Case Summary
| Case ID | 24F-H043-REL |
|---|---|
| Agency | ADRE |
| Tribunal | OAH |
| Decision Date | 2024-07-10 |
| Administrative Law Judge | Samuel Fox |
| Outcome | partial |
| Filing Fees Refunded | $2,000.00 |
| Civil Penalties | $0.00 |
Parties & Counsel
| Petitioner | Brian Gordon and Rosalie Gordon | Counsel | — |
|---|---|---|---|
| Respondent | Tucson Estate No. Two Owner's Association | Counsel | Jason Smith |
Alleged Violations
Bylaws Article 10; Finance Committee rules
A.R.S. § 33-1805; Bylaws Article 10
A.R.S. § 33-1805; Bylaws Article 10
A.R.S. § 33-1805; Bylaws Article 10
Outcome Summary
Petitioners were deemed the prevailing party regarding Petition Issues 1 and 4, and Respondent was deemed the prevailing party regarding Issues 2 and 3. Respondent was ordered to pay Petitioners $1,000.00 of the filing fee. Respondent was also directed to comply with Community Documents and A.R.S. § 33-1805 going forward. No Civil Penalty was levied.
Why this result: Petitioners failed to meet the burden of proof for Complaints 2 and 3, establishing that Respondent violated A.R.S. § 33-1805 or failed to abide by Community Documents, because Respondent provided all available records or offered additional reports.
Key Issues & Findings
Violation of Community Documents by not recording and making available the minutes of all Finance Committee Meetings held in 2023.
Petitioners requested minutes for five 2023 Finance Committee Meetings. The Committee rules required minutes of its meetings as a permanent record of its actions. The Respondent failed to record meeting minutes as required.
Orders: Respondent directed to comply with the requirements of its Community Documents going forward.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
- A.R.S. § 33-1805
- A.R.S. § 10-11601
- Bylaws Article 10
Violation by not keeping and making financial and other HOA business documentation (Budget Working Papers) available for review.
Petitioners requested copies of Budget Working Papers. Respondent provided all available documents (unapproved budget, general ledger, and draft), maintaining only one version of a proprietary spreadsheet. Petitioners failed to meet their burden to prove Respondent did not make records available.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
- A.R.S. § 33-1805
- A.R.S. § 10-11601
- Bylaws Article 10
Violation by not keeping and making financial and other HOA business documentation (Accounts Payable journal with GL detail) available for review.
Petitioners requested Accounts Payable journal/reports multiple times. Respondent provided copies of available accounts payable reports (check receipts and general ledger). When Respondent later identified an additional detailed report available for purchase, Petitioners refused it.
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
- A.R.S. § 33-1805
- A.R.S. § 10-11601
- Bylaws Article 10
Violation by not keeping and making financial and other HOA business documentation (IRS Tax filings and backup documentation) available for review.
Petitioners requested IRS Tax filings. Respondent initially provided only photocopies of two pages of the 1120-h form, missing schedules and backup documentation. Respondent failed to provide full tax returns or backup documentation in a timely manner (within ten business days).
Orders: Respondent is directed to comply with the requirements of A.R.S. § 33-1805 going forward.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
- A.R.S. § 33-1805
- A.R.S. § 10-11601
- Bylaws Article 10
Analytics Highlights
- A.R.S. § 33-1805
- A.R.S. § 10-11601
- Bylaws Article 10
- A.R.S. § 32-2199.02
Video Overview
Audio Overview
Decision Documents
24F-H043-REL Decision – 1176916.pdf
24F-H043-REL Decision – 1198119.pdf
24F-H043-REL Decision – 1200350.pdf
Questions
Question
Is my HOA required to keep minutes for advisory committees?
Short Answer
Yes, if the community documents (like a committee charter or policy) state that minutes must be kept.
Detailed Answer
Even if an HOA argues a committee is only 'advisory' and doesn't take 'actions,' the ALJ ruled that activities like advising, reviewing, and recommending constitute 'actions' within the scope of the committee's duties. Therefore, if the committee's rules say minutes must be kept, failing to do so violates the community documents.
Alj Quote
When the Committee advised, assisted, reviewed, analyzed, recommended, or otherwise took action within the parameters of its Responsibilities and Duties, that was an 'action' by the Committee as established by the Board.
Legal Basis
Community Documents / Bylaws
Topic Tags
- meeting minutes
- committees
- record keeping
Question
Can I demand that the HOA create a specific report to answer my financial questions?
Short Answer
No, the HOA is not required to create new documents that do not already exist.
Detailed Answer
The law requires the HOA to make existing records available for examination. It does not compel the HOA to generate new reports, compile data in a specific format, or create documents they do not currently possess to satisfy a homeowner's request.
Alj Quote
It does not require Respondent to provide documents that it does not have nor does it require Respondent to create documents in response to a request.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- financial records
- document creation
- requests
Question
If the management company holds the records, can the HOA claim they don't have them?
Short Answer
No, records held by the management company are considered to be in the HOA's custody.
Detailed Answer
The ALJ explicitly ruled that documents in the custody of the management agent (e.g., AAM) are legally in the custody of the HOA. The HOA is obligated to provide them to members upon request.
