R.L. Whitmer v. Hilton Casitas Council of Homeowners

Case Summary

Case ID 25F-H056-REL
Agency ADRE
Tribunal OAH
Decision Date 2025-11-19
Administrative Law Judge Jenna Clark
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $167.00

Parties & Counsel

Petitioner R.L. Whitmer Counsel
Respondent Hilton Casitas Council of Homeowners Counsel Emily Mann, Esq.

Alleged Violations

ARIZ. REV. STAT. § 33-1248(A)

Outcome Summary

Petitioner's petition was granted in part, finding Respondent violated ARIZ. REV. STAT. § 33-1248(A) by failing to afford Petitioner an opportunity to speak before the vote ratification during the special meeting. The tribunal found no violations of ARIZ. REV. STAT. §§ 33-1248(E)(1), 33-1248(E)(4), or Art. 23, sec. 23.9. Petitioner was awarded a civil penalty of $167.00, but reimbursement of the filing fee was denied.

Why this result: Petitioner lost claims regarding the lack of meeting agenda (ARIZ. REV. STAT. § 33-1248(E)(1)) because the statute applies to board meetings, not special member meetings; regarding the unnoticed Town Hall (ARIZ. REV. STAT. § 33-1248(E)(4)) because the gathering was not considered an informal meeting to discuss Association business; and the claim regarding Art. 23, sec. 23.9 was abandoned/plead in error.

Key Issues & Findings

Member right to speak during noticed meeting

Petitioner alleged violation by refusing to permit him to speak during a noticed meeting. The Tribunal found Respondent in violation because Petitioner unequivocally indicated he wished to be heard ('waiting for the public comment') prior to vote ratification, but was not afforded a clear opportunity to do so.

Orders: Respondent shall tender $167.00 to the Department, in certified funds, as a civil penalty for its violation of ARIZ. REV. STAT. § 33-1248(A) within thirty (30) days of this Order. Respondent shall not violate this statutory provision henceforth.

Filing fee: $500.00, Fee refunded: No, Civil penalty: $167.00

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. § 33-1248(A)

Analytics Highlights

Topics: HOA, Condominium, Open Meeting Law, Right to Speak, Civil Penalty
Additional Citations:

  • ARIZ. REV. STAT. § 33-1248(A)
  • ARIZ. REV. STAT. § 33-1248(E)(1)
  • ARIZ. REV. STAT. § 33-1248(E)(4)
  • Art. 23, sec. 23.9

Audio Overview

Decision Documents

25F-H056-REL Decision – 1335493.pdf

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25F-H056-REL Decision – 1335502.pdf

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25F-H056-REL Decision – 1335656.pdf

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25F-H056-REL Decision – 1352057.pdf

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25F-H056-REL Decision – 1352067.pdf

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25F-H056-REL Decision – 1353232.pdf

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25F-H056-REL Decision – 1357681.pdf

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25F-H056-REL Decision – 1360270.pdf

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25F-H056-REL Decision – 1369834.pdf

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Briefing Doc – 25F-H056-REL


Briefing Document: Whitmer v. Hilton Casitas Council of Homeowners

Executive Summary

This briefing document synthesizes the legal dispute between homeowner R.L. Whitmer (Petitioner) and the Hilton Casitas Council of Homeowners (Respondent), culminating in a decision by an Arizona Administrative Law Judge (ALJ). The case, docket number 25F-H056-REL, centered on allegations that the Homeowners Association (HOA) violated Arizona’s open meeting laws during and after a special meeting of the members on April 7, 2025.

The Petitioner alleged three primary statutory violations of A.R.S. § 33-1248: (1) failure to provide a meeting agenda, (2) denial of the opportunity to speak, and (3) holding an unnoticed informal meeting with a quorum of the board present. The Respondent countered that the meeting was a special meeting of the members, not a board meeting, that the petitioner never explicitly requested to speak, and that the post-meeting gathering was an informal discussion among neighbors, not an official meeting.

The ALJ’s final decision, issued on November 19, 2025, resulted in a partial victory for the Petitioner. The judge found the HOA in violation of A.R.S. § 33-1248(A) for failing to provide an opportunity for the Petitioner to speak, deeming the HOA’s argument that he did not make an explicit request “disingenuous.” The other two allegations were dismissed. Consequently, a civil penalty of $167.00 was imposed on the Respondent, but the Petitioner’s request for reimbursement of his $500.00 filing fee was denied.

I. Case Overview

Case Name

In the Matter of R.L. Whitmer, Petitioner, v. Hilton Casitas Council of Homeowners, Respondent

Docket Number

25F-H056-REL

Adjudicating Body

Arizona Office of Administrative Hearings (OAH)

Administrative Law Judge

Jenna Clark

Referring Agency

Arizona Department of Real Estate (ADRE)

Petitioner

R.L. Whitmer (appearing on his own behalf)

Respondent

Hilton Casitas Council of Homeowners

Respondent’s Counsel

Emily Mann, Esq. (Phillips Maceyko & Battock, PLLC)

Respondent’s Witness

Robert Westbrook (HOA President)

Date of Incident

April 7, 2025

Petition Filed

April 9, 2025

Hearing Date

November 3, 2025

ALJ Decision Date

November 19, 2025

II. Petitioner’s Allegations and Requested Relief

On April 9, 2025, R.L. Whitmer filed a Homeowners Association Dispute Process Petition with the ADRE, alleging violations stemming from a “special meeting” presided over by HOA President Bob Westbrook on April 7, 2025.

Core Allegations:

Failure to Provide an Agenda (A.R.S. § 33-1248(E)(1)): The Petitioner alleged that the HOA failed to provide an agenda for the meeting. The petition states, “When asked for the agenda…Mr. Westbrook stated there was no agenda.”

Denial of Opportunity to Speak (A.R.S. § 33-1248(A)): The Petitioner claimed he was denied the opportunity to speak during the noticed session. The petition reads, “When asked for the opportunity to speak during the noticed session, Mr. Westbrook stated there would not be such an opportunity.”

Unnoticed Meeting (A.R.S. § 33-1248(E)(4)): The Petitioner alleged that after the special meeting was adjourned, the board “unlawfully proceeded to hold an unnoticed meeting with a quorum of the board present.”

Violation of Association Declaration: The petition initially cited a violation of “Article 23 § 23.9 of the Declaration of Horizontal Property Regime for Hilton Casitas.” During the hearing, the Petitioner acknowledged this was included in error and abandoned the claim.

Requested Relief:

1. An order directing the Respondent to abide by the Arizona statutes specified in the complaint.

2. The imposition of a civil penalty against the Respondent for the alleged violations.

III. Respondent’s Position and Defense

The Hilton Casitas HOA, represented by counsel, denied all allegations and argued for the petition’s complete dismissal.

Core Defense Arguments:

Agenda Not Required for Member Meeting: The Respondent contended that the April 7, 2025 meeting was a “special meeting of the members” for the sole purpose of ratifying a revised budget, not a “meeting of the board of directors.” Therefore, the specific agenda requirements of A.R.S. § 33-1248(E)(1) did not apply.

Ballot Packet Served as Agenda: Even if an agenda were required, the absentee ballot packet—which included a letter explaining the budget, the revised budget itself, and the ballot—sufficiently notified the membership of the meeting’s sole purpose.

Petitioner Never Explicitly Requested to Speak: The Respondent argued that the Petitioner never made a formal request to speak. Citing the hearing transcript, they noted that in response to being asked if he cared to vote, the Petitioner stated, “I’m waiting for the public comment.” The defense argued this statement was not a direct request to speak.

“Town Hall” Was Not a Board Meeting: The HOA characterized the gathering after the formal meeting as an “informal town hall discussion” where President Westbrook invited neighbors to stay at his home for a “neighborly conversation.” They asserted that no association business was conducted and that the mere presence of a quorum of board members did not transform the gathering into a formal, unnoticed board meeting, which would lead to the “absurd result” of directors being prohibited from attending member events.

IV. Procedural History and Hearing Chronology

April 9, 2025: Petition filed by R.L. Whitmer.

April 30, 2025: Petitioner pays the $500.00 single-issue filing fee.

June 6, 2025: Respondent files its answer, denying all complaint items.

June 24, 2025: ADRE issues a Notice of Hearing, scheduling it for August 1, 2025.

August 1, 2025: Petitioner moves to continue the hearing to amend his petition.

August 11, 2025: Petitioner submits an Amended HOA Dispute Petition.

September-October 2025: A series of motions are filed, including a Motion for Summary Judgment by the Petitioner and a Cross-Motion for Summary Judgment by the Respondent.

October 8, 2025: The OAH issues an order denying the Petitioner’s motion and dismissing his Amended Petition with prejudice, but allowing the original petition to proceed.

November 3, 2025: The continued hearing is held remotely before ALJ Jenna Clark. R.L. Whitmer testifies on his own behalf, and Robert Westbrook testifies for the Respondent.

November 19, 2025: ALJ Clark issues the final Administrative Law Judge Decision.

V. Administrative Law Judge’s Final Decision and Rationale

The ALJ granted the petition in part and denied it in part, finding the Respondent in violation of one of the three alleged statutory provisions.

The ALJ found that the Respondent violated the Petitioner’s right to speak. The decision concluded that although the Petitioner did not make an explicit request, his statement, “I’m waiting for the public comment,” was a clear and unequivocal indication of his desire to be heard.

Rationale: The judge found the Respondent’s counterargument to be “disingenuous,” stating, “It cannot be faithfully argued that the HOA President was unaware Petitioner was desirous of speaking. Animosity notwithstanding, Petitioner should have been afforded a reasonable amount of time to be heard prior to adjournment.”

The ALJ ruled that the Respondent did not violate the statute regarding meeting agendas.

Rationale: The decision affirms the Respondent’s position, stating, “the record clearly reflects that the April 07, 2025, special meeting was not a meeting of the board of directors, and did have an agenda issued to members in advance – as evidenced by the ballot and memorandum which provided objectively reasonable detail regarding the purpose and scope of the meeting.”

The ALJ determined that the post-meeting gathering did not constitute an illegal unnoticed meeting.

Rationale: The judge concluded that “the existence of a quorum, intentional or otherwise, absent open discussion of Association business does not a meeting make.” The decision further supported the Respondent’s argument that holding otherwise “would unintentionally result in absurdity.”

VI. Final Order and Sanctions

Based on the findings, the final order established the following:

1. Petition Status: The petition was granted in part (for the A.R.S. § 33-1248(A) violation) and denied and dismissed for all other allegations.

2. Civil Penalty: The Respondent was ordered to pay a civil penalty of $167.00 to the ADRE within thirty days for the violation.

3. Filing Fee Reimbursement: The Petitioner’s request to be reimbursed for the $500.00 filing fee was denied.

4. Future Compliance: The Respondent was ordered to not violate A.R.S. § 33-1248(A) henceforth.


Case Participants

Petitioner Side

  • Rial Lamar Whitmer (petitioner)

Respondent Side

  • Emily Mann (respondent attorney)
    Phillips Maceyko & Battock, PLLC
  • Robert Westbrook (HOA president/board member/witness)
    Hilton Casitas Council of Homeowners
  • John Brooke (board member)
    Hilton Casitas Council of Homeowners
    Director
  • Curt Richard Roberts (board member)
    Hilton Casitas Council of Homeowners
    Secretary
  • Jay Panzer (board member)
    Hilton Casitas Council of Homeowners
    Director
  • James Cox (board member)
    Hilton Casitas Council of Homeowners
    Treasurer

Neutral Parties

  • Jenna Clark (ALJ)
    Office of Administrative Hearings
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
  • Liz Recchia (Division Manager/ADRE staff)
    Arizona Department of Real Estate
  • V. Nunez (ADRE staff)
    Arizona Department of Real Estate
    Listed on distribution list
  • D. Jones (ADRE staff)
    Arizona Department of Real Estate
    Listed on distribution list
  • L. Abril (ADRE staff)
    Arizona Department of Real Estate
    Listed on distribution list
  • M. Neat (ADRE staff)
    Arizona Department of Real Estate
    Listed on distribution list
  • G. Osborn (ADRE staff)
    Arizona Department of Real Estate
    Listed on distribution list

Other Participants

  • Eli (homeowner/witness)
    Hilton Casitas Council of Homeowners
    Attendee at special meeting
  • Mike Benson (former board member/homeowner)
    Hilton Casitas Council of Homeowners
    Attendee at Town Hall
  • Katie Hobbs (Governor)

David Y. Samuels v. The Concorde Condominium Home Owners Association

Case Summary

Case ID 24F-H025-REL
Agency ADRE
Tribunal OAH
Decision Date 2024-04-18
Administrative Law Judge Amy M. Haley
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner David Y. Samuels Counsel
Respondent The Concorde Condominium Home Owners Association Counsel Ashley N. Turner

Alleged Violations

A.R.S. § 33-1803

Outcome Summary

The petition filed by David Y. Samuels against The Concorde Condominium Home Owners Association was dismissed. The Tribunal found that Samuels lacked standing to bring the action as an individual, and the cited statute, A.R.S. § 33-1803 (Planned Community Act), was improper for this condominium dispute.

Why this result: Petitioner lacked standing because the property was owned by Daso Properties, LLC, not by David Y. Samuels individually. Additionally, the Petitioner brought the action under the incorrect statute, A.R.S. § 33-1803, which governs planned communities, not condominiums.

Key Issues & Findings

Alleged violation concerning late fees, collection fees, and attorney fees for delinquent assessment payments

Petitioner alleged Respondent violated A.R.S. § 33-1803 by charging unwarranted late fees, collection fees, and attorney fees for delinquent assessments.

Orders: Petitioner's petition is dismissed because Petitioner lacked standing as an individual owner, and the cause of action was brought under the improper statute (Planned Community Act) for a condominium property.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1803
  • A.R.S. § 32-2199.01(A)
  • A.R.S. § 33-1801(A)
  • A.R.S. § 32-2199 et seq.
  • A.R.S. § 41-1092.09

Analytics Highlights

Topics: standing, condominium, planned community act, statutory violation, late fees, collection fees, attorney fees, jurisdiction, dismissal
Additional Citations:

  • A.R.S. § 33-1803
  • A.R.S. § 32-2199.01(A)
  • A.R.S. § 33-1801(A)
  • A.R.S. § 32-2199 et seq.
  • A.R.S. § 41-1092.09
  • A.A.C. R2-19-106(D)

Video Overview

Audio Overview

Decision Documents

24F-H025-REL Decision – 1124651.pdf

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24F-H025-REL Decision – 1133120.pdf

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24F-H025-REL Decision – 1134423.pdf

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24F-H025-REL Decision – 1139633.pdf

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24F-H025-REL Decision – 1139646.pdf

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24F-H025-REL Decision – 1157271.pdf

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24F-H025-REL Decision – 1168680.pdf

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Questions

Question

If my property is owned by an LLC, can I file a petition against the HOA in my own name as the managing member?

Short Answer

No. The petition must be filed by the legal owner (the LLC), not an individual member, or it will be dismissed for lack of standing.

Detailed Answer

The ALJ determined that an individual managing member of an LLC does not have standing to bring an action on behalf of the property owned by the LLC. The dispute statute specifically applies to 'owners' and 'associations'.

Alj Quote

The Tribunal finds that, after taking testimony, Petitioner, as an individual, did not have standing to bring this action… The proper party to bring the action would have been Daso Properties, LLC.

Legal Basis

A.R.S. § 32-2199.01(A)

Topic Tags

  • standing
  • LLC ownership
  • procedural requirements

Question

Can I use laws meant for Planned Communities (A.R.S. § 33-1803) to dispute charges if I live in a Condominium?

Short Answer

No. Condominiums are governed by a different set of statutes (Chapter 9) than Planned Communities (Chapter 16).

Detailed Answer

The ALJ dismissed the claim because the homeowner cited the Planned Community Act (A.R.S. § 33-1803) while the property was legally a condominium. Condominiums are not subject to the Planned Community Act.

Alj Quote

However, the Property is a condominium; therefore, Respondent is not subject to the Planned Community Act. … Chapter 9 governs condominiums.

Legal Basis

A.R.S. § 33-1801(A)

Topic Tags

  • jurisdiction
  • condominium vs planned community
  • statutory application

Question

Does the Department of Real Estate have jurisdiction to hear a dispute if I am not the legal owner of the property?

Short Answer

No. The Department's jurisdiction is limited to disputes specifically between an owner and an association.

Detailed Answer

The decision clarifies that the administrative hearing process is strictly for disputes involving an 'owner' or 'association'. If the petitioner is not the legal owner (even if they manage the LLC that owns it), the Department lacks jurisdiction.

Alj Quote

The department does not have jurisdiction to hear a dispute that does not involve an owner or an association.

Legal Basis

A.R.S. § 32-2199.01(A)

Topic Tags

  • jurisdiction
  • standing
  • homeowner rights

Question

Who has the burden of proof when a homeowner claims an HOA violated state laws?

Short Answer

The homeowner (Petitioner) has the burden of proving the violation by a preponderance of the evidence.

Detailed Answer

In these administrative hearings, it is the responsibility of the person bringing the complaint to provide sufficient evidence to prove their claims.

Alj Quote

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated A.R.S. § 33-1803 as alleged in his petition.

Legal Basis

Preponderance of Evidence

Topic Tags

  • burden of proof
  • evidence
  • legal standards

Question

What happens if I base my entire petition on a statute that doesn't apply to my type of property?

Short Answer

The petition will be dismissed because you have stated no claim upon which relief can be granted.

Detailed Answer

Because the petitioner cited the wrong statute (Planned Community Act for a Condominium), the judge ruled that there was no valid legal claim to rule on, resulting in dismissal.

Alj Quote

As such, Petitioner has stated no claim upon which relief can be granted under A.R.S. § 33-1801.

Legal Basis

A.R.S. § 33-1801

Topic Tags

  • dismissal
  • legal procedure
  • condominium act

Case

Docket No
24F-H025-REL
Case Title
David Y. Samuels vs The Concorde Condominium Home Owners Association
Decision Date
2024-04-18
Alj Name
Amy M. Haley
Tribunal
OAH
Agency
ADRE

Questions

Question

If my property is owned by an LLC, can I file a petition against the HOA in my own name as the managing member?

Short Answer

No. The petition must be filed by the legal owner (the LLC), not an individual member, or it will be dismissed for lack of standing.

Detailed Answer

The ALJ determined that an individual managing member of an LLC does not have standing to bring an action on behalf of the property owned by the LLC. The dispute statute specifically applies to 'owners' and 'associations'.

Alj Quote

The Tribunal finds that, after taking testimony, Petitioner, as an individual, did not have standing to bring this action… The proper party to bring the action would have been Daso Properties, LLC.

Legal Basis

A.R.S. § 32-2199.01(A)

Topic Tags

  • standing
  • LLC ownership
  • procedural requirements

Question

Can I use laws meant for Planned Communities (A.R.S. § 33-1803) to dispute charges if I live in a Condominium?

Short Answer

No. Condominiums are governed by a different set of statutes (Chapter 9) than Planned Communities (Chapter 16).

Detailed Answer

The ALJ dismissed the claim because the homeowner cited the Planned Community Act (A.R.S. § 33-1803) while the property was legally a condominium. Condominiums are not subject to the Planned Community Act.

