Case Summary
| Case ID | 23F-H007-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2023-01-20 |
| Administrative Law Judge | Jenna Clark |
| Outcome | loss |
| Filing Fees Refunded | $0.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Donald F. Molley | Counsel | — |
|---|---|---|---|
| Respondent | Verde Meadows Crest Homeowners Association | Counsel | Sean K. Moynihan, Esq. |
Alleged Violations
Declaration Section 12.B
ARIZ. REV. STAT. § 33-1805
Outcome Summary
Petitioner's entire petition was denied because the Department of Real Estate/OAH lacked statutory jurisdiction over the Association. The Association was found not to meet the statutory definitions of a condominium association or a planned community association because it does not own common areas or real property.
Why this result: OAH determined it lacked jurisdiction pursuant to ARIZ. REV. STAT. §§ 32-2199 et seq., because the Respondent Association is neither a condominium association nor a planned community association (ARIZ. REV. STAT. §§ 33-1202(10) and 33-1802(4)).
Key Issues & Findings
Alleged use of Association funds for maintenance on private property.
Petitioner alleged that the Association used HOA funds for maintenance on private property in violation of Section 12.B of the CC&Rs.
Orders: Petition denied due to lack of OAH jurisdiction.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
- ARIZ. REV. STAT. § 33-1202(10)
- ARIZ. REV. STAT. § 33-1802(4)
- Declaration Section 12.B
Alleged failure to provide requested financial documents and meeting minutes.
Petitioner requested monthly bank statements and financial reports for 2022, and financial books for 2021, which Respondent allegedly failed to provide in violation of ARS § 33-1805.
Orders: Petition denied due to lack of OAH jurisdiction.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_loss
- ARIZ. REV. STAT. § 33-1805
- ARIZ. REV. STAT. § 33-1202(10)
- ARIZ. REV. STAT. § 33-1802(4)
Analytics Highlights
- ARIZ. REV. STAT. § 32-2199
- ARIZ. REV. STAT. § 33-1805
- ARIZ. REV. STAT. § 33-1202(10)
- ARIZ. REV. STAT. § 33-1802(4)
- Declaration Section 12.B
Video Overview
Audio Overview
https://open.spotify.com/episode/34nyQuUBJcHHi8GYbfWjqN
Decision Documents
23F-H007-REL Decision – 1006960.pdf
23F-H007-REL Decision – 1008524.pdf
23F-H007-REL Decision – 1008675.pdf
23F-H007-REL Decision – 1010876.pdf
23F-H007-REL Decision – 1020898.pdf
23F-H007-REL Decision – 1027131.pdf
Questions
Question
If my HOA doesn't own any common areas or real property, can I still file a dispute with the Department of Real Estate?
Short Answer
No. If the association does not own real property, it may not meet the statutory definition of a 'planned community,' meaning the Department lacks jurisdiction to hear the dispute.
Detailed Answer
The ALJ determined that because the Association did not own any real property or common areas, it did not qualify as a 'planned community' under Arizona statutes. Consequently, the Department of Real Estate had no authority to enforce the Planned Communities Act against it.
Alj Quote
The record also reflects that the Association is also not a planned community association because it does not own any real property. As a result, neither the Condominium Act nor the Planned Communities Act governs the Association and neither Act can be enforced against it.
Legal Basis
A.R.S. § 33-1802(4); A.R.S. § 32-2199 et seq.
Topic Tags
- jurisdiction
- common areas
- planned community definition
Question
What evidence do I need to provide if I claim the HOA is spending money on maintenance in violation of the CC&Rs?
Short Answer
You must provide specific details such as the exact amounts spent, who performed the work, the specific locations (lots), and the dates/duration of the work.
Detailed Answer
The ALJ noted that the homeowner failed to support his claim because he could not provide specific facts regarding the alleged improper expenditures. General testimony without specific data (amounts, dates, locations) is insufficient.
Alj Quote
Petitioner, however, could not identify the amount Respondent allegedly spent on said landscaping, by whom the maintenance was performed, on which lots the maintenance was performed, or when and for what duration the alleged maintenance took place.
