The Administrative Law Judge concluded that Petitioner met his burden of establishing by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A). Petitioner was deemed the prevailing party, and Respondent was ordered to refund the $500.00 filing fee and comply with the statute in the future.
Key Issues & Findings
Failure to provide access to financial and other records within ten business days.
Respondent violated A.R.S. § 33-1258(A) by failing to allow Petitioner to examine original invoices for May 2024 (requested July 9, 2024) and bank statements from four accounts (requested September 23, 2024) within the required ten business days, despite receiving the requests through board members.
Orders: Respondent was ordered to pay Petitioner his filing fee of $500.00 within thirty (30) days and is directed to comply with the requirements of A.R.S. § 33-1258(A) going forward. No Civil Penalty was found appropriate.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
A.R.S. § 33-1258(A)
A.R.S. § 32-2199(1)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)
Vazanno v. Superior Court, 74 Ariz. 369, 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)
Analytics Highlights
Topics: HOA, records request, A.R.S. 33-1258, prevailing party, condominium association
Additional Citations:
A.R.S. § 33-1258(A)
A.R.S. § 32-2199(1)
A.A.C. R2-19-119(A)
A.A.C. R2-19-119(B)(1)
A.A.C. R2-19-119(B)(2)
Vazanno v. Superior Court, 74 Ariz. 369, 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)
Audio Overview
Decision Documents
25F-H018-REL Decision – 1263777.pdf
Uploaded 2026-01-23T18:14:18 (48.3 KB)
25F-H018-REL Decision – 1288586.pdf
Uploaded 2026-01-23T18:14:22 (105.9 KB)
Briefing Doc – 25F-H018-REL
Briefing Document: Case No. 25F-H018-REL, Allan v. The Springs Condominiums Association
Executive Summary
This briefing document synthesizes the key facts, arguments, and legal conclusions from the administrative hearing and subsequent decision in the matter of Joseph P. Allan (Petitioner) versus The Springs Condominiums Association (Respondent). The central issue was the Respondent’s failure to provide financial records to the Petitioner within the timeframe mandated by Arizona law.
The Petitioner, a homeowner and former board member, formally requested to examine bank statements and original invoices by sending emails directly to the association’s board members. The Respondent, represented by the owner of its property management company, did not fulfill these requests within the statutory ten-business-day period. The primary defense offered was that the requests were not sent to the management company, which is the customary channel for processing such items, and the board failed to forward the requests.
The Administrative Law Judge (ALJ) found conclusively in favor of the Petitioner. The decision established that the legal obligation to comply with Arizona Revised Statutes (A.R.S.) § 33-1258 rests with the association itself, and internal procedural preferences or communication failures between the board and its management agent do not absolve the association of this statutory duty. The documents were ultimately provided on the eve of the hearing, well past the legal deadline. The final order deemed the Petitioner the prevailing party, mandated the refund of his $500 filing fee, and directed the association to ensure future compliance with state law.
Case Overview
Case Number
25F-H018-REL
Jurisdiction
Office of Administrative Hearings, Phoenix, Arizona
Petitioner
Joseph P. Allan
Respondent
The Springs Condominiums Association
Presiding Judge
Administrative Law Judge Velva Moses-Thompson
Hearing Date
March 11, 2025
Decision Date
March 31, 2025
Core Allegation and Legal Framework
The dispute centered on the Petitioner’s allegation that The Springs Condominiums Association violated A.R.S. § 33-1258, which governs a member’s right to access association records.
• Statutory Requirement (A.R.S. § 33-1258 A): The statute mandates that “all financial and other records of the association shall be made reasonably available for examination by any member.” It explicitly states, “The association shall have ten business days to fulfill a request for examination.”
• Specific Violations Alleged: The Petitioner filed a petition with the Arizona Department of Real Estate after the association failed to respond to two separate requests for documents:
1. A request for original invoices for May 2024.
2. A request for bank statements from four association accounts.
Chronology of Events
• July 9, 2024: Mr. Allan emails several board members, including the President and Vice President, requesting to examine original invoices for May 2024.
• September 23, 2024: Mr. Allan emails several board members requesting to examine bank statements from four association accounts.
• October 2024 (approx.): After receiving no response, Mr. Allan files a petition with the Department of Real Estate, alleging the violations. The petition incorrectly listed the request dates as July 29 and September 24, a discrepancy clarified and acknowledged by both parties at the hearing.
• January 16, 2025: An “Order Granting Continuance” is issued at the Petitioner’s request, moving the hearing date.
• March 10, 2025: At 6:45 PM, the evening before the scheduled hearing, the Respondent provides the requested documents to Mr. Allan.
• March 11, 2025: The evidentiary hearing is held before ALJ Velva Moses-Thompson.
• March 31, 2025: The ALJ issues the final decision and order.
Analysis of Testimony and Arguments
Petitioner’s Position (Joseph P. Allan)
Mr. Allan, representing himself, argued that he followed the law by submitting his requests directly to the association. His key points were:
• Direct Communication with the Association: He intentionally sent his requests to the board members (President, Vice President, Treasurer, and Director) because he considers them to be the “association” as defined by the statute.
• Investigation of Management Company: He deliberately bypassed the management company because he was actively investigating its conduct.
• Lack of Timely Response: It was undisputed that the association failed to provide the documents within the 10-day period. He confirmed receipt only on March 10, 2025, months after the requests were made.
• Past Experience: As a former board member for three years, he was familiar with the association’s financial documents and was requesting them to ensure everything was correct due to perceived problems.
Respondent’s Position (The Springs Condominiums Association)
The association was represented by Belen Guzman, the owner of its management company, SSC Property Management. Her defense centered on a procedural failure, not a denial of the Petitioner’s right to the documents.
• Improper Channel of Request: The primary defense was that Mr. Allan failed to follow standard practice by not including the management company in his email requests.
• Board’s Failure to Act: Ms. Guzman testified that the board members who received the emails did not forward them or follow up. She stated she was unaware of the requests until after the official complaint was filed and one of the board members, Petri (the president at the time), forwarded an email to her.
• Lack of Written Policy: Ms. Guzman acknowledged that the association has no written policy requiring requests to be sent to the management company, but stated the board had verbally instructed Mr. Allan in a meeting to include management on such communications.
• Knowledge of Procedure: She argued that as a former board member, Mr. Allan was aware that record requests are typically handled by the management company.
Findings of Fact and Conclusions of Law
The ALJ’s decision provided a clear legal interpretation of the events and the responsibilities of the parties.
Key Findings of Fact
• It was undisputed that the Petitioner is a member of the Respondent association.
• The Petitioner made formal requests for records via email to board members on July 9, 2024, and September 23, 2024.
• These requests were not sent to the Respondent’s property management company.
• The Respondent did not respond to the requests within the ten-business-day timeframe required by law.
• The Respondent provided the requested documents on March 10, 2025.
• The Respondent’s representative, Ms. Guzman, did not dispute that the board members had received the requests.
Key Conclusions of Law
• The Petitioner successfully met his burden to prove by a “preponderance of the evidence” that the Respondent violated A.R.S. § 33-1258(A).
• The Respondent failed to provide any legal authority supporting its defense that a request must be sent to its property management company to be valid.
• The statutory obligation to provide records lies with the “association.” The failure of the board to forward the requests to its management agent does not excuse the association’s non-compliance.
• The ALJ concluded: “Respondent violated A.R.S. section 33-1258(A) when it failed to allow Petitioner to examine the May 2024 original invoices and bank statements from four of Respondent’s accounts, within ten business days of the date of Petitioner’s requests.”
Final Order and Implications
Based on the findings, the ALJ issued a binding order with the following components:
1. Prevailing Party: The Petitioner, Joseph P. Allan, was deemed the prevailing party.
2. Reimbursement: The Respondent was ordered to pay the Petitioner his $500.00 filing fee within thirty days of the order.
3. Future Compliance: The Respondent was formally directed to comply with the requirements of A.R.S. § 33-1258(A) going forward.
4. No Civil Penalty: The judge determined that a civil penalty was not appropriate in this matter.
The primary implication of this decision is that a condominium or homeowner association is directly and legally responsible for fulfilling its statutory obligations. It cannot use internal protocols, informal procedures, or communication breakdowns between its board and third-party vendors (like a management company) as a legal defense for failing to comply with state law.
Study Guide – 25F-H018-REL
{ “case”: { “docket_no”: “25F-H018-REL”, “case_title”: “Allan, Joseph P v. The Springs Condominiums Association”, “decision_date”: “2025-03-31”, “alj_name”: “Velva Moses-Thompson”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “If I send a records request to the Board but not the management company, can the HOA ignore it?”, “short_answer”: “No. Sending the request to Board members is sufficient to trigger the HOA’s legal obligation to respond.”, “detailed_answer”: “Even if the management company prefers requests to go directly to them, the Association is still obligated to comply with the law if the Board receives the request. In this case, the management company argued they didn’t know about the request because it went to the Board, but the judge ruled the violation still occurred.”, “alj_quote”: “Respondent did present any legal authority to establish that it was not obligated to comply with A.R.S. section 33-1258(A), for the reason that the requests were not sent to Respondent’s property management company.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “records request”, “HOA obligations”, “property management” ] }, { “question”: “How many days does the HOA have to let me examine the records I requested?”, “short_answer”: “The HOA must make records available for examination within 10 business days.”, “detailed_answer”: “Arizona law grants the Association ten business days to fulfill a request for examination after receiving it.”, “alj_quote”: “The association shall have ten business days to fulfill a request for examination.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “timelines”, “records request”, “statutory requirements” ] }, { “question”: “Can the HOA charge me a fee just to look at the records?”, “short_answer”: “No. The HOA cannot charge a member for making material available for review.”, “detailed_answer”: “While the HOA can charge for copies (up to 15 cents per page), they are explicitly prohibited from charging a fee for the act of making materials available for review.”, “alj_quote”: “The association shall not charge a member or any person designated by the member in writing for making material available for review.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “fees”, “records request”, “homeowner rights” ] }, { “question”: “What happens if I win my hearing against the HOA?”, “short_answer”: “You may be deemed the prevailing party and the HOA can be ordered to reimburse your filing fee.”, “detailed_answer”: “If the judge rules in your favor, they can order the HOA to pay back the filing fee you paid to bring the case. In this decision, the HOA was ordered to pay the homeowner $500.”, “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”, “topic_tags”: [ “penalties”, “reimbursement”, “ruling” ] }, { “question”: “Does the HOA have to provide original invoices if I request them?”, “short_answer”: “Yes. Financial records, including original invoices, must be made reasonably available.”, “detailed_answer”: “The decision confirms that failure to allow examination of original invoices constitutes a violation of the statute governing association records.”, “alj_quote”: “Respondent violated A.R.S. section 33-1258(A) when it failed to allow Petitioner to examine the May 2024 original invoices and bank statements”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “invoices”, “financial records”, “transparency” ] }, { “question”: “What is the standard of proof for proving the HOA violated the law?”, “short_answer”: “Preponderance of the evidence.”, “detailed_answer”: “The homeowner must prove their case by showing it is ‘more probably true than not.’ This is the standard evidentiary weight required in these administrative hearings.”, “alj_quote”: “Petitioner bears the burden of proof to establish that Respondent violated A.R.S. § 33-1258 (A) by a preponderance of the evidence.”, “legal_basis”: “A.A.C. R2-19-119(A)”, “topic_tags”: [ “legal standards”, “burden of proof”, “hearing procedures” ] }, { “question”: “Will the HOA always be fined a civil penalty if they break the law?”, “short_answer”: “Not necessarily. The judge has discretion on whether to apply a civil penalty.”, “detailed_answer”: “Even if a violation is found (as it was in this case regarding the records), the judge may decide that a civil penalty is not appropriate based on the circumstances.”, “alj_quote”: “No Civil Penalty is found to be appropriate in this matter.”, “legal_basis”: “Order”, “topic_tags”: [ “civil penalty”, “fines”, “enforcement” ] } ] }
Blog Post – 25F-H018-REL
{ “case”: { “docket_no”: “25F-H018-REL”, “case_title”: “Allan, Joseph P v. The Springs Condominiums Association”, “decision_date”: “2025-03-31”, “alj_name”: “Velva Moses-Thompson”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “If I send a records request to the Board but not the management company, can the HOA ignore it?”, “short_answer”: “No. Sending the request to Board members is sufficient to trigger the HOA’s legal obligation to respond.”, “detailed_answer”: “Even if the management company prefers requests to go directly to them, the Association is still obligated to comply with the law if the Board receives the request. In this case, the management company argued they didn’t know about the request because it went to the Board, but the judge ruled the violation still occurred.”, “alj_quote”: “Respondent did present any legal authority to establish that it was not obligated to comply with A.R.S. section 33-1258(A), for the reason that the requests were not sent to Respondent’s property management company.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “records request”, “HOA obligations”, “property management” ] }, { “question”: “How many days does the HOA have to let me examine the records I requested?”, “short_answer”: “The HOA must make records available for examination within 10 business days.”, “detailed_answer”: “Arizona law grants the Association ten business days to fulfill a request for examination after receiving it.”, “alj_quote”: “The association shall have ten business days to fulfill a request for examination.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “timelines”, “records request”, “statutory requirements” ] }, { “question”: “Can the HOA charge me a fee just to look at the records?”, “short_answer”: “No. The HOA cannot charge a member for making material available for review.”, “detailed_answer”: “While the HOA can charge for copies (up to 15 cents per page), they are explicitly prohibited from charging a fee for the act of making materials available for review.”, “alj_quote”: “The association shall not charge a member or any person designated by the member in writing for making material available for review.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “fees”, “records request”, “homeowner rights” ] }, { “question”: “What happens if I win my hearing against the HOA?”, “short_answer”: “You may be deemed the prevailing party and the HOA can be ordered to reimburse your filing fee.”, “detailed_answer”: “If the judge rules in your favor, they can order the HOA to pay back the filing fee you paid to bring the case. In this decision, the HOA was ordered to pay the homeowner $500.”, “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”, “topic_tags”: [ “penalties”, “reimbursement”, “ruling” ] }, { “question”: “Does the HOA have to provide original invoices if I request them?”, “short_answer”: “Yes. Financial records, including original invoices, must be made reasonably available.”, “detailed_answer”: “The decision confirms that failure to allow examination of original invoices constitutes a violation of the statute governing association records.”, “alj_quote”: “Respondent violated A.R.S. section 33-1258(A) when it failed to allow Petitioner to examine the May 2024 original invoices and bank statements”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “invoices”, “financial records”, “transparency” ] }, { “question”: “What is the standard of proof for proving the HOA violated the law?”, “short_answer”: “Preponderance of the evidence.”, “detailed_answer”: “The homeowner must prove their case by showing it is ‘more probably true than not.’ This is the standard evidentiary weight required in these administrative hearings.”, “alj_quote”: “Petitioner bears the burden of proof to establish that Respondent violated A.R.S. § 33-1258 (A) by a preponderance of the evidence.”, “legal_basis”: “A.A.C. R2-19-119(A)”, “topic_tags”: [ “legal standards”, “burden of proof”, “hearing procedures” ] }, { “question”: “Will the HOA always be fined a civil penalty if they break the law?”, “short_answer”: “Not necessarily. The judge has discretion on whether to apply a civil penalty.”, “detailed_answer”: “Even if a violation is found (as it was in this case regarding the records), the judge may decide that a civil penalty is not appropriate based on the circumstances.”, “alj_quote”: “No Civil Penalty is found to be appropriate in this matter.”, “legal_basis”: “Order”, “topic_tags”: [ “civil penalty”, “fines”, “enforcement” ] } ] }
Case Participants
Petitioner Side
Joseph P. Allan(petitioner) Appeared on behalf of himself. Name also appears as Joseph P. Allen.
Respondent Side
Belen Guzman(property manager) SSC Property Management Owner of the property management company for the Respondent. Appeared on behalf of the Respondent.
Peetri Ahon(board member) The Springs Condominiums Association Was the President of the board at the time of requests, later identified as a member at large.