Alj Quote

However, the Property is a condominium; therefore, Respondent is not subject to the Planned Community Act. … Chapter 9 governs condominiums.

Legal Basis

A.R.S. § 33-1801(A)

Topic Tags

  • jurisdiction
  • condominium vs planned community
  • statutory application

Question

Does the Department of Real Estate have jurisdiction to hear a dispute if I am not the legal owner of the property?

Short Answer

No. The Department's jurisdiction is limited to disputes specifically between an owner and an association.

Detailed Answer

The decision clarifies that the administrative hearing process is strictly for disputes involving an 'owner' or 'association'. If the petitioner is not the legal owner (even if they manage the LLC that owns it), the Department lacks jurisdiction.

Alj Quote

The department does not have jurisdiction to hear a dispute that does not involve an owner or an association.

Legal Basis

A.R.S. § 32-2199.01(A)

Topic Tags

  • jurisdiction
  • standing
  • homeowner rights

Question

Who has the burden of proof when a homeowner claims an HOA violated state laws?

Short Answer

The homeowner (Petitioner) has the burden of proving the violation by a preponderance of the evidence.

Detailed Answer

In these administrative hearings, it is the responsibility of the person bringing the complaint to provide sufficient evidence to prove their claims.

Alj Quote

In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated A.R.S. § 33-1803 as alleged in his petition.

Legal Basis

Preponderance of Evidence

Topic Tags

  • burden of proof
  • evidence
  • legal standards

Question

What happens if I base my entire petition on a statute that doesn't apply to my type of property?

Short Answer

The petition will be dismissed because you have stated no claim upon which relief can be granted.

Detailed Answer

Because the petitioner cited the wrong statute (Planned Community Act for a Condominium), the judge ruled that there was no valid legal claim to rule on, resulting in dismissal.

Alj Quote

As such, Petitioner has stated no claim upon which relief can be granted under A.R.S. § 33-1801.

Legal Basis

A.R.S. § 33-1801

Topic Tags

  • dismissal
  • legal procedure
  • condominium act

Case

Docket No
24F-H025-REL
Case Title
David Y. Samuels vs The Concorde Condominium Home Owners Association
Decision Date
2024-04-18
Alj Name
Amy M. Haley
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • David Y. Samuels (petitioner)
    Daso Properties, LLC
    Managing member of the property owner (Daso Properties, LLC); Appeared on his own behalf.

Respondent Side

  • Ashley N. Turner (HOA attorney)
    Goodman Law Group
    Council for respondent; Also appeared as Ashley N. Moscarello in earlier filings.
  • Alyssa Butler (community manager)
    The Management Trust (TMT)
    Witness for the association.
  • Stephanie Beck (HOA staff)
    Involved in prior HOA correspondence regarding fines.
  • Catherine Green (HOA staff)
    Involved in prior HOA correspondence regarding fines.

Neutral Parties

  • Amy M. Haley (ALJ)
    OAH
    Conducted the hearing and issued the final decision.
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate
  • Tammy L. Eigenheer (ALJ)
    OAH
    Issued an order on March 19, 2024.
  • A. Hansen (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission via email [email protected].
  • V. Nunez (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission via email [email protected].
  • D. Jones (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission via email [email protected].
  • L. Abril (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission via email [email protected].
  • M. Neat (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission via email [email protected].
  • A. Kowaleski (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission via email [email protected].
  • G. Osborn (ADRE staff)
    Arizona Department of Real Estate
    Recipient of transmission via email [email protected].

Keith W. Cunningham v. The Residences at 2211 Camelback Condominium

Case Summary

Case ID 24F-H008-REL
Agency ADRE
Tribunal OAH
Decision Date 2024-01-11
Administrative Law Judge Tammy L. Eigenheer
Outcome yes
Filing Fees Refunded $1,000.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Keith W. Cunningham Counsel
Respondent The Residences at 2211 Camelback Condominium Association, INC Counsel Allison Preston

Alleged Violations

A.R.S. § 33-1258
CC&Rs Section 8.1.1

Outcome Summary

Petitioner's petition is granted. Respondent violated A.R.S. § 33-1258 by failing to provide requested records within 10 business days. Respondent violated CC&Rs Section 8.1.1 by failing to maintain insurance coverage equal to 100% of the replacement cost and failing to meet specific liability limits. Respondent is ordered to reimburse Petitioner's $1,000.00 filing fee and comply with the statute and CC&Rs going forward.

Key Issues & Findings

Records Request

Petitioner alleged Respondent failed to provide financial records and vendor contracts (Epic Valet, FirstService Residential, landscaping) within the statutory timeframe. The ALJ found Respondent failed to provide the documents within 10 business days of the July 10, 2023 request and subsequent July 24, 2023 request.

Orders: Respondent shall comply with A.R.S. § 33-1258 going forward.

Filing fee: $1,000.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1258

Insurance Coverage

Petitioner alleged Respondent failed to maintain required insurance coverage. The ALJ found Respondent's property insurance coverage ($59M) was below the appraised replacement cost ($73M) and the general liability limits did not strictly comply with CC&Rs requirements despite an umbrella policy.

Orders: Respondent shall comply with Section 8.1.1 of the CC&Rs going forward.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_win

Cited:

  • CC&Rs Section 8.1.1

Analytics Highlights

Topics: Records Request, Insurance Coverage, Condominium, Contracts, Vendor Contracts, Replacement Cost
Additional Citations:

  • A.R.S. § 33-1258
  • CC&Rs Section 8.1.1

Video Overview

Audio Overview

Decision Documents

24F-H008-REL Decision – 1099767.pdf

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24F-H008-REL Decision – 1101587.pdf

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24F-H008-REL Decision – 1119643.pdf

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24F-H008-REL Decision – 1121917.pdf

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24F-H008-REL Decision – 1132963.pdf

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24F-H008-REL Decision – 1149691.pdf

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Briefing Doc – 24F-H008-REL


{
“case”: {
“docket_no”: “24F-H008-REL”,
“case_title”: “In the Matter of Keith W. Cunningham v The Residences at 2211 Camelback Condominium Association, INC”,
“decision_date”: “2024-01-11”,
“tribunal”: “OAH”,
“agency”: “ADRE”
},
“individuals”: [
{
“name”: “Keith W. Cunningham”,
“role”: “petitioner”,
“side”: “petitioner”,
“affiliation”: null,
“notes”: null
},
{
“name”: “Allison Preston”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: “Carpenter Hazlewood Delgado & Bolen LLP”,
“notes”: “Represented The Residences at 2211 Camelback Condominium Association, INC”
},
{
“name”: “Kyle von Johnson”,
“role”: “HOA attorney”,
“side”: “respondent”,
“affiliation”: null,
“notes”: “Represented The Residences at 2211 Camelback Condominium Association, INC”
},
{
“name”: “Mark Teman”,
“role”: “board member”,
“side”: “respondent”,
“affiliation”: null,
“notes”: “Association President, witness”
},
{
“name”: “Allison Renow”,
“role”: “property manager”,
“side”: “respondent”,
“affiliation”: “First Service Residential”,
“notes”: “General Manager (GM) on site”
},
{
“name”: “Frank Durso”,
“role”: “regional manager”,
“side”: “respondent”,
“affiliation”: “First Service Residential”,
“notes”: null
},
{
“name”: “Jamie George”,
“role”: “VP of Insurance”,
“side”: “respondent”,
“affiliation”: “First Service Financial”,
“notes”: “Assists with association insurance policies”
},
{
“name”: “Holly McNelte”,
“role”: “management staff”,
“side”: “respondent”,
“affiliation”: “First Service Residential”,
“notes”: “FSR team member who managed documents/files”
},
{
“name”: “Jonathan Henley”,
“role”: “insurance broker”,
“side”: “neutral”,
“affiliation”: “Gallagher”,
“notes”: null
},
{
“name”: “Brian Del Vecchio”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “OAH”,
“notes”: “Administrative Law Judge who conducted the hearing (12/8/23)”
},
{
“name”: “Tammy L. Eigenheer”,
“role”: “ALJ”,
“side”: “neutral”,
“affiliation”: “OAH”,
“notes”: “Administrative Law Judge who wrote the decision”
},
{
“name”: “Susan Nicolson”,
“role”: “Commissioner”,
“side”: “neutral”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: null
},
{
“name”: “AHansen”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Transmission recipient”
},
{
“name”: “vnunez”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Transmission recipient”
},
{
“name”: “djones”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Transmission recipient”
},
{
“name”: “labril”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Transmission recipient”
},
{
“name”: “mneat”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Transmission recipient”
},
{
“name”: “akowaleski”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Transmission recipient”
},
{
“name”: “gosborn”,
“role”: “ADRE staff”,
“side”: “unknown”,
“affiliation”: “Arizona Department of Real Estate”,
“notes”: “Transmission recipient”
}
]
}

{ “case”: { “agency”: “ADRE”, “tribunal”: “OAH”, “docket_no”: “24F-H008-REL”, “case_title”: “In the Matter of Keith W. Cunningham v The Residences at 2211 Camelback Condominium Association, INC”, “decision_date”: “2024-01-11”, “alj_name”: “Tammy L. Eigenheer” }, “parties”: [ { “party_id”: “P1”, “role”: “petitioner”, “name”: “Keith W. Cunningham”, “party_type”: “homeowner”, “email”: “[email protected]”, “phone”: null, “attorney_name”: null, “attorney_firm”: null, “attorney_email”: null, “attorney_phone”: null }, { “party_id”: “R1”, “role”: “respondent”, “name”: “The Residences at 2211 Camelback Condominium Association, INC”, “party_type”: “HOA”, “email”: null, “phone”: null, “attorney_name”: “Allison Preston”, “attorney_firm”: “Carpenter Hazlewood Delgado & Bolen LLP”, “attorney_email”: “[email protected]”, “attorney_phone”: null } ], “issues”: [ { “issue_id”: “ISS-001”, “type”: “statute”, “citation”: “A.R.S. § 33-1258”, “caption”: “Records Request”, “violation(s)”: “Failure to provide requested financial records and contracts within 10 business days”, “summary”: “Petitioner alleged Respondent failed to provide financial records and vendor contracts (Epic Valet, FirstService Residential, landscaping) within the statutory timeframe. The ALJ found Respondent failed to provide the documents within 10 business days of the July 10, 2023 request and subsequent July 24, 2023 request.”, “outcome”: “petitioner_win”, “filing_fee_paid”: 1000.0, “filing_fee_refunded”: true, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent shall comply with A.R.S. § 33-1258 going forward.”, “why_the_loss”: null, “cited”: [“A.R.S. § 33-1258”] }, { “issue_id”: “ISS-002”, “type”: “governing_documents”, “citation”: “CC&Rs Section 8.1.1”, “caption”: “Insurance Coverage”, “violation(s)”: “Failure to maintain property insurance equal to 100% of replacement cost and general liability insurance limits as required”, “summary”: “Petitioner alleged Respondent failed to maintain required insurance coverage. The ALJ found Respondent’s property insurance coverage (59M)wasbelowtheappraisedreplacementcost(73M) and the general liability limits did not strictly comply with CC&Rs requirements despite an umbrella policy.”, “outcome”: “petitioner_win”, “filing_fee_paid”: 0.0, “filing_fee_refunded”: false, “civil_penalty_amount”: 0.0, “orders_summary”: “Respondent shall comply with Section 8.1.1 of the CC&Rs going forward.”, “why_the_loss”: null, “cited”: [“CC&Rs Section 8.1.1”] } ], “money_summary”: { “issues_count”: 2, “total_filing_fees_paid”: 1000.0, “total_filing_fees_refunded”: 1000.0, “total_civil_penalties”: 0.0 }, “outcomes”: { “petitioner_is_hoa”: false, “petitioner_win”: “yes”, “summarize_judgement”: “Petitioner’s petition is granted. Respondent violated A.R.S. § 33-1258 by failing to provide requested records within 10 business days. Respondent violated CC&Rs Section 8.1.1 by failing to maintain insurance coverage equal to 100% of the replacement cost and failing to meet specific liability limits. Respondent is ordered to reimburse Petitioner’s $1,000.00 filing fee and comply with the statute and CC&Rs going forward.”, “why_the_loss”: null }, “analytics”: { “cited”: [“A.R.S. § 33-1258”, “CC&Rs Section 8.1.1”], “tags”: [“Records Request”, “Insurance Coverage”, “Condominium”, “Contracts”, “Vendor Contracts”, “Replacement Cost”] } }






Study Guide – 24F-H008-REL


{ “case”: { “docket_no”: “24F-H008-REL”, “case_title”: “Keith W. Cunningham v The Residences at 2211 Camelback Condominium Association, INC”, “decision_date”: “2024-01-11”, “alj_name”: “Tammy L. Eigenheer”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “How many days does my HOA have to provide records after I request them?”, “short_answer”: “The HOA has 10 business days to fulfill a request for examination of records.”, “detailed_answer”: “According to Arizona law cited in the decision, an association must make financial and other records reasonably available for examination within ten business days of a member’s request.”, “alj_quote”: “The association shall have ten business days to fulfill a request for examination.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “records request”, “deadlines”, “A.R.S. § 33-1258” ] }, { “question”: “Can my HOA claim they don’t have to provide specific contracts if they are not uploaded to the web portal?”, “short_answer”: “No. If the records exist and aren’t privileged, the HOA must make them available for examination, regardless of whether they are on a portal.”, “detailed_answer”: “In this case, the HOA failed to provide signed vendor contracts that existed, claiming they provided what was on the portal. The ALJ found that failing to provide these specific requested documents constituted a violation.”, “alj_quote”: “Respondent did not assert or establish that any of the requested documents were subject to any of the exceptions provided for in statute. Accordingly, Petitioner was entitled to examine those documents.”, “legal_basis”: “A.R.S. § 33-1258”, “topic_tags”: [ “records request”, “contracts”, “online portal” ] }, { “question”: “If my CC&Rs require specific insurance liability limits, does an umbrella policy count towards meeting them?”, “short_answer”: “Not necessarily. The ALJ ruled that a base policy lower than the CC&R requirement was non-compliant, even with a large umbrella policy.”, “detailed_answer”: “The CC&Rs required $3,000,000 per occurrence. The HOA had $1,000,000 coverage plus a $50,000,000 umbrella. The ALJ ruled the general liability insurance was not in compliance because the specific base limit was not met.”, “alj_quote”: “While Respondent had an umbrella policy in addition to the general liability insurance, Respondent’s general liability insurance was not in compliance with the applicable CC&Rs.”, “legal_basis”: “CC&Rs Section 8.1.1”, “topic_tags”: [ “insurance”, “compliance”, “CC&Rs” ] }, { “question”: “Must the HOA insure the building for its full replacement cost?”, “short_answer”: “Yes, if the CC&Rs state the insurance must equal 100% of the current replacement cost.”, “detailed_answer”: “The HOA obtained an appraisal showing a replacement cost of $73 million but maintained coverage of only $59 million. The ALJ found this violated the CC&Rs requirement for 100% replacement cost coverage.”, “alj_quote”: “Accordingly, Respondent’s property insurance was not in compliance with the applicable CC&Rs at the time the petition was filed.”, “legal_basis”: “CC&Rs Section 8.1.1”, “topic_tags”: [ “insurance”, “property value”, “CC&Rs” ] }, { “question”: “Will I get my filing fee back if I win the hearing?”, “short_answer”: “The ALJ has the authority to order the HOA to reimburse the filing fee if the petition is granted.”, “detailed_answer”: “After granting the petition and finding the HOA in violation, the judge specifically ordered the respondent to pay back the petitioner’s filing fee.”, “alj_quote”: “IT IS FURTHER ORDERED that Respondent reimburse Petitioner his $1,000.00 filing fee.”, “legal_basis”: “Order”, “topic_tags”: [ “remedies”, “filing fees”, “costs” ] }, { “question”: “What happens if I accidentally cite the wrong statute number in my complaint?”, “short_answer”: “It may not be dismissed if the context of your complaint makes it clear what you are disputing.”, “detailed_answer”: “The HOA tried to dismiss the case because the homeowner cited the Planned Community statute instead of the Condominium statute. The judge denied this because the checkboxes and narrative provided sufficient notice of the claim.”, “alj_quote”: “While it may be true Petitioner hand wrote A.R.S. §33-1805… the context surrounding Petitioner’s hand written statute provides adequate notice.”, “legal_basis”: “Due Process / Notice”, “topic_tags”: [ “procedure”, “complaint forms”, “legal error” ] }, { “question”: “What is the standard of proof I need to meet to win against my HOA?”, “short_answer”: “You must prove your case by a “preponderance of the evidence.””, “detailed_answer”: “The homeowner bears the burden of proof. This standard means showing that the fact sought to be proved is more probable than not.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258 and the Association’s governing documents.”, “legal_basis”: “A.A.C. R2-19-119”, “topic_tags”: [ “burden of proof”, “legal standard”, “evidence” ] }, { “question”: “Will the HOA be fined a civil penalty if I prove they violated the law?”, “short_answer”: “Not automatically. The ALJ decides if a penalty is appropriate based on the facts.”, “detailed_answer”: “Even though the HOA was found to have violated record laws and insurance requirements, the judge decided not to assess a civil penalty in this specific instance.”, “alj_quote”: “Based on the facts presented, the Administrative Law Judge finds no civil penalty is appropriate in this matter.”, “legal_basis”: “Judicial Discretion”, “topic_tags”: [ “penalties”, “fines”, “enforcement” ] } ] }