Alj Quote
Documents in the custody of AAM are in the custody of Respondent, and Respondent is obligated to provide them to members under A.R.S. § 33-1805.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- management company
- record custody
- access to records
Question
Are personal notes taken by committee members considered official HOA records?
Short Answer
No, personal notes or drafts on personal devices are generally not HOA records.
Detailed Answer
The ALJ found that notes, drafts, edits, or comments made by committee members on their personal versions of documents were not records of the Association if the Association did not collect, track, or record them.
Alj Quote
Any notes, drafts, edits, or comments that committee members made on their personal versions were not records of Respondent, which did not collect, track, or record the committee members’ individual notes.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- personal notes
- official records
- committees
Question
Does the HOA have to provide previous drafts of a budget or 'working papers'?
Short Answer
Only if they actually kept them. If they overwrite the file, they don't have to produce previous versions.
Detailed Answer
In this case, the HOA used a single spreadsheet that was updated and overwritten as the budget process moved forward. The ALJ ruled that since the HOA did not maintain multiple versions, they were not required to produce previous drafts they no longer possessed.
Alj Quote
Respondent only maintained one version of the spreadsheet, and when changes were made, the spreadsheet was updated… Petitioners failed to meet their burden to support that Respondent did not make records available for review.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- budget
- draft documents
- record retention
Question
Is providing the first two pages of a tax return sufficient to fulfill a records request?
Short Answer
No, the HOA must provide the complete tax return and backup documentation.
Detailed Answer
The ALJ found the HOA in violation for providing only the first two pages of Form 1120-H. The homeowner was entitled to the complete tax form and the backup documentation (which the management company or CPA had access to) within 10 days.
Alj Quote
The preponderance of the evidence establishes that Petitioners did not receive full copies of Respondent’s tax returns or backup documentation for the tax returns within ten days of their respective October requests.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- tax returns
- financial records
- transparency
Question
Can the ALJ enforce IRS regulations or the Nonprofit Corporation Act during this hearing?
Short Answer
No, the ALJ's jurisdiction is limited to Planned Community statutes and Community Documents.
Detailed Answer
The Administrative Law Judge explicitly stated that the tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act or IRS regulations, only Title 33 (Planned Communities) and the specific HOA documents.
Alj Quote
This Tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act, Internal Revenue Service regulations, or other laws or regulations.
Legal Basis
A.R.S. § 32-2199
Topic Tags
- jurisdiction
- legal authority
- IRS
- nonprofit act
Question
If I win my hearing against the HOA, can I get my filing fee back?
Short Answer
Yes, the ALJ has the discretion to order the HOA to reimburse the filing fee.
Detailed Answer
In this case, because the homeowners prevailed on two of their four issues, the ALJ ordered the HOA to pay the homeowners $1,000.00 (half of the $2,000 filing fee).
Alj Quote
IT IS ORDERED that Respondent pay Petitioners the filing fee of $1,000.00, to be paid directly to Petitioners within thirty (30) days of this Order.
Legal Basis
A.R.S. § 32-2199.02
Topic Tags
- filing fees
- penalties
- reimbursement
Case
- Docket No
- 24F-H043-REL
- Case Title
- Brian Gordon and Rosalie Gordon v. Tucson Estate No. Two Owner's Association
- Decision Date
- 2024-07-10
- Alj Name
- Samuel Fox
- Tribunal
- OAH
- Agency
- ADRE
Questions
Question
Is my HOA required to keep minutes for advisory committees?
Short Answer
Yes, if the community documents (like a committee charter or policy) state that minutes must be kept.
Detailed Answer
Even if an HOA argues a committee is only 'advisory' and doesn't take 'actions,' the ALJ ruled that activities like advising, reviewing, and recommending constitute 'actions' within the scope of the committee's duties. Therefore, if the committee's rules say minutes must be kept, failing to do so violates the community documents.
Alj Quote
When the Committee advised, assisted, reviewed, analyzed, recommended, or otherwise took action within the parameters of its Responsibilities and Duties, that was an 'action' by the Committee as established by the Board.
Legal Basis
Community Documents / Bylaws
Topic Tags
- meeting minutes
- committees
- record keeping
Question
Can I demand that the HOA create a specific report to answer my financial questions?
Short Answer
No, the HOA is not required to create new documents that do not already exist.
Detailed Answer
The law requires the HOA to make existing records available for examination. It does not compel the HOA to generate new reports, compile data in a specific format, or create documents they do not currently possess to satisfy a homeowner's request.
Alj Quote
It does not require Respondent to provide documents that it does not have nor does it require Respondent to create documents in response to a request.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- financial records
- document creation
- requests
Question
If the management company holds the records, can the HOA claim they don't have them?
Short Answer
No, records held by the management company are considered to be in the HOA's custody.
Detailed Answer
The ALJ explicitly ruled that documents in the custody of the management agent (e.g., AAM) are legally in the custody of the HOA. The HOA is obligated to provide them to members upon request.