Neutral Parties
Velva Moses-Thompson(ALJ) OAH Administrative Law Judge. Name also appears as Fala Moses Thompson.
Susan Nicolson(ADRE Commissioner) Arizona Department of Real Estate
Other Participants
Carmen(homeowner) The Springs Condominiums Association A homeowner who was CC'd on an email.
A.R.S. § 33-1258(A) A.R.S. § 33-1248 (A), (D), (E), and (F); and Tara CC&Rs Section 9(E)
Outcome Summary
Petitioner prevailed on the 'Records' issue (A.R.S. § 33-1258), resulting in a $500.00 filing fee reimbursement. Respondent prevailed on the 'Example 13' issue (A.R.S. § 33-1248 and CC&Rs § 9(E)).
Why this result: The Administrative Law Judge concluded that Petitioner failed to sustain her burden regarding the Open Meeting Law allegations, finding that TARA conducted meetings in compliance and the specific volunteer work referenced was not statutorily or contractually required to be placed on an agenda for formal action.
Key Issues & Findings
Records Access Violation
TARA failed to timely provide access to TARA HOA records it possessed, violating the ten business day fulfillment requirement for examination requests.
Orders: TARA was ordered to reimburse Petitioner $500.00.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
A.R.S. § 33-1258
A.R.S. § 33-1258(A)
Open Meeting Law Violation (Example 13)
Petitioner alleged open meeting violations concerning volunteer work and projects not placed on agendas or formally voted upon by the board (Example 13).
Orders: Petitioner's Petition was dismissed as to alleged violations of A.R.S. § 33-1248(A), (D), (E), and (F) and/or Tara CC&Rs Section 9(E).
Filing fee: $500.00, Fee refunded: No
Disposition: respondent_win
Cited:
A.R.S. § 33-1248(A)
A.R.S. § 33-1248(D)
A.R.S. § 33-1248(E)
A.R.S. § 33-1248(F)
Tara CC&Rs Section 9(E)
Analytics Highlights
Topics: HOA Records, Open Meeting Law, Partial Victory, Filing Fee Reimbursement, Condominium Association
Additional Citations:
A.R.S. § 32-2199
A.R.S. § 32-2199.01
A.R.S. § 32-2199.02
A.R.S. § 32-2199.04
A.R.S. § 32-2199.05
A.R.S. § 33-1248
A.R.S. § 33-1258
A.R.S. § 33-1801 et seq.
A.R.S. § 41-1092.09
Tara CC&Rs Section 9(E)
Audio Overview
Decision Documents
24F-H054-REL Decision – 1212274.pdf
Uploaded 2026-01-23T18:11:34 (70.4 KB)
24F-H054-REL Decision – 1212281.pdf
Uploaded 2026-01-23T18:11:41 (12.4 KB)
24F-H054-REL Decision – 1216809.pdf
Uploaded 2026-01-23T18:11:49 (50.9 KB)
24F-H054-REL Decision – 1225818.pdf
Uploaded 2026-01-23T18:11:58 (168.1 KB)
24F-H054-REL Decision – 1226250.pdf
Uploaded 2026-01-23T18:12:08 (41.9 KB)
Briefing Doc – 24F-H054-REL
Briefing Document: Marx v. Tara Condominium Association
Executive Summary
This document provides a comprehensive analysis of the administrative case Lisa Marx v. Tara Condominium Association (No. 24F-H054-REL), adjudicated by the Arizona Office of Administrative Hearings. The dispute centers on two primary allegations brought by homeowner and former board member Lisa Marx against the Tara Condominium Association (TARA): (1) violations of Arizona state law regarding access to association records, and (2) violations of the state’s Open Meeting Law.
The case culminated in a split decision by the Administrative Law Judge (ALJ). TARA was found to have violated A.R.S. § 33-1258 by failing to provide timely access to its financial and other records as requested by the petitioner. However, the petitioner failed to prove her second claim that TARA violated the open meeting provisions of A.R.S. § 33-1248 when board members and volunteers performed maintenance and repair projects on common areas without formal agenda items and board votes.
Consequently, the ALJ sustained the petition on the records violation and dismissed it on the open meeting violation. TARA was ordered to reimburse Ms. Marx $500, representing the filing fee for the single issue on which she prevailed. A subsequent request for rehearing filed by Ms. Marx was procedurally rejected for being submitted to the incorrect agency.
Case Background and Procedural History
Parties and Context
• Petitioner: Lisa Marx, a homeowner in the Tara Condominium Association and a former board member who served in various capacities, including Secretary, Chairperson, and Vice-Chairperson, from 2021 until her resignation in January 2024.
• Respondent: Tara Condominium Association (TARA), a 50-unit nonprofit management association, represented at the hearing by its Chairman, Mark Gottmann.
The dispute arose following a change in board leadership in early 2024, with Ms. Marx alleging the new board was operating without transparency and in violation of state statutes and the association’s governing documents.
Chronology of Key Events
Jan 2024
Lisa Marx resigns from the TARA board two weeks after being elected for a fourth term.
Feb 1, 2024
Mark Gottmann assumes the role of Chairman of the Board.
Feb–Apr 2024
Marx makes a series of five requests for association records, which are either partially or fully denied by the TARA board.
May 29, 2024
Marx files an HOA Dispute Process Petition with the Arizona Department of Real Estate, alleging two categories of violations and paying a 1,000filingfee(500 per issue).
Aug 8, 2024
TARA files an Amended Response, admitting to several of the alleged violations, offering to reimburse Marx’s $1,000 filing fee, and requesting that the hearing be vacated.
Aug 8, 2024
Marx files a reply rejecting the offer, stating that the “numerous” issues required “a ruling that is binding and definite” to “hopefully prevent further violations.”
Aug 16, 2024
The ALJ issues an order requiring Marx to narrow her petition to two specific issues, categorizing the five records-request instances as one “records” issue and requiring her to select one of the thirteen alleged open-meeting violations.
Aug 19, 2024
Marx selects “Example 13” from her petition as her second issue.
Aug 29, 2024
An administrative hearing is held before ALJ Kay A. Abramsohn.
Sep 20, 2024
The ALJ issues a final decision.
Sep 23, 2024
The ALJ issues a Minute Entry rejecting a request for rehearing filed by Marx, as it was sent to the Office of Administrative Hearings instead of the Commissioner of the Arizona Department of Real Estate.
Analysis of Disputed Issues and Testimony
The hearing focused on two central issues as narrowed by the ALJ’s order.
Issue 1: Access to Association Records (A.R.S. § 33-1258)
This issue consolidated five instances across multiple dates where Marx alleged she was improperly denied access to or provision of TARA’s records.
Petitioner’s Position (Lisa Marx):
• Marx testified that she made multiple written requests for documents including vouchers, contracts, financial reports (General Ledger, AP Distribution), architectural change forms, and violation letters.
• The board’s responses were statutorily invalid. For example, a February 22, 2024 response stated: “A member of the Association is entitled to see reasonable financial information only. A member does not have a right to see contracts entered into by the Board nor information concerning specific members. We respectfully refuse your request…” Another denial was based on her being “no longer a board member.”
• Marx argued this refusal to provide records blocks transparency, creates distrust, and prevents homeowners from ensuring the governing documents are being enforced impartially. She asserted that all requested documents, such as financial records and contracts related to common areas, are records homeowners are entitled to examine.
Respondent’s Position (Tara Condominium Association):
• Mark Gottmann testified that the board was new and that any mistakes were made out of “enthusiasm” and a desire to better the community, not malicious intent.
• He stated the board acted on advice from outside sources, including a trade association, which led them to believe they were “over-providing” documents compared to their CC&Rs, which only mandate semi-annual financial statements.
• TARA experienced delays in receiving financial reports from its management company, Colby, after it was acquired by another entity, which in turn delayed distribution to homeowners.
• Gottmann argued that some requested documents did not exist (e.g., contracts for volunteer work), while others were justifiably withheld because they contained private information about individual homeowners (e.g., violation letters, architectural change forms).
Issue 2: Open Meeting Law Violations (A.R.S. § 33-1248)
This issue centered on “Example 13” of the petition, which alleged the board undertook several projects without adhering to open meeting requirements.
Petitioner’s Position (Lisa Marx):
• Marx alleged that several projects were performed on common property without being included on a meeting agenda and without a formal vote by the board in an open meeting. These projects included:
◦ Board members spraying weeds.
◦ Board members digging up grass around trees and laying mulch.
◦ A board member refinishing wood shutters.
• She argued these actions violated A.R.S. § 33-1248 and TARA’s own CC&Rs (Section 9(E)), which states, “A majority vote of the Managers shall entitle the Board to carry out action on behalf of the owners of the units.”
• The failure to discuss these items in an open meeting denied members the right to provide input before the board took action on community property.
Respondent’s Position (Tara Condominium Association):
• Gottmann characterized the projects as ongoing operational responsibilities and good-faith efforts by volunteers to save the association money.
• The weed spraying was described as an “experiment” at no cost to TARA. The mulching was done with donated materials in response to a homeowner’s suggestion. The shutter repair was done by volunteers for a nominal cost of less than $150 for materials, which was within the monthly maintenance budget.
• He argued these were not formal actions requiring a board vote but were undertaken with an “enthusiasm and desire to make our community a better place.” TARA’s CC&Rs (Section 12, Part D) grant the board the power “to use and expend the assessments collected to maintain, care for, and preserve the common elements.”
Administrative Law Judge’s Decision and Order
The ALJ’s decision, issued on September 20, 2024, delivered a split verdict, finding for each party on one of the two core issues.
Finding on Records Violation (A.R.S. § 33-1258):
• Verdict: TARA violated the statute.
• Reasoning: The ALJ concluded that TARA failed to provide access to records it possessed within the statutorily required ten-day timeframe. While TARA had a potential defense for delays related to its management company and a valid reason to withhold records containing personal information of other members, the overall evidence demonstrated a failure to comply with the law.
• Outcome: The petitioner was deemed the prevailing party on this issue.
Finding on Open Meeting Violation (A.R.S. § 33-1248):
• Verdict: TARA did not violate the statute.
• Reasoning: The ALJ found that the petitioner failed to sustain her burden of proof. The evidence showed that TARA conducted its formal meetings in compliance with open meeting laws, providing notice and agendas. The ALJ concluded there was “no evidence in the hearing record that… those work circumstances… were required by statute or the CC&Rs to be placed on a TARA agenda for discussion and/or for ‘formal action’ by the Board.”
• Outcome: The respondent was deemed the prevailing party on this issue.
Final Order
Based on the findings, the ALJ issued the following orders:
1. Petitioner’s Petition is sustained as to the TARA violation of A.R.S. § 33-1258 (Records).
2. Petitioner’s Petition is dismissed as to the alleged violations by TARA of A.R.S. § 33-1248 (Open Meetings).
3. TARA is ordered to reimburse Petitioner in the amount of $500.00, representing the filing fee for the single successful claim.
Study Guide – 24F-H054-REL
{ “case”: { “docket_no”: “24F-H054-REL”, “case_title”: “Lisa Marx v. Tara Condominium Association”, “decision_date”: “2024-09-20”, “alj_name”: “Kay A. Abramsohn”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Can my HOA refuse to provide financial records because they are waiting to receive them from their third-party management company?”, “short_answer”: “No. The HOA is responsible for providing access to records within the statutory 10-day timeframe, regardless of management company delays.”, “detailed_answer”: “The ALJ ruled that waiting for a management company to provide monthly reports does not excuse the association from its statutory obligation to make records reasonably available within 10 business days. Even if the HOA acts in good faith while waiting for a vendor, failure to provide existing records violates the statute.”, “alj_quote”: “TARA has a defense, although unsupported, regarding the time frame only as to the financial documents for which TARA was waiting from its management company. … Overall, as to A.R.S. § 33-1258, there is no evidence that, within the ten day time frame, TARA provided access to the TARA HOA records it did have and which were required to have been provided to Petitioner; therefore, the Administrative Law Judge concludes that TARA violated A.R.S. § 33-1258.”, “legal_basis”: “A.R.S. § 33-1258”, “topic_tags”: [ “records request”, “financial records”, “management company” ] }, { “question”: “Does a group of board members or volunteers doing unpaid maintenance work require an open meeting and a formal vote?”, “short_answer”: “Not necessarily. If the work is volunteer-based and doesn’t require a specific contract or expenditure necessitating a vote under the CC&Rs or statutes, it may not trigger open meeting requirements.”, “detailed_answer”: “The ALJ determined that volunteer work performed by board members (like weeding or painting) to save money did not constitute ‘formal action’ that required placement on an agenda or a formal vote in an open meeting, provided no statute or governing document specifically required it.”, “alj_quote”: “There is no evidence in the hearing record that, prior to the volunteer work described in Example 13, that those work circumstances, or any projected volunteer work circumstances, were required by statute or the CC&Rs to be placed on a TARA agenda for discussion and/or for ‘formal action’ by the Board at the TARA monthly meetings.”, “legal_basis”: “A.R.S. § 33-1248”, “topic_tags”: [ “open meetings”, “volunteer work”, “board authority” ] }, { “question”: “Can the HOA withhold violation letters or architectural change forms concerning other homeowners?”, “short_answer”: “Yes, if those documents contain personal information about specific members.”, “detailed_answer”: “The decision affirms that HOAs can refuse to provide records related to specific units, such as violation notices or contracts containing personal data, under the statutory exception for personal, health, or financial records of individual members.”, “alj_quote”: “A.R.S. § 33-1258(B)(4) provides an exception to the requirement to provide records for ‘personal, health or financial records of an individual member’ … In this case, because some of the requested ‘repair’ contract information for repairs at certain addresses may have contained personal information of another member, TARA was likely within its statutory authority to refuse to provide that particular information.”, “legal_basis”: “A.R.S. § 33-1258(B)(4)”, “topic_tags”: [ “privacy”, “violation letters”, “records request” ] }, { “question”: “Can the board deny my records request because I am no longer a board member?”, “short_answer”: “No. The right to examine records belongs to all members of the association.”, “detailed_answer”: “The ALJ found the HOA in violation when it declined to provide information on the grounds that the requester was ‘no longer a Board member.’ The statute requires records be made available to ‘any member.'”, “alj_quote”: “TARA declined to provide such, stating that Petitioner was no longer a Board member. … TARA failed to comply with A.R.S. § 33-1258 regarding provision of access to TARA HOA records.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “homeowner rights”, “records access”, “board membership” ] }, { “question”: “If I file a petition with two issues and only win one, do I get my filing fee back?”, “short_answer”: “You may receive a partial reimbursement. The tribunal may order the HOA to reimburse the portion of the fee related to the successful claim.”, “detailed_answer”: “In this case, the petitioner paid 1,000fortwoissues(500 per issue). Since the petitioner prevailed on the records issue but failed on the open meeting issue, the ALJ ordered the HOA to reimburse only $500.”, “alj_quote”: “IT IS ORDERED that TARA reimburse Petitioner in the amount of $500.00. … The Administrative Law Judge concludes TARA is the prevailing party regarding the ‘Example 13’ issue and Petitioner bears the filing fee on this issue.”, “legal_basis”: “A.R.S. § 32-2199.01”, “topic_tags”: [ “filing fees”, “dispute resolution”, “penalties” ] }, { “question”: “Does being a ‘new board’ or ‘learning the ropes’ excuse the HOA from following state laws?”, “short_answer”: “No. Ignorance of the law or being a new board is not a valid defense for violating statutes.”, “detailed_answer”: “The HOA argued they were a new board acting in the best interest of the community and learning better governing practices. The ALJ acknowledged this explanation but still ruled that the failure to provide records was a violation of state statute.”, “alj_quote”: “TARA explained that the Board was a new Board and, believing it was acting in the Board’s best interest, was in the process of learning the procedures for better governing practices. … the Administrative Law Judge concludes that TARA violated A.R.S. § 33-1258.”, “legal_basis”: “A.R.S. § 33-1258”, “topic_tags”: [ “board duties”, “legal compliance”, “defenses” ] } ] }
Blog Post – 24F-H054-REL