Blog Post – 24F-H008-REL


{ “case”: { “docket_no”: “24F-H008-REL”, “case_title”: “Keith W. Cunningham v The Residences at 2211 Camelback Condominium Association, INC”, “decision_date”: “2024-01-11”, “alj_name”: “Tammy L. Eigenheer”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “How many days does my HOA have to provide records after I request them?”, “short_answer”: “The HOA has 10 business days to fulfill a request for examination of records.”, “detailed_answer”: “According to Arizona law cited in the decision, an association must make financial and other records reasonably available for examination within ten business days of a member’s request.”, “alj_quote”: “The association shall have ten business days to fulfill a request for examination.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “records request”, “deadlines”, “A.R.S. § 33-1258” ] }, { “question”: “Can my HOA claim they don’t have to provide specific contracts if they are not uploaded to the web portal?”, “short_answer”: “No. If the records exist and aren’t privileged, the HOA must make them available for examination, regardless of whether they are on a portal.”, “detailed_answer”: “In this case, the HOA failed to provide signed vendor contracts that existed, claiming they provided what was on the portal. The ALJ found that failing to provide these specific requested documents constituted a violation.”, “alj_quote”: “Respondent did not assert or establish that any of the requested documents were subject to any of the exceptions provided for in statute. Accordingly, Petitioner was entitled to examine those documents.”, “legal_basis”: “A.R.S. § 33-1258”, “topic_tags”: [ “records request”, “contracts”, “online portal” ] }, { “question”: “If my CC&Rs require specific insurance liability limits, does an umbrella policy count towards meeting them?”, “short_answer”: “Not necessarily. The ALJ ruled that a base policy lower than the CC&R requirement was non-compliant, even with a large umbrella policy.”, “detailed_answer”: “The CC&Rs required $3,000,000 per occurrence. The HOA had $1,000,000 coverage plus a $50,000,000 umbrella. The ALJ ruled the general liability insurance was not in compliance because the specific base limit was not met.”, “alj_quote”: “While Respondent had an umbrella policy in addition to the general liability insurance, Respondent’s general liability insurance was not in compliance with the applicable CC&Rs.”, “legal_basis”: “CC&Rs Section 8.1.1”, “topic_tags”: [ “insurance”, “compliance”, “CC&Rs” ] }, { “question”: “Must the HOA insure the building for its full replacement cost?”, “short_answer”: “Yes, if the CC&Rs state the insurance must equal 100% of the current replacement cost.”, “detailed_answer”: “The HOA obtained an appraisal showing a replacement cost of $73 million but maintained coverage of only $59 million. The ALJ found this violated the CC&Rs requirement for 100% replacement cost coverage.”, “alj_quote”: “Accordingly, Respondent’s property insurance was not in compliance with the applicable CC&Rs at the time the petition was filed.”, “legal_basis”: “CC&Rs Section 8.1.1”, “topic_tags”: [ “insurance”, “property value”, “CC&Rs” ] }, { “question”: “Will I get my filing fee back if I win the hearing?”, “short_answer”: “The ALJ has the authority to order the HOA to reimburse the filing fee if the petition is granted.”, “detailed_answer”: “After granting the petition and finding the HOA in violation, the judge specifically ordered the respondent to pay back the petitioner’s filing fee.”, “alj_quote”: “IT IS FURTHER ORDERED that Respondent reimburse Petitioner his $1,000.00 filing fee.”, “legal_basis”: “Order”, “topic_tags”: [ “remedies”, “filing fees”, “costs” ] }, { “question”: “What happens if I accidentally cite the wrong statute number in my complaint?”, “short_answer”: “It may not be dismissed if the context of your complaint makes it clear what you are disputing.”, “detailed_answer”: “The HOA tried to dismiss the case because the homeowner cited the Planned Community statute instead of the Condominium statute. The judge denied this because the checkboxes and narrative provided sufficient notice of the claim.”, “alj_quote”: “While it may be true Petitioner hand wrote A.R.S. §33-1805… the context surrounding Petitioner’s hand written statute provides adequate notice.”, “legal_basis”: “Due Process / Notice”, “topic_tags”: [ “procedure”, “complaint forms”, “legal error” ] }, { “question”: “What is the standard of proof I need to meet to win against my HOA?”, “short_answer”: “You must prove your case by a “preponderance of the evidence.””, “detailed_answer”: “The homeowner bears the burden of proof. This standard means showing that the fact sought to be proved is more probable than not.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258 and the Association’s governing documents.”, “legal_basis”: “A.A.C. R2-19-119”, “topic_tags”: [ “burden of proof”, “legal standard”, “evidence” ] }, { “question”: “Will the HOA be fined a civil penalty if I prove they violated the law?”, “short_answer”: “Not automatically. The ALJ decides if a penalty is appropriate based on the facts.”, “detailed_answer”: “Even though the HOA was found to have violated record laws and insurance requirements, the judge decided not to assess a civil penalty in this specific instance.”, “alj_quote”: “Based on the facts presented, the Administrative Law Judge finds no civil penalty is appropriate in this matter.”, “legal_basis”: “Judicial Discretion”, “topic_tags”: [ “penalties”, “fines”, “enforcement” ] } ] }


Case Participants

Petitioner Side

  • Keith W. Cunningham (petitioner)

Respondent Side

  • Allison Preston (HOA attorney)
    Carpenter Hazlewood Delgado & Bolen LLP
    Represented The Residences at 2211 Camelback Condominium Association, INC
  • Kyle von Johnson (HOA attorney)
    Represented The Residences at 2211 Camelback Condominium Association, INC
  • Mark Teman (board member)
    Association President, witness
  • Allison Renow (property manager)
    First Service Residential
    General Manager (GM) on site
  • Frank Durso (regional manager)
    First Service Residential
  • Jamie George (VP of Insurance)
    First Service Financial
    Assists with association insurance policies
  • Holly McNelte (management staff)
    First Service Residential
    FSR team member who managed documents/files

Neutral Parties

  • Jonathan Henley (insurance broker)
    Gallagher
  • Brian Del Vecchio (ALJ)
    OAH
    Administrative Law Judge who conducted the hearing (12/8/23)
  • Tammy L. Eigenheer (ALJ)
    OAH
    Administrative Law Judge who wrote the decision
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • vnunez (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • labril (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • mneat (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • akowaleski (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient
  • gosborn (ADRE staff)
    Arizona Department of Real Estate
    Transmission recipient

Deborah L. Masear v. Paradise Park Condominiums Phase II Homeowners

Case Summary

Case ID 23F-H053-REL
Agency ADRE
Tribunal OAH
Decision Date 2023-07-10
Administrative Law Judge Brian Del Vecchio
Outcome partial
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Deborah L. Masear Counsel
Respondent Paradise Park Condominiums Phase II Homeowners Association Counsel Ashley N. Moscarello

Alleged Violations

Article II Section 3 of Respondent’s bylaws

Outcome Summary

The Administrative Law Judge affirmed the Petitioner's claim, finding that the HOA violated Article II Section 3 of its bylaws by failing to hold the Annual Meeting on the second Monday of March (March 13, 2023). The HOA was ordered to reimburse the Petitioner's $500.00 filing fee, but a request for a civil penalty was denied.

Key Issues & Findings

Failure to hold an annual meeting as required by bylaws

The HOA failed to hold the mandatory annual meeting on March 13, 2023, as explicitly required by the amended bylaws (Article II Section 3). The meeting was subsequently scheduled for May 8, 2023, 56 days late, constituting a violation, even though the later meeting failed to meet quorum.

Orders: Petitioner’s petition is affirmed. Respondent shall reimburse Petitioner’s filing fee of $500.00. Petitioner’s request to levy a civil penalty against Respondent is denied.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • ARIZ. REV. STAT. § 32-2199.02(A)
  • ARIZ. REV. STAT. §§ 32-2102
  • ARIZ. REV. STAT. §§ 32-2199 et seq.

Analytics Highlights

Topics: HOA, Condominium, Annual Meeting, Bylaw Violation, Filing Fee Refund
Additional Citations:

  • ARIZ. REV. STAT. § 32-2199.02(A)
  • ARIZ. REV. STAT. §§ 32-2102
  • ARIZ. REV. STAT. §§ 32-2199 et seq.
  • ARIZ. REV. STAT. § 32-2199.05
  • ARIZ. REV. STAT. §§ 32-2199(2)
  • ARIZ. REV. STAT. §§ 32-2199.01(A)
  • ARIZ. REV. STAT. §§ 32-2199.01(D)
  • ARIZ. REV. STAT. §§ 32-2199.02
  • ARIZ. REV. STAT. § 32-2199.04
  • ARIZ. REV. STAT. § 41-1092 et seq.
  • ARIZ. ADMIN. CODE R2-19-119
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY 1220 (8th ed. 1999)

Video Overview

Audio Overview

Decision Documents

23F-H053-REL Decision – 1072068.pdf

Uploaded 2026-01-23T17:57:32 (115.3 KB)





Study Guide – 23F-H053-REL


{ “case”: { “docket_no”: “23F-H053-REL”, “case_title”: “Deborah L. Masear v. Paradise Park Condominiums Phase II Homeowners Association”, “decision_date”: “2023-07-10”, “alj_name”: “Brian Del Vecchio”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “If the bylaws state a specific date for the annual meeting, can the HOA board reschedule it to a different month?”, “short_answer”: “No. If the bylaws use mandatory language like “shall,” the HOA cannot change the date.”, “detailed_answer”: “The ALJ determined that when bylaws state a meeting “shall be held” on a specific date, this language is mandatory and not permissive. The HOA does not have the discretion to change the date of the annual meeting if the governing documents specify exactly when it must occur.”, “alj_quote”: “Respondent’s Bylaws state, ‘[t]he annual meeting of the members shall be held,’ at the designated date and time annually. The phrase ‘shall be held’ is not permissive; there is no changing the date of the annual meeting.”, “legal_basis”: “Bylaws Article II Section 3”, “topic_tags”: [ “Annual Meetings”, “Bylaws Interpretation”, “HOA Obligations” ] }, { “question”: “Does a meeting count as being ‘held’ if the HOA schedules it but fails to reach a quorum?”, “short_answer”: “No. If a quorum is not present, the meeting is legally considered not to have been held.”, “detailed_answer”: “Even if the HOA sends notice and attempts to convene, the failure to achieve a quorum means the meeting cannot conduct business. The ALJ ruled that in such cases, the meeting was not actually held, resulting in a violation if the bylaws required a meeting on that date.”, “alj_quote”: “Respondent attempted to hold an annual meeting on May 8, 2023, and but for the lack of quorum, the meeting was not held.”, “legal_basis”: “Findings of Fact”, “topic_tags”: [ “Quorum”, “Annual Meetings”, “Procedural Requirements” ] }, { “question”: “If I win my dispute against the HOA, will I get my $500 filing fee back?”, “short_answer”: “Yes. The ALJ has the authority to order the HOA to reimburse the filing fee to the prevailing homeowner.”, “detailed_answer”: “In this decision, after ruling in favor of the homeowner regarding the failure to hold the annual meeting, the judge ordered the HOA to reimburse the $500 filing fee the homeowner paid to initiate the case.”, “alj_quote”: “IT IS FURTHER ORDERED Respondent shall reimburse Petitioner’s filing fee of $500.00 pursuant to ARIZ. REV. STAT. § 32-2199.02(A).”, “legal_basis”: “ARIZ. REV. STAT. § 32-2199.02(A)”, “topic_tags”: [ “Remedies”, “Filing Fees”, “Costs” ] }, { “question”: “Will the HOA automatically be fined a civil penalty if they are found to have violated the bylaws?”, “short_answer”: “No. The ALJ may deny a request for civil penalties even if they find that a violation occurred.”, “detailed_answer”: “While the homeowner in this case requested a civil penalty be levied against the HOA for the violation, the ALJ explicitly denied this request in the final order, despite ruling that the HOA had violated the bylaws.”, “alj_quote”: “IT IS FURTHER ORDERED that Petitioner’s request to levy a civil penalty against Respondent is denied.”, “legal_basis”: “Administrative Discretion”, “topic_tags”: [ “Penalties”, “Remedies”, “Enforcement” ] }, { “question”: “Who has to prove that the HOA violated the rules?”, “short_answer”: “The homeowner (Petitioner) bears the burden of proof.”, “detailed_answer”: “In an administrative hearing before the OAH, the person bringing the complaint must prove their case by a ‘preponderance of the evidence.’ It is not up to the HOA to prove they are innocent; the homeowner must prove the violation occurred.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated Article II Section 3 of the Bylaws.”, “legal_basis”: “ARIZ. ADMIN. CODE R2-19-119”, “topic_tags”: [ “Burden of Proof”, “Legal Standards”, “Hearing Procedures” ] }, { “question”: “What kind of HOA disputes can I file with the Arizona Department of Real Estate?”, “short_answer”: “You can file petitions regarding violations of community documents (CC&Rs, bylaws) or state statutes regulating planned communities.”, “detailed_answer”: “The Department has jurisdiction to hear disputes between owners and associations specifically concerning violations of the community’s governing documents or the relevant Arizona statutes regulating these communities.”, “alj_quote”: “The owner or association may petition the department for a hearing concerning violations of community documents or violations of the statutes that regulate planned communities…”, “legal_basis”: “ARIZ. REV. STAT. §§ 32-2102 and 32-2199 et seq.”, “topic_tags”: [ “Jurisdiction”, “ADRE”, “Filing a Complaint” ] } ] }






Blog Post – 23F-H053-REL


{ “case”: { “docket_no”: “23F-H053-REL”, “case_title”: “Deborah L. Masear v. Paradise Park Condominiums Phase II Homeowners Association”, “decision_date”: “2023-07-10”, “alj_name”: “Brian Del Vecchio”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “If the bylaws state a specific date for the annual meeting, can the HOA board reschedule it to a different month?”, “short_answer”: “No. If the bylaws use mandatory language like “shall,” the HOA cannot change the date.”, “detailed_answer”: “The ALJ determined that when bylaws state a meeting “shall be held” on a specific date, this language is mandatory and not permissive. The HOA does not have the discretion to change the date of the annual meeting if the governing documents specify exactly when it must occur.”, “alj_quote”: “Respondent’s Bylaws state, ‘[t]he annual meeting of the members shall be held,’ at the designated date and time annually. The phrase ‘shall be held’ is not permissive; there is no changing the date of the annual meeting.”, “legal_basis”: “Bylaws Article II Section 3”, “topic_tags”: [ “Annual Meetings”, “Bylaws Interpretation”, “HOA Obligations” ] }, { “question”: “Does a meeting count as being ‘held’ if the HOA schedules it but fails to reach a quorum?”, “short_answer”: “No. If a quorum is not present, the meeting is legally considered not to have been held.”, “detailed_answer”: “Even if the HOA sends notice and attempts to convene, the failure to achieve a quorum means the meeting cannot conduct business. The ALJ ruled that in such cases, the meeting was not actually held, resulting in a violation if the bylaws required a meeting on that date.”, “alj_quote”: “Respondent attempted to hold an annual meeting on May 8, 2023, and but for the lack of quorum, the meeting was not held.”, “legal_basis”: “Findings of Fact”, “topic_tags”: [ “Quorum”, “Annual Meetings”, “Procedural Requirements” ] }, { “question”: “If I win my dispute against the HOA, will I get my $500 filing fee back?”, “short_answer”: “Yes. The ALJ has the authority to order the HOA to reimburse the filing fee to the prevailing homeowner.”, “detailed_answer”: “In this decision, after ruling in favor of the homeowner regarding the failure to hold the annual meeting, the judge ordered the HOA to reimburse the $500 filing fee the homeowner paid to initiate the case.”, “alj_quote”: “IT IS FURTHER ORDERED Respondent shall reimburse Petitioner’s filing fee of $500.00 pursuant to ARIZ. REV. STAT. § 32-2199.02(A).”, “legal_basis”: “ARIZ. REV. STAT. § 32-2199.02(A)”, “topic_tags”: [ “Remedies”, “Filing Fees”, “Costs” ] }, { “question”: “Will the HOA automatically be fined a civil penalty if they are found to have violated the bylaws?”, “short_answer”: “No. The ALJ may deny a request for civil penalties even if they find that a violation occurred.”, “detailed_answer”: “While the homeowner in this case requested a civil penalty be levied against the HOA for the violation, the ALJ explicitly denied this request in the final order, despite ruling that the HOA had violated the bylaws.”, “alj_quote”: “IT IS FURTHER ORDERED that Petitioner’s request to levy a civil penalty against Respondent is denied.”, “legal_basis”: “Administrative Discretion”, “topic_tags”: [ “Penalties”, “Remedies”, “Enforcement” ] }, { “question”: “Who has to prove that the HOA violated the rules?”, “short_answer”: “The homeowner (Petitioner) bears the burden of proof.”, “detailed_answer”: “In an administrative hearing before the OAH, the person bringing the complaint must prove their case by a ‘preponderance of the evidence.’ It is not up to the HOA to prove they are innocent; the homeowner must prove the violation occurred.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated Article II Section 3 of the Bylaws.”, “legal_basis”: “ARIZ. ADMIN. CODE R2-19-119”, “topic_tags”: [ “Burden of Proof”, “Legal Standards”, “Hearing Procedures” ] }, { “question”: “What kind of HOA disputes can I file with the Arizona Department of Real Estate?”, “short_answer”: “You can file petitions regarding violations of community documents (CC&Rs, bylaws) or state statutes regulating planned communities.”, “detailed_answer”: “The Department has jurisdiction to hear disputes between owners and associations specifically concerning violations of the community’s governing documents or the relevant Arizona statutes regulating these communities.”, “alj_quote”: “The owner or association may petition the department for a hearing concerning violations of community documents or violations of the statutes that regulate planned communities…”, “legal_basis”: “ARIZ. REV. STAT. §§ 32-2102 and 32-2199 et seq.”, “topic_tags”: [ “Jurisdiction”, “ADRE”, “Filing a Complaint” ] } ] }


Case Participants

Petitioner Side

  • Deborah Masear (petitioner)
    Paradise Park Condominiums Phase II HOA Member
    Also referred to as Deborah Maer

Respondent Side

  • Ashley Moscarello (HOA attorney)
    Goodman Law Group
    Appeared on behalf of Respondent
  • Carl Westlund (witness)
    Management Trust
    Community Manager for the HOA

Neutral Parties

  • Brian Del Vecchio (ALJ)
    OAH
    Also referred to as Judge Delio
  • Susan Nicolson (Commissioner)
    ADRE
  • AHansen (ADRE staff)
    ADRE
    Recipient of decision
  • vnunez (ADRE staff)
    ADRE
    Recipient of decision
  • djones (ADRE staff)
    ADRE
    Recipient of decision
  • labril (ADRE staff)
    ADRE
    Recipient of decision

Robert C. Ochs v. The Camelview Greens Homeowners Association

Case Summary

Case ID 22F-H2222048-REL
Agency ADRE
Tribunal OAH
Decision Date 2022-10-04
Administrative Law Judge Jenna Clark
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Robert C. Ochs Counsel
Respondent The Camelview Greens Homeowners Association Counsel Ashley Moscarello, Esq.

Alleged Violations

ARIZ. REV. STAT. § 33-1805 A

Outcome Summary

The Administrative Law Judge denied the petition, finding that the Petitioner failed to prove the Association violated ARIZ. REV. STAT. § 33-1805, concluding that the requested materials lists and specifications were not 'financial and other records of the association' that the HOA was legally required to possess and provide within 10 business days.

Why this result: Petitioner failed to sustain the burden of proof that the Respondent violated the records request statute.

Key Issues & Findings

Alleged violation of records request statute (failure to timely provide materials lists/specifications related to roof replacement/repairs).

Petitioner requested materials lists and specifications regarding recent (Sept 2021) and past (since 1986) roof work on February 27, 2022. The Association provided a scope of work document from the vendor on May 11, 2022, after the petition was filed. The ALJ determined the requested documents were not established to be 'financial and other records of the association' as contemplated by the statute, and TMT was not in possession of them at the time of the request.

