real Estate
Louis Dettorre (Commissioner)
Arizona Department of Real Estate

Other Participants

Kristin Roebuck Bethell (Attorney)
Horne Slaton, PLLC

Butler, Clifford and Jean vs. Happy Trails Community Association

Posted on July 2, 2012 by [email protected]

Case Summary

Case ID	12F-H1212004-BFS
Agency	Department of Fire, Building and Life Safety
Tribunal	OAH
Decision Date	2012-07-05
Administrative Law Judge	Sondra J. Vanella
Outcome	The ALJ dismissed the petition, concluding that the Petitioners failed to prove the HOA violated the CC&Rs. The governing documents require a Residence Vehicle to be present for occupancy, and the Arizona Room cannot serve as the main residence.
Filing Fees Refunded	$500.00
Civil Penalties	$0.00

Parties & Counsel

Petitioner	Clifford and Jean Butler	Counsel	—
Respondent	Happy Trails Community Association	Counsel	Maria Kupillas

Alleged Violations

CC&Rs Section 1.31; Section 11.1

Outcome Summary

The ALJ dismissed the petition, concluding that the Petitioners failed to prove the HOA violated the CC&Rs. The governing documents require a Residence Vehicle to be present for occupancy, and the Arizona Room cannot serve as the main residence.

Why this result: The Petitioners failed to prove a violation because the plain language of the CC&Rs supports the HOA's requirement that a Residence Vehicle be present on the lot for residency.

Key Issues & Findings

Enforcement of Residence Vehicle Policy

Petitioners alleged that the HOA enforced a policy preventing residents from living in an Arizona Room without a Residence Vehicle on the lot, arguing this policy was unreasonable and contrary to the CC&Rs.

Orders: The Petition is dismissed. No action is required of Happy Trails.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

CC&Rs Section 1.31
CC&Rs Section 11.1

Video Overview

Audio Overview

Decision Documents

12F-H1212004-BFS Decision – 300400.pdf

Uploaded 2026-04-24T10:40:09 (93.4 KB)

12F-H1212004-BFS Decision – 304741.pdf

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12F-H1212004-BFS Decision – 300400.pdf

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12F-H1212004-BFS Decision – 304741.pdf

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Administrative Decision Briefing: Butler v. Happy Trails Community Association

Executive Summary

The case of Clifford and Jean Butler vs. Happy Trails Community Association (No. 12F-H1212004-BFS) centers on a dispute regarding residency requirements within a planned adult community. The Petitioners, Clifford and Jean Butler, challenged an association policy requiring the presence of a "Residence Vehicle" (RV) on their lot as a prerequisite for occupying an "Arizona Room."

Following a hearing on June 18, 2012, Administrative Law Judge (ALJ) Sondra J. Vanella ruled in favor of the Happy Trails Community Association. The ALJ concluded that the Association's enforcement of the policy was consistent with the community's Amended and Restated Declarations of Covenants, Conditions and Restrictions (CC&Rs). The decision was certified as final on August 20, 2012, by the Department of Fire, Building and Life Safety.

Detailed Analysis of Key Themes

1. Interpretation of Governing Documents

The core of the legal dispute rested on the specific definitions and residential use restrictions outlined in the Happy Trails CC&Rs dated February 14, 2005.

CC&R Section	Definition/Provision	Legal Impact
Section 1.31	Defines "Arizona Room" as a separate structure used in part for residential purposes that does not serve as the main residence.	Established that an Arizona Room is legally secondary to the primary dwelling unit.
Section 11.1	States individuals may only reside in a Residence Vehicle; no other portion of the lot may be occupied as a residence.	Established the Residence Vehicle as the only permissible primary dwelling.
Section 11.1 (cont.)	Residents may "also occupy" an Arizona Room as long as they reside in a Residence Vehicle.	Created a requirement for contemporaneous occupancy; the RV must be present for the Arizona Room to be used.

2. Community Composition and Historical Enforcement

The evidence presented established Happy Trails as an over-55 planned community with approximately 2,000 lots.

