Tag Archives: A.R.S. § 32-2199.02

Keystone Owners Association V. Bernadette M. Bennett

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Case Summary

Case ID 24F-H031-REL
Agency ADRE
Tribunal OAH
Decision Date 2024-12-09
Administrative Law Judge Velva Moses-Thompson
Outcome The Petitioner (HOA) prevailed. The Respondent (Homeowner) was found in violation of Governing Documents for installing an unapproved driveway extension that exceeded 35% of the total yard frontage area. Respondent was ordered to pay the Petitioner the $1,500.00 filing fee and comply with all Governing Documents henceforth. No civil penalty was levied.
Filing Fees Refunded $1,500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Keystone Owners Association Counsel Erica L. Mortenson
Respondent Bernadette M. Bennett Counsel Thomas A. Walcott

Alleged Violations

Mountain Park Association CC&Rs Art. IV, Sec. 2; Keystone CC&Rs Art. V, Sec. 5.19; Rules (35% Frontage Limit)

Outcome Summary

The Petitioner (HOA) prevailed. The Respondent (Homeowner) was found in violation of Governing Documents for installing an unapproved driveway extension that exceeded 35% of the total yard frontage area. Respondent was ordered to pay the Petitioner the $1,500.00 filing fee and comply with all Governing Documents henceforth. No civil penalty was levied.

Why this result: Respondent failed to obtain prior written approval for the driveway alteration and failed to prove the affirmative defense of laches.

Key Issues & Findings

Unauthorized Driveway Extension Exceeding 35% of Total Yard Frontage Area

Petitioner alleged Respondent violated CC&Rs by installing a driveway extension exceeding 35% of the total yard frontage area without prior written approval. The ALJ found by a preponderance of the evidence that the violation occurred and the Respondent failed to establish the affirmative defense of laches.

Orders: Respondent ordered to pay Petitioner $1,500.00 for the filing fee and comply henceforth with the Governing Documents.

Filing fee: $1,500.00, Fee refunded: No

Disposition: petitioner_win

Cited:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.09
  • Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
  • Westburne Supply, Inc. v. Diversified Design and Construction, Inc., 170 Ariz. 598, 600, 826 P.2d 1224, 1226 (Ct. App. 1992)
  • Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo. App. 1993)
  • Flynn v. Rogers, 172 Ariz. 62 (1992)

Analytics Highlights

Topics: HOA, ARC, Driveway, Frontage Area, CC&Rs, Laches
Additional Citations:

  • A.R.S. § 32-2199(B)
  • A.R.S. § 33-1803
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.A.C. R2-19-119(B)(2)
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.09
  • Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999)
  • Westburne Supply, Inc. v. Diversified Design and Construction, Inc., 170 Ariz. 598, 600, 826 P.2d 1224, 1226 (Ct. App. 1992)
  • Powell v. Washburn, 211 Ariz. 553, 556 ¶ 9, 125 P.3d 373, 376 (2006)
  • Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs., 867 P.2d 70, 75 (Colo. App. 1993)
  • Flynn v. Rogers, 172 Ariz. 62 (1992)

Video Overview

Audio Overview

Decision Documents

24F-H031-REL Decision – 1159036.pdf

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24F-H031-REL Decision – 1180542.pdf

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24F-H031-REL Decision – 1180545.pdf

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24F-H031-REL Decision – 1198622.pdf

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24F-H031-REL Decision – 1198623.pdf

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24F-H031-REL Decision – 1225107.pdf

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24F-H031-REL Decision – 1227639.pdf

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24F-H031-REL Decision – 1227642.pdf

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24F-H031-REL Decision – 1230660.pdf

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24F-H031-REL Decision – 1241815.pdf

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24F-H031-REL Decision – 1250037.pdf

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24F-H031-REL Decision – 1159036.pdf

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24F-H031-REL Decision – 1180542.pdf

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24F-H031-REL Decision – 1180545.pdf

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24F-H031-REL Decision – 1198622.pdf

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24F-H031-REL Decision – 1198623.pdf

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24F-H031-REL Decision – 1225107.pdf

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24F-H031-REL Decision – 1227639.pdf

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24F-H031-REL Decision – 1227642.pdf

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24F-H031-REL Decision – 1230660.pdf

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24F-H031-REL Decision – 1241815.pdf

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24F-H031-REL Decision – 1250037.pdf

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This summary focuses on the hearing held on November 19, 2024 before Administrative Law Judge (ALJ) Velva Moses-Thompson, concerning the dispute between Keystone Owners Association (Petitioner) and Bernadette M. Bennett (Respondent).

Key Facts and Main Issues

The core issue was Petitioner's allegation that Respondent violated the Governing Documents by installing a driveway extension that exceeds 35% of the total yard frontage area. This included allegations of violating Article IV, Section 2 of the Mountain Park Association Covenants, Conditions, and Restrictions (CC&Rs) and Article V, Section 5.19 of Petitioner’s CC&Rs.

Key Facts Presented:

  • Respondent owns a home within Keystone, a subassociation of Mountain Park Ranch. Both associations' Governing Documents required Respondent to obtain prior written approval for any alteration to the exterior appearance.
  • Mountain Park Ranch Rules, which Keystone relied upon for enforcement, state that the parking surface shall not exceed 35 percent of the total yard frontage area.
  • Petitioner asserted that the Respondent installed the cement driveway extension without obtaining mandatory written approval.
  • An on-site inspection conducted in May 2024 determined that the driveway slabs (original 16 ft + unapproved 8 ft modification) measured 24 ft wide. Based on the lot frontage measurement of approximately 60 ft, the driveway covered 40% of the yard frontage, exceeding the 35% limit.
  • The Petitioner's right to enforce the Master Association’s rules was formalized by an Assignment Agreement signed on August 16, 2023.

Key Arguments and Proceedings

The Petitioner presented testimony from Harry Whitesell, a board member and former property appraiser, who detailed the measurements and the history of the Respondent's failed architectural requests (2015, 2017) to add parking. Petitioner argued that the Respondent ignored denial notices and that the modification was installed without approval and remains out of compliance.

The Respondent's legal strategy focused entirely on the affirmative defense of laches. Respondent's counsel argued that the condition had existed, open and obvious, since late 2017/early 2018 without enforcement. Respondent argued the HOA's delay was unreasonable, causing prejudice, and that the motivation to pursue the violation only arose after securing the enforcement authority from Mountain Park Ranch in 2023. Respondent also questioned the interpretation of "yard frontage area" used for the calculation, arguing it was ambiguous. Respondent did not present witness testimony at the hearing.

Petitioner countered the laches argument by citing a provision in the Keystone CC&Rs stating that failure to enforce a restriction "shall in no event be deemed a waiver of the right to do so thereafter".

Legal Points and Outcome

The ALJ admitted Petitioner’s Exhibits A through M and Respondent’s Exhibit 1 into evidence.

The ALJ made the following legal conclusions:

  1. Petitioner bore the burden of proof to establish the violation by a preponderance of the evidence.
  2. The preponderance of the evidence showed that Respondent erected a cement driveway extension that exceeds 35 percent of the total yard frontage area, without obtaining prior approval.
  3. Respondent failed to meet the burden of establishing the affirmative defense of laches. The ALJ found that Respondent had not established sufficient "unreasonable delay that has resulted in prejudice" to deny the relief sought by Petitioner.

Final Decision and Order:

  • Petitioner was deemed the prevailing party.
  • Respondent was ordered to pay Petitioner its filing fee of $1,500.00 within thirty days.
  • Respondent was ordered to henceforth comply with the provisions of the Governing Documents.
  • No Civil Penalty was found to be appropriate.

Questions

Question

Can a sub-association enforce the rules and CC&Rs of the master association?

Short Answer

Yes, if the master association has assigned those enforcement rights to the sub-association.

Detailed Answer

A sub-association (like a specific neighborhood HOA within a larger master planned community) generally enforces its own documents. However, this decision clarifies that a sub-association may be authorized to enforce the master association's governing documents if there is a specific assignment agreement executing that transfer of authority.

Alj Quote

The Governing Documents authorize Petitioner to enforce the Governing Documents, as further memorialized by an executed Assignment Agreement by and between Mountain Park Association and Keystone Owners Association signed on August 16, 2023.

Legal Basis

Assignment Agreement / Governing Documents

Topic Tags

  • jurisdiction
  • sub-associations
  • master association
  • enforcement authority

Question

If I extend my driveway without approval, does the HOA have to prove I didn't get permission, or do I have to prove I did?

Short Answer

The absence of written evidence granting approval can be used to establish a violation.

Detailed Answer

While the HOA bears the initial burden of proof for the violation, the lack of testimonial or written evidence showing that the homeowner received approval helps establish that the modification was unauthorized.

Alj Quote

However, there was no testimonial or written evidence presented to establish that Respondent was granted approval to install a driveway that exceeded 35% of the total yard frontage area.

Legal Basis

Burden of Proof

Topic Tags

  • architectural approval
  • evidence
  • driveways
  • modifications

Question

What is the 'burden of proof' for an HOA to win a violation hearing?

Short Answer

The HOA must prove the violation by a 'preponderance of the evidence'.

Detailed Answer

The HOA does not need to prove a violation 'beyond a reasonable doubt' (the criminal standard). They must only show that their contention is 'more probably true than not' or carries superior evidentiary weight.

Alj Quote

Petitioner bears the burden of proof to establish that Respondent violated CC&R § 7.9 by a preponderance of the evidence… 'A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.'

Legal Basis

A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A)

Topic Tags

  • legal standards
  • evidence
  • hearing procedures

Question

Can I use the defense that the HOA waited too long to enforce the rule (laches)?

Short Answer

Yes, but you bear the burden of proving that the delay was unreasonable and caused you prejudice.

Detailed Answer

Laches is an affirmative defense. It is not enough to simply show a delay; the homeowner must prove by a preponderance of the evidence that the delay was unreasonable and that it resulted in sufficient prejudice to deny the HOA's relief.

Alj Quote

Laches is an affirmative defense, and Respondent bears the burden of establishing the defense by a preponderance of the evidence… Respondent has not established by a preponderance of the evidence that there was unreasonable delay that has resulted in prejudice to Respondent sufficient to deny the relief Petitioner seeks…

Legal Basis

A.C.C. R2-19-119(B)(2); Flynn v. Rogers

Topic Tags

  • defenses
  • laches
  • enforcement delay

Question

If I lose the hearing, can the judge make me pay the HOA's filing fees?

Short Answer

Yes, the Administrative Law Judge can order the losing homeowner to reimburse the HOA's filing fee.

Detailed Answer

In this decision, the judge ordered the Respondent (homeowner) to pay the Petitioner's (HOA) filing fee of $1,500.00 directly to the Petitioner within 30 days.

Alj Quote

IT IS FURTHER ORDERED that Respondent pay Petitioner its filing fee of $1,500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Administrative Order

Topic Tags

  • fees
  • costs
  • penalties

Question

How do judges interpret the meaning of restrictive covenants (CC&Rs)?

Short Answer

They are interpreted as a whole, looking at the underlying purpose of the document.

Detailed Answer

Legal interpretation does not isolate single phrases but looks at the document in its entirety 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

Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs.

Topic Tags

  • legal interpretation
  • CC&Rs
  • covenants

Question

Can the judge issue a civil penalty (fine) in addition to ordering me to fix the violation?

Short Answer

Yes, the judge has the authority to levy a civil penalty, though they may choose not to.

Detailed Answer

Under Arizona statute A.R.S. § 32-2199.02, the administrative law judge has the discretion to order compliance and also levy a civil penalty for each violation. In this specific case, the judge found no civil penalty was appropriate, but the authority exists.

Alj Quote

The administrative law judge may order any party to abide by the statute, condominium documents, community documents or contract provision at issue and may levy a civil penalty on the basis of each violation.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • civil penalties
  • fines
  • statutory authority

Case

Docket No
24F-H031-REL
Case Title
Keystone Owners Association vs. Bernadette M. Bennett
Decision Date
2024-12-09
Alj Name
Velva Moses-Thompson
Tribunal
OAH
Agency
ADRE

Questions

Question

Can a sub-association enforce the rules and CC&Rs of the master association?

Short Answer

Yes, if the master association has assigned those enforcement rights to the sub-association.

Detailed Answer

A sub-association (like a specific neighborhood HOA within a larger master planned community) generally enforces its own documents. However, this decision clarifies that a sub-association may be authorized to enforce the master association's governing documents if there is a specific assignment agreement executing that transfer of authority.

Alj Quote

The Governing Documents authorize Petitioner to enforce the Governing Documents, as further memorialized by an executed Assignment Agreement by and between Mountain Park Association and Keystone Owners Association signed on August 16, 2023.

Legal Basis

Assignment Agreement / Governing Documents

Topic Tags

  • jurisdiction
  • sub-associations
  • master association
  • enforcement authority

Question

If I extend my driveway without approval, does the HOA have to prove I didn't get permission, or do I have to prove I did?

Short Answer

The absence of written evidence granting approval can be used to establish a violation.

Detailed Answer

While the HOA bears the initial burden of proof for the violation, the lack of testimonial or written evidence showing that the homeowner received approval helps establish that the modification was unauthorized.

Alj Quote

However, there was no testimonial or written evidence presented to establish that Respondent was granted approval to install a driveway that exceeded 35% of the total yard frontage area.

Legal Basis

Burden of Proof

Topic Tags

  • architectural approval
  • evidence
  • driveways
  • modifications

Question

What is the 'burden of proof' for an HOA to win a violation hearing?

Short Answer

The HOA must prove the violation by a 'preponderance of the evidence'.

Detailed Answer

The HOA does not need to prove a violation 'beyond a reasonable doubt' (the criminal standard). They must only show that their contention is 'more probably true than not' or carries superior evidentiary weight.

Alj Quote

Petitioner bears the burden of proof to establish that Respondent violated CC&R § 7.9 by a preponderance of the evidence… 'A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.'

Legal Basis

A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A)

Topic Tags

  • legal standards
  • evidence
  • hearing procedures

Question

Can I use the defense that the HOA waited too long to enforce the rule (laches)?

Short Answer

Yes, but you bear the burden of proving that the delay was unreasonable and caused you prejudice.

Detailed Answer

Laches is an affirmative defense. It is not enough to simply show a delay; the homeowner must prove by a preponderance of the evidence that the delay was unreasonable and that it resulted in sufficient prejudice to deny the HOA's relief.

Alj Quote

Laches is an affirmative defense, and Respondent bears the burden of establishing the defense by a preponderance of the evidence… Respondent has not established by a preponderance of the evidence that there was unreasonable delay that has resulted in prejudice to Respondent sufficient to deny the relief Petitioner seeks…

Legal Basis

A.C.C. R2-19-119(B)(2); Flynn v. Rogers

Topic Tags

  • defenses
  • laches
  • enforcement delay

Question

If I lose the hearing, can the judge make me pay the HOA's filing fees?

Short Answer

Yes, the Administrative Law Judge can order the losing homeowner to reimburse the HOA's filing fee.

Detailed Answer

In this decision, the judge ordered the Respondent (homeowner) to pay the Petitioner's (HOA) filing fee of $1,500.00 directly to the Petitioner within 30 days.

Alj Quote

IT IS FURTHER ORDERED that Respondent pay Petitioner its filing fee of $1,500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Administrative Order

Topic Tags

  • fees
  • costs
  • penalties

Question

How do judges interpret the meaning of restrictive covenants (CC&Rs)?

Short Answer

They are interpreted as a whole, looking at the underlying purpose of the document.

Detailed Answer

Legal interpretation does not isolate single phrases but looks at the document in its entirety 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

Lookout Mountain Paradise Hills Homeowners’ Ass’n v. Viewpoint Assocs.

Topic Tags

  • legal interpretation
  • CC&Rs
  • covenants

Question

Can the judge issue a civil penalty (fine) in addition to ordering me to fix the violation?

Short Answer

Yes, the judge has the authority to levy a civil penalty, though they may choose not to.

Detailed Answer

Under Arizona statute A.R.S. § 32-2199.02, the administrative law judge has the discretion to order compliance and also levy a civil penalty for each violation. In this specific case, the judge found no civil penalty was appropriate, but the authority exists.

Alj Quote

The administrative law judge may order any party to abide by the statute, condominium documents, community documents or contract provision at issue and may levy a civil penalty on the basis of each violation.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • civil penalties
  • fines
  • statutory authority

Case

Docket No
24F-H031-REL
Case Title
Keystone Owners Association vs. Bernadette M. Bennett
Decision Date
2024-12-09
Alj Name
Velva Moses-Thompson
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Erica L. Mortenson (attorney)
    Goodman Law Group
    HOA attorney
  • Harry Whitel (board member/witness)
    Keystone Owners Association
    Secretary of the Board
  • Tim Seyfarth (board member/president)
    Keystone Owners Association
    Board President
  • Glenn Steinman (board member)
    Keystone Owners Association
    Board Vice President
  • Debbie Burch (board member)
    Keystone Owners Association
    Board Treasurer
  • Cherry Collins (board member)
    Keystone Owners Association
    Member at large; Architectural Advisory Committee member
  • Joe Getti (ARC member/former board member)
    Keystone Owners Association
    Architectural Advisory Committee member
  • Mary Hamilton (ARC member)
    Keystone Owners Association
    Architectural Advisory Committee member
  • Dan (attorney/staff)
    Goodman Law Group

Respondent Side

  • Bernadette M. Bennett (respondent)
    Lot Owner
  • Thomas A. Walcott (attorney)
    Provident Lawyers
    Respondent attorney
  • Noah Alvarado (staff)
    Staff/assistant for Respondent's Counsel
  • Christopher J. Charles (attorney/staff)
    Provident Lawyers

Neutral Parties

  • Velva Moses-Thompson (ALJ)
    OAH
    Administrative Law Judge
  • Amy Haley (ALJ)
    OAH
    Administrative Law Judge (prior to VMT)
  • Susan Nicolson (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • Isabella (property manager)
    Vision Management
    Keystone Property Manager who was asked for documents
  • Annette Wthbon (property management agent)
    City Management
    Former Property Management Agent
  • Carla Garvin (property management agent)
    City Management
    Former Property Management Agent

Brian & Rosalie Gordon v. Tucson Estate No. Two Owner’s Association

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Case Summary

Case ID 24F-H043-REL
Agency ADRE
Tribunal OAH
Decision Date 2024-07-10
Administrative Law Judge Samuel Fox
Outcome Petitioners were deemed the prevailing party regarding Petition Issues 1 and 4, and Respondent was deemed the prevailing party regarding Issues 2 and 3. Respondent was ordered to pay Petitioners $1,000.00 of the filing fee. Respondent was also directed to comply with Community Documents and A.R.S. § 33-1805 going forward. No Civil Penalty was levied.
Filing Fees Refunded $2,000.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brian Gordon and Rosalie Gordon Counsel —
Respondent Tucson Estate No. Two Owner's Association Counsel Jason Smith

Alleged Violations

Bylaws Article 10; Finance Committee rules
A.R.S. § 33-1805; Bylaws Article 10
A.R.S. § 33-1805; Bylaws Article 10
A.R.S. § 33-1805; Bylaws Article 10

Outcome Summary

Petitioners were deemed the prevailing party regarding Petition Issues 1 and 4, and Respondent was deemed the prevailing party regarding Issues 2 and 3. Respondent was ordered to pay Petitioners $1,000.00 of the filing fee. Respondent was also directed to comply with Community Documents and A.R.S. § 33-1805 going forward. No Civil Penalty was levied.

Why this result: Petitioners failed to meet the burden of proof for Complaints 2 and 3, establishing that Respondent violated A.R.S. § 33-1805 or failed to abide by Community Documents, because Respondent provided all available records or offered additional reports.

Key Issues & Findings

Violation of Community Documents by not recording and making available the minutes of all Finance Committee Meetings held in 2023.

Petitioners requested minutes for five 2023 Finance Committee Meetings. The Committee rules required minutes of its meetings as a permanent record of its actions. The Respondent failed to record meeting minutes as required.

Orders: Respondent directed to comply with the requirements of its Community Documents going forward.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10

Violation by not keeping and making financial and other HOA business documentation (Budget Working Papers) available for review.

Petitioners requested copies of Budget Working Papers. Respondent provided all available documents (unapproved budget, general ledger, and draft), maintaining only one version of a proprietary spreadsheet. Petitioners failed to meet their burden to prove Respondent did not make records available.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10

Violation by not keeping and making financial and other HOA business documentation (Accounts Payable journal with GL detail) available for review.

Petitioners requested Accounts Payable journal/reports multiple times. Respondent provided copies of available accounts payable reports (check receipts and general ledger). When Respondent later identified an additional detailed report available for purchase, Petitioners refused it.

Filing fee: $500.00, Fee refunded: No

Disposition: respondent_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10

Violation by not keeping and making financial and other HOA business documentation (IRS Tax filings and backup documentation) available for review.

Petitioners requested IRS Tax filings. Respondent initially provided only photocopies of two pages of the 1120-h form, missing schedules and backup documentation. Respondent failed to provide full tax returns or backup documentation in a timely manner (within ten business days).

Orders: Respondent is directed to comply with the requirements of A.R.S. § 33-1805 going forward.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10

Analytics Highlights

Topics: HOA records dispute, Finance Committee minutes, budget working papers, accounts payable journal, IRS tax filings, record retention, A.R.S. § 33-1805 violation
Additional Citations:

  • A.R.S. § 33-1805
  • A.R.S. § 10-11601
  • Bylaws Article 10
  • A.R.S. § 32-2199.02

Video Overview

Audio Overview

Decision Documents

24F-H043-REL Decision – 1176916.pdf

Uploaded 2026-04-24T12:23:58 (53.5 KB)

24F-H043-REL Decision – 1198119.pdf

Uploaded 2026-04-24T12:24:02 (203.0 KB)

24F-H043-REL Decision – 1200350.pdf

Uploaded 2026-04-24T12:24:06 (37.2 KB)

24F-H043-REL Decision – 1176916.pdf

Uploaded 2026-01-23T18:07:38 (53.5 KB)

24F-H043-REL Decision – 1198119.pdf

Uploaded 2026-01-23T18:07:41 (203.0 KB)

24F-H043-REL Decision – 1200350.pdf

Uploaded 2026-01-23T18:07:45 (37.2 KB)

This case involves a records dispute between Petitioners Brian and Rosalie Gordon (members) and the Tucson Estate No. Two Owner's Association (Respondent/HOA), heard by Administrative Law Judge (ALJ) Samuel Fox at the Office of Administrative Hearings (OAH) on June 21, 2024. The OAH's authority is limited to adjudicating alleged violations of the Arizona Planned Community Statutes (A.R.S. Title 33, Chapter 16) and the HOA's Community Documents.