Orders: Petitioner's petition and request for a civil penalty were denied. Respondent was not ordered to reimburse Petitioner's filing fee.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. § 33-1805 A
  • ARIZ. REV. STAT. § 32-2199.02 A
  • ARIZ. REV. STAT. § 32-2199.05

Analytics Highlights

Topics: HOA records request, Planned Community Act, Roof Repair/Replacement, Condominium, Burden of Proof
Additional Citations:

  • ARIZ. REV. STAT. § 33-1805
  • ARIZ. REV. STAT. § 32-2199.02
  • ARIZ. REV. STAT. § 32-2102
  • ARIZ. REV. STAT. § 32-2199 et seq.
  • ARIZ. REV. STAT. § 32-2199.05
  • ARIZ. REV. STAT. § 32-2199(2)
  • ARIZ. REV. STAT. § 32-2199.01(A)
  • ARIZ. REV. STAT. § 32-2199.01(D)
  • ARIZ. REV. STAT. § 41-1092 et seq.
  • ARIZ. REV. STAT. § 32-2199.04
  • ARIZ. REV. STAT. § 41-1092.09

Video Overview

Audio Overview

Decision Documents

22F-H2222048-REL Decision – 1003691.pdf

Uploaded 2026-01-23T17:48:15 (160.6 KB)

22F-H2222048-REL Decision – 979940.pdf

Uploaded 2026-01-23T17:48:17 (49.4 KB)

22F-H2222048-REL Decision – 979959.pdf

Uploaded 2026-01-23T17:48:18 (7.1 KB)

22F-H2222048-REL Decision – 985762.pdf

Uploaded 2026-01-23T17:48:20 (52.8 KB)

22F-H2222048-REL Decision – 986375.pdf

Uploaded 2026-01-23T17:48:22 (52.8 KB)





Study Guide – 22F-H2222048-REL


{ “case”: { “docket_no”: “22F-H2222048-REL”, “case_title”: “Robert C. Ochs vs. The Camelview Greens Homeowners Association”, “decision_date”: “2022-10-04”, “alj_name”: “Jenna Clark”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “If my HOA does not have a specific document I requested, are they required to obtain it from a vendor to fulfill my request?”, “short_answer”: “No. The HOA is not obligated to produce records it does not possess or keep in the ordinary course of business.”, “detailed_answer”: “If an HOA management company is not in possession of a specific document (such as a materials list held by a third-party contractor) at the time of the request, they are not legally obligated to obtain it or provide it within the 10-day statutory window. A failure to provide a document the HOA never possessed is not a statutory violation.”, “alj_quote”: “What the record reflects is that TMT was never in possession of the documents in Petitioner’s request. While TMT could have provided notice of such within 10 business days, they were under no legal obligation to do so. No statutory violation(s) exist.”, “legal_basis”: “A.R.S. § 33-1805”, “topic_tags”: [ “records request”, “vendor documents”, “HOA obligations” ] }, { “question”: “Is the HOA required to mail or email me copies of the records I request?”, “short_answer”: “Not necessarily. The primary statutory requirement is to make records available for examination.”, “detailed_answer”: “The Administrative Law Judge clarified that the statute strictly requires the HOA to reasonably permit a homeowner to examine records. While providing copies is common, the explicit statutory requirement is for examination.”, “alj_quote”: “Notably, ARIZ. REV. STAT. § 33-1805 does not require a Homeowner’s Association to provide copies of records upon request of a homeowner. Rather, the statute requires only that the association reasonably permit a homeowner to examine records.”, “legal_basis”: “A.R.S. § 33-1805”, “topic_tags”: [ “records request”, “procedural requirements”, “copies vs examination” ] }, { “question”: “Can I request historical records dating back several decades?”, “short_answer”: “Requests for very old records may be deemed unreasonable, especially if management companies have changed.”, “detailed_answer”: “A request for records spanning 35 years was found to be unreasonable in this case, particularly because the current management company testified they did not receive such records from the previous management company.”, “alj_quote”: “Petitioner’s secondary request for 35 years’ worth records was unreasonable, as uncontroverted testimony established that TMT did not obtain any records from its predecessor upon the commencement of its position.”, “legal_basis”: “Reasonableness standard”, “topic_tags”: [ “historical records”, “reasonableness”, “management transition” ] }, { “question”: “How many days does the HOA have to fulfill a request to examine records?”, “short_answer”: “The HOA has ten business days.”, “detailed_answer”: “Under Arizona law, an association must allow a member to examine financial and other records within ten business days of the request.”, “alj_quote”: “The association shall have ten business days to fulfill a request for examination.”, “legal_basis”: “A.R.S. § 33-1805(A)”, “topic_tags”: [ “deadlines”, “statutory requirements” ] }, { “question”: “Do detailed materials lists from contractors count as ‘official records’ of the association?”, “short_answer”: “Not automatically. If they are not kept in the ordinary course of business, they may not be considered association records.”, “detailed_answer”: “The ALJ found that specific materials lists and specifications from a vendor, which were not kept by the HOA in the ordinary course of business, did not constitute ‘financial’ or ‘other records of the association’ that the HOA was mandated to provide.”, “alj_quote”: “Petitioner did not establish that the documents in his records request were ‘financial’ or constituted ‘other records of the association’ as required by law.”, “legal_basis”: “A.R.S. § 33-1805”, “topic_tags”: [ “definition of records”, “contractor documents” ] }, { “question”: “Who is responsible for proving that the HOA violated the law?”, “short_answer”: “The homeowner (petitioner) bears the burden of proof.”, “detailed_answer”: “In an administrative hearing regarding an HOA dispute, the homeowner filing the petition must prove by a ‘preponderance of the evidence’ that the HOA violated the statute.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated ARIZ. REV. STAT. § 33-1805.”, “legal_basis”: “A.A.C. R2-19-119”, “topic_tags”: [ “burden of proof”, “legal standards”, “hearing procedures” ] } ] }






Blog Post – 22F-H2222048-REL


{ “case”: { “docket_no”: “22F-H2222048-REL”, “case_title”: “Robert C. Ochs vs. The Camelview Greens Homeowners Association”, “decision_date”: “2022-10-04”, “alj_name”: “Jenna Clark”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “If my HOA does not have a specific document I requested, are they required to obtain it from a vendor to fulfill my request?”, “short_answer”: “No. The HOA is not obligated to produce records it does not possess or keep in the ordinary course of business.”, “detailed_answer”: “If an HOA management company is not in possession of a specific document (such as a materials list held by a third-party contractor) at the time of the request, they are not legally obligated to obtain it or provide it within the 10-day statutory window. A failure to provide a document the HOA never possessed is not a statutory violation.”, “alj_quote”: “What the record reflects is that TMT was never in possession of the documents in Petitioner’s request. While TMT could have provided notice of such within 10 business days, they were under no legal obligation to do so. No statutory violation(s) exist.”, “legal_basis”: “A.R.S. § 33-1805”, “topic_tags”: [ “records request”, “vendor documents”, “HOA obligations” ] }, { “question”: “Is the HOA required to mail or email me copies of the records I request?”, “short_answer”: “Not necessarily. The primary statutory requirement is to make records available for examination.”, “detailed_answer”: “The Administrative Law Judge clarified that the statute strictly requires the HOA to reasonably permit a homeowner to examine records. While providing copies is common, the explicit statutory requirement is for examination.”, “alj_quote”: “Notably, ARIZ. REV. STAT. § 33-1805 does not require a Homeowner’s Association to provide copies of records upon request of a homeowner. Rather, the statute requires only that the association reasonably permit a homeowner to examine records.”, “legal_basis”: “A.R.S. § 33-1805”, “topic_tags”: [ “records request”, “procedural requirements”, “copies vs examination” ] }, { “question”: “Can I request historical records dating back several decades?”, “short_answer”: “Requests for very old records may be deemed unreasonable, especially if management companies have changed.”, “detailed_answer”: “A request for records spanning 35 years was found to be unreasonable in this case, particularly because the current management company testified they did not receive such records from the previous management company.”, “alj_quote”: “Petitioner’s secondary request for 35 years’ worth records was unreasonable, as uncontroverted testimony established that TMT did not obtain any records from its predecessor upon the commencement of its position.”, “legal_basis”: “Reasonableness standard”, “topic_tags”: [ “historical records”, “reasonableness”, “management transition” ] }, { “question”: “How many days does the HOA have to fulfill a request to examine records?”, “short_answer”: “The HOA has ten business days.”, “detailed_answer”: “Under Arizona law, an association must allow a member to examine financial and other records within ten business days of the request.”, “alj_quote”: “The association shall have ten business days to fulfill a request for examination.”, “legal_basis”: “A.R.S. § 33-1805(A)”, “topic_tags”: [ “deadlines”, “statutory requirements” ] }, { “question”: “Do detailed materials lists from contractors count as ‘official records’ of the association?”, “short_answer”: “Not automatically. If they are not kept in the ordinary course of business, they may not be considered association records.”, “detailed_answer”: “The ALJ found that specific materials lists and specifications from a vendor, which were not kept by the HOA in the ordinary course of business, did not constitute ‘financial’ or ‘other records of the association’ that the HOA was mandated to provide.”, “alj_quote”: “Petitioner did not establish that the documents in his records request were ‘financial’ or constituted ‘other records of the association’ as required by law.”, “legal_basis”: “A.R.S. § 33-1805”, “topic_tags”: [ “definition of records”, “contractor documents” ] }, { “question”: “Who is responsible for proving that the HOA violated the law?”, “short_answer”: “The homeowner (petitioner) bears the burden of proof.”, “detailed_answer”: “In an administrative hearing regarding an HOA dispute, the homeowner filing the petition must prove by a ‘preponderance of the evidence’ that the HOA violated the statute.”, “alj_quote”: “In this proceeding, Petitioner bears the burden of proving by a preponderance of the evidence that Respondent violated ARIZ. REV. STAT. § 33-1805.”, “legal_basis”: “A.A.C. R2-19-119”, “topic_tags”: [ “burden of proof”, “legal standards”, “hearing procedures” ] } ] }


Case Participants

Petitioner Side

  • Robert C. Ochs (petitioner)
    Appeared on his own behalf

Respondent Side

  • Ashley N. Moscarello (HOA attorney)
    Goodman Holmgren
    Appeared on behalf of respondent
  • Carl Westlund (witness)
    The Management Trust
    Division Vice President of Community Management at TMT
  • Shauna Carr (property manager)
    The Management Trust
    Former executive community manager for Camel View Greens
  • Dameon Cons (HOA attorney)
    Goodman Holmgren
    Sent response letter to Petitioner
  • Mark A. Holmgren (HOA attorney)
    Goodman Holmgren
    Counsel for Respondent listed on transmittals

Neutral Parties

  • Jenna Clark (ALJ)
    OAH
  • Louis Dettorre (Commissioner)
    ADRE
  • Miranda Alvarez (Legal Secretary)
    OAH
    Transmitted orders/minute entries
  • AHansen (ADRE Staff)
    ADRE
    Recipient of official documents
  • vnunez (ADRE Staff)
    ADRE
    Recipient of official documents
  • djones (ADRE Staff)
    ADRE
    Recipient of official documents
  • labril (ADRE Staff)
    ADRE
    Recipient of official documents

Other Participants

  • Jeff Centers (vendor/project manager)
    Vendor
    Contractor hired by the community

Brian D Sopatyk v. Xanadu Lake Resort Condominium, Inc.

Case Summary

Case ID 21F-H2121065-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-11-01
Administrative Law Judge Velva Moses-Thompson
Outcome partial
Filing Fees Refunded $1,000.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian D. Sopatyk Counsel Jacob A. Kubert, Esq.
Respondent Xanadu Lake Resort Condominium, Inc. Counsel Penny L. Koepke, Esq.

Alleged Violations

CC&R Article 2 § 3(a)(2)
CC&R Article 3 § 3(d)(1)
CC&R Article 6 § 2(a)

Outcome Summary

Petitioner was deemed the prevailing party regarding Issues 1 and 3, while Respondent was deemed the prevailing party regarding Issue 2. Respondent was ordered to pay Petitioner his filing fee of $1,000.00. No civil penalty was found appropriate.

Why this result: Petitioner lost Issue 2 because he failed to prove the Respondent's no-pet policy was arbitrarily or unreasonably applied.

Key Issues & Findings

Alleged violation of CC&R Article 2 § 3(a)(2)

The Administrative Law Judge (ALJ) concluded that screen doors are not permitted in Xanadu under CC&R Article 2 § 3(a)(2), and CC&R Article 7 (Architectural Committee authority) does not override this explicit prohibition.

Orders: Respondent is directed to comply with the requirements of CC&R Article 2 § 3(a)(2) going forward.

Filing fee: $0.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • CC&R Article 2 § 3(a)(2)
  • CC&R Article 7

Alleged violation of CC&R Article 3 § 3(d)(1)

Petitioner alleged violation concerning the 'no-pet' policy. The ALJ concluded that Respondent is not required to allow pets, but may allow them with Board approval, and the Petitioner did not establish that the policy was arbitrarily or unreasonably applied.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • CC&R Article 3 § 3(d)(1)
  • A.R.S. § 12-548

Alleged violation of CC&R Article 6 § 2(a)

The ALJ concluded that the marquee is common area, and the Association was not authorized under CC&R Article 6 § 2(a) to charge a separate assessment or rental fee for its use. Furthermore, there was no evidence the $50 assessment complied with CC&R Article 6 § 5 (special assessment requirements).

Orders: Respondent is directed to comply with the requirements of CC&R Article 6 § 2(a) going forward.

Filing fee: $0.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • CC&R Article 6 § 2(a)
  • CC&R Article 6 § 5
  • A.R.S. § 12-548

Analytics Highlights

Topics: HOA Governance, Condominium, CC&R Violation, Assessment Dispute, Architectural Control, Pet Policy, Statute of Limitations Defense
Additional Citations:

  • A.R.S. § 32-2199(1)
  • A.R.S. § 12-548
  • A.R.S. § 32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • CC&R Article 2 § 3(a)(2)
  • CC&R Article 3 § 3(d)(1)
  • CC&R Article 6 § 2(a)
  • CC&R Article 6 § 5
  • CC&R Article 7

Video Overview

Audio Overview

Decision Documents

21F-H2121065-REL Decision – 913797.pdf

Uploaded 2026-01-23T17:39:10 (41.8 KB)

21F-H2121065-REL Decision – 913859.pdf

Uploaded 2026-01-23T17:39:13 (5.9 KB)

21F-H2121065-REL Decision – 921820.pdf

Uploaded 2026-01-23T17:39:16 (100.1 KB)

21F-H2121065-REL Decision – 921823.pdf

Uploaded 2026-01-23T17:39:19 (112.8 KB)

Questions

Question

Can the HOA Board or Architectural Committee authorize an improvement (like a screen door) if the CC&Rs explicitly ban it?

Short Answer

No. The Board cannot use its general approval powers to override specific prohibitions in the CC&Rs.

Detailed Answer

Even if an Architectural Committee has the authority to approve improvements, they cannot authorize items that are specifically prohibited by other sections of the CC&Rs. Doing so would render the specific prohibition meaningless.

Alj Quote

If Respondent were permitted to authorize the installation of screen doors through the approval of the Architectural Committee, the bar in CC&R Article 2 § 3(a)(2) would have no meaning.

Legal Basis

Contract Interpretation

Topic Tags

  • Architectural Control
  • Board Authority
  • CC&R Interpretation

Question

If the CC&Rs say pets are allowed 'with Board permission,' does the Board have to let me have a pet?

Short Answer

No. The Board has discretion to deny permission.

Detailed Answer

If the CC&Rs state that animals are not allowed without express permission, the Board is not required to grant that permission. As long as the Board has consistently prohibited pets and not acted arbitrarily, they can enforce a no-pet policy.

Alj Quote

The Administrative Law Judge concludes that Respondent is not required, but may allow pets with the Board’s approval… Petitioner did not establish by a preponderance of the evidence that Respondent has arbitrarily or unreasonably applied CC&R Article 3 § 3(d)(1).

Legal Basis

Board Discretion

Topic Tags

  • Pets
  • Rules Enforcement

Question

Can the HOA charge a 'rental fee' or separate assessment to specific owners for the use or repair of a common area structure?

Short Answer

Not usually. Common area maintenance should be paid from general reserve funds or regular assessments.

Detailed Answer

The HOA cannot arbitrarily charge a 'rental fee' or specific assessment for a common area amenity (like a marquee sign) if the CC&Rs require common area improvements to be funded by the reserve fund or regular assessments.

Alj Quote

The Administrative Law Judge concludes that the marquee is a part of the common area of Xanadu and therefore, the Association was not authorized under CC&R Article 6 § 2(a), to charge a separate assessment or rental fee for the use of the marquee.

Legal Basis

CC&R Article 6 § 2(a)

Topic Tags

  • Assessments
  • Common Areas
  • Financials

Question

Is there a statute of limitations for filing a petition against my HOA with the Arizona Department of Real Estate?

Short Answer

No.

Detailed Answer

The statute of limitations that applies to debts (A.R.S. § 12-548) does not apply to ADRE petitions because they are not actions for debt. The Department itself does not have statute of limitations provisions.

Alj Quote

A.R.S. § 12-548 is inapplicable to the petition filed in this matter because the statute applies to actions for debt evidenced by a contract in writing. The petition does not relate to a debt and furthermore, the Department does not have any statute of limitations provisions.

Legal Basis

A.R.S. § 12-548 (distinguished)

Topic Tags

  • Procedure
  • Statute of Limitations

Question

Can the HOA levy a special assessment for repairs without a vote of the members?

Short Answer

No, not if the CC&Rs require a member vote.

Detailed Answer

If the CC&Rs stipulate that special assessments for capital improvements require the assent of a certain percentage of voters (e.g., 2/3), the HOA cannot impose the cost without holding that vote.

Alj Quote

Furthermore, there was no evidence presented at hearing that the $50 assessment was imposed that complied with CC&R Article 6 § 5.

Legal Basis

CC&R Article 6 § 5

Topic Tags

  • Special Assessments
  • Voting

Question

If I win my hearing against the HOA, can I get my filing fee back?

Short Answer

Yes.

Detailed Answer

The Administrative Law Judge has the authority to order the HOA to reimburse the prevailing party for the filing fee.

Alj Quote

IT IS FURTHER ORDERED that Respondent pay Petitioner his filing fee of $1,000.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Administrative Order

Topic Tags

  • Remedies
  • Fees

Question

How are conflicts or ambiguities in the CC&Rs interpreted by the judge?

Short Answer

They are construed as a whole to determine the underlying purpose.

Detailed Answer

Restrictive covenants are interpreted by looking at the document as a whole to understand the intent of the parties and the purpose of the restrictions.

Alj Quote

Restrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein.

Legal Basis

Common Law Interpretation

Topic Tags

  • Legal Standards
  • CC&R Interpretation

Case

Docket No
21F-H2121065-REL
Case Title
Brian D. Sopatyk vs. Xanadu Lake Resort Condominium, Inc.
Decision Date
2021-11-01
Alj Name
Velva Moses-Thompson
Tribunal
OAH
Agency
ADRE

Questions

Question

Can the HOA Board or Architectural Committee authorize an improvement (like a screen door) if the CC&Rs explicitly ban it?

Short Answer

No. The Board cannot use its general approval powers to override specific prohibitions in the CC&Rs.

Detailed Answer

Even if an Architectural Committee has the authority to approve improvements, they cannot authorize items that are specifically prohibited by other sections of the CC&Rs. Doing so would render the specific prohibition meaningless.

Alj Quote

If Respondent were permitted to authorize the installation of screen doors through the approval of the Architectural Committee, the bar in CC&R Article 2 § 3(a)(2) would have no meaning.

Legal Basis

Contract Interpretation

Topic Tags

  • Architectural Control
  • Board Authority
  • CC&R Interpretation

Question

If the CC&Rs say pets are allowed 'with Board permission,' does the Board have to let me have a pet?