{ “case”: { “docket_no”: “24F-H054-REL”, “case_title”: “Lisa Marx v. Tara Condominium Association”, “decision_date”: “2024-09-20”, “alj_name”: “Kay A. Abramsohn”, “tribunal”: “OAH”, “agency”: “ADRE” }, “questions”: [ { “question”: “Can my HOA refuse to provide financial records because they are waiting to receive them from their third-party management company?”, “short_answer”: “No. The HOA is responsible for providing access to records within the statutory 10-day timeframe, regardless of management company delays.”, “detailed_answer”: “The ALJ ruled that waiting for a management company to provide monthly reports does not excuse the association from its statutory obligation to make records reasonably available within 10 business days. Even if the HOA acts in good faith while waiting for a vendor, failure to provide existing records violates the statute.”, “alj_quote”: “TARA has a defense, although unsupported, regarding the time frame only as to the financial documents for which TARA was waiting from its management company. … Overall, as to A.R.S. § 33-1258, there is no evidence that, within the ten day time frame, TARA provided access to the TARA HOA records it did have and which were required to have been provided to Petitioner; therefore, the Administrative Law Judge concludes that TARA violated A.R.S. § 33-1258.”, “legal_basis”: “A.R.S. § 33-1258”, “topic_tags”: [ “records request”, “financial records”, “management company” ] }, { “question”: “Does a group of board members or volunteers doing unpaid maintenance work require an open meeting and a formal vote?”, “short_answer”: “Not necessarily. If the work is volunteer-based and doesn’t require a specific contract or expenditure necessitating a vote under the CC&Rs or statutes, it may not trigger open meeting requirements.”, “detailed_answer”: “The ALJ determined that volunteer work performed by board members (like weeding or painting) to save money did not constitute ‘formal action’ that required placement on an agenda or a formal vote in an open meeting, provided no statute or governing document specifically required it.”, “alj_quote”: “There is no evidence in the hearing record that, prior to the volunteer work described in Example 13, that those work circumstances, or any projected volunteer work circumstances, were required by statute or the CC&Rs to be placed on a TARA agenda for discussion and/or for ‘formal action’ by the Board at the TARA monthly meetings.”, “legal_basis”: “A.R.S. § 33-1248”, “topic_tags”: [ “open meetings”, “volunteer work”, “board authority” ] }, { “question”: “Can the HOA withhold violation letters or architectural change forms concerning other homeowners?”, “short_answer”: “Yes, if those documents contain personal information about specific members.”, “detailed_answer”: “The decision affirms that HOAs can refuse to provide records related to specific units, such as violation notices or contracts containing personal data, under the statutory exception for personal, health, or financial records of individual members.”, “alj_quote”: “A.R.S. § 33-1258(B)(4) provides an exception to the requirement to provide records for ‘personal, health or financial records of an individual member’ … In this case, because some of the requested ‘repair’ contract information for repairs at certain addresses may have contained personal information of another member, TARA was likely within its statutory authority to refuse to provide that particular information.”, “legal_basis”: “A.R.S. § 33-1258(B)(4)”, “topic_tags”: [ “privacy”, “violation letters”, “records request” ] }, { “question”: “Can the board deny my records request because I am no longer a board member?”, “short_answer”: “No. The right to examine records belongs to all members of the association.”, “detailed_answer”: “The ALJ found the HOA in violation when it declined to provide information on the grounds that the requester was ‘no longer a Board member.’ The statute requires records be made available to ‘any member.'”, “alj_quote”: “TARA declined to provide such, stating that Petitioner was no longer a Board member. … TARA failed to comply with A.R.S. § 33-1258 regarding provision of access to TARA HOA records.”, “legal_basis”: “A.R.S. § 33-1258(A)”, “topic_tags”: [ “homeowner rights”, “records access”, “board membership” ] }, { “question”: “If I file a petition with two issues and only win one, do I get my filing fee back?”, “short_answer”: “You may receive a partial reimbursement. The tribunal may order the HOA to reimburse the portion of the fee related to the successful claim.”, “detailed_answer”: “In this case, the petitioner paid 1,000fortwoissues(500 per issue). Since the petitioner prevailed on the records issue but failed on the open meeting issue, the ALJ ordered the HOA to reimburse only $500.”, “alj_quote”: “IT IS ORDERED that TARA reimburse Petitioner in the amount of $500.00. … The Administrative Law Judge concludes TARA is the prevailing party regarding the ‘Example 13’ issue and Petitioner bears the filing fee on this issue.”, “legal_basis”: “A.R.S. § 32-2199.01”, “topic_tags”: [ “filing fees”, “dispute resolution”, “penalties” ] }, { “question”: “Does being a ‘new board’ or ‘learning the ropes’ excuse the HOA from following state laws?”, “short_answer”: “No. Ignorance of the law or being a new board is not a valid defense for violating statutes.”, “detailed_answer”: “The HOA argued they were a new board acting in the best interest of the community and learning better governing practices. The ALJ acknowledged this explanation but still ruled that the failure to provide records was a violation of state statute.”, “alj_quote”: “TARA explained that the Board was a new Board and, believing it was acting in the Board’s best interest, was in the process of learning the procedures for better governing practices. … the Administrative Law Judge concludes that TARA violated A.R.S. § 33-1258.”, “legal_basis”: “A.R.S. § 33-1258”, “topic_tags”: [ “board duties”, “legal compliance”, “defenses” ] } ] }
Case Participants
Petitioner Side
Lisa Marx(petitioner) Tara Condominium Association (Homeowner) Also former HOA Secretary, Vice-Chairperson, and Chairperson.
Brenda Spielder(observer) Tara Condominium Association (Member) Attended hearing with Petitioner.
Cynthia Poland(observer) Tara Condominium Association (Member) Attended hearing with Petitioner.
Respondent Side
Mark Gottmann(board member) Tara Condominium Association Chairman of the Board; represented Tara at the hearing.
Chandler W. Travis(HOA attorney) Travis Law Firm PLC Counsel for Tara Condominium Association until August 27, 2024.
Stephanie Bushart(board member) Tara Condominium Association
Tina Marie Shepherd(board member) Tara Condominium Association Resigned as Chairperson on January 31, 2024.
Dennis Anderson(board member) Tara Condominium Association Involved in volunteer work (weed spraying, trench digging, shutter refinishing).
Judy Rice(board member) Tara Condominium Association Treasurer and CPA.
Ted(board member) Tara Condominium Association Involved in volunteer trench work.
Nikki(volunteer) Tara Condominium Association Involved in volunteer shutter repair.
Neutral Parties
Kay A. Abramsohn(ALJ) Office of Administrative Hearings
Susan Nicolson(Commissioner) Arizona Department of Real Estate
Other Participants
Renee Snow(volunteer) Tara Condominium Association Volunteered for landscaping committee.
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
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.
Briefing Document: Babington v. Park Scottsdale II Townhouse Corporation
Executive Summary
This document synthesizes the key findings, arguments, and outcomes from the administrative case of Nancy L. Babington (Petitioner) versus the Park Scottsdale II Townhouse Corporation (Respondent). The dispute centered on the Respondent’s failure to provide association records as required by Arizona state law (A.R.S. § 33-1258).
The case progressed through two distinct phases: an initial hearing that ruled in favor of the Respondent, and a subsequent rehearing that reversed the decision. The initial ruling was based on the Respondent’s testimony that it did not possess the requested records due to a dispute with a former management company. However, the rehearing was granted based on newly discovered evidence proving the Respondent, through its management company and board, did possess key documents at the time of the request.
The final judgment established that the Respondent had violated state law. The Administrative Law Judge rejected the Respondent’s defense, including the argument that records held in a corporate satellite office were not in its possession. As a result, the Respondent was ordered to reimburse the Petitioner’s $500 filing fee and pay a $2,500 civil penalty to the Arizona Department of Real Estate.
Case Background and Timeline
The dispute arose from a records request made by Petitioner Nancy L. Babington to her condominium association, Park Scottsdale II Townhouse Corporation, and its management company, Associa Arizona. The timeline of key events is as follows:
June-July 2019
Respondent’s prior management company, Community Management & Consulting, LLC (CMC), terminates its agreement.
Post-July 2019
Respondent hires Associa Arizona (Associa). Associa and the Respondent encounter difficulty obtaining records from CMC due to a financial dispute.
April 29, 2020
Petitioner sends a formal email requesting association records from September 1, 2019, to April 28, 2020, citing A.R.S. § 33-1258.
May 1, 2020
Petitioner provides a specific, nine-point list of requested documents, including bank statements, financial statements, and contracts.
May 28, 2020
Having received no documents, Petitioner files a petition with the Arizona Department of Real Estate.
August 28, 2020
The Office of Administrative Hearings conducts the initial hearing.
September 17, 2020
The Administrative Law Judge (ALJ) issues a decision denying the petition.
Post-Sept 2020
Respondent provides some of the requested documents to the Petitioner. Upon review, Petitioner discovers evidence that the documents had been in the Respondent’s possession prior to her request.
Date Unspecified
Petitioner files a request for rehearing based on newly discovered material evidence.
March 4, 2021
A rehearing is held.
March 24, 2021
The ALJ issues a new decision, reversing the original finding and ruling in favor of the Petitioner.
The Initial Hearing: Petition Denied
The initial hearing on August 28, 2020, focused on whether the Respondent had violated its statutory obligation to provide records.
Petitioner’s Allegation
The Petitioner’s case was based on her formal request for records on April 29, 2020, and the Respondent’s failure to produce any documents. Her petition stated:
“After repeated attempts since the beginning of this year to get information, on April 29, 2020 I emailed Associa Arizona and the Board of Directors of Park Scottsdale II formally requesting records per ARS 33-1258 and to date, May 25, 2020, I have not received anything.”
Respondent’s Defense
The Respondent’s primary defense was that it could not provide documents that were not in its possession.
• Withheld Records: Joseph Silberschlag, Secretary of the Board of Directors, testified that due to ongoing issues with the former management company (CMC), neither the association nor Associa had possession of many documents, including previous financial records.
• Inability to Create Documents: Mr. Silberschlag stated that without the starting balances from CMC, it was not possible to create current financial statements.
• No Obligation to Create: The Respondent argued it was “under no statutory obligation to create documents to respond to Petitioner’s request.”
Ruling and Rationale
The ALJ sided with the Respondent in the initial decision. The judge noted that while there was no dispute that the documents were not provided within the 10-day statutory period, the Petitioner had not provided any authority showing the Respondent was required to create a document responsive to her request. The ruling concluded:
“Respondent did not have possession of any of the documents requested at the time of Petitioner’s request… Thus, Petitioner failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”
The petition was subsequently denied on September 17, 2020.
The Rehearing: Decision Reversed
A rehearing was granted after the Petitioner discovered that, contrary to the testimony at the initial hearing, the Respondent had possessed several of the requested documents. The rehearing on March 4, 2021, introduced new evidence that fundamentally changed the outcome of the case.
New Evidence and Testimony
The Petitioner presented evidence focusing on three categories of documents she had requested:
• Bank Statements: Petitioner testified that bank statements she received after the initial hearing showed they had been sent to Associa starting in August 2019. Evelyn Shanley, Community Director for Associa, testified that the statements were sent to a national office in Richardson, Texas, and admitted she did not contact that office to obtain them in response to the Petitioner’s request.
• Contracts: Petitioner received two contracts signed by board members on March 27 and March 31, 2020, which were in existence prior to her request. Ms. Shanley admitted these were not provided because the board members had not given them to Associa.
• 1099s: Petitioner noted a document indicating four vendors were eligible for 1099s for 2019. Ms. Shanley denied that any 1099s had been issued.
Respondent’s Evolved Arguments
Faced with the new evidence, the Respondent’s arguments shifted:
• “Immediate Possession”: Counsel argued that the requested documents were not in the “immediate possession” of Associa’s local office.
• Concession on Bank Statements: During closing arguments, Respondent’s counsel acknowledged that “‘one could concede’ the bank statements located in Richardson, Texas were in the possession of Associa and should have been provided to Petitioner in response to her request.”
• Mootness and Penalties: Counsel argued the matter was now moot because the documents had been provided. It was further argued that a civil penalty was inappropriate because the Petitioner did not specifically request one on her initial petition form.
Final Ruling and Rationale
The ALJ found the new evidence compelling and decisive.
• Direct Contradiction: The ruling stated that “the evidence presented during the rehearing was directly contradictory” to the representation made at the initial hearing that Respondent did not have possession of the documents.
• Violation Established: The ALJ concluded that the Petitioner successfully “established by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”
• Authority for Civil Penalty: The ALJ firmly rejected the Respondent’s argument against a civil penalty. The decision cited A.R.S. § 32-2199.02, noting that the plain language of the statute grants the judge the authority to levy a penalty for established violations. The judge wrote, “Nothing in the statute limits the available remedies to those specifically requested by a petitioner.”
Final Order and Penalties
Given the established violation, the ALJ found that a civil penalty was appropriate. The final order, issued March 24, 2021, mandated the following actions by the Respondent within 30 days of the decision’s mailing date:
1. Reimbursement of Filing Fee: Pay the Petitioner, Nancy L. Babington, her filing fee of $500.00.
2. Payment of Civil Penalty: Pay the Arizona Department of Real Estate a civil penalty of $2,500.00.
Study Guide – 20F-H2020064-REL-RHG
Study Guide: Babington v. Park Scottsdale II Townhouse Corporation
This study guide provides a comprehensive review of the administrative case Nancy L. Babington vs. Park Scottsdale II Townhouse Corporation. It covers the initial hearing, the subsequent rehearing, the key arguments presented by both parties, and the final legal outcome. The materials are designed to test and deepen understanding of the case’s facts, legal principles, and timeline.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three complete sentences, using only information provided in the case documents.
1. What specific Arizona statute did Petitioner Nancy L. Babington allege that the Respondent, Park Scottsdale II Townhouse Corporation, had violated?
2. What was the Respondent’s primary defense during the initial hearing for not providing the requested documents within the statutory timeframe?
3. What was the official outcome of the first Administrative Law Judge Decision issued on September 17, 2020?
4. On what legal grounds did the Petitioner successfully request a rehearing of the case?
5. What new evidence regarding the requested bank statements was introduced during the rehearing?
6. How did the Respondent’s management company, Associa Arizona, explain its failure to produce the two contracts signed in March 2020?
7. What was the Respondent’s counsel’s argument at the rehearing for why a civil penalty should not be levied?
8. How did the Administrative Law Judge counter the Respondent’s argument regarding the imposition of a civil penalty?
9. What two financial penalties were included in the final order issued on March 24, 2021?
10. What is the standard of proof the Petitioner was required to meet, and what is its definition according to the case file?
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Answer Key
1. The Petitioner alleged that the Respondent had violated A.R.S. Title 33, Chapter 16, Section 33-1258. This statute requires a condominium owners association to make its financial and other records reasonably available for examination by any member within ten business days of a request.
2. During the initial hearing, the Respondent argued that it was unable to provide the documents because they were not in its possession. This was attributed to a financial disagreement with its former management company, Community Management & Consulting (CMC), which was withholding records.
3. The first decision, issued on September 17, 2020, was in favor of the Respondent. The Administrative Law Judge denied the Petitioner’s petition, concluding she had failed to establish by a preponderance of the evidence that the Respondent violated the statute, as it was not required to create or provide documents it did not possess.
4. A rehearing was granted based on the Petitioner’s claim of “newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.” After the initial ruling, the Respondent provided some documents, which revealed that it had, in fact, been in possession of them prior to the Petitioner’s formal request.
5. During the rehearing, it was revealed that bank statements were being sent to Associa’s national central office in Richardson, Texas, starting in August 2019. An Associa representative admitted that the local office never contacted the central office to obtain these statements in response to the Petitioner’s request.
6. Associa’s representative, Evelyn Shanley, admitted that two signed contracts existed but had not been provided to the Petitioner. She stated this was because the members of the Board of Directors who signed them had not yet provided the contracts to Associa.