Infrastructure: Approximately 500 lots contain Arizona Rooms, while fewer than 1,000 lots are designed to accommodate a Residence Vehicle. Some lots are reserved for permanent manufactured homes.
Historical Usage: Mr. Butler testified that the Association had historically condoned the occupancy of Arizona Rooms since 1997. He argued that many residents live in these rooms full-time, often despite conflicting language in the original 1985 CC&Rs.
Current Enforcement: The Association maintains a strict enforcement stance to avoid setting precedents. The Board of Directors has consistently voted against granting variances or waivers regarding the RV requirement.

3. Economic and Practical Hardship

The Petitioners highlighted several practical and financial burdens imposed by the strict adherence to the CC&Rs:

Maintenance Costs: Residents who do not use their RVs must still pay for licensure, insurance, and maintenance.
Depreciation: RVs lose value over time, representing a significant financial loss for residents who only keep them to satisfy Association requirements.
Compliance Costs: Mr. Butler cited instances of residents purchasing 24-foot travel trailers at costs exceeding $10,000 solely to avoid Association fines and remain in their Arizona Rooms.
Market Realities: The Butlers expressed difficulty selling their lot, which prevented them from moving out of the community and necessitated their continued occupancy of the Arizona Room.

4. Administrative Legal Framework

The burden of proof in this matter rested with the Petitioners to demonstrate by a "preponderance of the evidence" that the Association violated the CC&Rs.

Finding: The ALJ determined that the Association’s "Courtesy Notice" and subsequent enforcement actions were in strict accordance with the written governing documents.
Certification: Because the Department of Fire, Building and Life Safety took no action to reject or modify the ALJ’s decision by August 9, 2012, the decision became the final administrative action.

Important Quotes with Context

"The Association is enforcing a policy that is not in accord with the CC&Rs… If I move my recreational vehicle off my lot for any reason… I have three choices. 1. Move out of my Arizona Room… 2. To purchase another recreational vehicle… 3. The Association will levy fines of up to $2,500."

Context: From the Butlers' initial petition filed on February 29, 2012, outlining the perceived unreasonableness and cost of the Association's enforcement.

"Arizona Room… does not serve as the main residence on the Lot."

Context: Definition found in Section 1.31 of the CC&Rs, which served as the primary legal basis for the ALJ's decision against the Butlers.

"Individuals who reside on Lots on which Arizona Rooms are allowed may also occupy an Arizona Room on the Lot so long as the entire Lot is occupied by no more than two individuals."

Context: Section 11.1 of the CC&Rs, interpreted by the court to mean that an Arizona Room can only be occupied if the resident is also occupying a Residence Vehicle on the same lot.

"While the requirement of the presence of a Residence Vehicle on the lot may not necessarily be economical or practical for many residents at this time, if residents are dissatisfied with this requirement, procedures exist to amend the CCR’s."

Context: The ALJ’s concluding remarks, acknowledging the hardship on residents but emphasizing that the court must follow the written law of the Association.

Actionable Insights

Amendment Requirements

The ruling clarifies that the only path for residents to change the residency requirements is through a formal amendment of the CC&Rs.

Threshold: An amendment requires 1,001 votes.
Challenges: Historical data suggests reaching this threshold is difficult, as the Association has never recorded more than 800 votes for any proposal. A proposed amendment was scheduled for a December 2012 vote, though community leaders expressed skepticism regarding its passage.

Association Enforcement Strategy

The Association’s refusal to grant variances is a deliberate strategy to maintain uniform enforcement. The Board of Directors believes that granting a single waiver would obligate them to grant waivers to all residents, potentially undermining the community's established structure.

Compliance Standards

For residents to avoid fines (which can reach $2,500) or legal action, they must:

Maintain a Residence Vehicle (motor home or trailer) of at least 24 feet in length on the property.
Provide evidence of repair if the Residence Vehicle is temporarily removed from the lot, as the Association only allows full-time Arizona Room occupancy during such documented intervals.

Study Guide: Clifford and Jean Butler v. Happy Trails Community Association

This study guide provides a comprehensive overview of the administrative law case Clifford and Jean Butler v. Happy Trails Community Association (No. 12F-H1212004-BFS). It examines the legal dispute regarding the interpretation of Covenants, Conditions and Restrictions (CCR’s) in a planned community and the subsequent ruling by the Office of Administrative Hearings.