Short Answer

No. The Board has discretion to deny permission.

Detailed Answer

If the CC&Rs state that animals are not allowed without express permission, the Board is not required to grant that permission. As long as the Board has consistently prohibited pets and not acted arbitrarily, they can enforce a no-pet policy.

Alj Quote

The Administrative Law Judge concludes that Respondent is not required, but may allow pets with the Board’s approval… Petitioner did not establish by a preponderance of the evidence that Respondent has arbitrarily or unreasonably applied CC&R Article 3 § 3(d)(1).

Legal Basis

Board Discretion

Topic Tags

  • Pets
  • Rules Enforcement

Question

Can the HOA charge a 'rental fee' or separate assessment to specific owners for the use or repair of a common area structure?

Short Answer

Not usually. Common area maintenance should be paid from general reserve funds or regular assessments.

Detailed Answer

The HOA cannot arbitrarily charge a 'rental fee' or specific assessment for a common area amenity (like a marquee sign) if the CC&Rs require common area improvements to be funded by the reserve fund or regular assessments.

Alj Quote

The Administrative Law Judge concludes that the marquee is a part of the common area of Xanadu and therefore, the Association was not authorized under CC&R Article 6 § 2(a), to charge a separate assessment or rental fee for the use of the marquee.

Legal Basis

CC&R Article 6 § 2(a)

Topic Tags

  • Assessments
  • Common Areas
  • Financials

Question

Is there a statute of limitations for filing a petition against my HOA with the Arizona Department of Real Estate?

Short Answer

No.

Detailed Answer

The statute of limitations that applies to debts (A.R.S. § 12-548) does not apply to ADRE petitions because they are not actions for debt. The Department itself does not have statute of limitations provisions.

Alj Quote

A.R.S. § 12-548 is inapplicable to the petition filed in this matter because the statute applies to actions for debt evidenced by a contract in writing. The petition does not relate to a debt and furthermore, the Department does not have any statute of limitations provisions.

Legal Basis

A.R.S. § 12-548 (distinguished)

Topic Tags

  • Procedure
  • Statute of Limitations

Question

Can the HOA levy a special assessment for repairs without a vote of the members?

Short Answer

No, not if the CC&Rs require a member vote.

Detailed Answer

If the CC&Rs stipulate that special assessments for capital improvements require the assent of a certain percentage of voters (e.g., 2/3), the HOA cannot impose the cost without holding that vote.

Alj Quote

Furthermore, there was no evidence presented at hearing that the $50 assessment was imposed that complied with CC&R Article 6 § 5.

Legal Basis

CC&R Article 6 § 5

Topic Tags

  • Special Assessments
  • Voting

Question

If I win my hearing against the HOA, can I get my filing fee back?

Short Answer

Yes.

Detailed Answer

The Administrative Law Judge has the authority to order the HOA to reimburse the prevailing party for the filing fee.

Alj Quote

IT IS FURTHER ORDERED that Respondent pay Petitioner his filing fee of $1,000.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Administrative Order

Topic Tags

  • Remedies
  • Fees

Question

How are conflicts or ambiguities in the CC&Rs interpreted by the judge?

Short Answer

They are construed as a whole to determine the underlying purpose.

Detailed Answer

Restrictive covenants are interpreted by looking at the document as a whole to understand the intent of the parties and the purpose of the restrictions.

Alj Quote

Restrictive covenants must be construed as a whole and interpreted in view of their underlying purposes, giving effect to all provisions contained therein.

Legal Basis

Common Law Interpretation

Topic Tags

  • Legal Standards
  • CC&R Interpretation

Case

Docket No
21F-H2121065-REL
Case Title
Brian D. Sopatyk vs. Xanadu Lake Resort Condominium, Inc.
Decision Date
2021-11-01
Alj Name
Velva Moses-Thompson
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Brian D. Sopatyk (petitioner)
    Unit Owner
  • Jacob A. Kubert (petitioner attorney)
    Dessaules Law Group

Respondent Side

  • Penny L. Koepke (respondent attorney)
    Maxwell Morgan PC

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (ADRE Commissioner)
    Arizona Department of Real Estate
  • Louis Dettorre (ADRE Commissioner)
    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

Other Participants

  • c. serrano (clerk/staff)
    Transmitting agent mentioned in distribution list

Lee & Kim Edwards v. Scottsdale Embassy Condominium Association

Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID 21F-H2120028-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-07-28
Administrative Law Judge Velva Moses-Thompson
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Lee & Kim Edwards Counsel Terry Foster, Esq.
Respondent Scottsdale Embassy Condominium Association Counsel

Alleged Violations

A.R.S. § 33-1255

Outcome Summary

The Administrative Law Judge dismissed the petition, finding that the Petitioner failed to prove by a preponderance of the evidence that the Respondent violated its CC&Rs, Bylaws, or A.R.S. § 33-1255, ruling that the statute was inapplicable due to the specific provisions in the Declaration regarding the 1/26 assessment calculation.

Why this result: Petitioner failed to meet the burden of proof, and the ALJ determined A.R.S. § 33-1255 was superseded by the Declaration, which mandated assessments based on the undivided 1/26 interest in the common elements.

Key Issues & Findings

Assessment calculation based on undivided interest in common areas

Petitioner challenged the Association's decision to change assessments from a historical square footage basis to a 1/26 interest calculation, arguing that this method violates A.R.S. § 33-1255 by charging for limited common elements (patios/parking).

Orders: The petition of Lee & Kim Edwards is dismissed; Respondent is deemed the prevailing party.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1255
  • Declaration Article I, Section 5
  • Declaration Article II, Section 5
  • Declaration Article II, Section 7
  • Declaration Article IV, Section 4
  • Declaration Article VI, Section 9

Analytics Highlights

Topics: condominium, assessment, cc&r, statutory interpretation, common elements, limited common elements
Additional Citations:

  • A.R.S. § 32-2199(1)
  • A.R.S. § 33-1255
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • Vazanno v. Superior Court, 74 Ariz. 369
  • Powell v. Washburn, 211 Ariz. 553
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70

Video Overview

Audio Overview

Decision Documents

21F-H2120028-REL-RHG Decision – 899379.pdf

Uploaded 2026-01-23T17:36:25 (123.6 KB)

21F-H2120028-REL-RHG Decision – ../21F-H2120028-REL/856603.pdf

Uploaded 2026-01-23T17:36:31 (98.1 KB)





Briefing Doc – 21F-H2120028-REL-RHG


Assessment Methodology Dispute: Edwards v. Scottsdale Embassy Condominium Association

Executive Summary

This document provides a comprehensive analysis of the legal dispute between homeowners Lee & Kim Edwards (Petitioners) and the Scottsdale Embassy Condominium Association (Respondent) concerning a change in the methodology for calculating homeowner assessments. The core of the conflict was the Association’s decision to shift from a historical practice of assessments based on unit square footage to a uniform rate where each of the 26 units pays an equal 1/26 share of the common expenses.

The dispute was adjudicated by an Administrative Law Judge (ALJ) in two separate hearings. In both instances, the ALJ ruled in favor of the Association, dismissing the petitions filed by the Edwards.

Key Takeaways:

Change in Methodology: The Association’s Board, acting on legal advice received in January 2020, concluded that its 40-year practice of using a square-footage-based assessment violated the community’s Covenants, Conditions, and Restrictions (CC&Rs). The Board subsequently implemented a 1/26 equal-share assessment method after a majority of homeowners selected this option.

Initial Ruling on “Uniform Rate”: In the first hearing in February 2021, the Petitioners argued that the historical square footage method was a “uniform rate” and that the Association had waived its right to change the long-standing practice. The ALJ rejected this, finding that the new 1/26 rate complied with the CC&Rs’ requirement for a “uniform rate” (Article VI, Section 9) and aligned with each unit’s specified 1/26 undivided interest in the common elements (Article VI, Section 4(d)).

Rehearing Ruling on State Statute: The Petitioners were granted a rehearing in July 2021, where they argued that the 1/26 method violated Arizona statute A.R.S. § 33-1255 by improperly charging all owners for “limited common elements” like patios and parking spaces. The ALJ again ruled against the Petitioners, concluding that the state statute did not apply. The ruling was based on a key provision in the statute: “Unless otherwise provided for in the declaration.” The judge found that the Association’s Declaration did provide otherwise by defining patios and parking as general common elements and explicitly mandating that costs be shared based on each unit’s 1/26 interest.

Final Outcome: The petition was definitively dismissed after the rehearing, making the ALJ’s order binding. The Association’s adoption of the 1/26 assessment rate was upheld as compliant with its governing documents.

——————————————————————————–

Background of the Dispute

The legal conflict originated from a single-issue petition filed on November 20, 2020, by Lee and Kim Edwards, owners of unit 6937 in the Scottsdale Embassy Condominium development. The petition, filed with the Arizona Department of Real Estate, alleged that the Scottsdale Embassy Condominium Association had violated its CC&Rs, specifically Article VI, Section 9, and Article IV, Section 1.

The central issue was the Association Board’s decision to change the long-standing method of calculating homeowner assessments. For over 40 years, assessments had been based on the square footage of each unit. In 2020, the Board implemented a new system where the Association’s annual budget was divided equally among the 26 units, with each owner paying a 1/26 share. The Petitioners sought to enforce the historical calculation method unless and until the CC&Rs were properly amended.

Chronology of the Assessment Change

Historical Practice: For more than four decades, the Association calculated and charged member assessments based on the square footage of each condominium unit.

Legal Consultation (January 2020): Two members of the Association’s Board consulted with an attorney regarding the legality of the historical assessment method.

Attorney Recommendation (January 24, 2020): The attorney advised the Association that, to ensure compliance with the CC&Rs, it should calculate assessments based on each homeowner’s 1/26 interest in the common areas. The attorney’s letter stated:

Homeowner Consultation: Following the legal advice, the Board informed homeowners that the prior square-footage method violated the CC&Rs. The Board sought input on three potential assessment methods: the 1/26 rate, a variable blended rate, or continuing with the square footage rate. A majority of homeowners selected the 1/26 rate. The Board noted that any method other than the 1/26 rate would require a formal amendment to the CC&Rs.

Implementation (September 26, 2020): The Board officially notified homeowners that it would begin charging assessments based on the 1/26 rate and that an amendment to the CC&Rs was not necessary to implement this change.

Initial Hearing and Decision (February 2021)

An evidentiary hearing was held on February 9, 2021, before Administrative Law Judge Velva Moses-Thompson.

Arguments Presented

Petitioners (Edwards)

1. The historical square footage rate qualified as a “uniform rate” and was compliant with the CC&Rs.
2. By using the square footage rate for over 40 years, the Association had waived its right to enforce a different method like the 1/26 rate.

Respondent (Association)

1. The plain language of the CC&Rs requires that each homeowner pay an assessment based on the 1/26 rate.
2. It is not legally possible to waive a mandatory CC&R requirement through past practice.

On February 19, 2021, the ALJ issued a decision dismissing the petition. The judge’s conclusions of law were based on a direct interpretation of the CC&Rs:

Uniform Rate Compliance: The ALJ determined that the “preponderance of the evidence” showed that the Association’s 1/26 rate was a uniform rate that complied with Article VI, Section 9 of the CC&Rs.

Burden of Proof: The Petitioners failed to meet their burden to prove that the Association had violated its governing documents.

Outcome: The Association was deemed the prevailing party, and the petition was dismissed.

Rehearing and Final Decision (July 2021)

The Petitioners filed a request for a rehearing on March 30, 2021, which was granted. The rehearing was held on July 8, 2021. The Respondent did not appear at this hearing, as its counsel had withdrawn from representation without formally notifying the tribunal.

In the rehearing, the Petitioners introduced a new argument, alleging that the 1/26 assessment method violated Arizona state law, specifically A.R.S. § 33-1255.

• The core of this argument was that the 1/26 rate improperly included charges for “limited common elements,” such as patios and assigned parking spaces.

• The Petitioners contended that this forced all homeowners to pay for the maintenance of elements that were assigned to and benefited fewer than all units, in direct violation of the statute.

On July 28, 2021, the ALJ issued a final decision, once again dismissing the petition. The ruling hinged on the precise wording of both the state statute and the Association’s Declaration.

Applicability of A.R.S. § 33-1255: The judge found that the statute did not apply to this matter. The relevant section of the law, A.R.S. § 33-1255(C), begins with the critical phrase: “Unless otherwise provided for in the declaration…”

Supremacy of the Declaration: The ALJ concluded that the Association’s Declaration did provide otherwise. The CC&Rs explicitly:

◦ Define “Common Elements” broadly to include patios and parking areas (Article I, Section 3).

◦ Establish that each unit has an “undivided interest in the general common areas” of 1/26 (Article I, Section 5).

◦ Mandate that each unit’s share of costs for repair and maintenance of common areas is the “same as its undivided interest in the common elements” (Article IV, Section 4(d)).

Final Outcome: Because the Declaration’s specific provisions overrode the general terms of the state statute, the Association was found to be in compliance. The petition was dismissed, and the order was deemed binding on the parties.

Key Legal Principles and Definitions

Concept

Definition / Application in Case

Burden of Proof

The Petitioners were required to establish their claim by a “preponderance of the evidence.”

Preponderance of the Evidence

Defined as “proof as convinces the trier of fact that the contention is more probably true than not.” The ALJ found the Petitioners failed to meet this standard in both hearings.

Restrictive Covenants

Arizona law requires that unambiguous restrictive covenants be enforced to give effect to the parties’ intent and be interpreted as a whole. The ALJ’s decisions were based on a direct interpretation of the CC&Rs’ language.

Common Elements (per CC&Rs)

A broad definition including multifamily structures, land, roofs, ceilings, foundations, storage spaces, patios, parking areas, recreational facilities, lawns, pipes, and conduits.

Unit (per CC&Rs)

A freehold estate consisting of the interior space of an apartment. The definition explicitly states that common elements are not part of the unit.

Undivided Interest (per CC&Rs)

Article I, Section 5 clearly establishes that “The undivided interest in the general common areas… which shall be conveyed with each respective units shall be 1/26.” This provision was central to the final ruling.






Study Guide – 21F-H2120028-REL-RHG


Study Guide: Edwards v. Scottsdale Embassy Condominium Association

This study guide provides a comprehensive review of the administrative case between Lee & Kim Edwards and the Scottsdale Embassy Condominium Association, based on the provided legal decisions. It includes a short-answer quiz, an answer key, suggested essay questions, and a detailed glossary of key terms.

Short-Answer Quiz

Answer the following questions in two to three sentences each, based on the information provided in the case documents.

1. What was the central conflict between the Petitioners (Lee & Kim Edwards) and the Respondent (Scottsdale Embassy Condominium Association)?

2. For over 40 years, how did the Association historically calculate assessments for homeowners?

3. What specific event in January 2020 prompted the Association’s Board to change the assessment method?

4. In the first hearing on February 9, 2021, what were the two main arguments presented by Mr. Edwards?

5. What was the Administrative Law Judge’s conclusion regarding the “uniform rate” requirement from CC&Rs Article VI, Section 9 in the initial decision?

6. Upon what new legal grounds did the Petitioners base their March 30, 2021, request for a re-hearing?

7. According to the CC&Rs, what is the defined undivided interest in the general common areas for each unit?

8. Why did the Administrative Law Judge ultimately conclude that Arizona Revised Statutes (A.R.S.) § 33-1255 did not apply in this case?

9. What legal standard of proof did the Petitioners need to meet to successfully prove their case?

10. What was the final, binding outcome of the re-hearing held on July 8, 2021?

——————————————————————————–

Answer Key

1. The central conflict concerned the method for calculating homeowner assessments. The Petitioners argued for the historical method based on unit square footage, while the Respondent implemented a new method where each of the 26 units paid an equal share (1/26 rate) of the Association’s costs.

2. For over 40 years, the Association historically calculated assessments based on the square footage of each condominium unit. This practice was changed by the Board in 2020.

3. In January 2020, two Board members met with an attorney who advised that to comply with the CC&Rs, the Association should charge assessments based on each homeowner’s 1/26 interest in the common areas, not on square footage.

4. Mr. Edwards argued that the historical square footage rate was a “uniform rate” that complied with the CC&Rs. He also contended that by using this method for 40 years, the Association had waived its right to enforce a different assessment method like the 1/26 rate.

5. The Judge concluded that the Respondent’s assessment method, based on a uniform rate of 1/26 of the Association’s costs for each unit, did comply with Article VI, Section 9. Therefore, the Petitioners failed to prove the Association had violated the CC&Rs.

6. The Petitioners based their request for a re-hearing on the new allegation that the Respondent had violated Arizona Revised Statutes (A.R.S.) § 33-1255. They argued the 1/26 rate improperly required members to pay for limited common elements, such as patios and parking spaces, not assigned to them.

7. According to Article I, Section 5 of the Declaration (CC&Rs), the undivided interest in the general common areas established and conveyed with each respective unit is 1/26.

8. The Judge concluded that A.R.S. § 33-1255 did not apply because the statute itself contains an exception: “Unless otherwise provided for in the declaration.” In this case, the Association’s Declaration explicitly required that each member be charged an assessment equivalent to their 1/26 interest in the total costs, which included patios and parking areas.

9. The Petitioners bore the burden of proof to establish their claims by a “preponderance of the evidence.” This standard requires proof that convinces the trier of fact that a contention is more probably true than not.

10. Following the re-hearing, the Administrative Law Judge again ordered that the petition of Lee & Kim Edwards be dismissed. The Respondent was deemed the prevailing party, and the order was declared binding on the parties.

——————————————————————————–

Essay Questions

The following questions are designed for longer, essay-style responses. Answers are not provided.

1. Trace the evolution of the Petitioners’ legal strategy from the initial petition filed on November 20, 2020, to the arguments made during the re-hearing on July 8, 2021. How did their core arguments change, and what new evidence or legal statutes were introduced?

2. Analyze the concept of a “uniform rate” as required by Article VI, Section 9 of the CC&Rs. Discuss how both the Petitioners and the Respondent interpreted this phrase to support their respective assessment methods (square footage vs. 1/26 rate).

3. Explain in detail the role of A.R.S. § 33-1255 in the re-hearing. Why did the Petitioners believe it supported their case, and what specific language in both the statute and the Association’s Declaration led the Administrative Law Judge to rule that it did not apply?

4. Evaluate the actions taken by the Association’s Board of Directors in 2020. Consider their consultation with an attorney, their communication with homeowners, and their final decision to implement the 1/26 rate. Discuss whether these actions were consistent with the powers and obligations outlined in the CC&Rs.

5. Discuss the legal argument of “waiver” raised by Mr. Edwards in the first hearing. Explain what he meant by this and why the Association’s 40-year history of using a square-footage-based assessment was central to this claim. Why did this argument ultimately fail?

——————————————————————————–

Glossary of Key Terms

Definition

1/26 Rate

The assessment method where the Association’s annual budget is divided 26 ways, with each unit responsible for paying an equal portion. This is based on each unit’s 1/26 undivided interest in the common areas as specified in the CC&Rs.