7. The Respondent’s counsel argued that a civil penalty was not appropriate because the Petitioner did not specifically request one by checking the corresponding box on the initial petition. Counsel asserted that the rehearing process was not designed for the Petitioner to change the relief requested.
8. The Judge rejected the Respondent’s argument, stating it was an erroneous interpretation of A.R.S. § 32-2199.02. The Judge clarified that the plain language of the statute allows the Administrative Law Judge to levy a civil penalty for established violations, and nothing in the statute limits available remedies to only those specifically requested by a petitioner.
9. The final order required the Respondent to pay the Petitioner her 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 required standard of proof was a “preponderance of the evidence.” The case document defines this as “Evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”
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Essay Questions
Instructions: The following questions are designed for essay-style responses. Formulate a comprehensive argument using only the evidence and legal reasoning presented in the source documents.
1. Analyze the concept of “possession” as it applied to the association’s records in this case. How did the distinction between Associa’s local Arizona office and its national central office in Texas impact the initial ruling versus the outcome of the rehearing?
2. Trace the evolution of the Respondent’s legal arguments from the first hearing to the second. Discuss the strengths and weaknesses of their positions at each stage, including the “mootness” argument, and explain why their defense ultimately failed.
3. Discuss the legal standard of “preponderance of the evidence.” How did the Petitioner fail to meet this standard in the initial hearing but succeed in the rehearing? Use specific examples of evidence related to the bank statements and contracts to support the analysis.
4. Examine the role and authority of the Administrative Law Judge in this case, particularly concerning the decision to grant a rehearing and the authority to levy a civil penalty even when not explicitly requested by the petitioner.
5. Evaluate the significance of A.R.S. § 33-1258 for condominium owners. Using the facts of this case, explain the rights it grants to members and the obligations it places on associations and their management companies regarding record-keeping and transparency.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions and orders. In this case, the ALJ was Tammy L. Eigenheer.
A.R.S. § 33-1258
The specific Arizona Revised Statute that requires condominium associations to make all financial and other records reasonably available for examination by a member within ten business days of a request.
Associa Arizona (Associa)
The management company hired by Park Scottsdale II Townhouse Corporation after the termination of the previous management agreement. Associa was responsible for handling the Petitioner’s records request on behalf of the association.
Civil Penalty
A monetary penalty levied by a government agency or administrative judge for a violation of a statute or regulation. In this case, a $2,500 penalty was levied against the Respondent for violating A.R.S. § 33-1258.
Community Management & Consulting, LLC (CMC)
The previous management company for Park Scottsdale II Townhouse Corporation. CMC terminated its agreement in 2019 and was withholding records from the association due to a financial disagreement.
Department of Real Estate
The Arizona state agency with jurisdiction to hear disputes between property owners and condominium owners associations. The Petitioner filed her initial petition with this department.
HOA Dispute Rehearing Request
The formal request filed by the Petitioner with the Department of Real Estate to have the case reheard. It was granted based on the discovery of new material evidence.
Petitioner
The party who files a petition initiating a legal action. In this case, the Petitioner was Nancy L. Babington, a member of the condominium association.
Preponderance of the Evidence
The standard of proof required in this administrative hearing. It is defined as evidence that is more convincing and shows that the fact sought to be proved is more probable than not.
Respondent
The party against whom a petition is filed. In this case, the Respondent was Park Scottsdale II Townhouse Corporation, the condominium owners association.
Blog Post – 20F-H2020064-REL-RHG
She Sued Her HOA and Lost. What Happened Next Reversed Everything: 4 Lessons from a Homeowner’s Fight for Records
For too many homeowners, the Homeowner’s Association is a black box. Simple requests for financial records or board contracts—information you are legally entitled to—are met with delays, excuses, or outright silence. This isn’t just an annoyance; it’s an abuse of power that can leave residents feeling helpless against a secretive body that controls their property and their money. But what happens when one homeowner refuses to accept the stonewalling?
The case of Nancy L. Babington versus her Scottsdale, Arizona HOA provides a powerful playbook for fighting back. Documented in public legal records, her journey began with a standard request for records, escalated to a legal petition that she initially lost, and ended with a stunning reversal that holds critical lessons for every homeowner in America. Her fight demonstrates how persistence, diligence, and an understanding of the law can turn a seemingly hopeless situation into a victory for transparency.
Here are the four essential lessons from her successful battle for accountability.
1. Lesson One: An Initial Loss Isn’t the Final Word
Nancy Babington’s initial petition against her HOA was denied. At the first hearing on August 28, 2020, the HOA presented a seemingly plausible defense: they couldn’t provide the records because of an ongoing dispute with a former management company, CMC, which they claimed was withholding the documents.
The judge sided with the HOA. In a decision issued on September 17, 2020, the judge ruled against Babington, stating she had not sufficiently proven her case. The official ruling found she “failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).” For most people, this would have been the end of the story.
But then the HOA made a critical, almost theatrical, miscalculation. After their victory, they provided Babington with some of the documents she had requested. As she reviewed them, she discovered the bombshell: the records proved the HOA had possessed crucial documents like bank statements and signed board contracts all along. These documents had nothing to do with the former management company, CMC, making the HOA’s initial defense appear to be a deliberate misdirection. This was the “newly discovered material evidence” she needed. The homeowner turned the HOA’s own actions against them, securing a rehearing on March 4, 2021, that would unravel their entire case.
2. Lesson Two: “Possession” Is More Than What’s in the Local Office
During the rehearing, the HOA pivoted to a new excuse, this time concerning bank statements. Their national management company, Associa, had its bank statements sent to a central office in Richardson, Texas. Because the records weren’t physically in the local Arizona office, the HOA argued they were not in their “immediate possession” and therefore not subject to the production deadline.
Under questioning, the Community Director, Evelyn Shanley, admitted she never even contacted the Texas office to get the statements for the homeowner. The HOA’s legal argument rested on the idea that their own corporate geography could shield them from transparency laws.
The judge flatly rejected this logic. An organization is responsible for its own records, no matter where they are stored. The argument was so weak that the HOA’s own lawyer was forced to backpedal during the hearing. The final decision noted:
Counsel acknowledged during closing arguments that “one could concede” the bank statements located in Richardson, Texas were in the possession of Associa and should have been provided to Petitioner in response to her request.
This ruling is a critical precedent: Your HOA cannot hide records in a corporate vault in another state and claim they are out of reach. If the documents belong to the association, they are in its possession, period.
3. Lesson Three: The Board Is the HOA, Not a Separate Entity
The next fight was over two contracts signed by board members in March 2020—documents that were created months after the dispute with the old management company. The excuse for not providing them? The management company claimed the contracts “had not been provided by the members of the Board of Directors to Associa.”
This was an attempt to create a legal fiction—that the Board of Directors and the HOA’s management company are separate entities, and that if the Board withholds a document from its own agent, the HOA can claim ignorance. The court did not buy it. By holding the HOA (the Respondent) responsible for the failure to produce the documents, the judge made it clear that this distinction is invalid.
For the purposes of records law, the Board is the HOA. The lesson is clear: The buck stops with the HOA. Board members cannot play a shell game with documents to evade their legal duty.
4. Lesson Four: Justice Doesn’t Require You to Check the Right Box
Having lost on the facts, the HOA’s counsel made one last-ditch effort to avoid a penalty. They argued that a civil penalty was inappropriate because the petitioner “did not indicate in her petition that she was seeking a civil penalty.” In essence, they claimed that because she hadn’t checked the right box on a form, the judge was powerless to punish them for breaking the law.
The Administrative Law Judge swiftly dismantled this procedural excuse. The judge’s final decision, issued on March 24, 2021, explicitly called out the HOA’s flawed logic:
Respondent erroneously interpreted A.R.S. § 32-2199.02 to require a petitioner to identify the requested relief in the petition when the plain language of the statute provides that the Administrative Law Judge may levy a civil penalty for violations that are established. Nothing in the statute limits the available remedies to those specifically requested by a petitioner.
The final ruling was the tangible consequence of the HOA’s failed arguments and lack of transparency. The judge ordered the HOA to reimburse Babington’s $500 filing fee and levied a separate $2,500 civil penalty payable to the Arizona Department of Real Estate. The message was unmistakable: the law has teeth, and a judge can use them based on the facts, regardless of which boxes were checked on a form.
Conclusion: Knowledge is Power
Nancy Babington’s fight is a masterclass in homeowner advocacy. Her journey from a seemingly hopeless loss to a precedent-setting victory proves that a single resident, armed with facts and relentless persistence, can force an HOA to follow the law. This case affirms that transparency is a legal requirement, not an optional courtesy. It serves as a powerful reminder that while the law is on the side of transparency, it often falls to diligent homeowners to hold their associations accountable.
This case was won because the facts came to light—do you know what your rights are, and what records you’re entitled to see from your own HOA?
Case Participants
Petitioner Side
Nancy L. Babington(petitioner) Appeared on her own behalf at both the initial hearing and the rehearing.,
Respondent Side
Lydia Linsmeier(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent at the initial hearing.,
Mark K. Sahl(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent at the rehearing.,
Scott B. Carpenter(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent at the rehearing.,
Joseph Silberschlag(board member) Park Scottsdale II Townhouse Corporation Secretary of the Board of Directors; testified at the initial hearing; also referred to as 'Joe Silberschlag' in the petition request.,,,
Debbie Schumacher(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Marty Shuford(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Angelina Rajenovich(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Dermot Brown(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Lori Nusbaum(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Linda Parker(property manager) Associa Arizona Director of Client Services; responded to Petitioner's record requests.,,,
Evelyn Shanley(property manager/witness) Associa Arizona Community Director; previously communicated with Petitioner; testified at the rehearing.,,,
Laura Smith(property manager) Associa Arizona Previously communicated with Petitioner regarding records.,
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
c. serrano(admin staff) Transmitted the initial decision.
Other Participants
Stephen Silberschlag(unknown) Petitioner requested proof of his liability insurance.,
Note: A Rehearing was requested for this case. The dashboard statistics reflect the final outcome of the rehearing process.
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, Scott B. Carpenter
Alleged Violations
A.R.S. § 33-1258(A)
Outcome Summary
The Administrative Law Judge found Respondent violated A.R.S. § 33-1258(A). Respondent was ordered to reimburse Petitioner's $500.00 filing fee and pay a $2,500.00 civil penalty to the Department of Real Estate.
Key Issues & Findings
Failure to make financial and other association records reasonably available for examination/provide copies within ten business days
Petitioner formally requested several records on May 1, 2020, but Respondent failed to provide the documents within the 10-day statutory limit. Evidence presented at the rehearing established that Respondent possessed the requested bank statements and contracts prior to the request.
Orders: Respondent was ordered to pay Petitioner her $500.00 filing fee and pay a civil penalty of $2,500.00 to the Department of Real Estate.
Briefing Document: Babington v. Park Scottsdale II Townhouse Corporation
Executive Summary
This document synthesizes the key findings, arguments, and outcomes from the administrative case of Nancy L. Babington (Petitioner) versus the Park Scottsdale II Townhouse Corporation (Respondent). The dispute centered on the Respondent’s failure to provide association records as required by Arizona state law (A.R.S. § 33-1258).
The case progressed through two distinct phases: an initial hearing that ruled in favor of the Respondent, and a subsequent rehearing that reversed the decision. The initial ruling was based on the Respondent’s testimony that it did not possess the requested records due to a dispute with a former management company. However, the rehearing was granted based on newly discovered evidence proving the Respondent, through its management company and board, did possess key documents at the time of the request.
The final judgment established that the Respondent had violated state law. The Administrative Law Judge rejected the Respondent’s defense, including the argument that records held in a corporate satellite office were not in its possession. As a result, the Respondent was ordered to reimburse the Petitioner’s $500 filing fee and pay a $2,500 civil penalty to the Arizona Department of Real Estate.
Case Background and Timeline
The dispute arose from a records request made by Petitioner Nancy L. Babington to her condominium association, Park Scottsdale II Townhouse Corporation, and its management company, Associa Arizona. The timeline of key events is as follows:
June-July 2019
Respondent’s prior management company, Community Management & Consulting, LLC (CMC), terminates its agreement.
Post-July 2019
Respondent hires Associa Arizona (Associa). Associa and the Respondent encounter difficulty obtaining records from CMC due to a financial dispute.
April 29, 2020
Petitioner sends a formal email requesting association records from September 1, 2019, to April 28, 2020, citing A.R.S. § 33-1258.
May 1, 2020
Petitioner provides a specific, nine-point list of requested documents, including bank statements, financial statements, and contracts.
May 28, 2020
Having received no documents, Petitioner files a petition with the Arizona Department of Real Estate.
August 28, 2020
The Office of Administrative Hearings conducts the initial hearing.
September 17, 2020
The Administrative Law Judge (ALJ) issues a decision denying the petition.
Post-Sept 2020
Respondent provides some of the requested documents to the Petitioner. Upon review, Petitioner discovers evidence that the documents had been in the Respondent’s possession prior to her request.
Date Unspecified
Petitioner files a request for rehearing based on newly discovered material evidence.
March 4, 2021
A rehearing is held.
March 24, 2021
The ALJ issues a new decision, reversing the original finding and ruling in favor of the Petitioner.
The Initial Hearing: Petition Denied
The initial hearing on August 28, 2020, focused on whether the Respondent had violated its statutory obligation to provide records.
Petitioner’s Allegation
The Petitioner’s case was based on her formal request for records on April 29, 2020, and the Respondent’s failure to produce any documents. Her petition stated:
“After repeated attempts since the beginning of this year to get information, on April 29, 2020 I emailed Associa Arizona and the Board of Directors of Park Scottsdale II formally requesting records per ARS 33-1258 and to date, May 25, 2020, I have not received anything.”
Respondent’s Defense
The Respondent’s primary defense was that it could not provide documents that were not in its possession.
• Withheld Records: Joseph Silberschlag, Secretary of the Board of Directors, testified that due to ongoing issues with the former management company (CMC), neither the association nor Associa had possession of many documents, including previous financial records.
• Inability to Create Documents: Mr. Silberschlag stated that without the starting balances from CMC, it was not possible to create current financial statements.
• No Obligation to Create: The Respondent argued it was “under no statutory obligation to create documents to respond to Petitioner’s request.”
Ruling and Rationale
The ALJ sided with the Respondent in the initial decision. The judge noted that while there was no dispute that the documents were not provided within the 10-day statutory period, the Petitioner had not provided any authority showing the Respondent was required to create a document responsive to her request. The ruling concluded:
“Respondent did not have possession of any of the documents requested at the time of Petitioner’s request… Thus, Petitioner failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”
The petition was subsequently denied on September 17, 2020.
The Rehearing: Decision Reversed
A rehearing was granted after the Petitioner discovered that, contrary to the testimony at the initial hearing, the Respondent had possessed several of the requested documents. The rehearing on March 4, 2021, introduced new evidence that fundamentally changed the outcome of the case.
New Evidence and Testimony
The Petitioner presented evidence focusing on three categories of documents she had requested:
• Bank Statements: Petitioner testified that bank statements she received after the initial hearing showed they had been sent to Associa starting in August 2019. Evelyn Shanley, Community Director for Associa, testified that the statements were sent to a national office in Richardson, Texas, and admitted she did not contact that office to obtain them in response to the Petitioner’s request.
• Contracts: Petitioner received two contracts signed by board members on March 27 and March 31, 2020, which were in existence prior to her request. Ms. Shanley admitted these were not provided because the board members had not given them to Associa.
• 1099s: Petitioner noted a document indicating four vendors were eligible for 1099s for 2019. Ms. Shanley denied that any 1099s had been issued.
Respondent’s Evolved Arguments
Faced with the new evidence, the Respondent’s arguments shifted:
• “Immediate Possession”: Counsel argued that the requested documents were not in the “immediate possession” of Associa’s local office.
• Concession on Bank Statements: During closing arguments, Respondent’s counsel acknowledged that “‘one could concede’ the bank statements located in Richardson, Texas were in the possession of Associa and should have been provided to Petitioner in response to her request.”