Key Facts and Main Issues

The Petitioners filed a four-issue complaint alleging the Respondent violated A.R.S. § 33-1805 (requiring records to be made available for examination) and the HOA's Bylaws, primarily by failing to provide specific financial documentation requested in 2022 and 2023.

The four contested issues were:

  1. Finance Committee Minutes: Failure to record and make available minutes of 2023 Finance Committee Meetings.
  2. Budget Working Papers: Refusal to provide copies of draft budget working papers.
  3. Accounts Payable (AP) Journal: Failure to provide AP journals with General Ledger (GL) detail.
  4. Tax Filings Backup: Provision of incomplete IRS tax filings (just two pages of the 1120-h form) and lack of supporting backup documentation.

Key Arguments During the Hearing

Petitioners' Position: The Gordons argued that all financial and other records must be made reasonably available for examination by any member under A.R.S. § 33-1805. They contended that the HOA’s own Finance Committee policy required minutes of all its meetings as a permanent record of its "actions". They also claimed that essential documents (budget working papers, AP detail, and full tax backups) either existed and were being withheld, or should have been maintained by the HOA according to policy, even if created by its vendor, AAM.

Respondent's Position: The HOA, represented by Jason Smith, argued that the OAH’s jurisdiction is narrow. They maintained that they provided every document they possessed. For the minutes, they argued the Finance Committee is purely advisory, does not take corporate "action," and therefore minutes are not required. For the budget documents (Issue 2) and AP journal (Issue 3), the HOA claimed that the requested specific documents did not exist (as the budget utilized a single constantly updated spreadsheet, and the AP detail was handled by a third party not required to generate a specific report for the HOA). The HOA stressed that they are not required to create or reorganize information to satisfy a homeowner's request.

Final Decision and Outcome

The ALJ issued a decision on July 10, 2024, finding that the Petitioners prevailed on Issues 1 and 4, while the Respondent prevailed on Issues 2 and 3.

Legal Conclusions:

  • Issue 1 (Finance Minutes): VIOLATION FOUND. The HOA failed to abide by its Community Documents. Although the Finance Committee is advisory, its rules established that its activities (advising, reviewing, making recommendations) constituted "actions" for which minutes were required to be kept.
  • Issue 4 (Tax Filings Backup): VIOLATION FOUND. The HOA violated A.R.S. § 33-1805 because the preponderance of evidence showed Petitioners did not receive the complete tax returns or backup documentation in a timely manner (within the required ten business days of their October requests), even though the records were eventually available or accessible through the HOA’s agents.
  • Issues 2 & 3 (Working Papers & AP Journal): NO VIOLATION FOUND. The ALJ concluded that the Petitioners failed to meet their burden of proof, noting that A.R.S. § 33-1805 and the Bylaws do not require the HOA to create documents that it does not possess in response to a request. Respondent was found to have provided all available records related to these complaints.

Order:

The Respondent was ordered to comply with its Community Documents and the requirements of A.R.S. § 33-1805 going forward. The

Questions

Question

Is my HOA required to keep minutes for advisory committees?

Short Answer

Yes, if the community documents (like a committee charter or policy) state that minutes must be kept.

Detailed Answer

Even if an HOA argues a committee is only 'advisory' and doesn't take 'actions,' the ALJ ruled that activities like advising, reviewing, and recommending constitute 'actions' within the scope of the committee's duties. Therefore, if the committee's rules say minutes must be kept, failing to do so violates the community documents.

Alj Quote

When the Committee advised, assisted, reviewed, analyzed, recommended, or otherwise took action within the parameters of its Responsibilities and Duties, that was an 'action' by the Committee as established by the Board.

Legal Basis

Community Documents / Bylaws

Topic Tags

  • meeting minutes
  • committees
  • record keeping

Question

Can I demand that the HOA create a specific report to answer my financial questions?

Short Answer

No, the HOA is not required to create new documents that do not already exist.

Detailed Answer

The law requires the HOA to make existing records available for examination. It does not compel the HOA to generate new reports, compile data in a specific format, or create documents they do not currently possess to satisfy a homeowner's request.

Alj Quote

It does not require Respondent to provide documents that it does not have nor does it require Respondent to create documents in response to a request.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • financial records
  • document creation
  • requests

Question

If the management company holds the records, can the HOA claim they don't have them?

Short Answer

No, records held by the management company are considered to be in the HOA's custody.

Detailed Answer

The ALJ explicitly ruled that documents in the custody of the management agent (e.g., AAM) are legally in the custody of the HOA. The HOA is obligated to provide them to members upon request.

Alj Quote

Documents in the custody of AAM are in the custody of Respondent, and Respondent is obligated to provide them to members under A.R.S. § 33-1805.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • management company
  • record custody
  • access to records

Question

Are personal notes taken by committee members considered official HOA records?

Short Answer

No, personal notes or drafts on personal devices are generally not HOA records.

Detailed Answer

The ALJ found that notes, drafts, edits, or comments made by committee members on their personal versions of documents were not records of the Association if the Association did not collect, track, or record them.

Alj Quote

Any notes, drafts, edits, or comments that committee members made on their personal versions were not records of Respondent, which did not collect, track, or record the committee members’ individual notes.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • personal notes
  • official records
  • committees

Question

Does the HOA have to provide previous drafts of a budget or 'working papers'?

Short Answer

Only if they actually kept them. If they overwrite the file, they don't have to produce previous versions.

Detailed Answer

In this case, the HOA used a single spreadsheet that was updated and overwritten as the budget process moved forward. The ALJ ruled that since the HOA did not maintain multiple versions, they were not required to produce previous drafts they no longer possessed.

Alj Quote

Respondent only maintained one version of the spreadsheet, and when changes were made, the spreadsheet was updated… Petitioners failed to meet their burden to support that Respondent did not make records available for review.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • budget
  • draft documents
  • record retention

Question

Is providing the first two pages of a tax return sufficient to fulfill a records request?

Short Answer

No, the HOA must provide the complete tax return and backup documentation.

Detailed Answer

The ALJ found the HOA in violation for providing only the first two pages of Form 1120-H. The homeowner was entitled to the complete tax form and the backup documentation (which the management company or CPA had access to) within 10 days.

Alj Quote

The preponderance of the evidence establishes that Petitioners did not receive full copies of Respondent’s tax returns or backup documentation for the tax returns within ten days of their respective October requests.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • tax returns
  • financial records
  • transparency

Question

Can the ALJ enforce IRS regulations or the Nonprofit Corporation Act during this hearing?

Short Answer

No, the ALJ's jurisdiction is limited to Planned Community statutes and Community Documents.

Detailed Answer

The Administrative Law Judge explicitly stated that the tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act or IRS regulations, only Title 33 (Planned Communities) and the specific HOA documents.

Alj Quote

This Tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act, Internal Revenue Service regulations, or other laws or regulations.

Legal Basis

A.R.S. § 32-2199

Topic Tags

  • jurisdiction
  • legal authority
  • IRS
  • nonprofit act

Question

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

Short Answer

Yes, the ALJ has the discretion to order the HOA to reimburse the filing fee.

Detailed Answer

In this case, because the homeowners prevailed on two of their four issues, the ALJ ordered the HOA to pay the homeowners $1,000.00 (half of the $2,000 filing fee).

Alj Quote

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

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • filing fees
  • penalties
  • reimbursement

Case

Docket No
24F-H043-REL
Case Title
Brian Gordon and Rosalie Gordon v. Tucson Estate No. Two Owner's Association
Decision Date
2024-07-10
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Questions

Question

Is my HOA required to keep minutes for advisory committees?

Short Answer

Yes, if the community documents (like a committee charter or policy) state that minutes must be kept.

Detailed Answer

Even if an HOA argues a committee is only 'advisory' and doesn't take 'actions,' the ALJ ruled that activities like advising, reviewing, and recommending constitute 'actions' within the scope of the committee's duties. Therefore, if the committee's rules say minutes must be kept, failing to do so violates the community documents.

Alj Quote

When the Committee advised, assisted, reviewed, analyzed, recommended, or otherwise took action within the parameters of its Responsibilities and Duties, that was an 'action' by the Committee as established by the Board.

Legal Basis

Community Documents / Bylaws

Topic Tags

  • meeting minutes
  • committees
  • record keeping

Question

Can I demand that the HOA create a specific report to answer my financial questions?

Short Answer

No, the HOA is not required to create new documents that do not already exist.

Detailed Answer

The law requires the HOA to make existing records available for examination. It does not compel the HOA to generate new reports, compile data in a specific format, or create documents they do not currently possess to satisfy a homeowner's request.

Alj Quote

It does not require Respondent to provide documents that it does not have nor does it require Respondent to create documents in response to a request.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • financial records
  • document creation
  • requests

Question

If the management company holds the records, can the HOA claim they don't have them?

Short Answer

No, records held by the management company are considered to be in the HOA's custody.

Detailed Answer

The ALJ explicitly ruled that documents in the custody of the management agent (e.g., AAM) are legally in the custody of the HOA. The HOA is obligated to provide them to members upon request.

Alj Quote

Documents in the custody of AAM are in the custody of Respondent, and Respondent is obligated to provide them to members under A.R.S. § 33-1805.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • management company
  • record custody
  • access to records

Question

Are personal notes taken by committee members considered official HOA records?

Short Answer

No, personal notes or drafts on personal devices are generally not HOA records.

Detailed Answer

The ALJ found that notes, drafts, edits, or comments made by committee members on their personal versions of documents were not records of the Association if the Association did not collect, track, or record them.

Alj Quote

Any notes, drafts, edits, or comments that committee members made on their personal versions were not records of Respondent, which did not collect, track, or record the committee members’ individual notes.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • personal notes
  • official records
  • committees

Question

Does the HOA have to provide previous drafts of a budget or 'working papers'?

Short Answer

Only if they actually kept them. If they overwrite the file, they don't have to produce previous versions.

Detailed Answer

In this case, the HOA used a single spreadsheet that was updated and overwritten as the budget process moved forward. The ALJ ruled that since the HOA did not maintain multiple versions, they were not required to produce previous drafts they no longer possessed.

Alj Quote

Respondent only maintained one version of the spreadsheet, and when changes were made, the spreadsheet was updated… Petitioners failed to meet their burden to support that Respondent did not make records available for review.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • budget
  • draft documents
  • record retention

Question

Is providing the first two pages of a tax return sufficient to fulfill a records request?

Short Answer

No, the HOA must provide the complete tax return and backup documentation.

Detailed Answer

The ALJ found the HOA in violation for providing only the first two pages of Form 1120-H. The homeowner was entitled to the complete tax form and the backup documentation (which the management company or CPA had access to) within 10 days.

Alj Quote

The preponderance of the evidence establishes that Petitioners did not receive full copies of Respondent’s tax returns or backup documentation for the tax returns within ten days of their respective October requests.

Legal Basis

A.R.S. § 33-1805

Topic Tags

  • tax returns
  • financial records
  • transparency

Question

Can the ALJ enforce IRS regulations or the Nonprofit Corporation Act during this hearing?

Short Answer

No, the ALJ's jurisdiction is limited to Planned Community statutes and Community Documents.

Detailed Answer

The Administrative Law Judge explicitly stated that the tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act or IRS regulations, only Title 33 (Planned Communities) and the specific HOA documents.

Alj Quote

This Tribunal is not authorized to adjudicate complaints arising from the Arizona Nonprofit Corporations Act, Internal Revenue Service regulations, or other laws or regulations.

Legal Basis

A.R.S. § 32-2199

Topic Tags

  • jurisdiction
  • legal authority
  • IRS
  • nonprofit act

Question

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

Short Answer

Yes, the ALJ has the discretion to order the HOA to reimburse the filing fee.

Detailed Answer

In this case, because the homeowners prevailed on two of their four issues, the ALJ ordered the HOA to pay the homeowners $1,000.00 (half of the $2,000 filing fee).

Alj Quote

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

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • filing fees
  • penalties
  • reimbursement

Case

Docket No
24F-H043-REL
Case Title
Brian Gordon and Rosalie Gordon v. Tucson Estate No. Two Owner's Association
Decision Date
2024-07-10
Alj Name
Samuel Fox
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Brian Gordon (petitioner)
  • Rosalie Gordon (petitioner)
  • James Tilly (witness)
    Member of Respondent who testified.
  • Leonard Vidovic (witness)
    Also referred to as Leonard Judbec.

Respondent Side

  • Jason E. Smith (HOA attorney)
    SMITH & WAMSLEY, PLLC
  • Sean K. Moynihan (attorney)
    Smith & Wamsley, PLLC
  • Mandy Bates (property manager)
    Associated Asset Management
    Community Manager for Tucson Estates No. Two Owner's Association.
  • Trudy Peterson (finance chair)
    Treasurer and Finance Chair.
  • Rose Spank (board member)
    HOA President in 2012.
  • Janelle Richmond (board member)
    HOA Secretary in 2012.
  • Sharon Matthews (AAM staff)
    AAM
    Referenced in emails regarding accounting procedures (also referred to as Karen Matthews).

Neutral Parties

  • Samuel Fox (ALJ)
    OAH
    Administrative Law Judge for the decision and hearing.
  • Sondra J. Vanella (ALJ)
    OAH
    Signed the initial Order Setting Hearing.
  • Susan Nicolson (ADRE Commissioner)
    Arizona Department of Real Estate
  • vnunez (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • labril (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • mneat (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • lrecchia (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.
  • gosborn (ADRE staff)
    Arizona Department of Real Estate
    Listed on transmission/service list.

Daniel Mayer v. Scottsdale North Homeowners Association, Inc.

Posted on by

Case Summary

Case ID 23F-H020-REL
Agency ADRE
Tribunal OAH
Decision Date 2023-02-17
Administrative Law Judge Adam D. Stone
Outcome The Petitioner was deemed the prevailing party after establishing that the Respondent HOA violated A.R.S. § 33-1812 by improperly combining two separate expenditure proposals (roadway preservation and gate replacement) into a single vote on a ballot, failing to provide an opportunity to vote on each action separately. Respondent was ordered to refund the $500.00 filing fee and pay a $500.00 civil penalty.
Filing Fees Refunded $500.00
Civil Penalties $500.00

Parties & Counsel

Petitioner Daniel Mayer Counsel —
Respondent Scottsdale North Homeowners Association, Inc. Counsel —

Alleged Violations

A.R.S. § 33-1812

Outcome Summary

The Petitioner was deemed the prevailing party after establishing that the Respondent HOA violated A.R.S. § 33-1812 by improperly combining two separate expenditure proposals (roadway preservation and gate replacement) into a single vote on a ballot, failing to provide an opportunity to vote on each action separately. Respondent was ordered to refund the $500.00 filing fee and pay a $500.00 civil penalty.

Key Issues & Findings

Combining two separate proposed actions into a single vote action on a ballot.

The Respondent HOA combined two separate proposed expenditures ($30,000 total for roadway asset preservation and common area gate replacement) into one vote on a ballot sent to homeowners, violating statutory requirements that each proposed action must be voted upon separately.

Orders: Respondent must abide by A.R.S. § 33-1812; Respondent must refund the Petitioner's $500.00 filing fee; Respondent must pay a $500.00 civil penalty to the Department of Real Estate.

Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $500.00

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1812
  • A.R.S. § 10-3708
  • A.R.S. § 33-1812(A)(1)

Analytics Highlights

Topics: HOA Ballot, Combined Vote, Reserve Funds Access, Statutory Violation
Additional Citations:

  • A.R.S. § 33-1812
  • A.R.S. § 10-3708
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.07
  • A.R.S. § 41-1092.09
  • A.A.C. R2-19-119

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Decision Documents

23F-H020-REL Decision – 1031122.pdf

Uploaded 2026-04-24T11:59:44 (100.0 KB)

23F-H020-REL Decision – 1038504.pdf

Uploaded 2026-04-24T11:59:48 (54.8 KB)

23F-H020-REL Decision – 1031122.pdf

Uploaded 2026-01-23T17:52:58 (100.0 KB)

23F-H020-REL Decision – 1038504.pdf

Uploaded 2026-01-23T17:53:01 (54.8 KB)

This administrative hearing, docket number 23F-H020-REL, addressed the petition filed by Daniel Mayor against Scottsdale North Homeowners Association, Inc. (SNHA), concerning alleged violations of community documents and Arizona Revised Statute (A.R.S.) § 33-1812. Administrative Law Judge (ALJ) Adam D. Stone presided over the hearing on February 3, 2023.

Key Facts and Main Issues

The core issue centered on a ballot sent to homeowners on May 18, 2022, seeking approval to access $30,000 from the reserve fund for two distinct capital improvement projects: roadway asset preservation/resurfacing and common area gate replacement.

  1. Violation of Separate Voting Requirement: Petitioner Daniel Mayor argued that the ballot improperly combined these two separate "proposed actions" into a single yes/no vote, failing to provide members the opportunity to vote for or against each expenditure individually. Mayor requested that the vote be recalled and recast properly.
  2. Applicability of Statute: Respondent SNHA, represented by Board President Andrew Chambers, admitted the projects were combined but argued that A.R.S. § 33-1812 (which requires separate votes for separate actions) did not apply. SNHA contended the statute only governs votes taken at formal meetings, whereas this vote was conducted via mail, email, and fax prior to the meeting where results were announced. SNHA also noted that 91% (32 of 35) of responding homeowners approved the combined expenditure, and the projects were subsequently completed.

Legal Points and Decision

The ALJ determined that the cover letter and prior discussions clearly indicated that the roadway resurfacing and gate replacement were two separate projects for which SNHA was seeking approval.

The ALJ rejected the Association's defense, concluding that the ballot was improper because it failed to allow separate votes. The decision highlighted that A.R.S. § 33-1812, even when referring to votes taken outside of a meeting, directs attention to A.R.S. § 10-3708 (Arizona Nonprofit Corporation Act). This statute mandates that written ballots must set forth each proposed action and provide an opportunity to vote for or against each.

Outcome

The ALJ found that the Petitioner established, by a preponderance of the evidence, that SNHA acted in violation of A.R.S. § 33-1812(A)(1) and the community documents.

The ALJ noted that A.R.S. § 32-2199.02 did not grant the authority to order the projects rescinded or the vote nullified, but only permitted ordering parties to abide by the statute and levying civil penalties.

  • Prevailing Party: Daniel Mayor was deemed the prevailing party.
  • Filing Fee: SNHA was ordered to pay the Petitioner his $500.00 filing fee.
  • Civil Penalty: Due to concern that this type of improper ballot could be used in the future, the ALJ levied a $500.00 Civil Penalty. (A subsequent correction order specified that this civil penalty must be paid to the Department of Real Estate).

Questions

Question

Can my HOA combine multiple capital improvement projects into a single 'Yes' or 'No' vote?

Short Answer

No. The HOA must allow homeowners to vote for or against each proposed action separately.

Detailed Answer

Even if the projects are related or presented in the same letter, the ballot itself must provide an opportunity to vote on each specific expenditure or project individually. Combining them into one vote violates Arizona statutes.

Alj Quote

Thus, the tribunal finds the ballot improper because it did not contain the opportunity to vote on each separate proposal.

Legal Basis

A.R.S. § 33-1812(A)(1)-(2)

Topic Tags

  • voting
  • ballots
  • assessments

Question

If the HOA conducts a vote by mail or email rather than at a live meeting, do they still have to list voting items separately?

Short Answer

Yes. The requirement to list each proposed action separately applies to absentee ballots and written ballots used without a meeting.

Detailed Answer

The ALJ rejected the argument that voting requirements only apply to in-person meetings. Statutes governing both planned communities and nonprofit corporations require that written ballots set forth each proposed action.

Alj Quote

According to that statute, the ballots still must set for each action and provide an opportunity to vote for or against each action. … Therefore, this ballot runs afoul of A.R.S. § 33-1812.

Legal Basis

A.R.S. § 33-1812; A.R.S. § 10-3708

Topic Tags

  • absentee ballots
  • voting
  • mail-in voting

Question

Can the Administrative Law Judge force the HOA to undo a project (like a road repair) if the vote was illegal?

Short Answer

Generally, no. The ALJ lacks the statutory authority to order projects rescinded once completed.

Detailed Answer

While the ALJ can determine that a violation occurred and levy penalties, they cannot order the association to 'un-do' the physical work or rescind the project.

Alj Quote

The Administrative Law Judge does not have the authority under the A.R.S. § 32-2199.02 to order the projects rescinded…

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • remedies
  • powers of ALJ
  • construction

Question

What is the standard of proof for a homeowner suing their HOA in an administrative hearing?

Short Answer

Preponderance of the evidence.

Detailed Answer

The homeowner (Petitioner) must prove that their contention is 'more probably true than not.'

Alj Quote

Petitioner bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence.

Legal Basis

A.R.S. § 41-1092.07(G)(2)

Topic Tags

  • legal standards
  • burden of proof
  • evidence

Question

Can the HOA claim that their specific bylaws or CC&Rs override state laws regarding ballot formats?

Short Answer

No. The relevant state statute explicitly overrides community documents regarding absentee ballot requirements.

Detailed Answer

The statute begins with 'Notwithstanding any provision in the community documents,' meaning the state law requirements for ballots take precedence over the HOA's internal rules.

Alj Quote

A.R.S. § 33-1812 provides… 'Notwithstanding any provision in the community documents… any action taken… shall comply with all of the following…'

Legal Basis

A.R.S. § 33-1812(A)

Topic Tags

  • governing documents
  • statutory interpretation
  • supremacy of law

Question

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

Short Answer

Yes. The ALJ can order the HOA to reimburse the homeowner for the filing fee.

Detailed Answer

In this decision, the HOA was ordered to pay the $500 filing fee directly to the Petitioner.

Alj Quote

IT IS FURTHER ORDERED that Respondent pay Petitioner his filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Order of the ALJ

Topic Tags

  • remedies
  • fees
  • penalties

Question

Does a majority vote of the homeowners cure a defective ballot?

Short Answer

No. Even if the vast majority of homeowners approved the spending, the ballot can still be ruled a violation.

Detailed Answer

The ALJ noted that although most homeowners approved the proposal, the violation still stood because allowing such ballots would leave 'virtually no remedy' for future procedural violations.

Alj Quote

In this case, although the vast majority of homeowners approved the proposals, the Administrative Law Judge is concerned that this type of ballot could be used in the future, leaving virtually no remedy.