Legal Basis
Burden of Proof
Topic Tags
- evidence
- maintenance
- misuse of funds
Question
Is a verbal request enough to prove the HOA failed to provide financial documents?
Short Answer
Likely not. To succeed in a hearing, you must be able to prove the specific date of the request and the identity of the person to whom the request was made.
Detailed Answer
The ALJ found the homeowner's testimony insufficient because he claimed to have made verbal requests but could not recall when they happened or who he asked.
Alj Quote
Petitioner testified that he verbally requested 'financials' and 'meeting minutes' from Respondent, but could not provide the date(s) of the request(s) and/or name the person(s) to whom the request(s) were made.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- records request
- evidence
- financials
Question
Are the CC&Rs considered a binding contract?
Short Answer
Yes. When a homeowner buys a property within the development, they agree to be bound by the terms of the Declaration, forming an enforceable contract.
Detailed Answer
The decision affirms that the Declaration acts as a contract between the Association and the property owner upon purchase.
Alj Quote
Thus, the Declaration forms an enforceable contract between the Association and each property owner.
Legal Basis
Contract Law
Topic Tags
- CC&Rs
- contract
- enforceability
Question
What is the legal definition of a 'condominium' in Arizona regarding HOA disputes?
Short Answer
Real estate is only a condominium if the unit owners are vested with undivided interests in the common elements.
Detailed Answer
The ALJ clarified that if owners do not have undivided interests in common elements, the development is not a condominium under the law.
Alj Quote
Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners.
Legal Basis
A.R.S. § 33-1202(10)
Topic Tags
- condominium definition
- common elements
Question
Can the HOA be excused from providing financial records if a former board member failed to hand them over?
Short Answer
Potentially yes. The ALJ noted testimony that the HOA could not provide certain records because the Petitioner (a former Treasurer) had failed to return them after leaving the board.
Detailed Answer
While the case was decided on jurisdiction, the decision recorded the HOA's defense that the 2022 financial statement was incomplete because the former Treasurer (the Petitioner) did not remit the necessary documentation.
Alj Quote
Ms. Wickenheiser testified that Respondent was unable to comply with Petitioner’s request for the Association’s 2022 financial statement… in large part, because Petitioner had served as the Association’s Treasurer for that fiscal year and had failed to remit the Association’s financial documentation
Legal Basis
A.R.S. § 33-1805
Topic Tags
- records
- board member duties
- treasurer
Case
- Docket No
- 23F-H007-REL
- Case Title
- Donald F. Molley v. Verde Meadows Crest Homeowners Association
- Decision Date
- 2023-01-20
- Alj Name
- Jenna Clark
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
If my HOA doesn't own any common areas or real property, can I still file a dispute with the Department of Real Estate?
Short Answer
No. If the association does not own real property, it may not meet the statutory definition of a 'planned community,' meaning the Department lacks jurisdiction to hear the dispute.
Detailed Answer
The ALJ determined that because the Association did not own any real property or common areas, it did not qualify as a 'planned community' under Arizona statutes. Consequently, the Department of Real Estate had no authority to enforce the Planned Communities Act against it.
Alj Quote
The record also reflects that the Association is also not a planned community association because it does not own any real property. As a result, neither the Condominium Act nor the Planned Communities Act governs the Association and neither Act can be enforced against it.
Legal Basis
A.R.S. § 33-1802(4); A.R.S. § 32-2199 et seq.
Topic Tags
- jurisdiction
- common areas
- planned community definition
Question
What evidence do I need to provide if I claim the HOA is spending money on maintenance in violation of the CC&Rs?
Short Answer
You must provide specific details such as the exact amounts spent, who performed the work, the specific locations (lots), and the dates/duration of the work.
Detailed Answer
The ALJ noted that the homeowner failed to support his claim because he could not provide specific facts regarding the alleged improper expenditures. General testimony without specific data (amounts, dates, locations) is insufficient.