Administrative Law Judge (ALJ)

The independent judicial officer who presides over administrative hearings, hears evidence, and issues a decision. In this case, the ALJ was Velva Moses-Thompson.

A.R.S. § 32-2199(1)

The Arizona Revised Statute that permits a condominium unit owner to file a petition with the Department of Real Estate for a hearing regarding alleged violations of the Condominium Act.

A.R.S. § 33-1255

The Arizona Revised Statute concerning common expenses. It states that unless the declaration provides otherwise, expenses for a limited common element shall be assessed against the units to which it is assigned, and expenses benefitting fewer than all units shall be assessed exclusively against the units benefitted.

Arizona Department of Real Estate

The state agency authorized by statute to receive and decide Petitions for Hearings from members of condominium associations in Arizona.

Burden of Proof

The obligation on a party in a legal proceeding to establish its claims by a required standard of evidence. In this case, the Petitioners bore the burden of proof.

CC&Rs (Covenants, Conditions, and Restrictions)

The governing legal documents that set up the guidelines for a planned community or condominium. Also referred to as the “Declaration” in the provided documents.

Common Area / Common Elements

As defined in Article I, Section 3 of the CC&Rs, this includes the multifamily structure (except for the units), land, air space, bearing walls, roofs, storage spaces, patios, recreational facilities, lawns, pipes, and other premises designed for common use.

Declaration

Another term for the Covenants, Conditions, and Restrictions (CC&Rs).

Lee & Kim Edwards

The Petitioners in the case and owners of unit 6937 in the Scottsdale Embassy Condominium development.

Office of Administrative Hearings

An independent state agency to which the Department of Real Estate refers petitions for evidentiary hearings.

Petitioners

The party that initiates a legal action or petition. In this case, Lee & Kim Edwards.

Preponderance of the Evidence

The evidentiary standard required to be met by the Petitioners. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

Respondent

The party against whom a petition is filed. In this case, the Scottsdale Embassy Condominium Association.

Restricted Common Area

As defined in Article I, Section 3(b) of the CC&Rs, this refers to a separately designed and exclusive parking area for each unit as assigned by the Board of Directors.

Scottsdale Embassy Condominium Association

The Respondent in the case; the condominium unit owners’ association for the development.

Square Footage Rate

The historical method of calculating assessments for over 40 years, where each unit’s assessment was based on its square footage.

Uniform Rate

A requirement from Article VI, Section 9 of the CC&Rs that states both regular and special assessments must be fixed at a uniform rate for all units. The interpretation of this term was central to the dispute.

As defined in Article I, Section 4 of the CC&Rs, a separately designated freehold estate consisting of the space bounded by the interior surfaces of the perimeter walls, floors, ceilings, windows, and floors of each apartment. It does not include common elements.

Waiver

A legal argument made by the Petitioners that because the Association had charged assessments based on square footage for 40 years, it had relinquished or “waived” its right to enforce a different method.






Blog Post – 21F-H2120028-REL-RHG


4 Shocking Lessons from an HOA Lawsuit That Could Upend How You See Your Fees

Introduction: The 40-Year Mistake

If you live in a condominium or a community governed by a Homeowners Association (HOA), you likely operate under a simple assumption: the way things have always been done is the correct and legal way. Monthly fees, maintenance schedules, and community rules that have been in place for decades feel permanent and unassailable. But what if they aren’t?

This was the central question in the case of Lee & Kim Edwards versus the Scottsdale Embassy Condominium Association. For over 40 years, the Association calculated homeowner fees based on the square footage of each unit—a practice that seemed fair and logical, and one that was never questioned by residents.

Then came the twist. In January 2020, after consulting with an attorney, the HOA board announced a shocking revelation: their 40-year-old assessment method was a direct violation of the community’s own governing documents. The board presented the legal findings to the community and sought their input on how to proceed. After being given the choice between the old method, a blended rate, or a new flat-rate fee that complied with the rules, most homeowners voted for the compliant flat-rate system for every single unit, regardless of its size.

Homeowners sued to keep the old method, sparking a legal battle that went all the way to an administrative court. The resulting decisions offer surprising and crucial lessons for every homeowner paying HOA dues. Here are the four most impactful takeaways from the case that could change how you view your own community’s rules.

1. “Past Practice” Means Nothing if It Violates the Rules

The primary argument made by the petitioners, Mr. and Mrs. Edwards, was that the Association had “waived its right” to change the assessment method. After all, by using the square-footage calculation for four decades, hadn’t they established an unbreakable precedent? It seemed like a common-sense argument rooted in history and consistency.

The court, however, completely rejected this line of reasoning. The Administrative Law Judge’s decision was not based on historical practice but on the clear, written rules found in the community’s Covenants, Conditions, and Restrictions (CC&Rs). The Association argued that it’s “not possible to waive the CC&R requirement,” and the court agreed.

The Lesson: This case powerfully demonstrates that tradition or “how things have always been done” cannot override the explicit language of an HOA’s governing documents. The CC&Rs are a contract. The lesson is clear: if your HOA’s practice contradicts its documents, the practice is invalid. The board has a fiduciary duty to follow the written rules, not a 40-year-old mistake.

2. Your CC&Rs Are a Binding Contract—Read Them

Throughout the legal proceedings, the Administrative Law Judge consistently referred back to the specific text of the CC&Rs to make a final decision. The entire case ultimately hinged on the interpretation of a few key sentences written decades ago.

The most critical passage, which decided the outcome, was from Article VI, Section 4(d) of the community’s governing documents:

“Each unit’s share shall be the same as its undivided interest in the common elements of the total amount determined under the subparagraphs (a), (b), (c), and (d) above.” —Scottsdale Embassy Condominium Association CC&Rs, Article VI, Section 4(d)

This single sentence was the linchpin. It explicitly linked each unit’s assessment share to its “undivided interest in the common elements.” Another section of the document, Article I, Section 5, had already established that interest as an equal 1/26 for all 26 units.

The Lesson: This is a classic example of legal cross-referencing in a contract. Section 4(d) provided the instruction (base fees on “undivided interest”), while Article I, Section 5 provided the specific value (1/26). With both parts present and unambiguous, the court had no choice but to enforce them exactly as written, leaving no room for interpretations based on fairness or history. The contract was the contract.

3. A “Uniform Rate” Might Not Mean What You Think

One of the central points of contention was the term “uniform rate.” Article VI, Section 9 of the CC&Rs required that all assessments “must be fixed at a uniform rate for all units.”

The homeowners argued that the square footage rate was, in fact, a “uniform rate”—a consistent price per square foot applied to every unit. It’s an interpretation many of us might find reasonable.

However, the HOA Board and the court had a different interpretation. The judge found that the flat 1/26 rate was the correct interpretation of a “uniform rate” because it was uniformly applied to every unit’s established 1/26 interest in the common areas. In the court’s view, the “rate” being applied uniformly was the 1/26 fraction of the total budget. The fact that this resulted in different dollar amounts for square-footage fees was irrelevant; the legal share was what had to be uniform.

The Lesson: Common-sense terms like “uniform” can have very specific legal meanings within the context of your governing documents. The true definition is found not in a dictionary, but in how the term is defined and applied by the rest of the document’s provisions.

4. Your HOA’s Rules Can Sometimes Override State Law

In a final attempt to overturn the decision, the petitioners filed for a re-hearing. This time, they cited a specific Arizona state law, A.R.S. 33-1255. This statute says that expenses for “limited common elements”—things like assigned patios or parking spaces that only benefit specific units—should be assessed only against those units that benefit from them. The homeowners argued that the new 1/26 flat fee unfairly forced them to pay for their neighbors’ patios and parking spots, a direct violation of state law.

Surprisingly, this argument also failed. The reason is found in the crucial introductory clause of the state law itself: “Unless otherwise provided for in the declaration…”

Because the Scottsdale Embassy’s Declaration did provide otherwise—by explicitly rolling all general and restricted common area costs into the total budget before calculating each unit’s 1/26 share—the community’s own rules legally superseded the default state statute. The judge concluded that the state law “does not apply to this matter because the Declaration requires” a different method.

The Lesson: This is perhaps the most counter-intuitive lesson of all. This demonstrates a key principle of contract law and planned community governance: state statutes often provide a “default” rule for situations a community’s documents don’t address. However, they also grant communities the power to create their own specific rules, which, if legally permissible, will take precedence. Homeowners cannot assume that a state law automatically protects them if their community’s own governing documents have a more specific rule in place.

Conclusion: Are You Sure You Know What You Agreed To?

The central message from the Scottsdale Embassy case is undeniable: in an HOA, the written word is law. The CC&Rs and other governing documents are a binding contract that dictates the rules, regardless of 40 years of history, common-sense assumptions, or even some default state laws. What you believe is fair or standard practice is irrelevant if the document you agreed to upon purchase says otherwise.

This case was decided by a few sentences written decades ago. When was the last time you read your community’s governing documents from cover to cover?


Case Participants

Petitioner Side

  • Lee Edwards (petitioner, witness)
  • Kim Edwards (petitioner)
  • Teresa H. Foster (petitioner attorney)
    Ellis & Baker, P.C.
    Also referred to as Terri Foster and Terry Foster

Respondent Side

  • Lauren Vie (respondent attorney)
    Appeared for initial hearing; withdrew prior to rehearing
  • Caleb Koch (board member, witness)
    Scottsdale Embassy Condominium Association
    Board President
  • Mary Edinburgh (board member, witness)
    Scottsdale Embassy Condominium Association
  • Beth Mulcahy (respondent attorney)
    Mulcahy Law Firm, PC
    Withdrew prior to rehearing

Neutral Parties

  • Velva Moses-Thompson (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • Miranda Alvarez (unknown)
    Listed in transmission records for Petitioner's counsel

Keith D Smith v. Sierra Foothills Condominium Association

Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.

Case Summary

Case ID 21F-H2120003-REL
Agency ADRE
Tribunal OAH
Decision Date 2021-06-03
Administrative Law Judge Thomas Shedden
Outcome loss
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Keith D Smith Counsel
Respondent Sierra Foothills Condominium Association Counsel Stuart Rayburn

Alleged Violations

CC&R section 7.1(C)
ARIZ. REV. STAT. section 33-1248

Outcome Summary

The petition was dismissed as the Petitioner failed to prove by a preponderance of the evidence that the Association violated CC&R section 7.1(C) or ARIZ. REV. STAT. section 33-1248. The rule limiting sign use was deemed reasonable.

Why this result: Petitioner failed to meet the burden of proof on both issues.

Key Issues & Findings

Alleged unreasonable discrimination in adopting rules regarding common elements (monument sign)

Petitioner alleged the Association violated CC&R 7.1(C) by adopting a rule limiting the use of the common element monument sign to only owners in Building B, arguing this was unreasonable discrimination against Building A owners.

Orders: Petition dismissed for this issue.

Filing fee: $250.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • CC&R section 7.1(C)
  • CC&R section 6.26(a)
  • ARIZ. REV. STAT. section 33-1217

Alleged open meeting law violation at the June 10, 2020 Board meeting

Petitioner alleged the Board violated open meeting laws by communicating via email and reaching a decision prior to the June 10, 2020 meeting, claiming the President called for a vote without discussion.

Orders: Petition dismissed for this issue.

Filing fee: $250.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • ARIZ. REV. STAT. section 33-1248

Analytics Highlights

Topics: Condominium, Commercial HOA, Signage rules, Open meeting law, Discrimination
Additional Citations:

  • ARIZ. REV. STAT. section 33-1248
  • CC&R section 7.1(C)
  • ARIZ. REV. STAT. Title 32, Ch. 20, Art. 11
  • ARIZ. ADMIN. CODE § R2-19-119
  • ARIZ. REV. STAT. § 41-1092.07(F)(6)

Video Overview

Decision Documents

21F-H2120003-REL-RHG Decision – 885949.pdf

Uploaded 2026-01-23T17:34:33 (143.3 KB)

21F-H2120003-REL-RHG Decision – ../21F-H2120003-REL/837073.pdf

Uploaded 2026-01-23T17:34:35 (103.9 KB)





Briefing Doc – 21F-H2120003-REL-RHG


Administrative Hearing Briefing: Smith v. Sierra Foothills Condominium Association

Executive Summary

This briefing summarizes the administrative legal proceedings between Keith D. Smith (Petitioner) and the Sierra Foothills Condominium Association (Respondent) regarding Case No. 21F-H2120003-REL and its subsequent rehearing. The dispute centered on two primary allegations: that the Association’s Board of Directors established an unreasonable and discriminatory rule regarding a common-element monument sign, and that the Board violated Arizona’s open meeting laws during the adoption of said rule.

Following an initial hearing on October 26, 2020, and a subsequent rehearing considered on June 3, 2021, the Administrative Law Judge (ALJ) dismissed the petition in its entirety. The rulings established that the Association acted within its authority under the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) to create rules for common elements, provided those rules are reasonable. The ALJ found that limiting sign usage to specific buildings was a reasonable exercise of power based on the physical layout of the property. Furthermore, the Petitioner failed to provide substantial evidence to support claims of illegal pre-meeting communications by the Board.

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Core Dispute: Monument Sign Usage

The central conflict involved a monument sign located on the common elements of a commercial condominium consisting of two buildings, Building A and Building B.

The Challenged Rule

On June 10, 2020, the Association Board adopted a policy limiting the use of the monument sign exclusively to Unit owners in Building B. The monument sign contains only five advertising spaces.

Association Justification

The Association argued that the rule was necessary due to the physical limitations of the property:

Space Scarcity: The sign has a finite capacity (five spaces) that cannot accommodate all owners.

Building Frontage: Building A has direct street frontage, allowing its owners to hang signs directly on the building wall.

Lack of Frontage: Building B does not have street frontage, significantly limiting the utility and visibility of any signs hung on its walls.

Zoning Restrictions: Under the City of Phoenix Sign Code, businesses cannot post signs on buildings they do not occupy. Therefore, Building B owners are prohibited from hanging signs on Building A, making the monument sign their only viable external advertising option.

Petitioner’s Arguments

Mr. Smith, a Unit owner in Building A, challenged the rule based on the following:

Common Interest: He asserted that his deed grants him an undivided interest in common elements, meaning no owner should have exclusive use of the sign.

Disparate Treatment: He argued the rule violated CC&R section 6.26(a), which prohibits treating owners differently regarding occupancy and use restrictions.

Alternative Solutions: Mr. Smith proposed altering the sign to increase capacity or reducing existing sign sizes by half (which he offered to fund).

——————————————————————————–

Legal Analysis of CC&R Provisions

The ALJ’s decision hinged on the interpretation of specific articles within the Association’s governing documents.

CC&R Section 7.1(C): Board Authority

This section grants the Board the power to adopt, amend, and repeal Rules and Regulations to restrict and govern the use of any area.

Condition: Rules must not “unreasonably discriminate” and must be consistent with the Declaration and the Act.

Ruling: The ALJ concluded that discriminating among owners is permitted under 7.1(c) as long as it is not unreasonable. Given the lack of street frontage for Building B, the restriction was deemed a reasonable management of limited resources.

CC&R Section 6.26(a): Use Restrictions

The Petitioner argued that this section required all limitations to be applicable to all occupants equally.

Scope Limitation: The ALJ found that section 6.26(a) explicitly applies only to “occupancy and use restrictions contained in this Article 6.”

Ruling: Because the sign rule was promulgated under Article 7, the restrictive language of Article 6.26(a) did not apply.

Common Element Status and Partition

During the proceedings, the Association initially argued the sign was not a common element but later waived this argument. The Petitioner argued that common elements cannot be partitioned under A.R.S. § 33-1217. However, the ALJ found no evidence that the monument sign had been “partitioned” in a legal sense, merely that its use was regulated.

——————————————————————————–

Open Meeting Law Allegations

Mr. Smith alleged that the Association violated A.R.S. § 33-1248 regarding the conduct of the June 10, 2020, meeting.

Claims of Pre-Meeting Deliberation

The Petitioner asserted that Board members had “obviously” communicated via email and reached a decision before the meeting. His evidence for this was:

• The Board President called for a vote immediately without initiating discussion.

• The Board members appeared to have their minds made up.

Evidence and Testimony

The ALJ rejected these claims based on the following:

Lack of Proof: The Petitioner admitted he had no emails or physical evidence to support the claim of private deliberation.

Conflicting Testimony: Association witnesses provided “credible testimony” that a protracted discussion took place, lasting approximately 90 minutes. Mr. Smith himself spoke for 20 minutes during this period.

New Evidence Barred: During the rehearing, Mr. Smith claimed to possess an email supporting his position. The ALJ refused to consider it, citing Arizona Administrative Code § R2-19-115, which requires all evidence to be presented at the original hearing.

——————————————————————————–

Procedural Findings and Rehearing

The rehearing (Case No. 21F-H2120003-REL-RHG) addressed the Petitioner’s claims of administrative error and “arbitrary” findings.

ALJ Determination

Number of Issues

The hearing was limited to two issues because the Petitioner only paid the fee for a two-issue hearing. Claims of other meeting deficiencies were excluded.

Sufficiency of Evidence

The ALJ found that the original decision was supported by substantial, reliable, and probative evidence as required by A.R.S. § 41-1092.07.

Reasonableness of Rule

The ALJ reaffirmed that the unequal access to the monument sign was not “unreasonable discrimination” given the objective differences in building locations.

Sign Modification

The Association argued that modifying the sign would require rescinding previous approvals granted to other businesses, a position the ALJ did not find unreasonable.

Final Conclusion

The Administrative Law Judge dismissed the petition in both the original hearing and the rehearing. The final order, dated June 3, 2021, is binding. The Association’s rule limiting monument sign access to Building B was upheld as a reasonable exercise of Board authority, and the Petitioner failed to meet the burden of proof regarding violations of Arizona’s open meeting laws.






Study Guide – 21F-H2120003-REL-RHG


Study Guide: Keith D. Smith vs. Sierra Foothills Condominium Association

This study guide examines the administrative proceedings and legal conclusions regarding the dispute between Keith D. Smith and the Sierra Foothills Condominium Association. The guide covers the original hearing (October 26, 2020) and the subsequent rehearing (March 21, 2021), focusing on the interpretation of CC&Rs, open meeting laws, and the standards of evidence in administrative hearings.

——————————————————————————–

Part I: Short-Answer Quiz

Instructions: Answer the following questions in two to three sentences based on the provided source context.

1. What were the two primary issues the Petitioner was permitted to raise during the hearings?

2. Why did the Association Board decide to limit the use of the monument sign specifically to owners of units in Building B?

3. What was the Petitioner’s argument regarding his “undivided interest” in the common elements of the condominium?

4. How did the Administrative Law Judge (ALJ) interpret the scope of CC&R section 6.26(a)?

5. What specific evidence did the Petitioner provide to support his allegation that Board members had communicated via email prior to the June 10, 2020, meeting?

6. How did the testimony of Stuart Rayburn and Harold Bordelon contradict the Petitioner’s claim regarding the lack of discussion at the June 10 meeting?

7. What were the two physical alterations to the monument sign suggested by the Petitioner to allow for more advertising space?

8. Why did the ALJ refuse to consider certain City of Phoenix zoning ordinance arguments and new email evidence during the rehearing?