Legal Basis

A.R.S. § 33-1812

Topic Tags

  • voting results
  • procedural violations
  • compliance

Case

Docket No
23F-H020-REL
Case Title
Daniel Mayer vs Scottsdale North Homeowners Association, Inc.
Decision Date
2023-02-17
Alj Name
Adam D. Stone
Tribunal
OAH
Agency
ADRE

Questions

Question

Can my HOA combine multiple capital improvement projects into a single 'Yes' or 'No' vote?

Short Answer

No. The HOA must allow homeowners to vote for or against each proposed action separately.

Detailed Answer

Even if the projects are related or presented in the same letter, the ballot itself must provide an opportunity to vote on each specific expenditure or project individually. Combining them into one vote violates Arizona statutes.

Alj Quote

Thus, the tribunal finds the ballot improper because it did not contain the opportunity to vote on each separate proposal.

Legal Basis

A.R.S. § 33-1812(A)(1)-(2)

Topic Tags

  • voting
  • ballots
  • assessments

Question

If the HOA conducts a vote by mail or email rather than at a live meeting, do they still have to list voting items separately?

Short Answer

Yes. The requirement to list each proposed action separately applies to absentee ballots and written ballots used without a meeting.

Detailed Answer

The ALJ rejected the argument that voting requirements only apply to in-person meetings. Statutes governing both planned communities and nonprofit corporations require that written ballots set forth each proposed action.

Alj Quote

According to that statute, the ballots still must set for each action and provide an opportunity to vote for or against each action. … Therefore, this ballot runs afoul of A.R.S. § 33-1812.

Legal Basis

A.R.S. § 33-1812; A.R.S. § 10-3708

Topic Tags

  • absentee ballots
  • voting
  • mail-in voting

Question

Can the Administrative Law Judge force the HOA to undo a project (like a road repair) if the vote was illegal?

Short Answer

Generally, no. The ALJ lacks the statutory authority to order projects rescinded once completed.

Detailed Answer

While the ALJ can determine that a violation occurred and levy penalties, they cannot order the association to 'un-do' the physical work or rescind the project.

Alj Quote

The Administrative Law Judge does not have the authority under the A.R.S. § 32-2199.02 to order the projects rescinded…

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • remedies
  • powers of ALJ
  • construction

Question

What is the standard of proof for a homeowner suing their HOA in an administrative hearing?

Short Answer

Preponderance of the evidence.

Detailed Answer

The homeowner (Petitioner) must prove that their contention is 'more probably true than not.'

Alj Quote

Petitioner bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence.

Legal Basis

A.R.S. § 41-1092.07(G)(2)

Topic Tags

  • legal standards
  • burden of proof
  • evidence

Question

Can the HOA claim that their specific bylaws or CC&Rs override state laws regarding ballot formats?

Short Answer

No. The relevant state statute explicitly overrides community documents regarding absentee ballot requirements.

Detailed Answer

The statute begins with 'Notwithstanding any provision in the community documents,' meaning the state law requirements for ballots take precedence over the HOA's internal rules.

Alj Quote

A.R.S. § 33-1812 provides… 'Notwithstanding any provision in the community documents… any action taken… shall comply with all of the following…'

Legal Basis

A.R.S. § 33-1812(A)

Topic Tags

  • governing documents
  • statutory interpretation
  • supremacy of law

Question

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

Short Answer

Yes. The ALJ can order the HOA to reimburse the homeowner for the filing fee.

Detailed Answer

In this decision, the HOA was ordered to pay the $500 filing fee directly to the Petitioner.

Alj Quote

IT IS FURTHER ORDERED that Respondent pay Petitioner his filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Order of the ALJ

Topic Tags

  • remedies
  • fees
  • penalties

Question

Does a majority vote of the homeowners cure a defective ballot?

Short Answer

No. Even if the vast majority of homeowners approved the spending, the ballot can still be ruled a violation.

Detailed Answer

The ALJ noted that although most homeowners approved the proposal, the violation still stood because allowing such ballots would leave 'virtually no remedy' for future procedural violations.

Alj Quote

In this case, although the vast majority of homeowners approved the proposals, the Administrative Law Judge is concerned that this type of ballot could be used in the future, leaving virtually no remedy.

Legal Basis

A.R.S. § 33-1812

Topic Tags

  • voting results
  • procedural violations
  • compliance

Case

Docket No
23F-H020-REL
Case Title
Daniel Mayer vs Scottsdale North Homeowners Association, Inc.
Decision Date
2023-02-17
Alj Name
Adam D. Stone
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Daniel Mayer (petitioner)
    Appeared on his own behalf
  • Mr. D'Angelo (witness)
    Petitioner's husband

Respondent Side

  • Sandy Chambers (board president)
    Scottsdale North Homeowners Association, Inc.
    Appeared on behalf of Respondent; also referred to as 'Andrew Chambers' and 'Miss Chambers' in the transcript

Neutral Parties

  • Adam D. Stone (ALJ)
    OAH
  • Miranda (OAH staff)
    OAH
    Front desk staff mentioned by ALJ
  • James Knupp (commissioner)
    ADRE
    Acting Commissioner listed on initial transmittal
  • Susan Nicolson (commissioner)
    ADRE
  • AHansen (ADRE staff)
    ADRE
    Transmittal recipient
  • vnunez (ADRE staff)
    ADRE
    Transmittal recipient
  • labril (ADRE staff)
    ADRE
    Transmittal recipient
  • djones (ADRE staff)
    ADRE
    Transmittal recipient

Other Participants

  • jzipprich (property manager)
    Desert Management
    Email contact for Respondent HOA

Brenda C Norman v. Rancho Del Lago Community Association

Posted on by

Case Summary

Case ID 22F-H2221019-REL
Agency ADRE
Tribunal OAH
Decision Date 2022-01-18
Administrative Law Judge Adam D. Stone
Outcome Petitioner was deemed the prevailing party and RDLCA was ordered to comply with CC&R Section 3.1(D)(3) and refund the $500.00 filing fee. The specific remedy requested by Petitioner (ordering RDLCA to fine the neighbor or force light removal) was denied as the ALJ lacked statutory authority (A.R.S. § 32-2199.02) to grant that relief.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Brenda C Norman Counsel —
Respondent Rancho Del Lago Community Association Counsel Mackenzie Hill, Esq.

Alleged Violations

Section 3.1(D)(3) of the CC&Rs

Outcome Summary

Petitioner was deemed the prevailing party and RDLCA was ordered to comply with CC&R Section 3.1(D)(3) and refund the $500.00 filing fee. The specific remedy requested by Petitioner (ordering RDLCA to fine the neighbor or force light removal) was denied as the ALJ lacked statutory authority (A.R.S. § 32-2199.02) to grant that relief.

Key Issues & Findings

Violation of CC&R regarding flood illumination direction and ARC approval process.

Petitioner alleged that Respondent (RDLCA) violated CC&R 3.1(D)(3) because a neighbor installed flood lights shining onto Petitioner's property without RDLCA approval (ARC approval). The ALJ found RDLCA in violation because the lights were never approved.

Orders: RDLCA must comply with CC&R Section 3.1(D)(3) and pay Petitioner her $500.00 filing fee. No civil penalty was levied.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 32-2199
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • A.R.S. § 32-2199.02

Analytics Highlights

Topics: HOA, CC&R, Lighting, Architectural Review, Filing Fee Refund
Additional Citations:

  • A.R.S. § 32-2199
  • A.R.S. § 41-1092.07(G)(2)
  • A.A.C. R2-19-119(A)
  • A.A.C. R2-19-119(B)(1)
  • Vazzano v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952)
  • A.R.S. § 32-2199.02
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09

Video Overview

Audio Overview

Decision Documents

22F-H2221019-REL Decision – 939490.pdf

Uploaded 2026-04-26T09:57:40 (95.0 KB)

22F-H2221019-REL Decision – 939490.pdf

Uploaded 2026-01-23T17:42:27 (95.0 KB)

This summary details the administrative hearing proceedings in the matter of *Brenda C Norman v. Rancho Del Lago Community Association* (RDLCA), held on January 14, 2022, before Administrative Law Judge (ALJ) Adam D. Stone.

Key Facts and Main Issue

The Petitioner, Brenda C Norman, filed a Homeowners Association (HOA) Dispute Process Petition on or about October 23, 2021, alleging that RDLCA violated the community documents. The specific issue was RDLCA's alleged failure to enforce Section 3.1(D)(3) of the CC&Rs, which mandates that flood illumination must be directed at the owner’s property away from neighboring property. The Petitioner testified that her neighbor installed flood lights that shined into her backyard and residence, and she requested RDLCA fine the neighbors or force the removal of the fixture. The Petitioner paid a $500.00 filing fee.

Hearing Proceedings and Arguments

The Petitioner bore the burden of proof to establish the violation by a preponderance of the evidence.

  • Petitioner’s Argument: The neighbor's lights continued to shine onto her property, and RDLCA had not adequately remedied the situation.
  • Respondent’s Argument: RDLCA, through community manager Spencer Brod, testified that upon receiving the complaint, they investigated and sent correspondence (August 17, 2021) to the neighbor requesting light removal. The neighbor subsequently replaced the fixture, and RDLCA later informed the Petitioner that the floodlights were now angled downward and were in compliance (September 2021). RDLCA also argued that the specific CC&R section applied only to lights on the front of the house, meaning neighbor approval was not required for the side/backyard fixture.

Legal Points and Final Decision

The ALJ found RDLCA in violation of the CC&Rs.

  • Legal Rationale: The ALJ could not definitively rule on RDLCA’s defense that the CC&R section applied only to front yards, as neither party submitted the full Section 3.1. However, the ALJ noted that RDLCA’s own correspondence referenced Section 3.1 and indicated the light was installed without ARC approval. Since no evidence demonstrated that ARC approval occurred, RDLCA was found to be in violation of CC&R Section 3.1(D)(3).
  • Outcome and Order: The Petitioner was deemed the prevailing party in this matter. Pursuant to A.R.S. § 32-2199.02, the ALJ ordered RDLCA to comply with Section 3.1(D)(3). The ALJ explicitly stated that he did not have the statutory authority to order RDLCA to fine or force the neighbor to remove the lights, thus denying the Petitioner's requested specific remedies. RDLCA was ordered to pay the Petitioner her $500.00 filing fee within thirty days. No civil penalty was deemed appropriate.

Questions

Question

Can an Administrative Law Judge order my HOA to fine a neighbor for a violation?

Short Answer

No, the ALJ does not have the statutory authority to order fines against neighbors.

Detailed Answer

Even if a violation is found, the ALJ explicitly stated that the statute does not grant them the power to order the HOA to fine a neighbor or to force a neighbor to remove non-compliant items.

Alj Quote

The Administrative Law Judge does not have the authority under the applicable statute to order that RDLCA fine or order the neighbor remove the lights.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • Remedies
  • Fines
  • Authority

Question

Who is responsible for proving that the HOA violated the community documents?

Short Answer

The homeowner (Petitioner) bears the burden of proof.

Detailed Answer

The homeowner filing the dispute must prove the HOA's violation by a 'preponderance of the evidence'. It is not the HOA's job to disprove it initially.

Alj Quote

Petitioner bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence.

Legal Basis

A.R.S. § 41-1092.07(G)(2)

Topic Tags

  • Burden of Proof
  • Evidence
  • Procedure

Question

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

Short Answer

Yes, the ALJ can order the HOA to reimburse the filing fee.

Detailed Answer

In this decision, because the homeowner was the prevailing party, the HOA was ordered to pay the $500 filing fee directly to the homeowner within 30 days.

Alj Quote

IT IS FURTHER ORDERED that Respondent pay Petitioner her filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Order

Topic Tags

  • Fees
  • Reimbursement
  • Prevailing Party

Question

Can I challenge my HOA for failing to enforce architectural rules on a neighbor?

Short Answer

Yes, if the HOA allows modifications without the required approval.

Detailed Answer

The ALJ found the HOA in violation of the CC&Rs because the neighbor installed lights without the required Architectural Review Committee (ARC) approval, and the HOA failed to address this specific lack of approval.

Alj Quote

Because this never occurred, Respondent is in violation of CC&R Section 3.1(D)(3).

Legal Basis

CC&R Section 3.1(D)(3)

Topic Tags

  • Enforcement
  • Architectural Review
  • Lighting

Question

What happens if we don't provide the full text of the CC&Rs during the hearing?

Short Answer

The judge cannot rule on parts of the rules that are not provided.

Detailed Answer

The HOA tried to argue a rule applied only to the front yard, but because neither party submitted the full section of the CC&Rs, the judge could not verify that claim and had to rule based only on the evidence available.

Alj Quote

At the outset, neither party submitted the full Section 3.1 of the CC&R’s and the ALJ therefore cannot determine if the section in question applies to the front yard only.

Legal Basis

Evidentiary Standard

Topic Tags

  • Evidence
  • CC&Rs
  • Documentation

Question

What does 'preponderance of the evidence' mean?

Short Answer

It means the claim is more likely true than not.

Detailed Answer

The decision defines this legal standard as proof that convinces the judge that a contention is 'more probably true than not,' even if there is still some doubt.

Alj Quote

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

Legal Basis

Arizona Law of Evidence

Topic Tags

  • Legal Definitions
  • Standards

Case

Docket No
22F-H2221019-REL
Case Title
Brenda C Norman vs. Rancho Del Lago Community Association
Decision Date
2022-01-18
Alj Name
Adam D. Stone
Tribunal
OAH
Agency
ADRE

Questions

Question

Can an Administrative Law Judge order my HOA to fine a neighbor for a violation?

Short Answer

No, the ALJ does not have the statutory authority to order fines against neighbors.

Detailed Answer

Even if a violation is found, the ALJ explicitly stated that the statute does not grant them the power to order the HOA to fine a neighbor or to force a neighbor to remove non-compliant items.

Alj Quote

The Administrative Law Judge does not have the authority under the applicable statute to order that RDLCA fine or order the neighbor remove the lights.

Legal Basis

A.R.S. § 32-2199.02

Topic Tags

  • Remedies
  • Fines
  • Authority

Question

Who is responsible for proving that the HOA violated the community documents?

Short Answer

The homeowner (Petitioner) bears the burden of proof.

Detailed Answer

The homeowner filing the dispute must prove the HOA's violation by a 'preponderance of the evidence'. It is not the HOA's job to disprove it initially.

Alj Quote

Petitioner bears the burden of proof to establish that Respondent committed the alleged violations by a preponderance of the evidence.

Legal Basis

A.R.S. § 41-1092.07(G)(2)

Topic Tags

  • Burden of Proof
  • Evidence
  • Procedure

Question

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

Short Answer

Yes, the ALJ can order the HOA to reimburse the filing fee.

Detailed Answer

In this decision, because the homeowner was the prevailing party, the HOA was ordered to pay the $500 filing fee directly to the homeowner within 30 days.

Alj Quote

IT IS FURTHER ORDERED that Respondent pay Petitioner her filing fee of $500.00, to be paid directly to Petitioner within thirty (30) days of this Order.

Legal Basis

Order

Topic Tags

  • Fees
  • Reimbursement
  • Prevailing Party

Question

Can I challenge my HOA for failing to enforce architectural rules on a neighbor?

Short Answer

Yes, if the HOA allows modifications without the required approval.

Detailed Answer

The ALJ found the HOA in violation of the CC&Rs because the neighbor installed lights without the required Architectural Review Committee (ARC) approval, and the HOA failed to address this specific lack of approval.

Alj Quote

Because this never occurred, Respondent is in violation of CC&R Section 3.1(D)(3).

Legal Basis

CC&R Section 3.1(D)(3)

Topic Tags

  • Enforcement
  • Architectural Review
  • Lighting

Question

What happens if we don't provide the full text of the CC&Rs during the hearing?

Short Answer

The judge cannot rule on parts of the rules that are not provided.

Detailed Answer

The HOA tried to argue a rule applied only to the front yard, but because neither party submitted the full section of the CC&Rs, the judge could not verify that claim and had to rule based only on the evidence available.

Alj Quote

At the outset, neither party submitted the full Section 3.1 of the CC&R’s and the ALJ therefore cannot determine if the section in question applies to the front yard only.

Legal Basis

Evidentiary Standard

Topic Tags

  • Evidence
  • CC&Rs
  • Documentation

Question

What does 'preponderance of the evidence' mean?

Short Answer

It means the claim is more likely true than not.

Detailed Answer

The decision defines this legal standard as proof that convinces the judge that a contention is 'more probably true than not,' even if there is still some doubt.

Alj Quote

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

Legal Basis

Arizona Law of Evidence

Topic Tags

  • Legal Definitions
  • Standards

Case

Docket No
22F-H2221019-REL
Case Title
Brenda C Norman vs. Rancho Del Lago Community Association
Decision Date
2022-01-18
Alj Name
Adam D. Stone
Tribunal
OAH
Agency
ADRE

Case Participants

Petitioner Side

  • Brenda C Norman (petitioner)
    Appeared on her own behalf

Respondent Side

  • Mackenzie Hill (HOA attorney)
    The Brown Law Group, PLLC
    Represented Rancho Del Lago Community Association
  • Nathan Tennyson (HOA attorney)
    Represented Rancho Del Lago Community Association
  • Spencer Brod (community manager)
    Testified for Respondent

Neutral Parties

  • Adam D. Stone (ALJ)
    Office of Administrative Hearings
  • Louis Dettorre (Commissioner)
    Arizona Department of Real Estate

Other Participants

  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Recipient of order transmission
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Recipient of order transmission
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Recipient of order transmission
  • vnunez (ADRE staff)
    Arizona Department of Real Estate
    Recipient of order transmission

Foothills Club West Homeowners Association v. Subrahmanyam & Sheila

Posted on by

Case Summary

Case ID 21F-H2120004-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-11-27
Administrative Law Judge Kay Abramsohn
Outcome The ALJ concluded that Foothills demonstrated Respondents' violation of the community governing documents by commencing and continuing construction of a second-story Addition without obtaining the required Architectural Committee approval. Foothills was deemed the prevailing party, and Respondents' appeal was dismissed.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Foothills Club West Homeowners Association Counsel John Halk, Esq.
Respondent Subrahmanyam & Sudhakar Living Trust Counsel Mary T. Hone, Esq.

Alleged Violations

CC&Rs Article 7, Section 7.3, and Article 9, Sections 9.3, 9.4, and 9.5

Outcome Summary

The ALJ concluded that Foothills demonstrated Respondents' violation of the community governing documents by commencing and continuing construction of a second-story Addition without obtaining the required Architectural Committee approval. Foothills was deemed the prevailing party, and Respondents' appeal was dismissed.

Key Issues & Findings

Unauthorized 2nd story addition

Respondents constructed a second-story Addition to their property without first obtaining approval from the Foothills Architectural Committee, violating the community governing documents.

Orders: Respondents’ appeal is dismissed, and Foothills is deemed the prevailing party with regard to its Petition.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_win

Cited:

  • CC&Rs Article 7, Section 7.3
  • CC&R Article 9, Section 9.3
  • CC&R Article 9, Section 9.4
  • CC&R Article 9, Section 9.5

Analytics Highlights

Topics: architectural review, cc&r violation, unapproved construction, second story addition, prevailing party
Additional Citations:

  • A.R.S. §§ 32-2102
  • A.R.S. §§ 32-2199 et al.
  • A.R.S. §§ 32-2199(2)
  • A.R.S. §§ 32-2199.01(D)
  • A.R.S. §§ 32-2199.02
  • A.R.S. § 32-2199.05
  • A.R.S. § 41-1092
  • A.R.S. §32-2199.02(B)
  • A.R.S. § 32-2199.04
  • A.R.S. § 41-1092.09
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 165 P.3d 173 (App. 2007)
  • ARIZ. ADMIN. CODE R2-19-119
  • MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960)
  • BLACK’S LAW DICTIONARY 1220 (8th ed. 1999)

Video Overview

Audio Overview

Decision Documents

21F-H2120004-REL Decision – 839537.pdf

Uploaded 2026-04-28T10:53:36 (135.4 KB)

21F-H2120004-REL Decision – 839537.pdf

Uploaded 2026-01-23T17:34:43 (135.4 KB)

Briefing Document: Foothills Club West HOA v. Subrahmanyam & Sudhakar Living Trust

Executive Summary

This document synthesizes the findings and decision in the case of Foothills Club West Homeowners Association v. Subrahmanyam & Sudhakar Living Trust (No. 21F-H2120004-REL), adjudicated by the Arizona Office of Administrative Hearings. The core dispute involved the construction of a second-story addition by homeowners (Respondents) without the prior approval of the Homeowners Association (Petitioner), a direct violation of the community’s governing documents.

The Administrative Law Judge (ALJ) found conclusively in favor of the Foothills Club West HOA. The evidence demonstrated that the Respondents not only began construction without seeking approval but continued the project even after receiving a formal denial from the HOA’s Architectural Committee. A subsequent agreement between the parties, wherein the Respondents would demolish the addition in exchange for a waiver of fines, was not honored by the Respondents. The ALJ dismissed the Respondents’ appeal and declared the HOA the prevailing party, validating its authority to enforce the community’s architectural standards as outlined in its Covenants, Conditions, and Restrictions (CC&Rs).

I. Case Overview

• Case Name: Foothills Club West Homeowners Association, Petitioner, v. Subrahmanyam & Sudhakar Living Trust, Respondent.

• Case Number: 21F-H2120004-REL

• Jurisdiction: Arizona Office of Administrative Hearings

• Administrative Law Judge: Kay Abramsohn

• Hearing Date: October 5, 2020

• Decision Date: November 27, 2020

• Central Issue: The petition filed by Foothills HOA on July 24, 2020, alleged that the Respondents constructed an unauthorized and unapproved second-story addition to their property. This action was alleged to be in violation of CC&Rs Article 7, Section 7.3, and Article 9, Sections 9.3, 9.4, and 9.5.

II. Chronology of Key Events

The hearing record established the following undisputed sequence of events:

Oct. 2018

Respondents begin construction of the second-story addition.

Nov. 7, 2018

The City of Phoenix issues a stop-work order, noting a permit is required.

Nov. 7, 2018

Foothills HOA issues a violation notice to the Respondents.

Dec. 17, 2018

Respondents obtain a permit from the City of Phoenix.

Jan. 18, 2019 (approx.)

Respondents submit a request for approval to the Foothills Architectural Committee.

Jan. 18, 2019

Foothills HOA issues a penalty notice to the Respondents, with further notices issued monthly.

Feb. 22, 2019

Foothills HOA issues a formal denial of the application.

Mar. 15, 2019

The City of Phoenix gives final approval to the construction and issues a Certificate of Occupancy.