• Mootness and Penalties: Counsel argued the matter was now moot because the documents had been provided. It was further argued that a civil penalty was inappropriate because the Petitioner did not specifically request one on her initial petition form.
Final Ruling and Rationale
The ALJ found the new evidence compelling and decisive.
• Direct Contradiction: The ruling stated that “the evidence presented during the rehearing was directly contradictory” to the representation made at the initial hearing that Respondent did not have possession of the documents.
• Violation Established: The ALJ concluded that the Petitioner successfully “established by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”
• Authority for Civil Penalty: The ALJ firmly rejected the Respondent’s argument against a civil penalty. The decision cited A.R.S. § 32-2199.02, noting that the plain language of the statute grants the judge the authority to levy a penalty for established violations. The judge wrote, “Nothing in the statute limits the available remedies to those specifically requested by a petitioner.”
Final Order and Penalties
Given the established violation, the ALJ found that a civil penalty was appropriate. The final order, issued March 24, 2021, mandated the following actions by the Respondent within 30 days of the decision’s mailing date:
1. Reimbursement of Filing Fee: Pay the Petitioner, Nancy L. Babington, her filing fee of $500.00.
2. Payment of Civil Penalty: Pay the Arizona Department of Real Estate a civil penalty of $2,500.00.
Study Guide – 20F-H2020064-REL-RHG
Study Guide: Babington v. Park Scottsdale II Townhouse Corporation
This study guide provides a comprehensive review of the administrative case Nancy L. Babington vs. Park Scottsdale II Townhouse Corporation. It covers the initial hearing, the subsequent rehearing, the key arguments presented by both parties, and the final legal outcome. The materials are designed to test and deepen understanding of the case’s facts, legal principles, and timeline.
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Short-Answer Quiz
Instructions: Answer the following questions in two to three complete sentences, using only information provided in the case documents.
1. What specific Arizona statute did Petitioner Nancy L. Babington allege that the Respondent, Park Scottsdale II Townhouse Corporation, had violated?
2. What was the Respondent’s primary defense during the initial hearing for not providing the requested documents within the statutory timeframe?
3. What was the official outcome of the first Administrative Law Judge Decision issued on September 17, 2020?
4. On what legal grounds did the Petitioner successfully request a rehearing of the case?
5. What new evidence regarding the requested bank statements was introduced during the rehearing?
6. How did the Respondent’s management company, Associa Arizona, explain its failure to produce the two contracts signed in March 2020?
7. What was the Respondent’s counsel’s argument at the rehearing for why a civil penalty should not be levied?
8. How did the Administrative Law Judge counter the Respondent’s argument regarding the imposition of a civil penalty?
9. What two financial penalties were included in the final order issued on March 24, 2021?
10. What is the standard of proof the Petitioner was required to meet, and what is its definition according to the case file?
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Answer Key
1. The Petitioner alleged that the Respondent had violated A.R.S. Title 33, Chapter 16, Section 33-1258. This statute requires a condominium owners association to make its financial and other records reasonably available for examination by any member within ten business days of a request.
2. During the initial hearing, the Respondent argued that it was unable to provide the documents because they were not in its possession. This was attributed to a financial disagreement with its former management company, Community Management & Consulting (CMC), which was withholding records.
3. The first decision, issued on September 17, 2020, was in favor of the Respondent. The Administrative Law Judge denied the Petitioner’s petition, concluding she had failed to establish by a preponderance of the evidence that the Respondent violated the statute, as it was not required to create or provide documents it did not possess.
4. A rehearing was granted based on the Petitioner’s claim of “newly discovered material evidence that could not with reasonable diligence have been discovered and produced at the original hearing.” After the initial ruling, the Respondent provided some documents, which revealed that it had, in fact, been in possession of them prior to the Petitioner’s formal request.
5. During the rehearing, it was revealed that bank statements were being sent to Associa’s national central office in Richardson, Texas, starting in August 2019. An Associa representative admitted that the local office never contacted the central office to obtain these statements in response to the Petitioner’s request.
6. Associa’s representative, Evelyn Shanley, admitted that two signed contracts existed but had not been provided to the Petitioner. She stated this was because the members of the Board of Directors who signed them had not yet provided the contracts to Associa.
7. The Respondent’s counsel argued that a civil penalty was not appropriate because the Petitioner did not specifically request one by checking the corresponding box on the initial petition. Counsel asserted that the rehearing process was not designed for the Petitioner to change the relief requested.
8. The Judge rejected the Respondent’s argument, stating it was an erroneous interpretation of A.R.S. § 32-2199.02. The Judge clarified that the plain language of the statute allows the Administrative Law Judge to levy a civil penalty for established violations, and nothing in the statute limits available remedies to only those specifically requested by a petitioner.
9. The final order required the Respondent to pay the Petitioner her 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 required standard of proof was a “preponderance of the evidence.” The case document defines this as “Evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”
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Essay Questions
Instructions: The following questions are designed for essay-style responses. Formulate a comprehensive argument using only the evidence and legal reasoning presented in the source documents.
1. Analyze the concept of “possession” as it applied to the association’s records in this case. How did the distinction between Associa’s local Arizona office and its national central office in Texas impact the initial ruling versus the outcome of the rehearing?
2. Trace the evolution of the Respondent’s legal arguments from the first hearing to the second. Discuss the strengths and weaknesses of their positions at each stage, including the “mootness” argument, and explain why their defense ultimately failed.
3. Discuss the legal standard of “preponderance of the evidence.” How did the Petitioner fail to meet this standard in the initial hearing but succeed in the rehearing? Use specific examples of evidence related to the bank statements and contracts to support the analysis.
4. Examine the role and authority of the Administrative Law Judge in this case, particularly concerning the decision to grant a rehearing and the authority to levy a civil penalty even when not explicitly requested by the petitioner.
5. Evaluate the significance of A.R.S. § 33-1258 for condominium owners. Using the facts of this case, explain the rights it grants to members and the obligations it places on associations and their management companies regarding record-keeping and transparency.
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Glossary of Key Terms
Definition
Administrative Law Judge (ALJ)
An official who presides over administrative hearings, makes findings of fact and conclusions of law, and issues decisions and orders. In this case, the ALJ was Tammy L. Eigenheer.
A.R.S. § 33-1258
The specific Arizona Revised Statute that requires condominium associations to make all financial and other records reasonably available for examination by a member within ten business days of a request.
Associa Arizona (Associa)
The management company hired by Park Scottsdale II Townhouse Corporation after the termination of the previous management agreement. Associa was responsible for handling the Petitioner’s records request on behalf of the association.
Civil Penalty
A monetary penalty levied by a government agency or administrative judge for a violation of a statute or regulation. In this case, a $2,500 penalty was levied against the Respondent for violating A.R.S. § 33-1258.
Community Management & Consulting, LLC (CMC)
The previous management company for Park Scottsdale II Townhouse Corporation. CMC terminated its agreement in 2019 and was withholding records from the association due to a financial disagreement.
Department of Real Estate
The Arizona state agency with jurisdiction to hear disputes between property owners and condominium owners associations. The Petitioner filed her initial petition with this department.
HOA Dispute Rehearing Request
The formal request filed by the Petitioner with the Department of Real Estate to have the case reheard. It was granted based on the discovery of new material evidence.
Petitioner
The party who files a petition initiating a legal action. In this case, the Petitioner was Nancy L. Babington, a member of the condominium association.
Preponderance of the Evidence
The standard of proof required in this administrative hearing. It is defined as evidence that is more convincing and shows that the fact sought to be proved is more probable than not.
Respondent
The party against whom a petition is filed. In this case, the Respondent was Park Scottsdale II Townhouse Corporation, the condominium owners association.
Blog Post – 20F-H2020064-REL-RHG
She Sued Her HOA and Lost. What Happened Next Reversed Everything: 4 Lessons from a Homeowner’s Fight for Records
For too many homeowners, the Homeowner’s Association is a black box. Simple requests for financial records or board contracts—information you are legally entitled to—are met with delays, excuses, or outright silence. This isn’t just an annoyance; it’s an abuse of power that can leave residents feeling helpless against a secretive body that controls their property and their money. But what happens when one homeowner refuses to accept the stonewalling?
The case of Nancy L. Babington versus her Scottsdale, Arizona HOA provides a powerful playbook for fighting back. Documented in public legal records, her journey began with a standard request for records, escalated to a legal petition that she initially lost, and ended with a stunning reversal that holds critical lessons for every homeowner in America. Her fight demonstrates how persistence, diligence, and an understanding of the law can turn a seemingly hopeless situation into a victory for transparency.
Here are the four essential lessons from her successful battle for accountability.
1. Lesson One: An Initial Loss Isn’t the Final Word
Nancy Babington’s initial petition against her HOA was denied. At the first hearing on August 28, 2020, the HOA presented a seemingly plausible defense: they couldn’t provide the records because of an ongoing dispute with a former management company, CMC, which they claimed was withholding the documents.
The judge sided with the HOA. In a decision issued on September 17, 2020, the judge ruled against Babington, stating she had not sufficiently proven her case. The official ruling found she “failed to establish by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).” For most people, this would have been the end of the story.
But then the HOA made a critical, almost theatrical, miscalculation. After their victory, they provided Babington with some of the documents she had requested. As she reviewed them, she discovered the bombshell: the records proved the HOA had possessed crucial documents like bank statements and signed board contracts all along. These documents had nothing to do with the former management company, CMC, making the HOA’s initial defense appear to be a deliberate misdirection. This was the “newly discovered material evidence” she needed. The homeowner turned the HOA’s own actions against them, securing a rehearing on March 4, 2021, that would unravel their entire case.
2. Lesson Two: “Possession” Is More Than What’s in the Local Office
During the rehearing, the HOA pivoted to a new excuse, this time concerning bank statements. Their national management company, Associa, had its bank statements sent to a central office in Richardson, Texas. Because the records weren’t physically in the local Arizona office, the HOA argued they were not in their “immediate possession” and therefore not subject to the production deadline.
Under questioning, the Community Director, Evelyn Shanley, admitted she never even contacted the Texas office to get the statements for the homeowner. The HOA’s legal argument rested on the idea that their own corporate geography could shield them from transparency laws.
The judge flatly rejected this logic. An organization is responsible for its own records, no matter where they are stored. The argument was so weak that the HOA’s own lawyer was forced to backpedal during the hearing. The final decision noted:
Counsel acknowledged during closing arguments that “one could concede” the bank statements located in Richardson, Texas were in the possession of Associa and should have been provided to Petitioner in response to her request.
This ruling is a critical precedent: Your HOA cannot hide records in a corporate vault in another state and claim they are out of reach. If the documents belong to the association, they are in its possession, period.
3. Lesson Three: The Board Is the HOA, Not a Separate Entity
The next fight was over two contracts signed by board members in March 2020—documents that were created months after the dispute with the old management company. The excuse for not providing them? The management company claimed the contracts “had not been provided by the members of the Board of Directors to Associa.”
This was an attempt to create a legal fiction—that the Board of Directors and the HOA’s management company are separate entities, and that if the Board withholds a document from its own agent, the HOA can claim ignorance. The court did not buy it. By holding the HOA (the Respondent) responsible for the failure to produce the documents, the judge made it clear that this distinction is invalid.
For the purposes of records law, the Board is the HOA. The lesson is clear: The buck stops with the HOA. Board members cannot play a shell game with documents to evade their legal duty.
4. Lesson Four: Justice Doesn’t Require You to Check the Right Box
Having lost on the facts, the HOA’s counsel made one last-ditch effort to avoid a penalty. They argued that a civil penalty was inappropriate because the petitioner “did not indicate in her petition that she was seeking a civil penalty.” In essence, they claimed that because she hadn’t checked the right box on a form, the judge was powerless to punish them for breaking the law.
The Administrative Law Judge swiftly dismantled this procedural excuse. The judge’s final decision, issued on March 24, 2021, explicitly called out the HOA’s flawed logic:
Respondent erroneously interpreted A.R.S. § 32-2199.02 to require a petitioner to identify the requested relief in the petition when the plain language of the statute provides that the Administrative Law Judge may levy a civil penalty for violations that are established. Nothing in the statute limits the available remedies to those specifically requested by a petitioner.
The final ruling was the tangible consequence of the HOA’s failed arguments and lack of transparency. The judge ordered the HOA to reimburse Babington’s $500 filing fee and levied a separate $2,500 civil penalty payable to the Arizona Department of Real Estate. The message was unmistakable: the law has teeth, and a judge can use them based on the facts, regardless of which boxes were checked on a form.
Conclusion: Knowledge is Power
Nancy Babington’s fight is a masterclass in homeowner advocacy. Her journey from a seemingly hopeless loss to a precedent-setting victory proves that a single resident, armed with facts and relentless persistence, can force an HOA to follow the law. This case affirms that transparency is a legal requirement, not an optional courtesy. It serves as a powerful reminder that while the law is on the side of transparency, it often falls to diligent homeowners to hold their associations accountable.
This case was won because the facts came to light—do you know what your rights are, and what records you’re entitled to see from your own HOA?
Case Participants
Petitioner Side
Nancy L. Babington(petitioner) Appeared on her own behalf at both the initial hearing and the rehearing.,
Respondent Side
Lydia Linsmeier(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent at the initial hearing.,
Mark K. Sahl(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent at the rehearing.,
Scott B. Carpenter(HOA attorney) CARPENTER, HAZLEWOOD, DELGADO & BOLEN LLP Represented Respondent at the rehearing.,
Joseph Silberschlag(board member) Park Scottsdale II Townhouse Corporation Secretary of the Board of Directors; testified at the initial hearing; also referred to as 'Joe Silberschlag' in the petition request.,,,
Debbie Schumacher(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Marty Shuford(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Angelina Rajenovich(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Dermot Brown(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Lori Nusbaum(board member) Park Scottsdale II Townhouse Corporation Named in Petitioner's record request email.,
Linda Parker(property manager) Associa Arizona Director of Client Services; responded to Petitioner's record requests.,,,
Evelyn Shanley(property manager/witness) Associa Arizona Community Director; previously communicated with Petitioner; testified at the rehearing.,,,
Laura Smith(property manager) Associa Arizona Previously communicated with Petitioner regarding records.,
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(Commissioner) Arizona Department of Real Estate
c. serrano(admin staff) Transmitted the initial decision.
Other Participants
Stephen Silberschlag(unknown) Petitioner requested proof of his liability insurance.,
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.
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.
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 – 823263.pdf
Uploaded 2025-10-09T03:35:33 (108.6 KB)
Briefing Doc – 20F-H2020064-REL
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 – 20F-H2020064-REL
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.
Blog Post – 20F-H2020064-REL
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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.
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
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
Petitioner was deemed the prevailing party because Respondent established a technical violation of A.R.S. § 33-1258(A) by failing to provide requested documents within the 10-day limit. However, the Administrative Law Judge found a civil penalty was not appropriate given the circumstances.
Key Issues & Findings
Failure to provide requested association records within 10 business days
Petitioner requested sign-in sheets for the January 10, 2018, and February 15, 2018, CBS HOA meetings. Respondent acknowledged a technical violation of the statute by failing to provide the requested documents within the required 10-day timeframe, although they were ultimately provided prior to the hearing.
Orders: Respondent must comply with the applicable provisions of A.R.S. § 33-1258(A) in the future, and pay Petitioner her filing fee of $500.00 within thirty (30) days.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
A.R.S. § 33-1258
A.R.S. § 33-1258(A)
Analytics Highlights
Topics: records request, failure to provide documents, condominium owners association, filing fee refund
Additional Citations:
A.R.S. § 32-2199 et seq.