9. According to the “Conclusions of Law,” what is the definition of a “preponderance of the evidence”?

10. What is the final recourse for a party wishing to appeal the order issued following the rehearing?

——————————————————————————–

Part II: Answer Key

1. The Petitioner was limited to whether the Association violated CC&R section 7.1(C) regarding the Board’s authority to make rules for the monument sign and whether the Association violated open meeting laws under ARIZ. REV. STAT. section 33-1248. These limitations were enforced because the Petitioner only paid the required fees for a two-issue hearing.

2. The Board limited the sign to Building B because the monument sign has space for only five businesses, and unlike Building A, Building B does not have street frontage for advertising. Building A owners have the option to hang signs on their own building walls, a utility not available to Building B owners under city ordinances.

3. The Petitioner argued that his deed grants him an undivided interest in the common elements, which he interpreted to mean that no owner should have exclusive use of the monument sign. He contended that the Association’s common elements cannot be partitioned and that all owners should have access to the advertising space.

4. The ALJ ruled that section 6.26(a), which prohibits disparate treatment of owners, is expressly limited to the occupancy and use restrictions contained within Article 6. Because the rule in question was adopted under the authority of Article 7, the non-discrimination requirements of 6.26(a) did not apply.

5. The Petitioner admitted during the hearing that he had no emails or physical evidence to support his allegation of prior communication among Board members. He relied on the reasoning that because the President called for a vote immediately, they must have “obviously” reached a decision beforehand.

6. The Association’s witnesses provided credible testimony that a protracted discussion took place before the vote, lasting approximately 90 minutes. They noted that the Petitioner himself spoke for twenty minutes and that research on city ordinances and governing documents was presented before the board took action.

7. The Petitioner proposed either reducing the size of existing signs by one-half to create more slots—which he offered to pay for—or increasing the overall size of the monument sign. The Association resisted these plans, arguing they would require rescinding prior approvals and might not meet city codes.

8. The ALJ excluded this information because administrative findings must be based exclusively on evidence and issues raised in the original petition. New evidence or legal theories (such as ARIZ. REV. STAT. section 33-1217) not presented at the original hearing cannot be introduced during a rehearing.

9. A “preponderance of the evidence” is defined as the greater weight of the evidence that possesses the most convincing force. It is evidence sufficient to incline a fair and impartial mind toward one side of an issue rather than the other, even if it does not eliminate all reasonable doubt.

10. The order following a rehearing is binding; however, a party may seek judicial review as prescribed by ARIZ. REV. STAT. Title 12, Chapter 7, Article 6. This appeal must be filed with the superior court within thirty-five days from the date the order was served.

——————————————————————————–

Part III: Essay Questions

Instructions: Use the provided documents to develop comprehensive responses to the following prompts.

1. The Balance of Equity in Association Governance: Discuss how the Board justified a rule that seemingly treats Building A and Building B owners differently. In your answer, evaluate the ALJ’s conclusion that this “discrimination” was not unreasonable given the physical layout of the property.

2. Statutory Interpretation of CC&Rs: Analyze the conflict between reading the CC&Rs as a “continuous document” versus the ALJ’s strict adherence to the express terms of specific sections (Article 6 vs. Article 7). How does the wording “subject to the provisions of this Declaration” in section 7.1(c) impact this interpretation?

3. Procedural Rigidity in Administrative Hearings: Explain the impact of the Petitioner’s decision to only pay for two issues. How did this choice limit his ability to introduce alternative legal arguments, such as the non-partition of common elements or additional open meeting law violations?

4. The Role of Testimony vs. Allegation: Compare the Petitioner’s reliance on “rhetorical questions” and “obvious” conclusions with the Respondent’s use of witness testimony. How does this case demonstrate the burden of proof required to establish a violation of ARIZ. REV. STAT. section 33-1248?

5. Impact of Local Ordinances on Private Governance: Assess how the City of Phoenix Zoning Ordinance (Section 705) and Sign Code influenced the Board’s policy and the ALJ’s final decision. Why was the distinction between “contiguous” signage and “flexible” placement critical to the reasonableness of the Association’s rule?

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Part IV: Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

A presiding officer who conducts hearings and issues decisions on disputes involving state agency regulations or statutes.

ARIZ. REV. STAT. section 33-1248

The Arizona state statute governing open meeting laws for condominiums, requiring transparency in Board deliberations.

Covenants, Conditions, and Restrictions; the governing documents that dictate the rules and operations of a common interest development.

Common Elements

Portions of a condominium project other than the individual units, managed by the Association and intended for common use.

Monument Sign

A ground-level sign, typically located near a property entrance, used to identify the businesses or residents within a complex.

Partition

The act of dividing a property into separate parts or to sever the unity of possession; in this context, the Petitioner argued common elements cannot be partitioned.

Preponderance of the Evidence

The legal standard of proof in civil and administrative cases, meaning the evidence on one side is more convincing than the other.

Rehearing

A second consideration of a case, usually based on specific grounds such as an irregularity in the original proceeding or an error of law.

Respondent

The party against whom a petition is filed; in this case, the Sierra Foothills Condominium Association.

Substantial Evidence

Evidence that a reasonable mind might accept as adequate to support a conclusion; a requirement for the validity of an ALJ decision.

Undivided Interest

The legal right of each owner to use the whole of the common property, rather than a specific, physically divided portion.






Blog Post – 21F-H2120003-REL-RHG


The Monument Sign Mystery: 4 Surprising Lessons in HOA Power and “Reasonable” Fairness

1. Introduction: The Paradox of Undivided Interest

In the world of commercial real estate, few phrases carry as much weight—or cause as much confusion—as “undivided interest.” When Keith D. Smith purchased a unit in the Sierra Foothills Condominium Association, his deed granted him an interest in the common elements. To many owners, this implies a fundamental right to equal use of every square inch of the property, including high-visibility signage.

However, a recent dispute between Mr. Smith and his Association highlights a complex legal paradox: an owner can have an undivided interest in a common element while being legally barred from using it. The conflict arose when the Board restricted a five-space monument sign to a specific subset of owners, sparking a claim of “unreasonable discrimination.”

Does fairness require a Board to grant every owner a “slice of the pie,” or can they prioritize certain owners for the functional benefit of the whole? The ruling in this case provides a masterclass in how administrative courts define “reasonableness” and “fairness” within a shared property.

2. Takeaway 1: When Equality Isn’t “Reasonable”

At first glance, the Association’s rule seemed blatantly unfair. The Board enacted a policy that limited the use of the monument sign exclusively to owners in Building B, completely barring Building A owners like Mr. Smith.

However, the Administrative Law Judge (ALJ) looked beyond the surface-level exclusion to the “functional reality” of the property. Building A enjoys direct street frontage, allowing its owners to hang signs directly on their building. Building B, situated behind Building A, has no such visibility.

The “legal knot” that sealed the decision was a City of Phoenix Zoning Ordinance. While Building A owners had their own signage options, the ordinance prohibited Building B owners from hanging signs on Building A—the only building visible from the street. Because Building B owners were effectively invisible without the monument sign, the Board’s “discrimination” was deemed a logical, functional necessity rather than an arbitrary act.

CC&R section 7.1(c) grants the Board broad authority to manage common areas:

The Board … subject to the provisions of this Declaration, may adopt, amend and repeal Rules and Regulations. The Rules and Regulations may … restrict and govern the use of any area by any Owner or Occupant…; provided however that the Rules and Regulations shall not unreasonably discriminate among Owners and Occupants.

Because the rule addressed a specific geographical disadvantage, the court found the Board’s decision was reasonable and consistent with its governing authority.

3. Takeaway 2: The “Fine Print” Trap of Article Silos

Mr. Smith argued that the sign rule violated CC&R section 6.26(a), which requires that use restrictions be “applicable to all Occupants.” It is a compelling argument for any property owner: if the rules say everyone must be treated the same, how can the Board pick favorites?

The legal reality, however, comes down to the structural logic of the CC&Rs—what we might call “Article Silos.” The ALJ pointed out that the “equality clause” Mr. Smith cited was explicitly limited to the confines of Article 6 (Occupancy and Use). The Board, however, enacted the sign rule under the powers granted in Article 7 (Association Powers).

In legal interpretation, the specific placement of a rule dictates its reach. The decision emphasized this “smoking gun” phrasing:

…although CC&R section 6.26 does prohibit disparate treatment of Owners, by its express terms, CC&R section 6.26 applies only to CC&R Article 6, and not Article 7.

This serves as a critical warning for property professionals: a protection in one article of a governing document does not necessarily limit the powers granted in another.

4. Takeaway 3: The Burden of Proof and the “Pre-Meeting” Myth

Property owners often suspect that by the time a public meeting begins, the “real” decision has already been made in secret. Mr. Smith alleged that the Board violated Arizona’s Open Meeting Law (A.R.S. § 33-1248) by reaching a consensus via email before the official vote on June 10, 2020.

His evidence was purely circumstantial; he posed a rhetorical question asking how the Board could call for a vote so quickly if they hadn’t already decided. The court, however, requires “substantial evidence” to overturn a Board action.

Testimony revealed that the meeting was far from a “rubber stamp” event. It involved a “protracted” discussion lasting an hour and a half, during which Mr. Smith himself was allowed to speak for 20 minutes. The ALJ applied the standard of the “Preponderance of the Evidence,” which favors the side with the most convincing weight of facts:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

5. Takeaway 4: The “Pay-to-Play” Reality of Administrative Hearings

The final lesson is a procedural one that every petitioner must understand: administrative law is a “one-shot” game governed by fees and strict paperwork.

When Mr. Smith filed his petition with the Department of Real Estate, he paid the fee for a two-issue hearing. Consequently, when he attempted to raise a new legal argument during his rehearing—citing A.R.S. § 33-1217 regarding the partition of common elements—the court flatly rejected it. Because the issue wasn’t in the original petition and he hadn’t paid for it to be heard, it simply didn’t exist in the eyes of the court.

The same “closed-door” policy applied to new evidence. During the rehearing, Mr. Smith claimed he finally had an email to prove the Board’s secret communications. The court refused to look at it, noting that because it wasn’t presented at the original hearing, it could not be considered later. In these proceedings, you must bring every issue and every piece of evidence to the table at the very beginning; there are no “add-ons” in the middle of the process.

6. Conclusion: A New Perspective on Common Ground

The dismissal of all claims against the Sierra Foothills Condominium Association clarifies that “common elements” are not always equally shared in practice. Instead, they are managed for the functional benefit of the whole community. In this instance, providing visibility to the “hidden” units in Building B was a reasonable use of limited space, even if it meant Building A owners had to rely on their own street frontage.

This case leaves property owners with a challenging question: If your “undivided interest” doesn’t guarantee you a spot on the sign, what exactly are you entitled to? The answer is rarely found in the spirit of “fairness,” but rather in the specific, siloed mechanics of your Association’s CC&Rs.


Case Participants

Petitioner Side

  • Keith D Smith (petitioner)

Respondent Side

  • Sierra Foothills Condominium Association (respondent)
  • Stuart Rayburn (president)
    Sierra Foothills Condominium Association
    Appeared for Respondent
  • Harold Bordelon (witness)
    Testified for the Association

Neutral Parties

  • Thomas Shedden (ALJ)
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • LDettorre (staff)
    Arizona Department of Real Estate
  • AHansen (staff)
    Arizona Department of Real Estate
  • djones (staff)
    Arizona Department of Real Estate
  • DGardner (staff)
    Arizona Department of Real Estate
  • ncano (staff)
    Arizona Department of Real Estate

Lee & Kim Edwards v. Scottsdale Embassy Condominium Association

Case Summary

Case ID 21F-H2120028-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-07-28
Administrative Law Judge Velva Moses-Thompson
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Lee & Kim Edwards Counsel Terry Foster, Esq.
Respondent Scottsdale Embassy Condominium Association Counsel

Alleged Violations

A.R.S. § 33-1255

Outcome Summary

The Administrative Law Judge dismissed the petition, finding that the Petitioner failed to prove by a preponderance of the evidence that the Respondent violated its CC&Rs, Bylaws, or A.R.S. § 33-1255, ruling that the statute was inapplicable due to the specific provisions in the Declaration regarding the 1/26 assessment calculation.

Why this result: Petitioner failed to meet the burden of proof, and the ALJ determined A.R.S. § 33-1255 was superseded by the Declaration, which mandated assessments based on the undivided 1/26 interest in the common elements.

Key Issues & Findings

Assessment calculation based on undivided interest in common areas

Petitioner challenged the Association's decision to change assessments from a historical square footage basis to a 1/26 interest calculation, arguing that this method violates A.R.S. § 33-1255 by charging for limited common elements (patios/parking).

Orders: The petition of Lee & Kim Edwards is dismissed; Respondent is deemed the prevailing party.

Filing fee: $0.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1255
  • Declaration Article I, Section 5
  • Declaration Article II, Section 5
  • Declaration Article II, Section 7
  • Declaration Article IV, Section 4
  • Declaration Article VI, Section 9

Analytics Highlights

Topics: condominium, assessment, cc&r, statutory interpretation, common elements, limited common elements
Additional Citations:

  • A.R.S. § 32-2199(1)
  • A.R.S. § 33-1255
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • Vazanno v. Superior Court, 74 Ariz. 369
  • Powell v. Washburn, 211 Ariz. 553
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70

Video Overview

Audio Overview

Decision Documents

21F-H2120028-REL Decision – 856603.pdf

Uploaded 2025-12-09T10:06:35 (98.1 KB)

21F-H2120028-REL Decision – 899379.pdf

Uploaded 2025-10-09T03:36:38 (123.6 KB)





Briefing Doc – 21F-H2120028-REL


Assessment Methodology Dispute: Edwards v. Scottsdale Embassy Condominium Association

Executive Summary

This document provides a comprehensive analysis of the legal dispute between homeowners Lee & Kim Edwards (Petitioners) and the Scottsdale Embassy Condominium Association (Respondent) concerning a change in the methodology for calculating homeowner assessments. The core of the conflict was the Association’s decision to shift from a historical practice of assessments based on unit square footage to a uniform rate where each of the 26 units pays an equal 1/26 share of the common expenses.

The dispute was adjudicated by an Administrative Law Judge (ALJ) in two separate hearings. In both instances, the ALJ ruled in favor of the Association, dismissing the petitions filed by the Edwards.

Key Takeaways:

Change in Methodology: The Association’s Board, acting on legal advice received in January 2020, concluded that its 40-year practice of using a square-footage-based assessment violated the community’s Covenants, Conditions, and Restrictions (CC&Rs). The Board subsequently implemented a 1/26 equal-share assessment method after a majority of homeowners selected this option.

Initial Ruling on “Uniform Rate”: In the first hearing in February 2021, the Petitioners argued that the historical square footage method was a “uniform rate” and that the Association had waived its right to change the long-standing practice. The ALJ rejected this, finding that the new 1/26 rate complied with the CC&Rs’ requirement for a “uniform rate” (Article VI, Section 9) and aligned with each unit’s specified 1/26 undivided interest in the common elements (Article VI, Section 4(d)).

Rehearing Ruling on State Statute: The Petitioners were granted a rehearing in July 2021, where they argued that the 1/26 method violated Arizona statute A.R.S. § 33-1255 by improperly charging all owners for “limited common elements” like patios and parking spaces. The ALJ again ruled against the Petitioners, concluding that the state statute did not apply. The ruling was based on a key provision in the statute: “Unless otherwise provided for in the declaration.” The judge found that the Association’s Declaration did provide otherwise by defining patios and parking as general common elements and explicitly mandating that costs be shared based on each unit’s 1/26 interest.

Final Outcome: The petition was definitively dismissed after the rehearing, making the ALJ’s order binding. The Association’s adoption of the 1/26 assessment rate was upheld as compliant with its governing documents.

——————————————————————————–

Background of the Dispute

The legal conflict originated from a single-issue petition filed on November 20, 2020, by Lee and Kim Edwards, owners of unit 6937 in the Scottsdale Embassy Condominium development. The petition, filed with the Arizona Department of Real Estate, alleged that the Scottsdale Embassy Condominium Association had violated its CC&Rs, specifically Article VI, Section 9, and Article IV, Section 1.

The central issue was the Association Board’s decision to change the long-standing method of calculating homeowner assessments. For over 40 years, assessments had been based on the square footage of each unit. In 2020, the Board implemented a new system where the Association’s annual budget was divided equally among the 26 units, with each owner paying a 1/26 share. The Petitioners sought to enforce the historical calculation method unless and until the CC&Rs were properly amended.

Chronology of the Assessment Change

Historical Practice: For more than four decades, the Association calculated and charged member assessments based on the square footage of each condominium unit.

Legal Consultation (January 2020): Two members of the Association’s Board consulted with an attorney regarding the legality of the historical assessment method.

Attorney Recommendation (January 24, 2020): The attorney advised the Association that, to ensure compliance with the CC&Rs, it should calculate assessments based on each homeowner’s 1/26 interest in the common areas. The attorney’s letter stated:

Homeowner Consultation: Following the legal advice, the Board informed homeowners that the prior square-footage method violated the CC&Rs. The Board sought input on three potential assessment methods: the 1/26 rate, a variable blended rate, or continuing with the square footage rate. A majority of homeowners selected the 1/26 rate. The Board noted that any method other than the 1/26 rate would require a formal amendment to the CC&Rs.

Implementation (September 26, 2020): The Board officially notified homeowners that it would begin charging assessments based on the 1/26 rate and that an amendment to the CC&Rs was not necessary to implement this change.

Initial Hearing and Decision (February 2021)

An evidentiary hearing was held on February 9, 2021, before Administrative Law Judge Velva Moses-Thompson.

Arguments Presented

Petitioners (Edwards)

1. The historical square footage rate qualified as a “uniform rate” and was compliant with the CC&Rs.
2. By using the square footage rate for over 40 years, the Association had waived its right to enforce a different method like the 1/26 rate.

Respondent (Association)

1. The plain language of the CC&Rs requires that each homeowner pay an assessment based on the 1/26 rate.
2. It is not legally possible to waive a mandatory CC&R requirement through past practice.

On February 19, 2021, the ALJ issued a decision dismissing the petition. The judge’s conclusions of law were based on a direct interpretation of the CC&Rs:

Uniform Rate Compliance: The ALJ determined that the “preponderance of the evidence” showed that the Association’s 1/26 rate was a uniform rate that complied with Article VI, Section 9 of the CC&Rs.

Burden of Proof: The Petitioners failed to meet their burden to prove that the Association had violated its governing documents.

Outcome: The Association was deemed the prevailing party, and the petition was dismissed.

Rehearing and Final Decision (July 2021)

The Petitioners filed a request for a rehearing on March 30, 2021, which was granted. The rehearing was held on July 8, 2021. The Respondent did not appear at this hearing, as its counsel had withdrawn from representation without formally notifying the tribunal.

In the rehearing, the Petitioners introduced a new argument, alleging that the 1/26 assessment method violated Arizona state law, specifically A.R.S. § 33-1255.

• The core of this argument was that the 1/26 rate improperly included charges for “limited common elements,” such as patios and assigned parking spaces.

• The Petitioners contended that this forced all homeowners to pay for the maintenance of elements that were assigned to and benefited fewer than all units, in direct violation of the statute.