Post Feb. 2019

The parties reach an agreement for Respondents to demolish the addition in exchange for a waiver of fines.

July 24, 2020

Foothills HOA files its petition, noting Respondents have not complied with the demolition agreement.

Oct. 5, 2020

The administrative hearing is held.

Nov. 27, 2020

The Administrative Law Judge issues the final decision.

III. Arguments of the Parties

A. Petitioner: Foothills Club West HOA

• Violation of CC&Rs: The HOA argued that the Respondents violated CC&R Article 9, Section 9.3 by commencing construction without first obtaining approval from the Architectural Committee.

• Disregard for Denial: The HOA asserted that the Respondents completed the addition after receiving a formal denial of their application.

• Breach of Agreement: The HOA noted that the parties had reached a settlement agreement for demolition, which the Respondents failed to honor. The HOA requested that the Tribunal enforce this agreement.

• Jurisdictional Distinction: The HOA maintained that approval from the City of Phoenix was a separate matter and did not negate the requirement to obtain approval from the HOA as mandated by the governing documents.

B. Respondents: Subrahmanyam & Sudhakar Living Trust

• Initial Ignorance: Respondents claimed they were initially unaware of the HOA approval requirements.

• Attempted Compliance: They argued that once notified, they followed the association’s guidance, met with the Board, and sought approval.

• Vague Denial: Respondents stated they did not understand the meaning of the denial reason, “Fails aesthetics of surrounding community,” or how the addition specifically violated community rules.

• Lack of Due Process: They argued they did not receive a letter indicating an appeal process was available and therefore felt they had not received a final “denial.”

• Demolition Delay: While not disputing the existence of the demolition agreement, Respondents cited COVID-19 issues and safety concerns for their at-risk family as reasons for requesting more time.

• Final Appeal: At the hearing, Respondents reversed their position on the agreement and requested to be allowed to keep the addition.

IV. Analysis of Governing Documents

The decision centered on specific provisions within the Foothills Club West governing documents, which constitute the contract between the HOA and the homeowners.

• CC&R Article 9, Section 9.3 (Architectural Approval): This section was central to the case. It states in pertinent part:

• CC&R Article 9, Section 9.4 (Obligation to Obtain Approval): This provision explicitly sets forth a homeowner’s obligation to secure approval from the Architectural Committee.

• CC&R Article 9, Section 9.5 (Exterior Appearance): This section clarifies that while the HOA cannot limit interior remodeling, it retains jurisdiction over any changes that are “visible from outside such [home] … or affects the exterior appearance of such [home].”

• Amended Architectural Guidelines (2013): These guidelines reinforce the CC&Rs, specifying that a homeowner’s plans must be submitted for approval through the Architectural Committee on a case-by-case basis.

V. Administrative Law Judge’s Decision and Rationale

The ALJ’s conclusions of law provided a clear framework for the final order.

A. Burden of Proof

The ALJ established that in this proceeding, the petitioner (Foothills HOA) bore the burden of proving by a “preponderance of the evidence” that the Respondents had violated the governing documents. A preponderance of the evidence is defined as “proof as convinces the trier of fact that the contention is more probably true than not.”

B. Core Conclusion on Violations

The ALJ found that the HOA had successfully met its burden of proof. The central conclusion of law states:

“The Administrative Law Judge concludes that Foothills has demonstrated Respondents’ violation of the community governing documents, as stated in CC&R Article 9, Sections 9.3, 9.4, and 9.5, because Respondents began to construct a modification, the Addition, to their existing home prior to obtaining approval from Foothills Architectural Committee and, further, Respondents continued to construct the Addition despite receiving a denial of approval from Foothills Architectural Committee.”

This finding affirmed that the Respondents committed two distinct violations: starting work without approval and continuing work after being explicitly denied approval.

VI. Final Order and Implications

Based on the findings of fact and conclusions of law, the ALJ issued a decisive order.

• Order:

• Binding Nature: The decision notes that the order is binding on both parties unless a rehearing is requested. Pursuant to A.R.S. § 41-1092.09, a request for rehearing must be filed with the Commissioner of the Arizona Department of Real Estate within 30 days of the service of the order.

Study Guide: Foothills Club West HOA v. Subrahmanyam & Sudhakar Living Trust

This guide provides a detailed review of the Administrative Law Judge Decision in case No. 21F-H2120004-REL. It includes a short-answer quiz to test factual recall, essay questions for deeper analysis, and a comprehensive glossary of key terms found within the document.

——————————————————————————–

Short-Answer Quiz

Instructions: Answer the following ten questions in 2-3 sentences each, based on the information provided in the source document.

1. Who are the Petitioner and Respondent in this case, and what is their relationship?

2. What was the single issue raised in the petition filed by Foothills Club West Homeowners Association?

3. According to the Petition, which specific articles and sections of the governing documents did the Respondents allegedly violate?

4. What action did the City of Phoenix take on November 7, 2018, regarding the Respondents’ construction project?

5. What reasons did the Foothills Architectural Committee provide for denying the Respondents’ application on February 22, 2019?

6. Prior to the hearing, what agreement did the parties reach in an attempt to resolve the dispute?

7. What was the Respondents’ primary argument for their actions and for their failure to comply with the association’s denial?

8. What is the legal standard of proof required in this case, and which party bore the burden of meeting it?

9. Explain the difference between the City of Phoenix’s approval and the Foothills Architectural Committee’s approval, as argued by the Petitioner.

10. What was the final order issued by the Administrative Law Judge in this matter?

——————————————————————————–

Answer Key

1. The Petitioner is the Foothills Club West Homeowners Association (“Foothills”). The Respondent is the Subrahmanyam & Sheila Sudhakar Living Trust. Their relationship is that of a homeowners’ association and a member homeowner residing within the planned community for 22 years.

2. The single issue raised was that the Respondents constructed an unauthorized and unapproved second-story addition to their property. The construction was completed even after the Foothills Architectural Committee had issued a denial of the project.

3. Foothills alleged that the Respondents violated the CC&Rs Article 7, Section 7.3, and Article 9, Sections 9.3, 9.4, and 9.5. These articles pertain to the rights and obligations of the association and the architectural standards requiring prior approval for modifications.

4. On November 7, 2018, the City of Phoenix issued a stop-work order for the Respondents’ construction project. The order noted that the work being performed required a permit, which had not yet been obtained.

5. The Foothills Architectural Committee denied the application because it needed copies of the City permit, the plans were incomplete, and there was no documentation on the roof line or roofing materials. Furthermore, the denial stated that the project “Fails aesthetics of surrounding community.”

6. The parties came to an agreement wherein the Respondents would complete the demolition of the second-story addition. In exchange, Foothills agreed to waive the penalties that had been imposed on the Respondents for the violation.

7. The Respondents argued that they initially did not know what was required and that they cooperated with the association’s Board once notified. They claimed they did not understand what “Fails aesthetics” meant, did not receive a letter about an appeal process, and therefore did not feel they had received a final “denial.”

8. The legal standard of proof is a “preponderance of the evidence,” which is defined as proof that convinces the trier of fact that a contention is more probably true than not. The Petitioner, Foothills, bore the burden of proving the Respondents’ violation by this standard.

9. Foothills argued that approval from the City of Phoenix and approval from the association’s Architectural Committee were two different and separate matters. Even though the Respondents eventually received a City permit and a Certificate of Occupancy, this did not override the CC&R requirement to first obtain approval from Foothills.

10. The Administrative Law Judge ordered that the Respondents’ appeal be dismissed. The Judge deemed Foothills the prevailing party with regard to its petition, finding that Foothills had demonstrated the Respondents’ violation of the community’s governing documents.

——————————————————————————–

Essay Questions

Instructions: The following questions are designed for longer, more analytical responses. Formulate an essay-style answer for each, drawing evidence and support directly from the provided legal decision.

1. Analyze the arguments presented by both the Petitioner (Foothills) and the Respondents at the hearing. Discuss the key evidence and claims each party used to support their position and explain why the Administrative Law Judge ultimately found the Petitioner’s case more persuasive.

2. Explain the distinct roles and jurisdictions of the Homeowners Association’s Architectural Committee and the City of Phoenix regarding the Respondents’ construction project. Why was obtaining a City permit and a Certificate of Occupancy insufficient for the Respondents to proceed without violating the community’s governing documents?

3. Trace the procedural history of case No. 21F-H2120004-REL, from the filing of the initial petition to the final order. Discuss key filings, motions, and deadlines mentioned in the document, including the Respondents’ attempt to consolidate another case.

4. Discuss the significance of the “contract” between the parties, as defined in footnote 15. How do the CC&Rs and the amended Architectural Guidelines function as this contract, and which specific sections were central to the judge’s conclusion that a violation occurred?

5. Evaluate the Respondents’ attempt to justify their failure to demolish the addition as per their agreement with Foothills, citing COVID-19 issues. How did their request at the hearing to keep the addition conflict with their prior agreement, and what does this reveal about their position in the dispute?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The official, in this case Kay Abramsohn, who presides over administrative hearings at the Office of Administrative Hearings and issues decisions.

Architectural Committee

A committee appointed by the Foothills HOA, as established by CC&R Article 9, with the authority to review, approve, or disapprove plans for construction, modifications, and additions to properties within the community.

An abbreviation for the Declaration of Covenants, Conditions and Restrictions. These are the governing documents that form a binding contract between the homeowners association and the property owners, outlining their rights and obligations.

Disclosure

The formal process by which parties in a legal case provide evidence, exhibits, and information to each other before a hearing. The deadline for disclosure in this case was September 29, 2020.

Governing Documents

The set of rules for the planned community, including the CC&Rs and the amended Architectural Guidelines, which have the same force and effect as association rules.

Petitioner

The party who initiates a legal proceeding by filing a petition. In this case, the Foothills Club West Homeowners Association.

Petition

The formal document filed with the Arizona Department of Real Estate to initiate a hearing concerning violations of community governing documents. In this case, it was a “single-issue petition.”

Preponderance of the Evidence

The standard of proof required in this administrative hearing. It is defined as “proof as convinces the trier of fact that the contention is more probably true than not.”

Respondent

The party against whom a petition is filed and who is required to respond to the allegations. In this case, the Subrahmanyam & Sheila Sudhakar Living Trust.

Tribunal

The Arizona Office of Administrative Hearings, the state agency authorized by statute to hear and decide contested matters referred to it, such as this dispute.

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839537.pdf

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21F-H2120004-REL

1 source

This text is an Administrative Law Judge Decision from the Arizona Office of Administrative Hearings concerning a dispute between the Foothills Club West Homeowners Association and the Subrahmanyam & Sudhakar Living Trust. The Petitioner, the Foothills Club West Homeowners Association, filed a petition alleging that the Respondents constructed an unauthorized second-story addition to their property in violation of the association’s governing documents, specifically the CC&Rs Article 9, Sections 9.3, 9.4, and 9.5. The Administrative Law Judge determined that the Respondents violated these community documents by beginning construction prior to obtaining approval from the Foothills Architectural Committee and continuing the work despite receiving a denial. The judge ultimately concluded that Foothills was the prevailing party and dismissed the Respondents’ appeal, effectively upholding the violation finding.

1 source

What are the specific governing document violations alleged and proven against the homeowners?
How did the legal and administrative process address the unauthorized construction dispute?
What was the final resolution ordered regarding the unapproved second-story home addition?

Based on 1 source

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Case Participants

Petitioner Side

  • John Halk (HOA attorney)
    BROWN/OLCOTT, PLLC
    Represented Petitioner Foothills Club West Homeowners Association
  • Nathan Tennyson (HOA attorney)
    BROWN/OLCOTT, PLLC
    Counsel for Petitioner

Respondent Side

  • Mary T. Hone (Respondent attorney)
    Mary T. Hone, PLLC
    Counsel for Respondent Trustees Subrahmanyam & Sheila Sudhakar
  • Subrahmanyam Sudhakar (respondent)
    Subrahmanyam & Sheila Sudhakar Living Trust
    Trustee of the Respondent Living Trust
  • Sheila Sudhakar (respondent)
    Subrahmanyam & Sheila Sudhakar Living Trust
    Trustee of the Respondent Living Trust

Neutral Parties

  • Kay Abramsohn (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • LDettorre (Agency Staff)
    Arizona Department of Real Estate
    Recipient of electronic transmission of Order
  • AHansen (Agency Staff)
    Arizona Department of Real Estate
    Recipient of electronic transmission of Order
  • djones (Agency Staff)
    Arizona Department of Real Estate
    Recipient of electronic transmission of Order
  • DGardner (Agency Staff)
    Arizona Department of Real Estate
    Recipient of electronic transmission of Order
  • ncano (Agency Staff)
    Arizona Department of Real Estate
    Recipient of electronic transmission of Order

Nancy L Babington v. Park Scottsdale II Townhouse Corporation

Posted on by

Case Summary

Case ID 20F-H2020064-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-03-24
Administrative Law Judge Tammy L. Eigenheer
Outcome full
Filing Fees Refunded $500.00
Civil Penalties $2,500.00

Parties & Counsel

Petitioner Nancy L. Babington Counsel —
Respondent Park Scottsdale II Townhouse Corporation Counsel Mark K. Sahl and Scott B. Carpenter

Alleged Violations

A.R.S. § 33-1258(A)

Outcome Summary

Following a rehearing based on newly discovered evidence, the Administrative Law Judge found that Respondent violated A.R.S. § 33-1258(A) by failing to timely provide records it possessed. Respondent was ordered to reimburse the Petitioner $500.00 for the filing fee and pay a $2,500.00 civil penalty to the Department of Real Estate.

Key Issues & Findings

Failure to make association financial and other records reasonably available for examination/provide copies within ten business days.

Petitioner alleged Respondent violated A.R.S. § 33-1258 by failing to provide requested records (including bank statements and contracts) following a formal request on May 1, 2020. The Administrative Law Judge, in the rehearing, found that the evidence showed Respondent was in possession of bank statements and two signed contracts at the time of the request, contradicting prior testimony, thereby establishing a violation of the statute.

Orders: Respondent was ordered to pay Petitioner $500.00 for the filing fee reimbursement and pay a civil penalty of $2,500.00 to the Department of Real Estate, both payments due within 30 days.

Filing fee: $500.00, Fee refunded: Yes, Civil penalty: $2,500.00

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1258
  • A.R.S. § 32-2199.02
  • A.A.C. R2-19-119

Analytics Highlights

Topics: HOA records request, A.R.S. 33-1258, Rehearing, Civil Penalty, Possession of Records
Additional Citations:

  • A.R.S. § 33-1258
  • A.R.S. § 32-2199.02
  • A.A.C. R2-19-119

Video Overview

Audio Overview

Decision Documents

20F-H2020064-REL Decision – 866802.pdf

Uploaded 2026-04-24T11:28:35 (123.5 KB)

20F-H2020064-REL Decision – 823263.pdf

Uploaded 2026-04-24T11:28:38 (108.6 KB)

Briefing Document: Babington v. Park Scottsdale II Townhouse Corporation

Executive Summary

This document synthesizes the findings from two administrative hearings concerning a records request dispute between homeowner Nancy L. Babington (Petitioner) and the Park Scottsdale II Townhouse Corporation (Respondent). The case, No. 20F-H2020064-REL, culminated in a reversal of an initial ruling, finding the Respondent in violation of Arizona law A.R.S. § 33-1258 for failing to provide association records within the statutory timeframe.

The initial hearing on August 28, 2020, resulted in a denial of the petition. The Respondent successfully argued that it could not produce the requested documents because they were not in its possession, largely due to a dispute with a former management company. However, a rehearing was granted after the Petitioner discovered new evidence.

The rehearing on March 4, 2021, established that the Respondent, through its management company Associa Arizona, was in possession of key requested documents—specifically bank statements and signed contracts—at the time of the initial request. Evidence revealed the bank statements were held at a central corporate office in Texas and were not retrieved, while signed contracts had not been forwarded to the management company by board members. The Administrative Law Judge found this directly contradicted the Respondent’s initial defense.

As a result, the Administrative Law Judge reversed the earlier decision, ordering the Respondent to reimburse the Petitioner’s $500 filing fee and imposing a $2,500 civil penalty payable to the Arizona Department of Real Estate. The case underscores an association’s responsibility to produce all records in its possession, regardless of physical location within the corporate structure, and affirms the court’s authority to levy penalties for violations.

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1. Case Overview

• Case Number: 20F-H2020064-REL

• Petitioner: Nancy L. Babington

• Respondent: Park Scottsdale II Townhouse Corporation

• Core Allegation: Violation of A.R.S. § 33-1258, which mandates that a condominium owners’ association must make its financial and other records reasonably available for examination by a member within ten business days of a request.

• Hearings Conducted:

◦ Initial Hearing: August 28, 2020

◦ Rehearing: March 4, 2021

• Presiding Administrative Law Judge: Tammy L. Eigenheer

2. Chronology of the Dispute

The dispute originated from difficulties following a change in the Respondent’s management company and subsequent records requests by the Petitioner.

• June-July 2019: The previous management company, Community Management & Consulting, LLC (CMC), terminated its agreement with the Respondent. A “financial disagreement” led to CMC withholding records, complicating the transition.

• Post-July 2019: Respondent hired Associa Arizona as its new management company. Associa and the Respondent’s counsel attempted to obtain the withheld records from CMC.

• April 29, 2020: After previous attempts to get information, Petitioner Nancy L. Babington sent a formal email to Associa and the Respondent’s Board of Directors. In the email, she stated:

• May 1, 2020: Linda Parker, Director of Client Services with Associa, replied, stating the request was not specific and asked the Petitioner to identify the exact records needed.

• May 1, 2020: The Petitioner responded with a detailed list of nine specific items:

1. All bank statements with copies of cancelled checks since Sept 1, 2019.

2. Any and all financial statements since Sept 1, 2019.

3. Any and all 1099s issued for 2019.

4. Any and all Executive Session meeting minutes conducted in 2020 (excluding statutory exemptions).

5. Any and all contracts signed in 2020.

6. Any and all outstanding invoices with a due date over 45 days.

7. Any documentation regarding the legality of the $204.75 maintenance fee.

8. Any proof of Stephen Silberschlag’s liability insurance.

9. Any landscaping plans.

• May 4, 2020: Ms. Parker from Associa responded that the company could only provide records within its possession.

• May 15, 2020: Following another email from the Petitioner, Ms. Parker stated that Associa had scheduled a meeting with the board on May 20 to discuss the request further.

• May 28, 2020: Having not received any of the requested documents, the Petitioner filed a petition with the Arizona Department of Real Estate.

3. The Initial Hearing and Decision (August – September 2020)

The first hearing focused on whether the Respondent had violated the statute by failing to produce the documents.

• The Respondent argued that it was unable to provide documents that were not in its possession.

• Joseph Silberschlag, Secretary of the Board of Directors, testified that issues with the former management company (CMC) meant neither the Respondent nor Associa had possession of many necessary documents.

• Specifically, he stated that without previous financial documents and starting balances from CMC, the association was unable to create current financial statements.

• The Respondent maintained it was under no statutory obligation to create documents to fulfill the Petitioner’s request.

• The Administrative Law Judge (ALJ) concluded that the Petitioner “failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”

• The finding was based on the Respondent’s argument that it did not possess the requested documents at the time of the request.

• On September 17, 2020, the ALJ issued a decision denying the Petitioner’s petition.

4. The Rehearing and Reversal (March 2021)

Following the initial decision, the case was reopened based on new evidence presented by the Petitioner.

• After the September 2020 decision, the Respondent provided some of the requested documents to the Petitioner.

• Upon reviewing these documents, the Petitioner realized that the Respondent had, in fact, been in possession of several key records prior to her May 1, 2020 request.

• She filed a Rehearing Request with the Department of Real Estate, citing “newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.” The request was granted.

The rehearing revealed crucial details about the location and accessibility of the requested records.

Record Type

Petitioner’s Evidence

Respondent’s Testimony/Explanation

Bank Statements

The documents received post-hearing showed that bank statements had been sent to Associa starting in August 2019.

Evelyn Shanley, Community Director for Associa, testified that statements for all HOAs were sent to a central office in Richardson, Texas. She admitted she did not contact the Texas office to obtain the statements for the Petitioner’s request. Counsel for the Respondent conceded the statements in Texas were in the possession of Associa.

Contracts

Petitioner presented two contracts signed by Board members on March 27 and March 31, 2020, prior to her request.

Ms. Shanley admitted the two signed contracts existed but stated that the Board of Directors members had not provided them to Associa.

1099 Forms

Petitioner noted a document indicating four vendors were eligible for 1099s.

Ms. Shanley denied that any 1099s had been issued.

• The documents were not in the “immediate possession” of the local Associa office.

• The matter was now moot because the Petitioner had received all requested documents.

• A civil penalty was inappropriate because the Petitioner did not specifically request one on her initial petition form.

• The evidence presented at the rehearing was “directly contradictory” to the representations made by the Respondent at the initial hearing.

• The Petitioner successfully established by a preponderance of the evidence that the Respondent violated A.R.S. § 33-1258(A) by failing to provide documents (bank statements and contracts) that were in its possession.

• The ALJ rejected the Respondent’s argument against a civil penalty, stating that the plain language of A.R.S. § 32-2199.02 allows the judge to levy a penalty for established violations, and “nothing in the statute limits the available remedies to those specifically requested by a petitioner.”

5. Final Order and Penalties

The Administrative Law Judge Decision issued on March 24, 2021, reversed the initial finding and imposed penalties on the Respondent.

IT IS ORDERED that:

1. Respondent must pay the Petitioner her filing fee of $500.00 within 30 days.

2. Respondent must pay to the Department of Real Estate a civil penalty in the amount of $2,500.00 within 30 days.

Study Guide: Babington v. Park Scottsdale II Townhouse Corporation

This study guide provides a review of the administrative case involving Petitioner Nancy L. Babington and Respondent Park Scottsdale II Townhouse Corporation. It includes a short-answer quiz to test factual recall, a separate answer key, a set of essay questions for deeper analysis, and a glossary of key terms and entities involved in the proceedings.

Short-Answer Quiz

Answer each question in 2-3 sentences based on the information provided in the case documents.

1. Who were the primary parties in this case, and what was the Petitioner’s central allegation?

2. What specific Arizona statute was the Respondent accused of violating, and what does this law generally require?

3. What was the Respondent’s main defense during the initial hearing on August 28, 2020, for not providing the requested records?