A.R.S. § 33-1258
A.A.C. R2-19-119
A.R.S. § 33-1258(A)
A.R.S. §32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.09
Video Overview
Audio Overview
Decision Documents
18F-H1818033-REL Decision – 642888.pdf
Uploaded 2026-01-23T17:23:22 (74.5 KB)
18F-H1818033-REL Decision – 655537.pdf
Uploaded 2026-01-23T17:23:25 (83.3 KB)
Briefing Doc – 18F-H1818033-REL
Administrative Hearing Briefing: Cohen v. CBS 136 Homeowners Association
Executive Summary
This document synthesizes the findings and decision from the administrative hearing case Annette Cohen v. CBS 136 Homeowners Association (No. 18F-H1818033-REL). The core of the dispute was the Homeowners Association’s (HOA) failure to provide requested documents—specifically, meeting sign-in sheets—to a member, Annette Cohen, within the ten-business-day timeframe mandated by Arizona statute A.R.S. § 33-1258.
At the hearing, the Respondent HOA acknowledged this “technical violation,” attributing the delay to operational difficulties arising from a recent change in management companies. The Petitioner, Ms. Cohen, argued the delay was intentional and warranted a civil penalty.
The Administrative Law Judge, Tammy L. Eigenheer, found that the HOA did violate the statute. In the final order, the Judge declared Ms. Cohen the prevailing party and mandated future compliance by the HOA. While a civil penalty was deemed inappropriate under the circumstances, the Judge ordered the HOA to reimburse Ms. Cohen’s $500 filing fee.
Case Overview
Entity / Individual
Petitioner
Annette Cohen
Respondent
CBS 136 Homeowners Association (CBS)
Respondent’s Counsel
Brian Ditsch, Sacks Tierney P.A.
Respondent’s Mgmt. Co.
Key Witness
Susan Rubin (PRM)
Adjudicating Body
Office of Administrative Hearings, Phoenix, Arizona
Administrative Law Judge
Tammy L. Eigenheer
Case Number
18F-H1818033-REL
Hearing Date
June 6, 2018
Decision Date
June 26, 2018
Chronology of the Dispute
The dispute centered on two separate sets of document requests made by Petitioner Annette Cohen.
• Request 1 (January 10 Meeting):
◦ On or about Jan. 10, 2018: Ms. Cohen requested the sign-in sheets from the annual meeting held on this date.
◦ Jan. 2018: The management company PRM took over management of the CBS 136 HOA.
◦ Feb. 15, 2018: After more than a month, and after two scheduled review appointments were cancelled by the management company, the sign-in sheets were finally provided to Ms. Cohen by email.
• Request 2 (February 15 Meeting):
◦ Feb. 19, 2018: Ms. Cohen requested the sign-in sheets from the February 15, 2018 HOA meeting. Receipt of this request was acknowledged by PRM.
◦ Feb. 21, 26, 27 & March 5, 2018: Ms. Cohen made repeated follow-up requests for the same information.
• Formal Proceedings:
◦ March 9, 2018: Ms. Cohen filed a formal petition with the Arizona Department of Real Estate.
◦ April 10, 2018: The Respondent HOA filed an answer denying all allegations.
◦ June 6, 2018: An administrative hearing was held. The documents had been provided to Ms. Cohen at some point prior to this hearing.
◦ June 26, 2018: The Administrative Law Judge issued the final decision.
Core Allegation and Legal Framework
Petitioner’s Allegation
Annette Cohen alleged that the CBS 136 Homeowners Association violated A.R.S. Title 33, Chapter 16, Section 33-1258 by failing to provide association records for review and copying within the statutorily required timeframe.
Governing Statute: A.R.S. § 33-1258(A)
The legal basis for the petition is Arizona Revised Statute § 33-1258(A), which governs a member’s right to access association records. The statute states, in relevant part:
“all financial and other records of the association shall be made reasonably available for examination by any member… The association shall have ten business days to fulfill a request for examination. On request for purchase of copies of records by any member… the association shall have ten business days to provide copies of the requested records. An association may charge a fee for making copies of not more than fifteen cents per page.”
The petitioner bears the burden of proving a violation by a preponderance of the evidence, defined as evidence that “shows that the fact sought to be proved is more probable than not.”
Arguments and Evidence Presented at Hearing
Once the Respondent acknowledged the delay, the hearing focused solely on determining the appropriate remedy.
Petitioner’s Position (Annette Cohen)
• Intentional Negligence: Ms. Cohen argued that the Respondent “intentionally ignored her request for the documents.”
• Request for Penalty: Based on the belief of intentional neglect, she asserted that a civil penalty was an appropriate remedy.
• Unreasonable Delay: She noted that the documents “could have easily been emailed to her within the 10 day deadline,” but that the HOA’s management company did not present this as an option until after the deadline had already passed.
Respondent’s Position (CBS 136 HOA)
• Acknowledged Violation: At the June 6, 2018 hearing, the Respondent “acknowledged that the requested documents were not provided within the 10 day timeframe set forth in statute.”
• Mitigating Circumstances: The defense centered on testimony from Susan Rubin of the management company, PRM. Ms. Rubin testified to the following:
◦ No requests are “ever purposefully ignored.”
◦ PRM had only taken over management of the HOA in January 2018.
◦ At the time of the requests, PRM was “still getting documents from the former management company.”
◦ The delay was not due to ignoring the request, but because it “took a little longer than expected to provide the documents.”
Administrative Law Judge’s Decision and Order
Findings and Conclusions
• Violation Established: The Judge concluded there was “no dispute that Respondent failed to provide the requested documents within 10 days.” Therefore, the Petitioner “established by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”
• Rejection of Civil Penalty: Despite the Petitioner’s argument, the Administrative Law Judge did “not find such a penalty to be appropriate given the circumstances in this matter.”
Final Order
The Judge issued a three-part order binding on the parties:
1. Prevailing Party: The Petitioner, Annette Cohen, is “deemed the prevailing party.”
2. Future Compliance: The Respondent, CBS 136 Homeowners Association, is ordered to “comply with the applicable provisions of A.R.S. § 33-1258(A) in the future.”
3. Reimbursement of Filing Fee: The Respondent must pay the Petitioner her filing fee of $500.00 directly to her within thirty (30) days of the order.
Study Guide – 18F-H1818033-REL
Study Guide: Cohen v. CBS 136 Homeowners Association
Short-Answer Quiz
Instructions: Please answer the following ten questions in 2-3 complete sentences, using only the information provided in the case documents.
1. Who were the primary parties involved in case No. 18F-H1818033-REL, and what were their respective roles?
2. What specific documents did the Petitioner, Annette Cohen, request from the Respondent?
3. According to the petition, what was the core legal violation alleged by Ms. Cohen against the Homeowners Association?
4. What was the timeline for the Respondent’s failure to produce the sign-in sheets from the January 10, 2018 meeting?
5. How did the Respondent initially respond to the petition after it was filed with the Arizona Department of Real Estate?
6. What admission did the Respondent make at the June 6, 2018 hearing?
7. What was the Respondent’s explanation for the delay in providing the requested documents to the Petitioner?
8. What remedy did the Petitioner argue was appropriate for the violation, and on what grounds?
9. What legal standard of proof was the Petitioner required to meet, and did the judge find that she met it?
10. What were the three components of the final Order issued by the Administrative Law Judge?
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Answer Key
1. The primary parties were Annette Cohen, who was the Petitioner, and the CBS 136 Homeowners Association, which was the Respondent. The Petitioner is the party who filed the complaint, and the Respondent is the party against whom the complaint was filed.
2. The Petitioner requested the sign-in sheets from two separate meetings. She requested the sign-in sheets from the January 10, 2018 annual meeting and the sign-in sheets from the February 15, 2018 CBS HOA meeting.
3. The core legal violation alleged by Ms. Cohen was that the Respondent had violated Arizona Revised Statutes (A.R.S.) Title 33, Chapter 16, Section 33-1258. This statute requires homeowner associations to provide requested records to members for examination or copying within a ten-business-day timeframe.
4. Ms. Cohen requested the January 10, 2018 sign-in sheets on or about that same date (January 10). She did not receive them via email until February 15, 2018, which is well beyond the ten-business-day limit stipulated by law.
5. On or about April 10, 2018, the Respondent filed an answer to the petition. In this official response, the Respondent denied all of the allegations made by the Petitioner.
6. At the June 6, 2018 hearing, the Respondent acknowledged its failure to comply with the law. The Respondent admitted that the requested documents were not provided within the 10-day timeframe set forth in the statute, constituting a technical violation.
7. The Respondent, through the testimony of Susan Rubin from its management company PRM, explained the delay was not intentional. Ms. Rubin stated that PRM had just taken over management of the HOA in January 2018 and was still in the process of getting documents from the former management company.
8. The Petitioner argued that a civil penalty was the appropriate remedy. She contended that the Respondent intentionally ignored her requests and could have easily emailed the documents within the deadline, but failed to do so until after the deadline had passed.
9. The Petitioner had the burden of proving her case by a “preponderance of the evidence.” The judge found that she successfully met this standard because there was no dispute that the Respondent failed to provide the documents within the required 10 days.
10. The three components of the final Order were: 1) The Petitioner, Annette Cohen, was deemed the prevailing party; 2) The Respondent was ordered to comply with A.R.S. § 33-1258(A) in the future; and 3) The Respondent was ordered to pay the Petitioner’s $500.00 filing fee within thirty days.
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Essay Questions
Instructions: The following questions are designed for longer, essay-format responses. Use the provided case documents to formulate a comprehensive analysis.
1. Analyze the arguments presented by both the Petitioner and the Respondent regarding the appropriate remedy for the acknowledged statutory violation. Evaluate the mitigating circumstances offered by the Respondent and discuss why the Administrative Law Judge may have found them persuasive enough to deny a civil penalty while still finding in favor of the Petitioner.
2. Discuss the legal framework governing disputes between property owners and condominium associations in Arizona as outlined in the case documents. Explain the roles of the Arizona Department of Real Estate and the Office of Administrative Hearings, and detail the specific requirements of A.R.S. § 33-1258(A).
3. Examine the concept of “preponderance of the evidence” as defined in the judge’s decision. Explain how the Petitioner successfully met this burden of proof, particularly in light of the Respondent’s initial denial of all allegations versus its later admission at the hearing.
4. Deconstruct the final Order issued by Judge Tammy L. Eigenheer. What were the three distinct parts of the Order, and what legal and practical purpose did each part serve in resolving the dispute, compensating the Petitioner, and ensuring future compliance by the Respondent?
5. Trace the procedural history of this case, creating a timeline of key events from Ms. Cohen’s first document request to the issuance of the final Order. Discuss the significance of each step, including the multiple requests, the petition filing, the Respondent’s answer, the hearing, and the final decision.
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Glossary of Key Terms
Definition
Administrative Law Judge
The official, in this case Tammy L. Eigenheer, who presides over hearings at the Office of Administrative Hearings and issues a decision.
A.R.S. § 33-1258(A)
The specific section of Arizona Revised Statutes cited in the case. It mandates that a homeowners association must make records available for member examination within ten business days and may charge up to fifteen cents per page for copies.
Burden of Proof
The obligation on a party in a legal proceeding to prove their assertions. In this case, the Petitioner bore the burden of proving the Respondent violated the statute.
CBS 136 Homeowners Association
The Respondent in the case; an association of condominium owners located in Sun City West, Arizona.
Department
The Arizona Department of Real Estate, the state agency with jurisdiction to hear disputes between property owners and condominium owners associations.
Findings of Fact
The section of the decision that outlines the factual history and evidence presented in the case, as determined by the judge.
Office of Administrative Hearings
The state office where the formal hearing on the petition was conducted.
Petitioner
The party who initiates a legal action by filing a petition. In this case, the Petitioner was Annette Cohen.
Preponderance of the Evidence
The standard of proof required for the Petitioner to win the case. It is defined as evidence that is more convincing and shows that the fact sought to be proved is “more probable than not.”
The management company that took over management of the CBS 136 Homeowners Association in January 2018.
Respondent
The party against whom a petition is filed. In this case, the Respondent was the CBS 136 Homeowners Association.
Technical Violation
An acknowledged infringement of a rule or statute where the substance of the rule may not have been maliciously violated. The Respondent admitted to a technical violation of the 10-day timeframe for document production.
Blog Post – 18F-H1818033-REL
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18F-H1818033-REL
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Both documents are identical excerpts from an Administrative Law Judge Decision from the Arizona Office of Administrative Hearings, concerning a dispute between Annette Cohen (Petitioner) and the CBS 136 Homeowners Association (Respondent). The case, No. 18F-H1818033-REL, addressed the Petitioner’s claim that the Respondent violated A.R.S. § 33-1258(A) by failing to provide requested association meeting sign-in sheets within the mandated ten-day period. Though the Respondent acknowledged a technical violation of the statute, the Administrative Law Judge determined that a civil penalty was not appropriate given the circumstances, such as the change in management. Ultimately, the Petitioner was deemed the prevailing party, and the Respondent was ordered to comply with the statute in the future and reimburse the Petitioner’s $500.00 filing fee.
Based on 2 sources
Case Participants
Petitioner Side
Annette Cohen(petitioner) Appeared on her own behalf
Respondent Side
Brian Ditsch(respondent attorney) Sacks Tierney P.A.
Susan Rubin(witness) PRM (management company) Testified for Respondent
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of decision notice
Other Participants
Felicia Del Sol(clerical staff) Transmitted the decision
Petitioner was deemed the prevailing party because Respondent established a technical violation of A.R.S. § 33-1258(A) by failing to provide requested documents within the 10-day limit. However, the Administrative Law Judge found a civil penalty was not appropriate given the circumstances.
Key Issues & Findings
Failure to provide requested association records within 10 business days
Petitioner requested sign-in sheets for the January 10, 2018, and February 15, 2018, CBS HOA meetings. Respondent acknowledged a technical violation of the statute by failing to provide the requested documents within the required 10-day timeframe, although they were ultimately provided prior to the hearing.
Orders: Respondent must comply with the applicable provisions of A.R.S. § 33-1258(A) in the future, and pay Petitioner her filing fee of $500.00 within thirty (30) days.
Filing fee: $500.00, Fee refunded: Yes
Disposition: petitioner_win
Cited:
A.R.S. § 33-1258
A.R.S. § 33-1258(A)
Analytics Highlights
Topics: records request, failure to provide documents, condominium owners association, filing fee refund
Additional Citations:
A.R.S. § 32-2199 et seq.
A.R.S. § 33-1258
A.A.C. R2-19-119
A.R.S. § 33-1258(A)
A.R.S. §32-2199.02(B)
A.R.S. § 32-2199.04
A.R.S. § 41-1092.09
Video Overview
Audio Overview
Decision Documents
18F-H1818033-REL Decision – 642888.pdf
Uploaded 2025-10-09T03:32:41 (74.5 KB)
18F-H1818033-REL Decision – 655537.pdf
Uploaded 2025-10-09T03:32:42 (83.3 KB)
Briefing Doc – 18F-H1818033-REL
Administrative Hearing Briefing: Cohen v. CBS 136 Homeowners Association
Executive Summary
This document synthesizes the findings and decision from the administrative hearing case Annette Cohen v. CBS 136 Homeowners Association (No. 18F-H1818033-REL). The core of the dispute was the Homeowners Association’s (HOA) failure to provide requested documents—specifically, meeting sign-in sheets—to a member, Annette Cohen, within the ten-business-day timeframe mandated by Arizona statute A.R.S. § 33-1258.
At the hearing, the Respondent HOA acknowledged this “technical violation,” attributing the delay to operational difficulties arising from a recent change in management companies. The Petitioner, Ms. Cohen, argued the delay was intentional and warranted a civil penalty.
The Administrative Law Judge, Tammy L. Eigenheer, found that the HOA did violate the statute. In the final order, the Judge declared Ms. Cohen the prevailing party and mandated future compliance by the HOA. While a civil penalty was deemed inappropriate under the circumstances, the Judge ordered the HOA to reimburse Ms. Cohen’s $500 filing fee.
Case Overview
Entity / Individual
Petitioner
Annette Cohen
Respondent
CBS 136 Homeowners Association (CBS)
Respondent’s Counsel
Brian Ditsch, Sacks Tierney P.A.
Respondent’s Mgmt. Co.