Key Concepts and Case Overview

1. The Core Conflict

The dispute centered on whether residents of the Happy Trails Community Association could legally reside in an "Arizona Room" without a "Residence Vehicle" (such as a motor home or trailer) present on the lot. The Petitioners, Clifford and Jean Butler, argued that the Association's enforcement of this requirement was unreasonable, costly, and not supported by the governing documents.

2. Governing Documents: The CCR’s

The primary authority in this case was the Amended and Restated Declarations of Covenants, Conditions and Restrictions for Happy Trails Resort, dated February 14, 2005. Two specific sections were pivotal to the legal analysis:

Section 1.31: Defines an "Arizona Room" as a separate structure used in part for residential purposes that "does not serve as the main residence on the Lot."
Section 11.1: Specifies that individuals may only reside in a "Residence Vehicle" and that no other portion of the lot may be occupied as a residence, except that those with Arizona Rooms may occupy them as long as the lot is occupied by no more than two individuals.

3. Burden of Proof

In administrative proceedings of this nature, the Petitioners (the Butlers) bore the burden of proving by a preponderance of the evidence that the Respondent (Happy Trails) violated the governing CCR’s. Under Arizona law (A.A.C. R2-19-119), the Petitioners had to demonstrate that their claim was more probable than not.

4. Variance and Amendment Procedures

The case highlighted the rigid nature of HOA governance:

Variances: The Board of Directors testified that they do not grant variances or waivers to avoid setting a precedent that would require granting them for all residents.
Amendments: Changing the CCR’s requires a formal vote. In this community, 1,001 votes were required to pass an amendment, a threshold that witness testimony suggested was historically difficult to reach.

Short-Answer Practice Questions

1. What was the specific allegation made by Clifford and Jean Butler against Happy Trails Community Association? Answer: They alleged that the Association was enforcing a policy contrary to the CCR’s by not allowing residents to reside in an Arizona Room without a Residence Vehicle present on the lot.

2. How do the CCR’s define an "Arizona Room" under Section 1.31? Answer: It is defined as a separate structure on a lot used for residential purposes that does not serve as the main residence.

3. According to Section 11.1 of the CCR’s, what is the only allowed "main residence" on a lot? Answer: A Residence Vehicle.

4. What was the financial impact cited by Mr. Butler regarding the Association’s policy? Answer: He argued that maintaining an unused Residence Vehicle is expensive due to depreciation, licensure requirements, and insurance costs. Additionally, some residents purchased $10,000 trailers they never intended to use just to comply with the policy.

5. Why did the Board of Directors refuse to grant a variance to the Butlers? Answer: The Board determined that granting a variance to one resident would obligate them to grant variances to all residents who applied.

6. What was the final ruling of the Administrative Law Judge (ALJ)? Answer: The ALJ concluded that the Butlers failed to prove that Happy Trails violated the CCR’s and recommended the Petition be dismissed.

Essay Prompts for Deeper Exploration

Strict Construction of CCR’s vs. Homeowner Hardship: Analyze the tension between the "economic and practical" concerns raised by the Butlers and the legal necessity for the ALJ to adhere to the written text of the CCR’s. Should administrative judges have the latitude to waive HOA rules based on the "age and health concerns" of residents, or is strict adherence vital for community stability?

The Role of the Amendment Process: The ALJ suggested that if residents are dissatisfied with the CCR’s, they should utilize the amendment process. Discuss the challenges of this democratic approach in a large community (2,000 lots) requiring a high vote threshold (1,001 votes). Does a high threshold for change unfairly protect the status quo at the expense of evolving resident needs?

The Definition of "Residence": Evaluate the legal distinction between a "main residence" and an "Arizona Room" as established in the Happy Trails CCR’s. How does this distinction impact the property rights of the owners, and how did it ultimately dictate the outcome of the Butlers' petition?

Glossary of Important Terms

Term	Definition
Administrative Law Judge (ALJ)	A judge who triages and adjudicates disputes within a specific government agency or administrative office.
Arizona Room	In the context of Happy Trails, a separate residential structure on a lot that is secondary to the main Residence Vehicle.
CCR’s	Covenants, Conditions and Restrictions; the governing documents that dictate the rules and limitations of a planned community or HOA.
Courtesy Notice	A formal communication from an HOA notifying a resident of a rule violation before fines or legal actions are taken.
Preponderance of the Evidence	The standard of proof in civil and administrative cases, meaning the evidence is "more likely than not" to be true or more convincing than the opposing evidence.
Residence Vehicle	A motor home or trailer (specifically 24 feet or longer in this case) designated by the CCR’s as the primary dwelling unit on a lot.
Variance	An official waiver or exception granted by a governing body to allow a property owner to deviate from the established rules or CCR’s.
Final Agency Action	The final decision made by an administrative body which, once certified, can be appealed to the Superior Court.