4. What was the conclusion of the Administrative Law Judge in the first decision, issued on September 17, 2020?

5. On what legal grounds did the Petitioner successfully file for a rehearing of her case?

6. What new evidence regarding bank statements was presented by the Petitioner at the March 4, 2021, rehearing?

7. How did the Respondent’s management company, Associa Arizona, explain its failure to produce the bank statements and signed contracts in response to the initial request?

8. What was the final outcome of the rehearing, and how did it contradict the initial decision?

9. What two financial penalties were imposed upon the Respondent in the final order of March 24, 2021?

10. What was the Respondent’s argument against the imposition of a civil penalty, and why did the Administrative Law Judge reject it?

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Answer Key

1. The primary parties were Petitioner Nancy L. Babington, a property owner, and Respondent Park Scottsdale II Townhouse Corporation, a condominium owners association. The Petitioner alleged that the Respondent failed to provide association records she formally requested, in violation of Arizona law.

2. The Respondent was accused of violating A.R.S. § 33-1258. This statute requires a condominium owners association to make its financial and other records reasonably available for examination by a member and to provide copies of requested records within ten business days.

3. During the initial hearing, the Respondent’s main defense was that it was unable to provide the documents because they were not in its possession. The Respondent claimed its former management company, CMC, was withholding records and that without starting balances, it could not create new financial documents.

4. The Administrative Law Judge denied the Petitioner’s petition in the first decision. The judge concluded that the Petitioner failed to establish by a preponderance of the evidence that the Respondent violated the statute because the Respondent did not possess the documents and was not required to create them.

5. The Petitioner was granted a rehearing based on the discovery of “newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.” After the first decision, the Respondent provided documents that proved it had, in fact, been in possession of some of the requested records prior to her request.

6. At the rehearing, the Petitioner testified that after receiving the documents, she realized bank statements had been sent to Associa’s central office in Richardson, Texas, starting in August 2019. This demonstrated that the records were in the management company’s possession when she made her request.

7. Associa’s representative testified that bank statements went to a central office in Texas and were not forwarded to the local office because financial packets could not be prepared without starting balances from the previous management company. Regarding the contracts, Associa claimed that the Board of Directors members who signed them had not provided the contracts to Associa.

8. The final outcome of the rehearing was a ruling in favor of the Petitioner. The judge found that evidence presented at the rehearing directly contradicted the Respondent’s earlier claims, establishing that the Respondent did possess bank statements and contracts and had violated A.R.S. § 33-1258(A).

9. In the final order, the Respondent was ordered to pay the Petitioner’s filing fee of $500.00. Additionally, the Respondent was ordered to pay a civil penalty of $2,500.00 to the Arizona Department of Real Estate.

10. The Respondent argued that a civil penalty was not appropriate because the Petitioner did not specifically request one by checking the box on the petition form. The judge rejected this, stating that the plain language of A.R.S. § 32-2199.02 allows the judge to levy a civil penalty for established violations, and this authority is not limited by the remedies requested by a petitioner.

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Essay Questions

The following questions are designed for analytical and in-depth responses. Answers are not provided.

1. Analyze the concept of “possession” of records as it evolved from the first hearing to the second. How did the Respondent’s initial interpretation of “immediate possession” differ from the Administrative Law Judge’s final conclusion regarding the records held by Associa’s Texas office?

2. Discuss the significance of the “preponderance of the evidence” standard in this case. Explain specifically how the Petitioner failed to meet this standard in the first hearing but succeeded in the second, citing the key pieces of evidence that shifted the outcome.

3. Evaluate the role and responsibilities of the management company, Associa Arizona, in this dispute. To what extent were its internal procedures and actions (or inactions) the primary cause of the Respondent’s violation of A.R.S. § 33-1258?

4. Trace the timeline of communication between Nancy Babington and Associa Arizona from April 29, 2020, to May 15, 2020. Analyze how the responses from Associa may have contributed to the perception that the Respondent was refusing to provide information, ultimately leading to the petition being filed.

5. The Administrative Law Judge has the statutory authority to levy a civil penalty for each violation found. Based on the facts of this case, including the Respondent’s representations at the first hearing and the contradictory evidence presented at the second, construct an argument justifying the imposition of the $2,500 civil penalty.

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Glossary of Key Terms

Term / Entity

Definition

A.R.S. § 32-2199 et seq.

The Arizona Revised Statute cited as giving the Arizona Department of Real Estate jurisdiction to hear disputes between a property owner and a condominium owners association.

A.R.S. § 33-1258

The Arizona Revised Statute at the core of the dispute. It requires that an association’s financial and other records be made “reasonably available” for examination and that the association has ten business days to fulfill a request for examination or to provide copies.

Administrative Law Judge (ALJ)

The official from the Office of Administrative Hearings (Tammy L. Eigenheer in this case) responsible for conducting the hearings, weighing evidence, and issuing a legally binding decision and order.

Associa Arizona

The management company hired by the Respondent to handle its operations after the termination of the previous management agreement. It was the primary point of contact for the Petitioner’s records request.

Civil Penalty

A monetary fine levied by the Administrative Law Judge for a violation of the law. In this case, a $2,500 penalty was ordered to be paid to the Department of Real Estate.

Community Management & Consulting, LLC (CMC)

The Respondent’s former management company. CMC terminated its agreement with the Respondent and was withholding association records due to a financial disagreement, which was a key part of the Respondent’s defense in the initial hearing.

Department of Real Estate (Department)

The Arizona state agency with which the Petitioner filed her petition and which has jurisdiction over such disputes.

A legal argument made by the Respondent’s counsel during the rehearing. Counsel asserted that the matter was moot (no longer relevant or in dispute) because, by the time of the rehearing, the Petitioner had received all the documents she requested.

Newly Discovered Material Evidence

The legal basis upon which the Petitioner was granted a rehearing. It refers to significant evidence that was not available at the time of the original hearing despite reasonable diligence.

Petitioner

The party who initiates a legal action or petition. In this case, Nancy L. Babington, a condominium owner.

Preponderance of the Evidence

The standard of proof required for the Petitioner to win her case. It is defined as evidence that is more convincing and shows that the fact sought to be proved is “more probable than not.”

Rehearing

A second hearing granted by the Commissioner of the Department of Real Estate to re-examine a case, which was held on March 4, 2021, after the Petitioner presented newly discovered evidence.

Respondent

The party against whom a petition is filed. In this case, Park Scottsdale II Townhouse Corporation, the condominium owners association.

Select all sources
823263.pdf
866802.pdf

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20F-H2020064-REL-RHG

2 sources

These two sources are Administrative Law Judge Decisions concerning a dispute between Nancy L. Babington, a homeowner, and the Park Scottsdale II Townhouse Corporation, her condominium owners association, regarding the provision of association records under Arizona statute A.R.S. § 33-1258. The first document details the initial hearing, held in August 2020, where the judge ruled in favor of the association, concluding that the association was not in violation because it lacked possession of the requested documents due to issues with its former management company. The second document outlines the rehearing, granted due to newly discovered evidence suggesting the association or its new management company, Associa Arizona, actually possessed some records, such as bank statements and contracts, despite earlier claims. Based on the rehearing’s findings, the judge determined the association violated the statute by not providing the records within the ten-day requirement and ordered the association to reimburse the petitioner’s filing fee and pay a civil penalty.

2 sources

How did newly discovered evidence lead to reversal of the initial legal decision?
What were the specific consequences for the respondent following the administrative rehearing?
How did the interpretation of statutory record possession requirements change between hearings?

Based on 2 sources

00:00
00:00

NotebookLM can be inaccurate; please double check its responses.

Case Participants

Petitioner Side

  • Nancy L. Babington (petitioner)

Respondent Side

  • Lydia A. Peirce Linsmeier (HOA attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Represented Respondent at initial hearing
  • Mark K. Sahl (HOA attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Represented Respondent at rehearing
  • Scott B. Carpenter (HOA attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Represented Respondent at rehearing
  • Debbie Schumacher (board member)
    Park Scottsdale II Townhouse Corporation
  • Marty Shuford (board member)
    Park Scottsdale II Townhouse Corporation
  • Joseph Silberschlag (board member)
    Park Scottsdale II Townhouse Corporation
    Secretary; testified
  • Angelina Rajenovich (board member)
    Park Scottsdale II Townhouse Corporation
  • Dermot Brown (board member)
    Park Scottsdale II Townhouse Corporation
  • Lori Nusbaum (board member)
    Park Scottsdale II Townhouse Corporation
  • Linda Parker (HOA staff)
    Associa Arizona
    Director of Client Services for property manager
  • Evelyn Shanley (HOA staff)
    Associa Arizona
    Community Director for property manager; testified at rehearing
  • Laura Smith (HOA staff)
    Associa Arizona

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    OAH
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
  • djones (ADRE staff)
    Arizona Department of Real Estate
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
  • ncano (ADRE staff)
    Arizona Department of Real Estate
  • c. serrano (staff)
    Signed order transmission

Other Participants

  • Stephen Silberschlag (unknown)
    Subject of Petitioner's record request

Debra K Morin v. Solera Chandler Homeowners’ Association, Inc.

Posted on by

Case Summary

Case ID 20F-H2020051-REL-RHG
Agency ADRE
Tribunal OAH
Decision Date 2021-01-08
Administrative Law Judge Kay Abramsohn
Outcome loss
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Debra K. Morin Counsel —
Respondent Solera Chandler Homeowners' Association, Inc. Counsel Lydia A. Perce Linsmeier, Esq.

Alleged Violations

CC&R Article 7, Section 7.1

Outcome Summary

The Administrative Law Judge ruled that Solera was in compliance with its governing documents, specifically CC&R Article 7, Section 7.1, concluding that the Board is the 'sole judge' regarding appropriate maintenance of AREAS. The Petitioner failed to meet the burden of proof, and the Rehearing Petition was dismissed.

Why this result: Petitioner failed to sustain her burden to establish a violation. The governing documents grant the Board 'the sole judge' authority over maintenance, and Petitioner did not provide legal support requiring the HOA to meet the homeowner maintenance standard.

Key Issues & Findings

Failure to maintain Areas of Association Responsibility (AREAS) in good condition and repair at all times

Petitioner alleged that Solera failed to maintain Areas of Association Responsibility (AREAS) in good condition and repair at all times, arguing that the same strict maintenance standard applied to homeowners (CC&R 7.2) should apply to the HOA (CC&R 7.1). The issue was heard on rehearing after the initial decision dismissed the petition.

Orders: The Administrative Law Judge concluded Solera was in compliance with its governing documents and was the prevailing party. Petitioner's appeal (Rehearing Petition) was dismissed.

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. 33-1801 et seq.
  • A.R.S. §§ 32-2102
  • A.R.S. §§ 32-2199 et al.
  • A.R.S. § 32-2199.05
  • A.R.S. §§ 32-2199(2)
  • A.R.S. § 32-2199.01(D)
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092
  • CC&R Article 7, Section 7.1
  • CC&R Article 7, Section 7.2
  • CC&R Article 9, Section 9.5
  • ARIZ. ADMIN. CODE R2-19-119
  • ARIZ. ADMIN. CODE R2-19-116

Analytics Highlights

Topics: HOA Dispute, CC&R Violation, Maintenance Standard, Areas of Association Responsibility, Rehearing, Sole Judge
Additional Citations:

  • A.R.S. 33-1801 et seq.
  • A.R.S. §§ 32-2102
  • A.R.S. §§ 32-2199 et al.
  • A.R.S. § 32-2199.05
  • A.R.S. §§ 32-2199(2)
  • A.R.S. § 32-2199.01(D)
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092
  • CC&R Article 7, Section 7.1
  • CC&R Article 7, Section 7.2
  • CC&R Article 9, Section 9.5
  • ARIZ. ADMIN. CODE R2-19-119
  • ARIZ. ADMIN. CODE R2-19-116

Video Overview

Audio Overview

Decision Documents

20F-H2020051-REL Decision – 816310.pdf

Uploaded 2026-04-24T11:26:18 (199.6 KB)

20F-H2020051-REL Decision – 847175.pdf

Uploaded 2026-04-24T11:26:21 (246.5 KB)

Briefing Document: Morin v. Solera Chandler Homeowners’ Association

Executive Summary

This document synthesizes the findings from the Administrative Law Judge Rehearing Decision in the case of Debra K. Morin versus the Solera Chandler Homeowners’ Association, Inc. (Solera), dated January 8, 2021. The central dispute involved a homeowner’s allegation that the association failed to maintain its common areas in good condition and repair.

The Administrative Law Judge (ALJ) ultimately dismissed the petitioner’s case, finding conclusively in favor of the Solera HOA. The decision rested on a critical provision within the association’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs), which designates the Solera Board as the “sole judge as to the appropriate maintenance, repair and replacement” of all common areas. This clause grants the Board exclusive discretion, superseding an individual homeowner’s opinion on the timing or quality of maintenance.

Despite the petitioner presenting extensive photographic evidence documenting various maintenance issues, the ALJ concluded that this evidence failed to prove a violation of the governing documents. The petitioner did not meet her burden of proving by a preponderance of the evidence that the Board had acted outside its granted authority. The ruling affirms that the authority of the Board is explicitly elevated above that of an individual homeowner in matters of common area maintenance under the controlling legal documents.

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I. Case Background and Procedural History

The case originates from a petition filed by Debra K. Morin, a four-year resident of the Solera community, against the Solera Chandler Homeowners’ Association. The matter was adjudicated by the Arizona Office of Administrative Hearings (Tribunal).

A. Initial Petition

On March 12, 2020, Ms. Morin filed a two-issue petition with the Arizona Department of Real Estate, alleging that Solera, its Board of Directors, and its management company (Premier) had violated numerous governing documents, including the Articles of Incorporation, By-Laws, CC&Rs, and Rules & Regulations (R&Rs).

• Issue #1: Alleged that Solera did not permit “direct communication from homeowners” and sought to have this “policy” rescinded.

• Issue #2: Alleged that Solera was not providing oversight to the General Manager in maintaining the “Areas of Association Responsibility” (AREAS) in “good condition and repair at all times.” Specific complaints included uncontrolled weeds and poor maintenance of the Community Center and other common areas.

B. Procedural Developments

• Motion to Dismiss: Solera filed a Motion to Dismiss, arguing the issues were outside the Department of Real Estate’s jurisdiction.

• Withdrawal of Issue #1: At a May 20, 2020 hearing, the Tribunal noted its jurisdiction did not extend to non-governing documents like the Board’s Code of Ethics. Consequently, Ms. Morin withdrew Issue #1. The Tribunal denied the Motion to Dismiss for the remaining “bare-bones” maintenance allegation in Issue #2.

• Initial Decision (August 19, 2020): Following the original hearing, the ALJ issued a decision concluding that Solera was the “sole judge” regarding maintenance of the AREAS and had not violated its governing documents. The petition was dismissed.

• Rehearing Request (September 24, 2020): Ms. Morin filed a request for rehearing, citing irregularities in the proceedings, misconduct by the prevailing party, and arguing the decision was arbitrary and capricious, particularly in its interpretation of CC&R Article 7, Section 7.1.

• Rehearing Granted and Conducted: The Commissioner of the Arizona Department of Real Estate granted the rehearing, which was conducted telephonically on December 16, 2020.

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II. Core Arguments of the Parties

The fundamental conflict centered on the interpretation of the maintenance standards outlined in the community’s CC&Rs.

A. Petitioner’s Position (Debra K. Morin)

Ms. Morin’s case was built on the principle of equal application of maintenance standards.

• Central Argument: The same maintenance standard requiring homeowners to keep their lots “in good condition and repair at all times” (per CC&R Article 7, Section 7.2) must be applied equally to Solera’s responsibility for the common AREAS (per CC&R Article 7, Section 7.1).

• Core Belief: Because homeowners are given no discretion regarding delays in maintenance, Solera should not be able to take months to address reported issues.

• Evidence Presented: The petitioner submitted extensive documentation, including over 80 photographs (referenced in the rehearing as “310 pictures”), emails, and other documents. This evidence was intended to show persistent maintenance failures, including:

◦ Uncontrolled weeds in granite rock locations

◦ Poor exterior condition of the Community Center

◦ Deficiencies in street asphalt, storm drains, sidewalks, and curbing

◦ Water pooling and intrusion issues

◦ Exposed landscaping lights and irrigation lines

◦ Unremoved tree stumps

B. Respondent’s Position (Solera HOA)

Solera’s defense relied entirely on the specific authority granted to its Board by the governing documents.

• Central Argument: The association met its responsibilities, and the petitioner’s subjective opinions about what, when, or how maintenance should be done are irrelevant.

• Dispositive Legal Provision: Solera consistently cited CC&R Article 7, Section 7.1, which states the Board “shall be the sole judge as to the appropriate maintenance, repair and replacement of all [AREAS].”

• Interpretation: This provision grants the Board exclusive discretion and authority to determine the nature and timing of maintenance, insulating its decisions from a single homeowner’s critique.

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III. Analysis and Key Findings of the Administrative Law Judge

The Rehearing Decision provided a thorough review of the evidence and legal arguments, ultimately reinforcing the original ruling in favor of Solera.

A. The “Sole Judge” Clause and Board Authority

The ALJ’s conclusion hinged on the unambiguous language of the CC&Rs, which establishes a clear hierarchy of authority.

• CC&R Article 7, Section 7.1: This article was identified as the dispositive text. It states, in pertinent part: “the Board ‘shall be the sole judge as to the appropriate maintenance, repair and replacement of all [AREAS], but all [AREAS], and the Improvements located thereon, shall be maintained in good condition and repair at all times.'” The ALJ found that the “sole judge” provision grants the Board exclusive authority to determine how the “good condition and repair” standard is met.

• CC&R Article 9, Section 9.5: This section further strengthens the Board’s position by granting Solera the “exclusive right to construe and interpret the provisions of the [CC&Rs],” with its interpretation being “final, conclusive and binding.”

• Conclusion on Authority: The ALJ concluded that these provisions clearly lift the Board’s authority above that of an individual homeowner in determining appropriate maintenance.

B. Rejection of the “Equal Standard” Argument

The petitioner’s primary argument for an equal, non-discretionary standard for both the HOA and homeowners was explicitly rejected.

• The ALJ found that the petitioner “failed to provide legal support for her argument that the same maintenance standard is required to be applied to the Board as it is applied to a homeowner.”

• The governing documents themselves create different levels of authority and obligation for the Board versus individual owners.

C. Evaluation of Evidence and Burden of Proof

• Burden of Proof: The decision reiterates that the petitioner bears the burden of proving a violation by a “preponderance of the evidence.”

• Photographic Evidence: The ALJ acknowledged reviewing all photographs from both hearings. The decision states that this evidence successfully documented “the existence, at those dates embedded in the photographs, of items that deal with maintenance and repairs in various locations of Solera AREAS.”

• Failure to Prove a Violation: Crucially, while the photos proved maintenance issues existed, they did not prove a violation of the CC&Rs. Because the Board is the “sole judge,” the existence of a weed or a cracked curb does not automatically constitute a breach of its duties, as the Board retains discretion over the timeline and method of repair.

D. Jurisdictional Limitations

The decision affirmed the Tribunal’s limited jurisdiction, noting that many of the petitioner’s underlying frustrations were not legally actionable in this venue.

• Not Actionable: A homeowner’s dissatisfaction with the Board, its management company, or the General Manager is “not within the purview of this process or the jurisdiction of the Tribunal.”

• Irrelevant Documents: Arguments based on City of Chandler standards, the landscaping contract with Integrated Landscape Management (ILM), or Premier’s General Manager job description were deemed irrelevant, as the Tribunal’s review is limited to the association’s governing documents and applicable state statutes.

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IV. Final Order and Conclusion

Based on an exhaustive review of the record from both the original hearing and the rehearing, the Administrative Law Judge reached a definitive conclusion.

• Final Finding: The petitioner failed to sustain her burden of proof to establish a violation by Solera of the governing documents. The ALJ concluded that Solera is in compliance with its governing documents, including CC&R Article 7, Section 7.1.

• Order:

◦ IT IS ORDERED that Solera is the prevailing party with regard to the Rehearing, and Petitioner’s appeal is dismissed.

◦ The order was issued on January 8, 2021.

◦ As a decision issued after a rehearing, the order is binding on the parties. Any further appeal must be filed with the Superior Court within 35 days from the date of service.

Study Guide: Morin v. Solera Chandler Homeowners’ Association, Inc.

This guide provides a comprehensive review of the administrative rehearing case No. 20F-H2020051-REL-RHG, between Petitioner Debra K. Morin and Respondent Solera Chandler Homeowners’ Association, Inc. It includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms derived from the case documents.

Short-Answer Quiz

Answer each of the following questions in 2-3 sentences based on the information provided in the case decision.

1. Who were the primary parties in this case, and who represented them at the telephonic hearing on December 16, 2020?

2. What were the two initial issues Petitioner Debra K. Morin raised in her petition filed on March 12, 2020?

3. Why did the Petitioner withdraw Issue #1 from her petition during the May 20, 2020 hearing?

4. What was the Petitioner’s central argument regarding the maintenance standard that Solera should be held to?

5. What type of evidence did the Petitioner primarily present to document the alleged maintenance failures in the Areas of Association Responsibility (AREAS)?

6. What specific clause in the CC&Rs did Solera (the Respondent) rely on to defend its actions and decisions regarding maintenance?

7. What were the primary reasons the Commissioner of the Arizona Department of Real Estate granted the Petitioner’s request for a rehearing?

8. How did the Administrative Law Judge rule on the relevance of non-governing documents, such as the City of Chandler ordinances and the Premier Management Company job description?

9. What is the legal standard of proof that a petitioner must meet in these proceedings, and how is it defined in the decision?

10. What was the final conclusion and order of the Administrative Law Judge in the Rehearing Decision issued on January 8, 2021?

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Answer Key

1. The primary parties were the Petitioner, Debra K. Morin, who represented herself, and the Respondent, Solera Chandler Homeowners’ Association (Solera). Solera was represented by Lydia Linsmeier, Esq.

2. Issue #1 alleged that Solera did not allow direct communication from homeowners. Issue #2 alleged that Solera, its Board, and its management company were not providing proper oversight to maintain the Areas of Association Responsibility (AREAS) in good condition and repair.

3. The Petitioner withdrew Issue #1 after the Tribunal ruled that the statutory parameters of its jurisdiction did not include the interpretation or application of a non-governing document like the Board’s Code of Ethics. The allegations regarding ethics and mismanagement based on this code were therefore removed from consideration.

4. The Petitioner’s central argument was that the same maintenance standard must be applied to Solera as is applied to homeowners. She contended that just as homeowners are required by CC&R Article 7, Section 7.2 to maintain their lots in good condition at all times, Solera must be held to the same standard for common AREAS under CC&R Article 7, Section 7.1.