Key Witness
Susan Rubin (PRM)
Adjudicating Body
Office of Administrative Hearings, Phoenix, Arizona
Administrative Law Judge
Tammy L. Eigenheer
Case Number
18F-H1818033-REL
Hearing Date
June 6, 2018
Decision Date
June 26, 2018
Chronology of the Dispute
The dispute centered on two separate sets of document requests made by Petitioner Annette Cohen.
• Request 1 (January 10 Meeting):
◦ On or about Jan. 10, 2018: Ms. Cohen requested the sign-in sheets from the annual meeting held on this date.
◦ Jan. 2018: The management company PRM took over management of the CBS 136 HOA.
◦ Feb. 15, 2018: After more than a month, and after two scheduled review appointments were cancelled by the management company, the sign-in sheets were finally provided to Ms. Cohen by email.
• Request 2 (February 15 Meeting):
◦ Feb. 19, 2018: Ms. Cohen requested the sign-in sheets from the February 15, 2018 HOA meeting. Receipt of this request was acknowledged by PRM.
◦ Feb. 21, 26, 27 & March 5, 2018: Ms. Cohen made repeated follow-up requests for the same information.
• Formal Proceedings:
◦ March 9, 2018: Ms. Cohen filed a formal petition with the Arizona Department of Real Estate.
◦ April 10, 2018: The Respondent HOA filed an answer denying all allegations.
◦ June 6, 2018: An administrative hearing was held. The documents had been provided to Ms. Cohen at some point prior to this hearing.
◦ June 26, 2018: The Administrative Law Judge issued the final decision.
Core Allegation and Legal Framework
Petitioner’s Allegation
Annette Cohen alleged that the CBS 136 Homeowners Association violated A.R.S. Title 33, Chapter 16, Section 33-1258 by failing to provide association records for review and copying within the statutorily required timeframe.
Governing Statute: A.R.S. § 33-1258(A)
The legal basis for the petition is Arizona Revised Statute § 33-1258(A), which governs a member’s right to access association records. The statute states, in relevant part:
“all financial and other records of the association shall be made reasonably available for examination by any member… The association shall have ten business days to fulfill a request for examination. On request for purchase of copies of records by any member… the association shall have ten business days to provide copies of the requested records. An association may charge a fee for making copies of not more than fifteen cents per page.”
The petitioner bears the burden of proving a violation by a preponderance of the evidence, defined as evidence that “shows that the fact sought to be proved is more probable than not.”
Arguments and Evidence Presented at Hearing
Once the Respondent acknowledged the delay, the hearing focused solely on determining the appropriate remedy.
Petitioner’s Position (Annette Cohen)
• Intentional Negligence: Ms. Cohen argued that the Respondent “intentionally ignored her request for the documents.”
• Request for Penalty: Based on the belief of intentional neglect, she asserted that a civil penalty was an appropriate remedy.
• Unreasonable Delay: She noted that the documents “could have easily been emailed to her within the 10 day deadline,” but that the HOA’s management company did not present this as an option until after the deadline had already passed.
Respondent’s Position (CBS 136 HOA)
• Acknowledged Violation: At the June 6, 2018 hearing, the Respondent “acknowledged that the requested documents were not provided within the 10 day timeframe set forth in statute.”
• Mitigating Circumstances: The defense centered on testimony from Susan Rubin of the management company, PRM. Ms. Rubin testified to the following:
◦ No requests are “ever purposefully ignored.”
◦ PRM had only taken over management of the HOA in January 2018.
◦ At the time of the requests, PRM was “still getting documents from the former management company.”
◦ The delay was not due to ignoring the request, but because it “took a little longer than expected to provide the documents.”
Administrative Law Judge’s Decision and Order
Findings and Conclusions
• Violation Established: The Judge concluded there was “no dispute that Respondent failed to provide the requested documents within 10 days.” Therefore, the Petitioner “established by a preponderance of the evidence that Respondent violated A.R.S. § 33-1258(A).”
• Rejection of Civil Penalty: Despite the Petitioner’s argument, the Administrative Law Judge did “not find such a penalty to be appropriate given the circumstances in this matter.”
Final Order
The Judge issued a three-part order binding on the parties:
1. Prevailing Party: The Petitioner, Annette Cohen, is “deemed the prevailing party.”
2. Future Compliance: The Respondent, CBS 136 Homeowners Association, is ordered to “comply with the applicable provisions of A.R.S. § 33-1258(A) in the future.”
3. Reimbursement of Filing Fee: The Respondent must pay the Petitioner her filing fee of $500.00 directly to her within thirty (30) days of the order.
Study Guide – 18F-H1818033-REL
Study Guide: Cohen v. CBS 136 Homeowners Association
Short-Answer Quiz
Instructions: Please answer the following ten questions in 2-3 complete sentences, using only the information provided in the case documents.
1. Who were the primary parties involved in case No. 18F-H1818033-REL, and what were their respective roles?
2. What specific documents did the Petitioner, Annette Cohen, request from the Respondent?
3. According to the petition, what was the core legal violation alleged by Ms. Cohen against the Homeowners Association?
4. What was the timeline for the Respondent’s failure to produce the sign-in sheets from the January 10, 2018 meeting?
5. How did the Respondent initially respond to the petition after it was filed with the Arizona Department of Real Estate?
6. What admission did the Respondent make at the June 6, 2018 hearing?
7. What was the Respondent’s explanation for the delay in providing the requested documents to the Petitioner?
8. What remedy did the Petitioner argue was appropriate for the violation, and on what grounds?
9. What legal standard of proof was the Petitioner required to meet, and did the judge find that she met it?
10. What were the three components of the final Order issued by the Administrative Law Judge?
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Answer Key
1. The primary parties were Annette Cohen, who was the Petitioner, and the CBS 136 Homeowners Association, which was the Respondent. The Petitioner is the party who filed the complaint, and the Respondent is the party against whom the complaint was filed.
2. The Petitioner requested the sign-in sheets from two separate meetings. She requested the sign-in sheets from the January 10, 2018 annual meeting and the sign-in sheets from the February 15, 2018 CBS HOA meeting.
3. The core legal violation alleged by Ms. Cohen was that the Respondent had violated Arizona Revised Statutes (A.R.S.) Title 33, Chapter 16, Section 33-1258. This statute requires homeowner associations to provide requested records to members for examination or copying within a ten-business-day timeframe.
4. Ms. Cohen requested the January 10, 2018 sign-in sheets on or about that same date (January 10). She did not receive them via email until February 15, 2018, which is well beyond the ten-business-day limit stipulated by law.
5. On or about April 10, 2018, the Respondent filed an answer to the petition. In this official response, the Respondent denied all of the allegations made by the Petitioner.
6. At the June 6, 2018 hearing, the Respondent acknowledged its failure to comply with the law. The Respondent admitted that the requested documents were not provided within the 10-day timeframe set forth in the statute, constituting a technical violation.
7. The Respondent, through the testimony of Susan Rubin from its management company PRM, explained the delay was not intentional. Ms. Rubin stated that PRM had just taken over management of the HOA in January 2018 and was still in the process of getting documents from the former management company.
8. The Petitioner argued that a civil penalty was the appropriate remedy. She contended that the Respondent intentionally ignored her requests and could have easily emailed the documents within the deadline, but failed to do so until after the deadline had passed.
9. The Petitioner had the burden of proving her case by a “preponderance of the evidence.” The judge found that she successfully met this standard because there was no dispute that the Respondent failed to provide the documents within the required 10 days.
10. The three components of the final Order were: 1) The Petitioner, Annette Cohen, was deemed the prevailing party; 2) The Respondent was ordered to comply with A.R.S. § 33-1258(A) in the future; and 3) The Respondent was ordered to pay the Petitioner’s $500.00 filing fee within thirty days.
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Essay Questions
Instructions: The following questions are designed for longer, essay-format responses. Use the provided case documents to formulate a comprehensive analysis.
1. Analyze the arguments presented by both the Petitioner and the Respondent regarding the appropriate remedy for the acknowledged statutory violation. Evaluate the mitigating circumstances offered by the Respondent and discuss why the Administrative Law Judge may have found them persuasive enough to deny a civil penalty while still finding in favor of the Petitioner.
2. Discuss the legal framework governing disputes between property owners and condominium associations in Arizona as outlined in the case documents. Explain the roles of the Arizona Department of Real Estate and the Office of Administrative Hearings, and detail the specific requirements of A.R.S. § 33-1258(A).
3. Examine the concept of “preponderance of the evidence” as defined in the judge’s decision. Explain how the Petitioner successfully met this burden of proof, particularly in light of the Respondent’s initial denial of all allegations versus its later admission at the hearing.
4. Deconstruct the final Order issued by Judge Tammy L. Eigenheer. What were the three distinct parts of the Order, and what legal and practical purpose did each part serve in resolving the dispute, compensating the Petitioner, and ensuring future compliance by the Respondent?
5. Trace the procedural history of this case, creating a timeline of key events from Ms. Cohen’s first document request to the issuance of the final Order. Discuss the significance of each step, including the multiple requests, the petition filing, the Respondent’s answer, the hearing, and the final decision.
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Glossary of Key Terms
Definition
Administrative Law Judge
The official, in this case Tammy L. Eigenheer, who presides over hearings at the Office of Administrative Hearings and issues a decision.
A.R.S. § 33-1258(A)
The specific section of Arizona Revised Statutes cited in the case. It mandates that a homeowners association must make records available for member examination within ten business days and may charge up to fifteen cents per page for copies.
Burden of Proof
The obligation on a party in a legal proceeding to prove their assertions. In this case, the Petitioner bore the burden of proving the Respondent violated the statute.
CBS 136 Homeowners Association
The Respondent in the case; an association of condominium owners located in Sun City West, Arizona.
Department
The Arizona Department of Real Estate, the state agency with jurisdiction to hear disputes between property owners and condominium owners associations.
Findings of Fact
The section of the decision that outlines the factual history and evidence presented in the case, as determined by the judge.
Office of Administrative Hearings
The state office where the formal hearing on the petition was conducted.
Petitioner
The party who initiates a legal action by filing a petition. In this case, the Petitioner was Annette Cohen.
Preponderance of the Evidence
The standard of proof required for the Petitioner to win the case. It is defined as evidence that is more convincing and shows that the fact sought to be proved is “more probable than not.”
The management company that took over management of the CBS 136 Homeowners Association in January 2018.
Respondent
The party against whom a petition is filed. In this case, the Respondent was the CBS 136 Homeowners Association.
Technical Violation
An acknowledged infringement of a rule or statute where the substance of the rule may not have been maliciously violated. The Respondent admitted to a technical violation of the 10-day timeframe for document production.
Blog Post – 18F-H1818033-REL
Select all sources
642888.pdf
655537.pdf
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Loading
18F-H1818033-REL
2 sources
Both documents are identical excerpts from an Administrative Law Judge Decision from the Arizona Office of Administrative Hearings, concerning a dispute between Annette Cohen (Petitioner) and the CBS 136 Homeowners Association (Respondent). The case, No. 18F-H1818033-REL, addressed the Petitioner’s claim that the Respondent violated A.R.S. § 33-1258(A) by failing to provide requested association meeting sign-in sheets within the mandated ten-day period. Though the Respondent acknowledged a technical violation of the statute, the Administrative Law Judge determined that a civil penalty was not appropriate given the circumstances, such as the change in management. Ultimately, the Petitioner was deemed the prevailing party, and the Respondent was ordered to comply with the statute in the future and reimburse the Petitioner’s $500.00 filing fee.
Based on 2 sources
Case Participants
Petitioner Side
Annette Cohen(petitioner) Appeared on her own behalf
Respondent Side
Brian Ditsch(respondent attorney) Sacks Tierney P.A.
Susan Rubin(witness) PRM (management company) Testified for Respondent
Neutral Parties
Tammy L. Eigenheer(ALJ) Office of Administrative Hearings
Judy Lowe(commissioner) Arizona Department of Real Estate Recipient of decision notice
Other Participants
Felicia Del Sol(clerical staff) Transmitted the decision
Petitioner prevailed on 5 of 17 allegations. The HOA was ordered to obtain an annual audit, refund excess assessments ($0.10/mo), provide access to financial records, obtain a fidelity bond, and repair specific common areas. Filing fee reimbursement was denied because the Petitioner did not prevail on the majority of issues.
Why this result: Petitioner failed to prevail on the majority of issues (12 of 17 lost).
Key Issues & Findings
No Annual Audit
Petitioner alleged the HOA failed to conduct an annual audit as required by the Declaration. The HOA argued the By-Laws did not require it, but the Declaration controls.
Orders: An annual audit, prepared by a certified public accountant, shall be obtained by the Association prior to establishing the annual amount to be assessed.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_win
Improper Assessment Increase
The Board raised the assessment by $14.00, exceeding the 10% limit ($13.90) by $0.10.
Orders: A credit or refund of $0.10 per month for each month of assessments paid during 2006 shall be provided.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_win
Failure to Provide Books and Records
Petitioner was denied access to actual invoices and receipts supporting accounting summaries.
Orders: Association must allow members to review all financial records including receipts, invoices, bids, etc.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_win
No Insurance Bond
The independent contractor manager was not bonded as required by the Declaration.
Orders: Manager must obtain a fidelity bond in amount equal to at least 3 months assessments plus reserve funds.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_win
Improper Maintenance
Photos showed crumbling perimeter wall and peeling paint, falling below the standard of care required.
Orders: Association shall repair the crumbling perimeter wall and flaking paint within six months.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_win
Various Dismissed Allegations (12 Counts)
Petitioner raised 12 other allegations which were not proven or deemed moot.
Orders: No violation established for these allegations.
Filing fee: $0.00, Fee refunded: No
Disposition: petitioner_lose
Decision Documents
07F-H067025-BFS Decision – 169617.pdf
Uploaded 2026-01-25T15:20:12 (125.4 KB)
Briefing Doc – 07F-H067025-BFS
Briefing Document: Franks v. Palms II Homeowners Association (No. 07F-H067025-BFS)
Executive Summary
This briefing document synthesizes the June 11, 2007, administrative decision regarding a dispute between Petitioner Charlene Franks and the Palms II Homeowners Association (HOA). The Petitioner alleged 17 separate violations of state statutes and community governing documents. The Administrative Law Judge (ALJ) determined that the HOA was in violation of five specific requirements related to financial audits, assessment limits, records transparency, fidelity bonding, and property maintenance.
Key Takeaways:
• Supremacy of the Declaration: The original 1984 Declaration remains the superior governing document. Updated By-Laws cannot supplant specific requirements of the Declaration (such as mandatory audits) unless the Declaration is formally amended by a 75–90% vote of the owners.
• Transparency and Access: Under A.R.S. §33-1258A, HOA members have a statutory right to examine original financial records, including invoices and receipts, not just summary reports.
• Mandatory Compliance: The HOA was ordered to provide refunds for over-assessments, obtain a certified audit, secure a fidelity bond for its manager, and complete specific property repairs within six months.
• Absence of Bad Faith: While the HOA was noncompliant in several areas, the ALJ found no evidence of bad faith or reckless disregard, thus declining to impose civil penalties or reimburse the Petitioner’s filing fees.
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Governing Authority and Background
The Palms II Homeowners Association was incorporated on June 15, 1989, succeeding the Gardens III Condominiums.
• Governing Documents: The Association is governed primarily by the Declaration of Covenants, Conditions and Restrictions (Declaration) filed May 9, 1984. While Palms II adopted its own By-Laws to replace the original Gardens III By-Laws, the 1984 Declaration remains the primary authority.
• Amendment Standards: The Declaration requires a signature from 90% of owners to amend within the first 20 years, and 75% thereafter. The Association’s By-Laws, which can be amended by a simple majority of the Board, cannot override specific mandates found in the Declaration.
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Analysis of Allegations and Findings
The following table categorizes the 17 allegations and the ALJ’s findings regarding each:
Allegation
Subject
Ruling
Summary of Evidence/Reasoning
Annual Audit
Violation
The Declaration explicitly requires a CPA audit before setting annual assessments. The absence of this requirement in the By-Laws does not excuse the Board.
Assessment Increase
Violation
Assessments were raised by 14.00/month,exceedingthe1013.90) by $0.10 without a two-thirds member vote.