Alj Quote
Documents in the custody of AAM are in the custody of Respondent, and Respondent is obligated to provide them to members under A.R.S. § 33-1805.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- management company
- record custody
- access to records
Question
Are personal notes taken by committee members considered official HOA records?
Short Answer
No, personal notes or drafts on personal devices are generally not HOA records.
Detailed Answer
The ALJ found that notes, drafts, edits, or comments made by committee members on their personal versions of documents were not records of the Association if the Association did not collect, track, or record them.
Alj Quote
Any notes, drafts, edits, or comments that committee members made on their personal versions were not records of Respondent, which did not collect, track, or record the committee members’ individual notes.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- personal notes
- official records
- committees
Question
Does the HOA have to provide previous drafts of a budget or 'working papers'?
Short Answer
Only if they actually kept them. If they overwrite the file, they don't have to produce previous versions.
Detailed Answer
In this case, the HOA used a single spreadsheet that was updated and overwritten as the budget process moved forward. The ALJ ruled that since the HOA did not maintain multiple versions, they were not required to produce previous drafts they no longer possessed.
Alj Quote
Respondent only maintained one version of the spreadsheet, and when changes were made, the spreadsheet was updated… Petitioners failed to meet their burden to support that Respondent did not make records available for review.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- budget
- draft documents
- record retention
Question
Is providing the first two pages of a tax return sufficient to fulfill a records request?
Short Answer
No, the HOA must provide the complete tax return and backup documentation.
Detailed Answer
The ALJ found the HOA in violation for providing only the first two pages of Form 1120-H. The homeowner was entitled to the complete tax form and the backup documentation (which the management company or CPA had access to) within 10 days.
Alj Quote
The preponderance of the evidence establishes that Petitioners did not receive full copies of Respondent’s tax returns or backup documentation for the tax returns within ten days of their respective October requests.
Legal Basis
A.R.S. § 33-1805
Topic Tags
- tax returns
- financial records
- transparency
Question
Can the ALJ enforce IRS regulations or the Nonprofit Corporation Act during this hearing?
Short Answer
No, the ALJ's jurisdiction is limited to Planned Community statutes and Community Documents.
Detailed Answer
The Administrative Law Judge explicitly stated that the tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act or IRS regulations, only Title 33 (Planned Communities) and the specific HOA documents.
Alj Quote
This Tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act, Internal Revenue Service regulations, or other laws or regulations.
Legal Basis
A.R.S. § 32-2199
Topic Tags
- jurisdiction
- legal authority
- IRS
- nonprofit act
Question
If I win my hearing against the HOA, can I get my filing fee back?
Short Answer
Yes, the ALJ has the discretion to order the HOA to reimburse the filing fee.
Detailed Answer
In this case, because the homeowners prevailed on two of their four issues, the ALJ ordered the HOA to pay the homeowners $1,000.00 (half of the $2,000 filing fee).
Alj Quote
IT IS ORDERED that Respondent pay Petitioners the filing fee of $1,000.00, to be paid directly to Petitioners within thirty (30) days of this Order.
Legal Basis
A.R.S. § 32-2199.02
Topic Tags
- filing fees
- penalties
- reimbursement
Case
- Docket No
- 24F-H043-REL
- Case Title
- Brian Gordon and Rosalie Gordon v. Tucson Estate No. Two Owner's Association
- Decision Date
- 2024-07-10
- Alj Name
- Samuel Fox
- Tribunal
- OAH
- Agency
- ADRE
Case Participants
Petitioner Side
- Brian Gordon (petitioner)
- Rosalie Gordon (petitioner)
- James Tilly (witness)
Member of Respondent who testified. - Leonard Vidovic (witness)
Also referred to as Leonard Judbec.
Respondent Side
- Jason E. Smith (HOA attorney)
SMITH & WAMSLEY, PLLC - Sean K. Moynihan (attorney)
Smith & Wamsley, PLLC - Mandy Bates (property manager)
Associated Asset Management
Community Manager for Tucson Estates No. Two Owner's Association. - Trudy Peterson (finance chair)
Treasurer and Finance Chair. - Rose Spank (board member)
HOA President in 2012. - Janelle Richmond (board member)
HOA Secretary in 2012. - Sharon Matthews (AAM staff)
AAM
Referenced in emails regarding accounting procedures (also referred to as Karen Matthews).
Neutral Parties
- Samuel Fox (ALJ)
OAH
Administrative Law Judge for the decision and hearing. - Sondra J. Vanella (ALJ)
OAH
Signed the initial Order Setting Hearing. - Susan Nicolson (ADRE Commissioner)
Arizona Department of Real Estate - vnunez (ADRE staff)
Arizona Department of Real Estate
Listed on transmission/service list. - djones (ADRE staff)
Arizona Department of Real Estate
Listed on transmission/service list. - labril (ADRE staff)
Arizona Department of Real Estate
Listed on transmission/service list. - mneat (ADRE staff)
Arizona Department of Real Estate
Listed on transmission/service list. - lrecchia (ADRE staff)
Arizona Department of Real Estate
Listed on transmission/service list. - gosborn (ADRE staff)
Arizona Department of Real Estate
Listed on transmission/service list.