5. The Petitioner presented an “enormity” of photographic evidence to document the maintenance issues. The decision notes she presented over eighty photographs at the original hearing and an additional “310 pictures” were mentioned in the rehearing, showing weeds, debris, exposed wiring, and other issues at various dates.

6. Solera relied on CC&R Article 7, Section 7.1, which states that the Solera Board of Directors “shall be the sole judge as to the appropriate maintenance, repair and replacement of all [AREAS].” Solera argued that the Petitioner’s subjective opinions on maintenance were therefore not relevant.

7. The rehearing was granted for reasons outlined in the Petitioner’s request, which claimed: irregularities in the proceedings, misconduct by the prevailing party, and that the original decision was arbitrary, capricious, an abuse of discretion, not supported by evidence, or contrary to law.

8. The Judge ruled that such documents were not relevant or justiciable. City standards were not under review, and the management company’s job description and landscape contract were not Solera governing documents, so they could not be used to prove a violation of the association’s governing documents.

9. The petitioner bears the burden of proving their case by a “preponderance of the evidence.” This is defined as proof that convinces the trier of fact that the contention is more probably true than not, and it represents the greater weight of evidence.

10. The Administrative Law Judge concluded that the Petitioner failed to sustain her burden to establish a violation by Solera of the governing documents. The Judge found Solera to be the prevailing party, in compliance with CC&R Article 7, Section 7.1, and ordered that the Petitioner’s appeal be dismissed.

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Suggested Essay Questions

The following questions are designed to encourage deeper analysis of the case. No answers are provided.

1. Analyze the balance of power between a homeowner and an HOA as depicted in this case. Discuss how specific clauses in the CC&Rs, particularly Article 7 (Section 7.1) and Article 9 (Sections 9.5 and 9.9), grant authority to the Board and limit the recourse available to an individual owner within the association’s own framework.

2. Examine the role and limitations of evidence in this administrative hearing. Why was the Petitioner’s photographic evidence, despite its volume, ultimately insufficient to meet the burden of proof? Discuss the distinction made by the Tribunal between evidence of a maintenance issue and evidence of a violation of the governing documents.

3. The Petitioner argued for an equal application of the “maintenance standard” to both homeowners and the HOA, stating “[t]here must be equal consideration to have a valid contract.” Evaluate this argument in the context of the specific language found in the Solera CC&Rs. Is the concept of “equal consideration” legally applicable in the way the Petitioner suggests?

4. Discuss the jurisdiction of the Arizona Office of Administrative Hearings (the Tribunal) in HOA disputes as described in the decision. Explain why the Tribunal could rule on the maintenance of common areas but had to dismiss claims related to the Solera Code of Ethics, City of Chandler ordinances, and Premier Management’s internal documents.

5. Based on the findings of fact, trace the procedural journey of this case from the initial petition to the final rehearing order. Identify the key turning points, such as the Motion to Dismiss and the Order Granting Rehearing, and explain their impact on the scope and outcome of the dispute.

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Glossary of Key Terms

Definition from Source Context

Administrative Law Judge (ALJ)

The judicial authority, in this case Kay Abramsohn, who presides over hearings at the Office of Administrative Hearings, makes findings of fact, issues decisions, and conducts rehearings.

Areas of Association Responsibility (AREAS)

The common areas within the Solera community that the homeowners’ association is responsible for managing and maintaining. This includes landscaping, the Community Center exterior, street conditions, storm drains, sidewalks, walls, and curbing.

Articles of Incorporation

One of the governing documents of the Solera Chandler Homeowners’ Association, referenced as Solera Exhibit A.

By-Laws

One of the governing documents of the Solera Chandler Homeowners’ Association, referenced as Solera Exhibit B.

CC&Rs (Declaration of Covenants, Conditions, and Restrictions)

A primary governing document for the Solera at Springfield Lakes community. It outlines the rights and responsibilities of both the homeowners and the association.

Maintenance Standard

Defined in CC&R Article 1, Section 1.30 as “the standard of maintenance of Improvements established from time to time by the Board and/or the Architectural Review Committee in the Design Guidelines, or in the absence of any such standards, the standards of maintenance of Improvements generally prevailing through the Project.”

Motion to Dismiss

A formal request filed by a party (in this case, Solera) asking for a petition or case to be dismissed on the grounds that the issues are outside the Department’s jurisdiction or that the requested relief cannot be granted as a matter of law.

Petitioner

The party who initiates a legal action or petition. In this case, Debra K. Morin, a homeowner in the Solera community.

Preponderance of the Evidence

The standard of proof required for a petitioner to win in these proceedings. It is defined as “such proof as convinces the trier of fact that the contention is more probably true than not.”

Premier Management Company (Premier)

The management company hired by the Solera Board of Directors to handle duties including the oversight of a General Manager.

Project Documents

Defined in CC&R Article 1, Section 1.37 as the CC&Rs, any supplements to the CC&Rs, the By-Laws, the Rules and Regulations (R&Rs), and the Design Guidelines.

Respondent

The party against whom a petition is filed. In this case, the Solera Chandler Homeowners’ Association, Inc.

R&Rs (Rules and Regulations)

One of the governing documents of the Solera Chandler Homeowners’ Association, referenced as Solera Exhibit D.

Tribunal

A term used to refer to the Arizona Office of Administrative Hearings (OAH), the body responsible for conducting administrative hearings for disputes referred by the Arizona Department of Real Estate.

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20F-H2020051-REL-RHG

1 source

This document presents an Administrative Law Judge Rehearing Decision regarding a dispute between Debra K. Morin (Petitioner) and the Solera Chandler Homeowners’ Association, Inc. (Respondent). The Petitioner initially filed a two-issue complaint with the Arizona Department of Real Estate alleging that the HOA had violated various governing documents, primarily concerning lack of direct homeowner communication and a failure to maintain Association Responsibility Areas (AREAS) in good condition. After the first issue was withdrawn due to jurisdictional limitations, the initial decision dismissed the petition, finding the HOA was the sole judge of appropriate maintenance under the Covenants, Conditions, and Restrictions (CC&Rs). This rehearing decision, granted due to claims of procedural irregularities and arbitrary findings, ultimately reaffirms the original dismissal, concluding that the Petitioner failed to meet the burden of proof to establish a violation of the governing documents.

Case Participants

Petitioner Side

  • Debra K. Morin (petitioner)
    Represented herself

Respondent Side

  • Lydia A. Perce Linsmeier (HOA attorney)
    CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP
    Represented Solera Chandler Homeowners' Association
  • Denise Frazier (general manager/witness)
    Premier Management Company / Solera Chandler Homeowners' Association
    Solera's onsite general manager who testified

Neutral Parties

  • Kay Abramsohn (ALJ)
    Office of Administrative Hearings
    Administrative Law Judge for both original and rehearing decisions
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Commissioner of the Arizona Department of Real Estate
  • Felicia Del Sol (administrative)
    Transmitted the original August 19, 2020 Decision

Magnus LD MacLeod v. Mogollon Airpark, Inc. (ROOT)

Posted on by

Case Summary

Case ID No. 20F-H2019019-REL (Root), No. 20F-H2019034-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-07-28
Administrative Law Judge Kay Abramsohn
Outcome Petitioner MacLeod's challenge to the HOA's Amendment (Petition #19) was dismissed. The HOA's cross-petition (Petition #34) was partially affirmed, finding MacLeod in violation of the Amendment by living full-time in his hangar/home. The HOA (Mogollon Airpark, Inc.) was deemed the prevailing party in the cross-petitions, and each party was ordered to bear its own filing fee.
Filing Fees Refunded $0.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Magnus L.D. MacLeod Counsel Jeffrey M. Proper, Esq.
Respondent Mogollon Airpark, Inc. Counsel Gregory A. Stein, Esq.

Alleged Violations

A.R.S. § 33-1817(A)(1), (A)(2)(a), and (A)(2)(b)

Outcome Summary

Petitioner MacLeod's challenge to the HOA's Amendment (Petition #19) was dismissed. The HOA's cross-petition (Petition #34) was partially affirmed, finding MacLeod in violation of the Amendment by living full-time in his hangar/home. The HOA (Mogollon Airpark, Inc.) was deemed the prevailing party in the cross-petitions, and each party was ordered to bear its own filing fee.

Why this result: Petitioner MacLeod failed to prove the Amendment was improperly adopted, and the HOA successfully proved MacLeod was in violation of the Amendment regarding full-time residency.

Key Issues & Findings

Challenge to the proper adoption of the October 18, 2018 Amendment to the Declaration (Petition #19)

Petitioner MacLeod alleged that the Amendment substantially altering residential usage in Tract Hangar/Homes was improperly adopted because it applied to fewer than all lots and thus required unanimous approval under A.R.S. § 33-1817(A)(2).

Orders: Petition #19 was dismissed because the Amendment was found to be properly adopted requiring 75% approval pursuant to the Declaration and A.R.S. § 33-1817(A)(1) [40, 44a].

Filing fee: $0.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1817(A)(1)
  • A.R.S. § 33-1817(A)(2)
  • A.R.S. § 33-1817(A)(2)(a)
  • A.R.S. § 33-1817(A)(2)(b)

Analytics Highlights

Topics: HOA Amendment Validity, Planned Community, Homeowner Violation, Full-Time Residency, Hangar Home, Statutory Interpretation 33-1817, Cross-Petitions, Filing Fee Bear Own Costs
Additional Citations:

  • A.R.S. 33-1801 et seq.
  • A.R.S. § 33-1817(A)(1)
  • A.R.S. § 33-1817(A)(2)
  • A.R.S. § 32-2102
  • A.R.S. § 32-2199 et al.
  • A.R.S. § 32-2199.05
  • A.R.S. § 32-2199(2)
  • A.R.S. § 32-2199.01(D)
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092
  • Tierra Ranchos Homeowners Ass'n v. Kitchukov

Video Overview

Audio Overview

Decision Documents

20F-H2019019-REL Decision – 810246.pdf

Uploaded 2026-04-24T11:23:53 (188.3 KB)

Administrative Law Judge Decision: MacLeod v. Mogollon Airpark, Inc.

Executive Summary

This briefing document outlines the findings and decision of an Administrative Law Judge (ALJ) in the cross-petitions between Magnus L.D. MacLeod and Mogollon Airpark, Inc. (MAP). The central dispute revolves around the validity of a 2018 Amendment to the community’s Declaration and MacLeod’s alleged violation of this Amendment by residing full-time in an aircraft hangar.

MacLeod (Petition #19) contended that the Amendment was invalid because it was not unanimously approved by all lot owners, as he argued was required by Arizona statute A.R.S. § 33-1817(A)(2) since it applied to fewer than all properties. MAP (Petition #34) argued the Amendment was properly adopted with the required 75% approval and that MacLeod was in violation by living in his Tract G hangar, which also allegedly failed to meet the minimum living space requirement.

The ALJ ruled decisively in favor of Mogollon Airpark, Inc., deeming it the prevailing party. The judge concluded that the Amendment was properly adopted under the 75% approval threshold outlined in the community’s Declaration and A.R.S. § 33-1817(A)(1), thereby dismissing MacLeod’s petition. On MAP’s petition, the ALJ found that MacLeod had indeed violated the Amendment by living full-time in the hangar, affirming that part of the petition. However, the ALJ dismissed MAP’s claim regarding the hangar’s living space size due to insufficient evidence. The final order dismisses Petition #19, partially affirms and partially dismisses Petition #34, and orders each party to bear their own filing fees.

Case Overview

Case Numbers

No. 20F-H2019019-REL (Root), No. 20F-H2019034-REL

Parties

Petitioner: Magnus L.D. MacLeod
Respondent: Mogollon Airpark, Inc. (MAP)

Jurisdiction

Arizona Department of Real Estate, Office of Administrative Hearings

Administrative Law Judge

Kay Abramsohn

Hearing Date

June 19, 2020

Decision Date

July 28, 2020

The Cross-Petitions

The legal conflict originated from two separate petitions filed with the Arizona Department of Real Estate.

Petition #19: Filed by Magnus L.D. MacLeod

• Filing Date: On or about October 15, 2019.

• Core Allegation: MAP violated Arizona statute A.R.S. § 33-1817(A)(1), (A)(2)(a), and (A)(2)(b) in its adoption of the October 18, 2018 “Amendment to Declaration of Establishment of Conditions, Reservations and Restrictions…”

• MacLeod’s Argument: The Amendment could not be enforced because it lacked the affirmative vote or written consent of all owners of the property to which it applied. He specifically noted that three of the nine Real Property Tracts (Tract G, Tract H, and Tract M) did not provide an affirmative vote and that he personally did not sign it. He argued the amendment required unanimous approval.

Petition #34: Filed by Mogollon Airpark, Inc. (MAP)

• Filing Date: On or about December 16, 2019.

• Core Allegations:

1. Violation of the Amendment: MacLeod was in continued violation of the properly adopted Amendment by living full-time in his Tract G aircraft storage hangar.

2. Violation of Square Footage Requirement: MAP alleged, upon information and belief, that the living space in the hangar was “only 549 square feet,” which violated the Declaration’s requirement that structures for living purposes contain no less than 1,200 square feet.

• Requested Relief: MAP sought enforcement of the Declaration and Amendment, including injunctive relief to compel MacLeod’s compliance, and an award of its attorney’s fees and costs.

Analysis of the Disputed Amendment

The conflict centers on an amendment recorded on October 18, 2018. This amendment introduced several significant changes to the community’s governing documents.

Key Provisions of the Amendment

• Creates Two Lot Categories: The Amendment establishes “Residential lots” (lots #178 through #213) and “Hangar Tracts” (Tracts E through M).

• Regulates Hangar Use: It designates Tracts E through M for the purpose of “aircraft storage only.”

• Restricts Occupancy: While guest quarters may be constructed within a hangar, they are for “temporary living only.” “Temporary” is explicitly defined as “not longer than four months per calendar year.” An owner can request an extension in special circumstances.

• Maintains Living Space Requirement: It affirms that any single-family structure or combination hangar/house must have a living area of “not less than 1,200 square feet.”

• Adds Taxiway Access: The Amendment adds Lot 213 to the list of properties authorized to use the aircraft taxiway. This change was necessitated by a fence MacLeod had erected that blocked the Lot 213 owner’s access.

MacLeod’s Objections to the Amendment

In his petition, MacLeod argued the Amendment fundamentally and unreasonably altered the original covenants:

• It “substantially alters” the covenants for Tract Hangar/Homes by imposing the new four-month temporary living limit where unrestricted usage was previously allowed.

• It replaced the allowance for “Guest Homes with Kitchens” with “Guest Quarters without Kitchens,” impacting Tract G.

• It created a “large burden upon me to buy or build an additional home that I do not want and do not need.”

Background and History of the Dispute

• Property Acquisition: MacLeod purchased Tract G from his brother, Pat MacLeod, in February 2017 with the stated expectation of living in the hangar/home full-time.

• Occupancy: After acquiring the property, MacLeod made interior improvements and began living full-time in the aircraft hangar.

• Conflict Origin: The issue of MacLeod’s full-time residency first arose in May 2017 when he requested to build a group home for disabled veterans, a request that drew opposition from other lot owners.

• Initial Violation Notice: On September 18, 2017, MAP’s Architectural Committee sent MacLeod a letter notifying him that living full-time in a hangar intended for aircraft storage was a violation and requested he vacate within 60 days.

• Formal Non-Compliance Notices & Fines:

◦ December 29, 2018: MAP issued a “First Notice of Non-Compliance,” imposing a $100 fine.

◦ April 29, 2019: MAP issued a “Second Notice: Non-Compliance,” imposing an additional $200 fine if the violation was not remedied.

Legal Framework and Adjudicated Issues

The central legal question was the standard of approval required to pass the Amendment. The parties stipulated that the core dispute was whether a 75% approval or a unanimous approval was necessary.

Stipulated Fact #11

The parties agreed to the following crucial point, which narrowed the scope of the legal argument:

“The AMENDMENT contains at least the required minimum signatures and authorizations from the Lot Owners in Unit IVB to adopt the AMENDMENT, provided that unanimous approval of all affected property owners was not required.”

Conflicting Legal Standards

• Declaration Requirement (75% Rule): The original Declaration states it can be amended “by an instrument in writing, executed and acknowledged by the owners of not less than three-fourths of the lots in said subdivision…”

• Arizona Statute (Unanimous Rule): A.R.S. § 33-1817(A)(2) requires unanimous “affirmative vote or written consent of all of the owners of the lots or property to which the amendment applies” if the amendment “apply to fewer than all of the lots or less than all of the property that is bound by the Declaration.”

Parties’ Core Arguments

• MacLeod’s Position: The Amendment required unanimous approval under A.R.S. § 33-1817(A)(2) because it applied to “fewer than all the lots,” specifically pointing out that Tract B (a common area) was not included.

• MAP’s Position: The 75% rule under A.R.S. § 33-1817(A)(1) was the applicable standard. MAP argued that Tract B was a common area not subject to the Declaration’s conditions, so its exclusion from an amendment concerning residential use was irrelevant and did not trigger the unanimity requirement.

Administrative Law Judge’s Decision and Rationale

The ALJ’s conclusions systematically addressed each petition.

Ruling on Petition #19 (Amendment Validity)

• Conclusion: The Amendment was properly adopted.

• Rationale: The ALJ concluded that the 75% approval threshold, as specified in the Declaration and permitted by A.R.S. § 33-1817(A)(1), was the correct standard. Because the parties stipulated that the 75% threshold had been met, MAP was not in violation of the statute.

• Outcome: Petition #19 was dismissed.

Ruling on Petition #34 (MacLeod’s Violations)

• Conclusion on Full-Time Occupancy: MacLeod was in violation of the Amendment by living full-time in the Tract G Hangar/Home.

• Rationale: MacLeod acknowledged living there full-time. His testimony regarding when he ceased this practice was found to be “widely inconsistent,” and the ALJ could not conclude that the violation had stopped by the time MAP filed its petition.

• Outcome: This allegation in Petition #34 was affirmed.

• Conclusion on Living Space Requirement: MAP failed to prove its allegation that the living space was less than the required 1,200 square feet.

• Rationale: MAP did not clearly document or otherwise prove its claim that the living space was only 549 square feet. MacLeod, in contrast, cited a 2007 architectural committee sign-off indicating 1,656 square feet.

• Outcome: This allegation in Petition #34 was dismissed.

• Conclusion on Injunctive Relief: The Tribunal lacked the authority to grant the requested relief.

• Rationale: MAP “cited no statutory authority of this Tribunal with regard to ‘enforcement’ of a homeowner’s association governing documents or with regard to any injunctive relief.”

Final Order

1. Prevailing Party: Mogollon Airpark, Inc. (MAP) is deemed the prevailing party in the cross-petitions.

2. Petition #19 (MacLeod v. MAP): Dismissed.

3. Petition #34 (MAP v. MacLeod):

◦ Partially affirmed as to the allegation of MacLeod living full-time in the Tract G Hangar/Home in violation of the Amendment.

◦ Partially dismissed as to the allegation regarding the amount of living space within the hangar.

4. Filing Fees: Each party shall bear their own filing fee.

Study Guide: MacLeod v. Mogollon Airpark, Inc.

Short-Answer Quiz

1. What were the two primary allegations made by Mogollon Airpark, Inc. (MAP) in its petition (Petition #34) against Magnus L.D. MacLeod?

2. What was the core argument presented by Magnus L.D. MacLeod in his petition (Petition #19) regarding the October 18, 2018 Amendment?

3. According to the original Declaration, what was the minimum approval threshold required to amend it?

4. How did the Amendment of October 18, 2018 change the rules regarding residency in Hangar Tracts like Tract G?

5. What was the central legal question that the parties stipulated to regarding the adoption of the Amendment?

6. Describe the two notices that MAP issued to MacLeod prior to filing its petition.

7. What argument did MacLeod make regarding A.R.S. § 33-1817(A)(2) and why he believed the Amendment required unanimous approval?

8. Why was MAP’s allegation regarding the living space in MacLeod’s Tract G hangar (that it was only 549 sq. ft.) dismissed by the Administrative Law Judge?

9. What was MacLeod’s testimony regarding his occupancy of the Tract G hangar, and how did the Administrative Law Judge view this testimony?

10. What was the final order of the Administrative Law Judge regarding Petition #19 and Petition #34, and which party was deemed the prevailing party?

Answer Key

1. In Petition #34, MAP first alleged that MacLeod was in continued violation of the Amendment by living full-time in his Tract G aircraft storage hangar. Second, MAP requested enforcement of the Declaration and Amendment, seeking injunctive relief and an award of its attorney’s fees and costs.

2. MacLeod’s petition alleged that the Amendment was unenforceable because it was not properly adopted pursuant to A.R.S. § 33-1817. He argued it did not receive the affirmative vote or written consent of all owners of the property to which the amendment applied, specifically noting that owners of three of the nine affected tracts (G, H, and M) did not consent.

3. The original Declaration stipulated that it could be amended by “an instrument in writing, executed and acknowledged by the owners of not less than three-fourths of the lots in said subdivision.” This represents a 75% approval threshold.

4. The Amendment established that guest quarters in aircraft storage hangars (Tracts E through M) were for “temporary living only,” which was defined as “not longer than four months per calendar year.” It also specified that such quarters could not be used as a permanent residence.

5. The parties stipulated that the central dispute was whether the Amendment required 75% approval from lot owners as specified in the Declaration, or if it required unanimous approval from all affected property owners pursuant to A.R.S. § 33-1817(A)(2).

6. On December 29, 2018, MAP issued a “First Notice of Non-Compliance” with a $100 fine for living full-time in the hangar. On April 29, 2019, MAP issued a “Second Notice: Non-Compliance,” imposing an additional $200 fine if the violation was not remedied.

7. MacLeod argued that pursuant to A.R.S. § 33-1817(A)(2), unanimous approval was required because the Amendment applied to fewer than all the lots bound by the Declaration. He specifically pointed out that Tract B, a common area, was not included in the Amendment.

8. The Administrative Law Judge dismissed this part of MAP’s petition because MAP failed to clearly document or prove its allegation. The judge concluded that MAP did not sufficiently demonstrate that the living space within the Tract G Hangar/Home was less than the required 1,200 square feet.

9. MacLeod gave widely inconsistent dates for his full-time occupancy of the hangar and testified that he had moved to Concho in January 2019. The Administrative Law Judge found his testimony inconsistent and could not conclude that MacLeod had stopped living in the hangar at the time Petition #34 was filed.