Access to Records
Violation
Under A.R.S. §33-1258A, the HOA failed to provide Petitioner with underlying documents (invoices, receipts, bids).
Fidelity Bond
Violation
The Declaration requires a fidelity bond for anyone handling funds. The independent contractor manager was not bonded.
Maintenance
Violation
Peeling paint and a crumbling perimeter wall fell below the “reasonably high standard of care” required by the Declaration.
Financial Reporting
No Violation
Discrepancies in P&L statements were attributed to simple accounting errors by a volunteer homeowner.
Annual Report
No Violation
The Board’s use of annual P&L and Balance Sheets satisfied the “annual report” requirement.
Annual Budget
No Violation
Neither the Palms II By-Laws nor the Declaration explicitly require a formal “budget” document.
Accounting for Funds
No Violation
While no audit was performed, financial records were sufficient to account for receipts and disbursements.
Meeting Timelines
No Violation
Delays in annual meetings were caused by a lack of quorum, not a refusal to meet.
Check Signing
No Violation
The Board has the discretion to designate the manager as the sole signer, though it acknowledged the risk.
Nominating Committee
No Violation
A committee was designated; no minimum size is required by the governing documents.
Candidate Notice
No Violation
Notice provided in election ballots and meeting announcements was deemed sufficient.
Proxies
The Association transitioned to absentee ballots in compliance with A.R.S. §33-1250C.
Common Area Usage
No Violation
Plantings in common areas had received prior Board approval.
Enforcement
No Violation
No evidence of improper enforcement of community documents was presented.
Breach of Duty
No Violation
No evidence was presented that the Board allowed the manager excessive control in violation of statutes.
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Detailed Findings on Key Violations
1. Mandatory Annual Audit (Allegation 3)
The Association argued that annual audits were an unnecessary expense for a small organization and pointed to their updated By-Laws, which did not require one. However, the ALJ ruled that Article VI, Section 6 of the Declaration is the controlling authority. It stipulates that assessments can only be established after the Board examines an annual audit prepared by a Certified Public Accountant (CPA).
2. Statutory Right to Records (Allegation 8)
The HOA provided summary financial statements but refused access to the source documentation. The ruling clarified that A.R.S. §33-1258A mandates that all financial records be made “reasonably available.” This includes:
• Invoices and receipts.
• Contractor bids.
• Payment records and bills.
3. Property Maintenance Standards (Allegation 11)
Under Article IX, Section 1 of the Declaration, the HOA must maintain a standard that reflects “a high pride of ownership.” Photographic evidence demonstrated that a perimeter wall and the exterior eaves of certain units had been neglected for several years. The Board’s defense of “lack of funds” was insufficient to excuse the failure to meet the standard of care required by the Declaration.
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Administrative Order
The Association was ordered to take the following corrective actions:
1. Financial Audit: Obtain an annual audit prepared by a CPA before establishing the assessment amount for the next fiscal year.
2. Member Refunds: Provide a credit or refund of $0.10 per month for all assessments paid during 2006 to every member.
3. Future Assessments: Adhere to the 10% maximum annual increase limit unless a two-thirds member vote is obtained.
4. Information Access: Allow members or their representatives to review all financial records, including all source documents (invoices, bids, etc.).
5. Bonding Requirement: Ensure any non-employee manager obtains a fidelity bond covering at least three months of assessments plus reserve funds.
6. Property Repair: Complete repairs to the crumbling perimeter wall and flaking paint depicted in the hearing exhibits within a reasonable time, not to exceed six months from the date of the order.
Finality of Decision
The ALJ’s decision is the final administrative action and is not subject to a request for rehearing. It is enforceable through contempt of court proceedings in Superior Court, which may result in an award of attorney fees and costs to the prevailing party.
Study Guide – 07F-H067025-BFS
Case Study Guide: Franks vs. Palms II Homeowners Association
This study guide provides a comprehensive review of the administrative hearing decision regarding the dispute between Charlene Franks (Petitioner) and the Palms II Homeowners Association (Respondent). It explores the legal interpretation of community governing documents, state statutes, and the fiduciary responsibilities of homeowners association boards.
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Part I: Short-Answer Quiz
Instructions: Answer the following questions in 2–3 sentences based on the provided administrative decision.
1. What is the historical relationship between Gardens III Condominiums and Palms II Homeowners Association?
2. Why did the Administrative Law Judge (ALJ) determine that the discrepancies in the 2004 and 2005 financial statements did not constitute a violation?
3. According to the Declaration, what must occur before the Board of Directors can establish the annual assessment amount?
4. Why were the Palms II By-laws insufficient to override the audit requirement found in the Declaration?
5. What specific calculation led the ALJ to conclude that the 2006 assessment increase was a violation of the Declaration?
6. Under A.R.S. §33-1258A, what rights do Association members have regarding financial records?
7. What was the Respondent’s justification for the delay in holding annual meetings, and how did the ALJ rule on this?
8. What are the specific requirements for a fidelity bond when a management agent is retained?
9. How did the ALJ define the standard of care for property maintenance at Palms II?
10. Why did the ALJ decline to award civil penalties or the reimbursement of filing fees to the Petitioner despite finding five violations?
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Part II: Answer Key
1. What is the historical relationship between Gardens III Condominiums and Palms II Homeowners Association? Gardens III was the original condominium development governed by a 1984 Declaration. When Palms II was incorporated in 1989, it consisted of the same units and formally adopted the original Declaration to govern its membership and obligations.
2. Why did the Administrative Law Judge (ALJ) determine that the discrepancies in the 2004 and 2005 financial statements did not constitute a violation? The ALJ found that the statements were prepared by a volunteer homeowner accountant and that the discrepancies were the result of simple accounting errors rather than intentional falsification. Since the evidence was undisputed that these were unintentional mistakes, no violation of state statutes or community documents was proven.
3. According to the Declaration, what must occur before the Board of Directors can establish the annual assessment amount? The Declaration requires the Board of Directors to examine both an annual report and an annual audit prepared by a certified public accountant. The ALJ emphasized that the language in the Declaration explicitly links the setting of assessment amounts to the review of these specific documents.
4. Why were the Palms II By-laws insufficient to override the audit requirement found in the Declaration? The Declaration is the superior document and requires a 75% to 90% owner vote for amendment, whereas the By-laws can be changed by a simple majority of the Board. Because the By-laws specifically incorporate the Declaration, the absence of an audit requirement in the By-laws cannot supplant the explicit mandate for an audit contained within the Declaration.
5. What specific calculation led the ALJ to conclude that the 2006 assessment increase was a violation of the Declaration? The Declaration limits annual assessment increases to 10% without a two-thirds membership vote. Since the previous assessment was $139.00, the maximum allowed increase was $13.90, but the Board raised it by $14.00, resulting in an unauthorized overage of $0.10 per month per member.
6. Under A.R.S. §33-1258A, what rights do Association members have regarding financial records? This state statute mandates that all financial and other records of the association be made reasonably available for examination by any member or their designated representative. This includes supporting documents such as invoices, receipts, bids, and payment records that form the basis of accounting summaries.
7. What was the Respondent’s justification for the delay in holding annual meetings, and how did the ALJ rule on this? The Association argued that meetings were delayed past the required February date because they failed to achieve a quorum of members in attendance. The ALJ ruled that no violation occurred because the meetings were eventually held once a quorum was reached, acknowledging the procedural necessity of meeting the quorum requirement.
8. What are the specific requirements for a fidelity bond when a management agent is retained? The Declaration requires the management agent to obtain a fidelity bond at their own expense covering their personnel. This bond must cover an amount equal to at least the total of three months of assessments on all units plus the Association’s reserve funds.
9. How did the ALJ define the standard of care for property maintenance at Palms II? The ALJ cited Article IX of the Declaration, which requires a “reasonably high standard of care” intended to ensure the project reflects a “high pride of ownership.” The existence of a crumbling perimeter wall and peeling paint for several years was found to fall below this mandatory standard.
10. Why did the ALJ decline to award civil penalties or the reimbursement of filing fees to the Petitioner despite finding five violations? The ALJ determined that the Petitioner did not prevail on the majority of the 17 allegations, making a fee reimbursement unjustified. Furthermore, while the Association was noncompliant in several areas, the ALJ found no evidence of bad faith, reckless disregard, or sufficient negligence to warrant civil penalties.
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Part III: Essay Questions
1. The Hierarchy of Governing Documents: Analyze the conflict between the Palms II By-laws and the 1984 Declaration regarding the annual audit. Why is the legal weight of a Declaration generally superior to that of By-laws in a community association context?
2. Transparency and Statutory Compliance: Discuss the implications of A.R.S. §33-1258A on HOA governance. Why is the access to raw financial data (invoices, bids, etc.) critical for members, and how does it differ from simply receiving a Profit & Loss statement?
3. Fiduciary Duty and Maintenance: The Respondent argued that maintenance was deferred due to a lack of funds. Evaluate the Board’s responsibility to balance budget constraints with the “high pride of ownership” standard mandated by the Declaration.
4. The Role of Independent Contractors in HOA Management: The case highlights issues with a manager who was an independent contractor rather than an employee. Discuss the risks associated with check-signing authority and bonding requirements for third-party managers as identified in the ALJ’s decision.
5. The Limits of Administrative Oversight: Although the ALJ found five violations, he did not find “bad faith” or “reckless disregard.” Explore the distinction between administrative noncompliance and actionable negligence in the management of a planned community.
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Part IV: Glossary of Key Terms
Definition
A.R.S. §33-1258A
An Arizona Revised Statute requiring homeowners associations to make financial and other records reasonably available for member examination.
Administrative Law Judge (ALJ)
A presiding officer who hears evidence and issues decisions in disputes involving state agency regulations or administrative petitions.
Annual Audit
A formal examination of an organization’s accounts, which the Palms II Declaration requires to be performed by a Certified Public Accountant (CPA).
Articles of Incorporation
The legal document filed with the state to create the Palms II Homeowners Association as a corporate entity.
Assessment
A periodic fee (monthly, in this case) paid by homeowners to the Association to cover common expenses and reserves.
By-laws
A set of rules adopted by an association to govern its internal management, such as meeting dates and officer duties.
Declaration (CC&Rs)
The Covenants, Conditions, and Restrictions that govern the land and the obligations of the members; it is typically the superior governing document.
Fidelity Bond
A form of insurance that protects the Association against losses caused by the dishonest or fraudulent acts of those handling its funds.
Management Agent
An individual or corporation contracted by the Board to handle the daily operations of the Association.
Petitioner
The party (in this case, Charlene Franks) who files a petition or claim alleging violations of law or governing documents.
A written authorization allowing one person to act or vote for another; the Association transitioned away from these in favor of absentee ballots.
Quorum
The minimum number of members who must be present (in person or by ballot) at a meeting to make the proceedings of that meeting valid.
Respondent
The party (in this case, Palms II HOA) against whom a petition is filed and who must respond to the allegations.
Blog Post – 07F-H067025-BFS
The 10-Cent Violation: 5 Surprising Lessons from a Real-Life HOA Legal Battle
Living in a homeowners association (HOA) often feels like a delicate truce between individual property rights and community standards. For many, the Board of Directors can seem like an untouchable “Goliath,” wielding power through complex rules and assessments. However, the case of Charlene Franks vs. Palms II Homeowners Association serves as a powerful warning shot to boards that treat their governing documents as suggestions rather than mandates.
The conflict centered on a Declaration filed in 1984—long before the dispute reached a Phoenix courtroom in 2007. Petitioner Charlene Franks brought 17 allegations against her association, and while she only prevailed on five, those victories represent a masterclass in community governance. They prove that even decades-old rules can come back to haunt a negligent board, and that in the eyes of the law, there is no such thing as a “minor” violation.
1. The Audit Trap: Why the “Declaration” Is King
The most common mistake an HOA board can make is assuming their By-Laws are the final word. In this case, the Palms II Board argued that an annual audit was an “unnecessary expense.” They pointed to their current By-Laws, which could be amended by a simple majority vote of the Board and contained no audit requirement.
However, the legal hierarchy is clear: the Declaration of Covenants, Conditions and Restrictions is the “constitution” of the community; the By-Laws are merely the “operations manual.” The original 1984 Declaration explicitly required an audit by a certified public accountant. Because the Declaration required a signature from 75% to 90% of all owners to be amended—unlike the By-Laws, which the Board could change on a whim—the Board had no right to ignore it.
2. The 10-Cent Lesson: Precision Over “Close Enough”
In 2006, the Board raised monthly fees from $139.00 to $153.00. Under the Declaration, the Board was permitted to increase assessments by up to 10% annually without a full membership vote. To the average person, a $14 increase sounds like a reasonable “round number.” To the court, it was an illegal overcharge.
The Math of the Violation:
• Original Assessment: $139.00
• Maximum 10% Increase Allowed: $13.90
• Actual Increase Charged: $14.00
• The Discrepancy: $0.10
This ten-cent error upended the Board’s assessment hike. The court ruled that “close enough” is not a legal defense, ordering the Association to provide a credit or refund to every member who paid the assessment in 2006. This underscores a vital principle: boards must follow the mathematical letter of their founding documents, or they risk the entire financial structure being invalidated.
3. Transparency: You Have a Right to the Receipts
HOA boards often try to pacify inquisitive homeowners with “filtered” data, such as Profit & Loss statements or balance sheets prepared by an accountant. In this case, the Board felt these summaries were sufficient. Charlene Franks disagreed, demanding the raw data: the actual invoices, bids, and receipts.
The Judge upheld the petitioner’s right to see the “man behind the curtain” under A.R.S. §33-1258A. The lesson for homeowners is empowering: you are legally entitled to the supporting documents that prove where every cent of your dues is going.
4. Maintenance: “Lack of Funds” Is Not a Defense
When confronted with evidence of a crumbling perimeter wall and peeling unit paint, the Board offered a common excuse: they had to prioritize projects due to a “lack of funds.” They argued the property was in “relatively good shape” for its age.
The court rejected this defense entirely. The Declaration mandated a “reasonably high standard of care” so that the project would reflect a “high pride of ownership.” As a legal advocate would note, “lack of funds” is often a political choice—a Board’s refusal to pass a special assessment to meet their maintenance obligations. The Judge ruled that political inconvenience does not waive the standard of care, ordering the Association to fix the flaking paint and crumbling walls within six months.
5. The Checkbook Risk: The Dangers of the Unbonded Manager
One of the most alarming revelations in the case involved the Association’s manager. Despite being paid $1,000.00 per month and serving as the sole authorized signer on the Association’s checking account, the manager was not covered by a fidelity bond.
The Board relied on a general insurance policy covering “employee dishonesty,” but because the manager was an independent contractor, that coverage was useless. The Declaration required any “management agent” to obtain a fidelity bond at their own expense to protect the Association’s reserves. By allowing one person total control over the checkbook without the protection of a bond, the Board placed the entire community’s financial security at risk.
Conclusion: Accountability Over Perfection
The Franks vs. Palms II decision proves that HOA governance is a matter of strict accountability to the fine print. While the Board wasn’t found to have acted in “bad faith,” their failure to follow the 1984 Declaration regarding audits, assessment caps, and bonding was enough to trigger a court-ordered overhaul of their operations.
For every homeowner, this case is a reminder: the power of your “Goliath” is limited by the very documents they were sworn to uphold. If you looked at your own community’s founding Declaration today, would you find a forgotten protection—or a 10-cent violation—hiding in the fine print?
Case Participants
Petitioner Side
Charlene Franks(Petitioner) Appeared on her own behalf
Respondent Side
Carol Noxon(Representative) Palms II Homeowners Association Appeared on behalf of Respondent
Jean Tipfer(Representative) Palms II Homeowners Association Appeared on behalf of Respondent
Neutral Parties
Michael K. Carroll(Administrative Law Judge) Office of Administrative Hearings
Robert Barger(Agency Official) Department of Fire Building and Life Safety Listed in distribution (H/C)
Joyce Kesterman(Agency Official) Department of Fire Building and Life Safety Listed in distribution