Alj Quote
Petitioner, however, could not identify the amount Respondent allegedly spent on said landscaping, by whom the maintenance was performed, on which lots the maintenance was performed, or when and for what duration the alleged maintenance took place.
Legal Basis
Burden of Proof
Topic Tags
- evidence
- maintenance
- misuse of funds
Question
Is a verbal request enough to prove the HOA failed to provide financial documents?
Short Answer
Likely not. To succeed in a hearing, you must be able to prove the specific date of the request and the identity of the person to whom the request was made.
Detailed Answer
The ALJ found the homeowner's testimony insufficient because he claimed to have made verbal requests but could not recall when they happened or who he asked.
Alj Quote
Petitioner testified that he verbally requested 'financials' and 'meeting minutes' from Respondent, but could not provide the date(s) of the request(s) and/or name the person(s) to whom the request(s) were made.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- records request
- evidence
- financials
Question
Are the CC&Rs considered a binding contract?
Short Answer
Yes. When a homeowner buys a property within the development, they agree to be bound by the terms of the Declaration, forming an enforceable contract.
Detailed Answer
The decision affirms that the Declaration acts as a contract between the Association and the property owner upon purchase.
Alj Quote
Thus, the Declaration forms an enforceable contract between the Association and each property owner.
Legal Basis
Contract Law
Topic Tags
- CC&Rs
- contract
- enforceability
Question
What is the legal definition of a 'condominium' in Arizona regarding HOA disputes?
Short Answer
Real estate is only a condominium if the unit owners are vested with undivided interests in the common elements.
Detailed Answer
The ALJ clarified that if owners do not have undivided interests in common elements, the development is not a condominium under the law.
Alj Quote
Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners.
Legal Basis
A.R.S. § 33-1202(10)
Topic Tags
- condominium definition
- common elements
Question
Can the HOA be excused from providing financial records if a former board member failed to hand them over?
Short Answer
Potentially yes. The ALJ noted testimony that the HOA could not provide certain records because the Petitioner (a former Treasurer) had failed to return them after leaving the board.
Detailed Answer
While the case was decided on jurisdiction, the decision recorded the HOA's defense that the 2022 financial statement was incomplete because the former Treasurer (the Petitioner) did not remit the necessary documentation.
Alj Quote
Ms. Wickenheiser testified that Respondent was unable to comply with Petitioner’s request for the Association’s 2022 financial statement… in large part, because Petitioner had served as the Association’s Treasurer for that fiscal year and had failed to remit the Association’s financial documentation
Legal Basis
A.R.S. § 33-1805
Topic Tags
- records
- board member duties
- treasurer
Case
- Docket No
- 23F-H007-REL
- Case Title
- Donald F. Molley v. Verde Meadows Crest Homeowners Association
- Decision Date
- 2023-01-20
- Alj Name
- Jenna Clark
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Donald F. Molley (petitioner)
Appeared on his own behalf; also referred to as Donald Molley or Mr. Molly; previously served as Association board member and treasurer
Respondent Side
- Kari Wickenheiser (board president)
Verde Meadows Crest Homeowners Association
Testified on behalf of Respondent; also referred to as Miss Wizer/Wenheiser - Sean K. Moynihan (HOA attorney)
Smith & Wamsley, PLLC
Counsel for Respondent - Sue Antonio (board member)
Verde Meadows Crest Homeowners Association
Former President, Treasurer, and Secretary of the HOA, mentioned in testimony
Neutral Parties
- Jenna Clark (ALJ)
Office of Administrative Hearings - Louis Dettorre (Commissioner)
Arizona Department of Real Estate - c. serrano (OAH staff)
Office of Administrative Hearings
Transmitted documents - Miranda Alvarez (legal secretary)
Office of Administrative Hearings
Transmitted documents - AHansen (ADRE staff)
Arizona Department of Real Estate
Recipient of transmittal - vnunez (ADRE staff)
Arizona Department of Real Estate
Recipient of transmittal - djones (ADRE staff)
Arizona Department of Real Estate
Recipient of transmittal - labril (ADRE staff)
Arizona Department of Real Estate
Recipient of transmittal