10. The judge ordered that MacLeod’s Petition #19 be dismissed entirely. The judge partially dismissed MAP’s Petition #34 regarding the living space allegation but affirmed the allegation that MacLeod was living in the hangar in violation of the Amendment. MAP was deemed the prevailing party in the cross-petitions.

Essay Questions

1. Analyze the conflicting interpretations of A.R.S. § 33-1817 presented by Magnus L.D. MacLeod and Mogollon Airpark, Inc. Explain why the Administrative Law Judge ultimately sided with MAP’s interpretation that A.R.S. § 33-1817(A)(1) was the applicable statute.

2. Trace the timeline of the dispute, starting with MacLeod’s purchase of Tract G and his proposal for a group home. Discuss how the actions and reactions of both parties escalated the conflict, leading to the filing of cross-petitions with the Department of Real Estate.

3. Evaluate the evidence presented by both parties. How did the parties’ joint stipulation of facts narrow the central legal issue? Discuss the impact of MacLeod’s inconsistent testimony on the judge’s final decision regarding his residency.

4. MacLeod argued that MAP had waived its right to enforce the Amendment due to “longstanding and widespread utilization of Tract Hanger/Homes as full-time residences.” Although the Judge did not address this argument due to jurisdictional limits, construct an argument for or against this claim based on the facts available in the decision.

5. Discuss the scope and limitations of the Administrative Law Judge’s authority in this case. Why was the Judge able to rule on the validity of the Amendment’s adoption and MacLeod’s violation, but not grant MAP’s request for injunctive relief and enforcement?

Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

The judicial authority, Kay Abramsohn, who presided over the hearing and issued the decision in this case.

A.R.S. § 33-1817

Arizona Revised Statute governing the amendment of a planned community’s Declaration. Subsection (A)(1) allows amendment by the vote specified in the Declaration, while (A)(2) requires unanimous consent of affected owners if the amendment applies to fewer than all lots.

Amendment

The “Amendment to Declaration of Establishment of Conditions, Reservations and Restrictions…” recorded on October 18, 2018. It created categories for Residential and Hangar lots and restricted hangar occupancy to temporary living of no more than four months per year.

A colloquial acronym used by the Petitioner to refer to the original “Declaration of Establishment of Conditions, Reservations and Restrictions and Mutual and Reciprocal Covenants and Liens Running with the Land.”

Declaration

The original governing document for Mogollon Airpark, Inc., establishing conditions, reservations, and restrictions for the properties. It required a three-fourths (75%) vote of lot owners to be amended.

Hangar Tracts

Tracts E through M, inclusive, as designated by the Amendment for the primary purpose of aircraft storage, though guest quarters for temporary living are permitted.

Magnus L.D. MacLeod

The Petitioner in Petition #19 and Respondent in Petition #34. He is the owner of Tract G and resided in the hangar on that property.

Mogollon Airpark, Inc. (MAP)

The Respondent in Petition #19 and Petitioner in Petition #34. It is the planned community association responsible for administering the Declaration.

Petition #19

The petition filed by Magnus L.D. MacLeod on October 15, 2019, alleging MAP improperly adopted the Amendment in violation of Arizona statute.

Petition #34

The petition filed by Mogollon Airpark, Inc. on December 16, 2019, alleging MacLeod was violating the Amendment by living full-time in his hangar.

Preponderance of the evidence

The standard of proof required in the hearing, defined as evidence that is sufficient to “incline a fair and impartial mind to one side of the issue rather than the other.”

Residential Lots

Lots numbered 178 through 213, inclusive, as categorized by the Amendment.

Tract G

An aircraft storage hangar lot in Unit 4B owned by Magnus L.D. MacLeod, which was the central property in the dispute.

Unit 4B

The specific subdivision within Mogollon Airpark subject to the Declaration and Amendment. It includes Lots 178-213 and Tracts B, E, F, G, H, I, J, K, L, and M.

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20F-H2019019-REL

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This administrative law judge decision concerns cross-petitions filed by Magnus L.D. MacLeod and Mogollon Airpark, Inc. (MAP) regarding disputes within a planned community association in Arizona. MacLeod’s petition challenged the validity of an amendment to the community’s governing documents (CC&Rs), arguing it was improperly adopted and unreasonably altered prior usage rights for hangar/homes, specifically his Tract G property. MAP’s petition alleged that MacLeod was in continued violation of the amendment by living full-time in his aircraft storage hangar and requested injunctive relief to compel compliance. The judge ruled to dismiss MacLeod’s petition, finding the amendment was properly adopted, and partially affirmed MAP’s petition, concluding that MacLeod had violated the amendment by residing full-time in the hangar. Ultimately, MAP was deemed the prevailing party in the proceedings.

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What were the central legal issues and findings in this property dispute case?
How did the contested amendment change the community’s declaration and rules?
What were the core arguments and outcomes for each party involved in this hearing?

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Case Participants

Petitioner Side

  • Jeffrey M. Proper (attorney)
    JEFFREY M. PROPER, PLLC
    Counsel for Magnus L.D. MacLeod

Respondent Side

  • Gregory A. Stein (attorney)
    Carpenter, Hazlewood, Delgado & Bolen LLP
    Counsel for Mogollon Airpark, Inc.
  • Craig Albright (board member)
    MAP Board of Directors
    Then President of the MAP Board of Directors

Neutral Parties

  • Kay Abramsohn (ALJ)
  • Judy Lowe (commissioner)
    Arizona Department of Real Estate

Other Participants

  • Magnus L.D. MacLeod (party)
    Petitioner in 20F-H2019019-REL and Respondent in 20F-H2019034-REL
  • Pat MacLeod (HOA president)
    HOA
    Brother of Petitioner; previous owner of Tract G; appeared to be HOA President around 2017

Susan L Alandar v. Ventana Lakes Property Owners’ Association

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Case Summary

Case ID 20F-H2020046-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-07-23
Administrative Law Judge Tammy L. Eigenheer
Outcome The Petitioner's petition alleging violations of statute and community documents was denied in its entirety. Two issues were found moot because the prohibited action had already concluded, and the other two issues failed because the Petitioner did not meet the burden of proof to establish a violation.
Filing Fees Refunded $2,000.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Susan L. Alandar Counsel —
Respondent Ventana Lakes Property Owners' Association Counsel Nicholas Nogami

Alleged Violations

A.R.S. § 33-1804
CC&R’s Article V Section C; Bylaws Article IV.E.8; Ventana Lakes Rule 8.4.A
CC&R’s Article III Section A; CC&R’s Article IV Section C.23; Bylaws Article IV.E.8; Ventana Lakes Rule 8.4.A
Ventana Lakes Rule 8.3.B.1.b

Outcome Summary

The Petitioner's petition alleging violations of statute and community documents was denied in its entirety. Two issues were found moot because the prohibited action had already concluded, and the other two issues failed because the Petitioner did not meet the burden of proof to establish a violation.

Why this result: Issues 2 and 3 were moot. Issues 1 and 4 failed on the merits because the evidence did not prove the HOA violated the cited statute or rule.

Key Issues & Findings

Board conducted interviews of candidates in closed executive session.

Petitioner alleged the Board improperly conducted interviews for Board vacancies in closed sessions. The Board admitted to the practice but asserted they did so to elicit personal, health, or financial information, which is a statutory exception to the open meeting law.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • A.R.S. § 33-1804

Discriminately penalized homeowners/members (Italian American Club).

Petitioner alleged the HOA wrongfully penalized and denied use of facilities to the Italian American Club (IAC). This issue was based on a specific one-year prohibition on facility use imposed after the IAC violated rules regarding moving furniture.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • Article V, Section C of the CC&Rs
  • Article IV.E.8 of the Bylaws
  • Ventana Lakes Rules 8.4.A

Refusal of homeowners' use of facilities without authorization by rule.

Petitioner alleged the HOA wrongfully denied the Italian American Club use of facilities following an incident where club members moved tables against HOA rules, resulting in a one-year ban on facility use.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • Article III, Section A of the CC&Rs
  • Article IV, Section C.23 of the CC&Rs
  • Article IV.E.8 of the Bylaws
  • Ventana Lakes Rules 8.4.A

Refusal to place written requests for Board action on the agenda.

Petitioner argued that Ventana Lakes Rule 8.3.B.1.b required the Board president to include every single written request from members on the next upcoming Board meeting agenda, which the Board had failed to do.

Filing fee: $500.00, Fee refunded: No

Disposition: petitioner_loss

Cited:

  • Ventana Lakes Rule 8.3.B.1.b

Analytics Highlights

Topics: HOA Open Meetings, Executive Session, Mootness, Facility Use Suspension, Agenda Setting
Additional Citations:

  • A.R.S. § 33-1804
  • Article IV, Section E of the Bylaws
  • Article 5, Section C of the CC&Rs
  • Article IV, Section C(23) of the CC&Rs
  • Article XII, Section B of the CC&Rs
  • Article III, Section A of the CC&Rs
  • Ventana Lake Rules 8.3.B
  • Ventana Lake Rules 8.4.A
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02

Video Overview

Audio Overview

Decision Documents

20F-H2020046-REL Decision – 809207.pdf

Uploaded 2026-04-24T11:25:42 (157.4 KB)

20F-H2020046-REL Decision – 809207.pdf

Uploaded 2026-01-23T17:31:55 (157.4 KB)

Administrative Law Judge Decision: Alandar vs. Ventana Lakes POA

Executive Summary

This briefing document analyzes the Administrative Law Judge (ALJ) decision in case number 20F-H2020046-REL, involving a dispute between Petitioner Susan L. Alandar and the Ventana Lakes Property Owners’ Association (the “Respondent” or “Board”). The petition, filed with the Arizona Department of Real Estate, alleged multiple violations of state statutes and the Association’s governing documents. The ALJ ultimately denied the petition in its entirety, finding that the Petitioner failed to meet the burden of proof by a preponderance of the evidence for any of her claims.

The key takeaways from the decision are as follows:

• Board Candidate Interviews: The Board’s practice of interviewing candidates for board vacancies in closed executive sessions was deemed permissible. The ALJ found that these sessions were appropriately used to elicit personal, health, or financial information relevant to a candidate’s ability to serve, which is an exception to Arizona’s open meeting law (A.R.S. § 33-1804).

• Sanctions Against a Club: The Petitioner’s challenge to a one-year ban on facility use imposed upon the Italian American Club (IAC) was dismissed as moot. Because the one-year penalty had expired before the hearing date, the ALJ concluded there was no active issue to rule on or remedy to order.

• Agenda Setting Authority: The ALJ determined that the Board president possesses broad, inherent authority in setting the agenda for Board meetings. The governing rules do not require the president to place every written request from an Association member onto the agenda for the next meeting.

• Burden of Proof: Across all issues, the Petitioner failed to provide sufficient evidence to convince the judge that her contentions were “more probably true than not.” The decision repeatedly highlights the lack of evidence to support the claims of improper conduct.

Case Overview

On February 3, 2020, Petitioner Susan L. Alandar filed a petition alleging that the Ventana Lakes Property Owners’ Association violated Arizona state law and several provisions of its own Covenants, Conditions & Restrictions (CC&Rs), Bylaws, and Rules. After paying an additional filing fee, the Petitioner presented four distinct issues for the hearing held on June 11, 2020. The final decision was issued on July 23, 2020.

Case Detail

Information

Case Number

20F-H2020046-REL

Petitioner

Susan L. Alandar

Respondent

Ventana Lakes Property Owners’ Association

Presiding Judge

Administrative Law Judge Tammy L. Eigenheer

Hearing Date

June 11, 2020

Decision Date

July 23, 2020

Final Disposition

Petitioner’s petition is denied.

Detailed Analysis of Allegations and Rulings

Issue 1: Board Candidate Interviews in Executive Session

• Allegation: The Petitioner contended that the Board of Directors violated A.R.S. § 33-1804 (Arizona’s open meeting law for HOAs) by interviewing candidates for Board appointments in closed executive sessions.

• Factual Background: The Respondent acknowledged that prior to June 2019, its practice was to conduct interviews, discussions, and votes to fill Board vacancies entirely within executive session, announcing the result in an open meeting. After this practice was questioned, the Board changed its procedure. Since June 2019, the Board has conducted candidate interviews in executive session specifically to “elicit private information that may impact the candidate’s ability to perform the duties of a Board member.” An example provided was a candidate who revealed his wife’s dementia diagnosis, which would take priority over Board duties. Under this revised process, the final vote on candidates is cast in an open session, and candidates also participate in an open forum where members can ask questions.

• Conclusion of Law: The ALJ found that the uncontroverted evidence showed the executive sessions were used for the purpose of discussing “personal, health, or financial information,” which is a specific exception allowed under A.R.S. § 33-1804. The decision states, “While Petitioner may believe the interviews were being conducted in executive session for nefarious purposes, no evidence was presented to establish such motives existed.” Consequently, the Petitioner failed to establish a violation.

Issues 2 & 3: Penalties and Facility Use Denial for the Italian American Club

• Allegation: The Petitioner argued that the Respondent wrongfully penalized the Italian American Club (IAC) and denied its members use of facilities, asserting that this action was discriminatory and not authorized by rule, in violation of CC&R’s Article V Section C and other community documents.

• Factual Background:

◦ In January 2018, the Board met with the IAC regarding non-compliance with rules and warned that failure to comply could result in the loss of privileges to use the Yacht Club.

◦ On April 4, 2019, an incident occurred where IAC members, after their last-minute request for more tables and chairs was denied, were observed on security cameras moving furniture from a storage area themselves. This was against Association rules, reportedly due to insurance policy limitations on volunteers moving tables.

◦ The situation escalated into a verbal altercation. Even after staff agreed to set up the requested tables, IAC members were again seen moving more furniture.

◦ On April 17, 2019, after reviewing video and audio recordings of the incident, the Board revoked the IAC’s right to use all Association facilities for a one-year period, from May 1, 2019, to April 30, 2020.

• Conclusion of Law: The ALJ found that the one-year prohibition on the IAC’s use of facilities had expired on April 30, 2020, prior to the June 11, 2020 hearing. As no evidence was presented that the revocation was still in effect, the matter was declared moot. The decision notes that even if the judge had found the revocation improper, she could not order any action because the penalty was no longer active. The ALJ did not rule on the merits of whether the Board’s action was initially justified.

Issue 4: Refusal to Place Member Items on Board Meeting Agenda

• Allegation: The Petitioner claimed the Board violated Ventana Lakes Rule 8.3.B.1.b by refusing to place homeowners’ written requests for Board action on the agenda for upcoming Board meetings. The Petitioner’s position was that the rule required the Board president to place any such item on the agenda.

• Factual Background: Both parties agreed that the Board president had received written requests from members that were not subsequently included on a meeting agenda. The Petitioner herself acknowledged during the hearing that it would be impractical for the president to include every single request if, for example, hundreds were received for a single meeting.

• Conclusion of Law: The ALJ determined that the “plain language” of the rule does not mandate that all requests must be placed on the agenda. The judge used the Petitioner’s own hypothetical concession to demonstrate that the Board president must have “inherent authority to limit the number of items to be included.” The ruling concluded that the president’s authority in setting the agenda is “broad” and that the Petitioner failed to prove a violation of the rule.

Key Referenced Authority

The decision was based on an interpretation of the following Arizona statutes and Ventana Lakes governing documents:

Document

Provision

Relevance to the Case

Arizona Revised Statutes

A.R.S. § 33-1804

Open Meetings: Allows meetings to be closed for specific reasons, including discussion of “Personal, health or financial information about an individual member.”

Article III, Section A

Easements of Enjoyment: Gives the Board the right to suspend any Resident from using Common Areas and to regulate their use through rules.

Article IV, Section C

Health, Safety and Welfare: Allows the Board to make rules restricting activities deemed a nuisance or to adversely affect the health, safety, or welfare of residents.

Article V, Section C

Ventana Lakes Rules: Grants the Association power to adopt and repeal rules governing the use of Common Areas, provided they are not discriminatory or inconsistent.

Bylaws

Article IV.E.8

Board Powers: Grants the Board the power to adopt, amend, and enforce rules covering the operation and use of all property.

Ventana Lakes Rules

Rule 8.3.B

Board President Duties: States the president shall prepare agendas and “ensure that written requests for Board action…are placed on the agenda.” (Interpreted by ALJ).

Final Order

The Administrative Law Judge concluded the hearing with a definitive ruling:

“IT IS ORDERED that Petitioner’s petition is denied.”

This order is binding unless a request for rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of the service of the order.

Study Guide: Alandar v. Ventana Lakes Property Owners’ Association

This study guide provides a review of the Administrative Law Judge Decision in case number 20F-H2020046-REL, concerning a dispute between Petitioner Susan L. Alandar and Respondent Ventana Lakes Property Owners’ Association. The guide includes a short-answer quiz, an answer key, suggested essay questions, and a glossary of key terms to facilitate a comprehensive understanding of the case’s facts, arguments, and legal conclusions.

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Short-Answer Quiz

Answer the following questions in 2-3 sentences each, based on the information provided in the case document.

1. What were the initial steps Susan L. Alandar took to begin the HOA dispute process, and when did she file her petition?

2. What was the Ventana Lakes Board’s practice regarding interviewing candidates for Board vacancies both before and after June 2019?

3. What was the core of the dispute regarding the Italian American Club (IAC), and what specific action by the club led to the conflict on April 4, 2019?

4. What penalty did the Board of Directors impose on the Italian American Club, and for what duration?

5. Why did the Administrative Law Judge ultimately dismiss Issues 2 and 3 (concerning the IAC) as moot?

6. What was the Petitioner’s argument regarding the Board President’s responsibility for setting the meeting agenda under Ventana Lakes Rule 8.3.B.1.b?

7. How did the Administrative Law Judge interpret the Board President’s authority and discretion in setting the agenda?

8. Which party bears the “burden of proof” in this type of hearing, and what is the standard of proof required?

9. According to Arizona statute A.R.S. § 33-1804, when is it permissible for a Board of Directors to hold a closed or executive session?

10. What was the final order issued by the Administrative Law Judge in this case?

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Answer Key

1. On or about February 3, 2020, Susan L. Alandar filed a Homeowners Association (HOA) Dispute Process Petition with the Arizona Department of Real Estate. She initially indicated two issues would be presented and paid a $1000.00 filing fee.

2. Prior to June 2019, the Board conducted candidate interviews, discussions, and votes in closed executive sessions. After June 2019, the Board conducted interviews in executive session to elicit private information but held the final vote in an open session.

3. The dispute centered on the IAC’s non-compliance with association rules. The conflict on April 4, 2019, was triggered when IAC members were observed on security cameras moving tables and chairs from a storage area against the instructions of the facilities manager.

4. In an executive session on April 17, 2019, the Board revoked the Italian American Club’s ability to use all of the association’s facilities. The penalty was for a period of one year, from May 1, 2019, to April 30, 2020.

5. The Judge dismissed these issues as moot because the one-year prohibition on the IAC’s use of facilities had already expired at the time of the hearing. Since the penalty was no longer in effect, the Judge could not order the Respondent to take any corrective action.

6. The Petitioner argued that Rule 8.3.B.1.b required the Board president to place any written request for Board action from an association member onto the agenda for the next meeting. She contended this was a mandatory duty, regardless of the nature or number of requests.

7. The Judge concluded that the rule’s plain language does not require every request to be placed on the agenda. Citing the impracticality of including hundreds of hypothetical requests, the Judge found that the Board President has broad, inherent authority to limit the items on the agenda.

8. The Petitioner bears the burden of proof to establish that the Respondent committed the alleged violations. The required standard of proof is a “preponderance of the evidence.”

9. A.R.S. § 33-1804 allows a portion of a meeting to be closed to consider specific matters, including personal, health, or financial information about an individual member or employee of the association. The Board used this exception to justify holding candidate interviews in executive session.

10. The final order issued on July 23, 2020, was that the Petitioner’s petition is denied.

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Essay Questions

The following questions are designed for deeper analysis and discussion. Formulate comprehensive answers based on the facts and legal reasoning presented in the decision.

1. Analyze the Board of Directors’ evolving practice for interviewing candidates for board vacancies (Issue 1). Discuss how their pre- and post-June 2019 methods relate to the specific language and exceptions outlined in A.R.S. § 33-1804.

2. Explain the legal concept of “mootness” as it was applied to the sanctions against the Italian American Club (Issues 2 and 3). Why was the Administrative Law Judge unable to rule on the propriety of the Board’s actions, and what does this imply about the timing of legal challenges in HOA disputes?

3. Compare and contrast the Petitioner’s interpretation of Ventana Lakes Rule 8.3.B.1.b with the Administrative Law Judge’s final interpretation (Issue 4). Discuss the Judge’s reasoning for concluding that the Board President has “inherent authority” to limit agenda items.

4. Define the “preponderance of the evidence” standard. Using examples from at least two of the four issues raised in the petition, explain how the Petitioner failed to meet this burden of proof.

5. Based on the referenced community documents (CC&Rs and Bylaws), describe the scope of the Ventana Lakes Board of Directors’ power to regulate Common Areas, suspend resident privileges, and enforce rules. How do these documents grant authority that was relevant to the Board’s actions against the Italian American Club?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An independent judge who presides over administrative hearings, makes findings of fact, and issues decisions based on the evidence and applicable law. In this case, the ALJ was Tammy L. Eigenheer.

A.R.S.

Abbreviation for Arizona Revised Statutes, which are the codified laws of the state of Arizona.

Bylaws

A set of rules adopted by an organization, such as an HOA, to govern its internal management and operations. Article IV, Section E of the Bylaws addresses the Board’s powers and duties.

Covenants, Conditions & Restrictions. These are legally binding rules recorded with the property deeds in a planned community, governing property use and the rights and obligations of the homeowners and the HOA.

Common Areas

Property within a planned community owned by the HOA for the common use and enjoyment of all residents, such as the Yacht Club and recreational facilities mentioned in the case.

Executive Session

A closed portion of a meeting of a deliberative body, such as an HOA board, which is not open to the general membership. A.R.S. § 33-1804 specifies the limited circumstances under which such a session can be held.

HOA (Homeowners Association)

An organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties and its residents. In this case, the Ventana Lakes Property Owners’ Association.

A legal term for a matter that is no longer in controversy or has become irrelevant. The ALJ declared the issues regarding the Italian American Club moot because the one-year penalty had already expired.

Petitioner

The party who files a petition initiating a legal action or administrative proceeding. In this case, Susan L. Alandar.