The RV or the Room? Lessons from the Happy Trails HOA Dispute

1. Introduction: The Clash of Rules and Lifestyle

In the expansive Happy Trails Community Association—a planned over-55 community in Arizona spanning 2,000 lots across 10 subdivisions—a fundamental dispute recently highlighted the rigid hierarchy of governing documents over personal lifestyle preferences. The conflict centered on the definition of "permitted use" versus "incidental use" regarding a staple of desert architecture: the "Arizona Room."

The core dilemma in Case No. 12F-H1212004-BFS, Butler vs. Happy Trails, was whether a resident could legally occupy an Arizona Room as a primary residence in the absence of a "Residence Vehicle" (RV) on the lot. As a Senior HOA Legal Analyst, I find this case a quintessential example of how homeowners often mistake historical leniency for a permanent waiver of rights. This post examines the Administrative Law Judge's (ALJ) ruling and the sobering reality of living under Covenants, Conditions, and Restrictions (CC&Rs).

2. The Core Conflict: A Case of Definitions

The dispute was triggered when Clifford and Jean Butler, residents for 12 years, sold their RV and attempted to reside full-time in their Arizona Room while listing their lot for sale. On May 8, 2012, the HOA issued a "Courtesy Notice" identifying a violation of the governing documents and directing the Butlers to place a motor home or trailer (24 feet or longer) on the property immediately.

The Butlers filed a petition with the Department of Fire, Building and Life Safety, anchoring their challenge on three primary arguments:

Physical and Financial Burden: They asserted that maintaining an unused RV is a significant hardship, requiring insurance, licensing, and a capital investment that often exceeds $10,000 for a compliant vehicle.
Historical Condonation: The Butlers argued the HOA had condoned full-time residence in Arizona Rooms since 1997, even though the 1985 CC&Rs—which were in effect when they purchased in 1999—did not even permit the construction of such rooms.
Lack of Specific Fining Authority: They contended the CC&Rs contained no explicit language authorizing the Association to levy fines (which they believed could reach $2,500) for the mere absence of a recreational vehicle.

3. Decoding the CC&Rs: The Legal Reality

The ALJ's analysis focused strictly on the 2005 Amended and Restated CC&Rs. The case turned on whether an Arizona Room is legally capable of serving as a primary residence under the community’s specific definitions.

Section 1.31: Defines "Arizona Room" as "a separate structure located on the Lot used, in part, for residential purposes, but that does not serve as the main residence on the Lot." Section 11.1 (Residential Use): "Each lot may be used only for residential purposes and none other. Except as otherwise set forth in this section, individuals may only reside in a Residence Vehicle and no other portion of the Lot may be occupied as a residence. Individuals who reside on Lots on which Arizona Rooms are allowed may also occupy an Arizona Room on the Lot…"

The ALJ interpreted these sections with clinical literalism. Because Section 1.31 explicitly states the room "does not serve as the main residence," it is legally incapable of being a standalone dwelling. Under Section 11.1, the right to occupy the room is tethered to the "Residence Vehicle." Without the RV, the occupancy of the Arizona Room is no longer "contemporaneous" with a permitted primary use; it becomes an unauthorized use of a secondary structure.

4. The Practical Burden vs. Legal Enforcement

Testimony from the Butlers and witness Sal Ognibene highlighted the economic and health-related difficulties of the "RV requirement," noting that the population's advancing age makes maintaining depreciating vehicles impractical. However, the HOA leadership—including Community Manager Beth McWilliams and Board President Jim Weihman—testified that the Board refuses to grant variances to avoid the legal "domino effect." If a waiver is granted for one resident, the Association risks losing its ability to enforce the standard against others, potentially eroding the community's character as an RV resort.