On July 28, 2021, the ALJ issued a final decision, once again dismissing the petition. The ruling hinged on the precise wording of both the state statute and the Association’s Declaration.

Applicability of A.R.S. § 33-1255: The judge found that the statute did not apply to this matter. The relevant section of the law, A.R.S. § 33-1255(C), begins with the critical phrase: “Unless otherwise provided for in the declaration…”

Supremacy of the Declaration: The ALJ concluded that the Association’s Declaration did provide otherwise. The CC&Rs explicitly:

◦ Define “Common Elements” broadly to include patios and parking areas (Article I, Section 3).

◦ Establish that each unit has an “undivided interest in the general common areas” of 1/26 (Article I, Section 5).

◦ Mandate that each unit’s share of costs for repair and maintenance of common areas is the “same as its undivided interest in the common elements” (Article IV, Section 4(d)).

Final Outcome: Because the Declaration’s specific provisions overrode the general terms of the state statute, the Association was found to be in compliance. The petition was dismissed, and the order was deemed binding on the parties.

Key Legal Principles and Definitions

Concept

Definition / Application in Case

Burden of Proof

The Petitioners were required to establish their claim by a “preponderance of the evidence.”

Preponderance of the Evidence

Defined as “proof as convinces the trier of fact that the contention is more probably true than not.” The ALJ found the Petitioners failed to meet this standard in both hearings.

Restrictive Covenants

Arizona law requires that unambiguous restrictive covenants be enforced to give effect to the parties’ intent and be interpreted as a whole. The ALJ’s decisions were based on a direct interpretation of the CC&Rs’ language.

Common Elements (per CC&Rs)

A broad definition including multifamily structures, land, roofs, ceilings, foundations, storage spaces, patios, parking areas, recreational facilities, lawns, pipes, and conduits.

Unit (per CC&Rs)

A freehold estate consisting of the interior space of an apartment. The definition explicitly states that common elements are not part of the unit.

Undivided Interest (per CC&Rs)

Article I, Section 5 clearly establishes that “The undivided interest in the general common areas… which shall be conveyed with each respective units shall be 1/26.” This provision was central to the final ruling.






Study Guide – 21F-H2120028-REL


Study Guide: Edwards v. Scottsdale Embassy Condominium Association

This study guide provides a comprehensive review of the administrative case between Lee & Kim Edwards and the Scottsdale Embassy Condominium Association, based on the provided legal decisions. It includes a short-answer quiz, an answer key, suggested essay questions, and a detailed glossary of key terms.

Short-Answer Quiz

Answer the following questions in two to three sentences each, based on the information provided in the case documents.

1. What was the central conflict between the Petitioners (Lee & Kim Edwards) and the Respondent (Scottsdale Embassy Condominium Association)?

2. For over 40 years, how did the Association historically calculate assessments for homeowners?

3. What specific event in January 2020 prompted the Association’s Board to change the assessment method?

4. In the first hearing on February 9, 2021, what were the two main arguments presented by Mr. Edwards?

5. What was the Administrative Law Judge’s conclusion regarding the “uniform rate” requirement from CC&Rs Article VI, Section 9 in the initial decision?

6. Upon what new legal grounds did the Petitioners base their March 30, 2021, request for a re-hearing?

7. According to the CC&Rs, what is the defined undivided interest in the general common areas for each unit?

8. Why did the Administrative Law Judge ultimately conclude that Arizona Revised Statutes (A.R.S.) § 33-1255 did not apply in this case?

9. What legal standard of proof did the Petitioners need to meet to successfully prove their case?

10. What was the final, binding outcome of the re-hearing held on July 8, 2021?

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Answer Key

1. The central conflict concerned the method for calculating homeowner assessments. The Petitioners argued for the historical method based on unit square footage, while the Respondent implemented a new method where each of the 26 units paid an equal share (1/26 rate) of the Association’s costs.

2. For over 40 years, the Association historically calculated assessments based on the square footage of each condominium unit. This practice was changed by the Board in 2020.

3. In January 2020, two Board members met with an attorney who advised that to comply with the CC&Rs, the Association should charge assessments based on each homeowner’s 1/26 interest in the common areas, not on square footage.

4. Mr. Edwards argued that the historical square footage rate was a “uniform rate” that complied with the CC&Rs. He also contended that by using this method for 40 years, the Association had waived its right to enforce a different assessment method like the 1/26 rate.

5. The Judge concluded that the Respondent’s assessment method, based on a uniform rate of 1/26 of the Association’s costs for each unit, did comply with Article VI, Section 9. Therefore, the Petitioners failed to prove the Association had violated the CC&Rs.

6. The Petitioners based their request for a re-hearing on the new allegation that the Respondent had violated Arizona Revised Statutes (A.R.S.) § 33-1255. They argued the 1/26 rate improperly required members to pay for limited common elements, such as patios and parking spaces, not assigned to them.

7. According to Article I, Section 5 of the Declaration (CC&Rs), the undivided interest in the general common areas established and conveyed with each respective unit is 1/26.

8. The Judge concluded that A.R.S. § 33-1255 did not apply because the statute itself contains an exception: “Unless otherwise provided for in the declaration.” In this case, the Association’s Declaration explicitly required that each member be charged an assessment equivalent to their 1/26 interest in the total costs, which included patios and parking areas.

9. The Petitioners bore the burden of proof to establish their claims by a “preponderance of the evidence.” This standard requires proof that convinces the trier of fact that a contention is more probably true than not.

10. Following the re-hearing, the Administrative Law Judge again ordered that the petition of Lee & Kim Edwards be dismissed. The Respondent was deemed the prevailing party, and the order was declared binding on the parties.

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Essay Questions

The following questions are designed for longer, essay-style responses. Answers are not provided.

1. Trace the evolution of the Petitioners’ legal strategy from the initial petition filed on November 20, 2020, to the arguments made during the re-hearing on July 8, 2021. How did their core arguments change, and what new evidence or legal statutes were introduced?

2. Analyze the concept of a “uniform rate” as required by Article VI, Section 9 of the CC&Rs. Discuss how both the Petitioners and the Respondent interpreted this phrase to support their respective assessment methods (square footage vs. 1/26 rate).

3. Explain in detail the role of A.R.S. § 33-1255 in the re-hearing. Why did the Petitioners believe it supported their case, and what specific language in both the statute and the Association’s Declaration led the Administrative Law Judge to rule that it did not apply?

4. Evaluate the actions taken by the Association’s Board of Directors in 2020. Consider their consultation with an attorney, their communication with homeowners, and their final decision to implement the 1/26 rate. Discuss whether these actions were consistent with the powers and obligations outlined in the CC&Rs.

5. Discuss the legal argument of “waiver” raised by Mr. Edwards in the first hearing. Explain what he meant by this and why the Association’s 40-year history of using a square-footage-based assessment was central to this claim. Why did this argument ultimately fail?

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Glossary of Key Terms

Definition

1/26 Rate

The assessment method where the Association’s annual budget is divided 26 ways, with each unit responsible for paying an equal portion. This is based on each unit’s 1/26 undivided interest in the common areas as specified in the CC&Rs.

Administrative Law Judge (ALJ)

The independent judicial officer who presides over administrative hearings, hears evidence, and issues a decision. In this case, the ALJ was Velva Moses-Thompson.

A.R.S. § 32-2199(1)

The Arizona Revised Statute that permits a condominium unit owner to file a petition with the Department of Real Estate for a hearing regarding alleged violations of the Condominium Act.

A.R.S. § 33-1255

The Arizona Revised Statute concerning common expenses. It states that unless the declaration provides otherwise, expenses for a limited common element shall be assessed against the units to which it is assigned, and expenses benefitting fewer than all units shall be assessed exclusively against the units benefitted.

Arizona Department of Real Estate

The state agency authorized by statute to receive and decide Petitions for Hearings from members of condominium associations in Arizona.

Burden of Proof

The obligation on a party in a legal proceeding to establish its claims by a required standard of evidence. In this case, the Petitioners bore the burden of proof.

CC&Rs (Covenants, Conditions, and Restrictions)

The governing legal documents that set up the guidelines for a planned community or condominium. Also referred to as the “Declaration” in the provided documents.

Common Area / Common Elements

As defined in Article I, Section 3 of the CC&Rs, this includes the multifamily structure (except for the units), land, air space, bearing walls, roofs, storage spaces, patios, recreational facilities, lawns, pipes, and other premises designed for common use.

Declaration

Another term for the Covenants, Conditions, and Restrictions (CC&Rs).

Lee & Kim Edwards

The Petitioners in the case and owners of unit 6937 in the Scottsdale Embassy Condominium development.

Office of Administrative Hearings

An independent state agency to which the Department of Real Estate refers petitions for evidentiary hearings.

Petitioners

The party that initiates a legal action or petition. In this case, Lee & Kim Edwards.

Preponderance of the Evidence

The evidentiary standard required to be met by the Petitioners. It is defined as proof that convinces the trier of fact that a contention is “more probably true than not.”

Respondent

The party against whom a petition is filed. In this case, the Scottsdale Embassy Condominium Association.

Restricted Common Area

As defined in Article I, Section 3(b) of the CC&Rs, this refers to a separately designed and exclusive parking area for each unit as assigned by the Board of Directors.

Scottsdale Embassy Condominium Association

The Respondent in the case; the condominium unit owners’ association for the development.

Square Footage Rate

The historical method of calculating assessments for over 40 years, where each unit’s assessment was based on its square footage.

Uniform Rate

A requirement from Article VI, Section 9 of the CC&Rs that states both regular and special assessments must be fixed at a uniform rate for all units. The interpretation of this term was central to the dispute.

As defined in Article I, Section 4 of the CC&Rs, a separately designated freehold estate consisting of the space bounded by the interior surfaces of the perimeter walls, floors, ceilings, windows, and floors of each apartment. It does not include common elements.

Waiver

A legal argument made by the Petitioners that because the Association had charged assessments based on square footage for 40 years, it had relinquished or “waived” its right to enforce a different method.






Blog Post – 21F-H2120028-REL


4 Shocking Lessons from an HOA Lawsuit That Could Upend How You See Your Fees

Introduction: The 40-Year Mistake

If you live in a condominium or a community governed by a Homeowners Association (HOA), you likely operate under a simple assumption: the way things have always been done is the correct and legal way. Monthly fees, maintenance schedules, and community rules that have been in place for decades feel permanent and unassailable. But what if they aren’t?

This was the central question in the case of Lee & Kim Edwards versus the Scottsdale Embassy Condominium Association. For over 40 years, the Association calculated homeowner fees based on the square footage of each unit—a practice that seemed fair and logical, and one that was never questioned by residents.

Then came the twist. In January 2020, after consulting with an attorney, the HOA board announced a shocking revelation: their 40-year-old assessment method was a direct violation of the community’s own governing documents. The board presented the legal findings to the community and sought their input on how to proceed. After being given the choice between the old method, a blended rate, or a new flat-rate fee that complied with the rules, most homeowners voted for the compliant flat-rate system for every single unit, regardless of its size.

Homeowners sued to keep the old method, sparking a legal battle that went all the way to an administrative court. The resulting decisions offer surprising and crucial lessons for every homeowner paying HOA dues. Here are the four most impactful takeaways from the case that could change how you view your own community’s rules.

1. “Past Practice” Means Nothing if It Violates the Rules

The primary argument made by the petitioners, Mr. and Mrs. Edwards, was that the Association had “waived its right” to change the assessment method. After all, by using the square-footage calculation for four decades, hadn’t they established an unbreakable precedent? It seemed like a common-sense argument rooted in history and consistency.

The court, however, completely rejected this line of reasoning. The Administrative Law Judge’s decision was not based on historical practice but on the clear, written rules found in the community’s Covenants, Conditions, and Restrictions (CC&Rs). The Association argued that it’s “not possible to waive the CC&R requirement,” and the court agreed.

The Lesson: This case powerfully demonstrates that tradition or “how things have always been done” cannot override the explicit language of an HOA’s governing documents. The CC&Rs are a contract. The lesson is clear: if your HOA’s practice contradicts its documents, the practice is invalid. The board has a fiduciary duty to follow the written rules, not a 40-year-old mistake.

2. Your CC&Rs Are a Binding Contract—Read Them

Throughout the legal proceedings, the Administrative Law Judge consistently referred back to the specific text of the CC&Rs to make a final decision. The entire case ultimately hinged on the interpretation of a few key sentences written decades ago.

The most critical passage, which decided the outcome, was from Article VI, Section 4(d) of the community’s governing documents:

“Each unit’s share shall be the same as its undivided interest in the common elements of the total amount determined under the subparagraphs (a), (b), (c), and (d) above.” —Scottsdale Embassy Condominium Association CC&Rs, Article VI, Section 4(d)

This single sentence was the linchpin. It explicitly linked each unit’s assessment share to its “undivided interest in the common elements.” Another section of the document, Article I, Section 5, had already established that interest as an equal 1/26 for all 26 units.

The Lesson: This is a classic example of legal cross-referencing in a contract. Section 4(d) provided the instruction (base fees on “undivided interest”), while Article I, Section 5 provided the specific value (1/26). With both parts present and unambiguous, the court had no choice but to enforce them exactly as written, leaving no room for interpretations based on fairness or history. The contract was the contract.

3. A “Uniform Rate” Might Not Mean What You Think

One of the central points of contention was the term “uniform rate.” Article VI, Section 9 of the CC&Rs required that all assessments “must be fixed at a uniform rate for all units.”

The homeowners argued that the square footage rate was, in fact, a “uniform rate”—a consistent price per square foot applied to every unit. It’s an interpretation many of us might find reasonable.

However, the HOA Board and the court had a different interpretation. The judge found that the flat 1/26 rate was the correct interpretation of a “uniform rate” because it was uniformly applied to every unit’s established 1/26 interest in the common areas. In the court’s view, the “rate” being applied uniformly was the 1/26 fraction of the total budget. The fact that this resulted in different dollar amounts for square-footage fees was irrelevant; the legal share was what had to be uniform.

The Lesson: Common-sense terms like “uniform” can have very specific legal meanings within the context of your governing documents. The true definition is found not in a dictionary, but in how the term is defined and applied by the rest of the document’s provisions.

4. Your HOA’s Rules Can Sometimes Override State Law

In a final attempt to overturn the decision, the petitioners filed for a re-hearing. This time, they cited a specific Arizona state law, A.R.S. 33-1255. This statute says that expenses for “limited common elements”—things like assigned patios or parking spaces that only benefit specific units—should be assessed only against those units that benefit from them. The homeowners argued that the new 1/26 flat fee unfairly forced them to pay for their neighbors’ patios and parking spots, a direct violation of state law.

Surprisingly, this argument also failed. The reason is found in the crucial introductory clause of the state law itself: “Unless otherwise provided for in the declaration…”

Because the Scottsdale Embassy’s Declaration did provide otherwise—by explicitly rolling all general and restricted common area costs into the total budget before calculating each unit’s 1/26 share—the community’s own rules legally superseded the default state statute. The judge concluded that the state law “does not apply to this matter because the Declaration requires” a different method.

The Lesson: This is perhaps the most counter-intuitive lesson of all. This demonstrates a key principle of contract law and planned community governance: state statutes often provide a “default” rule for situations a community’s documents don’t address. However, they also grant communities the power to create their own specific rules, which, if legally permissible, will take precedence. Homeowners cannot assume that a state law automatically protects them if their community’s own governing documents have a more specific rule in place.

Conclusion: Are You Sure You Know What You Agreed To?

The central message from the Scottsdale Embassy case is undeniable: in an HOA, the written word is law. The CC&Rs and other governing documents are a binding contract that dictates the rules, regardless of 40 years of history, common-sense assumptions, or even some default state laws. What you believe is fair or standard practice is irrelevant if the document you agreed to upon purchase says otherwise.

This case was decided by a few sentences written decades ago. When was the last time you read your community’s governing documents from cover to cover?


Case Participants

Petitioner Side

  • Lee Edwards (petitioner, witness)
  • Kim Edwards (petitioner)
  • Teresa H. Foster (petitioner attorney)
    Ellis & Baker, P.C.
    Also referred to as Terri Foster and Terry Foster

Respondent Side

  • Lauren Vie (respondent attorney)
    Appeared for initial hearing; later noted as withdrawn
  • Caleb Koch (board president, witness)
    Scottsdale Embassy Condominium Association
  • Mary Edinburgh (board member, witness)
    Scottsdale Embassy Condominium Association
  • Beth Mulcahy (respondent attorney)
    Mulcahy Law Firm, PC
    Recipient of transmission; noted as withdrawn counsel prior to rehearing

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    OAH
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Electronic transmission recipient

Other Participants

  • Miranda Alvarez (unknown)
    Associated with transmission for petitioner's attorney

John D Klemmer v. Caribbean Gardens Association

Case Summary

Case ID 21F-H2120009-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-12-17
Administrative Law Judge Kay A. Abramsohn
Outcome loss
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner John D Klemmer Counsel
Respondent Caribbean Gardens Association Counsel Nicole D. Payne, Esq., Lydia A. Pierce Linsmeier, Esq.

Alleged Violations

CC&Rs Article 1, Sections 1.5 and 1.8; Article 3, Section 3.4; Article 4, Section 4.1; Article 8, Section 8.1; and, Article 12, Section 12.4

Outcome Summary

The Petition was dismissed because the Petitioner failed to prove, by a preponderance of the evidence, that the Respondent Association violated the cited CC&R provisions by refusing to manage the disputed area, which the ALJ determined was a limited common element.

Why this result: The Petitioner lost because the area in dispute was determined to be a 'limited common element' (a balcony serving Unit 207) under Arizona statute (A.R.S. § 33-1212(A)), not a 'common area' the Association was required to manage under the referenced CC&Rs.

Key Issues & Findings

Refusal to manage, operate, maintain and administer common area

Petitioner alleged the HOA violated multiple CC&Rs by refusing to maintain an area between Unit 206 and Unit 207, which he claimed was a common area. The HOA argued the area was a limited common element. The ALJ concluded, relying on A.R.S. § 33-1212(A), that the disputed area was a limited common element (a balcony) allocated exclusively to Unit 207, thus Petitioner failed to establish a CC&R violation.

Orders: Petitioner's Petition is dismissed. Petitioner bears his $500.00 filing fee.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1212(A)
  • CC&Rs Article 1, Section 1.5
  • CC&Rs Article 1, Section 1.6
  • CC&Rs Article 3, Section 3.4
  • CC&Rs Article 4, Section 4.1
  • CC&Rs Article 8, Section 8.1
  • CC&Rs Article 12, Section 12.4

Analytics Highlights

Topics: condominium, common elements, limited common elements, balcony dispute, CC&R violation, A.R.S. 33-1212
Additional Citations:

  • A.R.S. § 33-1212
  • A.R.S. § 33-1218
  • A.R.S. Title 33, Chapter 16
  • A.A.C. R2-19-119
  • CC&Rs Article 1, Sections 1.5, 1.8
  • CC&Rs Article 3, Section 3.4
  • CC&Rs Article 4, Section 4.1
  • CC&Rs Article 8, Section 8.1
  • CC&Rs Article 12, Section 12.4