Preponderance of the Evidence

The standard of proof in most civil cases, which requires the trier of fact (the judge) to be convinced that a contention is more probably true than not. The Petitioner had the burden to meet this standard.

Respondent

The party against whom a petition is filed or an appeal is brought. In this case, the Ventana Lakes Property Owners’ Association.

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20F-H2020046-REL

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The provided text is an Administrative Law Judge Decision concerning a dispute between Susan L. Alandar, the Petitioner, and the Ventana Lakes Property Owners’ Association, the Respondent. The Petitioner filed a Homeowners Association (HOA) Dispute Process Petition alleging four violations of statute and community documents by the HOA, requiring her to pay additional filing fees to pursue all four issues. The judge systematically addressed each of the four allegations, which included improper closed-door interviews for board candidates, discriminatory penalizing and facility denial against an Italian American Club, and the refusal to place all member-requested items on the board agenda. Ultimately, the Administrative Law Judge denied the Petitioner’s petition, finding that she failed to establish the alleged violations by a preponderance of the evidence, and further determined that the facilities denial issue was moot as the one-year prohibition had expired.

1 source

What were the specific allegations and outcomes across the four distinct issues presented?
How did the Administrative Law Judge interpret governing documents regarding Board authority and rules?
What legal standards and statutes primarily governed the resolution of this HOA dispute petition?

Based on 1 source

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Case Participants

Petitioner Side

  • Susan L. Alandar (petitioner)
    Appeared on her own behalf.

Respondent Side

  • Nicholas Nogami (HOA attorney)
    Carpenter Hazlewood Delgado & Bolen, LLP
    Represented Ventana Lakes Property Owners' Association.

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    OAH
    Administrative Law Judge who signed the decision.
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate
    Decision transmitted to.
  • LDettorre (ADRE staff)
    Arizona Department of Real Estate
    Decision transmitted to.
  • AHansen (ADRE staff)
    Arizona Department of Real Estate
    Decision transmitted to.
  • djones (ADRE staff)
    Arizona Department of Real Estate
    Decision transmitted to.
  • DGardner (ADRE staff)
    Arizona Department of Real Estate
    Decision transmitted to.
  • ncano (ADRE staff)
    Arizona Department of Real Estate
    Decision transmitted to.

Other Participants

  • c. serrano (Staff/Clerk)
    Transmitted the decision to the attorney for the Respondent.

Douglas J Karolak vs. VVE – Casa Grande Homeowners Association

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Case Summary

Case ID 20F-H2020041-REL
Agency ADRE
Tribunal OAH
Decision Date 2020-05-21
Administrative Law Judge Tammy L. Eigenheer
Outcome Petitioner was deemed the prevailing party after establishing that the Respondent HOA violated A.R.S. § 33-1817(A)(1) and the community documents by improperly recording Amended CC&Rs without proper owner consent. The Respondent was ordered to refund the $500.00 filing fee. However, the ALJ could not grant the requested relief (rescission of the Amended CC&Rs) due to a lack of statutory authority.
Filing Fees Refunded $500.00
Civil Penalties $0.00

Parties & Counsel

Petitioner Douglas J. Karolak Counsel —
Respondent VVE – Casa Grande Homeowners Association Counsel David Fitzgibbons

Alleged Violations

A.R.S. § 33-1817(A)(1); CC&Rs Part 10, Section 10.4

Outcome Summary

Petitioner was deemed the prevailing party after establishing that the Respondent HOA violated A.R.S. § 33-1817(A)(1) and the community documents by improperly recording Amended CC&Rs without proper owner consent. The Respondent was ordered to refund the $500.00 filing fee. However, the ALJ could not grant the requested relief (rescission of the Amended CC&Rs) due to a lack of statutory authority.

Key Issues & Findings

Violation regarding the validity of Amended CC&Rs due to lack of required owner approval.

The Petitioner alleged that the Amended CC&Rs recorded by the Board were invalid because they were not approved by two-thirds (2/3) of the lot owners as required by the CC&Rs and statute. The ALJ agreed, finding the Board acted improperly and violated the documents and statute.

Orders: Respondent was ordered to pay Petitioner the filing fee of $500.00. No civil penalty was assessed. The ALJ determined she lacked the statutory authority to order the rescission of the Amended CC&Rs requested by the Petitioner.

Filing fee: $500.00, Fee refunded: Yes

Disposition: petitioner_win

Cited:

  • A.R.S. § 33-1817(A)(1)
  • CC&Rs Part 10, Section 10.4

Analytics Highlights

Topics: HOA Dispute, CC&R Amendment, Board Authority, Filing Fee Refund, Partial Win
Additional Citations:

  • 20F-H2020041-REL
  • A.R.S. § 33-1817
  • A.R.S. § 33-1817(A)(1)
  • A.R.S. § 32-2199
  • A.R.S. § 32-2199.02
  • A.R.S. § 41-1092.07(G)(2)
  • CC&Rs Part 10, Section 10.4

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Video Overview

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Decision Documents

20F-H2020041-REL Decision – 792824.pdf

Uploaded 2026-05-01T09:47:41 (102.9 KB)

20F-H2020041-REL Decision – 792824.pdf

Uploaded 2026-01-23T17:31:22 (102.9 KB)

Briefing Document: Karolak vs. VVE – Casa Grande Homeowners Association

Executive Summary

This briefing analyzes the Administrative Law Judge (ALJ) Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL). The central issue was whether the HOA Board had the authority to unilaterally amend and record changes to the community’s Covenants, Conditions, and Restrictions (CC&Rs) without the required homeowner vote.

The petitioner, Douglas J. Karolak, successfully argued that the HOA violated its own governing documents and Arizona state law by filing “Amended CC&Rs” on October 5, 2018, without securing the approval of two-thirds of the lot owners. The HOA contended its actions were a valid exercise of its authority to create “Association Rules.”

ALJ Tammy L. Eigenheer ruled decisively in favor of the petitioner. The decision established a clear legal distinction between the Board’s power to adopt rules and the separate, more stringent process required to formally amend the CC&Rs. The judge found the Board acted improperly, declaring Karolak the prevailing party and ordering the HOA to reimburse his $500 filing fee. Notably, while the judge found the amended document was improperly recorded, she concluded she lacked the statutory authority to order its rescission, which was the remedy the petitioner had requested.

Case Overview

Case Name

Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association

Case Number

20F-H2020041-REL

Arizona Office of Administrative Hearings

Administrative Law Judge

Tammy L. Eigenheer

Hearing Date

May 1, 2020

Decision Date

May 21, 2020

The Central Dispute

The core of the dispute revolved around the legitimacy of a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs), which the HOA Board recorded with the Pinal County Recorder on October 5, 2018.

• Petitioner’s Position (Douglas J. Karolak): The Amended CC&Rs are invalid because they were not approved by “owners of at least two-thirds (2/3) of the Lots,” a requirement explicitly stated in Section 10.4 of the original CC&Rs and supported by Arizona statute A.R.S. § 33-1817(A)(1). Karolak argued that the Board’s action of recording an amendment is fundamentally different from its power to adopt internal “Association Rules.”

• Respondent’s Position (VVE – Casa Grande HOA): The Board argued that its actions were a valid exercise of the authority granted to it under the CC&Rs. It claimed that because the only changes were to Part 7 (Use Restrictions), they fell under the Board’s power to “adopt, amend, or repeal such rules and regulations as it deems reasonable and appropriate” (Section 3.4) and to “modify or waive the foregoing restrictions… by reasonable rules and regulations” (Section 7.43). The Respondent’s counsel did, however, concede that “perhaps the Amended CC&Rs should not have been recorded.”

Factual Background and Chronology

• The VVE – Casa Grande Homeowners Association is a 56-lot community in Casa Grande, Arizona, with 19 lots remaining vacant at the time of the hearing.

• April 30, 1999: The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” (CC&Rs) was recorded.

• 2014 and 2015: The HOA Board made unsuccessful attempts to amend the CC&Rs through membership votes.

• 2018: Following the failed votes, the Board determined it would make changes to the “rules section” of the CC&Rs under the authority it believed was granted by Section 3.4.

• October 5, 2018: The Board recorded the Amended CC&Rs with the Pinal County Recorder. The HOA acknowledged that these amendments had not been approved by the required two-thirds of lot owners.

Legal Analysis and Key Provisions

The decision rested on the interpretation of specific sections of the community’s CC&Rs and Arizona state law. The judge concluded that the document’s structure clearly separates the process of rulemaking from the process of formal amendment.

Provision

Source

Summary of Stipulation

Amendment Process

CC&Rs Section 10.4

Requires an instrument “executed by the Owners of at least two-thirds (2/3) of the Lots” and recorded to become effective.

Rulemaking Authority

CC&Rs Section 3.4

Empowers the Board to adopt, amend, or repeal “Association Rules” governing the use of the property. States rules have the “same force and effect as if they were set forth in” the CC&Rs.

Statutory Requirement

A.R.S. § 33-1817(A)(1)

Provides that a declaration may be amended by the association via an affirmative vote or written consent of the number of owners specified in the declaration.

The judge’s rationale emphasized that the distinct sections for rulemaking (3.4) and amendments (10.4) demonstrate that the original drafters did not intend for the Board to have the power to unilaterally amend the CC&Rs. The judge stated, “The fact that the two topics are covered as separate topics in the CC&Rs leads to the conclusion that the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”

The Court’s Decision and Final Order

The Administrative Law Judge ruled that the petitioner, Douglas J. Karolak, had successfully proven by a preponderance of the evidence that the respondent HOA had acted improperly.

Key Findings:

• The HOA Board did not have the authority to amend the CC&Rs without the approval of two-thirds of the lot owners.

• The Board’s action of recording the Amended CC&Rs on October 5, 2018, was a violation of the community’s governing documents (Section 10.4) and Arizona state law (A.R.S. § 33-1817(A)(1)).

• The Board’s ability to create “Association Rules” is a separate and distinct process from the formal procedure required to amend the Declaration.

Final Order:

• The petitioner, Douglas J. Karolak, was deemed the prevailing party.

• The respondent HOA was ordered to pay the petitioner his $500.00 filing fee within thirty days of the order.

• No civil penalty was found to be appropriate in the matter.

• Critically, the judge determined that under the applicable statute (A.R.S. § 32-2199.02), the Administrative Law Judge does not have the authority to order the Amended CC&Rs rescinded, despite this being the remedy requested by the petitioner.

The order is binding on both parties unless a request for rehearing is filed with the Commissioner of the Department of Real Estate within 30 days of the decision.

Study Guide: Karolak v. VVE – Casa Grande Homeowners Association

This guide is designed to review the key facts, legal arguments, and outcomes of the Administrative Law Judge Decision in the case of Douglas J. Karolak vs. VVE – Casa Grande Homeowners Association (No. 20F-H2020041-REL).

Short-Answer Quiz

Instructions: Answer the following questions in two to three complete sentences, drawing all information directly from the provided legal decision.

1. Who were the petitioner and the respondent in this case, and what was the petitioner’s core allegation?

2. What specific statute and section of the community documents did the petitioner claim the respondent violated?

3. According to Section 10.4 of the original CC&Rs, what was the required procedure for amending the Declaration?

4. Under what authority did the VVE – Casa Grande HOA Board claim it could make changes to the community documents without a membership vote?

5. What key event occurred on or about October 5, 2018, that became the central point of the dispute?

6. What was the respondent’s primary argument for why their actions were valid?

7. What is the “preponderance of the evidence,” and which party bears the burden of proof to establish a violation?

8. Why did the Administrative Law Judge conclude that the Board’s authority to create “Association Rules” was a separate process from amending the CC&Rs?

9. What remedy did the petitioner request, and why was it not granted by the Administrative Law Judge?

10. What was the final order issued by the Judge in this case?

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Answer Key

1. The petitioner was Douglas J. Karolak, a homeowner. The respondent was the VVE – Casa Grande Homeowners Association. Karolak’s core allegation was that the HOA had improperly amended the community’s governing documents.

2. The petitioner alleged a violation of Arizona Revised Statute (A.R.S.) § 33-1817(A)(1). He also claimed a violation of Part 10, Section 10.4 of the community’s Covenants, Conditions, and Restrictions (CC&Rs).

3. Section 10.4 of the CC&Rs stipulated that the Declaration could be amended by an instrument executed by the owners of at least two-thirds (2/3) of the lots. The amendment would not be effective until that instrument was officially recorded.

4. The HOA Board claimed it had the authority to make the changes under Section 3.4 of the CC&Rs. This section empowered the Board to adopt, amend, or repeal “Association Rules” as it deemed reasonable and appropriate.

5. On or about October 5, 2018, the Board recorded a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates” (Amended CC&Rs) with the Pinal County Recorder. This was done without the required two-thirds vote from the lot owners.

6. The respondent argued that because the only changes made were to Part 7 (Use Restrictions), which fell under the type of rules the Board was authorized to adopt, the Amended CC&Rs were a valid exercise of the Board’s authority. Their counsel did acknowledge, however, that perhaps the document should not have been recorded.

7. A “preponderance of the evidence” is proof that convinces the trier of fact that a contention is more probably true than not. The petitioner bears the burden of proof to establish that the respondent committed the alleged violations by this standard.

8. The Judge concluded they were separate processes because the CC&Rs cover the topics in different sections. This separation led the Judge to believe the original drafters did not intend for the Board to have the authority to amend the CC&Rs on its own.

9. The petitioner requested that the improperly recorded Amended CC&Rs be rescinded. This remedy was not granted because the applicable statute, A.R.S. § 32-2199.02, does not give the Administrative Law Judge the specific authority to order a document rescinded.

10. The final order deemed the petitioner the prevailing party. It further ordered the respondent to repay the petitioner his $500.00 filing fee within thirty days, but found that no civil penalty was appropriate.

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Essay Questions

Instructions: The following questions are designed to promote deeper analysis of the case. Formulate a comprehensive response to each, using only the information presented in the legal decision.

1. Analyze the distinction made by the Administrative Law Judge between the Board’s authority to create “Association Rules” under Section 3.4 and the process for amending the Declaration under Section 10.4. Why was this distinction critical to the case’s outcome?

2. Discuss the legal standard of “preponderance of the evidence” as defined in the decision. How did the petitioner successfully meet this burden of proof to establish the respondent’s violation, and what specific facts supported this conclusion?

3. Examine the respondent’s (HOA’s) argument regarding its authority to amend the CC&Rs. What were the fundamental flaws in this argument, and how did their counsel’s acknowledgment about the recording of the Amended CC&Rs potentially weaken their position?

4. Explain the legal framework governing this dispute, citing the specific Arizona Revised Statutes (A.R.S.) mentioned in the decision. Detail the roles of the Arizona Department of Real Estate, the Office of Administrative Hearings, and the Administrative Law Judge in resolving this type of HOA conflict.

5. Evaluate the final Order of the Administrative Law Judge. While the petitioner was deemed the prevailing party, why was their requested remedy (rescission of the Amended CC&Rs) denied? What does this reveal about the specific limits of the Administrative Law Judge’s authority in such cases under A.R.S. § 32-2199.02?

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Glossary of Key Terms

Definition

Administrative Law Judge (ALJ)

An official who presides over administrative hearings. In this case, Tammy L. Eigenheer of the Office of Administrative Hearings made the findings of fact, conclusions of law, and issued the final order.

A.R.S. § 33-1817(A)(1)

The specific Arizona Revised Statute cited by the petitioner. It states that a declaration may be amended by the association with an affirmative vote or written consent of the number of owners specified in the declaration.

Amended CC&Rs

The document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates,” which the HOA Board recorded on October 5, 2018, without the required two-thirds owner approval.

Association Rules

Rules and regulations that the HOA Board is empowered to adopt, amend, or repeal under Section 3.4 of the CC&Rs to govern the use of Common Areas and other parts of the Project. The Board argued their changes fell under this authority.

Burden of Proof

The obligation to prove one’s assertion. In this case, the petitioner bore the burden of proof to establish the respondent’s violations by a preponderance of the evidence.

An acronym for Covenants, Conditions, and Restrictions. These are the governing legal documents for a planned community. The original “Restated Declaration of Covenants, Conditions and Restrictions for VVE” was recorded on April 30, 1999.

Department

Refers to the Arizona Department of Real Estate, the agency with which the petitioner filed his Homeowners Association (HOA) Dispute Process Petition.

An acronym for Homeowners Association. In this case, the VVE – Casa Grande Homeowners Association, an association of 56 lot owners in Casa Grande, Arizona.

Office of Administrative Hearings

The office responsible for conducting hearings for disputes filed with state agencies like the Department of Real Estate.

Petitioner

The party who initiates a legal action or petition. In this case, homeowner Douglas J. Karolak.

Preponderance of the Evidence

The evidentiary standard required to win the case, defined as “such proof as convinces the trier of fact that the contention is more probably true than not.”

Respondent

The party against whom a petition is filed. In this case, the VVE – Casa Grande Homeowners Association.

Your HOA Just Changed the Rules? Why This Homeowner’s $500 Victory is a Warning to Everyone

For millions of Americans, living in a planned community means living under the authority of a Homeowners Association (HOA). While intended to protect property values, these relationships can often feel one-sided, with boards issuing mandates and homeowners feeling powerless to push back. It’s a common frustration, but it’s rare to see a single homeowner challenge their board and force a legal reckoning.

A recent case from Arizona, Douglas J. Karolak versus the VVE – Casa Grande Homeowners Association, provides a critical case study in board overreach and the surprising limits of legal victory. Karolak alleged his HOA board violated its own governing documents and state law by improperly changing the community’s core rules.

He took his case to an administrative law judge and, in a significant ruling, he won. But the outcome of this seemingly straightforward dispute was far from simple. The final decision reveals a shocking twist that holds critical lessons for every homeowner about the difference between being right on paper and getting the remedy you actually want.

There’s a Huge Difference Between a ‘Rule Change’ and a ‘Declaration Amendment’

The first lesson from this case is a critical one for every homeowner: understand the constitutional hierarchy of your community’s documents. The core of the dispute was the HOA Board’s attempt to amend its foundational document, the CC&Rs (Covenants, Conditions, and Restrictions), without getting the required approval from the homeowners.

Here are the key facts of the case:

• The Original Rule: The community’s CC&Rs explicitly stated in Section 10.4 that any amendment required a vote and execution by “at least two-thirds (2/3) of the Lots.” This is the highest level of authority in a planned community, akin to a constitution.

• The Failed Attempts: The Board had tried to get this two-thirds vote in both 2014 and 2015, but was unsuccessful.

• The Workaround: In 2018, the Board decided to bypass the homeowners. It used a separate power granted in Section 3.4 of the CC&Rs—the authority to create day-to-day “Association Rules”—to make what it called changes to the “‘rules section’ of the CC&Rs, specifically targeting the Use Restrictions in Part 7.”

The judge’s conclusion was crystal clear: The CC&Rs were drafted to treat the power to create “rules” and the power to “amend” the declaration as two entirely separate processes. This separation acts as a crucial check on the board’s power, preventing a small group from unilaterally changing the fundamental property rights of all owners. As the judge noted, “the original drafters of the CC&Rs did not contemplate that the Board had the authority to, on its own, amend the CC&Rs.”

Recording a Document Doesn’t Magically Make It Valid

To make their changes appear official, the HOA Board took a significant step. On October 5, 2018, they filed a document titled “Restated Declaration of Covenants, Conditions and Restrictions for Val Vista Estates (Amended CC&Rs)” with the Pinal County Recorder.

For the average homeowner, a formally recorded document filed with the county looks final, official, and legally binding. It’s an intimidating piece of paper that suggests any challenge would be futile.

However, the judge’s ruling highlights a critical legal truth: procedural legitimacy is paramount. An official-looking document, even one filed with the county, is invalid if the legal process required to create it was ignored. The judge found that because the Board did not follow the correct internal procedure—securing the two-thirds vote from homeowners—the very act of recording the document was improper. Even the HOA’s own lawyer seemed to concede this point during the hearing, acknowledging that “perhaps the Amended CC&Rs should not have been recorded.”

The Winner’s Paradox: You Can Be Right and Still Not Get Your Desired Fix

The final order from the Administrative Law Judge was unambiguous: Douglas Karolak, the petitioner, was officially deemed the “prevailing party.” The judge concluded that the HOA had acted in violation of its own community documents and Arizona state law. This was a clear-cut victory for the homeowner.

But here is the shocking twist. Karolak’s requested remedy was for the illegally filed “Amended CC&Rs” to be rescinded—in other words, to have them officially nullified and removed. This seems like the logical and necessary fix to the problem.

The judge, however, was bound by the limits of her authority. The final decision states plainly: “The Administrative Law Judge does not have the authority under the applicable statute to order the Amended CC&Rs rescinded.” This highlights a critical jurisdictional gap. The Administrative Law Judge’s role in this venue is to determine if a violation occurred and assign limited penalties, not to perform the function of a higher court, which might have the power to void a recorded document.

So, what was the actual remedy for this clear violation? The judge ordered the HOA to repay Karolak his $500 filing fee. No other civil penalty was issued. The homeowner won the argument but did not get the one thing he asked for to correct the board’s improper action.

A Victory on Paper, A Question in Practice

The case of Douglas J. Karolak is a powerful real-world lesson. It proves that a single homeowner, armed with a thorough understanding of their community’s governing documents, can successfully challenge an overreaching HOA board and win. It confirms that procedural shortcuts, even when filed and recorded, do not make an illegal action legal.

But it also reveals the frustrating limitations that can exist within the legal process. The homeowner was proven right, but the improperly filed document remains on the books, unable to be rescinded in this specific venue. It raises a crucial question for homeowners everywhere: How do you ensure your victory has real teeth?

Case Participants

Petitioner Side

  • Douglas J. Karolak (petitioner)

Respondent Side

  • David A. Fitzgibbons III (HOA attorney)
    Fitzgibbons Law Offices PLC
    Represented VVE – Casa Grande Homeowners Association
  • CV Mathai (witness)
    VVE – Casa Grande Homeowners Association
  • John Kelsey (witness)
    VVE – Casa Grande Homeowners Association
  • Kristi Kelsey (witness)
    VVE – Casa Grande Homeowners Association
  • William Findley (witness)
    VVE – Casa Grande Homeowners Association
  • Kay Niemi (witness)
    VVE – Casa Grande Homeowners Association
  • Mark Korte (witness)
    VVE – Casa Grande Homeowners Association
  • Felicia Del Sol (property manager rep)
    Norris Management

Neutral Parties

  • Tammy L. Eigenheer (ALJ)
    Office of Administrative Hearings
  • Judy Lowe (Commissioner)
    Arizona Department of Real Estate