Homeowner’s Perspective	HOA’s Legal Position
High Value Assets: Arizona Rooms are high-quality structures valued between $200,000 and $300,000, suitable for full-time living.	Defined Use: Regardless of value, the CC&Rs define the Arizona Room as incidental to a Residence Vehicle.
Economic Hardship: Requiring a $10,000+ "placeholder" RV that is never used is an unreasonable financial burden.	Contractual Adherence: The CC&Rs are a binding contract; the law is indifferent to financial hardship when the text is clear.
Historical Leniency: The Board has condoned this living arrangement for over a decade.	Anti-Precedent: Historical leniency does not create a permanent waiver; boards must enforce the text to maintain community standards.

5. The Ruling: Why the Butlers Lost

On July 5, 2012, ALJ Sondra J. Vanella recommended the dismissal of the petition, a decision certified as final on August 20, 2012. The ruling rested on several key conclusions of law:

Burden of Proof: Under A.A.C. R2-19-119, the petitioners bear the burden of proving by a "preponderance of the evidence" that the HOA violated its governing documents. The Butlers failed to show any such violation.
Explicit Prohibition: The ALJ found the CC&Rs were unambiguous: an Arizona Room "does not serve as the main residence."
Contemporaneous Occupancy Required: The legal right to occupy the secondary structure is dependent upon the presence of the primary structure (the RV).
Policy vs. Text: While the Butlers viewed the RV requirement as a "policy," the ALJ found it was a direct application of the recorded CC&Rs.

6. The Path Forward: How to Change the Rules

The ALJ noted that while the RV requirement might not be "economical or practical," litigation is not the appropriate venue for redressing "unreasonable" rules that are clearly written into the CC&Rs. The only remedy is the formal amendment process.

However, Happy Trails represents a cautionary tale in "voter apathy" and procedural hurdles:

High Threshold: An amendment requires 1,001 affirmative votes.
Historical Failure: Testimony revealed the community has never gathered more than 800 votes for any proposal.
Failed Referendum: Sal Ognibene testified that a previous attempt at a referendum was abandoned due to these hurdles, leading the residents to litigation as a "last resort"—a strategy that rarely succeeds when the governing documents are clear.

7. Conclusion & Key Takeaways

The dismissal of the Butlers' petition underscores a hard truth in community management: the hierarchy of governing documents is nearly absolute. Personal circumstances, financial logic, and even years of "condoned" behavior cannot override the plain language of a recorded CC&R.

Takeaways for Homeowners:

Document Supremacy: CC&Rs are the "law of the land." Historical leniency by a Board rarely creates a legal waiver; a subsequent Board or an ALJ will almost always prioritize the written text.
Definition Matters: Understand how your property is legally defined. An Arizona Room may look, feel, and be valued like a house, but if the CC&Rs define it as a "secondary structure," it cannot legally function as a primary residence.
Amendment is the Key: Legal challenges are a losing battle when the CC&R text is clear. The only permanent remedy for rules that no longer serve the community is a formal amendment, which requires organized voting and overcoming community apathy.

In an HOA, your lifestyle is governed by the contract you signed at closing. Before making significant financial or lifestyle changes—like selling a primary "Residence Vehicle"—you must verify that those changes comport with the strict definitions of your governing documents.

Case Participants

Petitioner Side

Clifford Butler (petitioner)
Happy Trails Community Association (resident)
Appeared on own behalf
Jean Butler (petitioner)
Happy Trails Community Association (resident)
Appeared on own behalf
Sal Ognibene (witness)
Happy Trails Community Association (resident)
Called by Mr. Butler

Respondent Side

Maria Kupillas (attorney)
Farley, Seletos & Choate
Represented Happy Trails Community Association
Beth McWilliams (community manager)
Happy Trails Community Association
Testified regarding amendments and violations
Jim Weihman (board president)
Happy Trails Community Association
Testified regarding variances and waivers

Neutral Parties

Sondra J. Vanella (ALJ)
Office of Administrative Hearings
Administrative Law Judge
Gene Palma (agency director)
Department of Fire, Building and Life Safety
Director
Cliff J. Vanell (OAH director)
Office of Administrative Hearings
Certified the ALJ decision
Beth Soliere (agency staff)
Department of Fire, Building and Life Safety
Recipient of transmitted decision