**Case Summary: Varhely v. Eighth Street Square Townhouse Association**
**Case No:** 12F-H1213009-BFS
**Forum:** Office of Administrative Hearings, State of Arizona

**Proceedings and Parties**
This administrative hearing, held on February 13, 2013, involved a dispute between home buyers Emry and Muriel Varhely (Petitioners) and the Eighth Street Square Townhouse Association (Respondent). The Petitioners appeared on their own behalf, while the Respondent was represented by counsel.

**Key Facts**
* **The Purchase:** In February 2012, Petitioners entered a contract to buy a unit in the Eighth Street Square community, which was owned by ING Bank FSB following a foreclosure.
* **Community Size:** The planned community consists of 48 units.
* **Disclosure Dispute:** On March 13, 2012, the Respondent provided information to the escrow company indicating violations existed. However, the Petitioners claimed that prior to closing escrow on that same day, they did not receive a specific statement from the Association regarding alterations or improvements that violated the Declaration.
* **The Allegation:** Petitioners filed a complaint alleging the Association violated A.R.S. § 33-1806 by failing to notify them of existing violations at the time of purchase.

**Main Arguments**
* **Petitioners' Argument:** The Petitioners argued that because the Respondent provided some documents required under the statute, it was obligated to provide all of them, including the statement on violations. They contended they relied on the documents provided and that since the seller (the bank) likely lacked knowledge of the violations, the Association was responsible for notifying them.
* **Respondent's Defense:** The Association maintained that because the community contained fewer than 50 units, the specific statutory requirement for the Association to provide a statement regarding existing violations did not apply.

**Legal Analysis and Findings**
The Administrative Law Judge (ALJ) focused on the specific applicability of A.R.S. § 33-1806 regarding community size.

1. **Statutory Distinction:** The ALJ noted that for planned communities with *fewer than 50 units*, A.R.S. § 33-1806(A) directs that a "member" (seller) shall mail or deliver the required disclosures to the purchaser.
2. **Association's Obligation:** The Judge clarified that if the community had 50 or more units, the Association would have been required to provide an affirmative statement regarding violations. However, because Eighth Street Square has only 48 units, the Respondent had no obligation under the statute to notify the Petitioners of the known violation, regardless of whether the seller knew of the violation or whether the Association provided other documents.
3. **Burden of Proof:** The Petitioners failed to meet the burden of proving by a preponderance of the evidence that the Respondent violated the statute.

**Final Decision and Outcome**
* **Ruling:** The ALJ ordered that the Petition be dismissed, concluding that no action was required of the Respondent.
* **Certification:** The Department of Fire, Building and Life Safety took no action to modify or reject the decision within the statutory timeframe. Consequently, the ALJ’s decision was certified as the final administrative decision on April 10, 2013.